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Directors Report of Power Grid Corporation of India Ltd.

Mar 31, 2023

â¢ Assets of f7,413 Crore were capitalized.

â¢ For ensuring effective communication of the existing as well as new substations with Regional Load Despatch Centres (RLDCs) /State Load Despatch Centers (sLDCs), 6,600 km of Optical Ground Wire (OPGW) network was added.

â¢ Achieved collection efficiency of 98.84% of billing in FY 2022-23.

â¢ Emerged successful in 11 TBCB projects

â¢ Rated as best utility in Transformer Maintenance and 3^rd best utility in Vegetation Management in Internationa

Dear Shareholders,

On behalf of the Board of Directors, it gives me immense pleasure in presenting the 34^th Annual Report on the performance of the Company, together with the Audited Financial Statements for the financial year ended 31^st March, 2023.

Key Performance highlights of your Company during FY 2022-23 are briefly mentioned here:

â¢ Rated "Excellent" with a score of 95.96 in Memorandum of Understanding (MoU) signed with Government of India for FY 2021-22.

â¢ On a standalone basis, the Company''s Total Income at f45,968.07 crore, increased by 8.58% and Profit after Tax (PAT) at f15,333.02 crore, increased by 11.16% (Excluding Exceptional Item), as compared to previous year.

â¢ Achieved system availability of 99.82%. The trippings per line decreased to 0.27, lowest in last five years.

â¢ Charging of 2,972 circuit km (ckm) of Extra High Voltage (EHV) transmission lines, 28,990 Mega Volt Ampere (MVA) transformation capacity and 9 new Substations (including subsidiaries).

Transmission Operation and Maintenance Study (ITOMS) for 2021-22.

1. Financial Performance

Financial Performance during year under review (FY 2022-23) as compared to the previous year (FY 2021-22) on standalone basis is summarized below:

(All Figures except per share data are in units as indicated)

S.	Parameters	2022-23		2021-22		Y-O-Y
No.		W (Crore)	US $ (Million)	W (Crore)	US $ (Million)	Growth (%)
1	Revenue
	Transmission Charges	42104.78	5088.81	38599.71	4665.18	9.08
	Consultancy-Sale of Services	509.29	61.55	753.34	91.05	-32.40
	Telecom	728.98	88.10	580.34	70.14	25.61
2	Other Income	2625.02	317.26	2402.48	290.36	9.26
3	Total Income	45968.07	5555.72	42335.87	5116.73	8.58
4	Profit After Tax (PAT)	15333.02	1,853.16	17093.76	2,065.96	11.16**
5	Earnings per Share (EPS) (f)	f 21.98	US $ 0.27	f 19.79**	US $ 0.24	11.07
6	Book Value per Share (f)	f 118.75	US $ 1.44	f 109.17	US $ 1.32	8.78
7	Gross Fixed Assets	255823.80	30919.00	249953.70	30209.54	2.35
8	Long term borrowing*	125894.90	15215.72	129365.27	15635.15	-2.68
9	Net Worth	82832.96	10,011.24	76151.57	9,203.72	8.77
10	Debt Equity Ratio	60:40		63:37
11	Return on Net Worth	18.51%		18.11%**

* Including current maturities of Long-Term Borrowings ** Excluding Exceptional Item

Convenience Conversion at US $ 1= f82.74 as on 31.03.2023

1.1. Dividend Payout

The Company recommended / declared dividend as follows: -

Dividend (per share)	FY 2022-23		FY 2021-22
Dividend (per share)	in W	in %	in W	in %
First Interim Dividend	5.00	50.00	7.00*	70.00
Second Interim Dividend	5.00	50.00	5.50	55.00
Final Dividend	4.75a	47.50a	2.25	22.50
Total Dividend	14.75	147.50	14.75	147.50

* Including a Special Dividend of f3.00 per share a Recommended for approval of Shareholders

The total dividend payout for the year amounts to f10,289 crore (including interim dividends of f6,975 crore). The final dividend shall be paid after approval at the Annual General Meeting. The total payout ratio for the year was 67% as compared to 60% for previous year.

1.2. Transfer to Reserves

For FY 2022-23, appropriation of profit has been made as follows:

a) General Reserve: f8,000.00 crore

b) Self-Insurance Reserve: f299.42 crore

1.3. Government of India (GOI) Shareholding

The Government of India''s shareholding in the Company remained unchanged at 51.34%.

2. Significant Developments

2.1. Tariff Based Competitive Bidding (TBCB)

During the year under review, your Company emerged as successful bidder in eleven Inter-State Transmission System Projects under TBCB route. The SPVs to implement these projects were also acquired by your Company in FY 2022-23. Besides, two SPVs to implement one inter-state and one intra-state Transmission System projects namely, Strengthening Scheme for Evacuation of Power from Solar Energy Zones in Rajasthan (8.1 GW) under Phase-II Part-G and Transmission System for Mohanlalganj (Lucknow) with associated 400kV lines, LILOs at Rampur & Sector 123 Noida respectively in which your Company had emerged successful in

â¦ Implementation of Asset Management Dashboard (UDAAN-Unique Digital Analysis of Asset and Network) to ensure a single window access to all the key performance indicators (KPIs) by integrating data stored in various formats. This has enabled management to have a bird''s eye geospatial view of the asset management system across the organization.

â¦ Commissioned a Green field fully digital 220/66kV GIS Substation at Chandigarh with IEC 61850 Process Bus based Protection Automation and Control system. It significantly reduces the use of cables in EHV Sub-station thus resulting in safer working environment and lower carbon footprint.

â¦ Launch of In-house, Asset Health Indexing Software for Circuit Breakers which automatically fetches and evaluates the Circuit Breaker data from a centralized database and assigns health index to the equipment based on the extent of deterioration using POWERGRID''s own interpretation technique. This will help in migration to Reliability Centered Maintenance of Transmission Assets.

â¦ Organized a two-day International Conference, GRIDCON2023, on 16^th & 17^th February 2023. The theme of the conference was "Digitalization in Transmission Asset Management: Building Block for Future" and it covered

FY 2021-22, were also acquired by your Company in FY 2022-23. The aggregate annual levelized tariff of these projects is about f1,200 crore.

As on 31^st March 2023, 13 TBCB subsidiaries were fully operational while 2 TBCB subsidiaries were partly operational with total TBCB transmission assets comprising 83 transmission lines with 7354 ckm & 13 Substations with aggregate transformation capacity of 30,175 MVA. At the end of FY 2022-23, the Company owned 33 TBCB subsidiaries, the details of which are provided in the Management Discussion & Analysis Report (MD&A).

2.2. Monetization of Transmission Assets through Securitization

In Union Budget 2021-22, Monetization of Assets has been identified as one of the three pillars for enhanced and sustainable infrastructure financing in the country. Based on the mandate for ''Asset Monetisation'' in the Union Budget, Niti Aayog prepared "National Monetization Pipeline" (NMP) with year wise targets. The framework for monetization of core asset as per the NMP has three key imperatives:

â¦ Monetization of ''Rights'' not ''Ownership'', Assets handed back to the government at the end of transaction life.

â¦ Brownfield de-risked assets, stable revenue streams.

â¦ Structured partnerships under defined contractual frameworks with strict KPIs & performance standards.

During FY 2022-23, considering the above, POWERGRID monetized the cashflow of its three operational TBCB SPVs through securitization route by private placement of bonds and raised f3,412 crore in three tranches against monetization target of f3,000 crore.

3. Operational Performance

3.1. Asset Management

As on 31^st March, 2023, your Company''s total transmission assets including those owned through its wholly owned subsidiaries consisted of 1,459 transmission lines aggregating to 1,74,113 ckm., 272 substations with an aggregate transformation capacity of 4,99,362 MVA.

Keeping in view the growing asset base, your Company is migrating towards digitization of asset management. Some of the initiatives and developments in this direction are as follows:

â¦ Remote operation of the /- 500 kV, 1500MW HVDC Rihand -Dadri Bi-Pole Terminals and 500MW Vindhyachal HVDC back to back from National Transmission Asset Management Centre (NTAMC) Manesar. This is first time in India that a HVDC Sub-station is being operated from a remote control centre. This innovation enhances efficiency, reduces cost and presents a promising future for the industry.

â¦ In-house development of a AI/ ML based defect identification tool POWERGRID Asset Management though Artificial Intelligence in Transmission (PG AMRIT) which has been integrated with transmission line patrolling platform POWERGRID Digital Application for Routine Patrolling & Assessment of Network (PG-DARPAN). This has aided in optimizing the efforts of line maintenance manpower and move the focus from defect identification to defect rectification.

global asset management practices. International experts & industry leaders from USA, Canada, South Africa, Scotland, Japan, Portugal & Germany shared knowledge pertaining to O&M of power transmission networks. It provided an excellent platform to enable sharing of knowledge and expertise in the transmission sector, and discussion that helped identify international best practices, innovative solutions and new opportunities for collaboration.

â¦ Drone-based patrolling of transmission lines all across the Regions of POWERGRID.

â¦ Methanol Marker Test Kit has been commissioned which shall be helpful in early detection of aging of transformer/reactors and take proactive action to redress the same. Your Company is one of the few utilities globally to establish alcoholic marker test facility.

â¦ First 765 kV RIP bushing in India has been taken into service in Line Reactor at Satna, Western Region.

â¦ In-house Repair of GIS Substation equipment have been carried out by the maintenance teams of your Company at 9 Substations which prevented long outages of system and resulted in considerable cost savings. One old AIS Substation in NER has been converted to GIS which will result in increased reliability of the system.

For many years, your Company has participated in the International Transmission Operation and Maintenance Study (ITOMS), a global Operations & Maintenance (O&M) benchmarking platform that includes 32 major power transmission utilities globally. Based on the report on ITOMS for 2021-22, published in February, 2023. Your Company has been ranked in first quadrant for both Line and Substation Maintenance reflecting asset maintenance being carried out at low cost with high performance levels.

3.2.National Transmission Asset Management Centre (NTAMC), Manesar and Regional Transmission Asset Management Centres (RTAMCs)

To facilitate remote operation of your Company''s transmission system and monitoring of various parameters on real time basis at Regional and National levels, NTAMC was set up at Manesar, near Gurugram (Haryana) and RTAMCs were set up at various locations across the country. The back-up of main control centre i.e. BNTAMC is located at Bengaluru (Karnataka). These state-of-the-art centres are manned round-the-clock by experts for effective monitoring and management of transmission assets. During FY 2022-23, ten Extra High Voltage (EHV) Substations were integrated with NTAMC for remote operation. By the end of FY 2022-23, a total of 271

Substations are being operated remotely from these asset management centres.

Central Government has declared Supervisory Control and Data Acquisition (SCADA) System installed at NTAMC & RTAMCs as Critical Information Infrastructure (CII) vide Gazette notification dated 13^th December 2022.

3.3. Cyber Security

Cyber Security initiatives are led by the Chief Information Security Officer (CISO) through the Information Security Department in the Company. Your Company''s Corporate Office, all regional headquarters and 239 substations are certified as per the Information Security Management System ISO:27001. The Company works closely with designated statutory bodies: Computer Emergency Response Team (CERT-In) and the National Critical Information Infrastructure Protection Center (NCIIPC). Your Company follows the recommendations issued by these agencies from time to time. Your Company conducts extensive training programs for employees and participated in programs and simulations organised by CERT-In and NCIIPC.

Your Company has set up a Cyber Security Operations Center for threat analysis and monitoring to strengthen resilience in its operations.

