Dear Members,

The Board of Directors of your Company is pleased to present before you the 48th Annual Report of your Company, highlighting the development and progress for the financial year 2023-24 along with audited financial statements, Auditors' Report thereon, Secretarial Auditor's Report and review of financial statements by the Comptroller and Auditor General of India (C&AG).

Major highlights of performance of your Company during the year under review are as under:

• NHPC has earned Profit After Tax (PAT) of Rs 3,743.94 crore on standalone basis in the financial year 202324 compared to Rs 3,833.79 crore in the previous financial year. The consolidated net profit was Rs 4,028.01 crore in financial year 2023-24 as compared to Rs 4,260.83 crore in previous financial year.

• Total income and revenue from operations were Rs 10,024.99 crore and Rs 8,404.92 crore respectively during the financial year 2023-24. Total comprehensive income for financial year 2023-24 was Rs 3,718.98 crore.

• NHPC's power stations recorded overall Plant Availability Factor (PAF) of 77.6% and generated 21,779 Million Units (MUs) during the year.

• Cash contribution of Rs 1268.52 crore was made to Government of India's exchequer through dividend (final dividend for financial year 2022-23 of Rs 320.70 crore and interim dividend for financial year 2023-24 of Rs 947.82 crore) during the financial year 2023-24.

• Foundation stone of India's largest hydro power project 2880 MW Dibang Multipurpose Project was laid in the distinguished presence of the Hon'ble Prime Minister of India, Shri Narendra Modi.

• The inauguration of the 380 MW Solar Project in Jaisalmer District, Rajasthan under REIA scheme, by the Hon'ble Prime Minister, Shri Narendra Modi, further underscored NHPC's pivotal role in the renewable energy sector. Furthermore, the laying of the foundation stone for the 1200 MW Jalaun Ultra Mega Renewable Energy Power Park of Bundelkhand Saur Urja Limited (BSUL), NHPC's JV with Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA), added another feather to NHPC's cap.

• NHPC has achieved a significant milestone with the foundation stone laying ceremony of the

300 MW Solar Power Plant by Hon'ble Prime Minister, Shri Narendra Modi, located in Bikaner, Rajasthan under the Government of India's CPSU Scheme, Phase-II, Tranche-III, with total investment of over Rs 1732 crore.

• NHPC has signed an MOU with Department of Energy, Govt. of Maharashtra for the development of Pumped Storage Schemes and other Renewable Energy Source Projects in Maharashtra. The MOU envisages development of four Pumped Storage Projects aggregating to 7350 MW namely Kalu- 1150 MW, Savitri-2250 MW, Jalond-2400 MW & Kengadi-1550 MW and other Renewable Energy Source Projects in the state.

• NHPC has signed an MOU with Govt. of Odisha through GRIDCO Limited for "Development of Pumped Storage Projects (PSPs) and Renewable Energy in the State of Odisha."

• NHPC signed an MOU with Kerala State Electricity Board (KSEB) to set up a "Design Clinic" for vetting of design of KSEB Projects as part of its Consultancy Services initiatives.

• A Memorandum of Agreement (MOA) was signed with Government of Arunachal Pradesh for development of two mega projects i.e. 1605 MW Subansiri Upper Hydroelectric Project and 1720 MW Kamala Hydroelectric Project.

• NHPC has signed an MOU with Andhra Pradesh Power Generation Corporation Limited (APGENCO) for Implementation of Pumped Hydro Storage Projects and Renewable Energy Projects under joint venture mode in Andhra Pradesh.

• NHPC has signed an MOU with School of Planning and Architecture for developing 3 Model villages in Siang and Upper Siang Districts, Arunachal Pradesh. The model villages will provide appropriate and robust livelihood to local people and will also improve social & economic infrastructure.

• NHPC has signed an MOU with ONGC for "Cooperation in exploration & development of Pumped Hydro Storage & other Renewable Projects".

• NHPC has signed an MOU with Gujarat Power Corporation Limited for proposed investment of Rs 4,000 crore in Kuppa Pumped Storage Project (750 MW), Chhota Udaipur, Gujarat. NHPC secured a significant achievement by securing a 200 MW capacity solar project in the 1,125 MW Gujarat State Electricity Corporation Limited (GSECL) Solar Park at Khavda, Gujarat.

• NHPC has signed an agreement with Japan Bank for International Cooperation (JBIC), Japan for a loan of JPY 20 billion for implementation of renewable project including 300 MW Solar Power Project, Bikaner being developed under CPSE 1000 MW Scheme.

1. FINANCIAL PERFORMANCE

The important financial highlights are given in table below:

1.1 REVENUE

Your Company has generated total income of Rs 10,024.99 crore during the financial year 2023-24. The total income during the financial year 2022-23 was Rs 10,150.90 crore.

1.2 EXPENSES

The total expenditure during financial year 2023-24 increased to Rs 5,962.79 crore as compared to Rs 5,567.30 crore in the previous financial year.

1.3 TOTAL COMPREHENSIVE INCOME

Total Comprehensive Income of your Company decreased to Rs 3,718.98 crore during the financial year 2023-24 as compared to Rs 3830.42 crore in the previous financial year.

1.4 NET WORTH

Your Company's net worth as on March 31, 2024 was Rs 37,268.61 crore as compared to Rs 35,407.96 crore at the end of previous financial year.

1.5 SHARE CAPITAL

Your Company's paid-up share capital as on March 31, 2024 was Rs 10,045.03 crore which remained unchanged during the financial year 2023-24.

1.6 TRANSFER TO RESERVES

During the year 2023-24, Company did not transfer any amount to any reserve.

2. DIVIDEND

Your Company has a consistent track record of dividend payment. The Board of Directors has recommended a final dividend of Rs 0.50 per equity share for the financial year 2023-24 amounting to Rs 502.25 crore. The above dividend is in addition to the interim dividend of Rs 1.40 per equity share amounting to Rs 1,406.30 crore paid in March, 2024. Accordingly, total dividend for the financial year 2023-24 comes to Rs 1.90 per equity share amounting to Rs 1,908.55 crore. Your Company has a Dividend Distribution Policy in place since May, 2017. The Policy sets out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/ or retained profits earned by the Company. As per Dividend Distribution Policy of the Company, broadly the dividend payment shall be 30% of PAT or 5% of the Net worth, whichever is higher. Accordingly, total dividend payout for financial year 2023-24 (subject to approval of final dividend by the members of the Company) @ Rs 1.90 per share will be Rs 1,908.55 crore i.e. 51% of PAT for financial year 2023-24 and 5.12% of Net worth as on March 31, 2024 as against total dividend pay-out of Rs 1858.33 crore i.e. 48% of the PAT for financial year 2022-23 and 5.25% of Net worth as on March 31, 2023 in the previous year. The Dividend Distribution Policy of the Company is available on website of the Company at https://www.nhpcindia. com/assests/pzi public/gallery/1672828855.pdf

3. OFFER FOR SALE

Govt. of India has divested 3.55% stake in NHPC through Offer For Sale (OFS) during financial year 2023-24. Out of this, 3.50% stake was divested through OFS to Retail and Non Retail Investors in the month of January, 2024. Further, 0.05% stake was divested through Employee OFS (EOFS) in the month of February, 2024. Post OFS, the shareholding of Govt. of India in NHPC has been reduced from 70.95% to 67.40%.

4. OPERATIONAL PERFORMANCE

Your Company's power stations have achieved total generation of 21,779 MUs during the year 2023-24 against generation of 24,907 MUs during the previous year. Your Company has achieved overall Plant Availability Factor (PAF) of 77.60% during financial year 2023-24 against overall PAF of 88.75% during the previous year. Major reasons for less generation were flash floods in Himachal region during July 2023, unprecedented flash flood originating from Lhonak lake during October 2023 in Sikkim Region and overall less inflow of water.

The power station wise generation and PAF during the year 2023-24 are given in table below:

Note:

*As per MOU FY 2023-24, Consolidated Generation Target is 35,746 MUs i.e. including Generation Target of NHPC, NHDC & BSUL. Actual generation for FY 2023-24 including NHPC, NHDC ( ISPS, OSPS & Sanchi Solar) & BSUL is 26,291 MUs.

** Actual Generation shown is infirm power.

During the financial year 2023-24:

• Six (06) power stations viz. Chamera-I, Uri-II, Dulhasti, Salal, Sewa-II and Tanakpur have achieved their respective annual design energy.

• Ten (10) power stations viz. Chamera-I, Dhauliganga, Dulhasti, Sewa-II, Salal, Tanakpur, Uri, Uri-II, Nimoo Bazgo and Chutak have achieved their respective NAPAF (Normative PAF).

Renovation & Modernization of Loktak Power Station

Loktak Power Station situated in Churachandpur district of Manipur state is an integral part of Loktak Lake Multipurpose project of Government of Manipur to harness the hydro power potential of Loktak Lake fed by Khuga and Imphal rivers. It was commissioned in April- May 1983. The installed capacity of the Power Station is 105 MW with three units of 35 MW each. The annual design energy is 448 MU and the beneficiaries' states of the Power Station are Manipur, Nagaland, Assam, Mizoram, Arunachal Pradesh, Meghalaya and Tripura. Since, Loktak Power Station has completed its schedule life of 35 years in May 2018, it was desired to have complete R&M works of entire Power Station to continue its services in future as per norms, defined in CERC Tariff Regulations 2014-19 (35 years from the COD). The DPR for R&M works of Loktak Power station has been approved for Rs 273.59 crore (Sept. 2017 PL) including IDC & FC. Post R&M, the Design Energy shall increase to 562.73 MU from existing 448 MU. Progress of work has suffered due to the civil commotion in the state of Manipur.

5.1 SALES AND REALIZATION

During the year under Report, your Company's sales from operations stood at Rs 8,404.92 crore. Total billing was Rs 8,992.53 crore and collection was Rs 9,653.04 crore including collection on account of late payment surcharge of Rs 38.50 crore. Total collection in financial year 2023-24 including collection from Power Trading Business was Rs 9,664.56 crore

As on March 31,2024, the total outstanding dues of Rs 98.41 crore (including late payment surcharge of Rs 4.26 crore) were pending for more than 45 days. The outstanding amount mainly pertains to Jammu & Kashmir Power Corporation Limited, Jammu & Kashmir (Rs 69.79 crore). Your Company is making all out efforts to liquidate the outstanding dues by continuous follow-up.

5.2 SIGNING OF POWER PURCHASE AGREEMENTS (PPA)

Availability of long term PPAs for Power Stations is key to survival of organization as this gives revenue visibility for the organization and assured rate of return which can be utilized for business expansion.

Therefore, a conscious decision has been taken to focus on this area and execute PPAs for existing, under construction and upcoming projects for complete useful life of the projects. During the financial year, NHPC has signed PPA in respect of following power stations/upcoming Projects:

With sanction of number of new Hydro projects/Solar projects under CPSU scheme, NHPC has been pursuing states/ DISCOMs to tie up the capacity of these new projects. PPA for following projects has been signed:

6 STATUS OF HYDROELECTRIC PROJECTS UNDER CONSTRUCTION

At present, your Company is actively engaged in the construction of 09 Hydro Power Projects of 9,314 MW Capacity (including JV & Subsidiaries). The detail is given in table below:

6.1.1 PARBATI-II HE PROJECT - 800 MW (4 X 200 MW), HIMACHAL PRADESH:

Parbati-II HE project is being constructed by NHPC as a run-of-the-river scheme to harness the hydro-potential of the lower reaches of Parbati River. A Concrete Gravity Dam of 83.7 m height has been constructed at Village Pulga in Parbati valley to divert the river water through a 31,557 m long Head Race Tunnel (HRT). An underground Power House of 800 MW (4 x 200 MW) capacity has been constructed at Village Suind in Sainj valley utilizing gross head of 863 m. The diverted discharge of the Parbati River is to be further augmented by diverting the discharge of various nallahs viz. Jiwa, Hurla, Pancha and Manihar falling along the HRT alignment.

Major civil works of Dam, intake structure, desilting chamber, pressure shafts, surge shaft, power house, all nallahs viz. Jiwa, Hurla, Pancha and Manihar have been completed. HRT excavation has been completed (except 41m rock plug) using Drill and Blast Method (DBM) and Tunnel Boring Machine (TBM). At present, HRT lining is in progress from Face-3 and Face-4. Total 99.87% HRT excavation and 92.56% overt lining have been completed till March, 2024.

Major Hydro Mechanical Works and Electro-Mechanical works of the project have been completed. All the generating units have been synchronized with grid at part load. At present generation of electricity (infirm power) is being made as per availability of water from Jiwa, Manihar, Pancha and Hurla Nallah. 1,123 MUs Energy have been generated till March, 2024 from Parbati-II in the form of infirm power.

SALIENT FEATURES

6.1.2 SUBANSIRI LOWER HE PROJECT - 2,000 MW (8 X 250 MW), ARUNACHAL PRADESH/ ASSAM:

Subansiri Lower HE Project is one the biggest hydroelectric project under construction in India so far and is a run of-the-river scheme on Subansiri River, a tributary of Brahmaputra. The project is located at Gerukamukh (Dhemaji District) / Kolaptukar (Kamle District) on the border of Assam and Arunachal Pradesh. The right bank of river Subansiri is situated in Arunachal Pradesh and left bank is in Assam. At the right bank of river Subansiri all the major project component viz. Intake, HRT, Power House & TRC etc. are situated and on the left bank Diversion Tunnels are located.

The CCEA sanction to the project was accorded in September 2003 and NHPC started construction works in January 2005. The construction work was halted from December 2011 to July 2019 due to various reasons and ban of Hon'ble NGT on construction activities of the Project. Hon'ble NGT dismissed all the petitions and cleared the project vide order dated July 31,2019. Now, the Project is in advance stage of construction. Three units of the Project are scheduled to be commissioned in March 2025 and all units by May 2026.

SALIENT FEATURES

UNIQUE FEATURES:

• The project involves 1200 TPH aggregate processing plant which is the largest such plant commissioned in India so far in a hydroelectric project. Also, it has a 300 m span conveyor bridge over river Subansiri which is longest span conveyor bridge in India.

• The concrete batching and mixing plant consists of 880 cum capacity plants, a twin shaft mixing plant, and a chilling and ice plant from KTI Germany. This is the single largest batching and mixing plant for Dam construction in India.

• Rotec's Tower belt System used first time in India for concreting of Dam of Subansiri Lower HE Project.

• Biggest Radial gates in terms of size and head combination (11.5 m x 14.0 m) and effective head of 64 m.

• Unique feature of 8 lanes of pressure shafts each having 8 m dia., 10 Diversion Tunnel gates and 24 draft tube gates.

• The Generator of Subansiri Project is the largest capacity hydro generator of the Country with its MVA rating of 306 MVA.

• The Rotor is the biggest equipment ever handled in a hydro power plant in India with its weight of 620 ton and diameter of approx. 11.45 m.

• The Stator of the Project is the largest in the Country in term of its weight of 395 ton and bore dia. of 11.5 m.

• The runner of the project is the heaviest Francis Turbine runner of the Country in its category with its weight of approx. 105 ton.

• The Main Inlet Valve with its weight of about 355 ton and dia. of 7 m is the biggest Main Inlet Valve (MIV) in the Country.

• The 420 KV GIS with total 22 bays shall be the biggest Gas Insulated Switchyard of the Country.

Dam Works: Dam works completed.

Power House Civil Package works: Total 13,19,639 cum concreting completed out of 14,67,867 cum in power house. HRT Overt Lining and Invert lining of (7,102 m) has been completed. Surge Tunnel Overt lining of 3,221 m completed out of 3,545 m (90.86%).

E&M Works: Unit-1 & 2: Boxing up completed and pre-commissioning activities are under progress. Unit-3: Assembly of Rotor completed and erection of Stator is in progress. Erection of spiral casing is completed. Unit-4, Unit-5, Unit-6 &7: Erection of Draft Tube completed. Unit-8: Erection of Draft Tube in progress.

HM Works: Testing and commissioning of all Intake Service Gates (08) have been completed. Fabrication of ferrule and erection work of Penstock Liner is in progress (98.24 % completed).

Erection of Spillway Bulkhead units is completed. Erection of Draft Tube Gates of Unit -1, 2, 3 & 4 have been completed & remaining is in progress.

In addition to implementation of major works of project, downstream protection works upto 30 km downstream of dam has been completed. Protection works beyond 30 Km downstream of Dam area in identified stretches as per directions of Assam Govt. is also being implemented. NHPC is also undertaking downstream developmental works for safety and uplifting the living status of local people in downstream of dam through various livelihood intervention engaging Institute of Rural Management, Anand, Gujarat. Further, various Corporate Social Responsibility and Sustainable Development programs have been implemented for welfare of the local populace of Assam / Arunachal Pradesh. The Project would provide a great relief from the flood devastation being faced by the region every year since time immemorial by controlling the flood through regulated discharge of water in river.

This project has brought prosperity for local people as well as the region boosting local economy and general improvement in living standard of masses, providing employment to the local youths, indirect employment generated in various forms like deployment of inspection vehicles, contractor, sub-contractors, petty contractors, R&M works and other works.

Total 17 states including all seven north-eastern states (Assam, Manipur, Meghalaya, Nagaland, Tripura, Arunachal Pradesh and Mizoram), five northern states / UTs (Haryana, Punjab, Rajasthan, Uttar Pradesh and Chandigarh) and five western states (Gujarat, Madhya Pradesh, Chhattisgarh, Maharashtra and Goa) will be benefitted from the power generated from Subansiri Lower HE Project.

6.1.3 DIBANG MULTIPURPOSE PROJECT - 2,880 MW (12 X 240 MW), ARUNACHAL PRADESH

Dibang Multipurpose Project, one of the largest project in the Country, is a hydropower cum flood moderation scheme. The Project envisages utilization of gross head of 230 m by construction of a 278 m high concrete dam across river Dibang. The estimated energy generation with an installed capacity of 2,880 MW works out to be 11,223 MUs for the 90% dependable year. In addition, the reservoir created behind the dam will provide flood moderation benefit in the downstream, for which reservoir will be kept 40.10 m below Full Reservoir Level (FRL) in monsoon period. The back water in the reservoir will travel up to a length of 41 km in Dibang River and its tributaries. The flood moderation will save erosion of agricultural land, damage to crops and further save crores of rupees being spent on flood control measures by the Government.

SALIENT FEATURES:

STATUS OF MAJOR WORKS:

• CCEA approval of the project amounting to Rs 31,876.39 crore at May 2021 Price Level has been accorded on February 27, 2023, with a completion period of 108 Months. Government of India has extended grant of Rs 6,159.40 crore (including IDC of Rs 57.21 crore) for Flood Moderation and Rs 556.15 crore for Enabling Infrastructure (i.e. roads and bridges). The total Govt. of India grant for the Dibang MPP is Rs 6,715.55 crore.

• As on date Possession Certificate of land received is 1,519.59 ha (99.91%) in Lower Dibang Valley and 1,701.23 ha (98%) in Dibang Valley District by the Project for Project Construction Components.

• Construction of Haulage Road has been completed. Formation cutting of various approach road on left and right bank has been completed and widening of the roads is in progress.

• Major works of the Project have been divided into 08 packages out of which 04 packages have been awarded. The other packages are in various stages of Tendering & Evaluation Process.

• As on March 31, 2024, the overall physical progress of the project is 10.55% and financial progress is 7.23%.

6.2.1 Teesta Stage-VI HE Project: 500 MW (4x125MW) Sikkim-Implementing through Lanco Teesta Hydro Power Limited (LTHPL):

LTHPL was acquired by NHPC through Corporate Insolvency Resolution Process (CIRP) in October, 2019 and is a wholly owned subsidiary of NHPC developing 500 MW Teesta VI HE Project in Sikkim. The project is a Run of River (RoR) Scheme in Sirwani Village of Sikkim to utilize the power potential of Teesta River Basin in a cascade manner. Major components of the project include 26.5m high barrage and underground power house having 4 units of 125 MW each. The project is having an estimated annual energy generation of 2,400 MUs in a 90% dependable year.

SALIENT FEATURES:

STATUS OF MAJOR WORKS:

The Construction works of Barrage, Excavation of HRT and Power House works are in full swing, despite various hindrances faced from time to time. As on March 31,2024, the overall progress of the project is 61.63%.

6.2.2 Rangit-IV HE Project: 120 MW (3x40MW) - Implementing through Jalpower Corporation Limited (JPCL):

JPCL was acquired by NHPC through Corporate Insolvency Resolution Process (CIRP) in March, 2021 and is a wholly owned subsidiary of NHPC developing Rangit-IV HE Project in Sikkim. The project is located on Rangit River near Rishi village, West Sikkim and is a run-of-the-river scheme envisaging construction of a 44m high concrete gravity dam to generate 120 MW (3x40MW) of power. The estimated design energy of the project is 507.88 MUs in a 90% dependable year.

SALIENT FEATURES:

STATUS OF MAJOR WORKS:

The Construction works of Dam, HRT and Power House are in full swing, despite various hindrances faced from time to

time. As on March 31,2024, the overall progress of the project is 72.65%.

Projects Limited (CVPPL):

The project is being developed on Marusudar River, a tributary of Chenab in Kishtwar District, UT of Jammu & Kashmir. The project has been planned as a storage scheme and shall utilize the permissible storage under Indus Water Treaty with storage of 0.1 Million Acre Feet (MAF). The scheme envisages construction of a 167m high Concrete-Face Rockfill Dam (CFRD) (highest in India) to store and carry water through two HRTs of length 9.6 Km each to an underground power house, thereby utilizing rated head of 397.30 m to generate 3,230.18 MUs energy annually through 4 units of 250 MW each.

SALIENT FEATURES:

Dam Package Works: River Diversion, construction of upstream & downstream Coffer dam, Dam stripping, excavation in cut off wall area, and heading excavation of Tunnel Spillway-1 completed.

Powerhouse Package Works: Excavation of Power House cavern, MIV cavern, Transformer cavern, Butterfly valve House cavern, Tail Race Tunnel, Pothead yard completed.

E&M Package Works: Detailed Engineering, manufacturing, inspection, supply & erection of E&M components are in progress.

Unit: 1- Erection of Spiral case & Stay ring completed, Stator build up work in progress.

Unit: 2 - Spiral casing erection completed. Upper pit liner lowered and alignment completed. Stator build up work is in progress.

Unit: 3- Spiral case erection is in progress.

Unit: 4- Stay ring alignment completed in service bay.

HM Package Works: Detailed Engineering, manufacturing, inspection, supply & erection of HM components are in progress. Erection of Pressure shaft liner of 2.9 m dia. PS1A, PS1B, PS2A & PS2B completed. Erection of steel liner for both Pressure shafts (Horizontal portion) having 6 m dia. is in progress.

HRT-TBM Package Works: Excavation of HRT-1 by TBM is in progress & 348.5 m (4%) achieved out of 7350 m. Assembly of TBM-2 and Lining Segment casting is in progress.

(CVPPL):

The project has been planned as run-of-river scheme on river Chenab and located near Village Kiru / Patharnakki in Kishtwar District of UT of Jammu & Kashmir. The major components of project includes 135 m high concrete gravity dam, 4 nos. (5.5 m dia.) pressure shafts/ penstocks and underground Power House having 4 units each of 156 MW. The project of 117.98 m Rated Head will generate 2,272 MUs energy annually.

SALIENT FEATURES:

Civil Package Work: Construction of coffer dams, River bed excavation and Dam foundation concreting completed after River diversion in December' 2021. The excavation of Power House Cavern, Transformer Cavern and Pressure Shaft completed.

Electro-Mechanical Works: Detailed Engineering, manufacturing, inspection, supply & erection of E&M components is in progress.

Hydro-Mechanical Works: Detailed Engineering, manufacturing, inspection, supply & erection of HM components is in progress.

