Jaiprakash Power Ventures Ltd Management Discussions

(Forming part of Directors Report for the year ended 31st March, 2025)

1.0 GLOBAL ECONOMY

The global economy during the fiscal year 2024-25 is marked by cautious optimism amidst a backdrop of shifting dynamics. Growth projections from the International Monetary Fund (IMF) suggest a global expansion rate of around 3.2%, which mirrors the growth rate of 2023-24. While the economic recovery from the pandemic continues, this modest pace of growth reflects the interplay of factors such as high inflation, ongoing geopolitical tensions, and trade uncertainties. Advanced economies, particularly the U.S. and the European Union, are expected to see slight improvements, with growth forecasts of 1.7% in 2024, bolstered by stabilization in inflation and recovery in consumer demand. Conversely, emerging markets are facing headwinds as slowing demand from key global markets, coupled with tighter monetary policies, weighs on their growth prospects. Despite this, countries like India and some in Southeast Asia remain resilient due to strong domestic consumption and investments in infrastructure.

However, the global economic environment in 2024-25 was not without its challenges, with several uncertainties casting a shadow on growth prospects. Trade tensions, particularly between the U.S. and China, have escalated into a trade war with tariff impositions, undermining the stability of global supply chains and dampening investor confidence. This uncertainty is compounded by the potential risks of a US initiated Tariff War wherein the policies of the U.S. administration could spark further economic slowdowns. History says it was then tariff war which culminated into the second World War. Hence, the world is quite apprehensive now. Moreover, central banks across the world have been dealing with the challenge of balancing inflation control with economic growth. Interest rates in several countries, particularly in the U.S. and Europe, are expected to remain elevated as central banks combat inflationary pressures, which in turn affects borrowing costs and consumer spending. These economic headwinds, along with the ongoing energy crisis and fluctuations in commodity prices, suggest that while growth may persist, it will be uneven across regions, with significant risks looming over the global financial landscape.

2.0 INDIAN ECONOMY

The Indian economy in FY 2024-25 is expected to maintain a steady growth trajectory, building on its strong recovery from the pandemic and bolstered by domestic demand. The International Monetary Fund (IMF) projects Indias growth rate at around 7.1% for 2024-25, making it one of the fastest- growing major economies globally. This growth is driven by robust consumption, increased public sector investments in infrastructure, and ongoing reforms aimed at enhancing ease of doing business. The Indian governments push towards digitization, energy transition, and development of key sectors like manufacturing and services is expected to provide further impetus to economic activity. The success of initiatives like "Make in India" and "Atmanirbhar Bharat" (self-reliant India) could help foster growth in the manufacturing sector, creating new employment opportunities. Moreover, strong agricultural output, rising exports in sectors like IT and pharmaceuticals, and a thriving startup ecosystem fuelled the countrys economic engine throughout FY 2024-25.

However, the Indian economy faces several challenges despite its optimistic growth outlook. High inflation, driven by global commodity price fluctuations, and rising input costs could continue to weigh on consumer purchasing power and business margins. While the government has implemented various fiscal measures to stabilize prices, the impact of higher fuel and food prices could pose challenges to achieving sustained inflation control. Additionally, the Reserve Bank of India (RBI) faces a delicate balancing act in managing interest rates. Although the retail inflation has been at its lowest since 2018-19 at 4.8% limit and YoY inflation was 27 basis point lower then previous year at 3.34%, the RBI must also ensure that the higher cost of borrowing does not stifle investment and consumption. Furthermore, Indias banking and financial sectors will need to navigate challenges related to nonperforming assets (NPAs) and liquidity. As the global economic landscape remains uncertain, Indias export-dependent sectors could also be impacted by slowing global demand and trade tensions, particularly in the context of ongoing geopolitical uncertainties. Nevertheless, Indias self supporting and highly indigenised demand with large domestic market and youthful demographic provide a solid foundation for continued growth, albeit at a more moderated pace.

3.0 INDIAN POWER SECTOR

In the fiscal year 2024-25, Indias power sector achieved significant milestones, reflecting the nations commitment to balancing economic growth with sustainable energy development.

The countrys total installed power generation capacity reached approximately 466 gigawatts (GW) till January, 2025, marking an 87.15% increase from 249 GW in 2014.

This expansion was largely driven by renewable energy sources with installed capacity of 220.10 GW according to Ministry of New and Renewable Energy (MNRE) making it achievable target of 500 GW of non-fossil fuel by 2030. The target forms part of "Panchamrut" Climate Commitment announced by PM Shri Narender Modi. During the year, biggest capacity addition was made in Solar energy of 23.83 GW followed by 4.15 GW in Wind energy. Consequently, renewable energy now accounts for about 47% of Indias total power capacity.