3.4. Safety

Your Company is certified with ISO 45001:2018, Occupational Health & Safety Management System which ensures a healthy work environment for employees by strict adherence to norms on Occupational Health & Safety at workplace.

The Company recognizes its responsibility for maintaining a safe working environment for all its employees including contract workers. Necessary steps are taken to ensure that all applicable safety factors are taken into account as per standards during the design, construction and operation & maintenance of assets.

Safety audits/ inspections, trainings, safety briefings, mock-drills were carried out for all contract workers and Company staff at various O&M and construction sites. Safety audits of 272 substations and safety inspection at 235 construction sites were carried out in FY 2022-23.

Animated safety video films on "safety during transmission line maintenance work" have been developed for promoting safety awareness of the workers. Remote safety monitoring of construction sites on mobile apps connected through static camera were started on trial basis.

Safety trainings were organized on various safety aspects such as job specific training, fire safety, stress

& health management and first aid etc. at various sites. 1207 safety training sessions were organized for Company employees and 5374 safety training sessions were conducted for construction agency workers/ staff. 1227 mock-drills were organized at sites for preparedness to cope up with any untoward incident/ urgency/emergency.

National Safety Day/week in March, National fire safety day/week in April, National electrical day/week in June are celebrated every year involving employees, their family members and contractual workers helping in creating awareness towards adherence to safety at work place and home.

All the dangerous occurrences were reviewed by Standing Safety Management Committee and POWERGRID Apex Safety Board in association with all Heads of Regions and Board level representatives of construction Agencies. Recommendations of Accident Enquiry committees were widely circulated at all sites for implementation.

4. Project Implementation

During FY 2022-23, your Company added about 2,972 circuit kilometer (ckm) of Extra High Voltage (EHV) transmission lines, 28,990 Mega Volt Ampere (MVA) transformation capacity and 9 new Substations (including through its subsidiaries).

Further, about 6,600 km of OPGW network was added during the year to support voice and data communication with Regional Load Dispatch Centres (RLDCs) / State Load Despatch Centres (SLDCs) for effective grid management.

Major Transmission Assets Commissioned

â¢ Reconfiguration of 765 kV D/C Bhuj PS - Lakadia PS line so as to establish 765 kV D/C Bhuj-II -Lakadia line as well as 765 kV D/C Bhuj-Bhuj-II line

â¢ 400 kV D/C Jeerat (New) - Subhasgram (PM-JTL-TBCB) line

â¢ 400 kV D/C Lower Subhansiri - Biswanath Chariyali line-I

â¢ 400 kV D/C Simbhavali - Meerut line

â¢ 220 kV D/C UT Chandigarh S/S - Panchkula (PG) s/s line

â¢ 400 kV D/C Mohindergarh - Bhiwani line

â¢ LILO of Kishanganj (POWERGRID) - Darbhanga (DMTCL) 400 kV D/C (Quad) line at Saharsa (New)

â¢ 400 kV D/C Bina- Guna line

â¢ LILO of both circuits of 400 kV D/C Dhauliganga - Bareilly (PG) line at Jauljivi

As on 31^st March 2023, the inter-regional power transfer capacity of the transmission assets belonging to the Company and its subsidiaries was 97,290 MW (i.e. 86.67%) out of 1,12,250 MW inter-regional power transfer capacity of the national grid.

5. Capital Investment, Fund Mobilization & Investment Approvals

During FY 2022-23, your Company made a consolidated capital investment of f8,850 crore on cash basis. To finance this investment, the Company mobilized f2,120 crore from securitization, f4,488 crore through bonds & term loans and f2,242 crore from Internal accruals & others.

During FY 2022-23, investment approvals for transmission projects with an estimated cost of f22,250 crore were accorded.

6. Commercial Performance

Sharing of Inter-state transmission charges is governed by CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, as notified from time to time in line with the National Tariff Policy notified by Govt. of India and provisions of the Electricity Act, 2003. Presently, CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, 2020 are in vogue. As per the Sharing Regulations, the Central Transmission Utility (CTU), had the responsibility of billing & collecting transmission charges on behalf of all ISTS licensees in the country including your Company and disbursing to them. Central Transmission Utility of India Limited (CTUIL), a wholly owned subsidiary of your Company has been notified as CTU by the Government of India. Your Company continues to be a deemed Transmission Licensee under the Electricity Act, 2003.

Your Company, through regular follow up with its customers (DICs) and timely regulatory actions has achieved collection efficiency of 98.84% of billing in FY 2022-23.

7. Other Businesses

7.1. Telecom Business

a) POWERTEL

The Company is providing a range of services under its Unified License as National Long Distance (NLD) and Internet Service Provider -Category ''A'' (ISP-''A'') service authorizations. Your Company is providing nationwide services like point-to-point leased line bandwidth services, Internet leased line, Tower co-location, MPLS based IP-VPN, SD-WAN, DDoS etc. in all parts of the country with its Pan India high-capacity network under the brand name ''POWERTEL''. Revenue from Telecom Business was f729 crore during FY 2022-23.

During FY 2022-23, the Company''s telecom network coverage increased to 82,294 km from 74,109 km at the end of previous year and the telecom backbone availability for the year was 99.99%. The Company''s telecom network is present in more than 3000 locations covering all major cities /towns and metros in India.

Your Company has signed Agreements with Damodar Valley Corporation (DVC), Manipur State Power Company Ltd. (MSPCL), J&K Power

Development Corp. Ltd. (JKPDCL), Power Transmission Corp. of Uttarakhand Ltd. (PTCUL), Goa Electricity Department (GED), Uttar Pradesh Power Transmission Corp. Ltd. (UPPTCL) and Rajasthan Vidyut Prasaran Nigam Ltd. (RVPNL) for leasing of their OPGW fibres (approx. 19,000 km). Utilisation of these OPGW fibres will enable Company to expand its telecom network in various cities for new business opportunities.

POWERGRID Teleservices Limited (PTL), the wholly owned subsidiary of your Company has been incorporated to undertake Telecommunications and Digital Technology business. PTL has obtained the Unified License with service authorization of National Long Distance (NLD), Internet Service Provider (ISP-A) & International Long Distance (ILD). The business transfer agreement to hive off the Telecom business into PTL has been executed and the transfer is to take effect in this financial year.

Your Company''s Board approved expansion of POWERGRID Telecom into Data Center Business and to establish the Pilot Data Center at Manesar. The Central Electricity Regulatory Commission (CERC) has given permission on 30^th November, 2022 to set-up the Data Centre at Manesar through POWERGRID Teleservices Limited. Further, POWERGRID is also planning to set-up a 500 Rack Disaster Recovery (DR) Data Centre at Bengaluru. The DR centre at Bengaluru will serve as a back-up for the Data Centre at Manesar and also as a main Data Centre for nearby customers. In this regard, Petition has been filed before CERC requesting permission for establishment of DR Data Centre at Bengaluru and Data Centre(s) at 15 Nos. other substations across the country.

POWERGRID Teleservices Limited is also planning to provide International Long Distance (ILD) connectivity. The provisional permissions for setting-up ILD-Gateways has been received from DoT.

b) BHARAT NET

Your Company is one of the implementing agencies for ''Bharat Net'' Phase-I project envisaged to provide broadband connectivity to Gram Panchayats (GPs), thus making valuable contribution to the initiatives of the Govt. of India for Digital India.

The scope of work is spread across 39 districts in 5 States viz., Andhra Pradesh, Telangana, Himachal Pradesh, Jharkhand & Odisha. The Company has completed the work for all 511 Blocks and successfully handed over to M/s BBNL.

7.2. Consulting Services

load dispatch & communications, in India and abroad. Leveraging its capacity and experience, consulting services have been provided to several customers in India and worldwide. During the year, your Company achieved revenue from operations of f509 crore from Consultancy segment.

a) Domestic Market

On behalf of Government of India, your Company is implementing two important projects as consultancy assignments for strengthening of the Intra-State Transmission and Distribution Systems (33kV and above) namely ''NER Power System Improvement Project'' (NERPSIP) in Manipur, Meghalaya, Mizoram, Tripura, Nagaland & Assam and ''Comprehensive Scheme'' for strengthening of Transmission & Distribution in Arunachal Pradesh and Sikkim. Your Company is also providing consultancy services to Indian Railway for electrification of un-electrified railways tracks in Central, East Central, SouthWestern & South-East-Central Railway zones.

Your Company is currently executing about 80 consultancy assignments in various fields including transmission & sub transmission, design & engineering, EV charging, Renewable, Smart Metering, etc. During the year, your Company bagged 54 new consultancy assignments.

Some of the major consultancy assignments include:

â¦ Agreement signed with Jammu Power Distribution Corporation Limited (JPDCL) and Kashmir Power Distribution Corporation Limited (KPDCL) for loss reduction initiatives under Revamped Distribution Sector Scheme (RDSS).

â¦ MOU signed with Greenko Energies Pvt. Ltd. for implementation of transmission system associated with RE generation.

â¦ MOUs signed with Madhya Pradesh Power Transmission Company Limited (MPPTCL) and Odisha Power Transmission Corporation Limited (OPTCL) for Substations Automation/ establishment of State Transmission Asset Management System (STAMS).

â¦ Consultancy services to NHIDCL for Construction of 2x25MVA, 66/11 kV, substation at Zojila east portal location and 66 kV D/C line from 220/66 kV Drass substation to 66/11 kV Zojila east portal location substation along with 66 kV underground cable work in the union territory of Ladakh.

â¦ Consultancy services to NHIDCL for Construction of 50MVA 220/33KV Nilgrar Subsation and LILO of one circuit of SLTS at Nilgrar at West Portal location, UT of J&K.

â¦ Consultancy services to CVPPL for Laying of 400 kV Dedicated Transmission Line from Pothead Yards of 1000 MW Pakal Dul HE Project, 624 MW Kiru HE Project & 540 MW Kwar HE Project to proposed Pooling Station in Kishtwar, UT of J&K.

b) International Market

On the International front, as on 31^st March, 2023, your Company has its footprint in 23 countries. During the FY 2022-23, Your Company has received orders worth f 52 crores from Uganda, Nepal, and Ethiopia. The Company is providing consultancy to various clients in Nepal, Uganda, Fiji, and Moldova.

8. International Projects

A Privately Initiated Proposal (PIP) for development of transmission project in Kenya submitted by your company in Joint Venture with Africa-50 has been approved by PPP Directorate, Govt. of Kenya, to proceed into Project Development Phase in line with Public Private Partnership (PPP) Law of Kenya. The estimated cost of the Project is USD 300 Million. Your Company is exploring suitable opportunities to replicate the similar model in other African countries.

9. Cross Border Interconnections

Your Company has established a Joint Venture Company viz. Butwal-Gorakhpur Cross Border Power Transmission Limited (BGCBPTL) with equity participation of 50:50 with Nepal Electricity Authority (NEA) for Implementation of Indian Portion of New Butwal - Gorakhpur 400 kV Double Circuit (Quad Moose) Crossborder Transmission Line.

10. Quality Management

Your Company has developed and maintained systems and procedures that are in accordance with the Publicly Available Specification, PAS 99:2012, while also incorporating the requirements of ISO 9001:2015 (Quality Management System), ISO 14001:2015 (Environmental Management System), and ISO 45001:2018. (Occupational Health & Safety Management System).

