NTPC Limited (NTPC) Earnings Call Transcript & Summary

[Audio Gap] videoconferencing. I am Nandini Sarkar, Company Secretary of NTPC Limited. In line with the circulars issued by the Ministry of Corporate Affairs and in view of the situation of COVID-19 pandemic, the 45th AGM of your company has been called through videoconferencing. I thank and welcome all the shareholders who have joined us today through the Webex platforms provided by the Central Depository Services (India) Limited. Before commencing the proceedings, I'd like to inform all the attendees that in compliance with provisions of the MCA Circulars, the facility to join 45th AGM has been given to 1,000 shareholders on a first come, first served basis. Shareholders can also see the live webcasting of the event on the website of the company, that is www.ntpc.co.in through the link provided under the shareholders' meeting under Investors section. [Operator Instructions] If you have further queries on any of the business, even if we are not able to respond today due to time constraints, we'll be happy to address them in due course through e-mail or any other means. I would now like to request all the Board members to introduce themselves and confirm from where they are joining this meeting. Starting with Shri Gurdeep Singh.

Good morning. I'm Gurdeep Singh, Chairman and Managing Director, joining 45th AGM from my office at Sport Complex, New Delhi.

Shri Gurdeep, you are welcome.

Good morning, everybody. I'm Anil Kumar Gautam, Director of Finance, joining this 45th AGM from my office in Scope Complex, Lodi Road, New Delhi.

Shri Dillip Kumar Patel.

Good morning, everyone. I'm Dillip Kumar Patel, Director of Human Resources, joining the 45th AGM from our place in Scope Complex, New Delhi.

Shri Ramesh Babu.

Good morning, everyone. I'm Ramesh Babu, Director of Operations, joining the 45th Annual General Board Meeting from my office at Scope Complex, New Delhi.

Good morning, everyone. I am Chandan Kumar Mondol, Director of Commercial. I'm joining this meeting from my office at Scope Complex in Delhi.

Shri Ujjwal Kanti Bhattacharya.

Good morning, everyone. I'm with Ujjwal Kanti Bhattacharya, Director of Projects, joining this 45th AGM from my office in Scope Complex, Lodi Road.

Shri Ashish Upadhyaya.

Good morning, everyone. I'm Ashish Upadhyaya, Government Nominee Director, joining this meeting from my office in Shram Shakti Bhawan in New Delhi. I'm also the Chairperson of the Audit Committee.

Shri Vivek Kumar Dewangan.

Good morning, everyone. I'm Vivek Kumar Dewangan, Additional Secretary and Ministry of Power, and Government Nominee Director on the Board of NTPC, joining the 45th AGM of NTPC from my office at Shram Shakti Bhawan, Rafi Marg, New Delhi. I'm also member of Nomination and Remuneration Committee, including [ VRP ] and the Stakeholders' Relationship Committee.

Thank you, sir. I also take this opportunity to welcome Shri S.K. Kassi, Chief Engineer, Thermal, Ministry of Power and Operator Representative of President of India. Representatives of joint statutory auditors, sectarial auditor, and scrutinizer are also present at this AGM. Shri Amit Kaushal from [ SSA ] KAUSHAL & ASSOCIATES, practicing company secretary, has been appointed as a scrutinizer for the 45th AGM. Necessary link for inspection of registers, as requested by shareholders, has been shared with them and the same shall also be available during the meeting on request. As informed by CDSL, requisite quorum for the meeting is present. Accordingly, the meeting is in order. Now I request the Chairman and Managing Director, to start the proceedings of the 45th AGM.

