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LETTER TO SHAREHOLDERS:
I am pleased to present 37th Annual Report of your Company for the financial year 2012–13. Your Company is successfully moving on the path of excellence that it has carved out for itself. During the financial year 2012–13, sales realization of NHPC has increased to Rs.5,369 crore from Rs.4,415 crore as compared to the previous year. Likewise your Company had raised bills amounting to Rs.5,184 crore and generated a profit ofRs.2,348.22 crore during the financial year 2012–13.
Considering the progress made by your Company, Directors have recommended a dividend of Re. 0.60 per share (excluding dividend tax) for the year 2012–13. The total dividend payout will be Rs.738.04 crore which is 31.43 per cent of the profit after tax. It will be paid after the approval of shareholders at the ensuing Annual General Meeting.
You will be glad to know that during 2012–13 your Company has commissioned Chamera–lll H.E. Project (231 MW) in Himachal Pradesh in July, 2012, Chutak (44 MW) in Jammu & Kashmir in January, 2013 and Teesta Low Dam III HEP (132 MW) in West Bengal in May, 2013. Further, all the three units (45 MW) of Nimmo Bazgo Project are commissioned at partial load.
Thus, at present the total installed capacity of your Company is 5,747 MW consisting of 16 operating Power Stations of NHPC Limited with an installed capacity of 4,227 MW and 2 Power Stations of its subsidiary i.e. NHDC Limited with an installed capacity of 1,520 MW.
Presently, construction activities in respect of 6 hydroelectric projects with an installed capacity of 4,050 MWare in progress out of which two projects of 760 MW viz. – Uri–ll and Parbati–lll are in advanced stages of completion.
Construction activities at Subansiri Lower H.E. Project (2000 MW) in Arunachal Pradesh have suffered a setback due to local agitations since 16th December, 2011 and currently the works of the project are standstill. The matter is under consideration of Government to resolve the issue at the earliest. In respect of Parbati II H.E Project, the contract for excavation of headrace tunnel was terminated and fresh tender has already been floated to engage a new contractor.
It gives me great pleasure to share with you that as a part of its future expansion programme, five projects with an installed capacity of 5,115 MW are under various stages of approval. In addition to above, three projects with an installed capacity of 3,686 MW are to be executed through Joint Venture Companies (JVCs) with State/ Government PSUs. The joint ventures include the projects at Loktak Downstream Project (66 MW), Tipaimukh (1500 MW) in Manipur and Pakal Dul, Kim & Kwar (2120 MW) in Jammu & Kashmir.
A Memorandum of Understanding (MoU) and a promoter's agreement among NHPC Limited, SJVN Limited and the Government of Manipur was signed for forming Joint Venture Company to execute Tipaimukh Hydroelectric Project in Manipur. However, presently the Government of India has approved to induct NEEPCO in place of SJVN in the proposed Joint Venture, as a joint venture partner. Accordingly, formation of Joint Venture Company amongst NHPC, NEEPCO and Government of Manipur is under process.
Out of the total 16 operating power stations located in different parts of the country, 12 power stations have generated 18,162 Mils of power during the year 2012–13 which was the highest ever generation of power since its incorporation and had exceeded the annual MoU Target. New power stations commissioned during the year 2012–13 have generated 761 Mils during the said period.
I also wish to inform that our long pending dues have reduced considerably during the year. The outstanding dues pending for more than 60 days as on 31st March, 2013 have been brought down to Rs.830 crore from Rs.1,176 crore in previous year. Your Company deserves a special mention for having succeeded in receiving an approval from Ministry of Power, Government of India for clearance of outstanding receivables ofRs.120.81 crore pertaining to M/s Delhi Transco Limited (erstwhile DESU) along with an interest ofRs.240.01 crore.
Your Company has been playing an active role in implementing Rural Electrification projects under the Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY) in 27 districts spread over five states ofWest Bengal, Bihar, Jammu & Kashmir, Chhattisgarh and Odisha at an estimated cost of Rs.2,837 crore approximately. To give effect to the scheme, NHPC undertook electrification of Un–electrified/De–electrified (UE/ DE) villages, Partially Electrified (PE) villages and service connections to Below Poverty Line (BPL) households. The achievements for UE/DE villages were 9,119, PE villages 18,076 and BPL connection 18.33 Lakh till 31st March, 2013.
NHPC's varied expertise and experience acquired over the years has been recognized at national and international levels. The Company has received consultancy assignments from central and state government agencies in India and others in neighboring countries like Bhutan, Myanmar and Tajikistan. So far NHPC has successfully completed 84 consultancy assignments while another 17 are under progress.
Your Company has also expanded its operations globally by providing consultancy services in various fields related to hydropower
Major Foreign assignments during the year 2012–13 include:
1. Pre–feasibility Report (PFR) for Kuri Gongri Basin Project was submitted to Royal Government of Bhutan (RGoB)/Government of India (Gol) in July 2012.