Re-certification of Integrated Management system Certification (IMS) covering requirement of ISO 9001 (Quality

POWERGRID is meeting the subtarget as per Public Procurement Policy for MSEs Order 2012, and its Amendment dated: 09^thNovember 2018, which, inter alia, directs that in event of failure of such Micro and Small Enterprises to participate in tender process or meet tender requirements and L1 price, 4 percent sub-target for procurement earmarked for Micro and Small Enterprises owned by Scheduled Caste or Scheduled Tribe entrepreneurs shall be met from other Micro and Small Enterprises.

Management System), ISO 14001 (Environment Management System) and ISO 45001 (Occupational health and Safety Management System) was carried out successfully for three years without any non-conformity. Further, re-certification of Energy Management System ISO 50001 for Corporate Office building and NTAMC Building received for a period of three years without any non- conformity.

Other initiatives taken in the field of quality management are as follows:

Digital initiative

Manufacturer Unit Approval Portal: Your Company has launched a new online portal for approval of new manufacturing units, extension of approval of existing units and renewal of their manufacturing quality plan. With the launch of the portal, the complete process from approval to material dispatch has become paperless. The manufacturers can now upload their documents and check the real time status of their application for approval.

Initiative towards smart inspection

Grading of Manufacturer: Grading of vendors, based on process audit and past performance with goal for almost zero inspection for Grade A vendors, has been initiated for transformer radiators as a pilot project. Standardization of documents viz MQP / FAT Checklist for level II item/ process audit checklist, has been carried out to bring uniformity, consistency and transparency in the inspection process.

H. Research and Development

Your Company has been granted two patents by the Patent Office, Government of India.

â¦ Patent (No. 418166) for an invention entitled ''ENERGY EFFICIENT ALL-SEASON ROOF SCREENING''. This roof coating /screening technique offers energy efficiency round the year without compromising the comfort level. Also, the invented screening process takes care of reflection issue on nearby buildings, dust settlement and expense towards deployment.

â¦ Patent (No. 411380) for an invention entitled ''SMART SOCKET AND SMART HOME ENERGY MANAGER'' which has been developed in collaboration with IIT Kharagpur. This smart socket along with home energy manager application can be used to manage household appliances efficiently to achieve optimum energy consumption and reduce the electricity bill.

This recognition is a testament to the innovative spirit and unwavering commitment of your Company towards advancing the indigenous technology.

In pursuit of cutting-edge innovation and advancement in the field of substation aerial inspection, development of programmable drone with specialized sensors (Thermal & Video) for substation aerial inspection including AI/ML based analytics capable of operating in diverse topographies has been taken up as a first of its kind in India. This integrated solution represents a significant step forward in enhancing efficiency, accuracy and safety of substation aerial inspections, and heralds a new era of data-driven decision-making.

Company is in the process of obtaining UCAIug Accreditation of Protection Automation and Control laboratory at POWERGRID Advanced Research and Technology Centre for testing and certifying IEC 61850 compliant equipment.

Your Company executives have published 14 technical papers at the CIGRE Session 2022 held in Paris on new technology / case studies, which were highly acclaimed by the industry / academia / experts.

12. Participation in GoI Initiatives

12.1. Promotion of ''Make In India''

Your Company through continuous measures, has encouraged localization of various goods to be sourced for development/operations of transmission system. Foreign manufacturers have also been nudged to set-up facilities in India and thus promoting the Make in India initiative of the Government. With the Company''s efforts, new plants and facilities have been set-up in India over the past few years by a number of foreign manufacturers for equipment like GIS, transformers, reactors, STATCOM, OPGW, etc. paving way for a wider vendor base and emergence of a more efficient supply chain.

Your Company also promotes existing vendors to upgrade their equipment to higher voltage level & cover more items to increase vendor base.

Further, the Company has given much impetus towards procuring from local suppliers in its various procurement verticals in line with the extant Government of India''s policy on the same. This is evident from the fact that during FY 2022-23, total awards amounting to about f 13,740 crore (124 nos. of Contracts) were placed on Indian vendors. Your Company is actively working on the development of its vendor base in the domestic market by encouraging participation of local suppliers and promoting capacity building for existing vendors.

12.2. Promotion of Micro, Small and Medium Enterprises (MSME)

In line with Government of India directives for promotion of MSMEs, the Company has been complying with the guidelines issued by the Government from time to time. The Company is registered on all the three(03) available Trade Receivable e-Discounting System (TReDS) platforms of (i) Receivable Exchange of India Limited (RXIL) (a NSE - SIDBI JV), (ii) Mynd Solutions Private Ltd (M1xchange) and (iii) A TREDS Ltd. (Invoicemart). Trade Receivables Discounting System (TReDS) is the platform for facilitating the financing of trade receivables from corporate and other buyers, including Government Departments and Public Sector Undertakings (PSUs), through multiple financiers. The Company is continuously pursuing with its MSMEs suppliers to get themselves on-boarded on TReDS Platforms, for which detailed guidelines have been provided on Company''s website www. powergrid.in.

Suitable provisions have already been incorporated in the bidding documents of POWERGRID for procurement of various products and services rendered by Micro and Small Enterprises (MSEs) in line with the Public Procurement Policy of the Government of India.

Your Company is actively developing and adding sub vendors, particularly in the MSME category. During FY 2022-23, 62 nos. of new vendors were added out of these 28 were MSE vendors.

In terms of the said policy, the total procurement from MSEs (including MSEs owned by SC/ST and Women entrepreneurs) by your Company was f 1,243.54 crore which is 53.34% of the total eligible value of Annual procurement of goods produced and services rendered by MSEs.

Further, the total procurement from MSEs owned by SC/ST entrepreneurs is f 48.76 Crore (2.09%) and from MSEs owned by Women Entrepreneurs is f 71.27 Crore (3.06%) against the sub-targets of 4% and 3% annual procurement from MSEs owned by SC/ST and Women entrepreneurs respectively. As such,

Annual procurement plan for FY 2022-23 from MSEs is uploaded on www.powergrid.in.

The Company has taken various steps to encourage MSE participation in the procurement process across India. During this year, in order to encourage and develop Micro and Small manufacturers for supply of innovative & quality products, 20 nos. of Vendor Development Programs(VDPs) have been organized in various parts of the country out of which 09 nos. of VDPs were exclusively held for SC/ST and Women MSEs. In these MSE vendor development programs, various presentations were made and discussions were held with representatives of numerous Micro and Small Enterprises of our Country. Special focus was on Micro and Small Enterprises owned by SC/ ST and Women entrepreneurs. The response of Micro and Small Enterprises in these meetings was overwhelming. A number of Micro, Small & Medium Enterprises have been developed as sub-vendors and approved for supply of components for various equipment.

12.3. Procurement through Government e-Marketplace (GeM):

In line with GoI mandate, procurement of Goods & Services is being done through GeM portal. Procurement through GeM in POWERGRID started in FY 2018-19 and in subsequent years, with persistent emphasis, procurement through GeM has continuously increased. During FY 2022-23, procurement of f1404 crore of Goods & Services was from GeM portal which is about twice the procurement of last FY 2021-22 (f 706 crore).

Further, the percentage achievement for FY 2022-23 in respect of GeM procurement with respect to the Categories of Goods & Services that are available in GeM works out to 98.86%. It may also be mentioned that for the first time, the Mega Insurance Package for Insurance of the HVDC and Building Assets of POWERGRID valuing about f138 crores was successfully awarded through GeM after enabling of the feature by GeM. Further, the Scrap Disposal Package was also auctioned successfully for the first time through GeM during the year.

13. Sustainable Growth

The principles of Environment, Social and Governance (ESG) are being embedded by your Company into business operations and the Company continues to attach importance to ESG ecosystem.

The Company is taking steps to align its sustainability related aspects with global requirements and is participating in assessment surveys carried out by MSCI, FTSE and S&P Global CSA annually, wherein your Company gets an opportunity to benchmark its various parameters pertaining to ESG under power transmission against domestic & international peers.

13.1. Environment and Social Management

Your company has been practicing the standards of sustainable development integrated in its corporate Environmental and Social Policy & Procedures (ESPP) since 1998, that lays down a detailed framework for identification, assessment and management for environmental and social concerns at organizational and project level based on the established principles of Avoidance, Minimization and Mitigation with provision of

restoration too. The comprehensive coverage and content of the ESPP can be judged by the fact that it has been accepted by two leading Multilateral Agencies of the world i.e. The World Bank and ADB under their Use of Country System (UCS) and Country Safeguard System (CSS) policy in 2009 and 2017 respectively.

On the environmental management front, your Company undertakes detailed Environmental & Social Assessment of new projects in line with the provisions of ESPP including alternative studies, development of Environment Management Plan (EMP) and public consultation, even though not mandated by the law of the land. Besides, your Company also leverages latest technology such as adoption of modern survey techniques to select most optimum line route to avoid ecological and social sensitive areas, use of innovative towers (multi circuit, compact, pole tower) in forest and habitation areas, and such initiatives not only helped in conservation of natural resources like forest and Right of Way (RoW) but also substantially reduced project''s environmental and social footprints.

Management of land issues has become a key challenge in recent times and as such securing land for infrastructure projects is becoming increasingly challenging. In this regard, your Company endeavor to secure barren government land as first option has resulted in conservation of precious land resources as well as minimization of adverse social impacts. Further, decisions like securing land through consent of landowners at mutually agreed rate on "Willing Buyer Willing Seller" basis instead of using involuntary mode of land acquisition, have not only strengthened our standing among local community /affected population but also ensured hassle free securing of land.

Recognizing the changing business contours, your Company has been providing due importance to issues related to Environment, Social & Governance (ESG), Sustainability reporting and alignment of Business activities in line with United Nations Sustainable Development Goals (SDG) and Net Zero Commitments. It''s a matter of great satisfaction that your Company has been continuously rated highly by several independent agencies both in the areas of ESG and Sustainability Reporting. However, your Company has planned to further improve its performance by setting up higher goals and scaling up sustainability efforts. Key initiatives taken in this direction are:

i. Separate policies viz. ESG, Waste management and Water Management were developed and approved by the Board. These policies are linked with company''s sustainability milestones like to achieve 50% of its electricity consumption from renewable sources by 2025 and become Net Zero by 2047, in line with Govt of India commitment towards climate change and net zero targets. Your Company has also committed to become a "Net Water Positive organization" and achieve "Zero Waste to Landfill status" by 2030.

ii. To reduce its carbon footprints, your Company has already taken various measures like installation of roof top solar PV on office buildings and Solar PV plants on vacant substation land, progressive replacement of diesel vehicle by e-vehicles, improving carbon sink through plantation etc.

13.2. "Mission LiFE" (Lifestyle For Environment)

Hon''ble Prime Minister introduced Mission LiFE to the world at the 26th UN Climate Change Conference of the Parties (COP26) in Glasgow.

In line with Mission LiFE of Government of India, POWERGRID undertook major outreach and advocacy activities for mass mobilisation on mission LiFE (Lifestyle For Environment), from 11th May 2023 to 5th June 2023 which covered seven themes of Mission LiFE - (a) Save energy (b) Save water (c)Say no to single use of plastic (d) Adopt sustainable food systems. (e) Reduce waste (f) Adopt healthy life system. (g) Reduce e-waste. The programme concluded on 5th June (World Environment Day) by Mass Plantation Drive across POWERGRID establishments. Major outreach activities included banning of single-use plastic, theme-based pledges, competitions, cycle rally, save energy measures at offices, waste reduction, segregation and re-use, media & FM campaign, expert talks on themes etc.

14. Corporate Social Responsibility (CSR)

For social and economic development of communities, your Company undertakes CSR activities in areas

of healthcare, drinking water & sanitation, education, skill development, rural development and other areas of national importance. The projects are conceived in consultation with the stakeholders, primarily in the vicinity of its area of operations.