(CVPPL):

The project has been planned as run-of-river scheme on river Chenab near Padyarna village in Kishtwar District of Jammu. The major components of project includes 109 m high concrete gravity dam, 4 nos., 5.65 m diameter pressure shafts and underground power house having 4 units each of 135 MW. The project of 102.5 m Rated Head will generate 1,975.54 MUs energy annually.

SALIENT FEATURES:

Civil Package Works: River Diversion achieved on January 15, 2024. Cable cum Ventilation Tunnel excavation, Pilot excavation of Powerhouse and Transformer Cavern completed.

E&M and HM Works: The tendering for E&M and HM packages are in progress.

6.3.4 Ratle HE Project (850 MW) (4 x 205 MW + 1 x 30 MW) - Implementing through Ratle Hydroelectric Power Corporation Limited (RHPCL):

The project has been planned as run-of-river scheme on river Chenab located at Kishtwar District of UT of Jammu & Kashmir near Drabshalla. The major components of the project include 133 m high concrete gravity dam and an underground power house having 4 units each of 205 MW and 30 MW Auxiliary Unit to utilize continuous release of environmental flows. The project of 97.39 m Rated Head will generate 3,137 MUs energy annually.

SALIENT FEATURES:

STATUS OF MAJOR WORKS:

EPC contract for the project was awarded in January' 2022. River Diversion achieved on January 27, 2024. Excavation of Power House & Transformer Cavern access tunnels & adits completed.

7. HYDROPOWER PROJECTS UNDER CLEARANCE/APPROVAL

The status of hydro projects including of subsidiaries/joint ventures under various stages of clearance/approval are given in below table:

7.1.1 TEESTA-IV H.E. PROJECT (520 MW), SIKKIM

All the clearances for the project have been accorded except Forest Clearance (FC-II) which is pending on account of compliance under the Forest Rights Act, 2006. The same is being pursued by NHPC.

7.1.2 SAWALKOT H.E. PROJECT (1,856 MW), UT OF JAMMU & KASHMIR

MOU has been signed between NHPC and JKSPDCL on January 03, 2021. Agreement for handing over / taking over of Sawalkot HE Project signed between NHPC and JKSPDCL on December 11, 2021 & NHPC has taken over the Project. MoP accorded approval on July 12, 2022 for incurring expenditure on pre-investment activities for Sawalkot HE Project for an amount of Rs 973 crore at Nov. 2021 PL.

CEA vide letter dated December 27, 2022 vetted the cost estimates of hard cost, IDC/FC and tariff of Sawalkot HE project at completion level for an amount of Rs 22,704.80 crores including Rs 4,593.41 crores for IDC and Rs 1,124.20 crores for enabling infrastructure. FC-I&II, EC, PIB & CCEA are pending.

7.1.3 DUGAR HE PROJECT (500 MW), HIMACHAL PRADESH

MOU was signed on September 25, 2019 between NHPC and Govt. of Himachal Pradesh for implementation of Dugar HE Project. CEA vide letter dated April 26, 2022 vetted the cost estimates of the project for an amount of Rs 4,250.20 crore at completion i.e. April, 2021 PL. FC-I & II, EC, PIB & CCEA are pending.

Govt. of Himachal Pradesh vide corrigendum dated December 12, 2023 has altered the terms & conditions agreed in Implementation Agreement for implementation of Dugar HEP by NHPC making the project commercially unviable with revised terms & conditions.

NHPC has filed a writ petition in the Hon'ble High Court of Shimla on February 05, 2024 to quash above Cabinet decisions/notifications/corrigendum. The case was heard on February 26, 2024, March 18, 2024, May 06, 2024 and July 02, 2024. The next date of hearing is scheduled on July 17, 2024.

The matter is sub-judice.

7.1.4 URI-I, STAGE-II (240 MW), UT OF JAMMU & KASHMIR

MOU has been signed between NHPC and JKSPDCL on January 03, 2021. DPR of Uri-I, Stage-II was concurred by CEA vide O.M. dated March 07, 2023 amounting to Rs 2,526.79 crore at completion level including Rs 249.45 crore for IDC and Rs 26.20 crore for enabling infrastructure. FC-I & II, EC, PIB & CCEA are pending.

7.2.1 KIRTHAI-II HE PROJECT (930 MW)

MOU has been signed between NHPC and JKSPDCL on January 03, 2021 for execution of Kirthai-II (930 MW) and other Hydroelectric Projects in UT of Jammu and Kashmir. Extension of validity of appraisal up to June 13, 2024 has been accorded by CEA on August 29, 2022. Balance investigation works are in progress in compliance to DPR concurrence. IWT, FC-I&II, EC, PIB & CCEA are pending.

7.2.2 LOKTAK DOWNSTREAM HE PROJECT

The details are provided elsewhere in the Directors' Report.

8. PROJECTS UNDER SURVEY AND INVESTIGATION (S&I)

Brief status of projects is as under:

i. Dulhasti Stage-II - MOU has been signed between NHPC and JKSPDCL on January 03, 2021. Defence Clearance has been accorded by MoD on January 03, 2022. DPR is under progress.

ii. Garba Tawaghat - The project is under "Mahakali Treaty" and consent of Govt. of Nepal is required, for which matter is under pursuance of MOP / MEA.

iii. Kamala HEP - MOA signed between Govt. of Arunachal Pradesh and NHPC on August 12, 2023.

iv. Subansiri Upper - MOA signed between Govt. of Arunachal Pradesh and NHPC on August 12, 2023.

v. 600 MW Kengadi PSP, Maharashtra - MOU signed with Department of Energy, Govt. of Maharashtra on June 06, 2023. PFR submitted to Govt. of Maharashtra on November 22, 2023.

vi. 1150 MW Kalu PSP, Maharashtra - MOU signed with Department of Energy, Govt. of Maharashtra on June 06, 2023. PFR is under progress.

vii. 1800 MW Savitri PSP, Maharashtra - MOU signed with Department of Energy, Govt. of Maharashtra on June 06, 2023. PFR submitted to Govt. of Maharashtra and CEA on September 11, 2023 & September 20, 2023 respectively.

viii. Indirasagar-Omkareshwar PSP (On Stream) - DPR

is under progress

ix. 950 MW Kamalapadu PSP, Andhra Pradesh -

MOU signed with APGENCO, Andhra Pradesh for development of Projects in JV mode (50:50) on August 23, 2023. MOP has conveyed the concurrence of DIPAM and NITI Aayog and directed NHPC for further necessary action as per extant rules of Govt. of India in this regard. DPR is under progress.

x. 1000 MW Yaganti PSP, Andhra Pradesh - MOU signed with APGENCO, Andhra Pradesh for development of Projects in JV mode (50:50) on August 23, 2023. MOP has conveyed the concurrence

of DIPAM and NITI Aayog and directed NHPC for further necessary action as per extant rules of Govt. of India in this regard. DPR is under progress.

9. NEW HYDRO PROJECTS INDICATED BY MINISTRY OF POWER FOR ALLOTMENT BY STATE GOVERNMENT TO NHPC

Ministry of Power (MoP) in December, 2021 has identified and indicated the four stalled Hydro Projects viz. Subansiri Upper (1605 MW) - Standalone by NHPC; Subansiri Middle (Kamala) (1720 MW)

- Standalone by NHPC; Siang Lower (2700 MW) - NHPC, JV with NEEPCO; Upper Siang (10000 MW)

- NHPC, JV with NEEPCO in the State of Arunachal Pradesh, for possible allocation to NHPC.

9.1 KAMALA HE PROJECT AND SUBANSIRI UPPER HEP (SUP):

Subsequent to indication of projects from MoP, NOC was obtained from MoP and accordingly Board of Directors of NHPC accorded approval for the acquisition of these projects. Govt. of Arunachal Pradesh approved allotment of Kamala HE Project (1720 MW) and Subansiri Upper HE Project (1605 MW) to NHPC. Memorandum of Agreement has been signed between Govt. of Arunachal Pradesh and NHPC on August 12, 2023 in the august presence of Hon'ble Minister of Power & New and Renewable Energy and Chief Minister of Arunachal Pradesh for further development by NHPC.

After signing of MoA, activities for DPR preparation for both projects are under progress. The Capacity & Design Energy works out as under:

Kamala HE Project : 1720 MW / 6869.92 MU

Subansiri Upper HE Project : 1605 MW / 6131.55 MU

9.2 SIANG LOWER PROJECT - 2700 MW:

The project is located in East Siang District of Arunachal Pradesh. As per the updated DPR, the estimated annual energy generation from the

project is 13,236.47 MUs in a 90% dependable year. The scheme features 111 m high concrete gravity dam and a surface power house of 2,700 MW capacity. Professional Consultant M/s Ernst & Young LLP (EY) engaged by NHPC has submitted the preliminary due diligence Report of Siang Lower HE Project.

As parameters of Siang Upper Multipurpose Project are under finalization and may impact project parameters of Siang Lower HE Project, as such techno-commercial aspects of Siang Lower are uncertain at this stage and shall only be firmed up after fixing the parameters of Upper Siang Multipurpose Storage Project.

9.3 UPPER SIANG MULTIPURPOSE STORAGE PROJECT - 10,000 MW:

Ministry of Jal Shakti in April, 2022 has entrusted the task for preparation of Pre-Feasibility Report (PFR) of Upper Siang Multipurpose Storage Project (USMSP) to NHPC. The PFR of the project considering following 3 alternatives at Uggeng (11,600 MW), Dite Dime (11,200 MW) & Parong (11,200 MW) Sites have been prepared by NHPC and submitted to Ministry of Jal Shakti, Govt. of India in December, 2022. Technical Committee constituted by Govt. of India has suggested that further geological investigations are required to concur the project site amongst

the alternative project locations submitted in PFR for DPR preparation. It recommended that drilling works need to be undertaken at all the three sites as suggested by Geological Survey of India (GSI). NHPC proposal of Drilling Cost Estimate for 3 alternative sites of USMSP, has been approved by Ministry of Jal Shakti vide Office Order dated May 09, 2023 for an amount of ' 401.08 Lakh. Letter of Award for Drilling work at Parong and Dite Dime site was issued on May 05, 2023 and for Uggeng site was issued on May 04, 2023. However, the work could not be started due to law and order issue in the project site area.

10. RENEWABLE ENERGY PROJECTS

Your Company intends to be part of the renewable energy growth story of India by contributing to the Govt. of India's ambitious target of development of 50% power from non-fossil fuel sources by 2030. World over, various new and advanced technologies are being explored in the transition to a net-zero carbon future and your Company is aggressively looking forward in this direction. NHPC, in line with the latest technological developments and advancements, is now exploring road maps and strategies to scale up its renewable energy projects. NHPC has also incorporated a wholly owned subsidiary i.e. NHPC Renewable Energy Limited (NHPC REL) in February, 2022 as a separate vertical for developing renewable energy projects.

10.1.1 Ongoing Solar Projects are given in table below:

(i) Projects awarded under CPSU Scheme, Phase-II, Tranche-III of MNRE/ IREDA:

Your Company is implementing total 1000 MW Solar Power Projects underTranche-III of CPSU Scheme (Phase-II) which includes 300 MW Project at Bikaner, Rajasthan, 600 MW Project at Kutch, Gujarat and 100 MW Project at N.P. Kunta, Andhra Pradesh. The projects are under implementation at various stages. 300 MW Project at Bikaner & 100 MW Project at N.P. Kunta, Andhra Pradesh are likely to be commissioned during financial year 2024-25. 600 MW Project at Kutch, Gujarat is likely to be commissioned during financial year 2025-26 aligned with the commissioning of respective ISTS sub-station for power evacuation.

(ii) 88 MW Floating Solar at Omkareshwar reservoir, Madhya Pradesh:

This project is being developed by NHDC Limited (a Joint Venture of NHPC and Govt. of Madhya Pradesh).

48.4 MW capacity of the project was commissioned in June 2024, balance capacity is likely to be commissioned during 2nd quarter of financial year 2024-25.

(iii) 700 kW Solar Power Project at Central University, Ajmer:

700 kW Solar Power Project at Central University, Ajmer is awarded by NHPC REL. The project is near completion and is likely to commissioned during 2nd quarter of financial year 2024-25.

(iv) Projects under development through selected developers - NHPC as Renewable Energy Implementing Agency (Intermediary Procurer) - 2000 MW (Tranche-I):

Out of total 2000 MW awarded Solar Projects, 320 MW capacity commissioned on December 10, 2022 and 380 MW capacity commissioned on February 07, 2024. Commissioning of balance 1300 MW Projects got delayed due to Great Indian Bustard (GIB) Issue, delay in commissioning of respective ISTS sub-stations and land arrangements. Efforts are being made to expedite resolution of issues through various stakeholders and to commission these projects by financial year 2024-25.

10.1.2 Renewable Energy projects under clearance/ new projects The solar power projects under clearance are:

Your Company, in line with the latest technological developments and advancements, is now exploring road maps and strategies to scale up projects in the field of Renewable Energy.

Your Company is actively exploring development of various sources of renewable energy on pan India basis and has identified projects in the potential rich states such as Rajasthan, Gujarat, Odisha, Uttar Pradesh, Kerala, Maharashtra etc. Efforts are underway to take up implementation of these projects under different schemes of MNRE so as to avail benefits/ incentives available to CPSUs under different schemes.

Your Company is also participating in Tariff Based Competitive Biddings (TBCB) conducted by various implementing agencies to win projects across India and has won total 400 MW Solar Power Projects viz. 200 MW Solar Project in 600 MW GSECL Solar Park at Khavda, Gujarat (Stage-1) & 200 MW Solar Project in 600 MW GSECL Solar Park at Khavda, Gujarat (Stage-3).

(i) 200 MW Grid Connected Solar Photovoltaic Power Projects located in 600 MW GSECL Solar Park at Khavda, Gujarat (Stage-1):

NHPC bagged 200 MW Grid Connected Solar Photovoltaic Power Projects located in 600 MW GSECL Solar Park at Khavda, Gujarat through tariff based competitive bidding from GUVNL. PPA for the project signed with GUVNL, tendering for EPC Contract concluded and award of EPC Contract for the said project is in process.

(ii) 200 MW Grid Connected Solar Photovoltaic Power Projects located in GSECL's RE Park (Stage-3) at Khavda, Gujarat:

NHPC bagged 200 MW Grid Connected Solar Photovoltaic Power Project through Tariff based competitive bidding from GUVNL. Tendering for EPC Contract is in process.

10.1.2.2 Projects envisaged under Solar Park Scheme:

Your Company is exploring possibilities for development of projects under Solar Park Scheme of MNRE in various solar power potential rich States across the Country. The status of development of such projects are as under:

(i) 50 MW Floating Solar Project in Kerala Ultra Mega Renewable Energy Power Parks (UMREPPs-Mode 8 of Solar Park Scheme):

EPC tender finalized and discussions for signing of PPA with Kerala State Electricity Board is in process.

(ii) 40 MW Solar Power Project, Ganjam, Odisha (Mode 5 of Solar Park Scheme):

EPC tender finalized. Modifications in earlier signed PPA with GRIDCO is in process before award of EPC contract.

(iii) 500 MW Floating Solar Project in Odisha:

Your Company had signed the Promoter's Agreement, with Green Energy Development Corporation of Odisha Limited (GEDCOL) for formation of JV Company for development of 500 MW Floating Solar Power Projects in various water reservoirs & other solar projects in Odisha. 300 MW Floating Solar at Rengali Reservoir, Odisha has been identified for implementation in 1st Phase for which EPC tender has been concluded. PPA for the project is under discussion with GRIDCO.

(iv) 10,000 MW Renewable Energy Parks/Projects in Rajasthan:

MOU for development of 10,000 MW Renewable Energy Projects in Rajasthan has been signed between NHPC Renewable Energy Limited (A wholly owned subsidiary of NHPC Limited) and

Govt. of Rajasthan. Under the purview of said MOU, development of 10,000 MW renewable energy parks/ projects under UMREPP are to be taken up by NHPC REL in the state of Rajasthan with facilitation from Govt. of Rajasthan regarding land, connectivity and other necessary clearances. Identification of land for 1st phase 1000 MW is under process.

10.1.2.3 NHPC as Renewable Energy Implementing Agency (REIA mode)

Your Company was designated as a Renewable Energy Implementing Agency (REIA) by MNRE on June 11, 2020. The primary role is to aggregate the power purchased from different RE Power plants of selected developers through long term Power Purchase Agreement (PPA) and sell it to the distribution licensee(s)/consuming entities/open access consumers through Long Term Power Sale Agreement (PSA). PPA and PSA are signed on back to back basis. Trading margin of Rs 0.07/kWh shall be payable by the end procurer to your Company being the Intermediary Procurer.

10.2 GREEN HYDROGEN TECHNOLOGY

The National Green Hydrogen Mission launched by Ministry of New and Renewable Energy in January, 2023 aims to make India a 'global hub' for using, producing and exporting green hydrogen. Green Hydrogen Technology is at nascent stage and emerging as the future source of energy in zero carbon emission scenario. NHPC is willing to leverage the emerging opportunities of green hydrogen in power sector to fulfil the grid balancing services and also to explore the end demand of hydrogen in other sectors. In order to avail the opportunities and gain business in Green Hydrogen sector, your Company has planned to enter and explore the production of Green Hydrogen with the use of various Renewable Energy Sources which are planned to be developed in potential rich States across the Country.

To start with, your Company has initiated actions for development of Green Hydrogen Technology on pilot basis as below:

a) Pilot Green Hydrogen Based Fuel-Cell Micro grid (25 kWe) at NBPS Guest House, Leh:

The construction work is in progress and project is likely to be commissioned during the financial year 2024-25.

b) Pilot Green Hydrogen Mobility Station at Kargil, UT of Ladakh:

EPC contract has been awarded and work likely to be completed during the financial year 2024-25.

c) Pilot Green Hydrogen Mobility Station at Chamba, Himachal Pradesh:

Project is under tendering process.

d) Procurement of 3 Nos. Hydrogen Fuel Cell Electric Buses (2 Nos. for Kargil and 1 No. for Chamba):

Procurement is in tendering process.

Based on the experiences obtained from above Pilot Projects, NHPC proposes to venture suitably in the Green Hydrogen business on larger scale in emerging hydrogen economy in future.

10.3 PUMPED STORAGE PROJECTS (PSP)

Your Company is also diversifying in the field of PSP currently in states of Maharashtra, Gujarat, Andhra Pradesh and Tripura. Memorandum of Understanding was signed between NHPC and Department of Energy, Govt. of Maharashtra on June 06, 2023 for establishment of Kalu (1,150 MW), Savitri (After PFR-1,800 MW), Kengadi (After PFR-600 MW), Jalond (2,400 MW). Further, an Investment MOU was signed between NHPC & Govt. of Gujarat for development of 750 MW PSP in Kuppa Village, Gujarat on January 03, 2024 and discussions with Govt. of Gujarat are underway for allotment of the project to NHPC on BOOM basis. PFR/ DPR for the projects are under preparation. Under the MOU signed with Govt. ofAndhra Pradesh for development of two PSPs in Joint venture with Andhra Pradesh Power Generation Corporation (APGENCO) namely Yaganti (1000 MW) and Kamalapadu (950 MW), the DPR/ FR works are in progress. Govt. of Tripura has also allotted 4 project sites to develop Pumped Storage Projects at Longtharai, Sunitipur, Shantipur and Sakhan in the State of Tripura. MOU for the development of these PSPs shall be finalized after identification of techno-commercial viability of the proposed PSP sites.

11. DIVERSIFICATION

Your Company has diversified in the field of renewable energy and green hydrogen energy development with an objective to strengthen its core vision of sustainable development of clean power. Further, in line with the paradigm shift towards clean energy transition and trajectory of energy markets in the Country, NHPC as a business growth plan is diversifying its business portfolio towards development of Pumped Storage Projects in the Country.

NHPC is perusing for development of 11,375 MW PSPs capacities across different states viz. Maharashtra, Madhya Pradesh, Odisha, Andhra Pradesh, Gujarat, Tripura, Punjab, etc.

The efforts made by NHPC are as under:

• NHPC has signed MOU for development of PSPs along with Renewable Energy Sources (like Solar/ Wind/ Hybrid etc.) in the state of Maharashtra with

Department of Energy, Govt. of Maharashtra for development of 4 PSPs.

• NHPC entered into a MOU with Govt. of Odisha through GRIDCO Limited to establish PSPs and Renewable Energy Projects in the State of Odisha. The MOU envisages setting up of self identified PSPs of at least 2000 MW and Renewable Energy Projects (Ground Mounted Solar Projects/ Floating Solar Projects) of at least 1000 MW in the state of Odisha which will help in de-carbonizing and energy transition of the State.

• NHPC has prepared the Pre-Feasibility Report in respect of 03 Pumped Storage Projects viz. Indirasagar-Omkareshwar, Tekwa-2 & Satpura-2 in the State of Madhya Pradesh.

• NHPC has signed MOU with APGENCO on August 23, 2023 for implementation of PSPs and other Renewable Energy (Solar/ Floating Solar/ Wind) Projects in the state of Andhra Pradesh in phases on joint venture Mode with 50:50 shareholding ratios.

• NHPC has signed MOU with Punjab State Power Corporation Limited (PSPCL) on March 14, 2024 for development of Hydro Projects, PSPs and other Renewable Energy Sources (Solar/ Floating Solar) in the State of Punjab.

12. POWER TRADING BUSINESS AND POWER TRADING LICENSE

As part of Business expansion and Diversification program, your Company has ventured into Power Trading Business. Endeavour of Power Trading Business of the Company is to provide efficient and smart business solution to its clients, viz. Buyers/ DISCOMs, Generators/ Sellers, Utilities, etc. In the year 2018-19, NHPC obtained Category-I license from CERC for interstate trading of electricity in whole of India. NHPC is registered at DEEP (Discovery of Efficient Electricity Price) e-bidding portal and has obtained trader membership in Indian Energy Exchange (IEX) & Power Exchange of India Limited (PXIL).

2000 MW Solar Projects Intermediary Scheme:

NHPC as an "Intermediary Procurer" had invited bids in 2019-20 for selection of Solar Power Developer (SPDs) for procurement of 2000 MW Solar Power from Solar projects. PPA has been signed with 05 SPDs viz. Avada Sunrays Energy Pvt. Ltd. (320 MW), O2 Power limited (380 MW), Adani Solar Energy Barmer One Private Limited (600 MW), EDEN Renewable Passy Pvt. Ltd. (300 MW) and ABC Renewable Energy Pvt. Ltd. (400 MW). Back to back Power Sale Agreements

(PSAs) were signed with Madhya Pradesh Power Management Corporation Limited for 1000 MW, Chhattisgarh State Power Development Corporation Limited for 400 MW, Punjab State Power Corporation Limited for 300 MW and Jammu & Kashmir Power Corporation Limited for 300 MW for sale of solar power. Out of 2000 MW, total 700 MW project has been commissioned and power is being supplied to Punjab, J&K and Madhya Pradesh. Balance capacity is likely to be commissioned in financial year 2024-25 & 2025-26. After full commissioning of 2000 MW projects, NHPC shall earn trading margin of Rs 35.00 crore annually for 25 years in this scheme. During financial year 2023-24, NHPC has traded 960.59 MUs with turnover of Rs 252.48 crore.

Further, 10 GW capacity has been allotted to NHPC as Renewable Energy Implementing Agency (REIA) for inviting bids for development of RE projects. MNRE has allocated 10 GW to NHPC as "REIA" for inviting bids for selection of SPDs for development of Solar, Wind, Hybrid and FDRE projects during 2023-24. NHPC as REIA invited bid for development of 3000 MW Solar projects. LOAs have been issued to 08 developers. NHPC has signed PSA with Uttar Pradesh and Maharashtra. Back to Back PPAs are being signed with successful bidders. Projects are likely to be commissioned in financial year 2026-27. After commissioning, NHPC shall earn Trading Margin of Rs 52.35 crore annually.

