The Board of Directors of your Company takes pleasure

in presenting the 50^th Annual Report of the Company,
commemorating five decades of sustained growth,
commitment, and service. This Report provides an
overview of the Company's operational and financial
performance, key developments, and achievements
during FY 2025-26. The Report is accompanied by the
audited financial statements for the year ended March 31,
2026, together with the reports of the Statutory Auditors
and the Secretarial Auditor, as well as the review of the
financial statements conducted by the Comptroller and
Auditor General of India (C&AG).

Major highlights of performance of your Company are as
under:

•    NHPC has earned Profit After Tax (PAT) of '3,617.80
crore on standalone basis and '4,220.46 crore on
consolidated basis.

•    On standalone basis, total income and revenue from
operations were '11,650.10 crore and '10,328.26
crore respectively, and total comprehensive income
and other comprehensive income were '3,542.39
crore and '(75.41) crore respectively.

•    NHPC's power stations recorded overall Plant
Availability Factor (PAF) of 69.50% and generated
23306.92 Million Units (MUs) during the year.

•    Cash contribution of '1,293.10 crore was made to
Government of India's exchequer through dividend
(final dividend for FY 2024-25 of '345.28 crore and
interim dividend for FY 2025-26 of '947.82 crore)
during FY 2025-26.

•    Commercial operation of 4 out of 8 units (250 MW
each) of Subansiri Lower HE Project (2000 MW),
located in Assam and Arunachal Pradesh, has been
declared in phased manner up to May, 2026.

•    Under the leadership of Hon'ble Prime Minister
Shri Narendra Modi, the Cabinet Committee on
Economic Affairs (CCEA), accorded investment
approval for implementation of 1720 MW Kamala
Hydroelectric Project in Arunachal Pradesh.

•    The entire 300 MW of Solar Power Project at Karnisar
Bhatiyan, District Bikaner, stands commissioned.
This landmark project stands as a testament to the
'Make in India' initiative, being constructed entirely
with 100% domestically manufactured Solar PV
Modules.

•    In a significant step towards Cyber Security
fortification, NHPC's Cyber Security Operations
Centre (CSOC) has been set up at Corporate Office.
The CSOC will strengthen NHPC's Cyber security
posture by unifying and coordinating all cyber
security devices / applications with round the clock
operations.

•    On the CSR front, it was a matter of great pride
that the Hon'ble President of India, Smt. Droupadi
Murmu, laid the foundation stone for a 360-seated
Girls' Hostel at Rairangpur Women's College, Odisha.
The project is being undertaken under NHPC's
CSR initiative which reflects our commitment to
empowering young women through improved
educational infrastructure.

•    During the AI Impact Summit 2026 held at Bharat
Mandapam in New Delhi, NHPC showcased its AI-
based Early Warning System along with a range of
digital initiatives aimed at strengthening dam safety,
operational efficiency and disaster preparedness to
enhance infrastructure management and promote
sustainable development in the power sector with
progressive adoption of advanced technologies.

1 FINANCIAL PERFORMANCE

The important financial highlights are given in table

below:

1.1    REVENUE

Your Company has generated total income of '11,650.10
crore during FY 2025-26. The total income during FY 2024¬
25 was '10,456.35 crore (restated).

1.2    EXPENSES

The total expenditure during FY 2025-26 increased to
'9,259.47 crore as compared to '6,597.39 crore (restated)
in the previous financial year.

1.3    TOTAL COMPREHENSIVE INCOME

Total Comprehensive Income of your Company increased
to '3,542.39 crore during FY 2025-26 as compared to
'2,981.09 crore (restated) in the previous financial year.

1.4    NET WORTH

Your Company's net worth as on March 31, 2026 was
'39,972.27 crore as compared to '38,348.48 crore
(restated) at the end of previous financial year.

1.5    SHARE CAPITAL

Your Company's paid-up share capital as on March 31,
2026 was '10,045.03 crore which remained unchanged
during FY 2025-26.

1.6    TRANSFER TO RESERVES

During the year 2025-26, 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 '0.21 per equity share for FY 2025-26
amounting to '210.95 crore. The above dividend is in
addition to the interim dividend of '1.40 per equity share
amounting to '1,406.30 crore paid in February, 2026.

Accordingly, total dividend for FY 2025-26 comes to '1.61
per equity share amounting to '1,617.25 crore.

Your Company has a Dividend Distribution Policy in place
since May, 2017 which was further amended in December,
2024. As per the latest Dividend Distribution Policy of the
Company, broadly the dividend payment shall be 30% of
PAT or 4% of the Net worth, whichever is higher which
is in line with the extant guidelines of Department of
Investment and Public Asset Management (DIPAM) for
dividend payment. Accordingly, total dividend payout
for FY 2025-26 (subject to approval of final dividend by
the members of the Company) @ '1.61 per share will be
'1,617.25 crore i.e. 44.70% of Profit after Tax for FY 2025¬
26 and 4.05% of Net worth as on March 31,2026 as against
total dividend pay-out of '1,918.60 crore i.e. 62.21% of
the Profit after Tax for FY 2024-25 and 5% of Net worth as
on March 31, 2025 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/1734608696.
pdf

3 OPERATIONAL PERFORMANCE

Your Company's power stations have achieved total generation of 23306.92 MUs during the year 2025-26 against
generation of 19878 MUs during the previous year. Your Company has achieved overall Plant Availability Factor (PAF) of
69.50% during FY 2025-26 against overall PAF of 73.94% during the previous year.

The power station wise generation and PAF during the year 2025-26 are given in table below:

Note:

•    Actual Generation includes infirm power of SPP Karnisar, Parbati-II Power Station and Subansiri Lower HEP.

•    Teesta-V Power Station is under complete shutdown since October 4, 2023 due to flood induced by the Glacial Lake
Outburst Flood (GLOF) of Lhonak Lake followed by breach of the Teesta Urja-III Dam in upstream of Teesta-V Power
Station.

$ SPP stands for Solar Power Plant.

During FY 2025-26:

•    Seven (07) Power Stations viz. Bairasiul, Loktak, Salal, Tanakpur, Chamera-I, Uri-I and Nimoo Bazgo have achieved
their respective annual design energy.

•    Thirteen (13) Power Stations viz. Uri-I, Uri-II, Kishanganga, Sewa-II, Salal, Chutak, Nimoo Bazgo, Bairasiul, Chamera-II,
Parbati-III, Dhauliganga, Tanakpur and Loktak have achieved their respective NAPAF (Normative PAF).

•    Chutak and Kishanganga Power Stations recorded their highest ever PAF during FY 2025-26 at 63.75% and
93.18%, respectively, surpassing their previous best of 61.83% (FY 2022-23) and 86.39% (FY 2021-22).

•    Four (4) Power Stations, namely Chutak, Nimoo Bazgo, Kishanganga and Parbati-III, achieved their highest ever
annual generation since commissioning.

NHPC hydro Power Stations have provided ancillary services, including reactive power support and Automatic
Generation Control (AGC), for maintaining grid stability and generation-load balance. Additionally, through effective
operation and prompt response to grid frequency variations, NHPC has also earned net deviation charges as well as
revenue from Primary Frequency Response (Beta Factor).

NHPC has achieved significant capacity addition with the Commercial Operation Declaration (COD) of key projects,
notably four (4) Units of Subansiri Lower Hydroelectric Project (1000 MW), Parbati-II Hydroelectric Project (800 MW),
and Karnisar Solar Power Project, Bikaner (300 MW). The commissioning of these projects (2100 MW) marked a major
milestone in enhancing the Company's installed capacity across both hydro and solar segments. These capacity
additions augmented the Company's generation capability, supported grid stability and contributed towards meeting
the country's growing demand for sustainable and reliable power.    .    . .    . . . .    ^    .

Renovation & Modernization of Loktak Power Station

The situation regarding Renovation and Modernization of Loktak Power Station remains same as was reported in
the 49^th Directors' Report. The complete shutdown has now been re-scheduled from the upcoming lean season i.e.
November, 2026 onwards.

4 COMMERCIAL PERFORMANCE

4.1    SALES AND REALIZATION

During the year under Report, your Company's Standalone sales from operations stood at '10,328.26 crore. Further,
during 2025-26, total billing was '8,597.06 crore (including net interest from beneficiaries) and collection was
'8,742.58 crore including collection on account of late payment surcharge of '27.32 crore. Total collection in FY 2025¬
26 including collection from Power Trading Business was '9,156.82 crore. As on March 31, 2026, the total outstanding
dues of '237.14 crore were pending for more than 45 days. The outstanding amount mainly pertains to Jammu and
Kashmir Power Corporation Limited, Jammu & Kashmir ('115.45 crore).

4.2    SIGNING OF POWER PURCHASE AGREEMENTS (PPA)

Availability of long term PPAs for our Power Stations is key to the survival of the 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.

