CHAIRMAN’S STATEMENT ON THE EVE OF 19TH  ANNUAL GENERAL MEETING

Dear Members,

I cordially invite you to the 19th Annual General Meeting scheduled to-day, the September 28th, 2007.  The Annual Audited Accounts along with the Report of the Auditors and Directors for the year 2006-07 are already with you and with your permission, I would take them as read.  While the Directors Report has dealt with extensively on the performance of the Company, I shall deal with few important issues concerning the Company.

THE YEARS PERFORMANCE

This year has been pleasant with respect to achievement in generation and growth of Income of the Company as compared to previous years.  As per MOU for the year 2006-07,the gross energy generation  based on 16 days closure on account of high silt and reservoir flushing was set at 6400 MU.  Against this, we have achieved 6014.48 MU despite the fact that power plant had to be shut down for 32 days due to high silt contents. The energy for the preceding year was 4104.42 MU. The years net profit after tax was Rs.732.71 crores as against Rs.498.21 crores and dividend proposed is Rs.235 crores including interim dividend whereas the dividend for the previous year was Rs.159.43 crores. The raising income, profits and return on investments year after year since year 2004 is witness to the committed growth.

FUTURE PLANS

The total installed capacity of power generation in India is presently at 1,35,000 MW.  Out of this, 33,775 MW comes from Hydro sector.  The unique   initiative of Ministry of Power “Power For All by 2012” requires addition of 1,00,000 MW to the existing capacity.  The Hydro power is  known as clean energy and enhances energy security and is also ideal source for meeting peak demand. The estimated hydro potential in the country is about 1,50,000 MW and the present installation capacities indicates less than  one-fourth of the envisaged potential. I am proud to say that the business opportunities ahead of us are unaccountable and it is time to avail.  Keeping this in view, we joined the hands of the Government in building up the additional capacities and towards this, the first project – the Rampur Project which has 412 MW, construction of which has already commenced with the award of major civil works in February 2007.The  progress of civil works is as per the schedule in most of the components.  The project is to be completed in 60 months time from the award of civil works, i.e., Feb.2012 and within 11th plan. Further, the Uttarakhand Projects, presently under consideration by the Government of Uttarakhand, would add further 684 MW capacity. Presently preparation of DPR in respect of these projects is in progress.

In respect of  Luhri Project, after complete survey and investigation, DPR  has been prepared  and submitted to the CEA.  The project is expected to generate 770 MW.  The approval of the Government of Himachal Pradesh for the allotment of the project is awaited. Meanwhile,  keeping in view the enhanced investment interests in the Equity  by the Government of Himachal Pradesh, the Government of India is examining the proposals including  setting up of a subsidiary to our Company to execute all future projects in Himachal Pradesh including the Luhri project.

Further the company has also been keen in executing projects in other States like Sikkim, Arunachal Pradesh and neighboring countries like Nepal, Bhutan.  Expression of interests have already been submitted and these are under consideration.

With the above efforts and opportunities, I have no doubt to say that the company shall not only prosper but also bring prosperity to the Country and her people.

ACKNOWLEDGEMENT

At the end, I would like to place on record my gratitude for the assistance and co-operation received from all the Members of the Board, Ministry of Power, the Government of Himachal Pradesh, the Government of Uttarankhand and all the other governmental and non-governmental agencies and the Employees, Financial Institutions, Contractors and Suppliers.

Thanking you,