13. DETAILS OF SUBSIDIARIES AND ASSOCIATE COMPANIES

No subsidiary/ joint venture/ associate Company was incorporated or ceased during financial year 2023-24.

A statement containing the salient features of the financial statements of subsidiaries and associate/ joint venture companies in AOC-I as per Section 129(3) of the Companies Act, 2013 and details of individual contribution of these companies in the overall performance of the Company during the financial year 2023-24 is given under Consolidated Financial Statements.

The audited financial statements of subsidiary companies are not being attached to the audited annual financial statements of the Company. In terms of Section 136 of the Companies Act, 2013, any shareholder who desires to have information on aforesaid financial statements may visit website of the Company i.e. www.nhpcindia.com.

Your Company has following subsidiaries and associate/joint venture companies as on March 31, 2024:

i) NHDC Limited (NHDC):

NHDC was incorporated as a joint venture of NHPC and Government of Madhya Pradesh in August, 2000. The shareholding pattern of NHDC as on March 31, 2024 was NHPC (51.08%), GoMP (26%) and Narmada Basin Projects Company Limited (Wholly owned by GoMP) (22.92%) respectively. NHDC has two operating power stations viz. Indira Sagar (1,000 MW) and Omkareshwar (520 MW) in Madhya Pradesh.

NHDC has also commissioned 8 MW ground mounted solar project at Sanchi, MP on March 29, 2024. NHDC is also engaged in the development of 88 MW Floating Solar Project at Omkareshwar reservoir.

During the financial year 2023-24, NHDC generated 4,473.18 MUs from its power stations i.e. 2,999.70 MU from Indira Sagar Power Station, 1,470.79 MU from Omkareshwar Power Station and 2.69 MU from Sanchi Solar Power Station.

ii) Chenab Valley Power Projects Limited (CVPPL):

CVPPL is a joint venture of NHPC and Jammu & Kashmir State Power Development Corporation Limited with shareholding of 54.02% and 45.98% respectively as on March 31, 2024. CVPPL was incorporated in June, 2011. CVPPL is developing four hydro-electric projects in UT of Jammu & Kashmir i.e. Pakal Dul HE Project (1,000 MW), Kiru HE Project (624 MW), Kwar HE Project (540 MW) and Kirthai-II HE Project (930 MW). The status of the Projects are provided elsewhere in the Report.

iii) Ratle Hydroelectric Power Corporation Limited (RHPCL):

RHPCL was incorporated in June, 2021 as joint venture of NHPC and Jammu & Kashmir State Power Development Corporation Limited (JKSPDCL). As on March 31, 2024, shareholding of NHPC and JKSPDCL was 54.88% and 45.12% respectively.

RHPCL is developing Ratle Hydroelectric Project (850 MW) in UT of Jammu & Kashmir. The status of the Project has been provided elsewhere in the Report.

iv) Bundelkhand Saur Urja Limited (BSUL):

BSUL is a joint venture between NHPC and Uttar Pradesh New & Renewable Energy Development Agency (UPNEDA). As on March 31, 2024, shareholding of NHPC and UPNEDA was 87.64% and 12.36% respectively. BSUL was incorporated in February, 2015 for development of Solar Power Project in Tehsil Kalpi, District Jalaun, Uttar Pradesh and other conventional & non-conventional power projects entrusted by the Govt. of Uttar Pradesh. BSUL has achieved the commisioning of Kalpi Solar Power Project (65 MW) on March, 2024.

BSUL is in the process of development of 1400MW (approx.) Solar Power Projects in Uttar Pradesh through various modes of implementation i.e. in EPC mode and development of Solar Park followed by plant installation in developer mode. Hon'ble Prime Minister laid foundation stone of Jalaun Ultra Mega Renewable Energy Power Park 1200 MW.

Preparation of Public Investment Board (PIB) proposals for investment in the projects viz. Mirzapur SPP (100 MW) , Madhogarh SPP (45 MW) and Jalaun Solar Park (1200 MW) are in progress.

v) Lanco Teesta Hydro Power Limited (LTHPL):

LTHPL was acquired by NHPC through Corporate Insolvency Resolution Process (CIRP) in October, 2019 and equity of Rs 897.50 crore was infused as consideration amount pursuant to approved resolution plan. LTHPL is a wholly owned subsidiary of NHPC. LTHPL is executing 500 MW Teesta VI HE Project in Sikkim and construction works are at full swing. The status of Teesta VI HE Project has been provided elsewhere in the Report. Approval of Ministry of Power was obtained for merger of LTHPL with NHPC Limited. The merger of LTHPL with NHPC is underway.

vi) Jalpower Corporation Limited (JPCL):

JPCL was acquired by NHPC through CIRP in March, 2021 and equity of Rs 165 crore was infused as consideration amount pursuant to approved resolution plan. JPCL is a wholly owned subsidiary of NHPC. JPCL is developing Rangit-IV HE Project in Sikkim and construction works are at full swing. The status of Rangit-IV HE Project has been provided elsewhere in the Report.

Ministry of Power (MoP), Govt. of I ndia has conveyed its approval for merger/ amalgamation of JPCL with NHPC Limited. Accordingly, NHPC (Transferee Company) and JPCL (Transferor Company) filed Merger application with MCA. The merger of JPCL with NHPC is under process.

vii) NHPC Renewable Energy Limited (NHPC REL):

NHPC REL was incorporated in February, 2022 as wholly owned subsidiary of NHPC for taking up

Solar, Wind, Small Hydro and Green Hydrogen ventures. NHPC REL is exploring various renewable energy projects for expansion of its activities. The status of its Projects has been provided elsewhere in the Report.

viii) Loktak Downstream Hydroelectric Corporation Limited (LDHCL):

LDHCL is subsidiary of NHPC with 74.82% shareholding of NHPC and 25.18% shareholding of Government of Manipur as on March 31, 2024. LDHCL was incorporated in October, 2009 to execute Loktak Downstream Hydro-electric Project (66 MW) in Noney District of Manipur. The PIB approval is pending for want of consent from Govt. of Manipur. The process of initiation of closure of Loktak Downstream Hydroelectric Corporation Limited (LDHCL) is under progress subject to the approval of DIPAM, Ministry of Power & Govt. of Manipur.

i) National High Power Test Laboratory Private Limited (NHPTL):

NHPTL, incorporated in May, 2009, is a joint venture between five (5) entities viz. NHPC Limited, NTPC Limited, Power Grid Corporation of India Limited, Damodar Valley Corporation and Central Power Research Institute, previously each having shareholding of 20%.

NHPTL was established to set up an online high power test laboratory for short-circuit test facility in the Country. The laboratory for High Voltage Transformer (HVTR) at 400 kV level and 765 kV level is already operational at Bina, Madhya Pradesh. In view of the financial crisis of NHPTL and for long term sustenance of this important testing facility for high voltage transformers in the Country, revival plan has been agreed in the meeting held on September 15, 2022 with Ministry of Power, GoI wherein it was agreed that Powergrid Corporation of India Limited (PGCIL) shall infuse funds subject to approval of respective managements of JV parties. As a result of revival plan of NHPTL, the revised equity holding of PGCIL in NHPTL shall be 50%, remaining fifty (50%) percent of equity shall be held equally by the other four Parties (i.e., 12.5% each of NHPC, NTPC, DVC & CPRI). NHPC signed a Supplementary JV Agreement with JV Partners of NHPTL for sale of partial stake in NHPTL. The Board of Directors of NHPTL has approved the transfer of 1,31,63,750 shares from NHPC to PGCIL during the financial year 2024-25, in line with the Supplementary JV Agreement signed.

14. GLOBAL INITIATIVES

NHPC has ventured into Nepal seeking to expand its footprint in the hydropower business in line with GoI direction that CPSEs act in a way to increase their geographic footprint in the neighbouring countries of India and that CPSEs should transform to globally respected multinational companies in the long run and be able to generate substantial revenues from their foreign operations.

Accordingly, during the year, NHPC has taken major strides in establishing its business footprint in Nepal. NHPC is currently engaged in three hydro-electric projects namely West Seti (750 MW), Seti River (SR6) (450 MW) & Phukot Karnali (480 MW) HE Projects in Nepal.

In this regard 02 MOUs (Memorandum of Understanding) have been signed by NHPC, one with IBN (Investment Board Nepal) on August 18, 2022 to develop West Seti (750 MW) & Seti River (SR6) (450 MW) HE Projects and another with VUCL (Vidhyut Utpadan Company Limited) on May 31, 2023 to develop Phukot Karnali HE Project (480 MW).

As per terms of the MOU, NHPC will review the prior studies/ details undertaken i.r.o. the schemes and prepare the DPR for the schemes to confirm the techno economic feasibility. Thereafter, Project Development Agreement is proposed to be signed for implementation of the schemes.

In this regard, subsequent to grant of Survey License, Inception Reports in respect of all the above three Projects stands prepared and submitted by NHPC to the concerned Authority of Nepal. Currently, investigation works & preparation of DPR (Detailed Project Report) is in progress and likely to be submitted within the timelines of MOU.

These projects are expected to significantly contribute to Nepal's energy sector and help to meet its growing electricity demand. As far as NHPC's future plans for expanding its international footprint is concerned, the Company aims to leverage its expertise in hydropower to expand its presence in the global energy market and shall continue exploring opportunities in Nepal and other countries to further its growth and contribute to the renewable energy sector.

Your Company has commissioned 14.1 MW Devighat Hydropower project in Nepal and 60 MW Kurichu Hydropower project in Bhutan on deposit basis. Company has already marked its footprints in countries like Nepal, Bhutan, Myanmar, Tajikistan, Nigeria and Ethiopia and is looking further to expand its business in various other countries.

15. HEALTH, SAFETY & ENVIRONMENT (HSE)

NHPC is committed to conduct its business with a strong environment conscience. NHPC is committed to protect the environment during the construction and operation phases of its hydroelectric projects. NHPC conducts its business with a strong environmental conscience and socially responsible manner, ensuring sustainable development, safe workplaces, and enrichment of the quality of life of its employees, customers, and the community. It is well aware of its obligation to conserve and protect the environment. During the investigation stage, probable impacts on the environment while executing the projects, are assessed and identified. Environmental Management Plans (EMPs) are proposed and implemented to compensate for the adverse impacts of the project by taking necessary measures. Compliance with safety systems & procedures and environmental laws is regularly monitored.

In NHPC Limited, Safety Manual & Safety Policy has been prepared which provides the detail of Scope, Applicability of Laws, Standard Operating Procedures (SOPs), Operations Control Procedures, Roles & Responsibilities etc. for effective Safety Management. All Power Stations/Projects have prepared their Crisis & Disaster Management Plan. Safety Policy & Safety Manual has been implemented at all Power Stations/ Projects of NHPC Limited with a target of Zero hazard potential at workplace. In addition of the above, Occupational Safety, Health and Working Conditions Code, 2020/ Factories Act, 1948, Building and Other Construction Workers Act 1996, Disaster Management Act, 2005, the Environment Protection Act, 1986, Hazardous Waste Rules, 2016, National Building Code and other applicable, Acts, Rules & Standards are being followed at all Power Stations/ Projects.

Annual Internal & External Safety Audits are being conducted at Power Stations/ Projects to identify, assess and control of hazards. Various type of Mock drills/ trainings/ awareness camps are being organised for awareness & also preparing the employees/ stakeholders for any probable threat, disaster and risk.

Early warning system is installed/ under progress at all Power Stations/ Projects to receive the early warnings from upstream of the river. Hooters are installed in Dam & Power House to sensitize public in the vicinity areas/ downstream before release of water from Dam.

Most of the power stations of your Company are ISO 9001:2015 (Quality Management System), ISO

14001:2015 (Environmental Management System) and ISO 45001:2018 (Occupational Health and Safety Management System) certified, thus ensuring sustainable development and enrichment of quality of life of its stakeholders. Compliance to safety systems & procedures and environmental laws is regularly monitored.

16. CONSULTANCY SERVICES

Your Company takes up consultancy assignments within India and in its neighboring countries. The main aim is to share its best practices with fellow organizations and other stakeholders in the hydropower sector in construction of hydro-electric projects in the geologically fragile Himalayan Region. The best O&M practices, which have allowed NHPC to achieve best plant availability, increased efficiency and increased plant/ equipment life across its various power stations are also shared through consultancy.

During the financial year 2023-24, a payment of Rs 74.04 crore has been received by NHPC Limited for consultancy services rendered to its different clients.

17. FINANCING OF NEW PROJECTS

The financing of any new hydro power project is carried out in line with CERC regulations and debt equity ratio is generally kept at 70:30. For solar/ wind projects, debt equity ratio varies from project to project, however largely it is kept at 80:20. For equity component, the Company has sufficient internal resources to meet out future CAPEX targets. Further, the Company possesses highest domestic credit rating and international credit rating at par with sovereign rating. Due to low geared capital structure and strong credit credentials, the Company is better positioned to raise debt for its CAPEX requirement. During the financial year 2023-24, Company has raised Rs 2,000 crore through term loan from Banks and Rs 2,046.94 crore through monetization of free cash (Return on Equity) of Kishanganga Power Station for 8 years under the ambit of Asset Monetization Pipeline.

• Domestic Rating

NHPC has highest domestic credit rating of 'AAA' with stable outlook assigned by domestic credit rating agencies i.e. ICRA, CARE and India Ratings & Research for its listed bonds which indicates lower credit risk for the investors.

• International Rating

NHPC has International Credit Rating of 'Baa3' with stable outlook rated by the Moody's Investors Service Singapore Pte. Ltd.

19. INFORMATION TECHNOLOGY AND COMMUNICATION

NHPC considers Information Technology as a strategic tool for the attainment of sustainable growth in business and to improve overall productivity and efficiency. All locations of the Company including remotely located Power Stations/ Projects are connected to Corporate Office/ Regional Offices through multimode communication links using MPLS-VPN/ ILL/ VSAT- Ku band/ VSAT Phones. These multimode links have been integrated through SDWAN (Software Defined Wide Area Network) technology to function in a fail-safe mode. IP Telephony has been deployed between Corporate Office/ Regional Offices and Power Stations / Projects. VMS (Video Management System) is also operational for better monitoring/ management and surveillance of Projects/ Power Stations. Two-Factor Authentication (2FA) has also been implemented for the users connecting NHPC network through SSL-VPN in a secured manner. NHPC had implemented Enterprise Resource Planning application across all its locations integrating its various business processes in 2009. Recently work has been started for implementation of state-of-the-art technology; AI/BI enabled New Age ERP solution at NHPC. This software solution will bring in latest available technologies to improve the efficiencies in core business areas such as Operations & Maintenance, Project Construction, Energy Sales and Accounting apart from support functions like HR, Finance, etc.

Apart from ERP, NHPC has implemented a host of other software applications/ Mobile apps to take care of day-to-day business requirements. Latest technology based NHPC's bilingual website and integrated intranet are functioning as powerful information dissemination systems to take care of external/ internal information requirements. As per Government of India directives, e-procurement, Government e-Marketplace (GeM), e-Office, e-Sushrut HMIS, Vendor payment portal and e-Reverse auction system are operational in the Company.

NHPC has implemented "Early Warning System (EWS) - e-Aabhas" an Internet Cloud based Software Application for monitoring of water level/discharge of rivers so as to raise alarms with sufficient lead time to handle disastrous situation at Project/ Power Station sites. Accordingly, Master Control Room facility has also been set up in NHPC Corporate Office for monitoring of vulnerable hydro-electric projects in the Country.

IT & Cyber Security Policy and Cyber-Crisis Management Plan are in place to strengthen Cyber Security Posture of the Organization. Critical IT Infrastructure including servers, data storage, communication equipment etc. have been installed at safe locations and are being managed through internal resources. NHPC Corporate Office and all Power Stations of NHPC are ISMS ISO 27001:2013 certified which assures confidentiality, integrity and availability of information assets. VAPT Audit is being regularly carried out at all generating power stations to secure valuable information and vital infrastructure. A centralised End Point Security Software solution has also been implemented to protect Servers/ Desktops against Cyber threats. NHPC has been nominated as nodal agency for Sectorial CERT i.e. CERT-Hydro to guide and monitor the Cyber security related activities in the constituent member organizations.

20. HUMAN RESOURCES

Your Company has a strong and dedicated workforce of 4,929 employees, consisting of 3,193 executives and 1,736 non-executives as on March 31, 2024. The above workforce includes 511 women employees. Your Company is strongly focused towards lifelong learning and competency development of its employees for their overall capacity building by improving their performance and enhancing organizational capabilities. Training programmes to employees are facilitated through internal faculty as well as through external agencies. NHPC has organized various training and development programmes for its employees through premier management and engineering institutions like IIMs, IITs etc. to enhance their skills and competencies and to encourage them to utilize their full potential in their respective field of operations. Your Company also deputes senior and high potential employees to foreign training programmes to keep them abreast with the latest know how and to understand the global scenario in the field of hydro power. NHPC also sponsors its executives to acquire higher qualification and specialization to improve their productivity and effectiveness.

NHPC is strongly focused towards lifelong learning and competency development of its employees for their overall capacity building by improving their performance and enhancing organizational capabilities. Training programmes to employees are facilitated through internal faculty as well as through external agencies. NHPC's vision towards human resource development is to develop & nurture its employees to leverage their fullest potential to make NHPC an employer of choice in the talent market.

Workshops and knowledge sharing sessions are organized both in physical and virtual mode for awareness and for updation of knowledge base of employees. Specially designed programs, like in the areas of Corporate Governance, are conducted for senior officials.

Considering the future training needs due to advancing technologies, NHPC recognizes the need to adopt modern and scientific training methodologies and to create an infrastructure accordingly. Further, specialized training in the field of project planning, execution & management, O&M, R&D, etc. will be met either by establishing JVs or in collaboration with the expert institutions in the concerned field in India & abroad.

Industrial relations in the Company remained cordial and harmonious during the year. Employees actively contributed in the growth of the Company. NHPC Limited continuously endeavours to establish good Industrial Relation among its stakeholders. NHPC stress upon acquiring the best talent in the Country on the basis of score of GATE, NET, CLAT, CA/ CMA/ CS etc. It has been working towards nurturing and retaining talent by providing opportunities to improve their knowledge and skills. The Company formulates employee oriented HR Policies and implement it in true spirit to ensure that its benefit reaches to the bottom level. Due to declining workforce, challenges in collective bargaining, etc the face of Industrial Relations in PSEs in India have changed to a great extent.

Further, to effectively address the changes and keeping the welfare of the Contract Workers engaged by Contractors in R&M/ Service Contracts in view, NHPC Limited has extended Uniform Higher Wages and Financial Benefits which is approximately 37%- 47% over and above the Minimum Wages notified by the Central Government or as the case may be, the state Government, whichever is higher. A Grievance Redressal Mechanism is also in place for resolution of their grievances. To ensure a robust & transparent payment system, NHPC Limited has developed a comprehensive Contract Labour Payment Management Portal wherein details of Wages and Benefits are uploaded for Public view. Considering the empowerment of women workforce, creches and day-care facility has been established across NHPC. Dedicated toilets for women at all NHPC locations especially at construction sites are mandatory.

Your Company follows the Government of India's guidelines regarding reservation in services for SC/ ST/ OBC/ PWD (Persons with Disabilities)/ Ex- servicemen/EWS to promote inclusive growth. Necessary concessions/ relaxations in accordance with the rules are extended to SC/ ST and physically challenged persons in recruitment. Details of representation of SC/ ST/ OBC/ PWD are given in "Management Discussion & Analysis".

21. AWARDS & RECOGNITIONS

NHPC has been proud recipient of following awards for excellence in different areas during 2023-24:-

• Hon'ble Vice President of India Shri Jagdeep Dhankhar presented SCOPE's 'Commendation Certificate' to NHPC in the category of 'Effective Implementation of RTI Act' at Vigyan Bhawan, New Delhi.

• NHPC was conferred with Second prize under NTPC Rajbhasha Shield Award Scheme for the year 2021-22 as well as Second prize for 2022-23 for excellent implementation of Rajbasha by Hon'ble Union Minister of Power.

• NHPC won the 2nd prize under the 'Annual Report' category of 'PRSI National Awards 2023' instituted by Public Relations Society of India. The award recognized the overall high quality, layout and design of NHPC Annual Report 2022-23.

• NHPC's efforts and commitment towards making India truly a digital economy was recognized by being conferred with 'Governance Now India PSU IT

Award 2023'.

• NHPC was awarded as 'Winner' in Power Generation- Renewables (CPSU) category of Dun & Bradstreet PSU AwardsRs 23 during the 15th edition of "PSU & government summit"in New Delhi

• NHPC was presented with "India's Best Hydro & Renewable Energy Public Sector Enterprise" award at PRAKASHmay "16th ENERTIA AwardRs 23 - India & South Asia's Awards for excellence in Sustainable Energy, Power & Renewables" held at Mumbai.

• NHPC won the coveted 'Economic Times HR World Exceptional Employee Experience Award 2023 in 'Large Scale Enterprise' category during ET HR WORLD EX Awards at Bengaluru. The Award was conferred to NHPC in recognition to its wide range of Employees Centric HR initiatives.

22. REHABILITATION AND RESETTLEMENT (R&R)

Your Company appreciates the difficulties of populace displaced during the execution of its projects. Rehabilitation & Resettlement Plans are formulated for Project Affected Families (PAFs) to provide economic sustenance under the provisions of 'The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013'. NHPC has formulated a Policy for reservation of certain type of works through competitive bidding for PAFs and locals residing near its projects/ power stations.

23. VIGILANCE

The objective of the vigilance function is to increase the productivity and efficiency of the Company by bringing about an improvement in system and encouraging transparency.

Your Company has a Vigilance Department headed by Chief Vigilance Officer who is an independent entity appointed by Govt. of India to ensure transparency, objectivity and quality of decision making in its operations. All the procedures are documented to monitor and handle vigilance complaints and disciplinary cases. Vigilance Department also co-ordinates with Ministry of Power, Central Bureau of Investigation (CBI), Central Vigilance Commission (CVC), Department of Personnel and Training (DoPT) and other concerned departments of the Government. In order to exercise effective supervision and for a better appreciation of the work being done by the Vigilance Units, the Central Vigilance Commission conducted 'Management Audit of Vigilance Unit (MAVU), of NHPC vigilance unit which concluded with satisfaction. Further, there are no vigilance cases due for dispose-off in financial year 2023- 24 except one vigilance case related to disproportionate assets and is sub-judice.

Further, as a part of preventive vigilance, circulars and guidelines are being issued regularly based on outcome of various inspections/ intensive examinations carried out from time to time. Vigilance awareness week, trainings and other vigilance awareness programmes are also being organized by the Company to promote transparency, capacity building, to address sector specific challenges and ethics in working system.

24. INTERNAL FINANCIAL CONTROLS

The Company has adequate internal financial control system in place with reference to the Financial Statements and such internal financial controls were operating effectively as at March 31, 2024. The Statutory Auditors of the Company have certified that the Company has an adequate internal financial control system with reference to the Standalone and Consolidated Financial Statements and such controls were operating effectively as at March 31, 2024 based on the internal control criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by ICAI.

25. RISK MANAGEMENT

NHPC recognizes that it is exposed to a number of uncertainties, which is inherent to the power sector. The volatility of the power sector affects the financial and non-financial results of the business. To increase confidence in the achievement of organization's objectives, NHPC has developed Risk Management Policy to remain a competitive and sustainable organization and enhance its operational effectiveness.

The Policy statement is as under:-

a. To ensure protection of shareholder value through the establishment of an integrated Risk Management Framework for identifying, assessing, mitigating, monitoring, evaluating and reporting of all risks.

b. To provide clear and strong basis for informed decision making at all levels of the organization.

c. To continually strive towards strengthening the Risk Management System through continuous learning and improvement and to achieve the objectives of this Policy through proper implementation and monitoring.

d. To ensure that new emerging risks are identified and managed effectively.

e. To put in place systems for effective implementation for achievement of Policy objectives through systematic monitoring and effective course corrections from time to time.