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

5 STATUS OF HYDROELECTRIC PROJECTS UNDER CONSTRUCTION

At present, your Company is actively engaged in the construction of 10 Hydro Power Projects of 8014 MW Capacity
(including JV & Subsidiaries). The detail is given in table below:

#Total installed capacity is 2000 MW. Out of2000 MW, part capacity of 1000 MW from 4 units has been commissioned and
balance capacity of 1000 MW is included in capacity under construction.

5.1    NHPC STANDALONE PROJECTS

5.1.1    SUBANSIRI LOWER H.E. PROJECT - 2000 MW (8 X 250 MW), ARUNACHAL PRADESH / ASSAM

The Subansiri Lower Hydroelectric Project is one of India's largest run-of-the-river hydroelectric projects. The project is
located on the Subansiri River, a major tributary of the Brahmaputra, near the border of Arunachal Pradesh and Assam.
After completion, the Project will generate 7422 MUs annually in a 90% dependable year. In addition, the project
will support regional development by improving infrastructure, creating employment opportunities, and enhancing
connectivity in remote areas. Strategically, the project is important for strengthening India's renewable energy portfolio
and reducing dependence on fossil fuels. It also plays a role in grid stability by providing peaking power. Overall, the
project represents a key component of hydropower development in the northeastern region and a significant step
towards sustainable energy generation in the country.

The estimated project cost is '27,948.52 crore. 97.57% physical progress has been achieved till March, 2026. All the
major works have been completed. The project is in advance stage of commissioning. COD of 4 out of 8 units of 250
MW each, have been achieved, up to May, 2026. Balance 4 units are expected to be commissioned by March, 2027 in
phased manner.

SALIENT FEATURES:

Dibang Multipurpose Project, one of the largest projects in the country, is a hydropower cum flood moderation
scheme. The estimated energy generation with an installed capacity of 2880 MW works out to be 11223 MUs for the
90% dependable year. In addition, the reservoir created behind the dam will provide flood moderation benefit in the
downstream. The flood moderation will save erosion of agricultural land, damage to crops and further save crores ol
rupees being spent on flood control measures by the Government.

The estimated Project cost is '31,876.39 crore (May 2021 PL). 17.25% physical progress has been achieved till March
2026.

SALIENT FEATURES:

Teesta Stage-VI HE Project is a Run of River scheme in Sirwani Village of Sikkim to utilize the power potential of Teesta
river basin in a cascade manner. The project was earlier developed by Lanco Teesta Hydro Power Limited (LTHPL),
but got stalled due to financial crunches. Subsequently, LTHPL was acquired by NHPC through Corporate Insolvency
Resolution Process (CIRP) in October, 2019 and became a wholly owned subsidiary of NHPC developing 500 MW Teesta
VI HE Project in Sikkim. Thereafter, LTHPL merged in NHPC. The Project will generate 2400 MUs annually in a 90%
dependable year.

The estimated Project cost is '8,448.74 crore (Jan 2024 PL). 72.08% physical progress has been achieved till March,
2026.

SALIENT FEATURES:

At the time of planning of Uri-I Hydroelectric Project, a provision was kept for construction of second phase of Uri-I
(known as Uri-I, Stage-II HE Project), considering possibility of additional discharge from some upstream schemes. Uri-I
Stage-II shall utilize, water of Uri-I and also the discharge from the Kishanganga Hydroelectric Project.

In this Project, it is envisioned that certain structures can be used from Uri-I Power Station that were designed for
combined discharges. In addition, certain structures will be required to be designed and constructed for the Project.

The estimated project cost is '2,708.95 crore. The major work package of civil works has already been awarded;
accordingly, construction of the project has commenced.

SALIENT FEATURES:

During implementation of Dulhasti HE Project, a provision had been contemplated for future extension of the Project
by construction of phase-II of the Project for utilizing the additional water available upon completion of some upstream
project. The water utilized by the Pakal Dul Project for power generation would be discharged into the reservoir of the
Dulhasti Project which would then be available for additional power generation. Accordingly, the designing of Dulhasti
Project was carried out taking into consideration of additional future discharges.

The Dam of Dulhasti shall cater to the requirements of Dulhasti Stage-II. NHPC has already constructed one of the
intake structures for Stage-II Project, as it would not be possible to construct it at a later stage. The balance structural
components are to be designed and implemented.

The estimated project cost is '2,993.97 crore. The major work package of civil works has already been awarded;
accordingly, construction of the project has commenced.

SALIENT FEATURES:

5.2 UNDER WHOLLY OWNED SUBSIDIARIES:

5.2.1 RANGIT-IV HE PROJECT - 120 MW (3 x 40 MW), SIKKIM - Implementing through Jalpower Corporation
Limited (JPCL)

Rangit IV Hydroelectric Project is a run off the river scheme located in western Sikkim. The Project will generate 507.88
MUs annually in a 90% dependable year.

Construction of the project was started by earlier developer of JPCL in June 2008, however, the project got stalled in
October, 2013 due to paucity of funds post cost overrun. Subsequently, JPCL was acquired by NHPC through Corporate
Insolvency Resolution Process (CIRP) in March, 2021 and it became a wholly owned subsidiary of NHPC, developing
Rangit-IV HE Project in Sikkim.

The estimated project cost is '1,888.67 crore. 96.32% physical progress has been achieved till March, 2026.

SALIENT FEATURES:

5.3 UNDER SUBSIDIARY/ JOINT VENTURE COMPANIES:

5.3.1 PAKAL DUL HE PROJECT - 1000 MW (4 x 250 MW), UT OF JAMMU & KASHMIR - Implementing through
Chenab Valley Power Projects Limited (CVPPL)

The Pakal Dul Hydroelectric Project has been conceived as a reservoir-based scheme. The Project is expected to
generate 3230 MUs of electricity annually.

The estimated project cost is '12,728 crore. 80% physical progress has been achieved till March, 2026.

SALIENT FEATURES:

The Kiru Hydroelectric Project is under development as a run-of-the-river scheme. The project is expected to generate
2272 MUs of electricity annually.

The estimated project cost is '5,409 crore (April 2023 PL). 82.19% physical progress has been achieved till March, 2026.
SALIENT FEATURES:

The estimated project cost is '4,526.12 crore (September 2020 PL) and the project is expected to generate 1975.54 MUs
of energy annually. Approximately, 32.82% physical progress has been achieved till March, 2026.

SAIIENT FEATURES:

The project has been planned as a run-of-the-river scheme. The project is expected to generate 3137 MUs of energy
annually. The estimated project cost is '5,281.94 crore (November 2018 PL). 28.79% physical progress has been
achieved till March, 2026.

SALIENT FEATURES:

6 PROJECTS UNDER CLEARANCE/APPROVAL

The status of projects including projects of subsidiaries/joint ventures under various stages of clearance/approval are
as under:

@ The matter at present is sub-judice in the Hon'ble High Court of Shimla with writ petition filed by NHPC.

#    Investment approval of Govt. of India has been conveyed by MoP on 22.04.2026.

*    NHPC on June 16, 2026 has entered into a Memorandum of Agreement with Govt. of Arunachal Pradesh to implement
the Project on BOOT-basis for lease period of 40years from the COD.

7    PROJECTS UNDER SURVEY AND INVESTIGATION (S&I)

S&I for the preparation of Detailed Project Reports (DPRs) of various Hydroelectric and Pump Storage Projects are
currently in progress. The combined capacity under consideration, including Hydroelectric Projects, Nepal Hydro
Projects, and Pump Storage Projects, is approximately 31668 MW.

8    RENEWABLE ENERGY (RE) PROJECTS

Amid the Government of India's various reforms towards a secure, affordable and sustainable energy system and
several measures to de-carbonize the energy sector, your company is also significantly pivoting its strategy to align
with India's intensified push towards the 500 GW RE milestone by 2030. During FY 2025-26, NHPC has commissioned
its 300 MW Karnisar Solar Power Project under CPSU Scheme at Bikaner, Rajasthan and is making continuous efforts to
contribute towards GOI's RE generation targets by exploring all possible opportunities to develop RE projects through
various modes such as development of Solar/Wind power projects, Solar parks/Floating solar projects, Pilot Green
Hydrogen Projects, Battery Energy Storage System (BESS), Pumped Storage Projects etc. in various potential rich states
across the country.

NHPC has already incorporated two subsidiary companies for development of RE potential, namely NHPC Renewable
Energy Limited (NHPC REL) (a wholly owned subsidiary for taking up Renewable Energy, Small Hydro Projects and
Hydrogen Technology based projects) and Bundelkhand Saur Urja Limited (BSUL) (JV with UPNEDA to develop RE
projects in Uttar Pradesh). Further, NHPC has also formed a JV Company, APGENCO NHPC Green Energy Limited
(ANGEL), with Andhra Pradesh Power Generation Corporation Limited (APGENCO) for development of pumped storage
hydro projects and RE projects (solar/floating solar/wind).

