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SJVN Ltd.

BSE: 533206 Sector: Infrastructure
NSE: SJVN ISIN Code: INE002L01015
BSE 00:00 | 20 Feb 25.70 0.10
(0.39%)
OPEN

25.60

HIGH

25.95

LOW

25.50

NSE 00:00 | 20 Feb 25.65 0.10
(0.39%)
OPEN

25.50

HIGH

26.00

LOW

25.45

OPEN 25.60
PREVIOUS CLOSE 25.60
VOLUME 52660
52-Week high 27.75
52-Week low 22.25
P/E 5.88
Mkt Cap.(Rs cr) 10,100
Buy Price 25.70
Buy Qty 3200.00
Sell Price 26.00
Sell Qty 987.00
OPEN 25.60
CLOSE 25.60
VOLUME 52660
52-Week high 27.75
52-Week low 22.25
P/E 5.88
Mkt Cap.(Rs cr) 10,100
Buy Price 25.70
Buy Qty 3200.00
Sell Price 26.00
Sell Qty 987.00

SJVN Ltd. (SJVN) - Chairman Speech

Company chairman speech

Dear Shareholders

My heartiest greetings to you all on behalf of SJVN and its employees.

Your participation in our business is one of the fundamental drivers of SJVN'ssustained growth and its contribution to the Power landscape of the country. Protectingshareholder interests through sustained value creation is top priority for the Company. Ithank you heartily for your continued support.

Three decades of sustained hardwork and excellence has enabled your Company carveitself a place amongst its peers in the Power Sector. Through sheer performance andexecution SJVN has transformed from a single project Special Purpose Vehicle (SPV) into adiversi ed Power major having presence in six states and two neighbouring countries.

It gives me great pleasure to present the 31 Annual Report of your Company for thefinancial year 2018-19. The Audited Financial Statements of the Company along with theReports of the Auditors and Directors for the year 2018-19 are presented for your approvaland I take this opportunity to share the achievements of your company during the past yearwith you.

HIGHLIGHTS OF THE YEAR 2018-19

As head of Team SJVN my heart is lled with pride to see the growth of ourorganization with a rich legacy of hard work & dedication. I am pleased to share withyou that your Company is progressing in leaps & bounds towards the shared vision ofachieving 5000 MW installed capacity by 2023 12000 MW by 2030 and 25000 MW by 2040. I amdelighted to inform our Shareholders that the past year has been one of the most eventfuland momentous years in the history of the Company.

During the year two of our Hydro Projects namely Arun-3 HEP and Naitwar Mori HEP haveprogressed into construction stage. Major Civil Electrical and Hydro-Mechanical works forNaitwar Mori HEP have been awarded. Diversion of River Tons within one year of laying thefoundation stone is testimony of the Company's Hydro Power expertise and professionalcompetence of our dedicated employees.

Generation license for our overseas project Arun-3 Hydro Electric Project has beenissued by Government of Nepal on 3 May 2018. Arun-3 HEP is a project of Internationalimportance for both India and Nepal and is under constant scrutiny of governments of boththe countries. I inform with great pleasure that all four major work packages for theProject have been awarded and construction is going on in full swing. Investment approvalhas also been accorded for Indo-Nepal portion of 217 km Transmission line from

Arun-3 Power House (Diding) to Nepal Border (Bathnaha) on 28 February 2019. Tenderingand awarding of all ve packages of transmission component are under process.

We have made appreciable and Jakhol Sankri Hydroelectric the necessary clearances andand start the construction works make the Dhaulasidh HEP some concessions from the Amongstother major for the Buxar Thermal Power was laid by Hon'ble Prime works as single EPCpackage Jangi Thopan Powari HEP with river Satluj in Distt. Kinnaur of to SJVN on 24November 2018

We have made appreciable progress on Luhri Stage -1 Sunni Dam Devsari and JakholSankri Hydroelectric projects. It will be my priority that we obtain the necessaryclearances and approvals for these projects within this year and start the constructionworks at the earliest. We are also making e orts to make the Dhaulasidh HEP financiallyviable by optimizing cost and seeking some concessions from the Government of HimachalPradesh.

Amongst other major developments CCEA accorded investment approval for the BuxarThermal Power Project on 8 March 2019 and Foundation stone was laid by Hon'ble PrimeMinister of India on 9 March 2019. Main plant works as single EPC package have beenawarded.

Jangi Thopan Powari HEP with proposed capacity of 780 MW located on river Satluj inDistt. Kinnaur of Himachal Pradesh has been allocated by GoHP to SJVN on 24 November 2018.

On the renewables front Commissioning and Commercial Operations of all 25 WEGs of 50MWSadla Wind Power Project have also been completed. Your Company is now a 2015 MW company.