26. PROCUREMENT FROM MICRO & SMALL ENTERPRISES

Government of India has notified Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012 to support marketing of products produced and services rendered by them. In compliance to the Policy, annual procurement plan including items to be procured from MSEs are uploaded on NHPC's website (www.nhpcindia.com) for the benefit of MSEs. The benefits to MSEs like exemption from tender fees and earnest money deposit, purchase preference, interest on delayed payments and exemption from prior experience - prior turnover criteria subject to meeting of quality and technical specifications are also extended to encourage these enterprises.

During financial year 2023-24, NHPC has procured 55.74% of the total annual procurement of products produced and services rendered by MSEs against the mandate of 25% set by Ministry of Micro, Small and Medium Enterprises, Govt. of India. Procurement also includes 3.46% from SC/ ST MSEs and 5.15% from women MSEs against the sub-target of 4% and 3% respectively.

During this period, 2420 MSEs were benefited out of which 120 MSEs and 385 MSEs were owned by SC/ ST and Women entrepreneurs respectively.

27. IMPLEMENTATION OF OFFICIAL LANGUAGE Your Company is committed to implement Official Language Hindi in day-to-day working in various offices/ locations/ units in accordance with the provisions of Official Languages Act, 1963 and Official Languages Rules, 1976. During the year

2023-24, quarterly meetings of Official Language Implementation Committee of the Company and half yearly meetings of Town Official Language Implementation Committee (Office), Faridabad were organized regularly to review the status of Official Language Implementation. Official language inspection of PID Office-Pathankot, Tanakpur Power Station, Regional Office-Banikhet, Chamera-I Power Station, Parbati-II HE Project, Liaison Offices- Lucknow and Kolkata was completed successfully by second sub-committee of Parliamentary Committee on Official Language and Official language implementation was speeded up in view of inspecting the official language in various offices/ locations/ units from time to time by senior officials of Company. During the year, NHPC organized various events like Three days NHPC Official Language Sangosthi/ Conference in non-hindi region Odisha and Hindi Kavi Sammelan, Hindi Pakhwada, Hindi Poetry Seminar, various Hindi Competitions for children and ladies of NHPC employees, Monthly Hindi Literary Series etc. in Corporate Office for its employees to encourage the use of Hindi. In addition to the above, Hindi Typing Training Programme, Hindi Workshops and Departmental Computer Workshops were also conducted regularly. Apart from this, to increase the interest of employees to work in Hindi, an 'Online Hindi Quiz Competition' was also conducted at corporate office, Faridabad. To promote the use of Hindi, Official Language magazines named 'Rajbhasha Jyoti' and 'Nagar Saurabh' were also published regularly.

In order to encourage and participate actively to promote Hindi, attractive incentive schemes have been implemented for employees to write articles/ papers for in-house journals, to read Hindi books and to do official work by writing noting and drafting, to do specific official language work etc. in Hindi. As a result of the commitment and seriousness of the Company towards implementation of official language Hindi, recruitment has also been done on 14 vacant posts of Hindi translators in various offices of the Company.

The efforts made by the Company for progressive use of Hindi have been appreciated at various forum, out of which your Company has been awarded 'Second Prize' recognized under Rajbhasha Shield Scheme for the year 2021-22 and 2022-23 for excellent Official Language Implementation under the aegis of Ministry of Power, Government of India. Your Company's website i.e. www.nhpcindia.com has been developed and updated continuously in bilingual operation mode i.e. Hindi & English for excellent implementation of Official Language in entire Power Sector.

28. RIGHT TO INFORMATION ACT

The Right to Information Act, 2005 has been implemented in our Company to provide information to citizens and to maintain accountability and transparency. The Company has placed various documents/ records on its website i.e. www.nhpcindia.com for access to all citizens of India, NHPC has designated Appellate Authority, Transparency Officer and Central Public Information Officer (CPIO) at Corporate Office and Assistant Public information Officer (APIOs) at all Power Stations/ Projects/ Regional Offices/ Units.

During financial year 2023-24, 785 applications and 73 first stage appeals were received under RTI Act. Out of above, 782 (99.61%) applications and 73 (100%) first stage appeals were replied/ disposed. Further, 7 second stage appeals were filed by the applicants before the Central Information Commissioner (CIC), which were also disposed-off in favour of NHPC.

29. CORPORATE SOCIAL RESPONSIBILITY (CSR)

CSR has been an integral part of your Company's business philosophy. Your Company is conducting its business in a socially responsible way by maintaining high level of organizational integrity and ethical behaviour, in conformity with expected standards of transparency in reporting and disclosing the performance in all spheres of its activities, demonstration of concern for social welfare, adoption of best management practices and effective operational methods to win the trust and confidence of all stakeholders. For years, your Company has played a vital role in the greater welfare of society through its various CSR initiatives. The positive impacts of these initiatives have deeply penetrated the needy sections of society, addressing the social, economic, environmental, and welfare concerns of stakeholders. The CSR initiatives of your Company encompass programs on promoting Education & Skill Development, Healthcare & Sanitation, Rural Development, Women Empowerment, Environmental Sustainability etc., in accordance with areas or subject specified in Schedule VII of the Companies Act, 2013.

Your Company's focused approach to aligning its CSR initiatives with national priorities and optimizing resource utilization has significantly maximized its socio-economic impact. Your Company is committed to making significant contributions to the community, environment and society through well-planned CSR interventions. Over time, the reach of your Company's CSR initiatives has expanded manifold, covering the intended areas effectively.

Your Company has adopted a CSR & Sustainability Policy in compliance with Section 135 of Companies Act, 2013, and the Companies (Corporate Social Responsibility Policy) Rules, 2014, along with their amendments. The major highlights of the CSR & Sustainability Policy of your Company are as under:

• Preference to the Local area around NHPC's Projects is being given by allocating atleast 80% of the CSR Budget amount. However, other locations are also being selected based on the needs and as per the direction of Government of India on National schemes and campaign, wherein about 20% amount of the CSR Budget may be spent, for the larger benefit of society/ environment.

• The CSR initiatives include programs in areas or subject specified in Schedule VII of the Companies Act, 2013. Expenditure on any other activity not in conformity with Schedule VII is not accounted towards CSR expenditure.

• Selection of CSR and sustainability schemes is carried out effectively to ensure that maximum benefits reach the poor, backward, and needy sections of society, while also contributing to the improvement of environmental quality.

• NHPC is open to join hands with the other CPSEs in planning, implementing and monitoring of Mega Projects for optimal use of resources, synergy of expertise and capabilities for maximizing socioeconomic or environmental impact.

• The CSR & Sustainability Policy of your Company has defined roles & responsibilities at various levels for proper selection, planning, execution & monitoring of CSR activities.

The CSR & Sustainability Policy is available on website of the Company at https://www.nhpcindia. com/assests/pzi public/gallery/1681895733.pdf. The Annual Report on CSR & Sustainability of your Company for financial year 2023-24 is provided as Annexure-I to this Report.

30. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

Your Company has not entered into any material transaction with any of its related parties during the financial year 2023-24. Company's major related party transactions are generally with its subsidiaries and associate companies for providing consultancy services, leasing out of properties, manpower services, inter-corporate loan, corporate guarantee, etc. All the contracts/ arrangements/ transactions entered into with related parties were on arm's length basis, intended to further the Company's interest. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h)

of the Companies Act, 2013 in Form AOC-2 is not applicable.

Attention of the members is also drawn to Notes of the standalone financial statements, which sets out related party disclosures as per Ind AS-24.

31. VIGIL MECHANISM-POLICY ON WHISTLE BLOWER AND FRAUD PREVENTION

Your Company has framed a 'Whistle Blower Policy' wherein Directors, employees, contractors and vendors of the Company are free to report any unethical practice, violation of applicable laws, rules, regulations or Company's Code of Conduct, that could adversely impact Company's operations, business performance and/or reputation. The Policy also allows direct access to the Chairperson of the Audit Committee. During the year, no person was denied access to the Audit Committee on issues relating to Whistle Blower Policy. The identity of the whistle blower is kept confidential so that the Whistle Blower is not subjected to any discriminatory practice. A senior level officer has been nominated as Coordinator for effective implementation of the Policy and to deal with complaints reported under the Policy. During the year 2023-24, no complaint was received under Whistle Blower Policy. Your Company has also framed a Fraud Prevention & Detection Policy to prevent, detect and allow speedy disposal of fraud or suspected fraud. Mechanism under the Policy is appropriately communicated within the organization across all levels and has been displayed on Company's intranet.

The Whistle Blower Policy is available at website of the Company at https://www.nhpcindia.com/ assests/pzi public/gallery/1683188102.pdf

32. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company believes that diversity at workplace creates an environment conducive to engagement, alignment, innovation and high performance. Every employee in the Company is treated with dignity, respect and afforded equal treatment. A Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 is in place. 'Internal Complaints Committees' have been constituted at all locations of the Company for the redressal of complaints against sexual harassment of women at workplace. The Committee at Corporate Office, Faridabad is headed by a senior woman officer and includes representative from an NGO, as one of its members. Your Company has also prohibited sexual harassment of women by incorporating it as misconduct under "NHPC Conduct, Discipline and Appeal Rules". Disclosure in respect of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 for the financial year 2023-24 is as under:

33. SPORTS AND OTHER ACTIVITIES

NHPC has always encouraged sports culture in the organization. NHPC employees have participated in various sports tournaments in individual and team events. As per NHPC's Sports Policy, your Company has given scholarship to thirty eight young sports persons during the financial year 2023-24. NHPC Sports Scholarship holders have participated in many national and international tournaments giving stellar performances.

The chairmanship of Power Sports Control Board (PSCB) under the aegis of Ministry of Power, Govt. of India which aims to promote sportsmanship and camaraderie amongst Power PSUs employees been taken over by NHPC for financial year 2023-24 and 2024-25.

NHPC hosted the 23rd Inter CPSU T-20 Cricket Tournament under the aegis of PSCB from 19th to 24th February 2024 at Gurugram.

The tournament witnessed highest ever participation of 14 power sector CPSUs/organizations including Ministry of Power, NHPC, DVC, PGCIL, CEA, BBMB, REC, THDC, BEE, NEEPCO, CEA, PFC, SJVNL and Grid Controller of India. NHPC's Teams participated in all the Inter CPSU Tournaments organized under the aegis of PSCB. NHPC's

Team and Individual achieved podium positions in Chess, Athletics, Carrom, Badminton and Bridge tournaments taking the medal tally to a total of 24.

Under the aegis of Bureau of Energy Efficiency (BEE), Ministry of Power, Govt. of India, NHPC organized State Level Painting Competition on the theme of energy conservation in four States/ UTs (J&K, Ladakh, Arunachal Pradesh, & Madhya Pradesh) in the month of November 2023. The winners of the State Level Painting Competition participated in the National Level Painting Competition held in Noida & Gurugram. Master Awaiz Alam, a participant from Madhya Pradesh was awarded 'Appreciation Prize' under Group 'A' category of National Painting Competition on Energy Conservation 2023 by Hon'ble Union Minister of Power, New & Renewable Energy during National Energy Conservation Day function on December 14, 2023 at New Delhi. The award recognized his talent and awareness displayed during the National Level Painting Competition 2023 on Energy Conservation.

NHPC observed its 49th Raising Day on November 07, 2023 at NHPC Corporate Office, Faridabad and across all its Regional Offices, Power Stations and Projects.

Your Company has organized Vasant Utsav 2024 with great festive spirit at the NHPC Residential Complex on March 2, 2024 to welcome the arrival of spring and to showcase the rich and diverse Indian culture. A number of stalls promoting local handicrafts, dress materials, food delicacies, puppet show etc. from various States/ Union Territories were set up by NHPC Power Stations, Projects and Regional Offices.

During the year, your Company also participated in various National and International exhibitions to showcase its strengths, capabilities, achievements and the roadmap ahead. NHPC participated in ICOLD 2023 Annual Meeting & Symposium at Gothenberg, Sweden in the month of June 2023, CSR Exhibition showcasing CSR activities of CPSEs organised by Department of Public Enterprises, Govt. of India in the month of September 2023, India International Trade Fair in the month of November 2023, Vibrant Gujarat Global Trade Show 2024 and Distribuelec 2024 in the month of January 2024.

34. DEBENTURE TRUSTEES

In compliance to the requirements of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR), the details of Debenture Trustees appointed by the Company for different series of Bonds is provided at reference information of this Annual Report.

35.1 INDUSTRY STRUCTURE AND DEVELOPMENT

Global warming is an aspect of climate change, referring to the long-term rise of the planet's temperatures. It is caused by increased concentrations of greenhouse gases in the atmosphere, mainly from human activities such as burning fossil fuels, and farming etc. Energy transition refers to the shift from fossil-fuels based generation to renewable energy sources like wind, solar & hydro and by improving the energy efficiency in various sectors of economy for reducing energy- related CO2 emissions with the objective to contain

global warming. Energy transition is happening across the world and India is also committed to energy transition from fossil fuels to non-fossil fuels. India is currently one of the fastest growing economies in the world, home to almost one-sixth of humanity. Its growth momentum is an integral part of global development and is essential to meet the world's sustainable development goals. India's contribution to global warming is minimal. Nevertheless, India is committed to combating climate change, by keeping in view, energy security, affordability and accessibility as critical inalienable priorities to ensure growth and development alongside Energy transition of the economy towards net-zero by 2070. India is a resource-rich and diverse Country. Having abundance of Renewable Energy Source, Indian renewable energy sector is one of the most attractive renewable energy markets in the world.

India has set a target to reduce the carbon intensity of the nation's economy by less than 45% by the end of the decade, achieve 50% cumulative electric power installed by 2030 from renewables, and achieve net-zero carbon emissions by 2070. India aims for 500 GW of renewable energy installed capacity by 2030. Besides this, India also aims to produce 5 MMT (Million Metric Tonne) of green hydrogen by 2030. This will be supported by 125 GW of renewable energy capacity.

With the increased support of Government and improved economics, Renewable Energy Sector has become attractive from investors perspective.

The Indian power sector has come a long way in the past decade, transforming from a power-deficit to a power-surplus nation. A series of concerted measures led to a 57.89% increase in generation capacity - from 275 GW in March, 2015 to ~441.96 GW in March, 2024.The Installed Generation Capacity as on March, 2024 was 441.97 GW comprising of 243.22 GW Thermal, 8.18 GW Nuclear, 190.57 GW Renewables including large hydro of 46.93 GW1.

A generation capacity addition totaling to 2,11,037.92 MW from various sources has been achieved from the year 2014-15 till March 31, 2024 comprising of 96,134.41 MW from conventional sources (Coal, Gas and Nuclear) and 1,14,903.51 MW from RE sources. The conventional capacity addition of 96,134.41 MW comprises of 92,734.41 MW of Coal and Gas, and 3,400 MW of Nuclear. RE capacity addition of 1,14,903.51 MW includes 6,246.99 MW of Large Hydro (Above 25 MW) and 1,08,656.52 MW of Renewable Energy (Solar, Wind, Biomass and Small Hydro) has been achieved since the year 2014-151.

35.2 STRATEGIC DIVERSIFICATION

NHPC is one of the India's leading hydro power generation Company and considering upcoming huge opportunities in Renewable Energy and Green Hydrogen sector, NHPC plans to strategically tap opportunities in these sectors. Various Solar Power Projects and pilot Green Hydrogen Projects are being taken up, which are under different stages of development. While NHPC will continue development of Hydro Power Projects as its core business, it would make all endeavors to expand its business in Renewable Energy development coupled with storage solutions such as Green Hydrogen and Pumped Storage Projects.

35.3 HYDROPOWER POTENTIAL IN INDIA

As per reassessment study carried out for the period 2017-2023, exploitable identified hydro power potential in terms of installed capacity is estimated at 1,33,410 MW consisting of hydro-electric schemes having installed capacity above 25 MW1.

35.4 MEASURES TAKEN BY GOVERNMENT OF INDIA TO PROMOTE HYDRO POWER SECTOR

The Government of India in past had taken several Policy initiatives for hydro power development in the Country viz., National Electricity Policy, 2005, Hydro Power Policy, 2008, Revised Tariff Policy, 2016 and Right to Fair Compensation & Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Over the period of past few years, the

Government had also issued measures to promote Hydro Power Sector, which included:-

• Large Hydro-power Projects (LHPs, i.e. > 25 MW Projects) have been declared as renewable energy source. However, LHPs would not be automatically eligible for any differential treatment for statutory clearances such as forest clearance, environmental clearances, National Board for Wildlife (NBWL) clearance, etc. as available to Small Hydro-power Projects (i.e. < 25 MW Projects). Ministry of Power shall continue to be administrative ministry for LHPs.

• Hydropower Purchase Obligation (HPO) is notified as a separate entity within Non-solar Renewable Purchase Obligation (RPO). The HPO shall cover all LHPs commissioned after March 08, 2019 (i.e. date of issuance of Office Memorandum by Ministry of Power) as well as untied capacity (i.e. without long term PPA) of the commissioned Power Station.

• Flexibility to the developers to determine tariff by back loading of tariff after increasing project life to 40 years, increasing debt-repayment period to 18 years and introducing escalating tariff to rationalize hydro power tariff.

• Budgetary Support shall be extended for Flood Moderation/Storage Hydro-Electric Projects (HEPs). Budgetary Support shall also be extended to Cost of Enabling Infrastructure i.e. roads/ bridges @ Rs 1.5 crore/ MW for project upto 200 MW and Rs 1 crore/ MW for project above 200 MW.

• New Projects commissioned after March 08, 2019 are covered under HPO provided tariff (LT) is not above Rs 5.50/kWh for Projects commissioned till March 31, 2021. 5% increment in tariff shall be permitted for subsequent financial years. Further, MoP vide order dated July 22, 2022 & October 20, 2023 has revised the trajectory of HPO along with notification of trajectory of Energy Storage Obligation (ESO).

• MoP vide order dated December 01, 2022 has extended the waiver of ISTS Charges on the transmission of power from new hydro power projects, for which construction work is awarded on or before June 30, 2025 and PPA is signed on or after December 01, 2023 and on or before June 30, 2025. Further, the trajectory of waiver of ISTS charges from June 30, 2025 to June 30, 2028 has also been laid off by MoP.

35.5 GOVERNMENT INITIATIVES FOR RENEWABLE ENERGY SECTOR

The Government of India has taken various initiatives to achieve inclusive growth in Power Sector for providing cleaner and affordable power for all. The planned large scale integration of renewable energy in the national grid has made Energy Storage

Capacity a critical aspect to meet the challenges of flexibility (grid support/ ancillary service), reliability (fast response/ ramping up/ peaking support) and security. In the interest of optimal use of Renewable Energy generation and smooth transition of lndian Power Sector to Net Zero by the year 2070, it is critically important to take up the large scale development of Hydro Pumped Storage Projects (PSPs) in the Country, which will play a vital role in Grid balancing and shall be utilized to meet the peak power requirements, energy arbitrage, ancillary services and RE smoothing. Accordingly, Ministry of Power, Govt. of India on April 10, 2023 issued "Guidelines to promote development of Pump Storage Projects (PSP)". Guideline offers that PSPs are energy storage schemes; hence the PSPs would be kept out of the liability of free power, LADF, Upfront Premium for Project allocations.

Amid various challenges, meeting the target of 500 GW of renewables by 2030 will require a dramatic acceleration in installed capacity. Govt. of India has taken major steps to reform the energy sector and usher in a climate-friendly energy transition that will deliver energy security, affordability, and sustainability. The steps include proposing the Electricity (Amendment) Bill, 2020, PM-KUSUM and Roof Top Solar scheme, various schemes to promote large scale Solar Power Development such as CPSU Scheme, Solar Park Scheme, Production linked incentive schemes, etc., proposing amendments to Energy Conservation Act (2001), Pradhan Mantri Ujjwala Yojana, National Green Hydrogen Mission, Guidelines to promote Pump Storage Hydro Power Plants and so on. MOP during the financial year 2023-24 also issued revised bidding guidelines for procurement and utilization of renewable energy such as Solar, Wind, Solar Wind Hybrid & Firm & Dispatchable RE power.

PM Surya Ghar: Muft Bijli Yojana was Launched by MNRE on February 13, 2024 with total financial outlay of Rs 75,021 crore. Your Company has also been allotted five States/ UT viz. Haryana, UT of J&K, Sikkim, Manipur and Nagaland for taking up Roof Top Solar Projects. Additionally, 8 Central Ministries/ Departments have been allocated to NHPC for installation of Roof Top Solar at the premises of these Ministries. The projects under PM Surya Ghar: Muft Bijli Yojana Scheme has been planned to be taken up through NHPC Renewable Energy Limited, a wholly owned subsidiary of NHPC.

Above initiatives in the Renewable Energy Sector in conjunction with technological advancements have made the investment in solar power business highly attractive. NHPC is making its efforts to explore

opportunities for development of renewable energy and green hydrogen projects through different modes.

35.6 ELECTRICITY (LATE PAYMENT SURCHARGE AND RELATED MATTERS) RULES, 2022

Ministry of Power vide notification dated February 22, 2021 had first notified the Electricity (Late Payment Surcharge) Rules, 2021 (LPSC). In the LPSC Rules, 2021, MoP had kept the base LPSC rate with MCLR rate plus 5%, which shall be increased by 0.5% every successive month till 6 months. It was also notified to adjust the payment received first towards the late payment surcharge and then towards the monthly charges starting from the longest overdue bill.

MoP has notified Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 on June 03, 2022 and its amendment on February 28, 2024. With other rules kept as same regarding rate of LPSC and adjustment of payment received, MoP has incorporated the following clauses, under these rules:

a. Liquidation of arrears:

MoP has allowed the DISCOMs to liquidate their old outstanding dues accumulated till date of notification of these rules in equal monthly installments (ranging from 12 to 48 EMIs depending on amount of outstanding). This rule played a vital role in settlement of long outstanding dues of NHPC. Jammu and Kashmir Power Corporation Limited (JKPCL) and Tamilnadu Generation and Distribution Corporation Limited (TANGEDCO) opted for liquidation of their old outstanding dues under these rules and are timely paying their monthly installments.

b. Operationalization of Payment Security Mechanism (PSM) and its consequences:

A DISCOM has to maintain unconditional, irrevocable and adequate payment security mechanism (LC) and in case of non-maintenance of PSM, generating companies, electricity trading licensee and transmission licensee shall regulate power supply to the DISCOMs. Supply of power shall be made only if adequate PSM is maintained or an advance payment is made. This rule ensures payment security, as LC can be encashed, if the payment is not made by DISCOMs on time.

Regulation of Power:

In case of non-payment of outstanding dues by default trigger date (45 days plus 30 days from bill date) and does not establish PSM, the generator can regulate 25% of contracted power and can sell in exchange. Further, if the DISCOMs do not establish PSM or continue the default for 30 days, generator can regulate 100% of contracted power and can sell in exchange. This rule has brought discipline among DISCOMs and has resulted in timely realisation of dues from beneficiary DISCOMs.

c. Regulation of access to defaulting entity:

In case of non-payment of dues for two and half month from date of presentation of bill, the short term access shall be regulated and if the default continues for another month, other contracts shall be regulated by 10% and the regulation shall be increased by 10% every successive month.

This rule has brought discipline among DISCOMs and has resulted in timely realisation of dues from beneficiary DISCOMs.

a. CERC Tariff Regulations, 2024:

CERC has issued CERC (Terms and Conditions of Tariff) Regulations, 2024 in March, 2024 which will be applicable for the period April 1, 2024 to March 31, 2029. Some of the major highlights of CERC Tariff Regulations 2024 which shall play a vital role in the development of hydro power sector in India are as under:

• For uninterrupted and timely development of Hydro projects, expenditure incurred towards developing local infrastructure in the vicinity of the power plant not exceeding Rs 10 lakh/MW shall be considered as part of the Capital cost, and in case the same work is covered under budgetary support provided by the Government of India, the funding of such works shall be adjusted on receipt of such funds.