NHPC has been designated as Renewable Energy Implementing Agency (REIA) by MNRE. NHPC has also been designated
as BESS Implementing Agency (BIA) to act as intermediary procurer for development of BESS projects anywhere in
India. As a designated REIA & BIA, NHPC's role has become very significant towards a facilitator for Renewable & Storage
capacity addition for the country and an important revenue pillar for the company.

8.1 RE POWER PLANTS UNDER OPERATION

NHPC has already commissioned 50MW Wind Project and 515.78 MW Solar Power Projects (including Joint Venture/
Subsidiary Companies) totalling to 565.78 MW in different states:.    ^    .    ^    .

Besides above, an aggregate capacity of 1570 MW RE Power Projects have also been commissioned through various
developers while NHPC acting in the role of REIA. The commissioned projects are 320 MW Solar Project at Bikaner, 380
MW Solar Project at Jaisalmer, 400 MW Solar Project at Barmer, 251 MW Solar Project at Jaisalmer, partially commissioned
69 MW discrete component of solar of a Hybrid project at Jaisalmer and 150 MW partially commissioned Solar project
at Barmer all in the State of Rajasthan.

8.2 RE PROJECTS UNDER CONSTRUCTION

NHPC, in line with the latest technological developments and advancements, is exploring road maps and strategies to
scale up its renewable energy projects. Your Company, as a developer, is implementing 1197.68 MW of RE projects under
different schemes besides 6278 MW of Projects as REIA, 1500 MWh BESS as BIA and 1200 MW Solar Park Project through
BSUL, described as under:

Note:

*    TBCB stands for Tariff Based Competitive Bidding

#    FDRE stands for Firm and Dispatchable Renewable Energy

Besides above, one 25 kWe capacity Pilot Green Hydrogen Project at Leh and one pilot green hydrogen-based e-mobility
project at Chamba, Himachal Pradesh are under advanced stages of implementation. ÝÝÝÝÝÝÝÝÝÝÝÝÝÝ

8.3 NEW RENEWABLE ENERGY PROJECTS

NHPC has already awarded RE Projects under various configurations to different vendors as REIA. Out of these projects,
projects with 1570 MW capacity have already completed and 6278 MW are under construction. Further, projects with
capacity of 12832 MW are pending for signing of Power Sale Agreement (PSA) with Buying Entities/Discoms and
back-to-back tie up for PPA with respective selected developers are underway. Further, 45 MW Solar Power Project at
Madhogarh, Jalaun and 95.26 MW Rooftop Solar are also in various stage of implementation.

The details of new RE Projects are as under:

8.4 NHPC UNDER DIFFERENT GOVERNMENT INITIATIVES / SCHEMES FOR RENEWABLE ENERGY SECTOR

8.4.1    CPSU Scheme:

NHPC has been allotted 1000 MW of solar projects under Tranche-III of the CPSU Scheme (Phase-II), comprising 300 MW
Karnisar Solar Project at Bikaner (Rajasthan), 600 MW at Kutch (Gujarat) and 100 MW at N.P Kunta (Andhra Pradesh). The
300 MW Karnisar Solar Project at Bikaner was fully commissioned on October 16, 2025 and connected to grid for sale
of power to Punjab Discom. The remaining 100 MW at N.P. Kunta (Andhra Pradesh) and 600 MW at Kutch (Gujarat) are
targeted for commissioning during 2^nd Quarter and 4^th Quarter of FY 2026-27, respectively.

8.4.2    Tariff Based Competitive Bidding (TBCB) Process:

NHPC has secured 400 MW Solar Power Projects under the TBCB route, comprising 200 MW Solar Project in 600 MW
GSECL Solar Park at Khavda, Gujarat (Stage-1) and 200 MW Solar Project in 600 MW GSECL Solar Park at Khavda, Gujarat
(Stage-3). Both projects are under various stages of implementation and are nearing completion with anticipated
commissioning during 2^nd quarter of FY 2026-27, subject to the availability of transmission connectivity.

8.4.3    Solar Park Scheme:

Your Company is exploring possibilities for development of several projects under Solar Park Scheme of MNRE and is
implementing 50 MW Grid Connected Floating Solar photovoltaic Power Project at West Kallada reservoir, Kerala and
40 MW Grid Connected Solar photovoltaic Power Project at Ganjam, Odisha targeted to be commissioned during FY
2026-27. Besides these, NHPC through its subsidiary, BSUL is also implementing 1200 MW Solar Park at Jalaun, Uttar
Pradesh.

8.4.4NHPC as Renewable Energy Implementing Agency (REIA mode):

As a designated REIA, NHPC aggregates power procured from selected developers through Power Purchase Agreements
(PPAs) and sell it to distribution utilities through Power Sale Agreements (PSAs). The end procurer pays applicable
trading margin to your Company, in its capacity as the Intermediary Procurer. Under Phase-I, NHPC awarded 2000 MW
of solar projects, of which 1351 MW has been commissioned/partially commissioned, while 349 MW is expected to
be commissioned in FY 2026-27 and 300 MW is held up due to GIB and connectivity issues, matter is sub-judice with
Hon'ble CERC. Under the MNRE bidding calendars, NHPC has 12832 MW of renewable energy projects awaiting PSA/
PPA signing (1812 MW from FY 2023-24 and 11020 MW from FY 2024-25), while several awarded projects are under
implementation and progressing toward commissioning.

8.4.5NHPC as BESS Implementing Agency (BIA mode):

NHPC was designated as a Battery Energy Storage System (BESS) Implementing Agency by the Ministry of Power in
October, 2024 and has been allocated 1500 MWh of BESS capacity under the Viability Gap Funding (VGF) of up to 30%
of capital cost for BESS or '27 Lakh/MWh, whichever is lower. NHPC has awarded the entire 1500 MWh BESS capacity
allocated under VGF Scheme - 500 MWh (single cycle 4-hour storage) being implemented in Kerala at 4 locations
and 1000 MWh (two cycle 2-hour storage) being implemented in Andhra Pradesh at 3 locations through selected
developers. Necessary agreements have been signed, and all projects are expected to be commissioned during FY
2026-27.

8.4.6 PM Surya Ghar - Muft Bijli Yojana:

Under the PM Surya Ghar - Muft Bijli Yojana, NHPC has been assigned five States/UTs—Haryana, J&K, Sikkim, Manipur,
Nagaland and eight Central Ministries/Departments for rooftop solar implementation. NHPC has awarded aggregate
capacity of 7.68 MW for Roof Top Solar installation on its own buildings across various locations, targeted for completion
during FY 2026-27. Further, installation of Roof Top Solar in allocated States and Central Ministries is being taken up in
RESCO mode through NHPC Renewable Energy Limited in the capacity of Scheme Implementation Partner (SIP) under
the provision of the Scheme.

8.5    GREEN HYDROGEN TECHNOLOGY

Under the National Green Hydrogen Mission by MNRE, NHPC is exploring opportunities of green hydrogen in power
sector to fulfil the grid balancing services. The company is currently undertaking pilot-based R&D projects to build
technical expertise and assess commercial viability. In this regard, one Pilot Green Hydrogen Based Fuel-Cell Micro grid
(25 kWe) at Nimoo Bazgo Power Station Guest House, Leh and one Pilot Green Hydrogen Mobility Station at Chamba,
Himachal Pradesh are in progress.

8.6    PUMPED STORAGE PROJECT (PSP) SCHEMES

NHPC is actively advancing its PSP portfolio across multiple Indian states to enhance grid stability and renewable
energy integration. NHPC is pursuing for development of PSPs in many states of India at various stages of development
with a cumulative potential of 17930 MW. Some of them are:

•    7500 MW in Maharashtra and 640 MW in Madhya Pradesh as indicated by the Ministry of Power. Projects include
Savitri (2400 MW), Kengadi (900 MW), Kalu (1800 MW), Jalond (2400 MW) in Maharashtra and Indirasagar-
Omkareshwar PSP (640 MW) in Madhya Pradesh — all under various stages from PFR to DPR concurrence.

•    2820 MW in Odisha, including Masinta (1000 MW) is in DPR preparation stage, Harbhangi (1020 MW) and
Badanalla stream (800 MW) for which PFRs have been submitted.

•    900 MW Kuppa PSP in Gujarat and 1000 MW Singli PSP in Rajasthan, for which PFRs have been submitted.

•    1800 MW in Chhattisgarh, including Kurund (1000 MW) for which PFR under preparation and Hasdeo Bango (800
MW) for which DPR under preparation by WAPCOS.

•    3270 MW of PSPs being pursued by NHPC through Joint Venture with APGENCO in Andhra Pradesh, including
Gadikota (1200 MW), Deenepalli (750 MW) and Aravetipalli (1320 MW) PSPs.

9    DIVERSIFICATION

With an objective to strengthen its role in sustainable development of clean power and as apparent from above
paras, NHPC has diversified in the field of renewable energy and green hydrogen energy development. For facilitating
the clean energy transition and in line with the trajectory of energy markets in the Country, NHPC has diversified its
business portfolio towards development of Pumped Storage Projects in the Country.

