Dear Shareholders,

The private sector has contributed greatly to building India''''s power generation and transmission capability over the last decade, thus energizing the nation''''s economic growth engine, and providing access to reliable power supply to a large number of hitherto underserved citizens. The nation is today largely free of the crippling problems of power shortages and unreliable supply, which plagued economic growth in the past.

Thermal power generation capacity, which stood at 82.4 GW in FY 2006-07, has grown rapidly during the last decade, to 218.3 GW. Of this, 99 GW has been added during the 12th Five Year Plan, outstripping the Plan target of 88 GW installations. Investments made by the private sector have played a key role in this capacity expansion, aided by enabling legislation. From a mere 9.6 GW, which was 12% of the total thermal power capacity in FY 2005-06, the private sector accounted for 84.2 GW or 39% of the total thermal power capacity at the end of FY 2016-17.

On the other hand, despite the commendable growth in generation and transmission capacity, the growth in consumption of electricity has fallen short of projections. This has led to a situation nearing oversupply in the electricity market in the near term. Along with this, there have been persistent challenges in terms of fuel shortages, non-availability of long-term PPAs, and policy uncertainties that have impacted private sector investments, and created a stress on the banking system,

It is imperative that the government as well as regulatory bodies take concrete steps towards resolving these challenges, by improving coal supply, signing fresh PPAs, and expeditiously addressing petitions.

The Central Government has already initiated several reforms in this direction, such as addressing the deteriorating financial health of DISCOMs through the UDAY scheme, alleviating the shortage in supply of domestic coal by setting a target of doubling domestic production to one billion tons by 2020, and announcing the new linkage policy for power called Scheme to Harness and Allocate Koyla (Coal) transparently in India, or SHAKTI. An earnest and time-bound implementation of these reforms by States is called for, along with due support from the regulatory system.

We strongly believe that the visionary reforms undertaken by the government, coupled with robust economic growth and renewed focus on the manufacturing sector as well as the Power for All goals, will drive consumption growth over the next few years.

Our Performance

As the largest private sector power producer, we maintained our emphasis on operational efficiency and cost control, while working relentlessly to solve persistent challenges. During FY 2016-17, we continued to see the impact of the overcapacity situation in the form of reduced demand for short-term contracts, low merchant prices and reduced off take by some long-term customers. However, with a major portion of our capacity tied under long-term PPAs, and our ability to maintain high availability of our plants, we have been able to withstand the vagaries of the market.

During FY 2016-17, your Company sold 60.2 billion units on a consolidated basis, and recorded total revenues of RS,23,203 crores.

Of this, the Standalone business accounted for sales of 27.6 billion units and RS,11,753 crores of revenues. Among subsidiaries, the Tiroda plant sold 17.3 billion units, the Kawai plant sold 7.9 billion units, and the Udupi plant sold 7.4 billion units.

A key challenge that we have faced, especially at the Mundra plant, is the unavailability of fuel cost pass through for imported coal. This has resulted into an under-recovery of costs at the plant. Consequent to the Supreme Court''''s order regarding Compensatory Tariffs, we have engaged in discussions with various stakeholders to identify remedial measures for sustainable operations of the Mundra power plant.

Business Outlook

The recently-announced SHAKTI

policy will allow power plants to source domestic coal reliably. We believe that the performance of our domestic coal-based power plants at Kawai and Tiroda plants will improve further with an assured supply of fuel. We will continue to focus on resource management as well as efficient operations of our capacities. We are committed to overcome the present challenges, and shall work diligently towards this end.

In the coming years, we foresee a consolidation in the power generation sector, even while new opportunities open up with economic growth. We are poised to pursue new opportunities of profitable growth, and will strive to identify the right assets for investment under organic and inorganic routes.

Our momentous journey over the years has been made possible by highly committed and capable teams, and an empowering and co-operative work culture. We have invested continuously in building our organization, identifying leadership capabilities in various fields, and improving skill sets and versatility by offering targeted training programs to our employees. The commitment and resourcefulness of our people is reflected in the fast-paced growth we have achieved by overcoming all challenges, and reaching new milestones continuously,

Your Company has been ranked as among the top 100 workplaces in India in FY 2015-16. We aim to live up to high standards of employee expectations, and improve our standing even further. We have a young work force, with an average age of 33 years, which gives us an opportunity to spot and nurture talent, and to cultivate leaders for our next phase of growth. At the same time, ensuring health and safety of our workforce in a fast paced environment is a key priority area. Your Company has engaged DuPont as a partner to support our ''''Zero Harm'''' objective. We have also embarked on a safety culture transformation journey to achieve excellence in all aspects of safety,

As important as all of these achievements is our commitment to the environment, and to the communities around us.

Your Company recognizes the relationship between ecosystems, biodiversity, and business sustainability. We continue to concentrate our efforts in environmental conservation and minimizing the impact of our activities, as well as working towards ensuring a bright future for the communities.

Climate change concerns are pushing for innovation and up gradation of technology world over. We are also evaluating efficient 800MW and 1,000 MW ultra-supercritical technology units for our future expansion plans, in order to help mitigate climate change concerns. Further, your Company has also implemented Sustainability Reporting with publication of annual Sustainability Reports covering our social and environmental performance and using it to build bridges with various stakeholder communities.

On behalf of the Board and the leadership team at Adani Power, I thank the shareholders, lenders, our employees, vendors, customers, and various regulatory and statutory bodies for their valuable support in building a strong, vibrant, and responsible organization.

Gautam Adani

Chairman - Adani Power Limited

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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