• Return on equity for the new Run-of-River (ROR) with pondage projects which will be commissioned on or after April 01, 2024 shall be 17% instead of 16.5%

• O&M expenses for older plants - the normative O&M expenses allowed for older power stations does not include Security Expenses and Insurance Expenses and shall be reimbursed separately as per actual. This is beneficial especially considering risk perception of Insurance companies for hydro power plant.

• In addition to AFC entitlement, the hydro generating station shall be allowed an incentive of up to 3% of the Capacity Charge approved for a given year which shall be billed monthly as per the following. Incentive = (3% x G x CCy)/12

• Rate of energy beyond Saleable Design Energy has been increase from 120 paise/kWh or ECR to 130 paise/kWh or ECR whichever is lower.

• An incentive shall be payable to a ROR Hydro generating station @ 50 paise/ kWh corresponding to the saleable scheduled energy during peak hours of the day in excess of average saleable scheduled energy during the day (24 hours).

b. CERC Ancillary Services Regulations, 2022:

CERC has issued Central Electricity Regulatory Commission (Ancillary Services) Regulations, 2022 which has come into force from January 31, 2022.

c. CERC Deviation Settlement Mechanism Regulations, 2022:

CERC has notified the Deviation Settlement Mechanism and Related Matters Regulations, 2022. The regulations seek to ensure, through a commercial mechanism that users of the grid do not deviate from and adhere to their schedule of drawal and injection of electricity in the interest of security and stability of the grid. As per the regulations, for a secure and stable operation of the grid, every grid connected regional entity shall adhere to its schedule as per the Grid Code and shall not deviate from its schedule. The regulations have been effective from December 02, 2022, however, due to difficulty in operationalization of notified regulation, various provisions have been relaxed by the Hon'ble Commission vide various Suo-moto order and presently CERC order dated February 06, 2023 in 1/SM/2023 effective from February 08, 2023 read with CERC order dated April 09, 2023 in 5/ SM/2023 is in force.

(i) STRENGTHS

• Established track record in developing hydroelectric projects & experienced manpower

NHPC possesses rich experience and expertise in developing hydroelectric projects across the Country. NHPC has a competent and committed workforce, which has extensive experience in the industry with capabilities and expertise in conceptualization, construction, commissioning and operation of hydroelectric projects. Their skills, industry knowledge and experience provide significant competitive advantage to the Company.

• Capabilities from concept to commissioning including in-house Design & Engineering NHPC has a full-fledged Design division dedicated to cater the design and engineering requirements of its projects. The in-house design team along with extensive experience in hydro power sector gives NHPC an edge over other hydro power companies. NHPC has in-house capability to carry out various types of survey works i.e. Control survey, Topographical survey, River X-section, Tunnel Alignment Checking, etc. for River valley projects including Pump Storage Projects & other Renewable Energy Projects. NHPC has an efficient team of professionals to investigate and monitor the Geological and Geotechnical, aspects of hydropower/ pump storage projects in an efficient and scientific manner including preparation of feasibility and Detailed Project Reports (DPRs). Geological investigations assist in avoiding or minimizing the threat of geological uncertainties during construction of various civil structures, powerhouse etc. The engineering capabilities of NHPC ranges right from the stage of conceptualization till the commissioning of the projects.

• Extensive experience in construction and operation

NHPC has extensive experience & expertise in developing hydroelectric projects in complex geological regions by overcoming number of geo-technical challenges using in-house state of-art technology. It has successfully completed construction of some of the challenging hydroelectric projects in India situated in remote hilly areas with various challenges like inaccessibility, poor logistic, adverse climate and technological hindrances. With its strong team of competent, efficient and experienced professionals, it is capable of executing all types and sizes of hydroelectric projects by overcoming such obstacles.

• Strong financial position

NHPC has paid-up share capital of Rs 10,045.03 crore and an investment base of over Rs 78,802.59 crore as on March 31, 2024. NHPC has credit rating of 'AAA' with stable outlook assigned by domestic credit rating agencies for its listed bonds. Moody's Ratings vide rating rationale dated April 24, 2024 has assigned 'Baa3' rating to NHPC with stable outlook. The strong financial position of the Company makes it competent enough to execute capital-intensive large hydroelectric projects.

• Strong operating performance

NHPC has successfully managed to develop and implement twenty-two hydroelectric projects (including two through its subsidiary Company i.e. NHDC Limited), one solar power project and one wind power project on its own and two solar power projects through its subsidiary companies with an aggregate installed capacity of 7,144.20 MW. NHPC with its fleet of power stations is a flagship Company in hydropower sector in India.

• Seismic safety assessment

NHPC is totally committed to seismic safety of its power stations. It has developed one of its kind state-of-art centralized Real Time Seismic Data Centre (RTSDC) for online seismic monitoring of all its power stations covering entire Himalayas. The RTSDC is connected with 54 Strong Motion Accelerographs stations across various power stations. NHPC is the only power utility in the Country to have such data centre. NHPC has also a team of experience geophysicists to carry out geophysical studies during investigation, construction and post construction stages with geophysical techniques like Seismic Refraction/ Reflection, Resistivity Imaging, High Resolution Seismic Tomography, Tunnel Seismic prediction, liquefaction potential assessment of various geological conditions.

• Untapped hydro potential

The deteriorating hydro-thermal mix, peaking shortages and frequency variations have forced Policy makers to turn their attention towards development of hydropower. India's huge untapped hydro potential, especially in the north-eastern region, provides opportunity for hydropower development. NHPC has an opportunity for adding to its capacity the untapped hydro potential in coming years in India and neighbouring countries.

• NHPC's continued ability to complete the hydro projects

The strength shown by NHPC over the years in its ability to complete the projects where most of other Companies have been generally failing, is a beacon of hope in the hydro sector. As a result, NHPC's forte in hydro projects construction is creating new space for its growth in the future.

• Renewable Energy

Accelerating the energy transition can bring numerous opportunities for India. It can create millions of jobs, enhance energy security, and tangibly reduce nationwide greenhouse gas emissions. India can serve as an example for the world by fostering what is potentially the largest green workforce in the world and building a domestic supply of critical battery materials via recycling, contributing significantly to the fight against climate change on both national and international scales.

India has already made strides in green energy production. It aims to become a net-zero emitter of CO2 by 2070 and generate at least half of its power from non-fossil sources by 2030. The Country's resources, including its long coastline, abundant

sunshine, and various vacant lands, can facilitate renewable power generation via hydro, solar, and wind. The Nation thus has the potential to rank among the top global producers of both wind and solar energy.

To achieve its target of 500 GW in renewable power capacity by 2030, India has implemented various measures, including the waiver of transmission system charges for inter-state solar and wind power sales, establishing renewable power purchase obligations, and creating Ultra Mega Renewable Energy Parks. The government also supports domestic manufacturing through Production- Linked Incentive (PLI) schemes. India has also set up innovative green energy trading platforms such as the GTAM (Green Term Ahead Market) and GDAM (Green Day Ahead Market). These platforms enable renewable energy developers to sell power on the open market without signing long-term Power Purchase Agreements. New measures introduced at the Indian Energy Exchange have also resulted in the trade of billions of units of clean energy in recent months. Government of India is also focussing on Green energy corridors to strengthen transmission networks in eight RE rich states by laying of new transmission lines and creating new sub-station capacity for integration of over 500 GW RE Capacity by 2030.

Thus, there exists immense opportunities for development of renewable energy and green hydrogen projects in coming years.

NHPC is exploring all possible opportunities to develop Renewable Energy and Green Hydrogen projects ensuring various incentives being provided by Govt. of India to give impetus to these sectors.

• Grid Balancing Requirement

In view of Government of India's present initiative for extensive renewable energy development particularly large scale development of solar power, hydro power would be required for grid balancing/ stability. The present scenario would create opportunities for NHPC to develop hydro power due to its inherent qualities of fast ramping up and down and flexibility imparted to the system

• Geological uncertainties:

Inaccessible terrain and constraints of logistic and limits of investigation, poses serious consequences for execution of projects. Excavation of tunnels under high superincumbent cover also poses serious problems in timely completion of projects due to severe stress related problems and heavy ingress of water.

• Time and cost overruns

Most hydro-electric projects are generally located in hilly terrain, which are at the receiving end of devastating natural calamities like landslides, hill slope collapses & roadblocks, flood, cloud burst etc. These calamities cause severe setbacks in construction schedule. Further, in-spite of extensive survey and investigation, geological uncertainties may have to be tackled especially in long tunnels such as Head Race Tunnel. NHPC with its rich experience and expertise coupled with state-of-the -art technology has overcome such surprises many a times in the past. However, these uncommon and unpredictable geological uncertainties may result in time and cost overrun. Sometimes law and order problems also result time and thus cost overrun.

• Time consuming clearance process:

Before any hydroelectric project is implemented, it needs to be cleared by various agencies by obtaining various statutory as well as non-statutory clearances. Often projects get bogged down with the lengthy clearance procedures involving multiple agencies/ organizations, states, etc. Obtaining the requisite clearances is a complex, tedious and time-consuming process which sometimes leads to abnormal delay, ultimately affecting the project implementation.

• Difficulties in entering into Power Purchase Agreements (PPAs)

Sale of energy from projects having higher tariff is getting difficult in present day's power trading scenario. Beneficiaries prefer to purchase their additional power requirement on short-term basis through power exchange or e-procurement rather than opting for long term/ medium term PPAs. As hydroelectric projects are site specific and its tariff depends on location/ design parameters and high initial investment, the tariff for new hydroelectric projects is relatively higher. Due to above reasons, NHPC is facing difficulties in dispatch of power from new projects through long term PPAs.

• High initial cost/ tariff

The development of hydroelectric projects involves long gestation period and require large initial investment, which results into high initial tariff. Cash flow and revenue from operations of hydroelectric projects are also subject to variations as per tariff regulations notified by CERC from time to time. High initial costs and tariffs sometimes prove detrimental in obtaining investment sanction and require extensive financial re-engineering and different waivers from various stakeholders to bring the project on the anvil.

• Law & order

NHPC is witnessing law & order problem at some of its projects/ power stations, as they are located near sensitive border areas and at remote locations. Officials posted at those projects/ power stations are prone to security threats.

• Opposition to hydroelectric projects: Hydroelectric projects in India are also facing opposition by certain pressure groups. This has created an apprehension amongst the hydroelectric project developers as some of their projects are getting stalled.

• State hydro policies restricting entry of PSUs

Several state hydro policies favors for payment of upfront premium, free power over & above the required free power etc. for allocation of hydroelectric projects to the developers. CPSEs are facing difficulties in getting these hydroelectric projects, as they have to follow the norms of Government of India.

• Dependence on few contractors Construction of hydroelectric projects requires manpower, machinery and substantial investment of money. There are very few contractors in India who can deliver especially in remote and difficult locations where accessibility is a major issue. The limited range of contractors who are able to perform in the sector increases our dependence on few available contractors in the Country.

35.9 RISK AND CONCERNS:

NHPC has a well-defined and dynamic Risk Management Policy since 2009 to provide overall framework for the risk management in the Company. The Policy is modified and updated from time to time. The revision-01 of the Policy was done in the year 2015, Revision-02 of the Policy was done in the year 2022 and Revision-03 of the Risk Management Policy has been done in the year 2024. At present, 70 key risks have been identified from initial 54 risks. To ensure effective implementation of the Risk Management Policy, two Committees have been constituted:

i. A Board level Risk Management Committee comprising of Directors, to assist the Board in management of key risks. The Committee inter-alia ensure that appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the Company.

ii. Risk Assessment Committee comprising of Chief Risk Officer and Risk Coordinators-HOD(s) of various divisions responsible for risk mitigation pertaining to their division as well as for Power Stations/

Projects/ Divisions of Corporate office. The Heads of Departments/ Regions / Projects/ Power Stations implement and review the directions issued by Risk Assessment Committee on the identified risks and their mitigation measures.

35.10 OUTLOOK:

Your Company has taken some very effective initiatives and successfully streamlined the processes for sustainable growth and consistent performance in the electricity business. It has adopted new and relevant technologies in the areas of electromechanical, civil and hydro-mechanical engineering. NHPC has applied contemporary practices to reduce construction time delays as well as cost overrun. Its power stations are run in an optimized way to reduce silting problem of its reservoir. Construction supervision, post-commissioning monitoring and hurdle free operation are ensured and augmented by use of information technology. Operations of all power stations of the Company are either semi or fully automated. Many power stations are equipped with advanced distributed control systems along with SCADA systems. NHPC is also looking forward for remote operation of some of its power stations. NHPC Limited at present has an installed capacity of 7,144.20 MW from 26 power stations including four power stations in JV mode and is looking for expansion through diversification.

Considering the opportunities available in the Renewable Energy and Green Hydrogen Sector and various initiatives taken up by Govt. of India to impart thrust towards development of clean Energy, NHPC is diversifying its portfolio by taking different renewable energy projects. NHPC has already commissioned 876.70 MW renewable energy projects in different modes and is in the process of development of many other renewable energy and green hydrogen projects, details of which are mentioned in the Directors' Report.

35.11 SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE: Generation of electricity is the principal business activity of the Company. Other operations viz. power trading, contracts, project management and consultancy works do not form a reportable segment as per the Ind AS - 108 on "operating segments". The Company has a single geographical segment, as all its power stations are located within the Country.

35.12 INTERNAL CONTROL SYSTEMS AND ADEQUACY:

The Company has sound internal control systems and processes in place for smooth and efficient conduct of business and ensure compliance to relevant

laws and regulations. NHPC has clearly defined organizational structure, manual and standard operating procedures to ensure orderly, ethical and efficient conduct of its business. A comprehensive delegation of power from Chairman and Managing Director to down below is in place to assist in smooth decision making, which is periodically reviewed to align it with changing business environment and for speedier decision making.

The Company has an in-house internal audit department headed by a senior officer. In compliance to Section 138 of the Companies Act, 2013, the Board has appointed a General Manager (Finance) as Internal Auditor of the Company. The department has qualified and experienced workforce to carry out periodical as well as special audits.

The Internal Audit department submits their audit observations and action taken reports to Audit Committee. The recommendations of the Committee are duly complied with. In compliance to Section 134 of the Companies Act, 2013, M/s A.M.A.A & Associates, Chartered Accountants, New Delhi was appointed to provide independent assurance on implementation of Internal Financial Controls in the Company during the financial year 2023-24. The Firm, in its Report, acknowledged the effectiveness of prevailing internal financial control systems in the Company.

35.13 FINANCIAL DISCUSSION AND ANALYSIS PROFIT & LOSS ITEMS

A detailed analysis of the Audited Financial Results of the Company for the Fiscal 2024 vis-a-vis Fiscal 2023 is as under: - Income

Total income in Fiscal 2024 decreased by 1.24% to Rs 10,024.99 crore from Rs 10,150.90 crore in Fiscal 2023, primarily due to decrease in generation, decrease in Revenue from Project Management and Consultancy works partially offset by increase in Other Operating Income and increase in Other Income in Fiscal 2024.

Sale of Energy

The principal source of income of the Company is from sale of power to bulk customers comprising, mainly of electricity utilities owned by State Governments/Private Distribution Companies pursuant to long-term Power Purchase Agreements. The rate of electricity is determined Power Station wise by the Central Electricity Regulatory Commission (CERC). The CERC vide its notification no. L-1/ 236/ 2018/CERC dated March 07, 2019 has issued Tariff Regulations for the tariff period 2019-24 and subsequent amendments from time to time. Sales in respect of one of the Power Stations has been recognized provisionally as per ibid tariff notification pending approval of tariff for the period 2019-24 by CERC.

The said regulations inter-alia provides that, for the purpose of filing of tariff petitions, the Return on Equity (ROE), a component of tariff, is to be grossed-up using effective tax rate of the respective Financial Year. For the purpose of recognizing Sales, ROE has been grossed up using effective tax rate for financial year 2023-24.

The Tariff Regulations also provide for incentives which comprise of incentives on achieving plant availability factor greater than Normative Annual Plant Availability Factor (NAPAF), incentive for generation of energy in excess of the design energy of the plant (Secondary Energy) as well as incentive by way of Unscheduled Interchange charges where the Power Stations of the Company contribute towards maintaining grid stability.

Sale includes reimbursement on account of Water Cess in respect of power stations situated in state of Jammu & Kashmir and Uttarakhand.

In Fiscal 2024, 21,773 MUs of electricity (excluding infirm power of 6 MUs generated by Parbati-II HE Project during FY 2023-24) was generated from installed capacity of 5,551 MW as against 24,619 MUs (excluding infirm power of 288 MUs generated by Parbati-II HE Project during financial year 2022-23) from installed capacity of 5,551MW in Fiscal 2023. Accordingly, there was decrease of 11.56% in the number of units generated. The average selling price (after adjustment of components of earlier year sales and free power to home state) was Rs 4.21 per unit for 19,138 million units sold in Fiscal 2024 as against Rs 3.97 per unit for 21,622 million units in Fiscal 2023. During Fiscal 2024, the Company has earned Rs 457.81 crore towards incentives against Rs 675.68 crore in Fiscal 2023. Sale of energy decreased by 12.79% to Rs 7,327.90 crore in Fiscal 2024 from Rs 8,404.65 crore in Fiscal 2023 primarily due to lower generation in Power Stations and decrease in sales pertaining to earlier years. Company's Plant Availability Factor (PAF) in Fiscal 2024 was 77.60% as compared to 88.75% in Fiscal 2023. Plant Availability Factor for Fiscal 2024 was higher by 0.32% as compared to Normative Annual PAF of 77.35%.

Adjusted Sale of Energy

The revenue from sale of energy includes sales pertaining to earlier years but recognised in current year and excludes the sale of energy of five Power Stations, whose sale of energy is accounted for as Operating/ Finance Lease in terms of Ind AS 116 - Leases.

As per CERC Tariff Regulations, Exchange Rate Variation on interest payments and loan repayments corresponding to the normative loans considered for tariff of stations/ units is payable/ recoverable to/ from the beneficiaries on repayment of the loans and interest thereon. Pursuant to the opinion of Expert Advisory Committee of the Institute of Chartered Accountants of India (EAC of the ICAI), Foreign Exchange Rate Variation on restatement of foreign currency loans as at the Balance Sheet date, payable/ recoverable to/ from customers later on actual settlement, is accounted for by creating a deferred liability/ asset in the accounts instead of adjusting the same in the Statement of Profit & Loss.

For the purpose of year to year comparison, the impact of earlier year sales has been excluded from sales of energy in order to arrive at the adjusted sales of energy.

The revenue from sales of energy after such adjustments is as under:

Revenue from Contracts, Project Management and Consultancy Works

The revenue under this head includes revenue from assignments pertaining to Construction Contracts, Project Management & Consultancy Contracts. These assignments primarily include consultancy assignments in respect of Chenab Valley Power Projects Limited, Lanco Teesta Hydro Power Limited, Jalpower Corporation Limited and Ratle Hydroelectric Power Corporation Limited. The income from contracts, project management and consultancy works decreased by 7.63% from Rs 60.94 crore in Fiscal 2023 to Rs 56.29 crore in Fiscal 2024 due to decrease in consultancy assignments in Fiscal 2024. Revenue from Power - Trading

The revenue under this head includes revenue from Power Trading activity which the Company ventured into during Fiscal 2019. The revenue from Power-Trading increased from Rs 4.60 crore in Fiscal 2023 to Rs 11.52 crore in Fiscal 2024 due to increased Power Trading activities in Fiscal 2024. The income under this activity was booked on net Trading Margin Basis in line with Ind AS 115 - Revenue from Contracts with Customers.

Other Operating Income

Other operating income in Fiscal 2024 was Rs 379.68 crore i.e. an increase of 201.45% as against Rs 125.95 crore in Fiscal 2023. Income on account of Interest from beneficiary states has been booked in respect of twelve power stations whose tariff orders for truing up of 2014-19 tariff period and provisional tariff orders for 2019-24 tariff period were received during Fiscal 2024. Components of other operating income are as under:

Other Income

Other income in Fiscal 2024 was Rs 1,620.07 crore i.e. an increase of 94.12% as against Rs 834.56 crore in Fiscal 2023. Major components of Other Income are placed and discussed hereunder:

During Fiscal 2024, Rs 25.96 crore was earned as Late Payment Surcharge (LPS) from beneficiaries, as against Rs 53.41 crore during Fiscal 2023. Lower income on account of LPS is due to better realisation of Trade Receivables during the current fiscal.

During Fiscal 2024, Rs 497.54 crore was earned as Dividend from investments, mainly from one subsidiary Company (NHDC Ltd.), as against Rs 376.85 crore during Fiscal 2023. During Fiscal 2024, Rs 149.86 crore was booked as realisation of Business Interruption (BI) loss, as against Rs 42.14 crore during Fiscal 2023. Higher income on account of BI Loss includes confirmation for "On Account Payment" of Rs 112.50 crore received from Insurance Company in respect of generation loss in one of the Power Stations of the Company.

During Fiscal 2024, Rs 381.92 crore was booked as Income from Insurance Claim, as against Rs 19.33 crore during Fiscal 2023. Higher income on account of Insurance Claim in the current fiscal is on account of amount recoverable from Insurance Company for certain losses to assets due to flash flood in the Power Stations located in Teesta River Basin.

Expenditure

Total expenditure increased by 7.10% to Rs 5,962.79 crore in Fiscal 2024 from Rs 5,567.30 crore in Fiscal 2023 mainly due to increase in Other Expenses by Rs 607.92 crore partially offset by decrease in Generation Expenses by Rs 122.19 crore, decrease in Depreciation & Amortization Expense by Rs 34.44 crore, decrease in Finance Cost by Rs 51.03 crore and decrease in Employee Benefits Expense by Rs 4.77 crore. Our total expenditure as a percentage of total income was 59.48% in Fiscal 2024 as compared to 54.85% in Fiscal 2023.

Generation Expenses

Generation expenses consist of Water Cess and consumption of stores and spare parts. These expenses represent approximately 13.66% of the total expenditure in Fiscal 2024 compared to 16.82% of the total expenditure in Fiscal 2023. In absolute terms, these expenses were Rs 814.27 crore in Fiscal 2024 as against Rs 936.46 crore in Fiscal 2023. The decrease of Rs 122.19 crore in generation expenses is primarily on account of reversal of liability towards water cess in respect of power stations located in the state of Himachal Pradesh where the relevant act has been deemed unconstitutional by the Hon'ble High Court of Himachal Pradesh and in the state of Sikkim, where management is of the opinion that obligation to pay water cess beyond what has already been paid is at best contingent in nature.

Employee Benefits Expense

Employee benefits expense include Salaries and Wages, Allowances, Incentives, Contribution to Provident Fund, Contribution to Employees Defined Contribution

Superannuation Scheme and expenses related to other employee welfare funds. These expenses represent 21.74% of our total expenditure in Fiscal 2024 as against 23.37% in Fiscal 2023. Employee costs has decreased from Rs 1,301.35 crore in Fiscal 2023 to Rs 1,296.58 crore in Fiscal 2024 i.e. a decrease of Rs 4.77 crore in Fiscal 2024.

There were 4,929 employees on the payroll as of March 31, 2024 compared to 4,776 employees as of March 31, 2023. Out of this 2,374 and 2,428 employees were engaged in Operation & Maintenance of Power Stations during Fiscal 2024 & 2023 respectively.

Finance Costs

'Finance costs' consist of interest expense on bonds and term loans. In books of accounts, borrowings are denominated in Indian Rupees, including amounts raised in foreign currencies (Japanese Yen). Finance Cost also includes expenses on account of Guarantee Fees to the Government of India in connection with loans raised from Foreign Market.