To meet the escalating energy demands, which peaked at a record 250 GW during this fiscal year, the government also awarded contracts for 19.2 GW of new coal-based thermal power capacity till Dec 2024, bringing the total coal and lignite- based thermal capacity to 217.5 GW.

Despite the substantial growth in renewables, coal remains a dominant energy source, underscoring the challenges in transitioning to a fully sustainable energy mix.

Significant advancements were also made in power distribution and infrastructure. The Revamped Distribution Sector Scheme (RDSS) sanctioned the installation of nearly 20 million prepaid smart meters and the replacement of inefficient streetlights with energy-efficient LED alternatives, leading to a reduction in Aggregate Technical and Commercial (AT&C) losses to 15.37%. Furthermore, the government approved 60,676 crore worth of Inter-State Transmission System (ISTS) projects, totaling 50.9 GW in capacity, to facilitate the integration of 280 GW of variable renewable energy by 2030. These initiatives are complemented by efforts to promote energy conservation, such as the adoption of revised building codes aimed at reducing electricity consumption in commercial and residential buildings by 18%. Additionally, the expansion of electric vehicle (EV) infrastructure is underway, with projections to increase EV charging stations from 34,000 to 100,000 by 2030, supporting the growing EV market and enhancing grid resilience.

Collectively, these developments underscore Indias strategic approach to modernizing its power sector, ensuring reliable, affordable, and sustainable energy access while progressing towards its net-zero emissions target by 2070.

4.0 OPPORTUNITIES IN INDIAN POWER SECTOR

The Indian power sector in FY 2024-25 presents a multitude of opportunities driven by increasing energy demand, rapid technological advancements, and strong government support for clean energy transition. With the countrys peak power demand reaching a record 250 GW, the need for capacity expansion creates significant investment opportunities, particularly in renewable energy. India aims to install 500 GW of non-fossil fuel capacity by 2030, paving the way for growth in solar, wind, and hydroelectric power projects. The Green Hydrogen Mission, with an outlay of 19,744 crore, is another lucrative avenue, offering scope for electrolyzer manufacturing and hydrogen production for industries like steel, cement, and transportation. Additionally, the approval of 60,676 crore worth of inter-state transmission projects enhances prospects for private sector participation in strengthening grid infrastructure, ensuring efficient renewable energy integration. These initiatives, along with attractive policy incentives like Production-Linked Incentives (PLI) for solar manufacturing and viability gap funding for battery energy storage, further boost investor confidence in the sector.

Moreover, the power distribution segment is poised for transformation, driven by smart grid technologies, digital metering, and power market reforms. The Revamped Distribution Sector Scheme (RDSS) aims to modernize aging infrastructure and reduce distribution losses, creating business opportunities in smart metering, grid automation, and energy efficiency solutions. The push for electric mobility, with plans to expand EV charging stations from 34,000 to 100,000 by 2030, also opens doors for investments in charging infrastructure, battery swapping, and grid integration solutions. Furthermore, Indias push towards energy efficiency in commercial and residential buildings, through revised building codes and adoption of energy-efficient appliances, presents growth prospects for energy service companies (ESCOs). With increasing international collaboration and foreign direct investment (FDI) inflows, along with policy-driven incentives for renewable energy parks and offshore wind projects, the Indian power sector remains a lucrative landscape for both domestic and global investors, fostering innovation and longterm sustainability.

5.0 SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company is primarily engaged in generation of power and thus has only one segment. The Company has Amelia (North) Coal Mine which is for captive consumption. Last year, the Company has received "Right of Exploration" in respect Banda (North) Coal Block on which exploration work is going on. The turnover from Cement Grinding was Nil.

6.0 INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an adequate internal control system which is commensurate with the nature and size of its operations and is manned by qualified and experienced personnel.

The system involves adopted policies and procedures regarding financial and operating functions for ensuring the orderly and efficient conduct of its business including adherence to Companys assets, prevention & detection of frauds and errors and timely preparation of reliable financial information.

The internal control systems are further supplemented by internal audit carried out by an independent firm of Chartered Accountants and periodical review by the management and Statutory Auditors. The Internal Audit reports are reviewed by the Audit Committee.

The internal control systems are implemented:-

• To safeguard the Companys assets from loss or damage.

• To keep constant check on cost structure.

• To provide adequate financial and accounting controls and implement accounting standards.

The senior management regularly reviews the findings and recommendations of the Internal Auditors so as to continuously monitor and improve internal controls to match the organizations pace of growth and increasing complexity of operations as well as to meet the changes in statutory and accounting requirements.