While NHPC will continue development of Hydro Power Projects as its core business, it would make all endeavours to
expand its business in Renewable Energy development coupled with storage solutions such as Green Hydrogen and
Pumped Storage Projects.

10    POWER TRADING BUSINESS AND POWER TRADING LICENSE

As part of business expansion and diversification program, NHPC 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. NHPC has 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) and Power Exchange of India Limited (PXIL).

During FY 2025-26, NHPC has traded 1776.71 MUs (FY
2024-25 1907.69 MUs) with turnover of '470.04 crore (FY
2024-25 '608.09 crore).

11 DETAILS OF SUBSIDIARIES AND ASSOCIATE
COMPANIES

No subsidiary/ joint venture/ associate Company was
incorporated or ceased during FY 2025-26.

A statement containing 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 FY 2025-26 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, 2026:

11.1 Subsidiary Companies:

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, 2026 was; NHPC (51.08%), GoMP (26%)
and Narmada Basin Projects Company Limited
(wholly owned by GoMP) (22.92%). NHDC has two
operating hydro power stations viz. Indira Sagar
Power Station (ISPS) (1000 MW) and Omkareshwar
Power Station (OSPS) (520 MW) in Madhya Pradesh.
NHDC also has two solar power projects viz. 8 MW
Sanchi Solar Project and 88 MW Omkareshwar
Floating Solar Project in Madhya Pradesh.

During FY 2025-26, NHDC generated 6208.78
MUs from its power stations i.e. 4018.82 MUs from
ISPS, 1998.48 MUs from OSPS, 14.26 MUs from
Sanchi Solar Power Station and 177.22 MUs from
Omkareshwar Floating Solar Project.

ii)    Chenab Valley Power Projects Limited (CVPPL):
CVPPL is a joint venture of NHPC and Jammu &
Kashmir State Power Development Corporation
Limited (JKSPDCL) with shareholding of 58.16%
and 41.84% respectively as on March 31, 2026.
CVPPL was incorporated in June, 2011. CVPPL is
developing four hydro-electric projects in UT of
Jammu & Kashmir viz. Pakal Dul HE Project (1000
MW), Kiru HE Project (624 MW), Kwar HE Project
(540 MW) and Kirthai-II HE Project (820 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 JKSPDCL. As on March 31,
2026, shareholding of NHPC and JKSPDCL was 51%
and 49% 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, 2026,
shareholding of NHPC and UPNEDA was 90.63%
and 9.37% respectively. BSUL was incorporated
in February, 2015 for development of Solar Power
Project in Tehsil Kalpi, District Jalaun, Uttar Pradesh
and other conventional and non-conventional
power projects entrusted by the Govt. of Uttar
Pradesh.

BSUL is in the process of development of approx.
1400 MW 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. BSUL has
achieved the commissioning of Kalpi Solar Power
Project (65 MW) in March, 2024. The investment
approval for development of 1200 MW Solar Park in
Jalaun District has been obtained.

v)    Jalpower Corporation Limited (JPCL):

JPCL was acquired by NHPC through CIRP in
March, 2021 and equity of '165 crore was infused
as consideration amount pursuant to approved
resolution plan. JPCL is a wholly owned subsidiary
of NHPC. It is developing Rangit-IV HE Project (120
MW) in Sikkim and construction works are in full
swing. The status of Rangit-IV HE Project has been
provided elsewhere in the Report.

NHPC (Transferee Company) and JPCL (Transferor
Company) has filed Merger application with Ministry
of Corporate Affairs consequent on receiving
approval from Ministry of Power, Govt. of India. The
merger of JPCL with NHPC is under process.

vi)    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.

vii) Loktak Downstream Hydroelectric Corporation
Limited (LDHCL):

LDHCL is a subsidiary of NHPC with 74%
shareholding of NHPC and 26% shareholding of
Government of Manipur as on March 31, 2026.
LDHCL was incorporated in October, 2009 to
execute Loktak Downstream Hydro-electric Project
(66 MW) in Noney District of Manipur.

The process of initiation of closure of LDHCL is under
progress subject to the approval of DIPAM, Ministry
of Power and Govt. of Manipur.

11.2 Associate Companies:

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

NHPTL was incorporated in May 2009. NHPTL
was established to set up an online high power
test laboratory for short-circuit test facility in the
Country. NHPTL has setup laboratory for testing of
High Voltage Transformers (HVTR) of 400 kV level
and 765 kV level at Bina, Madhya Pradesh which
is already operational. As on March 31, 2026, the
shareholding of NHPC in NHPTL was 12.5%.

ii)    APGENCO NHPC Green Energy Limited (ANGEL):

ANGEL was incorporated in January, 2025 as a
joint venture of NHPC and Andhra Pradesh Power
Generation Corporation Limited (APGENCO) to plan,
promote and organize an integrated and efficient
development of pumped storage hydro power
projects and renewable energy (solar/floating solar/
wind) projects. As on March 31, 2026, shareholding
of NHPC and APGENCO was 50% each. Currently
three projects aggregating to 3270 MW capacity
namely Gadikota (1200 MW), Aravetipalli (1320
MW) Deenepalli (750 MW) are being pursued for
development by ANGEL.

12 GLOBAL INITIATIVES

NHPC has expanded its presence into Nepal as part
of Government of India's directive for Central Public
Sector Enterprises (CPSEs) to strengthen their footprints
in neighbouring countries and evolve into globally
recognized multinational enterprises with sustainable
international business operations.

At present, NHPC is associated with three hydropower
projects in Nepal, namely the West Seti (800 MW),
Seti River-6 (460 MW) and Phukot Karnali (624 MW)
Hydroelectric Projects.

NHPC has submitted the Detailed Project Reports (DPRs)
for the West Seti and Seti River-6 projects to the Investment
Board Nepal (IBN) within the stipulated timelines. The DPRs
are presently under examination by the Central Electricity
Authority (CEA) and Central Water Commission (CWC) in

India, as well as by IBN in Nepal. Technical clearance to the
Final DPR of the West Seti Project was accorded by IBN in
August, 2025. Further, NHPC has submitted the Inception
Report and DPR Review Report for the Phukot Karnali
Project to Vidyut Utpadan Company Limited (VUCL), Nepal
within the prescribed timelines. The Company is also
engaged in strategic discussions relating to joint venture
arrangements and power purchase agreements, with a
development framework encompassing both domestic
supply and cross-border electricity exports. These projects
are expected to make a significant contribution to Nepal's
power sector while supporting regional energy security
and meeting the country's growing electricity demand.

In addition to its ongoing initiatives in Nepal, 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
continues to explore opportunities for expanding its
international portfolio in the hydropower and renewable
energy sectors.

13 HEALTH, SAFETY & ENVIRONMENT (HSE)

NHPC is committed to operate its business with
a strong environmental conscience and socially
responsible manner. NHPC is dedicated to protect local
environment during implementation of different phases
of hydropower project. It is well aware of its obligation
to conserve and protect the environment. During the
investigation stage, probable impacts on environment
and social aspects are assessed and identified by
carrying out Environment Impact Assessment (EIA) study.
Environmental Management Plans (EMPs) are formulated
and implemented to minimize the adverse impacts of the
project by taking necessary measures. Compliance with
safety systems & procedures (OHSAS) and environmental
laws is regularly monitored.

Early Warning System (EWS) is installed/under progress at
all Power Stations/Projects to receive the early warnings
from upstream of the river. Hooters, Caution Boards are
installed in Dam and Power House to sensitize public in
the vicinity areas/ downstream before release of water
from Dam.

Green Credit Program (GCP)

GCP is an innovative market-based mechanism aimed
at incentivizing voluntary environmental actions across
diverse sectors by various stakeholders, including
individuals, communities, private sector industries and
companies.

To promote sustainable lifestyles and environmental
conservation, the Hon'ble Prime Minister launched the
'LiFE' (Lifestyle for Environment) initiative. In alignment
with this initiative, NHPC joined the GCP in August, 2024

by identifying 25 plantation blocks covering a total area
of 224 hectares in Gujarat (170 hectares of plantable
area) and remitted '1,551.47 lakh to the Indian Council of
Forestry Research and Education (ICFRE), Dehradun, the
Administrator of the GCP.

Subsequently, ICFRE submitted Utilization Certificates
amounting to '914.63 lakh, reflecting expenditure
incurred up to March 31, 2025. Regular monitoring of
the plantation sites is being undertaken by officials of
ICFRE and NHPC in coordination with the Gujarat Forest
Department to review and assess the progress of the
plantation activities.

14    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. These practices have allowed NHPC
to achieve best plant availability, increased efficiency and
increased plant/equipment life across its various power
stations.

During FY 2025-26, a total revenue of '51.04 crore has
been generated by NHPC through consultancy services
rendered to its different clients.