Before I begin with the proceedings, I would like to inform, in line with the provisions of MCA Circulars issued from time to time regarding holding AGMs or EGMs through videoconferencing, all feasible efforts have been made by the company to enable members to participate in the meeting and to vote on the items being considered at this AGM. Dear shareholders, it is my pleasure to welcome you all to this 45th AGM of your company. With your support, your company has strengthened its fundamentals year after year and emerged as one of the largest and the best power utilities in the world. Before presenting the achievements and the targets, I would like to brief about the actions taken for control of the COVID-19. As you all know, the second wave of pandemic had a significant impact on the livelihood and the businesses. The coronavirus pandemic has resulted and challenged the entire humanity. As the government has taken steps for containing the spread of virus and providing vaccination for all, we have responded rapidly by putting the safety, health and well-being of our employees, their families and other stakeholders at our topmost priority. Quick action was taken for upgrading of our health care infrastructure facilities, including setting up the dedicated COVID hospitals and oxygen plants. We have also extended help to the state governments by way of strengthening their health care infrastructure and providing essential medical equipments wherever feasible. As the country's largest and responsible power company, your company has ensured that its generators were on par to meet the power requirements of the country, while continuing fighting with the pandemic. Even when many employees were affected by the virus, 24/7 uninterrupted power supply was ensured. Despite our utmost efforts, unfortunately, we lost a few employees and family members. My heartfelt condolences to their families. By taking care of their families, of the deceased employees, your company was among the first to put in place the policies to help their families. The company also had to face the unprecedented natural calamity that affected the Uttarakhand and our Tapovan Vishnugad hydro projects. I would like to extend my deepest condolences for the families of all those who lost their lives in this natural calamity. We would like to put on report our gratitude to Government of India, Government of Uttarakhand, district authorities, SDRF, ITBP, Indian Army and NDRF for all the support, which they extended for the rescue and the search operations. In these difficult times, the commitment of employees and the cooperation of the stakeholders has helped in ensuring our growth trajectory, and it has remained intact. We have made significant achievement during the past year and put several new initiatives for transforming NTPC to more robust organization. Your company improved its realization, established clear leadership in winning renewable energy bids, started foray into e-mobility, participated in bidding of distribution, continued capacity addition program and met its CapEx targets. Some of the significant achievements are, NTPC top 300 billion units of generation marked for the second time and registered highest generation since inception. Recorded our highest-ever single-day gross generation of 1,192 million units in FY '21. We also registered the fastest 100 billion units generation mark in FY '22, which was achieved in 104 days. Our coal stations maintained a positive difference of over 12% as compared to the national PLF of the coal stations. The generation share also reached nearly 24%. Our oldest unit at Singrauli, that is unit #1 at Singrauli and unit #2 at Korba, achieved over 100% PLF again and stood as the top performing units in the country, which underline your company's standing at the best class in operations. Achieved capacity addition of 4,160 megawatt in FY '21 and [ 1,090 ] megawatt in FY '22 till date. NTPC is now close to 67 gigawatt company. We have realized 100% of the billed amount and realization close to INR 1 lakh crore for the first time. A total of 1,560 megawatt of renewable bids, one in FY '21, which constitutes 15% of the total bids finalized in the country in FY '21. This was through the open competition. We also won [ 2,765 ] megawatt renewable energy bids in FY '22 till date. NTPC has now emerged as a serious player in the Indian renewable energy sector. As indicated last year, a separate subsidiary for the renewables, NTPC Renewable Energy Limited, has been formed to add the renewables through the focused approach. We will also list this company in the due course. Achieved a 11 million metric tonne of coal production from 30 mines. We have adopted a proactive refinancing strategy to leverage market conditions for availing low-cost debt. This has resulted in raising the most competitive debt in the market. Your company has been conferred with the excellence in the prestigious CII-ITC Stainability Award 2020 in corporate social responsibility category. It has also secured fifth position in the utility segment in the Forbes – World’s Best Employer list – 2020 and first in the PSUs in India. Your company has delivered robust financial performance in FY '21. It has registered its highest-ever profit of INR 13,769.52 crores, registering an increase of 36.16% over previous year. In FY '21, the Board of your company has recommended final dividend at a rate of 31.5% of paid up capital. That is INR 3.15 per share, subject to the approval of the shareholders in Annual General [ Board ] Meeting, in addition to the interim dividend at a rate of 30% of the paid up of capital. This is the 28th consecutive year that the company has paid dividend. Additionally, for the first time, we have undertaken buyback of 2% of the paid up capital in FY '21. Indian power sector is evolving at a fast pace, and power demand is increasing rapidly. The country recently witnessed all-time high peak of 200.57 gigawatt and energy met of 4,508 million units in a day on July 7, '21. The country also registered a generation growth of 13% in FY '22 until 26th September '21. The growth in the demand augurs well with the company. These numbers, coupled with Atmanirbhar Bharat initiative, indicated that there is a huge potential for growth in the power sector going forward. While focusing on the growth, we have taken significant steps for spearheading energy transition to deliver next level of growth and excellence and make NTPC a sustainable integrated energy company. With the focus shifting towards cleaner sources of power and government setting a target of 450 gigawatt of renewable energy capacity by 2030, we have also sharpened our focus on renewable energy as the next pillar of growth. Your company has prepared its business plan to tap this opportunity appropriately while continuing work on the operating its thermal fleet efficiently, economically and reliably, to meet the growing energy needs in the country. We have made plans for creating a renewable portfolio which could be as large as the thermal portfolio. Accordingly, the renewable energy targets have been revised from 30 gigawatt to 60 gigawatts by 2032. NTPC Renewable Energy Limited has achieved -- and received approval from the Ministry of New and Renewable Energy ministry for setting up of 4,750 megawatt renewable energy power in Rann of Kutch in Gujarat, which is the largest in the country. Approval has also been received from government of Madhya Pradesh for the development of the solar plant in the land acquired as well for