During FY 2022-23, your Company has spent f321.66 crore on CSR activities. Further, 168 new CSR projects of f275.10 crore were sanctioned during FY 2022-23.

During the year, the Company contributed f 105 crore to PM CARES Fund towards COVID-19 pandemic.

Also, the Company provided "POWERGRID Endowment Scholarship" Merit-Cum-Means (MCM) Scholarship Programme for B.Tech students of Indian Institute of Technology Madras (IITM).

Major CSR Projects Completed during FY 2022-23:

â¦ Vishram Sadan at DMCH, Darbhanga (Bihar), Guwahati Medical College & Hospital, Guwahati (Assam) and Sir Sayajirao General (SSG) Hospital, Vadodara (Gujarat).

â¦ Ring Gantry Linear Accelerator for Radiotherapy Treatment at Regional Cancer Centre, Thiruvananthapuram, Kerala.

â¦ MRI machine to Vivekanand Medical Institute,Palampur, Himachal Pradesh.

â¦ 100 bedded Pediatric Intensive Care Unit (PICU) at GSVM Medical College, Kanpur UP.

â¦ Financial assistance to National Foundation for Communal Harmony (NFCH) for education of 1600 violence affected students from Assam, Manipur and Chhattisgarh, etc.

â¦ 50 seat Hostel in Schedule Caste Senior Girls Hostel at Tehsil Sarai in Singrauli District.

â¦ Playground with all necessary facilities at K.B. Women''s Govt. College, Hazaribagh, Jharkhand.

â¦ Development & Upgradation of Dichenling Crematorium Complex Gangtok.

â¦ Providing Medical equipment and Instruments to various Government Health facilities in the State of Sikkim.

â¦ Supply of Medical equipment to ESI Hospital Faridabad.

â¦ Providing Aids & Appliances to Persons with Disabilities at Nalgonda in Telangana and East Godavari Districts in Andhra Pradesh.

â¦ Supply of Medical equipment to Swami Ramanand Theerth Rural, Government Medical College (SRTRGMC), Ambajogai, Beed district, Maharashtra.

Important CSR projects sanctioned during FY 2022-23:

â¦ Setting up of Industrial Training Institute (ITI) at Dharamgarh, sub division of Kalahandi District, Odisha.

â¦ Construction of 200 bedded Vishram Sadan at Maharani Laxmi Bai College and Hospital, Jhansi.

â¦ Engagement of apprentice trainees for skill development under CSR initiative FY 2022-23.

â¦ Providing life-saving medical equipment for critically-ill cancer and kidney-failure patients at Safdarganj Hospital, New Delhi.

â¦ Supply & Installation of 128-Slice CT scan for Emergency Medical Service Department of JIPMER,

Puducherry.

â¦ Establishment of Wi-Fi facility at NIT Jamshedpur campus.

â¦ Procurement of medical equipment for Govt. Maharaja Jitendra Narayan Medical College (MJN MC&h) at District Coochbehar, West Bengal.

â¦ Providing emergency & essential equipment/machinery (22 Nos. of items) to Osmania General Hospital, Hyderabad, Telangana.

â¦ Repair and Renovation of Sanskritik Bhawan, Ara, Bhojpur, Bihar.

â¦ Supply and installation of essential Medical Equipment in Chigateri District Hospital, Davanagere, Karnataka.

â¦ Improving nutrition of severely wasted and underweight children /Neonatal and adolescent girls of Baghpat District through establishment of Mother & New Born Care, Nutrition Rehabilitation Centre and mobile Pathology centre along with nutrition diet and supplement.

â¦ Installation of High Technology Nucleic Acid Amplification testing (ID NAAT) Machine at AIMS, Mohali, Punjab.

â¦ Construction of new OPD and ward in Community Health Center at Mehgaon, Bhind District, Madhya Pradesh.

â¦ Construction of community centers, boundary wall, classrooms in Govt. schools at Kota, Rajasthan.

â¦ Providing General modular operation theatre with required medical equipment''s in Civil General Hospital, Malegaon under Nashik District.

â¦ Installation of Equipment & machineries, furniture and Audio-visual aids for Skill Development Training Centre Building at Assam Engineering Institute.

â¦ Providing medical apparatus/instruments to Rural Hospital, Brahampuri and Sub-Dist Hospital, Warora General Hospital, Chandrapur, etc.

A complete list of all CSR Projects undertaken and sanctioned

by the Company during FY 2022-23 are given in Annexure-X

of this Report.

15. Governance

15.1. Right To Information

To promote transparency and accountability, an appropriate mechanism has been set up across your Company in line with ''Right to Information Act, 2005''. The Company has nominated Public Information Officers and Appellate Authorities at Corporate, Regional Head Quarters and other offices to provide required information to the citizens under the provisions of Act.

The Company has also developed its own web based online RTI portal, which facilitates timely reply of RTI/Appeal to applicants through real time monitoring of all RTIs/ Appeals. The portal also facilitates auto generation of various RTI reports for internal and external stakeholders.

In FY 2022-23, 933 RTI applications were received in the Company and processed timely as per the RTI Act, 2005. Training programs / awareness sessions for the Company''s CPIOs/PIOs/Appellate Authorities were organized for sensitization about their role in implementation of the RTI Act. The Company under suo moto

disclosures in compliance under Section 4 (l)(b) of Right to Information Act, 2005 has place large amount of information in public domain on a proactive basis to make the functioning of the Public Authorities more transparent and to reduce the number of RTI applications from individuals.

15.2. Commitment to Transparency and Ethical practices

Your Company advocates the principles of Transparency, Probity and Ethics in its functioning. Vigilance Department of your Company undertakes Preventive, Pro-active as well as Punitive Vigilance activities and ensures that the best ethical practices are followed in the organization.

a) Emphasis on Preventive Vigilance

To strengthen the organizational process and to minimize malpractices in various systems & activities of the organization, emphasis on preventive vigilance is given. Preventive vigilance focuses on the right types of systems or re-engineering processes for acting against potential threats.

During FY 2022-23, 71 surprise inspections, 32 process-on-line inspections and 21 Chief Technical Examiner (CTE) Type inspections were conducted. Pursuant to Vigilance inspections and observations/ recommendations, several system improvements have been implemented.

b) Preventive Vigilance Workshops as part of Capacity Building

During FY 2022-23, various Preventive Vigilance Workshops, Webinars were conducted for nonvigilance personnel at various regions of the Company. These workshops inter-alia cover contracts management, provisions of Conduct Discipline and Appeal Rules (CDA) Rules, compliances of rules and

policies, common irregularities, deliberation of case studies based on real cases, quality aspects as well as Ethics Management which enables the employees to identify and deal with ethical dilemma.

c) Vigilance Awareness

In pursuance of the directions of the Central Vigilance Commission, Vigilance

Awareness Week (VAW) was observed in POWERGRID from 31^st October, 2022 to 6^th November, 2022 with the theme "Corruption free India

for a developed nation; "hpvtpr eDT HTrerâfOdfia HiRT". Further, preventive vigilance measures cum housekeeping activities were also taken up as a 3 month''s campaign from 16^th August, 2022 to 15^thNovember, 2022 as a precursor to VAW-2022. Various activities like essay competition, quiz competition, slogan competition, etc. were organized within and outside POWERGRID in which more than 14,000 students participated. 19 Awareness Gram Sabhas involving approx. 6,000 persons were conducted. Vendor Meets were organized at Corporate Centre and all Regions. The message of VAW 2022 was propagated through social media platforms, FM Channel and Electronic media. Journal of Vigilance Department of POWERGRID (CANDOUR) was released in digital mode during the closing ceremony of VAW.

Senior officers of your Company participated in VAW celebration event organized by the CVC at Vigyan Bhawan on 3^rd November, 2022. Company''s best practices like Contract Closing Portal and Information on Record Portal were recognized and published in the Preventive Vigilance Initiative booklet released during the event.

d) Public Awareness about G20 Anti Corruption Working Group ( G20 ACWG)

1^st Meeting of G20 Anti Corruption Working Group held at Gurugram from 1^st to 3^rd March 2023. The Company organized various competitions like quiz, poster making, debate, essay competitions for students of schools and colleges, activities like nukkad-natak (street plays) and displayed banners and posters for general public at prominent locations to generate public awareness on theme of "Promoting Integrity, Preventing and Combating Corruption.

15.3. Citizen''s Charter

A Citizen''s Charter has been formulated for the Company providing a visible front of its Vision, Mission and Objectives. The Citizens'' Charter consisting of Company profile, commitments, expectations from citizens, Integrated Management Policy, services offered, values and standards of services, access to information and grievance redressal is available on the Company''s website.

16. People: Our Core Strength

Your Company has always believed in its employees achieving the assigned targets and has continually strived to nurture their abilities by addressing their requirements through timely and appropriate HR interventions. It has been our endeavour to develop and deploy systems & practices that facilitate employees to perform at their fullest potential. Company believes in attracting, retaining and developing such employees who are aligned with the core values of the Company and provide them with a workplace where their safety and health are upheld in a non-discriminative and approachable environment.

As on 31^st March 2023, the permanent employees on rolls of your Company stood at 8342 of which women employees constituted 8.15%. The attrition rate of regular employees stood at 0.83% in the year 2022-23. The Company also ensured filling up of key roles of Executive Directors and Chief General Managers in time.

16.1. Human Resource Development

In a world of disruptive business models and changing technologies, our ability to learn is one of the biggest organizational capabilities to survive and thrive in the future, and to this end, Human Resource Development has a key role in upskilling our workforce to make them future-ready. Through well-articulated talent management and learning & development interventions, Company has always endeavored to create a high-trust, high-performance work culture that brings out the best in people, enables and empowers them for continuous learning and be future ready.

To scaleup the learning & development in Power Sector, your Company has been operating state-of-art POWERGRID Academy of Leadership (PAL) at Manesar, which imparts a wide range of training and development opportunities for its employees and other stakeholders in India and abroad.

Some of the key learning & development initiatives undertaken by the Company during the year includes the following:

â¦ More than 700 training and development programs were organized at PAL, other Employee Development Centres in the regions and associated premier educational institutes in India and abroad.

â¦ In order to answer frequently asked queries regarding various HR & HRD policies, an AI /ML based chatbot named "POWERGRID Robotic AI Bot for HR Assistance (PRABHA)" has been rolled out.

â¦ To promote employee education, 15 employees have been sponsored for M. Tech program in POWER System and reliability by NIT Jalandhar and 5 employees have been sponsored for 15 months PGDM program by NTPC School of Business. 50 employees have been sponsored in AO/ML course through IIITB.

â¦ Company has developed 122 e-Learning modules related to different business verticals and 9 refresher courses related to various company domains benefiting about 7500 employees.

â¦ Company has hosted 7 modules related to Power transmission for Government of India ambitious "Mission Karmayogi" Programme.

â¦ Tie-up has been made with Ministry of IT & Electronics, Government of India and IT Industry body

NASSCOM for their FutureSkills Prime portal. This provides access to all employees to e-courses in emerging technologies and professional skills in FutureSkills Prime.

â¦ Your Company encouraged continuous learning and knowledge upgradation of its employees by providing access to more than 5 million online documents/ resources through EBSCO and IEEE collection with 24*7 access to e-books, e-journals, and standards on different subjects.

Leveraging its people''s capabilities and infrastructure available at PAL for capacity development of power sector, your Company has taken following initiatives for stakeholder development:

â¦ More than 950 apprentices have been engaged in different trades as per the Apprentice Act.