15    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 FY 2025-26, your Company has raised '2,651.71
crore through Long Term Loan from Banks, '5,945 crore
through issuance of listed, unsecured, non-cumulative,
non-convertible, redeemable and taxable bonds in
the nature of debentures and '1,854.33 crore through
monetization of free cash component (Return on Equity)
of Chamera-III and Parbati-III Power Stations for next 10
years under the ambit of National Monetization Pipeline
(NMP).

16    CREDIT RATINGS
• 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.

17    INFORMATION    TECHNOLOGY    AND

COMMUNICATION

NHPC considers Information Technology as a strategic
tool for sustainable growth and to improve operational
efficiency and productivity. All offices, power stations,
and project sites are connected through a robust
communication network comprising MPLS-VPN, ILL, VSAT,
and IP Telephony systems.

Implementation of the New Age ERP (SAP S/4 HANA) is in
progress to enhance efficiency across core business areas.
Further, NHPC has implemented various other software
applications/ Mobile apps to take care of day-to-day
business requirements. Business Continuity Plan (BCP) for
ERP and Disaster Recovery Plan (DRP) for ERP is in place in
NHPC.

As per Government of India directives, e-procurement,
Government e-Marketplace (GeM), e-Office, eSushrut -
Health Management Information System (HMIS), Vendor
payment portal and e-Reverse auction system are
operational in the Organization. NHPC has implemented
"Early Warning System (EWS) - e-Aabhas", an Internet Cloud
based Software Application for monitoring of water level/
discharge of rivers to raise alarms with sufficient lead time
to handle disastrous situation. Apart from these, various
mobile apps are under operation.

NHPC continued to strengthen its cyber security
framework during the year by implementing industry best
practices and advanced security solutions to safeguard
its digital infrastructure, critical information assets, and
operational technology systems. Regular cyber security
audits, employee awareness programs, compliance
reviews were also conducted to promote a strong security
culture and ensure adherence to applicable regulatory
and information security standards. NHPC Corporate
Office and all Power Stations of NHPC are ISMS ISO
27001:2022 certified. These initiatives have significantly
enhanced NHPC's resilience against evolving cyber threats
and strengthened the overall security posture of the
organization.

18    HUMAN RESOURCES

Your company boasts a strong and dedicated workforce of
4634 employees, consisting of 3386 executives and 1248
non-executives as on March 31,2026. The above workforce
includes 507 women employees. The Company continues
to attract talent through national-level competitive
examinations and professional qualifications and remains
committed to employee development through structured
training, competency enhancement, and lifelong learning
initiatives delivered through in-house and external
institutions.

Your Company adheres to the Government of India's
guidelines on reservations in employment for SC, ST,
OBC, PwD (Persons with Disabilities), Ex-servicemen and
EWS. Further details on the representation of SC, ST, OBC,
and PwD employees are available in the Management
Discussion & Analysis. Industrial relations remained cordial
and harmonious throughout the year, with employees
continuing to contribute significantly to the Company's
growth and performance.

Your Company is SA 8000 compliant which reflects
its commitment to maintain high standards of social
responsibility, ethical labour practices, occupational health
and safety, non-discrimination, fair remuneration and
employee welfare and all other aspects of its operations.
Your company has established a robust and transparent
Grievance Redressal Mechanism to address concerns
and complaints from employees, stakeholders, contract
labours and the public in a fair and timely manner.
Company follows a structured, multi-tiered process to
ensure that grievances related to employment, services,
project-affected families (PAFs) or any operational issue
are resolved effectively.

Your Company 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 the state Government as the case may
be, whichever is higher. Your company provides medical
insurance coverage up to '1.5 lakh per annum and extends
social security support of '10 lakh to contract workers
engaged by contractors in the event of death or total
permanent disability arising out of workplace accidents
in addition to the payments mandated by statutory
compliances. Contract Labour Payment Management
Portal is operational in the Company wherein details of
Wages and Benefits are uploaded for Public view.

During FY 2025-26, the Company has complied with
the provisions of Maternity Benefit Act, 1961 (Act) and
continued to promote an inclusive workplace through
employee welfare measures, creche and daycare facilities,
and structured engagement with women employees,
PwDs, unions and associations. The Company ensures all
eligible women employees receive maternity leave and
benefits as prescribed by the Act. No violations of the Act
were reported during the year.

Prior to implementation of the New Labour Codes i.e.
Code on Wages, 2019, Code on Social Security, 2020,
Industrial Relations Code, 2020 and Occupational Safety,
Health and Working Conditions Code, 2020 by the Central
Govt. w.e.f. November 21, 2025, NHPC had introduced and
implemented Uniform Wages and Financial Benefits w.e.f.
September 1, 2023 for the Contract Labours engaged by
Contractors in Running & Maintenance / Service Contracts
in the establishments of NHPC which is, depending upon
the location/site, 37%-47% over and above the Minimum

Wages notified by the Central Government. There will
be no additional financial implication in Running &
Maintenance/ Service contracts in NHPC for implementing
New Labour Codes. So far as implication of New Labour
Codes in ongoing Works Contracts is concerned, it shall be
dealt according to the provisions of'subsequent legislation'
under the Contracts.

19    HUMAN RESOURCE DEVELOPMENT & TRAINING

Your Company believes that training and development are
crucial for employee growth and organizational success.
The Company strived hard to keep the employees abreast
with the changes happening in the global market and
focuses on enhancing core competency skills in the areas
of Civil & Electrical Engineering, Design Engineering, HR,
Finance, etc. and also Managerial and soft skills. These
programs range from specific skill training to broader
career development initiatives. The reimagined approach
to learning and development has helped the Company to
provide 37014 man days training to its employees during
the period.

Employees were nominated in customized training
programmes, organized at India's leading institutes
like IIMs, IITs, XLRI and ASCI etc. to enhance their skills
for achieving higher productivity and efficiency in the
organization. A total 1462 employees were nominated in
different programmes organized by the above premier
institutes. Besides, employees were also nominated for
other In-house & external training programs, sponsored
for higher education courses like MBA and M.Tech etc.
and also deputed for foreign immersion programmes
to become aware of the global practices in the field
of Renewable Energy Development and other areas.
Newly recruited young executives were imparted 8 week
Induction cum Orientation program for familiarizing them
with the working and the culture of the organization.
Special initiatives were also taken to promote diversity.
Apart from female employees participation in above
programs both in India and abroad, training programs
were exclusively organised for female employees and
employees belonging to SC, ST, OBC & PwD categories.
Moreover, workshops and knowledge sharing sessions
are organized both in physical and virtual mode for
creating awareness and for updation of knowledge base
of employees. Specially designed programs in the areas of
Corporate Governance, are conducted for senior officials.

20    SOCIAL INITIATIVES

NHPC continued to foster an inclusive and employee¬
centric work culture through various initiatives promoting
employee well-being, work-life balance and community
engagement. Sports events, cultural programmes, yoga
sessions, competitions, and observances such as Hindi

Pakhwada, Vigilance Awareness Week, Kavi Sammelans, World Environment Day, Swachhata Pakhwada and National
Sports Day witnessed enthusiastic participation from employees and their families, contributing to a healthy and positive
workplace environment. During the year, NHPC celebrated its Golden Jubilee, marking 50 years of its establishment,
with events across its offices, power stations and project locations. NHPC also organized cultural events such as Vasant
Utsav to promote India's rich cultural heritage and support local artisans and handicrafts from various States and Union
Territories.

21 SPORTS AND OTHER ACTIVITIES

NHPC continued to promote sports and employee well-being through active participation in Power Sports Control Board
(PSCB) events and implementation of its Sports Policy. During FY 2025-26, the Company awarded sports scholarships
to 59 promising sportspersons and participated in ten PSCB sports events such as Chess, Carom, Badminton, Table
Tennis etc. NHPC teams delivered notable performances, securing medals in various Inter-CPSU tournaments including
multiple gold medal wins by both men's and women's teams. The recipients of NHPC's Sports Scholarships have
proudly represented the organization at numerous national and international tournaments delivering outstanding
performances and bringing laurels to the NHPC family.

NHPC also organized the 25^th Inter-CPSU Cricket
Tournament and, under the aegis of the Bureau of
Energy Efficiency (BEE), conducted State-Level Painting
Competitions on Energy Conservation in five States/UTs.
Master Stanzin Chosyangs, a student sponsored through
the initiative, secured second prize at the National Level
Painting Competition and received the award from the
Hon'ble President of India.

