FUTURE NTPC Chairmans Speech

Dear Shareowners,

You will be delighted to note that Financial Year 2015-16 turned out to
be yet another year of robust performance by your Company. Your company
maintained its strong leadership position in the country. Facts and
figures amply demonstrate your Company''''s excellent performance. With
its strong overall performance, your Company is expected to retain the
"Excellent" rating for the MoU signed with the Government of India for
Financial Year 2015-16.

Your Company contributed to the growth of power sector by commissioning
2,255 MW during Financial Year 2015-16 and added 1,960 MW to its
commercial capacity. With this, the installed capacity of NTPC
(including JVs and Subsidiaries) stood at 46,653 MW and the commercial
capacity was 45,428 MW as on 31.03.2016.

Investment approval for 2,360 MW new capacities was accorded during
Financial Year 2015-16. This includes 1,600 MW coal based capacity and
760 MW of solar capacity. Your Company has over 24,000 MW capacities
under construction and it is committed to delivering these projects in
time. Your Company achieved an all-time high capex of Rs. 25,960 crore
(standalone basis), exceeding the MoU target of Rs. 23,000 crore. This
underlines the brisk pace of project delivery by your Company.

The coal based stations of your Company achieved a plant load factor
(PLF) of 78.61% as against the all India PLF of 62.29%. Three stations
recorded PLF of more than 90%, which is a commendable achievement even
by international standards, and were ranked the Top 3 stations in the
country. Eleven stations of NTPC Group figure amongst the top 25
stations in the country. Very significantly, your Company was able to
activate its hydro portfolio by commissioning its first hydro project
of 800 MW at Koldam. This is a major milestone and provides the
necessary diversification to the generation portfolio.

Government of India recently issued a policy allowing flexibility in
use of coal. This policy allows linkages given to the different power
stations of your Company to be allocated in a single basket to the
Company and allows full flexibility in utilizing coal from this single
basket in the entire fleet of power stations in the most economical and
efficient manner. Your Company is uniquely positioned to maximize the
benefits arising out of this policy by utilizing coal in a manner which
provides operational flexibility on the one hand and also reduces
freight costs on the other. Rationalization of coal linkages and
reduction in use of imported coal has led to reduction in fuel cost.
During Financial Year 2015-16 the total fuel bill of your Company came
down to Rs. 43,793 crore as compared to Rs. 48,834 crore in Financial
Year 2014-15, a reduction of over Rs. 5,000 crore, in spite of
generation remaining at similar levels.

Apart from power project development and plant operation, your Company
took an important step in building the third pillar of its growth
strategy by commencing coal mining operations from its first mine. Your
company opened Pakri Barwadih mine in May 2016 and removal of top soil
and overburden has already begun. Mining of its own coal will provide
further impetus to the operations of the Company.

Your Company has always focused on operational as well as commercial
efficiency to ensure that the Company remains financially strong in a
sustainable manner. In pursuance of this goal, 100% realization of
current bills has been made for the thirteenth year in a row. Further,
your Company is pursuing with the Government of India to extend the
Tripartite Agreements with the States to ensure the continuity of
timely realization of bills.

Although power generation increased, your Company''''s total revenues for
Financial Year 2015-16 decreased to Rs. 71,696 crore from Rs. 75,337
crore in Financial Year 2014-15 mainly on account of lower fuel costs.
This clearly demonstrates the improvement in the operational
performance of your Company. Your Company was able to maintain the net
profit at Rs. 10,243 crore as compared to Rs. 10,291 crore last year.

Your Company''''s management has always believed in maximizing
shareholders'''' wealth. The Company has already paid an interim dividend
of Rs. 1.60 per share and has recommended a final dividend of Rs. 1.75
per share for 2015-16, subject to your approval.

Government of India divested 5% of equity share capital of the company
by offer for sale through Stock Exchange mechanism in February 2016. It
enabled the Government to garner Rs. 5,015 crore. Subsequently, the
Government allowed sale of 0.25% equity to the employees. Through this
offer, Government earned Rs. 203 crore. After these divestments, the
holding of the Government in your Company stands at 69.74%.

During Financial Year 2015-16, your Company spent Rs. 492 crore on CSR
activities, well above the mandated threshold of 2% of PAT, which
demonstrates its proactive approach towards contributing to the
society. Among the major initiatives undertaken was completion of about
29,000 toilets as part of the Swachh Bharat - Swachh Vidyalaya
Abhiyaan.

Your Company''''s achievements in various spheres have earned it a number
of awards and accolades. The Company has been awarded 1st Corporate
Governance Excellence Award in listed PSUs category for the year
2014-15 by ASSOCHAM. It has been ranked No.2 Independent Power
Producer and Energy Trader Globally in the Platts Top 250 Global Energy
Company Rankings, 2015. It has also been ranked 4th among the Asian
electric utilities in 2016 rankings as per Forbes Global 2000. It was
awarded with Dun & Bradstreet Corporate Awards 2016 for Best performing
company in India in Power Sector. Your Company has been adjudged as the
"Best Company to work for" in Public Sector category in the study
carried out by Great Place to Work and Economic Times.

I assure you that Team NTPC shall continue to put its best efforts in
sustaining the leadership position of your Company and thereby ensure
sustained returns to its stakeholders.

With best wishes,

Yours sincerely,

(GURDEEP SINGH)

Chairman & Managing Director

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