a coal-based plant. Additionally, discussions are also in progress with the various state governments for allocation of land parcels and the water body -- on the water bodies. With all these activities, have commenced for reaching the targeted capacity addition. Your company believes that green hydrogen is going to occupy significant energy space in future and interplay between the electrons and molecules, would lead to a significant benefits. Accordingly, we have initiated development project as well as the field demonstration project for hydrogen production. An agreement has been signed with Union Territory of Ladakh for setting up of country's first green hydrogen mobility project in the region. We have taken up pilot projects on the fuel cell-based storage and short-term energy storage micro grid projects. Additionally, R&D works are also in progress for development of High Temperature Steam Electrolysers, static hydrogen compression system and development of sea water electrolyzer. We are exploring various option using hydrogen-like transport, blending with natural gas, green ammonia, methanol, et cetera, and aspire to lead hydrogen economy in India and globally. Our sustainability efforts. I would like to reaffirm that we are committed to make fundamental changes in our business to transform ourselves into the most sustainable power producer as well as to become more transparent in timely disclosures of our social, environmental and economic performance. We had already adopted integrated reporting of our sustainability performance disclosures along with the financial disclosures. In our quest to deliver sustainable and affordable energy, we have declared our Energy Compact Goals at UN, and became the first energy company in the world to do so. Our current zero-carbon-based energy capacity is around 7.5%. And with further massive RE addition, we anticipate reducing our specific CO2 emissions substantially over the years. As indicated earlier, we have taken up development of eco park at the ash [ disposal ] of Badarpur power plant post its shutdown, which will be bigger than the New York Central Park and shall act as a green lungs for the national capital region of Delhi. The park will be ready by finance year '23, which displays our commitment towards environment. All our coal units are being equipped with FGD, Flue Gas Desulphurization system for reducing SOx emission as per MoEF & CC notification. Under Blue Sky initiative to address the issue of stubble burning in the northern part of India, we have started coal-firing in 14 of our coal plants. To find a technological solution, a technical hackathon was also conducted with the objective of increasing farmers' income and promote entrepreneurship, several awareness and the vendor development programs were undertaken. As a result of these initiatives, 109 vendors have participated in recently invited tender. Operating in a water-intensive sector, we consider it as our moral responsibility to undertake water efficiency measures at significant scale and set tougher targets. Towards this end, your company has become signatory of the UN CEO Water Mandate to better its waters stewardship program as part of the long-term sustainability development goals. Being a responsible corporate organization, community engagement is one of the business priorities. In financial year '21, we have spent around INR 419 crores towards various CSR activities. It gives me immense pleasure to share with you that your company has partnered with Archery Association of India since 2018. The Indian Archers have won 7 gold medals and 1 bronze medal in the World Cup held at Paris. They also represented India at Olympic Games Tokyo and Paralympic Games Tokyo in 2020, which was held in '21. Many power sector reforms are being introduced by government. New market mechanisms are under discussion to promote competition, thereby providing affordable power to all the consumers. While these policies and reforms offer new opportunities and bring discipline into the sector, they will also offer many challenges. We are geared up to adapt to these changes and working on the various models to maintain leadership in the sector. Your company believes in setting standards of transparency and sound systems. It has to put a well-defined risk management framework in place involving risk optimization, risk strategy, risk reporting structure and its monitoring. We are working on improving and to achieve excellence in every facet of our business. With the start of plying 40 e-buses in Port Blair, your company has forayed into e-mobility. Efforts are also on to -- for increasing the power trading through NVVNL. We are focusing on increasing business portfolio of NVVNL, which will also be listed in due course. We have taken initiative to explore setting up of captive industries and showed expression of interest for the same. Additionally, we are exploring tying up with the commercial and industrial consumers for direct supply of power. Your company believes in digitalization and automation as the key driver for improving business efficiency, speed, transparency and efficacy. Accordingly, we are deploying various digital AI/ML tools for the power plant operations to increase efficiency, safety, post optimization, ensuring cybersecurity and to reduce downtime. We are actively pursuing various options for increasing geo-strategic reach. We have undertaken project management consultancy-based assignments for 1,835-megawatt solar capacity under International Solar Alliance program in 5 countries. We are constantly working on imbibing agility in the workforce, improving the capability of our employees and building a strong leadership pipeline. Various initiatives have been taken in human resource front to make the organization future-ready, including introduction of job rotation and undergoing compulsory training program before taking up the new responsibility. We are constantly working on improving our competitiveness. Efforts are underway for improving the profitability and thereby increasing the wealth of the shareholders. With constant efforts, the under recoveries on account of fuel were eliminated in financial year '21. Additionally, with a strong focus on efficiency improvements, adoption of best O&M practices and optimization of the fuel linkages, the energy charge rate of your company's coal plants are reduced, which resulted in the saving to the tune of INR 4,500 crores for the beneficiary states. As you know, these are being passed on to the distribution companies. I take this opportunity to place on record my sincere thanks and gratitude of India, particularly Ministry of Power, Ministry of Coal, Ministry of Railways, Ministry of Environment, Forest and Climate Change, Ministry of New and Renewable Energy, DIPAM, CERC, CEA, CAG, state governments, our valued customers, auditors, vendors, other authorities and agencies that provided unstinted support. I convey my appreciation to my colleagues on the Board for their invaluable contribution in strengthening the company. I express my sincere thanks to investors, shareholders, employees and customers for their unstinted cooperation. Your company values your trust and confidence, and shall continue to work tirelessly to take it forward. Thank you. I would now request the company secretary to brief the members about voting procedures and take you through the agenda items. Details of objectives of the agenda items and its implications are mentioned in the notice calling AGM and are self-explanatory.