â¦ About 380 contract staff have been imparted training under Recognition of Prior Learning (RPL) certification.

â¦ Assessment and Development Centre (ADC) for E5-E8 covering about 2800 employees is under progress.

â¦ MoU has been signed among National Skill Development Corporation (NSDC), National Skill Development Fund (NSDF), Power Sector Skill Council (PSSC) and POWERGRID for Skill development training of 6000 unemployed youth in power Sector. As a part of this program, at present more than 5500 trainees are undergoing training across 25 locations in India.

â¦ Under the Northern Eastern Regional Power System Improvement (CBIS-NERPSIP) Project, the Company is undertaking Capacity Building and Institutional Strengthening program for State Power Utilities in 6 (six) states of NER (viz: Assam, Meghalaya, Mizoram, Manipur, Nagaland and Tripura) and Capacity Building under Comprehensive Scheme (Arunachal Pradesh & Sikkim - 2 states)

â¦ Extended customized Training Programs for clients from various power utilities.

16.2. Employee Welfare

In order to respond to the constantly evolving business scenario and to address the dynamic requirements of employees, your Company undertakes regular updation of its policies to keep up with the industry trends. In an effort to make the employee related processes smooth and for uniform implementation of employee benefits, an Employee Benefit Centre (EBC) has been established at Manesar, Haryana.

Continuing our efforts towards gender equity and to extend the coverage of maternal leave, your Company provided special maternity leave for adoption of child and for commissioning mothers & paternity leave for adoption of child/ having a child through surrogacy and also extended the provisions of childcare leave to single male parents.

Your Company has been an ardent advocate of physical and mental wellbeing of its employees and in this direction Company has organized numerous health talks on various topics to make its employees aware about the cause of diseases and measures to prevent them. In the wake of new diseases and to keep the employees hale and healthy, your Company encourages preventive medical interventions through preventive health checkup and reimbursement of vaccination. Further, as a novel initiative, a 24*7 Emergency helpline for dealing with medical emergencies of employees and their dependents has been made functional.

Your Company has constantly encouraged employees to be physically and mentally fit and active, in this direction, it has bagged the 2^nd position for excellent performance in sports activities in the Annual Performance Awards 202122 by Power Sports Control Board. Your Company has also won many notable laurels in sports viz., Bronze medal at the International Para TT Championship and the champions trophy of the Power Cup 2022.

Your Company has taken many initiatives towards

digitalization, like the introduction of dedicated portals for reservation related matters and management of apprentices. Further, a semi-formal online interaction medium has been provided for employees to interact and collaborate on their personal interests. Yet another digital initiative this year has been the launch of PG Arogya Portal as a repository of employee wellbeing related information and the introduction of e-medical card, whereby employees and dependents can access and download the medical card and authorization for hospitalization, anywhere and anytime.

16.3. Grievance Redressal

Grievance redressal is always taken up with priority and your Company promptly redresses the grievances of its employees within the broad parameters of guidelines enumerated by Government of India and policy framework. Employees can lodge their grievances on an online portal. The Company has designated nodal officers at corporate & regional offices for systematic & prompt redressal of the grievances within stipulated time frames.

16.4. Ensuring Social Justice

Separate cell to look after and safeguard the interests of SC/ ST/ OBC & PwD categories of employees is in place.

Liaison Officer looks after SC/ ST/ OBC & PwD employees and is assisted by the reservation cell. The Liaison Officer also ensures that there is no discrimination on the basis of caste, religion & disabilities amongst the employees. To ensure effective discharge of duties across all establishments of your Company, separate liaison officer for each region has been nominated. The Company implements all directives and guidelines with regard to reservation policy issued by Government of India. Annual inspection is also conducted by Liaison Officer to ensure implementation of directives issued by Government of India. Periodic meeting is held with representatives of the association of SC/ ST & OBC to resolve issues, if any.

17. Prevention of Sexual Harassment at Workplace

Your Company has framed a Policy on Prevention of Sexual Harassment at Workplace to reaffirm its commitment towards zero tolerance against Sexual Harassment and to provide a framework for dealing with Sexual Harassment incidents. The policy is in line with the provisions contained in the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made there under. Training/ workshop programs for both male and female employees have been conducted to sensitize them on issues and the law/ Act/ Policy relating to sexual harassment. Workshops on women empowerment, development and gender sensitization are also organized. One complaint of sexual harassment was received during FY 2022-23 and the same has been disposed off in stipulated time as per the Guidelines/ Policy.

18. Implementation of Official Language (Rajbhasha)

In pursuance of Govt. of India''s Rajbhasha policy to promote Indian languages and Rajbhasha "Hindi", your Company has made all round efforts to integrate and promote use of Hindi in its works at all levels. Your Company has proved its commitment to ensure the implementation of Rajbhasha policy and to achieve the goal as laid out in the Rajbhasha Annual Target given by Department of Official Language.

To ensure the increased use of Official Language, various activities such as Annuvad Abhayaas Karyakram, Workshops, Trainings, motivational programmes have been organized. Computer trainings are being imparted to enhance the working knowledge in Hindi on computers. Hindi classes are also being organized for non-

Hindi speaking employees through Hindi Teaching Scheme.

Various activities are undertaken to publicize Hindi every year, Akhil Bhartiya Rajbhasha Sammelans and technical conferences in Hindi, Kavi Sammelans (Poetry sessions), Plays, publication of House Magazines, publication of monthly articles in Hindi via emails are most prominent among these. These programs have been organized both online and offline during the year 202223. Also various competitions throughout the year with special emphasis during Hindi Pakhwada, Vigilance Awareness Week, Swachchhta Pakhwada etc. along with departmental meetings as well

^{as Official Language Implementation} Gurugram for excellent implementation in the field of Rajbhasha Committee (OLIC) meetings are also

being conducted. Your Company has established one of the best Hindi libraries among Public Sector where popular/literary Magazines and News Papers have been made available for the employees.

Attractive incentive schemes for employees working in Hindi have been implemented as per the Government guidelines. In addition, various reward schemes have been introduced to encourage employees to actively participate in promotion of Hindi, by giving articles/write-ups for in-house magazines, reading library books etc.

The effort made by your Company has been applauded in several forums during FY 2022-23. Various awards were given by "Town Official Language Implementation Committee (TOLIC), Rajbhasha Vibhag, Ministry of Home Affairs, Govt. of India and other agencies in recognition of implementation of Official Language. The offices at Gurugram, Secunderabad, Vadodara, Bhopal, Kolkata, Dadri, Faridabad, Nagpur, Magarwada, Siliguri, Jabalpur, Maithon, Jamshedpur etc. have been honoured.

19. Stakeholder Engagement

Your Company focuses on engaging with all of its stakeholders and building cordial relationships with them. This helps us in not only understanding their needs and expectations, but also helps us in recognizing opportunities and mitigating risks to our operations. We have a framework for engaging with our stakeholders which also includes categories of Stakeholder along with the respective modes of engagement.

20. Management Discussion and Analysis Report

Management Discussion and Analysis Report, forming part of the Directors'' Report is placed as Annexure-I of this report.

21. Business Responsibility and Sustainability Report

The Business Responsibility and Sustainability Report, as stipulated under Regulation 34(2) of the SEBI (LODR) Regulations, 2015, is given in Annexure-II and forms part of this Report.

22. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Pursuant to Section 134(3)(m) of Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, information relating to ''Conservation of energy, technology absorption and foreign exchange earnings and outgo'', is given in Annexure-III to this Report.

23. Auditors

23.1 Statutory Auditors of the Company

The Statutory Auditors of the Company are appointed by the Comptroller and Auditor General of India. M/s. S. Ramanand Aiyar & Co., M/s. Umamaheswara Rao & Co., M/s. B M Chatrath & Co LLP and M/s. PSD & Associates were appointed as Joint Statutory Auditors for the FY 2022-23.

The Statutory Auditors have given an unqualified report. The report is self-explanatory and does not require any further comments by the Board.

23.2 Comptroller and Auditor General''s Comments

The Company has received no comments on the Financial Statements (Standalone and Consolidated) for the Financial Year ended 31^st March 2023 from the Comptroller and Auditor General of India (C&AG) under Section 143(6) of the Companies Act, 2013. The communication from C&AG are placed at Annexure-IV.

23.3 Secretarial Audit

M/s. Kumar Naresh Sinha & Associates, Practicing Company Secretary has conducted Secretarial Audit of the Company for the financial year ended 31^st March, 2023. The Secretarial Audit Report is placed at Annexure-V.

The observations of Secretarial Auditor are as under:

i. Half of the board of directors of the Company was not independent as required under Regulation 17(1) of SEBI (LODR) Regulations, 2015 and para 3.1.4 of DPE Guidelines on Corporate Governance with regard to Composition of the Board of Directors.

ii. The Company did not have at least one independent woman director on its Board as required under Regulation 17(1) (a) of SEBI (LODR) Regulations, 2015 and at least one woman director with effect from June 1 2022 as required under section 149(1) of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014.

Your Company''s response to the observation made in Secretarial Audit Report is that the power to appoint Independent Directors in POWERGRID, which is a Government Company vests with the Government of India and the Company has taken up the matter for appointment of requisite number of Independent Directors (including one Independent Woman Director) with Government of India.

23.4 Cost Auditors & Cost Records

The Company appointed M/s Dhananjay V. Joshi & Associates and M/s Bandyopadhyaya Bhaumik & Co., as Cost Auditors for the FY 2022-23 under section 148 of the Companies Act, 2013.

Your Company is maintaining Cost Accounting Records as prescribed under the Companies (Cost Records and Audit) Rules, 2014, specified by the Central Government under section 148(1) of the Companies Act, 2013.

The Cost Audit Report for the Financial Year ended 31^st March, 2023 will be filed within the prescribed time period under the Companies (Cost Records and Audit) Rules, 2014.

24. Board & Committees

24.1. Company''s Board

During FY 2022-23, Shri Dilip Nigam, Scientist ''G'', Ministry of New and Renewable Energy (MNRE), Government of India, who completed his tenure as a Government Nominee Director on 30^th April, 2022 was appointed again as Government Nominee Director w.e.f. 6^th June, 2022.

Shri Raghuraj Madhav Rajendran, Joint Secretary, Ministry of Power, Government of India was appointed as Government Nominee Director w.e.f. 5^th August, 2022 and ceased to be a Director on 11^th October, 2022. In his place Mr. Mohammad Afzal, Joint Secretary, Ministry of Power, Govt. of India was appointed as Government Nominee Director w.e.f. 11^th October, 2022. He ceased to be a Govt. Nominee Director on 17^th May, 2023 and in his place Dr. Saibaba Darbamulla, Joint Secretary, Ministry of Power, Govt. of India was appointed as Government Nominee Director w.e.f. 18^th May, 2023.

Shri Ghanshyam Prasad, Joint Secretary, Ministry of Power, Govt. of India relinquished the post of Government Nominee Director on 14^th July, 2022 in terms of Article 31 of Articles of Association of the Company.

Shri M.N. Venkatesan, Independent Director ceased to be Director w.e.f. 10^th July, 2022 on completion of his tenure.

Smt. Seema Gupta and Shri M. Taj Mukarrum completed the tenure as Director (Operations) and Director (Finance) of POWERGRID on attaining the age of superannuation w.e.f. 31^st May, 2022 and 31^st July, 2022, respectively.