Finance Cost represents 7.13% of the total expenditure in Fiscal 2024 compared to 8.55% of the total expenditure in Fiscal 2023. Finance Cost decreased by 10.72% to Rs 425.13 crore in Fiscal 2024 from Rs 476.16 crore in Fiscal 2023. The decrease in Finance Cost is mainly due to repayment of loans and change in weighted average rate of interest in Fiscal 2024.

Depreciation & Amortization Expense

As per the material accounting policies of the Company, Depreciation is charged to the extent of 90% of the cost of assets following the rates and methodology notified by CERC on straight line method, except for some items on which depreciation is charged to the extent of 95% of the costs of the assets at the rates prescribed in the Companies Act, 2013 or as per rates assessed by Management. Depreciation cost decreased by 3.01% to Rs 1,111.00 crore in Fiscal 2024 from Rs 1,145.44 crore in Fiscal 2023. The decrease in depreciation expenses is primarily due to completion of 12 years of life of Sewa-II Power Station in Fiscal 2023.

As a percentage of total expenditure, depreciation & amortization expense decreased to 18.63% in Fiscal 2024 from 20.57% in Fiscal 2023.

Other Expenses

Other expenses consist primarily of Repair & Maintenance of Buildings and Plant & Machinery, Security Expenses, Insurance Expenses, CSR Expenses, Other Administrative Overheads, Provisions, etc. These expenses represent approximately 38.84% of the total expenditure in Fiscal 2024 as against 30.68% in Fiscal 2023. In absolute terms, these expenses increased by 35.59% to Rs 2,315.81 crore in Fiscal 2024 from Rs 1,707.89 crore in Fiscal 2023. The increase of Rs 607.92 crore in other expenses is primarily

due to increase in losses on insured assets (Rs 407.68 crore), Insurance Expenses (Rs 125.35 crore), Interest to Beneficiary states (Rs 69.27 crore), Security Expenses (Rs 15.17 crore), R&M Expenses (Rs 14.27 crore), Interest on arbitration/court cases (under Vivad se Viswas scheme) charged to the Statement of Profit & Loss (Rs 183.11 crore) partially offset by decrease in provision against impairment of investment in Subsidiary & Joint Venture Companies (Rs 115.81 crore), Fair Value Loss on Financial Assets (Rs 124.19 crore), CSR Expenses (Rs 41.58 crore), etc.

Movements in Regulatory Deferral Account Balances (Regulatory Income)

In line with the Guidance Note on "Accounting for Rate Regulated Activities" issued by the Institute of Chartered Accountants of India (ICAI) as well as keeping in view the provision of Ind AS 114 - Regulatory Deferral Accounts, 'Regulatory Assets' has been created and corresponding 'Regulatory Income' has been recognized for Rs 233.28 crore. This includes Depreciation due to moderation of Tariff in respect of Kishanganga Power Station Rs 197.93 crore, Exchange Differences against monetary Items Rs 0.04 crore, Adjustment against Deferred Tax Recoverable for tariff period up to 2009 '(-)61.68 crore, Adjustment against Deferred Tax Liabilities for tariff period 2014-19 '(-)38.52 crore and Interest Payment on Court/ Arbitration Cases Rs 135.51 crore. Rate regulated income is recognised in the books of accounts for Fiscal 2024 on account of below mentioned five factors:

(i) Regulatory Deferral Account balances due to moderation of tariff of Kishanganga Power Station

The Company has carried out moderation of depreciation as a component of tariff of Kishanganga Power Station to make the tariff saleable, which has been allowed by the CERC. This entitles the Company to recover the lower depreciation considered in tariff during the first ten years of operation over the balance useful life of the Power Station. Accordingly, the right to recover the difference between the depreciation charged in the books as per CERC Tariff Regulations, 2019-24 and that recoverable through tariff amounting to Rs 197.93 crore during Fiscal 2024 (Fiscal 2023 Rs 199.36 crore) has been recognised as a Regulatory Income.

(ii) Regulatory Deferral Account balances in respect of exchange differences on Foreign Currency Monetary items

Exchange differences arising on translation/ settlement of foreign currency monetary items to the extent charged to the Statement of Profit & Loss and further recoverable from or payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are being recognized as 'Regulatory Deferral Account balances' w.e.f. April 01, 2016. These balances are adjusted from the year in which the same become recoverable from or payable to the beneficiaries after Date of Commercial Operation (COD) of the Project. Accordingly the Company has created Regulatory Assets and recognised corresponding Regulatory Income of Rs 0.04 crore during Fiscal 2024 (Fiscal 2023 Rs 1.10 crore), which is recoverable from beneficiaries in future periods.

(iii) Regulatory Deferral Account balances due to reclassification of deferred tax recoverable/ deferred tax adjustment against deferred tax liabilities

As per CERC Tariff Regulations, deferred tax arising out of generating income for the tariff period 2004-09 is recoverable from beneficiaries in the year the same materializes as current tax. For the tariff periods 2014-19 and 2019-24, deferred tax is recoverable by way of grossing up the Return on Equity by the effective tax rate based on actual tax paid. Till 31st March, 2018 the deferred tax recoverable from beneficiaries in future years was presented as an adjustment to deferred tax liability.

The practice was reviewed in FY 2018-19 based on an opinion of the EAC of the ICAI obtained during that year. As per this opinion, adjustment against Deferred Tax Liability is not a deductible temporary difference resulting into deferred tax asset under Ind AS 12- Income Taxes, but rather fulfills the definition of regulatory deferral account balance in terms of Ind AS 114 - Regulatory Deferral Accounts.

The regulated assets (+)/liability (-) recognized in the books during Fiscal 2024 are as follows:

In respect of deferred tax recoverable for tariff period upto 2009, Rs 61.68 crore has been utilized during Fiscal 2024 (Fiscal 2023 Rs 56.09 crore) and in respect of deferred tax adjustment against deferred tax liabilities (pertaining to tariff period 2014-19) Rs 38.52 crore has been utilized during Fiscal 2024 (in Fiscal 2023 addition of Rs 1.18 crore and reversal of Rs 217.16 crore).

(iv) Creation of Regulatory Deferral Account balances on account of Interest payment on settlement of Court/ Arbitration cases (Under Vivad Se Viswas Scheme)

Vide Office Memorandum dated 29.05.2023, the Ministry of Finance, Government of India has notified the "Vivad Se Viswas II (Contractual Disputes) Scheme" (the Scheme) for settlement of contractual disputes between, inter alia CPSEs (the 'Procurer') and the counter-party to the dispute (the 'Contractor'). Disputes where the award by Court/

Arbitral Tribunal (AT) is only for monetary value are eligible for settlement under this scheme. Cases where the award stipulates specific performance of contract (either fully or partially) shall not be eligible for settlement through this scheme.

As per Regulation 91 of CERC Tariff Regulations, 2024-29, in cases where there is a liability with respect to capital works on account of award of arbitration having principal amount along with interest payment, the principal amount actually paid shall be capitalised. Provided that any interest amount associated with the arbitration award and actually paid shall be recovered in installments. Since, expenditure towards interest in case of award of arbitration or for compliance of order or directions of any Statutory Authority, or Order or decree of any Court of Law was allowed as reimbursement by CERC during tariff period 2019-24 and tariff regulation 2024-29 also allows for recovery of interest expenditure on arbitration award, the interest paid/ to be paid in respect of cases being settled under the Scheme has been charged to the Statement of Profit and Loss. Further, keeping in view the provisions of Ind AS 114- "Regulatory Deferral Accounts Debit Balance', such interest amount to the extent charged to the Statement of Profit and Loss till 31st March 2024, amounting to Rs 135.51 crore have been recognized as 'Regulatory Deferral Account balances'.

(v) Recognition of Minimum Alternative Tax (MAT) Credit and Regulatory Deferral Account (Credit) balances thereon

NHPC is currently paying its income tax liability under MAT mainly due to availment of deduction u/s 80-IA of the Income Tax Act,1961 in respect of its Power Stations commissioned before 31.03.2017.

During Fiscal 2024, MAT Credit of Rs 528.65 crore has been recognised and Rs 354.52 crore has been utilised.

During Fiscal 2023, MAT Credit of Rs 417.31 crore was recognised and Rs 328.94 crore was utilised. Simultaneously, Regulatory Deferral Account (Credit) balances of Rs 125.59 crore was recognised and the same was utilised during the year. Further, Rs 390.07 crore was adjusted being regulatory liability recognized in respect of Power Stations where tariff has been fixed on negotiated basis with the beneficiaries.

Profit before Tax and Rate Regulated Income

Due to the reasons outlined above, our profit before tax decreased by 11.38% to Rs 4,062.20 crore in Fiscal 2024 from Rs 4,583.60 crore in Fiscal 2023.

Tax Expenses

In Fiscal 2024, we provided Rs 551.54 crore towards tax expenses as compared to Rs 605.40 crore in Fiscal 2023. The decrease in tax expenses in Fiscal 2024 is on account of decrease in deferred tax expenses by Rs 76.33 crore and increase in current year taxes by Rs 22.47 crore.

Profit after Tax including Rate Regulated Income Our profit after tax decreased by 2.34% to Rs 3,743.94 crore in Fiscal 2024 from Rs 3,833.79 crore in Fiscal 2023.

Other Comprehensive Income (OCI)

OCI comprising of actuarial gain/ loss of re-measurements of post retirement Defined Benefit Plans and fair value gain/ loss on investments in Equity & Debt Instruments in Fiscal 2024 was '(-)24.96 crore against '(-)3.37 crore in Fiscal 2023.

Total Comprehensive Income (TCI)

TCI i.e. total profit inclusive of OCI in Fiscal 2024 was Rs 3,718.98 crore i.e. decrease of 2.91% as against Rs 3,830.42 crore in Fiscal 2023.

LIQUIDITY AND CAPITAL RESOURCES Both internal and external sources of liquidity are utilized for working capital requirement and funding of capital expenditure requirements. Generally long term borrowings are raised through term loans from banks/ financial institutions or issue of bonds either in Indian Rupees or foreign currencies. Cash and cash equivalents were Rs 775.27 crore and Rs 397.05 crore as of March 31, 2024 and 2023 respectively.

Cash Flows

Net Cash from Operating Activities

In Fiscal 2024, the net cash from operating activities was Rs 5,707.72 crore and Profit before Tax and Regulated Income was Rs 4,062.20 crore. Net cash from operating activities has been arrived at after adjusting non-cash items comprising Rs 1,111.00 crore towards depreciation, Rs 425.13 crore towards interest expenses, Rs 16.80 crore towards provisions, Rs 29.42 crore towards sales adjustment on a/c of FERV, Rs 13.17 crore loss on sale of assets/claims written off, Rs 34.15 crore towards fair value adjustments, Rs 50.42 crore towards deferred revenue on

account of advance against depreciation, Rs 138.11 crore on account of provisions/ liabilities not required written back, Rs 497.54 crore on account of dividend income, Rs 251.07 crore towards interest income & guarantee fees including late payment surcharge, Rs 74.14 crore towards exchange rate variation (gain) and Rs 33.15 crore towards amortization of government grants. Changes in Operating Assets & Liabilities had impact on cash outflow by Rs 1,810.50 crore, which was the net effect of change in Inventories, Trade Receivables, Other Financial Assets, Loans & Advances, Other Financial Liabilities & Provisions and Regulatory Deferral Account Balances.

In Fiscal 2023, the net cash from operating activities was Rs 3,907.35 crore and Profit before Tax and Regulated Income was Rs 4,583.60 crore. Net cash from operating activities was arrived at after adjusting non-cash items comprising Rs 1,145.44 crore towards depreciation, Rs 476.16 crore towards interest expenses, Rs 148.52 crore towards provisions, Rs 32.47 crore towards sales adjustment on a/c of FERV, Rs 1.36 crore loss on sale of assets/claims written off, Rs 50.42 crore towards deferred revenue on account of advance against depreciation, Rs 31.06 crore on account of provisions/liabilities not required written back, Rs 376.85 crore on account of dividend income, Rs 233.65 crore towards interest income & Guarantee Fees including Late Payment Surcharge, Rs 0.50 crore towards exchange rate variation (gain), Rs 93.45 crore towards fair value adjustments and Rs 33.20 crore towards amortization of government grants. Changes in Operating Assets & Liabilities had impact on cash outflow by Rs 1,056.83 crore, which was the net effect of change in Inventories, Trade Receivables, Other Financial Assets, Loans & Advances, Other Financial Liabilities & Provisions and Regulatory Deferral Account Balances.

Net Cash from Investing Activities Net cash used in investing activities was Rs 2,824.17 crore in Fiscal 2024. This was mainly on account of expenditure on Fixed Assets i.e. Property, Plant & Equipment, Other Intangible Assets, CWIP and Movement in Regulatory Deferral Account Balances forming part of project cost of Rs 3,316.05 crore, Rs 763.98 crore towards Investment in Joint Venture & Subsidiaries and Rs 600.05 crore towards loan to subsidiaries partly offset by interest income & Guarantee Fees by Rs 163.87 crore, Rs 497.54 crore towards dividend income, Rs 12.96 crore towards proceeds from term deposits, Rs 13.88 crore towards interest on loan to Subsidiaries/ Joint Ventures, Rs 2.18 crore towards sale of assets, Rs 625.00 crore towards repayment of loan by subsidiaries, Rs 150.00 crore towards proceeds from sale of investment and Rs 390.48 crore towards receipt of Grant. Net cash used in investing activities was Rs 2,929.30 crore in Fiscal 2023. This was mainly on account of expenditure on Fixed Assets i.e. Property, Plant & Equipment, Other Intangible Assets, CWIP and Movement in Regulatory

Deferral Account Balances forming part of project cost of Rs 2,767.79 crore, Rs 638.54 crore towards Investment in Joint Venture & Subsidiaries, Rs 14.28 crore towards investment in term deposits and Rs 315.00 crore towards loan to subsidiaries partly offset by interest income & guarantee fees by Rs 166.27 crore, Rs 376.85 crore towards dividend income, Rs 255.00 crore towards repayment of loan by subsidiaries, Rs 2.82 crore towards interest on loan to Subsidiaries/ Joint Ventures, Rs 1.39 crore towards sale of assets and Rs 3.98 crore towards receipt of Grant.

Net Cash from Financing Activities

In Fiscal 2024, our net cash outflow from financing activities was Rs 2,505.33 crore. Fund of Rs 4,046.94 crore has been raised through issue of bonds and loan from banks. Borrowings to the tune of Rs 2,713.51 crore were repaid. Our cash outflow on account of repayment of lease liability including interest thereon was to the tune of Rs 5.72 crore. The amount related to interest servicing was Rs 1,974.71 crore. In Fiscal 2024, Total dividend amounting to Rs 1,858.33 crore was paid.

In Fiscal 2023, our net cash outflow from financing activities was Rs 1,519.66 crore. Fund of Rs 3,972.37 crore was raised through issue of bonds and loan from banks. Borrowings to the tune of Rs 1,898.66 crore were repaid. Our cash outflow on account of repayment of lease liability including interest thereon was to the tune of Rs 3.29 crore. The amount related to interest servicing was Rs 1,681.52 crore. In Fiscal 2024, total dividend amounting to Rs 1,908.56 crore was paid.

Balance Sheet Highlights Assets

Property, Plant and Equipment (PPE), Capital Work in Progress (CWIP), Right of Use Assets (ROU), Investment Property, Intangible Assets

Our PPE consisting of Land, Dams, Tunnels, Buildings including Power House Buildings, Construction Equipment, Plant & Machinery, Office Equipment, Computers, etc. after provision for depreciation & amortisation were Rs 16,598.88 crore and Rs 17,435.03 crore as of March 31,2024 and March 31,2023 respectively.

CWIP which includes Hydraulic Works, Buildings including Power House Buildings, Construction Equipment, Plant & Machinery and S&I works at our power projects under Construction, Survey & Investigation were Rs 29,794.72 crore and Rs 25,315.01 crore as of March 31, 2024 and March 31, 2023 respectively.

ROU including forest land under right of use and other leased assets were Rs 2,613.18 crore and Rs 2,625.70 crore as of March 31, 2024 and March 31, 2023 respectively.

Investment Property consists of one piece of land at Bangalore amounting to Rs 4.49 crore.

Intangible Assets comprising of computer software were Rs 1.83 crore and Rs 3.08 crore as of March 31, 2024 and March 31, 2023 respectively.

Intangible Assets under development consisting of Upfront Fee/ Premium for allotment of two hydroelectric projects in the State of Arunachal Pradesh were Rs 180.00 crore as of March 31, 2024.

Investments (Current & Non-Current)

Investments are intended for long term and carried at cost which consists of Equity investments in Subsidiaries/ Joint Venture Companies, Govt. Securities and Bonds. Our total investment was Rs 6,368.29 crore and Rs 5,698.31 crore as of March 31, 2024 and March 31, 2023 respectively. The increase in investment is the net effect of increase in investment in subsidiary companies and increase in fair value of investment in equity instruments. During FY 2023-24, the Company has made fresh investment in subsidiary Companies amounting to Rs 689.51 crore.

Loans (Current & Non-Current)

Loans include loans to our employees, loan and interest accrued thereon to Govt. of Arunachal Pradesh and loans to subsidiary and joint venture companies' viz. Lanco Teesta Hydro Power Limited (LTHPL), Bundelkhand Saur Urja Limited (BSUL) and National High Power Test Laboratory Limited (NHPTL). Loans as of March 31, 2024 and March 31, 2023 were Rs 1,293.40 crore and Rs 1,204.39

crore respectively i.e. there is an increase of 7.39% over figures of previous fiscal mainly due to accrued interest on loan to Govt. of Arunachal Pradesh, loan to BSUL and increase in employee loans partially offset by repayment of loan by LTHPL during fiscal 2024.

Other Financial Assets (Current & Non-Current)

The other financial assets as at March 31, 2024 stood at Rs 5,760.83 crore against Rs 5,161.41 crore for the previous fiscal i.e. there is an increase of 11.61% over figures of previous fiscal. Other Financial Assets include amount recoverable on account of Bonds fully serviced by Govt. of India, Lease rent receivable, Receivable on account of Late Payment Surcharge, Interest income accrued on Bank Deposits/ Investment, claim recoverable from different agencies, Share Application Money pending allotment and Receivable from Subsidiaries, etc. The increase in other financial assets is mainly due to increase in claim recoverable from insurance Company and increase in Share Application Money pending allotment from Subsidiary Companies.

Tax Assets (Current & Non-Current)

Tax assets as of March 31, 2024 and 2023 were Rs 117.93 crore and Rs 163.10 crore respectively i.e. there is decrease of 27.69% over figures of previous fiscal. Tax Assets include Advance Income Tax & Tax Deducted at Source over and above provision for income tax up to financial year 2023-24. Tax assessment up to financial year 2021-22 has been completed except financial year 2020-21 and Tax assessment for financial year 2022-23 is under progress. Other Non-Current Assets

Other non-current assets mainly comprise deferred foreign currency fluctuation assets, advances (Capital as well as other than Capital) and advance to contractors against arbitration awards. Our other non-current assets as of March 31, 2024 and 2023 were Rs 3,528.73 crore and Rs 3,602.77 crore respectively. The decrease of 2.06% in fiscal 2024 as compared to the figures in fiscal 2023 is mainly due to recovery of capital advances and decrease in deferred foreign currency fluctuation assets. Inventories

Inventories are valued at cost or Net Realisable Value whichever is lower. Our inventories were valued at Rs 177.00 crore and Rs 150.48 crore as of March 31, 2024 and 2023 respectively.

Trade Receivables (Current & Non-Current)

These consist primarily of receivables against the sale of electricity including unbilled revenue. The Trade receivables (net of provision for doubtful debts) as of March 31, 2024 and 2023 were Rs 3,983.95 crore and

Rs 5,887.04 crore respectively. Decrease of 32.33% in trade receivables in fiscal 2024 as compared to fiscal 2023 is due to decrease in receivable on account of unbilled revenue and receivables not yet due.

Cash and Bank Balances

Cash and Bank balances as of the Balance Sheet date consist of cash surplus in our current account, short term deposits, unspent advances received from Government entities in respect of the Pradhan Mantri Grameen Sadak Yojna Scheme for development of rural roads and the Deen Dayal Upadhyaya Grameen Jyoti Yojana Scheme for development of rural electrification infrastructure.

Cash and Cash equivalents as of March 31,2024 and 2023, respectively, were Rs 775.27 crore and Rs 397.05 crore. The increase of Rs 378.22 crore during fiscal 2024 is the net result of cash inflow from operating activities of Rs 5,707.72 crore offset by cash outflow on investing activities by Rs 2,824.17 crore & Rs 2,505.33 crore on account of financing activities respectively.

Bank balances other than Cash and Cash Equivalents as of March 31, 2024 and 2023 were Rs 217.24 crore and Rs 241.17 crore respectively.

Our Bank balances other than Cash and Cash Equivalents include Rs 88.08 crore (Previous Year Rs 84.74 crore) held for Rural Road and Rural Electrification works being executed by Company on behalf of other agencies, unpaid dividend, unpaid interest & other earmarked balances of Rs 129.16 crore (Previous Year ' 140.13 crore) which are not freely available for the business of the Company.

Other Current Assets

Other Current Assets mainly comprise of advances to contractors and suppliers, Prepaid Expenditure and Deferred Foreign Currency Fluctuation Assets. Our other Current Assets, as of March 31, 2024 and 2023 respectively were Rs 732.23 crore and Rs 398.23 crore, an increase of 83.87% in fiscal 2024 as compared to the figures in fiscal 2023. This increase is mainly due to increase in Prepaid Insurance (Rs 373.00 crore) partly offset by decrease in Receivable on account of material issue to contractors (Rs 48.20 crore).

Regulatory Deferral Account Debit Balances In line with the Guidance Note on "Accounting for Rate Regulated Activities" issued by the Institute of Chartered Accountants of India as well as keeping in view the provisions of Ind-AS 114 - Regulatory Deferral Accounts, 'Regulatory Assets' have been created and corresponding 'Regulatory Income' has been recognized in respect of certain items which are recoverable from beneficiaries in future.

Regulatory Deferral Account Debit balances as on March 31,2024 and March 31, 2023 were as under:

Net Worth

Net Worth of the Company at the end of Fiscal 2024 increased to Rs 37,268.61 crore from Rs 35,407.96 crore in the previous Fiscal registering an increase of 5.25% mainly due to increase in Profit after tax and consequential increase in retained earnings.

Long Term Borrowings

Long Term Borrowings of the Company mainly comprise of Bonds, Secured Term Loans & Unsecured Loans (Bonds, Term Loans and Foreign Currency Loans) amounting to Rs 11,792.15 crore, Rs 8,580.60 crore and Rs 5,965.47 crore in Fiscal 2024 as against Rs 13,099.23 crore, Rs 5,313.60 crore and Rs 6841.86 crore respectively in Fiscal 2023. The Secured loans include borrowings from domestic banks and financial institutions along with corporate bonds raised in the capital markets that are secured against assets of the Company.

The increase in Long Term Borrowings to the extent of 4.29% over previous fiscal is mainly on account of borrowings from domestic banks including securitization of return on equity of one of the power station partly offset by redemption of secured bonds and repayment of borrowings.

Lease Liabilities (Current & Non-Current)

Lease Liabilities accounted for as per Ind AS 116 - Leases as at March 31, 2024 stood at Rs 23.14 crore against Rs 14.09 crore for the previous fiscal.