7.0 FINANCIAL DISCUSSION & ANALYSIS

After adoption of Indian Accounting Standards (Ind AS) from 1st April, 2016, the financial statements for the Financial Year 2023-24 have been prepared in accordance with Ind AS.

7.1 Standalone Financial Performance

The revenue from operations for the year ended 31st March, 2025 aggregated to Rs. 5,462.19 crore as compared to Rs. 6,762.78 crore in the previous year i.e. lower by Rs.1,300.59 crore due to impact of sand mining operations in the previous year figures, which was over by May, 2023.

The operations resulted in profit before exceptional items, tax and regulatory deferral account balances for the year under review of Rs 1,214.56 crore as compared to the same profit of Rs 1,710.28 crore in the previous year. The energy generation of Vishnuprayag HEP was higher in the current year due to hydrology, the Energy generation at Bina TPP was lower in the current year by 306.01 MUs. PLF of Bina TPP during the current year has been at 68.64% as compared to 75.80% in the previous year. Further the Energy generation at Nigrie STPP was higher in the current year by 454.10 MUs. PLF of Nigrie STPP during the current year has been at 80.93% as compared to 84.87% in the previous year.

Further, Other Income has decrease to Rs. 244.11 crore as compared to income of Rs. 388.22 crore in the previous year due absence of notional gain on investments in the current year.

The Tax expenses during the year under review are Rs. 403.83 crore against Tax expenses of Rs. 227.13 crore in the previous year. The Net profit during the year before OCI under review is Rs. 810.73 crore against Net profit of Rs. 686.10 crore during the previous year.

The EBIDTA stood at Rs. 2096.24 crore as against Rs. 2610.60 crore mainly due to lower revenue, higher O & M Exp. and loss on valuation on investments in the year ended 31st March, 2025.

7.2 Finance Cost

Finance cost has decreased from Rs. 449.18 crore in the Financial Year 2023-24 to Rs. 414.13 crore in FY 2024-25 mainly due to repayment of loan in current year.

7.3 Operational Performance

The Operational Performance of the company was as under:

The saleable energy generation for the year has been 12980.99 MUs as compared to 13,565.6 MUs during previous year i.e. lower by 584.61 MUs as detailed below:-

Energy in MUs

The Saleable energy generation of Vishnuprayag during the period ended 31st March, 2025 was 1,589.17 MUs as compared to 1,413.67 MUs during the corresponding previous year. Energy generation of Vishnuprayag HEP is Lower/Higher during the current year due to hydrology. Energy generation of Bina TPP is higher in the current year by 175.50 MUs. PLF of Bina TPP during the current year has been at 68.64% as compared to 75.80% in the corresponding period. Energy generation at JNSTPP is lower in the current year by 454.10 MUs. PLF of JNSTPP during the current year has been at 80.93% as compared to 84.87% in the corresponding previous year. The saleable energy generation of the JNSTPP was 8,675.00 MUs during the year.

7.4 Discussion on financial performance with respect to operational performance

The companys financial performance continued to sustain on optimal level due to operational efficiency and lower finance cost post implementation of the Debt Resolution Plan.

7.5 Consolidated Financial Review

The total income on consolidated basis for the year ended 31st March, 2024 aggregated to Rs. 5,707.55 crore as compared to Rs. 7,151.29 crore in the previous year. However, Net profit after tax and exceptional items before OCI on consolidated basis during the year under review stood at Rs. 813.55 crore as compared to net Profit on consolidated basis of Rs. 1,021.95 crore during the previous year due to impact of sand mining operations in the previous year figures, which was over by May, 2023..

7.6 Key Financial Ratios

In accordance with the SEBI (Listing Obligations and Disclosure Requirements 2018 (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key sector-specific financial ratios, along with detailed explanation there for. The details of Key

Financial Ratios for FY 2024-25 and FY 2023-24 are given below:

8.0 MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS

Human Resources are considered as one of the most critical resources in the business, which need to be continuously nurtured to maximize the effectiveness of the Organisation. The Company understands it is the people who drive the success of a company by bringing in skills, creativity, and dedication to their work. Human resource management ensures that the right individuals are hired, trained, and motivated to perform at their best. It also helps maintain a positive work environment, promotes teamwork, and supports the personal and professional growth of employees.

Total manpower of the Company at the end of the financial year was 4032 which includes professionals like engineers, chartered accountants, managers and other skilled and unskilled employees and workers. These Teams of professionals are put in place both at Corporate Office and in all the project locations.

Various initiatives have been taken up for developing employees at all levels by managing recruitment, training, performance, and employee welfare so as to make them future ready for higher roles and responsibility. Necessary training was imparted to the staff for operations and maintenance of power stations by specialist from related fields including the equipment suppliers from time to time.

Industrial relations remained cordial throughout the year.