Shri R. K. Tyagi assumed the charge of the post of Director (Operations) w.e.f. 12^th August, 2022 and Shri G. Ravisankar assumed the charge of the post of Director (Finance) w.e.f. 21^st September, 2022.

Shri K. Sreekant, Chairman & Managing Director had been entrusted with the additional charge of the post of Director (Operations) and Director (Finance) from 1^st June, 2022 to 12^th August, 2022 and from 1^st August, 2022 to 21^st September, 2022, respectively.

The Board placed on record its appreciation and gratitude to Smt. Seema Gupta, Shri M. Taj Mukarrum, Shri Ghanshyam Prasad, Shri Raghuraj Madhav Rajendran, Mr. Mohammad Afzal and Shri M.N. Venkatesan for their valuable contribution in steering the affairs of the Company.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, the resolutions w.r.t. reappointment of Shri Abhay Choudhary (DIN: 07388432) as Director liable to retire by rotation, has been included in the Notice of Annual General Meeting.

24.2. Number of Meetings of the Board

Board of Directors met 12 times during FY 2022-23. Details regarding dates and attendance at the Board meetings are provided in the Report on Corporate Governance, which forms part of this report.

Report on the Corporate Governance is enclosed at Annexure-VI, and the certificate thereon, issued by Practicing Company Secretary pursuant to Schedule V Para E of SEBI (LODR) Regulations, 2015 is attached at Annexure-VII to this Report.

24.3. Committees of the Board

The Company has constituted Audit Committee, Corporate Social Responsibility Committee, Nomination and Remuneration Committee, Stakeholders'' Relationship Committee, Risk Management Committee and other Committees for operational convenience. The composition and scope of the aforesaid Committees are provided in the Report on Corporate Governance, which forms part of this report.

24.4. Declaration by Independent Directors

During the financial year, all the Independent Directors have met the requirements specified under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (LODR) Regulations, 2015 for holding the position of ''Independent Director'' and necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI (LODR) Regulations, 2015 has been received.

Pursuant to Regulation 34(3) and Schedule V Para C Clause (10)(i) of SEBI (LODR) Regulations, 2015, M/s Naresh Kumar Sinha & Associates, Company Secretaries have issued Certificate of Non-Disqualification of Directors, who were on the Board of the Company during FY 2022-23.

24.5. Performance Evaluation of Directors

This has been provided in the ''Report on Corporate Governance'' section of this Report and you may refer it for details.

24.6. Policy on Director''s Appointment and Remuneration

The Company has framed a policy on the remuneration of the Directors, KMPs and employees. The said policy is available on our website at

https://www.powergrid.in/sites/default/tiles/lnvestor Relation/Reports Filings/Code of Conduct Policies/04 Remuneration%20Policy.pdf

25. Compliances

25.1. Risk Management Policy

Information on Risk Management Framework is covered in the Management Discussion and Analysis placed at Annexure-I of this Report.

25.2. Internal Financial Controls and Adequacy

The Board has adopted policies and procedures for ensuring orderly and efficient conduct of its businesses, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds, error reporting mechanism, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

25.3. Annual Return of the Company

In accordance with Section 92(3) read with Section 134 (3) (a) of the Companies Act, 2013, Annual Return of the Company is available on the website of the Company and can be accessed at https://www.powergrid.in/sites/default/files/agm egm files/Form MGT 7 FY 2022 23.pdf

25.4. Loans, Guarantees or Investments

Loans, Guarantees or investments under Section 186 of the Companies Act, 2013 form part of the notes to financial statements attached to this Report.

25.5. Contracts or Arrangements with Related Parties

Contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, are given at Annexure-VIII of this Report. Further, attention of the members is drawn on Note No. 55 of the Financial Statement which sets out related party disclosure.

25.6. Subsidiaries, Joint Ventures and Associate Companies

As on 31^st March, 2023, the Company has 37 subsidiaries, 12 Joint Ventures and 4 Associate Companies.

Salient features of the financial of our Subsidiaries and Joint Ventures are covered in the Management discussion and Analysis and a statement in the prescribed Form AOC-1 is annexed as Annexure-IX of this Report.

25.7. Dividend Distribution Policy

The dividend distribution policy setting out the parameters and circumstance that will be considered by the Board in determining the distribution of dividend to its shareholders and/or retained profits earned by the Company available on the Company''s website at

https://www.powergrid.in/sites/default/files/Dividend%20Distribution%20Policy.pdf

25.8. Significant Material Orders

There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future.

26. Annual Report on Corporate Social Responsibility (CSR)

In terms of provisions of Section 135 of the Companies Act, 2013, read with amended Companies (CSR Policy) Rules, 2014, the Annual Report on CSR activities in the format prescribed under the said rules is annexed to this Report at Annexure-X.

27. Particulars of Employees

Your Company being a Government Company, the provisions of Section 197(12) of the Companies Act, 2013 and relevant Rules issued thereunder, are not applicable as per the notification dated 5^th June, 2015 issued by the Ministry of Corporate Affairs.

The terms and conditions of the appointment of Functional Directors are subject to the applicable guidelines issued by the Department of Public Enterprises (DPE), Government of India from time to time.

28. Insolvency and Bankruptcy Code, 2016

No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the financial year is not applicable.

29. Reporting of Frauds by Auditors

During the year under review, none of the Auditors have reported to the Audit Committee or the Board, under Section 143(12) of the Companies Act, 2013 any instances of fraud committed against the Company by its officers or employees.

30. Fixed deposits

We have not accepted any fixed deposits, including from the public and as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

31. Secretarial Standards of ICSI

The Company has followed the requirements prescribed under Secretarial Standard on Meetings of Board of Directors (SS-1) and General Meetings (SS-2).

32. Material Changes & Commitments

There have been no material changes & commitments affecting the financial position of the Company, which have occurred between the end of the financial year and date of this report.

33. Directors'' Responsibility Statement

As required under Section 134(3)(c) & 134(5) of the Companies Act, 2013, the Directors confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the situation of the Company at the end of the financial year and of the profit of the Company for that period;

c. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the Directors had prepared the annual accounts on a going concern basis;

e. the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

34. Acknowledgements

The Board of Directors would like to express their deep sense of appreciation for the guidance and cooperation received from Government of India, particularly the Ministry of Power, Ministry of Finance, Ministry of Home Affairs, Ministry of External Affairs, Ministry of Statistics and Programme Implementation, Ministry of Environment & Forests, Ministry of Corporate Affairs, Central Electricity Regulatory Commission, Appellate Tribunal for Electricity, Central Electricity Authority, NITI Aayog, Department of Public Enterprises, Regional Power Committees, Office of the Comptroller and Auditor General of India, and other concerned Government departments/agencies at the Central and State level without whose active support, the achievements of the Company during the year under review would not have been possible.

Special thanks to our valued customers, State Governments and State power utilities and other clients, who have awarded various consulting works and reposed faith in Company''s capability to handle them. The Board also appreciates the contribution of Contractors, Vendors and Consultants for successful implementation of various projects by your Company.

The Directors also acknowledge the valuable suggestions and guidance received from the Statutory Auditors during the audit of accounts of the Company for the year under review. The Board also conveys its sincere thanks to national and international financial institutions, multilateral financial institutions, domestic & international credit rating agencies for their assistance, continued trust and confidence reposed in the Company.

I would also like to thank the Executive team for their strong leadership, the employee unions for their support and all our employees for their commitment, enthusiasm, and dedication.

For and on behalf of the Board of Directors

Date: 6^th August, 2023 (K.Sreekant)

^p|ace: G^urugram Chairman & Managing Director

DIN: 06615674

Mar 31, 2022

On behalf of the Board of Directors, it gives me immense pleasure in presenting the 33^rd Annual Report on the performance of the Company, together with the Audited Financial Statements for the financial year ended 31^st March 2022.

Key Performance highlights of the Company during FY 2021-22 are briefly mentioned here:

â¢ Rated "Excellent" with a score of 98.41 in Memorandum of Understanding (MoU) signed with Government of India for FY 2020-21.

â¢ On a standalone basis, the Company''s Total Income at ?42,335.87 crore, increased by 4.46 % and Profit after Tax (PAT) at ?17,093.76 crore, increased by 43.21%, as compared to previous year.

â¢ Achieved system availability of 99.83%. The trippings per line decreased to 0.33, lowest in last five years.

â¢ Addition of 5,450 circuit km (ckm.) of Extra High Voltage (EHV) transmission lines, 43,564 Mega Volt Ampere (MVA) transformation capacity and 7 new Substations.

â¢ Addition of 7,200 MW Inter-Regional power transfer capacity to the national grid.

â¢ Assets of ? 20,695 crore were capitalized.

â¢ Important transmission assets commissioned:

- Â±800 kV Raigarh - Pugalur HVDC link along with Bipole-II (Pole-III & IV 1,500 MW each)

- 765 kV D/C Vindhyachal Pooling Station - Varanasi Transmission Line

- 400 kV D/C Alipurduar - Jigmeling cross border interconnection between India and Bhutan (India portion)

- 400 kV D/C Bhadla-II PS - Bhadla (PG) line

- LILO of 765 kV D/C Ajmer - Bikaner line at Bhadla-II Pooling Station

- LILO of 765 kV D/C Fatehgarh (TBCB) - Bhadla (PG) line at Fatehgarh-II Pooling Station

- 400 kV D/C Pugalur HVDC Station - Thiruvalam line

- 400 kV D/C Pugalur HVDC Station -Edayarpalayam (TANTRANSCO) line

- 400 kV D/C Edayarpalayam (TANTRANSCO) - Udumalpet line

- 400 kV D/C Wardha - Aurangabad (Upgradable to 1200 kV S/C) Line

- 765 kV D/C Medinipur - Jeerat (New) line

- 400 kV D/C Jeerat (New) - Jeerat (WBSETCL) line

- 400 kV D/C Darbhanga - Sitamarhi (New) line

- 400 kV D/C Sitamarhi (New) - Motihari line

- LILO of both ckt of 400 kV D/C Kishanganj - Patna (Quad) line at Saharsa

- 765 kV D/C Ajmer (PG) - Phagi line

- 765 kV D/C Fatehgarh-II -Bhadla -II line

- 765 kV D/C Khetri- Jhatikara line

- 400 kV D/C Khetri - Sikar (PG) line

- 400 kV D/C Jawaharpur - Firozabad line ¹

State Load Despatch Centers (SLDCs), 8,174 km of Optical Ground Wire (OPGW) network was added.

â¢ Achieved collection efficiency of 97.98% of billing in FY 2021-22.

â¢ Emerged successful in 2 TBCB projects- Inter State Transmission Project associated with transmission strengthening scheme for evacuation of power from solar

energy zones in Rajasthan (8.1 GW) under Phase-II and

- Intra State Transmission Project in the State of Uttar Pradesh for construction of 400/ 220/ 132kV Substation at Mohanlalganj

(Lucknow), four 400kV D/C Transmission lines and two 765kV S/C Transmission lines.

â¢ Launched the Virtual Smart Grid Knowledge Centre (SGKC), a Digital-twin that replicates the facilities available at the SGKC in Manesar and can be accessed by anyone, at any time, from any location to accelerate knowledge dissemination in the smart grid domain.

â¢ Created a centralized circuit breaker health indexing system that allows for the transition to predictive circuit breaker maintenance.