Other Financial Liabilities (Current & Non-Current)

Other Financial Liabilities include amount payable towards Bonds fully serviced by Govt. of India, interest accrued but not due on borrowings, liability against capital works/supplies, EMD/ Retention Money, etc. The other financial liabilities as at March 31, 2024 stood at Rs 4,080.03 crore against Rs 3,684.12 crore for the previous fiscal i.e. there is an increase of 10.75% over figures of previous fiscal mainly due to increase in Liability against capital works/ supplies C277.42 crore), amount payable to beneficiaries (Rs 99.69 crore) and EMD/ Retention Money (Rs 59.34 crore) partially offset by decrease in Interest accrued but not due on borrowings (Rs 60.17 crore).

Provisions (Current & Non-Current)

Provisions include provision for employee benefit expenses viz. Performance Related Pay, Superannuation/ Pension fund and Provision towards long term employee benefits arrived at on the basis of actuarial valuation. Other Provisions include Provision for Restoration expenses of Insured Assets, Provision for Tariff Adjustment, Provision for Committed Capital Expenditure, Provision in respect of arbitration award/court cases and other Provisions. Total provisions stood at Rs 2,229.26 crore as at March 31, 2024 as against Rs 1,713.15 crore for previous fiscal i.e. there is an increase of 30.13% over figures of previous fiscal mainly due to increase in Provision for Restoration expenses of Insured Assets (Rs 376.12 crore), Provision in respect of arbitration award/ court cases (Rs 80.71 crore), Provision for Committed Capital Expenditure C52.42 crore) partly offset by decrease in Provision for Tariff Adjustment (Rs 12.98 crore) and other provisions.

Deferred Tax Liabilities

The Deferred Tax Liabilities as at March 31, 2024 stood at Rs 1,668.45 crore against Rs 1,937.34 crore for the previous fiscal i.e. there is decrease of 13.88% over figures of previous fiscal mainly due to recognition of MAT Credit (Rs 528.65 crore) and increase in deferred assets due to PPE (Rs 56.13 crore) partly offset by utilisation of MAT Credit (Rs 354.52 crore).

Other Non-Current Liabilities

Other Non-Current Liabilities include Income received in advance (Advance against Depreciation) and Grants in aid-from Government. The Other Non-Current Liabilities as at March 31, 2024 stood at Rs 2,250.06 crore against Rs 1,944.56 crore for the previous fiscal i.e. there is an increase of 15.71% over figures of previous fiscal mainly due to increase in Grants in aid received from Government of India for Downstream Protection Measures at Subansiri Lower Project C56.98 crore), for setting up Solar Power Projects and rooftop Solar Power Plant (Rs 223.50 crore) and for Flood Moderation & Enabling Infrastructure in respect of Dibang Project (Rs 109.00 crore).

Short Term Borrowings

The Short term borrowings as at March 31, 2024 stood at Rs 3,052.77 crore against Rs 2,885.65 crore for the previous fiscal. Increase in short term borrowings mainly due to increase in current maturities of long term borrowings (Rs 924.06 crore) partly offset by decrease in amount payable to the banks by the beneficiaries on account of bills discounted against trade receivables (Rs 756.94 crore). Trade Payables

The Trade payables as at March 31, 2024 stood at Rs 258.85 crore against Rs 215.45 crore for the previous fiscal i.e. there is an increase of 20.14% over figures of previous fiscal due to increase in unbilled amount of Trade payables (Rs 32.70 crore).

Other Current Liabilities

The other current liabilities as at March 31, 2024 stood at Rs 653.30 crore against Rs 734.91 crore for the previous fiscal i.e. there is decrease of 11.10% over figures of previous fiscal mainly due to decrease in water usage charges payable, liabilities against deposit works partially offset by increase in statutory dues payable.

Regulatory Deferral Account Credit Balances In line with the Guidance Note on "Accounting for Rate Regulated Activities" issued by the Institute of Chartered Accountants of India as well as keeping in view the provisions of Ind-AS 114-Regulatory Deferral Accounts, 'Regulatory Deferral Account Credit Balances' has been created and corresponding 'Movement in Regulatory Deferral Account Balances' has been recognized in respect of MAT Credit to be passed on the beneficiaries. Regulatory Deferral Account Credit Balances as at March

31,2024 stood at Rs 923.20 crore.

Current Tax Liabilities

The current tax liabilities as at March 31, 2024 stood at Rs 56.70 crore against Nil for the previous fiscal. This represents excess provision of current tax over and above Advance Tax & TDS for FY 2023-24.

Off-Balance Sheet Items Contingent Liabilities

The following table sets forth the components of our contingent liabilities as of Fiscal 2024 and 2023.

Contingent liabilities decreased by 9.62% from Rs 10,252.22 crore as of March 31, 2023 to Rs 9,265.46 crore as of March

31,2024 mainly due to contractors claim settled under the Vivad se Viswas II Scheme (Contractual Disputes) notified by the Government of India (Rs 676.32 crore) and reduction in contractors claims due to arbitration awards settled in favour of the Company (Rs 755.85 crore) partially offset by addition of interest on claims of existing contractors.

Key Financial Ratios (Standalone basis)

# For the calculation of ISCR and DSCR, amount of interest and Principal repayments against the borrowings of the operational projects have been considered.

* Closing Price as on 31st March of respective fiscal has been considered for Market Price per Share

PE Ratio (Market Price per Share/ Earning Per Share)

PE Ratio of the Company at the end of Fiscal 2024 increased to 24.03 from 10.52 in the previous Fiscal 2023 registering an increase of 128.42% mainly due to increase

in Market Price per Share of the Company. Market Price per Share as on 31st March 2024 was Rs 89.65 as against Rs 40.20 as on 31st March 2023.

Return on Net worth (PAT/ Average Shareholder's Equity)

Return on Net worth of the Company at the end of Fiscal 2024 decreased to 10.30% from 11.13% in the previous Fiscal 2023 registering a decrease of 7.46% mainly due to decrease in Profit after tax partially offset by increase in retained earnings.

BUSINESS AND FINANCIAL REVIEW OF SUBSIDIARIES/ JOINT VENTURE COMPANIES

Highlights of the subsidiaries and joint venture companies of NHPC are as under:- NHDC Limited

NHDC Ltd. was incorporated on 01.08.2000 as a Joint Venture of NHPC Ltd. (51.08%) and Government of Madhya Pradesh (48.92%) having authorised share capital of Rs 3,000 crore. NHDC has commissioned Indira Sagar Power Project (1,000 MW) and Omkareshwar Power Project (520 MW). The Total Income of NHDC Ltd. for the financial year ended March 31, 2024 and 2023 was Rs 1,500.27 crore and Rs 1,509.35 crore respectively. The Profit After Tax of NHDC Ltd. for the financial year ended March 31, 2024 and 2023 was Rs 812.24 crore and Rs 800.53 crore respectively. Paid up share capital of the Company is Rs 1,962.58 crore of which NHPC's contribution is Rs 1,002.42 crore. During the FY 2023-24, the Company has commissioned the 8 MW Sanchi Solar Project in the State of Madhya Pradesh. Loktak Downstream Hydroelectric Corporation Limited (LDHCL)

LDHCL was incorporated on 23.10.2009 as a Joint Venture of NHPC Ltd. (74%) and Government of Manipur (26%) having authorized share capital of Rs 230 crore. Paid up share capital of the Company is Rs 141.09 crore of which NHPC's contribution is Rs 105.56 crore (74.82%). Considering the delay in investment sanction (PIB & CCEA) and high projected tariff, impairment provision for the entire investment of NHPC in LDHCL was created in the books of the NHPC Limited during the FY 2022-23. The Company is yet to start operations.

Bundelkhand Saur Urja Limited (BSUL)

BSUL was incorporated on 02.02.2015, as a Joint Venture of NHPC Ltd. and Government of Uttar Pradesh (UPNEDA), with NHPC's share not less than 74%. The authorized share capital of the Company is Rs 450.00 crore. Paid up share capital of the Company is Rs 104.78 crore of which NHPC's contribution is Rs 91.83 crore (87.64%). During the FY 2023-24, the Company has commissioned the 65 MW Kalpi Solar Power Project in the State of Uttar Pradesh.

Lanco Teesta Hydro Power Limited (LTHPL)

During the FY 2019-20, NHPC had acquired LTHPL as its wholly owned subsidiary under insolvency resolution process. The acquisition was made as per the resolution plan submitted by NHPC and approved by the National Company Law Tribunal (NCLT). The authorized share capital of the Company is Rs 2,500.00 crore. Paid up share capital of the Company is Rs 1,724.41 crore. The Company is involved in construction of 500 MW Teesta-VI Hydro Power Project.

Jalpower Corporation Limited (JPCL)

On 31.03.2021, NHPC had acquired JPCL under insolvency resolution process and the Company had become a wholly owned subsidiary of NHPC from that date. The acquisition was made as per the resolution plan submitted by NHPC and approved by the NCLT. The authorized share capital of the Company is Rs 600.00 crore. Paid up share capital of the Company is Rs 281.49 crore. The Company is involved in construction of 120 MW Rangit-IV Hydroelectric Project.

Ratle Hydroelectric Power Corporation Limited (RHPCL)

RHPCL was incorporated on 01.06.2021, as a Joint Venture of NHPC Ltd. and Jammu and Kashmir State Power Development Corporation Limited (JKSPDCL), with equity participation of 51:49 respectively. The authorized share capital of the Company is Rs 1,600 crore. Paid up share capital of the Company is Rs 664.88 crore of which NHPC's contribution is Rs 364.88 crore (54.88%). The Company is involved in construction of 850 MW Ratle Hydroelectric Power Project.

Chenab Valley Power Projects Limited (CVPPL)

CVPPL was incorporated on 13.06.2011 as a Joint Venture of NHPC Ltd. (49%), Jammu & Kashmir State Power Development Corporation (JKSPDC) (49%) & PTC India Ltd. (2%) for execution of Pakal Dul, Kiru & Kwar H.E. Projects in Chenab River Basin. During the FY 2021-22, NHPC Limited had acquired 2% equity of PTC India Limited in CVPPL for an amount of Rs 4.19 crore. Further, during FY 2022-23, pursuant to signing of Supplementary Promoters' Agreement of CVPPL between NHPC Limited and J&K State Power Development Corporation Limited on November 21, 2022, NHPC Limited had obtained majority representation on the Board of CVPPL and had gained control over CVPPL from that date. Accordingly, CVPPL has been accounted for as a Subsidiary Company from ibid date. The authorized share capital of the Company is Rs 5,200 crore. Paid up share capital of the Company is Rs 4,450.34 crore out of which NHPC's contribution is Rs 2,404.11 crore. The Company's shareholding in CVPPL

due to additional equity infusion is 54.02% as on 31st March, 2024. The Company is involved in construction of 3 Hydroelectric Power Projects totalling 2164 MW in the UT of J&K.

NHPC Renewable Energy Limited (NHPC REL)

NHPC REL was incorporated on 16.02.2022 as a wholly owned subsidiary of NHPC Ltd. The authorised share capital and paid up share capital of the Company is Rs 499 crore and Rs 20 crore respectively. The Company is exploring options for setting up non-conventional/ renewable energy projects and is currently setting up a 700 KW Solar Plant in Rajasthan.

National High Power Test Laboratory Private Limited (NHPTL)

NHPTL was incorporated on 22.05.2009 as a Joint Venture Company of NHPC Ltd., NTPC Ltd., PGCIL and Damodar Valley Corporation (DVC) each having 25% of equity participation. During the Fiscal 2013, Central Power Research Institute also entered into the Joint Venture thereby revising the equity participation to 20% of each Joint Venture partner. The Company has been incorporated to set up an Online High Power Test Laboratory for short-circuit test facility in the Country having Authorised Share Capital of Rs 300 crore. As on March 31, 2024 paid up share capital of the Company is Rs 225.60 crore out of which NHPC's contribution is Rs 48.80 crore against which provision for impairment amounting to Rs 36.48 crore has been created in the books of NHPC Limited. During FY 2020-21, NHPC had granted loan of Rs 18.40 crore to NHPTL. Subsequently, promoters of NHPTL agreed to the revival plan of the Company, as per which the outstanding loan of the promoters has been converted into Equity. Accordingly, shares have been allotted to NHPC against loan of Rs 18.40 crore during FY 2023-24 and the shareholding of the Company in NHPTL has increased from 20% to 21.63%.

The Company has started commercial operation during Fiscal 2018. For the financial year ended March 31, 2024, the Company earned profit of Rs 20.90 crore while loss for the financial year ended March 31, 2023 was Rs 108.32 crore.

Consolidated Financial Statements of NHPC Ltd, its Subsidiaries and Joint Venture Companies

The Consolidated Financial Statements have been prepared in accordance with Ind-AS 110-'Consolidated Financial Statements' and Ind-AS 28-'Investment in Associates & Joint Ventures' which are included in this Annual Report.

A brief summary of the results on a consolidated basis is given below:

SUMMARY OF CONSOLIDATED BALANCE SHEET

35.14 MATERIAL DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS FRONT

Your Company has a highly talented team of committed professionals and has been able to induct, develop and retain the best talent. NHPC endeavors to acquire the best talent in the Country from leading educational institutions and universities. It has been working towards nurturing and retaining talent by providing opportunities to improve their knowledge and skills. Job rotation and inter-location transfer through-out the organization facilitate planned development of careers and broaden the outlook of employees. Employees' participation has been ensured through information sharing with employees, seeking their support, suggestions and co-operation.

(i) TRAINING OF EMPLOYEES

NHPC organizes various developmental programmes for its employees in the areas of behavioral, managerial skills and core competencies.

These programmes organized by the Company are either-in-house or through premier management & engineering institutions which helps employees to keep them abreast with the latest developments and changes taking place in the area of their operation. Special out- bound training programmes for women were organised through which they were acquainted with various aspects of management, leadership and teamwork. Women executives were nominated for International training programmes in the field of HRM and Power Sector to enhance their functional and professional prowess. In addition to above, NHPC also sponsors its executives on regular basis to acquire higher qualification and specialization to enhance their productivity and effectiveness. Workshops and knowledge sharing sessions are organized both in physical and virtual mode for awareness and for updation of knowledge base of employees. Specially designed programs, like in the areas of Corporate Governance, are conducted for senior officials.

Your Company also deputes senior and high potential employees to foreign training programmes to keep them abreast with the latest know how and to understand the global scenario in the field of hydro power. NHPC also sponsors its executives to acquire higher qualification and specialization to improve their productivity and effectiveness.

Considering the future training needs due to advancing technologies, NHPC recognizes the need to adopt modern and scientific training methodologies and to create an infrastructure accordingly. Further, specialized training in the field of project planning, execution & management, O&M, R&D, etc. will be met either by establishing JVs or in collaboration with the expert institutions in the concerned field in India & abroad.

(ii) EMPLOYEE STRENGTH

The employee strength of the Company as on March 31, 2024 was 4,929 (3,193 executives, 631 supervisors & 1,105 workmen).

(iii) WELFARE MEASURES FOR WOMEN EMPLOYEES The number and percentage of women employees as on March 31, 2024 is given in the table below:

Steps taken for the welfare of women employees

• Women employees are regularly nominated to various programmes/seminars on women empowerment and other issues related to women.

• Women employees are eligible for child care leave with pay up to 730 days for taking care of two children up to the age of 18 years (no age limit in respect of child with minimum disability of 40%).

• Women employees have option to declare parents/ parents-in-law as their dependents under medical rules.

• Internal Complaints Committees (ICCs) have been constituted at all locations of the Company to examine the grievances/complaints relating to sexual harassment of women employees.

• Women representatives are nominated on selection Board/Committee constituted for promotion/ recruitment of employees.

• Women employees may avail maternity leave upto 180 days.

• 12 Weeks Maternity Leave to Commissioning mothers on delivering child through surrogacy is allowed.

• NHPC Corporate Office, Faridabad has Creche facility for employees with infants in the age group of 6 months to 6 years.

• Relaxations in attendance timings are given to women employees posted at Corporate Office.

• WIPS (Women in Public Sector Forum) Cell has been constituted in Corporate Office.

• International Women's Day 2024 was celebrated on March 20, 2024 in order to commemorate the occasion and celebrate the progress made towards achieving gender equity and women's empowerment and also to critically reflect on accomplishments & significant contributions of our outstanding women employees. During the program women employees excelling in sports, leadership and social activities were felicitated.

• "Matritva"- A special welfare scheme for Female employees is introduced which aims at providing unwavering support and care to the female employees who is on the way to embrace motherhood and continuing their office duties. Under this Scheme, the expecting mothers are served with a bowl of cut fruit/handful of dry fruits/ milk, juice etc. once in a day to ensure proper nutrition during working hours. They are also provided with paddle stool to help them in elevating their feet to ensure comfortable sitting posture. A planter and a picture is also provided at their workspace to uplift their mood and bring positivity around.

(iv) WELFARE MEASURES AND RESERVATION FOR SCHEDULED CASTE (SC), SCHEDULED TRIBE (ST) AND OTHER BACKWARD CLASSES (OBC)

Your Company is providing reservation and relaxation to SC/ST and OBC candidates in direct recruitment as per guidelines issued by DoPT from time to time. The relaxed standard and reservation is also applicable to SC/ST employees, while considering them for promotion. The management holds periodical meetings with SC/ST/OBC employees for discussing various issues related to them. SC/ST & OBC Cells headed by separate Liaison Officers have been set up for the welfare of SC/ST and OBC employees. Representation of SC/ST/OBC employees is given in table below:

(v) WELFARE MEASURES FOR DIFFERENTLY ABLED EMPLOYEES:

Representation of differently abled employees as on March 31, 2024 is given in table below:

VH=Visual Handicap, HH=Hearing Handicap, OH=Orthopaedic Handicap

Steps taken for the welfare of differently abled employees:

Reservation and relaxation are provided to differently abled candidates/employees in direct recruitment and promotion as per guidelines issued by DoPT/ Ministry of Social Justice & Empowerment from time to time. In addition to above, following welfare schemes have also been extended to differently abled employees:-

• Differently abled employees as well as employees who are care giver to dependent physically/ mentally disabled child are exempted from rotational transfer. These employees are given option about their preference in place of posting at the time of transfer/promotion.

• Financial assistance is provided to employees (who get physically handicapped while in service) for vocational training.

• Reimbursement of expenses for purchase of hearing aid is given to hearing impaired employees/their dependents.

• Reimbursement of the cost of artificial limbs and for the same an interest free loan is being given to employees/their dependents.

• Restriction of age is not applicable in respect of physically/mentally retarded children for considering them as dependents for medical and other benefits.

(i) Environment Protection and Conservation:

Environmental Impact Assessment (EIA) for NHPC projects is undertaken during investigation stage to identify probable impacts on environment. Based on the findings of EIA studies, mitigatory Environmental Management Plans (EMPs) are proposed and implemented to ameliorate the adverse impacts of the project by taking necessary measures like; compensatory afforestation, catchment area treatment, biodiversity conservation, green belt development, fishery management, rejuvenation of dumping and quarry sites including rehabilitation & resettlement amongst others. Environment and Diversity Management Division has been established at the Corporate Office to monitor and facilitate implementation of environmental safeguard measures at all the Projects/Power Stations and Regional Offices.

Compliance under Corporate Environment Policy:

Your Company has also formulated Corporate

Environment Policy, 2022 Biodiversity Policy, 2023, Waste Management Policy, 2023 and Water Conservation Policy, 2023 to institutionalize environmental protection measures in its quest for sustainable development of clean power. Six monthly compliance reports on environmental aspects of Projects/ Power Stations for the periods ending March, 2023 and September, 2023 were submitted to Ministry of Environment, Forest and Climate Change (MoEF&CC), Government of India and its concerned Integrated Regional Offices. These reports were also uploaded on the website of the Company i.e. www.nhpcindia.com. The Company has evaluated the effectiveness of the management plans implemented during the course of construction of a project through post construction EIA studies of Uri (UT of J&K), Rangit (Sikkim), Dhauliganga (Uttarakhand) and Teesta-V (Sikkim) Power Stations. Post construction EIA Studies of Loktak Power Station (Manipur) and Uri-II Power Station (UT of J&K) are currently in progress. NHPC has also conducted sustainability assessment of Teesta-V Power Station (Sikkim) through Sustainability Assessment Protocol of International Hydropower Association (IHA) for operational projects. As per the findings of the assessment, out of 20 parameters on which the Teesta-V Power Station was assessed, it meets basic good practices on all parameters, meets proven best practice on 6 parameters and exceeds basic Good Practice on 9 parameters.

(ii) Sustainability Initiatives:

NHPC has embarked on the preparation of its Sustainability Report w.e.f. financial year 2021-22 on GRI Standards. The Sustainability Report for financial year 2022-23 is available on website of the Company at https://www.nhpcindia.com/assests/ pzi public/gallery/17183553740.pdf. Also, NHPC had actively participated in S&P Global Corporate Sustainability Assessment Survey (CSA)-2023. Based on CSA analysis on Dow Jones Sustainability World Index, NHPC has achieved S&P Global ESG Score of 48 in March, 2024. Earlier, S&P Global had provided ESG Score of 17 to NHPC (November, 2022) based on publicly available information. Enhanced ESG scores of NHPC signify a more robust commitment to environmental stewardship, social responsibility and effective governance practices.

(iii) Renewable Energy Developments:

Your Company is diversifying its activities to explore renewable energy projects. The details of renewable energy projects are given elsewhere in the Report.

(iv) Foreign Exchange Conservation:

In accordance with "Make in India" Policy of Government of India, your Company is making efforts to encourage the participation of local firms in the bidding process. The participation of local firms as well as Micro & Small Enterprises helps in conservation of foreign exchange and growth of Indian industry at large.

(v) Technological Absorption:

Information regarding technology absorption has been included elsewhere in this Report.

35.16 CORPORATE SOCIAL RESPONSIBILITY Information regarding Corporate Social Responsibility has been included elsewhere in this Report.

35.17 CAUTIONARY STATEMENT

The views and forward-looking statements contained in this Report are based on reasonable assumptions and subject to certain risks and uncertainties that could cause actual results to differ from those reflected in such statements.

Readers are requested to review and confirm with other information in this Report and in the Company's periodic Reports. The Company undertakes no obligation to publicly update or revise any of these forward-looking statements whether as a result of new information, future events or otherwise. The financial figures shown are based on the audited results of the Company.

36. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The particulars as required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, in respect of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo are as under:

(i) Steps taken or impact on conservation of energy

• Energy ConservationTask Force has been constituted at Corporate office for creating awareness amongst users, monitor effectiveness of measures adopted for energy conservation and provide vertical and horizontal feedback to the management/ users. Energy Conservation Task force suggests time to time measures for the Energy Saving at Corporate Office.

• To assess the efficiency of electrical equipments like generators, transformers etc. and to recommend the energy saving measures, energy audits are carried out for our power stations and recommendations are implemented on a regular basis.

• Neer Shakti Sadan has been rated Four star building with GRIHA certification. Jyoti Sadan Building of NHPC Corporate Office is accredited with a prestigious Three star rating by the Bureau of Energy Efficiency (BEE), Ministry of Power for its remarkable sustainable building practices.

• In Neer Shakti Sadan, Corporate Office lighting/ temperature is controlled through Building Management System, occupancy sensor, timers. The Senior Office Room, Corridor, general common toilets, restrooms are equipped with state-of- the-art motion detectors/sensors, a testament to the commitment to embracing cutting-edge technology in its facilities.

• The Energy Audit of the NHPC Office Complex has also been conducted through External Agency certified from BEE. The recommendations of the Energy Audit are being implemented.

• Electric Vehicle (EV) charging points has been established in the Neer Shakti Sadan Office Complex, promoting use of EV.

• Power efficient Equipments/ systems that have star ratings are procured, to reduce energy consumption. Five star rated air-conditioner/ refrigerators are procured and installed. Water pump with star rating are procured and installed. The old and non-star rated, uneconomical repairable Air Conditioners have been replaced by high Star rated Energy Efficient Air Conditioners in phased manner.

• The maximum available star rating Energy Efficient appliances are purchased for replacing old appliances. 400 five star rated BLDC Ceiling Fans has been procured and installed replacing Non star rated fans.