Smt. Droupadi Murmu, Hon'ble President of India, presenting the Second
Prize to Master Stanzin Chosyangs, Class-X student for his painting on energy
conservation under Category “B" at the National Energy Conservation Day
Awards Ceremony 2025 in the presence of Shri Manohar Lal, Hon'ble Union
Minister for Power and Housing & Urban Affairs; Shri Shripad Naik, Hon'ble
Minister of State for Power and New & Renewable Energy, Shri Pankaj
Agarwal, Secretary (Power), Government of India and Shri Dhiraj Kumar
Srivastava, Director General, BEE

During the year, NHPC participated in several national
and international exhibitions, conferences and industry
forums, including World Expo 2025 (Osaka, Japan), India
Energy Week 2025, Bharat Electricity Summit 2026,
Gujarat Global Expo 2025, GRIDCON 2025, RE-INVEST
2024, ELECRAMA 2025, AI Impact Summit 2026 and India
International Trade Fair. These platforms enabled the
Company to showcase its achievements in hydropower,
renewable energy, digital transformation efforts,
sustainability initiatives and technological innovations,
while strengthening stakeholder engagement and
enhancing NHPC's corporate visibility.

22 REHABILITATION AND RESETTLEMENT (R&R)
NHPC understands the challenges faced by populations
displaced during the implementation of its projects. R&R
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 local

people residing near projects/power stations. Additionally,
the skill development training is being provided to PAFs as
well as locals of the projects.

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 Bureau of Indian Standards (BIS) has
conducted Surveillance Audit of the vigilance processes
which concluded with satisfaction. Further, there were 3
Vigilance Cases due for disposal in FY 2025-26 out of which
2 cases were disposed and final orders have been issued.
Remaining one case related to disproportionate assets is
pending, which 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, 2026. 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, 2026 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 details regarding Risk
Management Policy are provided elsewhere in the Report.

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 FY 2025-26, NHPC on standalone basis has
procured 60.73% 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 5.49% from SC/ST MSEs and 4.60% from women
MSEs against the sub-target of 4% and 3% respectively.
During FY 2025-26, 2594 MSEs were benefited by NHPC
(standalone) out of which 189 MSEs and 573 MSEs were
owned by SC/ST and Women entrepreneurs respectively.

27    IMPLEMENTATION OF OFFICIAL LANGUAGE

During the year, the provisions of the Official Languages
Act, 1963 and Rules were complied with. Efforts were
made to increase the progressive use of Official Language
in accordance with the policy of the Government of
India. During this period, quarterly meetings of the
Official Language Implementation Committee were held
regularly. Regular monthly departmental Hindi meetings
were held in all the Departments of the Corporate Office.
During the year, Rajbhasha Sammelan/ Seminar, Kavi
Sammelan, Hindi workshops as well as various Hindi
competitions were organized. Hindi Pakhwara 2025 was
celebrated throughout the organisation. To encourage the
use of Hindi in Official work, 10 Hindi Incentive Schemes
were implemented. During the period, the 47^th and 48^th
issues of the Company's magazine 'Rajbhasha Jyoti' were
successfully published. Additionally, the Hindi magazine
'Nagar Saurabh' of the Nagar Rajbhasha Karyanvayan
Samiti (NRAKAS) (Karyalaya), Faridabad was also published
under the aegis of NRAKAS. The second Sub-Committee
of the Hon'ble Committee on Parliamentary Official
Language conducted the Rajbhasha inspection of Loktak,
Rangit, Teesta-V, Sewa-II, Salal Power Station, Regional
Office-Jammu and Registered Office. Your Company's
website i.e. www.nhpcindia.com is bilingual i.e. Rajbhasha
and English..................

28    RIGHT TO INFORMATION ACT

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

During FY 2025-26, 796 applications and 66 first stage
appeals were received under RTI Act. Out of above, 792
(99.50%) applications and 66 (100%) first stage appeals
were replied / disposed. Further, 8 second stage appeals
were filed by the applicants before the Central Information
Commission (CIC), which were also disposed-of in favour
of NHPC.

29    CORPORATE SOCIAL RESPONSIBILITY (CSR)

CSR is integral to your Company's commitment towards
addressing the social, economic, and environmental
concerns of the regions in which it operates. Your Company
conducts its business in a socially responsible manner
by upholding high standards of organizational integrity
and ethical behaviour, while maintaining transparency
in reporting and disclosure across all spheres of its
activities. Your Company consistently demonstrates its
commitment towards social welfare through the adoption
of best management practices and effective operational
methods, thereby fostering the trust and confidence of all
stakeholders.

Over the years, your Company has played a significant
role in the welfare and development of society through
the implementation of various CSR initiatives. Your
Company undertakes its CSR initiatives with the objective
of promoting the welfare and inclusive development of
communities and the public at large, including deprived
and underprivileged sections of society. Your Company
strives to ensure that the benefits of its CSR initiatives
reach all sections of society, particularly communities
residing in and around its project locations, units,
and other identified areas. The CSR initiatives of your
Company encompass programmes related to education
and skill development, healthcare and sanitation, rural
development, women empowerment, environmental
sustainability, and other areas specified under Schedule
VII of the Companies Act, 2013. Through well-planned
and need-based interventions, your Company remains
committed to contribute meaningfully towards the
welfare of communities, society, and the environment,
while steadily expanding the outreach of its CSR initiatives
across beneficiary areas...............

Your Company has a CSR & Sustainability Policy, aligned
with the provisions of CSR under Section 135 of the
Companies Act, 2013, the Companies (Corporate Social
Responsibility Policy) Rules 2014, and subsequent
amendments issued by the Ministry of Corporate Affairs,
Government of India. Your company also aims to adhere
to the Guidelines on CSR issued by the Department of
Public Enterprises (DPE). Your company has strengthened
its commitment to CSR in line with these statutory
provisions. The major highlights of the CSR Policy of your
Company are as under:

•    In terms of Section 135 of Companies Act 2013, the
Company shall spend, in every financial year, at least
two percent of the average net profits made during
the three immediately preceding financial years.
Accordingly, an annual budget for CSR activities is
allocated and approved by the Board of Directors
based on the recommendation of the Committee of
Directors on CSR & Sustainability.

•    At least 80% of the CSR schemes/ activities are to
be executed in and around NHPC's Projects, Power
Stations and offices preferably within 25 km and in
the district where the project is located. However,
other locations may also be chosen based on the
needs and as per the direction of Govt. of India on
National schemes/ campaign.

•    Choice of CSR & Sustainability schemes for
implementation will preferably be made in
consultation/ association with the Administrative
Authorities of District/ Sub-division/ Blocks/
Panchayats etc. in which the NHPC's Units are
operating.

•    Your Company 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 socio¬
economic or environmental impact.

•    Any changes in statutory provisions or government
guidelines shall be deemed to have been adopted,
as applicable, in accordance with the provisions
issued from time to time.

The CSR and 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 FY 2025-26 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 FY
2025-26. Company's major related party transactions are
generally with its subsidiaries and associate companies
which were entered into on arm's length basis and in
ordinary course of business of the Company. 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 he/she
shall not be 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
2025-26, no complaint was received under Whistle Blower
Policy. Your Company has also framed a Fraud Prevention
and 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 firmly believes that workplace diversity
fosters an environment that promotes employee
engagement, alignment, innovation and high
performance. Every employee is treated with dignity
and respect, and provided equal opportunities. A
comprehensive Policy on the Prevention, Prohibition,
and Redressal of Sexual Harassment of Women at the
Workplace, aligned with the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal)
Act, 2013, is in place. 'Internal Complaints Committees'

have been established at all Company locations to
address complaints related to sexual harassment.
Furthermore, your Company has classified sexual
harassment as misconduct under the 'NHPC Conduct,
Discipline and Appeal Rules'. Disclosures pertaining to the
implementation of the Act for FY 2025-26 are as follows:

33    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 the Annual Report.

34    AWARDS & RECOGNITIONS

NHPC has been proud recipient of following awards for
excellence in different areas during FY 2025-26:

• NHPC's Rajbhasha Magazine 'Rajbhasha Jyoti'
awarded the first prize in Region 'A' under
the Government of India's highest Rajbhasha
Kirti Puraskar (House Journal). The award was
presented by Hon'ble Union Minister for Home
and Cooperation, Shri Amit Shah, during the Hindi
Diwas 2025 and 5^th All India Rajbhasha Sammelan
held at Gandhinagar, Gujarat.

• Salal Power Station received the First Prize from
the Department of Official Language, Ministry of
Home Affairs for outstanding implementation of the
Official Language Policy among PSUs in 'Region C'.

•    NHPC has been awarded "Navratna of the Year
(Manufacturing) 2024" by Dalal Street Investment
Journal, recognizing its strong financial performance
and was honored with the Roll of Honor Certificate.

•    NHPC was conferred with the "GEEF Global
Environmental Excellence Company of the Year
2025 in Power Sector" award at the Global Energy
Leaders' Summit & Awards.

•    Nagar Rajbhasha Karayanwayan Samiti (Office),
Faridabad, functioning under the chairmanship of
CMD, NHPC was awarded the Best Official Language
Shield for Official Language Implementation during
Hindi Diwas-2025 and 5^th All India Official Language
Conference.

•    NHPC received the NIPM HR Excellence Silver Award

2025    for its innovative HR practices on "Innovative
Approaches to Promote Diversity" at the 41^st NIPM
National Conference.