Thank you, sir. Pursuant to Regulation 44 of the Listing Regulations 2015 and provisions of Section 108 of the Companies Act 2013 and rules made [ in general ], the company has provided facilities to the members to cast their vote through remote e-voting, through a voting platform provided by CDSL. The detailed procedure and instructions for casting votes by the members through electronic means were prescribed in the notice. The remote e-voting period was open from Friday, 24th September 2021, at 9 a.m. to Monday, 27th September 2021, 5 p.m. The company had fixed Q3 21 September 2021 as a cut-off date for deciding the names of the members entitled to cast their votes through remote e-voting as well as during this meeting. Shareholders who have not voted through remote e-voting can also cast their vote through a link appearing on the screen. As notice of the AGM, director's report and auditors report had already been circulated to members. The same may be taken as read. There are no qualification, observations or comments in the statutory auditor's report. In the secretarial audit report, the secretarial auditor has observed that during a part of the year, the company was not having requisite number of independent directors, including woman independent director on the Board, and the company had not carried out the performance evaluation of the directors. It has further been observed by the secretarial auditor that company has not complied with the provisions regarding formulation of policy for appointment and evaluation of directors. Since NTPC is a government company, the directors are appointed by the government of India. The company had requested Ministry of Power, Government of India being administrative ministry for appointment of independent director, including women independent director from time to time for compliance of the above regulations. NTPC being a government company, all the directors are evaluated by the Government of India. As per the notice of the meeting, there are total 10 businesses to be transacted at this meeting, 5 ordinary businesses and 5 special businesses. The businesses to be transacted are, item #1, to consider and adopt the audited standalone financial statements of the company for the financial year ended 31st March 2021, the reports of the Board of Directors and auditors thereon and audited consolidated financial statements of the company for the financial year ended 31st March 2021 and the report of the auditors thereon. Item #2, to confirm payment of interim dividend and declare a final dividend for the year 2020. Item #3, to appoint Shri Anil Kumar Gautam, DIN: 08293632, Director, Finance, who retired by rotation as a Director and being eligible, offers himself for reemployment. Item #4, to appoint Shri Dillip Kumar Patel, DIN: 08695490, Director, HR, who retired by rotation as a Director and being eligible, offers themselves for reemployment. Item #5, to fix the remuneration of the statuary auditors for the year '21, '22. Now the next item is regarding the reappointment of the Chairman and Managing Director of the company. As Chairman and Managing Director is interested in this item, Shri Anil Kumar Gautam, Director of Finance, is requested to take the chair for this item.