On the Operational front despite exceptionally poor hydrological conditions during theyear Company's major operational Hydro projects namely NJHPS and RHPS managed to performfairly well. A total of 8435 MUs of Energy was generated by the Company during the yearout of which 8335 MUs were generated by Hydro Power Projects and remaining 100 MUs bySolar/ Wind Power Projects. Nathpa Jhakri Hydro Power Station surpassed the milestone ofgenerating a cumulative 100 billion units electricity in this scal.

The financial performance of the Company continues to remain robust. The Revenue fromoperations increased by र426 crore to र2656 crores compared to र2230crores during previous year. Profit After Tax increased by र139 crore to र1364crores compared to र1225 crores during previous year. An interim dividend ofर1.50 per share was paid in the month of February 2019. In addition your Board hasrecommended a final dividend of र0.65 per share. Thus subject to your approval atotal dividend of र2.15 per share is proposed to be paid for FY 2018-19 as againstर2.10 paid during the previous year.

At the organizational level the implementation of Enterprise Resource Planning (ERP)system has been initiated which will help in boosting performance and ensuring overallorganizational effciency and effectiveness in the long run.

For its exceptional operational financial and organizational performance your companyhas been consistently earning 'Excellent/ Very Good' MoU rating for last manyyears. The banner has been ying high and will continue to do so.

HIGHLIGHTS OF THE YEAR 2019-20

Your company's Management and employees are moving closer to their milestones with eachpassing day. In the first quarter of the Financial Year 2019-20 against the annual targetof 9100 MU for excellent rating 3200 MU of power has already been generated. Out of thisNJHPS generated 2465 MUs RHPS generated 691 MU Renewable Power Projects have generated atotal of 44 MUs till 30 June 2019.

In the subsequent quarters SJVN aims to achieve the assigned target of 9100 MUs ofgeneration as per the MoU signed with the Ministry of Power. Even in terms of revenuerealization from sale of energy we plan to beat the target of र2450 crores.

MACRO ECONOMIC SCENARIO AND GOVERNMENT POLICY

Access to reliable and a ordable energy supply is an important factor affecting thequality of life and economic development in any country. Therefore the Government iscommitted to ensure 24 X7 power supply for all. Towards this goal many importantmilestones have been achieved and the year 2018 has been historic as electricity reachedevery village on 28 April 2018 under Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) andElectri cation of 99.99% households across the country was achieved under"Saubhagya" Scheme. Energy de cit has been reduced to almost zero and India hasemerged as net exporter of electricity. India's rank has improved to 24 in 2018 from 137in 2014 on World Bank's Ease of doing business - "Getting Electricity" Ranking.

Several steps have been taken to reform and strengthen the power sector as a wholeincluding power generation transmission and distribution. These also include not onlyachievements in capacity addition but also important reforms being undertaken onincreasing energy effciency and increasing accountability and transparency by launchingMobile applications like PRAAPTI Ash Track etc.

In order to encourage Renewable Generation Government extended the waiver of ISTSTransmission charges and losses for Solar and Wind based Projects upto March 2022 and alsoissued Long Term Growth trajectory Renewable Purchase Obligation (RPO) for Solar as wellas Non-Solar till the year 2022.

O -late the Government has recognized that besides being environment friendlyhydropower has several other unique features like ability for quick ramping black startreactive absorption etc. which make it ideal for peaking power spinning reserve and gridbalancing/ stability. Further hydropower also provides water security irrigation and oodmoderation benefits apart from socio-economic development of the entire region byproviding employment opportunities and boosting tourism etc. The importance of hydropoweris increasing even more as the country has targeted to add 160 GW of intermittent Solarand Wind power by 2022 and 40% of the total capacity from non-fossil fuel sources by 2030to honour its Nationally Determined Contribution (NDC) for Climate Change. ConsequentlyGovernment has undertaken special measures and incentives to promote and support HydroPower Sector which is good news for your company. Major reform initiatives are being takenby Ministry of Power which include addressing various issues being faced by electricitysector through draft amendments proposed in Electricity Act 2003 and Tariff Policy 2016.

The Union Cabinet approved a new Hydro Electricity Policy 2018-28 that amongst otherthings has brought large hydro projects (above 25 MW) within the ambit of renewableenergy which entails a paradigm shift in country's Power landscape.

The Policy makers have at last recognized that there has to be an ideal thermal hydroand renewables mix. Each of the three sources has its flown advantages and disadvantages.Hydro is one of the few sources where you can get peaking power which is critical for gridstability. Other highlights of the new Hydro Electricity Policy include - Hydro PurchaseObligation (HPO) as a separate entity within non-solar Renewable Purchase Obligation; Thetrajectory of annual HPO targets will be notified by Ministry of Power based on theprojected capacity addition plans in hydropower sector; Necessary amendments will beintroduced in the Tariff Policy and Tariff Regulations to operationalize HPO. Tariffrationalization measures including providing exibility to the developers to determinetariff by back loading of tariff after increasing project life to 40 years increasingdebt repayment period to 18 years and introducing escalating tariff of 2%. Budgetarysupport for funding ood moderation component of hydropower projects on case to case basis;and Budgetary support for funding cost of enabling infrastructure i.e. roads and bridgeson case to case basis as per actual limited to र1.5 crore per MW for upto 200 MWprojects and र1.0 crore per MW for above 200 MW projects. All these measures spellgood news for your Company in specific and Hydro Power Segment in general.