2. Design and Engineering consultancy is being offered by NHPC Limited for implementation of Mangdechhu HE Project (720 MW) in Bhutan to Mangdechhu Hydroelectric Project Authority (MHPA).
3. The work related to Renovation, Modernisation and uprating (RMU) of the Varzob–I HE Project in Tajikistan have been completed within scheduled time frame. The project was executed under a Tripartite Agreement signed amongst MEA, BHEL and NHPC.
4. Technical Due Diligence Study of Shiroro Hydroelectric Power Station in Nigeria for M/s Dangote Industries Limited was carried out by NHPC Limited.
5. In association with PGCIL and BSES Rajdhani an agreement has been signed for providing management consultancy to Ethiopia Electric Power Company (EEPCO).
A policy framework has been created to manage the Information Technology (IT) systems to ensure optimum and secure utilization of the assets owned by NHPC and to integrate with major focus on the management of projects under construction and also the operation and maintenance of power stations. An Online Project Monitoring Centre has been established for tracking the progress of various projects located at different locations.
Around 50 locations have been upgraded with IT and communication infrastructure and all the sites are connected to the corporate office through multi–mode, fail–safe communication links using MPLS–VPN (OFC)/VSAT–KuBand/Broadband technologies. Applications such as Intranet, Internet, e–mail and ERP are being run to leverage this network.
In view of dynamic economic and competitive market environment, there is absolute need for staying abreast with innovative technological advancements. In order to maintain high productivity standards and employee morals, your Company provides training to its employees through various agencies like IIMs/XLRIs/IITs etc. in addition to in–house training programmes. Special training programmes were organized for creating awareness about the features of the reservation policy and other essential provisions for employees in the SC/ST/ OBC categories.
Your Company is committed to take care of the life of people living around its projects. NHPC has its own Rehabilitation and Resettlement (R&R) Policy, CSR and Sustainable Development Policy which are in line with the National Rehabilitation and Resettlement Policy (NRRP), 2007 and Department of Public Enterprises Guidelines respectively. The R&R policy offers certain benefits over and above those proposed in NRRP, 2007. During financial year 2012–13, a budget of 0.5 per cent of PAT was allocated to CSR activities and total spending on CSR is Rs. 1,573.16 Lacswhich is 0.67 percent of PAT.
The CSR activities includes the development initiatives taken for various Skill Development and Vocational Training Programmes, Scholarships to deserving students, establishment of schools, maternity centers, organizing medical camps in project surrounding areas, promoting rural sports by providing sports equipments and other related facilities. A total of 11 ITI's have been adopted through Public Private Partnerships (PPP)/Vocational Training Improvement Program/Centre of Excellence Scheme (COE). The basic amenities were also provided, constant support and cooperation was assured to all. These activities have greatly enhanced the life of these people in a positive way.
It has been another year of excellent performance for your Company. It is making progress on all fronts and its activities have been appreciated by many. These include 'IPE Corporate Governance Award' by Institute of Public Enterprises (IPE), Award for promoting Rajbhasha under NTPC Rajbhasha Shield Programme for two consecutive years viz. 2011–12 and 2012–13, 'Best Power Producer (Hydro) Award' at 13th Regulators and Policymakers Retreat 2012, 'Sliver Award' in Training Excellence instituted by Greentech Foundation in Association with Indian Institute of Corporate Affairs, Ministry of Corporate Affairs, Government of India.
Due to recent cloud burst and high flood in Uttrakhand, the Dhauliganga Power Station (280 MW) got flooded resulting in submergence of all the systems in the early hours of 17th June, 2013. As a consequence, the power generation from the plant has been affected and rehabilitation works have been put into operation to restore the power generation at the earliest. The power station is covered under Mega All Risk Insurance Policy for Hydro power station.
Your Company is thankful for the continued support from the Government of India, particularly from the Ministry of Power, the Ministry of Finance, the Planning Commission, Ministry of Environment and Forests, Department of Public Enterprises, Ministry of Corporate Affairs, the CEA and CWC as well as State Governments, the Regional and State Electricity Board, beneficiaries drawing power from our power stations as also our other valuable clients for consultancy assignments. My sincere thanks for the faith imposed in the Company by the bankers and lenders including foreign institutions. I would like to express gratitude to all for their intense support and guidance at every step.
I also take this opportunity to thank all my shareholders for their continued involvement and their encouragement which was vital for the prosperity of your company.
All the achievements have been primarily possible with appreciable and continuous efforts and support of employees of the company. I appreciate each and every employee of NHPC for their trust, constant support and commitment which has added on to the company's performance.
I am thankful to the Board Members for their valuable support in taking NHPC to greater height of achievements.
With best wishes,
(G. Sai Prasad)
Chairman and Managing Director