Special business, item #6, to reappoint Shri Gurdeep Singh, DIN: 00307037, as Chairman and Managing Director of the company.

Now Shri Gurdeep Singh, Chairman and Managing Director of the company, is requested to resume the chair for further business item.

Please go ahead.

Item #7, to increase borrowing parts of the company from INR 2,00,000 crore to INR 2,25,000 crore. Item #8, to mortgage or create charge over the movable and immovable properties of the company, in favor of lenders in connection with the borrowings of the company. Item #9, to ratify the remuneration of the cost auditors for the financial year '21, '22. Item #10, to raise funds approved up to INR 18,000 crore through issue of bonds or debentures on a private placement basis. In respect to the items proposed, we have serial #1 to 6 and 9, ordinary resolutions are required. In respect of items proposed at serial #7, 8 and 10, special resolutions are required. The members who have exercised their voting rights through remote e-voting are once again requested not to cast their votes during this meeting. If any such member exercises his voting right through e-voting during this meeting, his e-voting will not be considered for counting the number of votes as his votes are already considered in remote e-voting. Voting facilitation will be available up to 15 minutes of conclusion of Annual General Meeting. Link for voting shall be deactivated thereafter. Once the report of the scrutinizer is received, the Chairman will declare the decision of the members on each business transacted by the members through e-voting during AGM, adding that to the votes cast by the members through remote e-voting. The results of the voting, together with scrutinizer's report, will be placed on the company's website, www.ntpc.co.in within the statutory time permitted under the law, that is within 2 working days, and the same will be implemented to stock exchanges, NSE and BSE and also CDSL. I would now request our Chairman and Managing Director, to take the proceeding further.

Now I request CDSL to connect shareholders who have given request for being a speaker at AGM one by one. In order to accommodate more shareholders, I request each speaker to be put -- to put their query in a precise manner and adhere to the given time limit of 2 minutes.

CDSL, have the registered speakers joined?

Yes, ma'am.

[ Mr. Santosh Kumar Saraf ].

First speaker, [ Mr. Santosh Kumar Saraf ]. [ Mr. Saraf ] have not joined the meeting.

Second, [ Tamal Kumar Majumdar ].

Ma'am, [ Mr. Tamal Majumdar ] is also not present in the meeting.

[ Mr. Sharaf Kumar ]. [ Sharaf ].

[ Mr. Sharaf ] is also not available in the meeting.

Mr. [indiscernible].

Mr. [indiscernible] is also not available in the meeting.

[ Mr. Saket Kapoor ].