•    NHPC was conferred with the Best Enterprise
Award (Third Place - Navratna Category) at the 36^th
National Meet of the Forum of Women in Public
Sector (WIPS) held under the aegis of Standing
Conference of Public Enterprises.

•    NHPC received the CII HR Excellence Award 2025-26
for "Significant Achievement in HR Excellence"at the
16^th CII National HR Excellence Award Confluence.

•    NHPC has been conferred with 'Special Jury Award'
under ET HR World Future Skills Award 2025 for "Use
of Games & Simulations in L&D".

•    NHPC was honored as India's Best Global
Hydropower & Renewable Energy Asset Holding &
Operating Enterprise at the 18^th ENERTIA Awards

2026    and as Best Hydropower Developer (Public) at
the IPPAI Power Awards 2026.

•    NHPC was honoured with the Silver Award at the
prestigious The Economic Times GovTech Awards
2026 under the category "Cybersecurity & Digital
Safety Excellence".

•    NHPC earned accolades at the 'Governance Now
10^th India PSU IT Awards 2025'. NHPC received
award for the 'Cybersecurity & Data Protection and
Digital Transformation Excellence'.

35 MANAGEMENT DISCUSSION & ANALYSIS
35.1 INDUSTRY STRUCTURE AND DEVELOPMENT
Electricity is among the most invisible yet indispensable
elements of modern life. Digital public infrastructure,
smarter networks, and new market arrangements are
reshaping how electricity is produced, consumed, and
valued. As these changes continue to take root, electricity
remains a quiet but essential enabler of growth, inclusion,
and opportunity. Over the past decade, India's power
sector has undergone a period of major structural change
to ensure reliable, affordable, and universal access to

power. As India's economy grows and living standards
rise, electricity demand continues to expand across
households, industry, agriculture, and services. Focusing
on this, the generation capacity has scaled/ expanded
steadily across conventional and renewable sources.
India's installed non-fossil fuel capacity has witnessed an
extraordinary rise that establishes India globally as the
3^rd largest in total installed renewable energy capacity.
In a remarkable energy transition, India achieved an
unprecedented ~50% of its installed electricity capacity
from non-fossil fuel sources by June 2025 - five years
ahead of its 2030 Paris Agreement Nationally Determined
Contribution (NDC) target. As the world repositions
itself towards sustainability, India's renewable sector
has unleashed extraordinary growth opportunities,
positioning the country as a global leader in clean energy
adoption.¹

India, at COP26 in November 2021, announced its target
to achieve net zero by 2070, positioning the renewable
energy sector as a catalyst for vast potential beyond
creating a cleaner future. Towards this, the government
has launched several flagship initiatives, including setting¬
up of solar parks across multiple states with capacities of
500 MW or more, PM Surya Ghar: Muft Bijli Yojana,
Sustainable AlternativeTowards AffordableTransportation
(SATAT) initiative which promotes Compressed Bio-Gas
(CBG) production plants and forward-looking policies
including waiver of Inter-State Transmission Charges,
Renewable Purchase Obligations, Production Linked
Incentives and budgetary support towards cost of
enabling infrastructure.

These changes have redefined the industry outlook and
are enabling the transition of Indian power sector towards
a more sustainable and competitive future, with a focus
on renewable energy and efficient grid management.
The same is also reflected through consistent growth in
generating capacity. A series of concerted measures led to
a 93.79 % increase in generation capacity - from 275 GW in
March, 2015 to ~532.74 GW in March, 2026. The Installed
Capacity as on March 2026 was 532.74 GW comprising of
249.27 GW thermal (comprising of Coal, Gas and Diesel),
8.78 GW Nuclear, 274.68 GW Renewables including large
hydro of 51.41 GW.²

During FY 2025-26, total electricity generation in the
Country was 1840110 MUs comprising of 1307130.61
MUs from thermal (comprising of Coal, Gas and Diesel),
55190.52 MUs from Nuclear, 47789.06 MUs from
Renewables including 167203.78 MUs from large hydro.³

35.2 STRATEGIC DIVERSIFICATION

NHPC is one of the India's leading hydro power generation
company and is considering upcoming opportunities in
Renewable Energy to reduce dependence on hydropower
alone and position itself as a comprehensive renewable
energy player and an integrated clean energy company
aligned with India's long-term energy transition goals.
While retaining its core strength holding a 16% share of
India's installed hydroelectric capacity with operations
across 15 States and 2 Union territories. The diversification
is a deliberate response to India's energy transition, as
hydropower alone faces constraints from limited suitable
sites and growing environmental considerations.

NHPC had signed MoUs with various state Governments
for joint development of pump storage and other
renewable energy projects. The Company's broader
ambition is to contribute meaningfully to India's target of
500 GW of renewable energy capacity by 2030. This multi¬
pronged strategy anchored in hydropower but branching
into solar, wind and pumped storage, strengthens NHPC's
long-term competitiveness and aligns it well with India's
evolving energy policy landscape.

³Source: India Climate & Energy Dashboard of NITI Aayog

35.3    HYDROPOWER POTENTIAL IN INDIA

As per the reassessment study carried out for the period
2017-2023, exploitable identified hydro power potential
in terms of installed capacity is estimated at 133410 MW,
consisting of hydro-electric schemes having installed
capacity above 25 MW. The identified Pump Storage
potential (On Stream & Off Stream PSPs) is estimated at
288595.60 MW (as on 31.03.2026).¹

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

The Government of India 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:-

•    Renewable Status: Large Hydro-power Projects
(LHPs i.e. greater than 25 MW) are officially classified
as renewable energy sources under the continuous
administration of the Ministry of Power. Hydropower
Purchase Obligations (HPOs) are now established
as a distinct category within Non-Solar Renewable
Purchase Obligations (RPOs).

•    Tariff Rationalization: Developers are provided
flexibility to lower initial tariffs by back-loading of
costs. This is supported by extending the project life
to 40 years, stretching debt repayment to 18 years,
and implementing escalating tariff structures.

•    Budgetary Support: Financial assistance covers
flood moderation and enabling infrastructure
(roads/bridges) at scaled limits:

(i)    Projects up to 200 MW: Capped at '1.0 crore/
MW.

(ii)    Projects above 200 MW: Capped at '200 crore
+ '0.75 crore/MW for capacity exceeding 200
MW.

(iii)    Exceptions: Up to '1.5 crore/MW with sufficient
justification.

•    ISTS Transmission Charge Waivers:

(i)    New HEPs: 100% waiver if construction is
awarded on or before 30.06.2025 and the
PPA is signed between 01.12.2023 and
30.06.2025. Phased part-waivers (decreasing
in 25% increments) apply for construction
work awarded and PPAs secured between
01.07.2025 and 30.06.2028.

(ii)    Hydro PSPs: 100% waiver if construction is
awarded on or before 30.06.2028.

(iii)    Co-located BESS: 100% waiver if commissioned

by 30.06.2028 and the power is consumed
outside the producing state........

• Renewable Energy Certificates (RECs): Under CERC
(Terms and conditions for Renewable Energy
Certificates for Renewable energy Generation)
Regulations, 2022, hydropower qualifies for
RECs with an incentive multiplier of 1.5 to boost
marketability and power sales.

35.5    GOVERNMENT INITIATIVES FOR RENEWABLE
ENERGY SECTOR

Amid various challenges, to meet the target of 500 GW
of renewables by 2030, 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
initiatives like PM Surya Ghar: Muft BijliYojana, PM-KUSUM,
and National Green Hydrogen Mission, Production Linked
Incentives (PLI) Scheme for domestic manufacturing of
High-Efficiency Solar PV Modules, various schemes to
promote large scale Solar Power Development such as
CPSU Scheme, Solar Park Scheme and extension in waiver
of ISTS charges for renewable energy projects.

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 order to
enhance grid flexibility, integration of renewable with the
grid and to meet the peak power demand, Govt. of India
has also introduced VGF based scheme for Battery Energy
system through Market component, State component,
CPSU component and PSDF. In the interest of optimal
use of Renewable Energy and smooth transition of Indian
Power Sector to Net Zero by the year 2070, it is essential to
take up large scale development of Hydro Pumped Storage
Projects (PSPs) in the country, which will play a vital role in
Grid balancing by meeting the peak power requirements,
energy arbitrage, ancillary services, RE smoothing.
Accordingly, Ministry of Power, Govt. of India on April 10,
2023 has issued "Guidelines to promote development
of Pump Storage Projects (PSP)". The guideline offer that
PSPs are energy storage schemes, hence PSPs would be
kept out of the liability of free power, LADF and Upfront
Premium for Project allocations.

Above initiatives in the Renewable Energy Sector in
conjunction with technological advancements have
made the investment in RE sector highly attractive.
NHPC is also making its efforts to explore opportunities
for development of renewable energy and PSP 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), the details of which had
already been covered in previous year's Management

Discussion & Analysis. Further, MoP has notified Electricity
(Late Payment Surcharge and Related Matters) Rules, 2022
on June 03, 2022 and its amendment on February 28, 2024.
This Rule has brought discipline among DISCOMs and
has resulted in timely realisation of dues from beneficiary
DISCOMs.