• Monthly maintenance of 900TR and 1200TR HVAC (Heating Ventilating Air Conditioning) system/ equipment is being taken up to guarantee efficient operation throughout the year. HVAC filters are replaced or cleaned every month during peak cooling or heating season for maintaining efficiency and air quality. The operation of the HVAC system for building space cooling is being regulated by BEE recommended optimum temperature setting i.e. 24-25 degree Celsius.

• Energy Conservation measure, Movement detectors have been installed in the toilets of Jyoti Sadan.

• A state-of-the-art Grid Solar Power Station, boasting an impressive capacity of 230 kWp, has been successfully installed on the rooftop of the Neer Shakti Sadan, Jyoti Sadan and Canteen Building of Corporate Office.

• 1000 kWp Grid connected Solar PV Power Plant is also installed at residential colony of NHPC Limited, Faridabad. This rooftop solar panels plant also partially supplements the Colony's electricity requirement.

• NHPC ensures maintenance of components for optimal productivity and availability of these Solar PV Plants.

• NHPC effectively promotes energy-saving best practices by designing posters aligned with the Mission LiFE (Lifestyle for Environment) initiative.

• Energy saving slogans are also displayed on NHPC Intranet and on personnel Computers.

• For illumination LED streetlight / solar PV standalone street light are installed at NHPC office Complex / Residential Complex. Energy Efficiency in Street Lighting is being achieved by replacing old inefficient street lights with energy efficient LED street lights. Astronomical timer switch for Street light are being used. Solar Street light are also installed. As an Energy Conservation measures, different types of conventional light fittings CFL, FTL, conventional Outdoor as well as indoor lights are being replaced with high efficacy / lumen level and less wattage consumption LED Light fittings.

• The roof top of the office buildings have been treated for reducing the heat /temperature impact on the floor.

• Energy efficient lights like LED bulbs and tubes are installed in the building.

• Painting Competitions were also organised in surrounding area schools for creating awareness of Energy Conservation and energy efficiency.

(ii) Steps taken by the Company for utilizing alternate sources of energy

Grid Solar Power Plant of 80 kWp and 150 kWp capacity has been installed at the roof top of the buildings of Corporate Office, Sector-33, Faridabad. 1000 kWp grid connected roof top Solar PV Plant has been installed at Residential Complex, Sector-41, Faridabad. The maintenance of the plant is being taken up on regular basis for obtaining maximum output. Further, Break even point for the 80 kWp and 150 kWp Solar PV Power Plant has been achieved.

Further, roof-top solar power projects of cumulative 3699 kWp capacity have been installed at various locations of the Company and additional installations being taken up on the premises of the Company as per the available roof area.

Your Company is also exploring use of green hydrogen as alternate source of energy and is implementing pilot projects in this regard. A 25 KWe green hydrogen pilot project is being taken up for use as storage energy for Nimmo Bazgo Project at Leh. Setting up of Pilot Green Hydrogen Mobility Projects at Leh and Chamba along with procurement of Hydrogen Fuel Cell Electric Buses are also being taken up.

(iii) Capital investment on energy conservation equipments

Capital investment on energy conservation equipments has been around Rs 40.07 lakh.

• Study the necessity & effectiveness of concrete cut off wall for Subansiri Dam as a seepage mitigation measure in soft rock foundation beneath concrete gravity Dam as a credible alternative to grout curtain: This is an in-house R&D Project. The concrete cut-off wall will help in limiting/ minimizing seepage and prevention of migration of particles. This will help in reducing the uplift force acting on the dam as the foundation galleries are provided just downstream of cutoff wall for release of uplift pressure by drilling pressure relief holes.

• Monitoring hydro abrasive erosion, and suspended sediment for optimal operation of Hydro Power Plant: This project has been taken up at Bairasiul Power Station with IIT Roorkee. From this project limiting value of suspended sediment concentration has been determined for optimum operation of power station as excessive silt load will lead to reduction in life of underwater parts. It will help in planning and management of Hydro Power Plants severely affected by HydroAbrasive Erosion.

• Updation of guidelines for Repair & Rehabilitation of civil structures of Hydroelectric Projects and inclusion of new material/ methodology based on performance evaluation: This is an in-house R&D Project. From this project, new repair guidelines has been prepared to reduce the frequency of repair cycles based on the experiences gained on repair/ remedial measures in various power stations, study of literatures available on the subject, internationally adopted repair methodology/

systems and relevant BIS codes, ASTM, ACI & European Codes, etc.

• Targeted Solutions through emerging Geophysical Technology in Seismic Tomography for optimization of Geological uncertainties in Hydro Power Projects: In

Hydroelectric Projects, investigation plays a very vital role and is of great importance for construction of project in optimum time and cost effective manner. The project concluded that Seismic Tomography can be very effectively utilized for providing targeted Solutions for Optimization of Geological Uncertainties in Hydropower Projects. Its application is providing continuous coverage of subsurface, thereby reducing the risk of overlooking the critical reaches. Hence, this may be utilized in association with direct investigations such as drilling/drifting.

• Analysis of strong motion accelerograph data recorded at NHPC Power Station for development of site specific peak ground acceleration attenuation relationship for Himalayan region: This project has been taken up in consultation with Department of Earthquake Engineering, IIT Roorkee for development ofHimalayan specific attenuation relationships. On the basis of comparative analysis of the recorded data and empirically obtained Peak Ground Acceleration values it can be concluded that the recorded data was much lesser than the calculated values.

A comprehensive Earthquake Catalog has been compiled from 1988 earthquake events from 27 global networks along with the NHPC network and by utilizing this Database a General Ground Motion Prediction Equation (GMPE) was developed for site specific Himalayan Region. The resulting GMPE was utilized for validating the Design spectrum for Kwar HEP, J&K. The results showed good conformity with the spectrum generated by Standard Practice.

i) Modelling to benchmark the operational availability of Hydro Generating Units of Power Stations. The benefits of the R&D project include developing process standardization, analyzing the availability of critical spares, tripping analysis, and optimizing maintenance periods.

ii) Optimization of Earthmat Design by Resistivity Imaging Technique. Its benefit is

to minimize costs by optimizing the design of earthmat fixing during construction using 3-D RI software Res3DinV for 3-D data processing and interpretation, utilizing FEM and FDM techniques.

iii) Development of a suitable risk-free cleaning arrangement of trash at Dam Intake The

main benefits of this project are to identify the factors causing trash at the dam intake and establish potential solutions.

iv) 3 Green Hydrogen Pilot Projects Located at Chamba, (H.P), Kargil, UT of Ladakh & NBPS Guest House, Leh

• The benefits of the project include the absorption of new technology, which appears as a future source of energy in the power sector.

• Technology has the potential to help in integration with renewable energy and the grid.

• It helps in achieving Net Zero carbon emission goal set by GOI.

• Based on the performance of these pilot projects and their commercial viability, large- scale green hydrogen energy projects will be undertaken in the future in the fields of transportation, the power industry, and micro grids.

• Exploring options for Green energy and environmental protection.

v) Glacial lake Outburst Flood (GLOF) of Hydroelectric Projects of NHPC

• Technical collaboration and capacity building on monitoring of glacial lakes using satellite data and development of framework and establishment of Early Warning System Methodology.

• Monitoring of glacial lakes in 26 (in 9 basins) hydropower stations by NHPC with hand holding of National Remote Sensing Centre (NRSC).

• Ranking and prioritization of glacial lakes in 26 (in 9 basins) NHPC hydropower stations jointly by NHPC and NRSC.

• Formulation of methodology & develop an early warning systems for threshold risk for an individual lake.

• NHPC has more than 26 Hydropower Projects in Himalayan Region which may be subjected to GLOF so it has become important to continuous monitor and manage GLOF eventually to minimize any risk or disasters.

vi) Modification of Trench Wear at Bhaledh including Design, Manufacturing, Supply and Erection of modified trash rack along with necessary civil works

The main benefits of this project is to increase the Water carrying capacity of Bhaledh Feeder Tunnel and decrease the damages of trench weir from rolling Boulders. Also modify the trench weir and trash rack so as to allow more water to pass through and avoid chocking with stones, boulders, silt and other debris and increase the discharge during lean season. Success of the R&D Project shall provide the solution for similar nature of problems at others geographical locations of NHPC.

vii) Conduct a study for generation capacity enhancement to Tanakpur Power Station The main benefits of this study is to search the option by Redesigning of Runner blade profile to increase the highest turbine output and increase overall Generation & PAF at the existing Net Head on other existing parameters.

viii) Arc Sensing technology for Root Cause Analysis in Reactors y-phase in transformer (increase Acetelene C2H2)

The Benefits of this arc sensing technology analysis are as follows:

• Arc Sensing Technology is an emerging technology which need to be tested in Hydro Power Sector for early detection of any failure in equipment like Transformers or Reactors.

• Early detection of fault and its preventative maintenance thereby saving the life of equipment.

• Identification of the location of faults where electrical arcing is taking place (along with its frequency of occurrence), resulting in the production of acetylene gas in reactors and implementation of corrective measures to stop the production of acetylene.

• Reducing downtime, Minimising maintenance costs, reducing/eliminating unplanned failures, and minimizing asset damage.

ix) Development of inflow forecasting system for Chamera-III Power Station

Inflow forecasting is important for Dam safety, better planning for operation of machine, generation of schedule on day to day basis. The information shall be useful for downstream projects. The hydro-metrological data in catchment and the climate changes in the catchment will be better known. Purchase of equipments for this work is under process.

Development of Design Guidelines/Charts for quick estimation of Caverns behaviour & support layout including openings based on 3D FEM Analysis (IIT Kanpur): The objectives of this Project is safe and economic design of underground caverns of various upcoming projects having underground caverns. The aim is to develop easy-to-use design charts/ guidelines based on advanced 3D numerical analysis for direct estimation of optimal cavern dimensional parameters and external support requirements, without undergoing detailed computational analysis.

Development of Partial Discharge Monitoring Solutions for High Voltage Electrical Apparatus can help NHPC to move towards a "Predictive Maintenance Practice" from its current Preventive Maintenance Practice. This will improve the system reliability and minimize the breakdown period.

c) Collaborative research related to growth of power sector

As per Ministry of Power recommendations for support and growth of power sector, Studies/ research related to Policy initiative, reforms, restructuring will provide crucial inputs for Policy formulation. For this a corpus for funding these studies has been setup jointly with MoP and CPSUs like NHPC, NTPC, PGCIL, PFC & REC. NHPC has been undertaking collaborative research for overall growth of power sector.

d) MoA signed with IIT Indore

NHPC has signed MOA with IIT Indore on September 05, 2023 under which IIT Indore shall provide education, training, research and development and advisory session services to NHPC in the broad areas of its various expertise, hydro, hydrology, water resources, geology, earthquake, renewable energy and environmental management.

e) MoA signed with IIT Patna

NHPC has signed MOA with IIT Patna on December 15, 2023 under which IIT Patna shall provide training, research and development and advisory session services to NHPC in the broad area of its various expertise, hydro, hydrology, water resources, geology, earthquake, renewable energy and environmental management.

(ii) Benefits derived like product improvement, cost reduction, product development or import substitution:

a) Monitoring hydro abrasive erosion, and suspended sediment for optimal operation of Hydro Power Plant will help in planning and management of Hydro Power Plants affected by Hydro-Abrasive Erosion.

b) Updation of guidelines for Repair & Rehabilitation of civil structures of Hydroelectric Projects and inclusion of new material/ methodology based on performance evaluation indicated that it will help in reducing the frequency of repair cycles of civil structures.

c) Targeted Solutions through emerging Geophysical Technology in Seismic Tomography for optimization of Geological uncertainties in Hydro Power Projects indicated that Seismic Tomography can be utilized effectively for finding the precise details of subsurface rock mass which can minimize uncertainties during construction stage for its timely completion.

d) Assessment on socio-economics of Sewa-II HE Project, J&K using Remote Sensing and GIS Technology indicated that CAT plan undertaken in the project has been beneficial.

e) Analysis of strong motion accelerograph data recorded at NHPC Power Station for development of site specific peak ground acceleration attenuation relationship for Himalayan region indicated that it can be utilized for optimizing the seismic design of civil structures.

Further, other efforts made towards technology absorption are in initial stages, benefits are expected to be derived after completion of studies and actual implementation.

(iii) Particulars of technology imported during the current year and last three years

NIL

(iv) Expenditure incurred on Research and Development:-

Expenditure incurred on Research and Development during the financial year 2023-24 was Rs 11.55 crore including Rs 7.80 crore towards establishment expenses.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

There were no foreign exchange earnings during the financial year 2023-24.

37.1 SECRETARIAL AUDIT

M/s Kumar Naresh Sinha & Associates, Company Secretaries, Noida has been appointed by the Board to conduct Secretarial Audit of the Company for the financial year 2023-24. The Secretarial Auditor, in its Report, has given certain observation. The Secretarial Auditor's Report is given as Annexure-II. The management reply against observation raised by Secretarial Auditor is as under:

In compliance to Regulation 24A of SEBI LODR, Secretarial Audit Report of NHDC Limited and Chenab Valley Power Projects Limited, which are material unlisted subsidiaries of NHPC, is also given elsewhere in the Annual Report.

37.2 STATUTORY AUDIT

In line with provisions of the Companies Act, 2013, the Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India (C&AG). C&AG had appointed following Joint Statutory Auditors for the financial year 2023-24:

1. M/s Chaturvedi & Co., Kolkata

2. M/s P. C. Bindal & Co, Srinagar

3. M/s S N Dhawan & Co., LLP, New Delhi

The Joint Statutory Auditors have given un-modified opinion in their Report on the standalone and consolidated financial statements of the Company for the financial year 2023-24. Further, no instance of fraud by any officer or employee of the Company has been reported by the Auditors under Section 143(12) of the Companies Act, 2013.

37.3 REVIEW OF ACCOUNTS BY C&AG

The C&AG has given its comments on the standalone and consolidated financial statements of your Company for the year ended March 31, 2024 after conducting supplementary audit under Section 143(6)(a) of the Companies Act, 2013. There are no Comments of C&AG for both the standalone and consolidated financial statements of your Company for the year ended March 31, 2024. The comments of C&AG are appearing elsewhere in the Annual Report.

37.4 COST AUDIT

The Company maintains necessary cost records as specified by Central Government under Section 148(1) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014. As recommended by the Audit Committee, your Board has appointed the following firms of Cost Accountants to conduct audit of cost accounting records of power stations for the financial year 202324 under Section 148 of the Companies Act, 2013:

The consolidated Cost Audit Report in XBRL format for the year ended March 31, 2023 was filed with the Ministry of Corporate Affairs on September 5,

2023 which was within the prescribed time period. The Cost Audit Report for the year ended March 31,

2024 shall be endeavoured to be filed within the prescribed time period.

38. ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, the Annual Return of the Company as on March 31, 2024 is available on the Company's website at https://www.nhpcindia.com/ assests/pzi public/gallery/17223220130.pdf

39. PARTICULARS OF LOANS, INVESTMENTS AND CORPORATE GUARANTEES

Section 186 of the Companies Act, 2013 (except sub-section 1) regarding loans made, guarantees given or securities provided is not applicable to NHPC being engaged in the business of providing infrastructure facilities.

40. PARTICULARS OF EMPLOYEES

In accordance to notification dated June 5, 2015 issued by the Ministry of Corporate Affairs, Government Companies are exempted from the disclosure requirements of Section 197 of the Companies Act, 2013. Therefore, such particulars have not been included as part of Directors' Report. The Policy on remuneration, pay structure, allowances and other benefits of employees of the Company are governed by relevant DPE Guidelines. Pay structure and allowances of the Company are also available on the website at https://www.nhpcindia. com/assests/pzi_public/gallery/1676010521.pdf

41. BOARD AND COMMITTEES OF THE BOARD

The Board of Directors met thirteen (13) times during the financial year 2023-24. The details of meetings of Board of Directors and attendance of Directors

therein are given in the Report on Corporate Governance, which forms part of the Annual Report. The details of various Committees of the Board along with their meetings and composition are given in Corporate Governance Report.

42. PERFORMANCE EVALUATION OF BOARD, BOARD LEVEL COMMITTEES AND DIRECTORS

NHPC has in place a "Policy on performance evaluation of Board, Board level Committees and Directors". As per the Policy, following evaluation process has been followed by the Company:

1. Every Director of the Company rate performance of the Board, Board level Committees and the individual Directors on pre-determined criteria.

2. The Nomination & Remuneration Committee reviews the performance of Independent Directors & the Board of Directors and determines whether to extend the term of the Independent Director.

3. Independent Directors review the performance of Non-Independent Directors, Chairperson of the Company and the Board as a whole.

4. Board evaluates the performance of Independent Directors, excluding the Director being evaluated. The performance evaluation of all the Board Members, Board as a whole and mandatory Committees of the Board for financial year 2023-24 was carried out during financial year 2024-25.

43. DIRECTORS' RESPONSIBILITY STATEMENT

In line with requirement of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 with respect to the Directors' Responsibility Statement, it is confirmed that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

44. SECRETARIAL STANDARDS

Your Company has followed in true spirit the applicable Secretarial Standards relating to 'Meetings of the Board of Directors' and 'General Meetings' issued by the Institute of Company Secretaries of India (ICSI).

45. GENERAL

No disclosure or reporting in respect of the following items is required, as there was no transaction on these items during the year under Report:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

3. Significant and material orders passed by regulators or courts or tribunals, which impact the going concern status or Company's operations in future.

4. Occurrence of any material changes and commitments after the close of the financial year till the date of this Report, which affect the financial position of the Company.

5. Details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof.

6. Details related to public deposits as required under Chapter V of the Companies Act, 2013.

7. Application made or proceeding pending under Insolvency & Bankruptcy Code, 2016.

46. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

The following changes in composition of Board of Directors and Key Managerial Personnel took place during the financial year 2023-24 and afterwards till signing of this Report:

1. Shri Yamuna Kumar Chaubey (DIN: 08492346) ceased to be Director (Technical) of the Company w.e.f. May 31, 2023 end of day on attaining the age of superannuation.

2. Shri Uttam Lal (DIN: 10194925) was appointed as Director (Personnel) of the Company w.e.f. June 13, 2023 pursuant to orders of Ministry of Power, Govt. of India.

3. Shri Raj Kumar Chaudhary (DIN: 10198931) was appointed as Director (Technical) of the Company w.e.f. September 18, 2023 pursuant to orders of Ministry of Power, Govt. of India. He also holds additional charge of Director (Projects) since January 01, 2024.

4. Shri Biswajit Basu (DIN: 09003080) ceased to be Director (Projects) of the Company w.e.f. January 01, 2024 on attaining the age of superannuation. He also held the additional charge of Director (Technical), NHPC from June 01, 2023 to September 17, 2023.

5. Shri Rajeev Kumar Vishnoi (DIN: 08534217) ceased to be Chairman & Managing Director of the Company w.e.f. March 01, 2024 pursuant to orders of Ministry of Power, Govt. of India.

6. Shri Rajendra Prasad Goyal (DIN: 08645380), Director (Finance) was also given additional charge of Chairman & Managing Director w.e.f. March 01,2024 pursuant to orders of Ministry of Power, Govt. of India. He also held the additional charge of Director (Personnel) from March 03, 2023 to June 12, 2023.

Details of remuneration and sitting fee paid to Directors during the financial year 2023-24 are given in the Report on Corporate Governance.

All Independent Directors of the Company as on March 31, 2024 have declared that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI LODR.They have further declared that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. Independent Directors have also declared that they have complied with Rule 6(1) & 6(2) of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 regarding inclusion of their name in the data bank of Independent Directors maintained by Indian Institute of Corporate Affairs (IICA).

As Shri Raj Kumar Chaudhary, Director (Technical) was appointed by Board of Directors as Additional Director, his appointment is proposed in the ensuing Annual General Meeting (AGM). Brief profile of Shri Raj Kumar Chaudhary is given in the Notice of AGM. Shri Rajendra Prasad Goyal, Director (Finance) is liable to retire by rotation and being eligible, has proposed himself to be re-appointed at the forthcoming AGM. Brief profile of Shri Rajendra Prasad Goyal is given in the Notice of AGM.

47. RAISING OF INCREMENTAL BORROWINGS BY WAY OF ISSUANCE OF DEBT SECURITIES

Regulation 50B of SEBI (Issue and Listing of NonConvertible Securities) Regulations, 2021 (NCS Regulations) read with Chapter XII of the NCS Master Circular on 'Fund raising by issuance of debt securities by large corporates' (LC Chapter), inter-alia, mandates Large Corporates (LCs) to raise a minimum 25% of their incremental borrowings in the financial year through issuance of debt securities which were to be met over a contiguous block of three years from the financial year 2022 onwards.

Further, SEBI vide circular dated October 19, 2023 has, inter-alia, provided that LCs shall endeavor to comply with the requirement of raising 25% of their incremental borrowings done during financial year 2022, financial year 2023 and financial year 2024 respectively by way of issuance of debt securities till March 31, 2024. Failing which, such LCs shall provide a one-time explanation in their Annual Report for financial year 2024. The total incremental borrowings of NHPC during financial year 2021-22, 2022-23 & 2023-24 are of Rs 10,656.60 crore. Being a Large Corporate, NHPC had to borrow through issuance of debt securities at least Rs 2664.16 crore (25% of Rs 10656.60 crore) by March 31, 2024. However, the actual borrowings done through debt securities by the Company during the period are Rs 996 crore. Accordingly, the shortfall in mandatory borrowings through debt securities works out to Rs 1668.16 crore.

The shortfall happened as NHPC is mainly in the business of developing Hydroelectric Power Projects and Power tariff is regulated by Central Electricity Regulatory Commission (CERC). In Hydro Power Sector, the debt equity ratio allowed by CERC is 70:30.

Therefore, the cost of debt has a major bearing on tariff rates of a Hydroelectric Power Project. Any increase in the interest cost will result into higher tariff and the same shall be passed through to the consumer at large as we are operating under cost plus tariff regime. Since, interest cost constitutes important element of the total project cost, it is our continuous endeavor to ensure low cost debt to establish commercial viability of the Hydro Power Project. In addition, we also take up refinancing of high cost debt with lower cost debt wherever opportunity arises. Further, it is pertinent to mention here that due to long gestation period of hydro projects, NHPC raises loan with a horizon of 10-15 years and in the present market scenario, debt instruments with floating rate of interest are

more cost effective in comparison to fixed rate debt instruments. Since, corporate bonds are fixed interest rate debt instruments, we had preferred term loans from banks with variable interest rate. However, NHPC is committed for the compliance with the ibid provision of SEBI regulations for mandatory borrowings through issuance of debt securities from financial year 2024-25 onwards.

48. ACKNOWLEDGEMENT

The Board of Directors wish to place on record their sincere appreciation to all the employees for their dedication and commitment. Their hard work and unstinted efforts enabled the Company to sustain its excellent performance and consolidate its sectoral leadership. The commitment displayed by the employees at all levels is exemplary and praise worthy. NHPC is proud of continuous untiring efforts of its employees especially posted at power stations & projects of the Company.

The Board of Directors would like to express their gratitude for the guidance and co-operation received from Govt. of India, particularly the Ministry of Power, Ministry of New & Renewable Energy, Department of Public Enterprises, Office of the Comptroller and Auditor General of India, Central

Electricity Authority, Central Electricity Regulatory Commission, Central Water Commission and other concerned Govt. departments/agencies at the Central and State level.

The Board is also thankful to all its stakeholders, valued customers, contractors, vendors and consultants for their continued support and confidence reposed in the Company.

The Board also acknowledges invaluable guidance and inputs received from Statutory Auditors, Secretarial Auditor and Cost Auditor of the Company. The Board also conveys its sincere thanks to the national and international financial institutions, multilateral financial institutions, domestic and international credit rating agencies for their valuable support and continued trust in the Company.