1. Financial Performance

Financial Performance during year under review (FY 2021-22) as compared to the previous year (FY 2020-21) on standalone basis is summarized below:

(All Figures except per share data are in units as indicated)
Parameters		FY 2021-22			FY 2020-21			Y-o-Y
		Â¥(Crore)	US $ (Million)		Â¥(Crore)		US $ (Million)	Growth (%)
REVENUE
Transmission Charges		38,594.41	5,056.26		36,456.92		4,776.22	5.86%
Consultancy-Sale of Services		753.34	98.70		501.28		65.67	50.28%
Telecom		580.34	76.03		707.45		92.68	(17.97)%
Other Income		2,407.78	315.44		2,861.46		374.88	(15.85)%
TOTAL INCOME		42,335.87	5,546.43		40,527.11		5,309.45	4.46%
Profit After Tax (PAT)		17,093.76	2,239.45		11,935.78		1,563.71	43.21%
Earnings per Share (EPS) #		Â¥ 24.51	US $ 0.32		Â¥ 17.11		US $ 0.22	43.25%
Book Value per Share #		Â¥ 109.17	US $ 1.43		Â¥ 99.75		US $ 1.31	9.44%
Gross Fixed Assets		2,49,953.70	32,746.46		2,34,284.32		30,693.61	6.69%
Long term borrowing¹		1,29,365.27	16,948.16		1,41,251.48		18,505.37	(8.41)%
Net Worth		76,151.57	9,976.62		69,578.84		9,115.53	9.45%
Debt Equity Ratio		63:37			67:33
Return on Net Worth (%)		22.45%			17.15%
# EPS and Book value have been adjusted for Bonus Issue * Including current maturities of Long-Term Borrowings Convenience Conversion at US $ 1= Â¥76.33 as on 31.03.2022 1.1. Dividend Payout The Company recommended / declared dividend as follows: -
	Dividend (per share)			FY 2021-22			FY 2020-21
				In Â¥		In %	In Â¥	In %
	First Interim Dividend			7.00¹		70.00	3.75#	37.50
	Second Interim Dividend			5.50		55.00	3.00#	30.00
	Final Dividend			2.25A		22.50	3.00	30.00
	Total Dividend			14.75		147.50	9.75	97.50
	* Including a Special Dividend of Â¥3.00 per share # Adjusted for Bonus ^A Recommended for approval of Shareholders

The total dividend payout for the year amounts to ? 10,289 crore (including interim dividends of ? 8,719 crore). The final dividend shall be paid after approval at the Annual General Meeting. The total payout ratio for the year was 60 % as compared to 57 % for previous year.

1.2. Transfer to Reserves

For FY 2021-22, appropriation of profit has been made as follows:

a) General Reserve: ? 7,000.00 crore

b) Self-Insurance Reserve: ? 291.14 crore

1.3. Government of India (GOI) Shareholding

The Government of India''s shareholding in the Company remained unchanged at 51.34%.

2. Significant Developments2.1. Completion of Inter-Regional projects

Your Company added 7,200 MW of Inter-Regional power transfer capacity to the national grid through following projects:

a) Pole-III & IV of the Raigarh-Pugalur-Trichur HVDC Scheme:

During the year, Â±800 kV Raigarh - Pugalur HVDC link along with Bipole-II (Pole-III & IV 1,500 MW each) and Â± 320 kV, 2000 MW, Pugalur - Trichur Voltage Source Converter (VSC) based HVDC System were commissioned (part of Raigarh-Pugalur- Trichur HVDC Scheme). This has enhanced the inter-regional power transfer capacity of national grid by 3,000 MW.

Through this project, the state-of-the-art VSC Technology has been brought to India for the first time by POWERGRID. The VSC technology significantly reduces the land requirement compared to the conventional HVDC systems and is particularly suitable for areas, where land is

scarce. It also facilitates development of smart grid and improves system resilience under various operating conditions. A unique feature of this project is the combination of overhead line and underground cable to address the restricted availability of transmission corridor in Kerala.

Major HVDC equipment like interface transformers and IGBT-based power convertors, AC equipment such as Gas Insulated Sub-station, switchgear, controls, and relay panels have been supplied by factories in India, aligned to the Government of India''s Make in India program. A significant part of the design, engineering, testing, and commissioning for this VSC based Pugalur - Trichur project has been done in India, supporting the Prime Minister''s vision of "Aatmanirbhar Bharat".

b) 765kV D/C Vindhyachal Pooling Station - Varanasi Transmission Line

During the year, POWERGRID''s wholly owned subsidiary POWERGRID Varanasi Transmission System Limited (PVTSL) commissioned Vindhyachal Pooling Station - Varanasi 765kV D/C Transmission Line. This transmission line corridor provides a strong connectivity between Northern Region and Western Region and has enhanced the inter-regional power transfer capacity of national grid by 4,200 MW.

2.2. Tariff Based Competitive Bidding (TBCB)

During the year under review, your Company emerged successful in one Inter-State Transmission project associated with solar energy zones in Rajasthan and one Intra-State Transmission Project in Uttar Pradesh. Three project SPVs (Sikar-II Aligarh Transmission Limited, Fathegarh Bhadla Transco Limited and Sikar New Transmission Limited) were acquired by your Company in FY 2021-22.

As on 31st March, 2022, nine TBCB subsidiaries were fully operational and six out of seven elements of one subsidiary were operational. Cumulatively, the Company, at the end of FY 2021-22, owned 20 TBCB subsidiaries, the details of which are provided in the Management Discussion & Analysis Report (MD&A).

2.3. Monetization of Transmission Assets through POWERGRID Investment Infrastructure Trust (PGInvIT):

The Union Budget 2019-20 emphasized investment led growth and indicated that new and innovative financial instruments including Infrastructure Investment Trusts (lnvITs), have been launched as part of the brown field asset monetization strategy for augmenting infrastructure investment.

Your Company in accordance with the guidelines of Government of India, had monetized assets, which are mainly High Voltage Transmission lines and substations, through Infrastructure Investment Trust (InvIT) model. Your Company is the first PSU in the country to undertake asset recycling by monetizing its assets through the InvIT model and using the proceeds to fund the new and under-construction capital projects. Total amount raised through asset monetization during the year was ?8,370 crore.

2.4. Incorporation of POWERGRID Energy Services Limited

Your Company has setup a wholly owned subsidiary namely ''POWERGRID Energy Services Limited'' with an objective to invest in and act as Project Management Consultant in new and emerging business areas viz. Energy Management, Transmission & Distribution business, Electric Vehicle charging infrastructure, Energy Storage, Smart Grid etc.

2.5. Incorporation of POWERGRID Teleservices Limited

The latest technological advancements in the telecom sector, increased thrust of the government on digitalization of the economy, enhanced data localization accelerated by prevailing geo-political environment are likely to provide growth opportunities. To harness the emerging opportunities in the sector, POWERGRID has formed a wholly owned subsidiary company POWERGRID Teleservices Limited which would provide greater focus to this segment. POWERGRID got International Long Distance (ILD) license to directly serve customers in the neighboring countries with reliable broadband connectivity.

POWERGRID''s Board accorded approval for expansion into Data Center Business. A Pilot Data Center at an estimated cost of ?322 crore is approved to be established at Manesar. The Company is also planning to establish hyper scale data centers in the country. POWERGRID Telecom is also planning to setup the edge data centers to serve the businesses in Tier-1 cities of the country.

2.6. Other emerging opportunities

Your Company is exploring opportunities for installation of smart meters for state utilities under DBFOOT model and initiated procurement process for End-to-End Smart Metering Solution for one crore smart meters. Your Company also envisages Battery Energy Storage System (BESS) to be a significant element of future grid. Accordingly, your Company has appointed a consultant to study the business scope for it in the BESS segment and is looking to setup BESS system.

Your Company is also evaluating setting up solar generation capacity on the vacant land available with it and few locations with a total potential of 200 MWp have been identified. Of these, preparations are being made to build your Company''s first 105MWp solar PV plant at Nagda, MP. The power generated would be either utilized for in-house requirements or sold through exchange/ PPAs.

3. Operational Performance3.1. Asset Management

As on 31st March 2022, your Company''s total transmission assets including those owned through its wholly owned subsidiaries consisted of 1,352 transmission lines aggregating to 1,72,437 ckm., 265 substations with an aggregate transformation capacity of 4,74,457 MVA.

Your Company is increasingly migrating towards digitization of asset management keeping in view the growing asset base. Centralized relay database management system has been introduced which will improve the efficiency of relay settings management and save manhours in operation and maintenance of assets.

Internal benchmarking on key performance indicators is used by

your Company to analyze operational performance, identify areas for improvement and achieve optimal operational performance.

In-house repair of GIS substation equipment by your Company''s maintenance team at six substations has avoided prolonged system failures and saved significant costs. Refurbishment of defective GIS modules at a site was also carried out by your Company''s team of maintenance specialists and provided significant cost savings. Five older air insulated substations (AIS) located in the North-Eastern region of your Company have been replaced with Gas Insulated Substations (GIS), improving system reliability.

Refurbishment of Â±2x250MW HVDC Vindhyachal back-to-back and Â±500kV, 1,500MW HVDC Rihand-Dadri Bipole were carried out for life extension. These projects have served the Indian power system for more than 25 years and refurbishing them, the first of its kind in India for HVDC systems, will extend their life by approximately 10 years benefiting the end

consumers with reliable and quality power supply. To evacuate power from solar energy zones in Rajasthan, testing of reverse power flow in Ballia-Bhiwadi HVDC link (Bhiwadi to Ballia) was carried out successfully.

Forma ny years, the Compa ny has participated in the International Transmission System Operation and Maintenance Study (ITOMS), a global Operations & Maintenance (O&M) benchmarking platform that includes 32 major power transmission utilities globally, where it has been consistently ranked amongst the most successful transmission companies.

3.2. National Transmission Asset Management Centre (NTAMC), Manesar and Regional Transmission Asset Management Centres (RTAMCS)

To facilitate remote operation of your

Company''s transmission system and monitoring of various parameters on real time basis at Regional and National levels, NTAMC was set up at Manesar, near Gurugram, Haryana and RTAMCs were set up at various locations across the country. These state-of-the-art centers are manned round-the-clock by experts for effective monitoring and management of transmission assets.

During FY 2021-22, twenty-two additional Extra High Voltage (EHV) Substations were integrated with NTAMC for remote operation. By the end of FY 2021-22, a total of 264 Substations are being operated remotely from these asset management centers.

Remote management of Substations has proved to be immensely beneficial during FY 2021-22 to ensure uninterrupted supply of power despite COVID-19 pandemic.

3.3. Cyber Security

Cybersecurity initiatives are led by the Chief Information Security Officer (CISO) through the Information Security Department in the Company. Your Company''s Corporate Office, all regional headquarters and 213 substations are certified as per the Information Security Management System ISO: 27001. Your Company conducts extensive training programs for employees and participated in programs and simulations organized by Computer Emergency Response Team (CERT-In) and National Critical Information Infrastructure Protection Center (NCIIPC).

In addition, the Company works closely with designated statutory bodies: CERT-In and the NCIIPC. Your Company follows the recommendations issued by these agencies from time to time and shares them with other utilities in the transmission sector. The Ministry of Power has assigned POWERGRID the responsibility of sectoral Computer Emergency Response Team (CERT) for the Transmission Sector. The Company is planning to set up a Cyber Security Operations Centre for threat analysis and monitoring in order to strengthen resilience in its operations.

3.4. Safety

Your Company has ISO 45001:2018 certified, Occupational Health and Safety Management System, which ensures a healthy work environment.

The Company is committed to maintaining a safe working environment and measures are taken to ensure that all applicable safety factors are considered in accordance with standards during the design, construction, operation and maintenance of the assets.

