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NHPC

BSE: 533098|NSE: NHPC|ISIN: INE848E01016|SECTOR: Power - Generation & Distribution
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Chairman's Speech (NHPC) Year : Mar '19

LETTER TO SHAREHOLDERS

Dear Members,

It is my pleasure and honor to have an opportunity to communicate with you for the second time as Chairman & Managing Director of your Company. Power sector to a great extent is an enabler of growth for any economy of the world and our country is not different. Ours is one of the fastest growing economy in the world and this creates immense opportunities for us to grow, expand and multiply.

Nature has bequeathed our country with hydropower potential of more than 148 GW, yet we have developed only about 45 GW of large hydro capacity. Thus, there is lot of scope for development of hydroelectric power. Hydroelectric power plays a critical role in the overall energy mix and Govt. of India has announced measures for promoting hydroelectric power. These measures shall provide impetus to the development of hydro power sector and NHPC, being the premier organization of the country for development of hydroelectric power is committed to tap and utilize the available hydroelectric power potential.

The year 2018-19 has been an eventful and notable year for your Company on operational, financial as well as business expansion fronts. Our Power Stations have set a new milestone by achieving highest ever annual generation of 24,193 Million Units (MUs) with PAF of 84.97%. The previous record was of 23,404 MUs during financial year 2015-16. This is a reflection of efficient operation as well as efforts of our operations and maintenance teams. Installed capacity of your Company stands at 7,071 MW on consolidated basis and 5,551 MW on standalone basis, which includes 50 MW each of solar and wind power.

On financial front, total income of Company increased to Rs 9,085.96 crore registering a growth of 9% over the total income in financial year 2017-18. Total comprehensive income, Net Profit After Tax (PAT) and other comprehensive income were Rs 2,618 crore, Rs 2,630 crore and Rs (12) crore respectively. Sales from operations during financial year 2018-19 were Rs 8,161.18 crore whereas realization, including liquidation of outstanding amount of previous years and surcharge were Rs 6,498.70 crore.

New venture of your Company i.e. Power Trading has also started yielding results. During the financial year 2018-19, the Company has earned revenue of Rs 13 crore approximately from power trading business.

On business expansion front, investment expenditure for pre-investment activities and various clearances of Dibang Multipurpose Project (2,880 MW) in the state of Arunachal Pradesh has been approved by the Cabinet Committee on Economic Affairs (CCEA) on the recommendations of Project Investment Board (PIB). The project is having all statutory clearances except Forest Clearance (Stage-ll) for seeking investment sanction from Govt. of India. Further, our bid for Lanco Teesta Hydro Power Limited (LTHPL), developer of Teesta-VI HE Project (500 MW) in Sikkim, for an amount of Rs 897.50 Crores under Corporate Insolvency Resolution Process was approved by National Company Law Tribunal (NCLT). CCEA has already approved the proposal for taking over of Lanco Teesta Hydro Power Limited (LTHPL). Company has received in-principle approval for setting-up of one Solar Park of 100 MW capacity in Odisha from Ministry of New and Renewable Energy, Government of India. NHPC was also appointed as ''Aggregator'' under Pilot Scheme-ll by Ministry of Power for procurement of aggregated power of 2,500 MW for three years.

The Company has also inked Memorandum of Understanding (MoU) with:

• Jammu and Kashmir State Power Development Corporation Limited (JKSPDC) and Government of Jammu & Kashmir (GoJK) for implementation of Ratle HE Project (850 MW) in the state of Jammu & Kashmir through a Joint Venture Company;

• BHEL for joint bidding in consultancy and hydro-electric projects;

• NLC India Limited for trading of power.

NHPC is proud to get the opportunity to work for the Indian army. The Company has signed a MoU with Indian Army in April, 2019 for undertaking construction of semi underground bunkers and fully underground caverns at different locations in India. The expertise of our company in undertaking construction at rough and difficult terrains is appreciated by one and all.