FUTURE BUSINESS STRATEGY

Your Management's highest priority would be to execute the projects in hand withspecial focus on projects under construction within the planned schedule. Obtainingnecessary approvals for Luhri Stage I Sunni Dam Devsari HEP and Jakhol Sankri HEP inthis year is targeted. It is heartening to note that Government of Himachal Pradesh isconsidering the relaxation of its Power Policy to harness the untapped hydro potential ofthe State. This would go a long way in making Hydro Projects in the State economicallyviable and enable construction of these Projects.

As a part of plan for accomplishing our cherished vision of achieving 5000 MW installedcapacity by 2023 12000 MW by 2030 and 25000 MW by 2040 the Management has formulatedaggressive strategies which include both organic as well as inorganic modes for growth. ABoard level Business Expansion Committee has been constituted and also a dedicatedBusiness Expansion Cell has been formed within the organization to identify assess andimplement various avenues for growth and expansion of business. The Company is alreadycharting out expansion strategies like acquisition of stressed companies through NCLT orotherwise formation of consortiums & strategic partnerships with peer group CPSEs /established players for bidding of power projects in India and South East Asiaacquisition of existing projects in various stages of survey & investigation orconstruction or O&M adding new hydro projects in portfolio via MoU route etc.

The Status of Operational Plants and other ongoing Projects has been amply covered inthe Directors' Report and hence I would only like to mention that in addition to theOperational Plants having combined installed capacity of more than 2015 MW the otherprojects namely Luhri (Stage I & II) Sunni Dam Dhaulasidh and Jhangi Thopan Powariin Himachal Pradesh; Devsari Naitwar Mori & Jakhol Sankri projects in Uttarakhand;Arun-3 in Nepal; Kholongchu project in Bhutan; Buxar Thermal Power Project in Bihar; Solar& Wind Projects in Gujarat; totalling up to 4786 MW of capacity are at di erentstages of construction and development.

CORPORATE SOCIAL RESPONSIBILITY

Your Company's resolve towards its social and environmental obligations is amplydisplayed in the way it functions and operates. We believe in optimum utilization ofresources for environment friendly socio-economic development resulting in growth withsustainability. The challenges ahead are big but I am sure that the expertise and driveof our employees will see us vanquishing them.

Your company has formulated and adopted a well perceived Corporate SocialResponsibility and Sustainability Policy which is in consonance with the Companies Act2013 and the DPE Guidelines on CSR & Sustainability-2014.

Your Company spent a total amount of र40.25 crore on CSR and Sustainabilityactivities during FY 2018-19 which is र5.40 more than 2.00% of the average netprofit during last three years i.e र34.85 crore. This demonstrates your Company's rmcommitment towards its social obligations in letter and spirit.

Your Company is engaged in a wide spectrum of CSR & Sustainability Projects &activities in verticals like Healthcare Sanitation (including Swachh Bharat Mission)Education and Skill Development Empowerment of vulnerable section of Society SustainableDevelopment Preservation and promotion of Culture heritage and iconic places Promotionof Sports Assistance to the victims of natural disasters/ calamities Infrastructuraldevelopment and Community Asset Creation etc.

It gives me great satisfaction to share that CSR initiatives of your company have stoodthe test of time and have been widely acclaimed at various national and internationalforums.

CORPORATE GOVERNANCE

As a listed company SJVN has been complying with the requirements of CorporateGovernance under the SEBI LODR Regulations and also Guidelines issued by Department ofPublic Enterprises Government of India. In this regard your company has been constantlyachieving "Excellent" rating for compliance with 'DPE Guidelines on CorporateGovernance' under the 'Corporate Governance Grading System' prescribed by DPE.

ACKNOWLEDGMENT

I take this opportunity to express my sincere gratitude for the continued and immensesupport and co-operation received from the Government of India State Governments ofHimachal Pradesh Uttarakhand Bihar Maharashtra and Gujarat the Governments of Nepaland Bhutan other Governmental and Non-Governmental agencies; Statutory Cost Secretarialand Internal Auditors; our Customers; Business associates who have supported the Company;various Financial Institutions & Bankers and Regulatory authorities. Above all Iacknowledge the unstinted support received from the Shareholders Investors and Partnersin the growth of the Company and thank them for their continued con dence and trust in theManagement.

I also convey my thanks and appreciation to my esteemed colleagues on the Board fortheir valuable support and guidance to my team of dedicated and hardworking employees forreposing their faith in me and granting me the opportunity to steer this wonderfulinstitution.

Thanking you

Yours Sincerely
Date: 12th August 2019 (Nand Lal Sharma)
Place: New Delhi Chairman & Managing Director
DIN: 03495554