35.7    CERC REGULATIONS

CERC Regulations covers the following:

a.    CERC Tariff Regulations:

The CERC (Terms and Conditions of Tariff)
Regulations, 2024 is applicable for the period
April 1, 2024 to March 31, 2029. Further, CERC
has notified Central Electricity Regulatory
Commission (Terms and Conditions of Tariff)
(Second Amendment) Regulations, 2026.

b.    CERC Ancillary Services Regulations, 2022:
These regulations provides a regulatory
mechanism for ancillary services in the interest
of reliability, safety and security of the grid.
Regulations aim to provide mechanisms for
procurement, through administered as well as
market-based mechanisms, deployment and
payment of Ancillary Services at the regional
and national level for maintaining the grid
frequency close to 50 Hz, and restoring the
grid frequency within the allowable band as
specified in the Grid Code and for relieving
congestion in the transmission network, to
ensure smooth operation of the power system,
and safety and security of the grid.

c.    CERC Deviation Settlement Mechanism
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.

35.8    SWOT ANALYSIS

(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.
Together, the integrated resources enable NHPC's
Design Division to deliver robust, evidence-based
solutions for hydropower projects, ensuring safety,
efficiency and regulatory compliance in complex
Himalayan environments.

NHPC is also using the latest Geophysical
Exploration techniques on site for data acquisition,
processing, interpretation and preparation of in¬
house reports. NHPC has expertise in technical
gamut of engineering geophysical explorations
such as Seismic Tomography, Electrical Resistivity
Tomography, Seismic Refraction Tomography and
Ground Penetrating Radar, which provide sub¬
surface information in an effective and economic way.
NHPC has also developed in house rock mechanics
testing laboratory (NABL accredited) with high-end
testing instruments and a sophisticated remote
sensing lab. Proven experience with validation in
execution and operation of large number of national
and international projects in respect of power
potential and optimization studies, powerhouse
dimensioning and transient studies.

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.

NHPC has a full-fledged in-house Survey Group
dedicated to carry out miscellaneous Survey
works of all hydroelectric projects from concept
to commissioning utilizing latest state-of-art
Technologies in utmost precision & accuracy. A
centralized data bank of all Survey works is created
for its easy accessibility & future references. NHPC in¬
house survey team conducts field survey to develop
various Survey Maps at desired scales which further
reduces dependency on outside agencies that saves
cost & time.

•    Extensive experience in construction and
operation

NHPC has extensive experience and expertise
in developing hydroelectric projects in complex
geological regions. 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, complex rock
conditions and technological hindrances. NHPC
has standardized its erection protocols in strict
adherence to international standards for developing
its projects as model of quality excellence. With its
strong team of competent, efficient and experienced
professionals, NHPC is capable of executing
hydroelectric projects of varying features and sizes
by effectively overcoming such challenges.

•    Strong financial position

NHPC has paid-up share capital of '10,045.03 crore
and an asset base of over '98,463.90 crore as on
March 31, 2026. The strong financial position of the
Company makes it competent enough to execute
capital-intensive large hydroelectric projects.

•    Strong operating performance

On a consolidated basis, NHPC has successfully
managed to develop and implement twenty-
four hydroelectric projects (including partly
commissioned Subansiri Lower HEP), two solar
power projects and one wind power project on
its own and four solar power projects through its
subsidiary companies with an aggregate installed
capacity of 9332.90 MW. NHPC with its fleet of power
stations is a flagship Company in hydropower sector
in India.

•    Seismic safety assessment

NHPC has setup one of the largest strong motion
instrument (SMAs) network owned by any public
sector utility in the Country covering all of NHPC
and JV power stations. This network is operational
on 24X7 basis and is maintained and monitored
exclusively by Engineering Seismological unit of
Geophysical team. For online monitoring of these
SMAs, NHPC has setup one of its kind state-of-art
centralized Real Time Seismic Data Centre (RTSDC)
at its Corporate Office for seismic monitoring of
all its power stations. The data centre records,
processes and provides quick assessment of any
earthquake event within the vicinity of respective
power stations. This also provides a strong database
for Comprehensive Dam Safety Evaluation teams in
accordance with Dam Safety Act, 2021. This is a big
step towards risk assessment measures and enables
dam safety reviews for each of its power stations.

Some High-end Research and Development
activities taken up as JV with seismic experts of the
Country have further strengthened the capabilities
of NHPC in seismic monitoring of Hydro projects.

•    NHPC's continued ability to complete the hydro
projects

NHPC's sustained ability to execute and complete
hydropower projects under challenging conditions
remains one of its core strengths. The Company's
extensive experience in overcoming geological,
logistical and engineering complexities has enabled
it to successfully deliver large hydroelectric projects
across diverse and difficult terrains. The milestones
achieved during the year reaffirm NHPC's project
execution capabilities and strengthen its position
to pursue future growth opportunities in the
hydropower sector.

(ii) OPPORTUNITIES
• Untapped hydro potential

The integration of intermittent renewable energy
has triggered peaking shortages and grid frequency
variations, driving a critical policy shift toward
hydropower and Pumped Storage Projects (PSPs)
for grid stabilization. This transition unlocks massive
expansion opportunities for the Company to capture
India's vast untapped hydro potential—particularly
across the North-Eastern region—as well as in
strategic neighboring countries. Capitalizing
on these unexploited assets and leveraging its
core domain strength in hydro-engineering, the
Company maintains a definitive competitive
edge to lead the large-scale deployment of PSP
infrastructure, positioning itself as a primary driver
of the nation's clean energy transition.

•    Renewable Energy

The Government of India is implementing reforms
towards a secure, affordable and sustainable energy
system to power a robust economic growth and
have taken several measures to de-carbonize the
energy sector like increasing the share of installed
RE capacity & its uptake and promoting energy
efficiency in all sphere of life and to make energy
transition from Fossil Fuel to Non-Fossil Fuel. With
the energy transition gaining momentum with
time, NHPC is leveraging its status as a premier
hydropower leader to establish itself in the emerging
Round-the-Clock (RTC) renewable energy market
through a diversified portfolio of Solar, Wind, and
Green Hydrogen.

NHPC is actively scaling its footprint in Renewable
Energy Sector by setting up of Renewable Energy
projects as standalone developer and also through
its specialized arms, NHPC Renewable Energy

Limited (NHPC REL) and Bundelkhand Saur Urja
Limited (BSUL). NHPC is also continuously focusing
on commercial-scale deployment of PSPs and
large-scale Floating Solar installations. NHPC is
also pursuing commercial-grade Green Hydrogen
ecosystems and e-mobility solutions to decarbonize
high-altitude and industrial clusters.

As a designated Renewable Energy Implementing
Agency (REIA), NHPC's role has become very
significant towards a facilitator for Renewable
capacity addition for the country and an important
revenue pillar for the Company. Having already
awarded over 23 GW of RE capacity with different
technologies, the Company is putting all its
efforts for expeditious signing of Power Purchase
Agreement (PPA) & Power Sale Agreement (PSA) to
bridge the gap between developers and DISCOMs
and commissioning the projects within the ambit of
signed PPA.

Recognizing that grid stability is the next frontier,
NHPC is accelerating its mandate as a Battery
Energy Storage System Implementing Agency
(BIA). The 1500 MWh BESS tranche (supported by
VGF) has now moved into the implementation
phase. This role as BIA not only supports the grid
but also establishes a significant, long-term fee-
based revenue stream through Battery Energy
Storage Purchase Agreements (BESPA). Apart from
above, company is also exploring opportunities for
installation of BESS capacity with the commissioned/
under implementation RE Projects and participating
in the upcoming bids for Storage based RE Projects.
Through these integrated efforts, NHPC is
evolving from a conventional hydro utility into a
comprehensive Green Energy Major, driving India's
journey toward a Net Zero future.

• Grid Balancing Requirement

In view of the Government of India's ongoing thrust
on large-scale renewable energy development,
particularly in solar power, hydropower will play a
critical role in ensuring grid balancing and stability.
The evolving energy scenario presents significant
opportunities for NHPC to expand hydropower
development, owing to its inherent advantages
such as fast ramping capability, operational
flexibility, fault current support, inertial and primary
frequency response, black start capability, and
environment-friendly scalable energy storage
scheme.

(iii) THREATS/ WEAKNESSES/ CHALLENGES/CONCERN
• 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. Hydropower plants face significant
challenges from natural hazards, particularly
because they are often located in mountainous,
geologically active regions. Key threats include
earthquakes, flash floods, landslides, avalanches,
Landslide Lake Outburst Flood (LLOF) and Glacial
Lake Outburst Flood (GLOF), which can damage
infrastructure and cause severe operational
disruptions.

•    Time and cost overruns