The status of operational plants, ongoing and new projects of the Company has been provided in detail in the Directors'' Report. However, I would like to mention that in addition to existing standalone operational capacity of 5,551 MW, two projects with total capacity of 2,800 MW are under different stages of construction. The Principal Bench of Hon''ble NGT vide order dated July 31, 2019 has upheld the constitution of Expert Committee by MoEF&CC and observed that the project be advanced in public interest. I am hopeful that this will pave the way for restarting the construction works in near future. Further, hydroelectric power project with expected capacity of 5,945 MW are under clearance/ approval stage. Capacity addition of 1,376 MW of hydroelectric power is also anticipated through Subsidiaries and Joint ventures. Further, two power stations of the Company namely Bairasiul (180 MW) and Loktak (105 MW) are under Renovation and Modernization with scheduled completion in financial year 2021-22.

Your Company has taken small but steady steps for increasing the share of renewable energy in its portfolio. To augment its existing portfolio of 100 MW of renewable energy (50 MW each of Wind and Solar power), Company has initiated the process for the development of 10 MW floating solar power project in Kallada, Kerala and 72 MW ( 10%) capacity Wind Power Projects in the Palakkad District of Kerala. NHPC in joint venture with Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) is also in the process of setting up a 32 MW solar power project in Uttar Pradesh. Further, opportunities for development of renewable energy are being explored actively.

During the financial year 2018-19, your company has installed roof-top/ ground mounted solar power panels at its various locations having capacity of 634.7 KWp. Further, your company has also installed 1.00 MWp Solar Power Plant at rooftop of different buildings of NHPC Residential Complex, Faridabad in June, 2019.

Every employee of your Company is committed to maximize its profitability thereby creating and maximizing wealth of shareholders. In this endeavor, the Company has already paid an interim dividend of Rs 0.71/- per share in March, 2019 and has recommended a final dividend of Rs 0.75/- per equity share for financial year 2018-19, subject to your approval. On approval, the total dividend payout for the financial year 2018-19 will be more than 5% of net worth and approximately 56% of the profit after tax.

During the financial year 2018-19, the Company had also bought back 21,42,85,714 fully paid equity shares of Rs 10/- each at a price of Rs 28/- per equity share in January, 2019. Further, Govt. of India had divested 0.50% of total paid-up share Capital of the company through Bharat 22 ETF in March, 2019. Post-buyback and divestment, the holding of the Government of India in your Company stands reduced at 73.33% of the total paid up capital of the Company.

As a socially responsible entity, your Company has continued to take CSR initiatives that have positive impact on society at large, especially the community in the neighborhood of its operations. Corporate Social Responsibility (CSR) has been an integral part of your Company''s business philosophy. During the year, various CSR activities have been undertaken in the field of Health, Sanitation, Drinking Water, Education and Skill development, capacity building, Women Empowerment, Social infrastructure development etc. The expenditure on CSR & SD activities during the financial year 2018-19 was Rs 17.58 crores. Your Company is committed to fulfill stakeholders'' aspiration and contributing to sustainable development of people, planet and the organization.

Management of your Company believes in adhering to highest standards of Corporate Governance in all its operations. Being a listed company, NHPC has been making sincere efforts to comply with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, to the extent it is within the ambit of the management of the Company. Your Company also follows the guidelines on Corporate Governance for CPSEs issued by Department of Public Enterprises (DPE), Government of India. During the year 2018-19, your Company has achieved Excellent rating for compliance with ''DPE Guidelines on Corporate Governance'' under ''Corporate Governance Grading System'' prescribed by DPE.

The efforts and practices of your Company have been recognized in form of awards and accolades such as Best Performing Utility in Hydropower Sector at CBIP Awards, TAI tunneling project of the year award by Tunneling Association of India for execution of tunnels in Kishanganga H.E. Project, SILVER level recognition in World Healthy Workplace Award 2018 instituted by Arogya World India Trust in partnership with Public Health Foundation of India and Second Prize in Region A for outstanding work in the field of Rajbhasha implementation for the year 2017-18 from Ministry of Home Affairs, Government of India.

I take this opportunity to convey my gratitude to all stakeholders, business partners, customers, CERC and various Ministries of Govt. of India, especially Ministry of Power for providing valuable guidance and support in our efforts. I would also like to thank Government of various States for extending support in our endeavors. I convey my sincere appreciation to my esteemed colleague Board members for their continued support. Finally, I must thank all the employees for their continuous and untiring efforts in building a strong, vibrant and responsible organization.

Thanking you.

Yours sincerely,

(Balraj Joshi)

Chairman and Managing Director

DIN 07449990

Date: August 2, 2019

Place: Faridabad

Source : Dion Global Solutions Limited
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