Yes, yes. Namaskar, sir. Hello?

Namaskar.

Sir, I have only 2 points to be kindly taken. Sir, firstly about this renewable space, how is our -- how is the company profile portfolio going to look, say, 5 years or 10 years down the line? Where would be solar, hydro, in comparison to what today we are in coal? And sir, with the shortages in coal currently, how are we coping up with our power generation? And what is the cost impact? Sir, when we look at the quarterly numbers and also the annual numbers, I'm pointing towards note #8. Ma'am -- and then [ ma'am and sir ] per note #8, which state the company had entered into an agreement of movement of coal through inland waterways for one of its stations. As per the agreement, the operator was to design, finance, build, operate and maintain the unloading and material handling for 7 years, after which it was to be transferred at INR 1. I think so this was a litigation with one of our private operators wherein we have made some payments and we have also made some provisions. So what is the status of the -- of this long pending issue? It is pending in the court. But just your take on the same? As ma'am and sir, it is mentioned here that the asset is to be transferred to us. And as per the note mentioned, it was mentioned that there was some agreement [Foreign Language]. As well, it's a matter of INR 2,000 crore something of that, and we have made provisions also for the interest provisions also. [Foreign Language]. Going forward, how are we treating this? And what is the status on the same if it is with one of the private operators? That's all from my side, and investor calls and all we are doing regularly, and I thank management for the continuity of the same, sir and all the best. Thank you, sir. That's all from my side.

We'll respond to that. Is there...

There is one more registered speaker, [ Rajagopal Ramanathan ]. Is he connected?

No, ma'am [ Mr. Ramanathan ] is also not available in the meeting.

Okay. So we don't have any other registered speaker. Chairman may answer the questions.

Okay. Thank you. So first of all, the question was raised by [ Mr. Saket Kumar ]. As we all know that energy transition is going to be a reality, it all depends on how much time it is going to take. And as I mentioned, the energy transition is on our agenda, and we are mindful of that. By 2030 -- by 2032, we should be having almost equal capacity of the renewable energy what we are having the coal-based energy. So this is -- this will lead to almost addition of 60 gigawatt of renewable energy, reaching to a 60 gigawatt of renewable energy towards -- until 2030, 2032. And we will be -- we are -- we will be putting all efforts how fast we can add the renewable energy, and make sure going forward that as the technology develops, we would also look at putting the storage solution to this so that we can start supplying, if not 24/7 immediately, but at least for maximum number of hours renewable energy and ultimately, 24/7 renewable energy. Solar is -- in our opinion, solar is going to occupy a much bigger space in the renewable energy space. On the shortage of coal and the continued power generation, I must mention here that due to increased demand -- sudden increased demand, which was also mentioned, this year, we are almost registering around 25%, 26% increase. So there is a sudden increase -- spurt in the demand, which is being met through the -- mainly through the domestic sources. And Coal India and our [ capacity ] coal mines, we are gearing up to how to really meet this increasing demand. Having said that, the grid is very stable, and please be reassured that we are doing everything possible so that there is no problem as far as the power supply is concerned. The cost impact as this is going to be the domestic coal, so it is going to be minimal. The international coal prices have really gone very high, but the dependence on the coal import is almost negligible. On the question of inland waterway, as you rightly mentioned, that this is, at present, in the court. So saying anything will be premature at this stage. But we have put up our case forward. And let's see then how soon we will be able to get the verdict from the court.

I now request Director, Finance, to give vote of thanks to the chair.

I am honored to get this opportunity to offer vote of thanks at 45th Annual General Meeting of the company. I sincerely thank our valued shareholders, including S.K. Kassi, the authorized representative of the President of India, and auditors of the company, for attending the 45th AGM of the company. I convey my sincere thanks to the Chairman and Managing Director, Shri Gurdeep Singh, for presiding over the meeting, and all the directors from Board of NTPC for sparing their valuable time for attending this virtual AGM. Finally, I am thankful to employees of the company who worked with their dedication in successfully organizing and managing this event. Thank you.

I now declare that meeting is concluded. Thank you.