Your Company has a 3-tier setup i.e., Corporate, Region and Substation/Site levels to implement safety policy, rules, and guidelines. Safety cells work to promote all safety measures for accident prevention in activities involving transmission lines and substations under construction and O&M. Regular monitoring and evaluation of safety performance is carried out by all Regions. Designated Safety officers at the Corporate and regional level ensure the implementation of safety aspects at site.

Safety audits/ inspections, trainings, safety briefings, mock-drills were carried out for all contract workers and Company

staff at various O&M and construction sites. Safety audits of 265 substations and safety inspection at 290 construction sites were carried out in FY 2021-22.

Safety trainings were organized on various safety aspects such as fire safety, stress & health management and first aid, etc. at various sites maintaining the Covid-19 precautions. During the year, 949 safety training sessions were organized for Company employees, and 4,865 safety training sessions were conducted for construction agency workers/staff. In addition to this, 908 mock-drills were organized at sites for preparedness to cope up with any untoward incident/ urgency/emergency.

Daily safety briefings/pep talks were held at all sites and safety instructions/accident precautions/committee recommendations were discussed in languages that workers understand to educate about the possible risks associated with work and how to reduce them. Safety day/weekly/fortnightly celebrations attended by employees, their family members, and contract workers help raise awareness about safety compliance at workplace and at home.

All the dangerous incidences were reviewed by Standing Safety Management committee and the POWERGRID Apex Safety Board in collaboration with all Heads of Regions and Board level representatives of construction agencies. The recommendations of Accident Enquiry committee was widely circulated to all sites for implementation.

4. Disaster Management

The Company has a "disaster and crisis management plan" to take immediate action during the pre and post-disaster period and to quickly restore damaged power infrastructure. It outlines the hierarchy of crisis / disaster management at different levels to manage crises and disasters effectively and efficiently, and the roles / responsibilities of different departments in disaster management.

The Company adequately prepared itself to meet any natural calamity, basis the inputs received from the Indian Meteorological Department (IMD). There was no major damage to your Company''s transmission network during major cyclones, namely Tauktae, Yaas, Gulab and Jawad. The Company also supported the transmission and distribution utilities of the affected states by providing manpower and equipment to rapidly restore their damaged transmission and distribution networks.

5. Project Implementation

During FY 2021-22, your Company added 5,450 circuit km (ckm.) of Extra High Voltage (EHV) transmission lines, 43,564 Mega Volt Ampere (MVA) transformation capacity, 7 new substations (including through its subsidiaries).

Further, about 8,174 km of OPGW network was added during the year to support voice and data communication with Regional Load Dispatch Centres (RLDCs)/ State Load Despatch Centres (SLDCs) for effective grid management.

5.1. Major Transmission Assets Commissioneda) Inter-Regional Lines

- Â±800 kV Raigarh - Pugalur HVDC link > along with Bipole-ll (Pole-Ill & IV 1,500 MW each)

- 765 kV D/C Vindhyachal Pooling Station - Varanasi Transmission Line associated with "Transmission System * New WR-NR 765 kV Inter-Regional Corridor"

b) Cross-Border Interconnection

- 400 kV D/C Alipurduar - Jigmeling cross border interconnection between India and Bhutan (India portion)

c) Transmission System Associated with ''

Solar Energy Zones in Rajasthan

- 400 kV D/C Bhadla-II PS - Bhadla (PG) line

- LILO of 765 kV D/C Ajmer - Bikaner line at Bhadla-II Pooling Station

- LILO of 765 kV D/C Fatehgarh (TBCB) - Bhadla (PG) line at Fatehgarh-II Pooling Station

5.2. Other Important Transmission Lines

- 400 kV D/C Pugalur HVDC Station - Thiruvalam line

- 400 kV D/C Pugalur HVDC Station -Edayarpalayam (TANTRANSCO) line

- 400 kV D/C Edayarpalayam (TANTRANSCO) - Udumalpet line

- 400 kV D/C Wardha - Aurangabad (Upgradable to 1200 kV S/C) Line

- 765 kV D/C Medinipur - Jeerat (New) line

- 400 kV D/C Jeerat (New) - Jeerat (WBSETCL) line

- 400 kV D/C Darbhanga - Sitamarhi (New) line

- 400 kV D/C Sitamarhi (New) - Motihari line

- LILO of both ckt of 400 kV D/C Kishanganj - Patna (Quad) line at Saharsa

- 765 kV D/C Ajmer (PG) - Phagi line

- 765 kV D/C Fatehgarh-II -Bhadla -II line

- 765 kV D/C Khetri- Jhatikara line

- 400 kV D/C Khetri - Sikar (PG) line

5.3. Intra-State Lines

- 400 kV D/C Jawaharpur - Firozabad line

As on 31st March 2022, the inter-regional power transfer capacity of the transmission assets belonging to the Company and its subsidiaries was 97,290 MW out of 1,12,250 MW inter-regional power transfer capacity of the national grid.

6. Capital Investment, Fund Mobilization & Investment Approval of New Projects

During FY 2021-22, your Company made a consolidated capital investment of ?9,426 crore on cash basis. To finance this investment, the Company mobilized ?8,106 crore from asset monetization, ?610 crore through bonds & term loans, ?567 crore from Internal accruals, ?133 crore through grants received from Power System Development Fund & from Central Financial Assistance (Ministry of New and Renewable Energy) and ?10 crore through External Commercial Borrowings (ECB)/ Suppliers'' Credit.

During FY 2021-22, investment approvals for transmission projects under regulated tariff mechanism (RTM) worth ~ ? 5,050 crore have been accorded and Company acquired projects estimated at ? 3,300 crore under the TBCB mechanism.

7. Commercial Performance

Sharing of Inter-state transmission charges is governed by CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, as notified from time to time in line with the National Tariff Policy notified by Government of India and provisions of the Electricity Act, 2003. Presently, CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, 2020 are in vogue. As per the Sharing Regulations, the Central Transmission Utility (CTU), had the responsibility of billing & collecting transmission charges on behalf of all ISTS licensees in the country including your Company and disbursing to them. Your Company ceased to be the CTU w.e.f. 01st April 2021 and Central Transmission Utility of India Limited (CTUIL), a wholly owned subsidiary of your Company has been notified as CTU by the Government of India. Your Company continues to be a deemed Transmission Licensee under the Electricity Act, 2003.

Your Company through regular follow up with its customers (DICs) and timely regulatory actions has achieved collection efficiency of 97.98% of billing in FY 2021-22.

8. Cross Border Interconnections

India, being centrally placed in South Asian region and sharing political boundaries with SAARC and BIMSTEC countries, has been playing a major role in establishment of cross-border interconnections with various neighbouring countries, namely Nepal, Bhutan, Bangladesh, Sri Lanka, and Myanmar, for optimal utilization of regional energy resources in South-Asian region.

The present cumulative power transfer capacity between India and neighbouring countries through cross-border interconnections is about 4,230 MW. In FY 2021-22, Alipurduar-Jigmeling line (India portion) 400kV D/C (Quad) line was commissioned. Additional links for interconnection with Nepal through the Gorakhpur (India) - New Butwal (Nepal) and Sitamarhi (India) - Dhalkebar (Nepal) 400kV D/C (Quad) transmission lines are under implementation.

9. Other Businesses9.1. Telecom Business a) POWERTEL

Your Company is providing a range of services under its Unified License as National Long Distance (NLD) and Internet Service Provider -Category ''A'' (ISP- ''A'') service authorizations. Your Company is providing nationwide services like point-to-point leased line bandwidth services, Internet Leased line, Tower co-location, MPLS based IP-VPN, SD-WAN, DDoS etc. in all parts of the country with its Pan India high-capacity optical ground wire (OPGW) network.

During FY 2021-22, the Company''s telecom network coverage increased to 74,109km from 71,673km at the end of the previous year, with annual telecom backbone availability of 99.99%. The Company''s telecom network spans across India and is in over 1200 locations covering all major cities and metros. During the year, your Company achieved revenue from operations of ?580.34 crore from telecom segment.

Your Company''s Board accorded the approval for expansion of POWERGRID Telecom into Data Center Business and to establish the Pilot Data Center at Manesar. POWERGRID Telecom is also planning to setup the edge data centers to serve businesses in Tier-1 cities of the country.

Your Company has signed agreements with

Damodar Valley Corporation, West Bengal State Electricity Transmission Company Limited, Bihar State Power Transmission Company Ltd. and Assam Electricity Grid Corporation Limited for leasing of their OPGW fibres, which provides it with access to additional 12,000 km of OPGW network. Through this, the Company will expand its telecom business in various new cities of West Bengal, Bihar, Assam & Jharkhand.

Further, during the year, your Company incorporated a wholly owned subsidiary ''POWERGRID Teleservices Limited'' on 25th November, 2021 to undertake Telecommunications and Digital Technology Business. POWERGRID Teleservices Limited has obtained the Unified License with service authorization of National Long Distance (NLD), Internet Service Provider (ISP-A) & International Long Distance (ILD) from Department of Telecommunications (DoT) on 11th May,2022.

b) BHARAT NET

The Company has completed the work on 473 blocks out of 511 Blocks and successfully handed over to M/s BBNL under Bharat Net Phase-I Project. Further, cumulatively 321 blocks asset capitalization has been completed out of 511 blocks. The scope of work is spread across 39 districts in 5 States viz., Andhra Pradesh, Telangana, Himachal Pradesh, Jharkhand & Odisha.

During FY 2021-22, the Company has handed over 55 blocks to M/s BBNL under Bharat Net Phase-I project and asset capitalization of 250 blocks has been completed during the year.

9.2. Consulting Services

Your Company, one among the largest power transmission utilities in the world, has developed expertise in its core areas such as power transmission projects, subtransmission system, distribution management, load dispatch & communications, in India and abroad. Leveraging its capacity and experience, consulting services have been provided to several customers globally. During the year, your Company achieved revenue from operations of ?753.34 crore from consultancy segment.

a) Domestic Market

On behalf of Government of India, your Company is implementing two important projects as consultancy assignments for strengthening of the Intra-State Transmission and Distribution Systems (33kV and above) namely ''NER Power System Improvement Project'' (NERPSIP) in Manipur, Meghalaya, Mizoram, Tripura, Nagaland & Assam and ''Comprehensive Scheme'' for strengthening of Transmission & Distribution in Arunachal Pradesh and Sikkim. Your Company is also providing services to the Indian Railways for electrification of un-electrified railways tracks in Central, East Central, South-Western & South-East-Central Railway zones.

During the year, your Company bagged 27 new consultancy assignments and is currently executing about 68 consultancy assignments in various fields including transmission & sub transmission, design & engineering, EV charging etc.

Your Company is implementing Rural Electrification Infrastructure works under Prime Minister''s Development Package (PMDP) scheme in 6 districts in J&K UT and 2 districts in Ladakh UT. Intra-state transmission work of 2 projects are under progress in J&K UT under PMDP.

b) International Market

On the International front, as on 31st March, 2022 your Company has its footprint in 23 countries. During the FY 2021 -22, Company has received orders from two new countries viz. Guinea and Moldova. The Company is providing consultancy to various clients in Nepal, Uganda, Fiji, and Moldova.

The Company has signed Joint Development Agreement with Africa50 to take up investment in Kenya under PPP mode through a Joint Venture with Africa50. Your Company has also signed Share Holders'' Agreement with Nepal Electricity Authority for Development of Indian portion of 400 kV New Butwal (Nepal) - Gorakhpur (India) transmission line in 50:50 JV with Nepal Electricity Authority.

10. Quality Management

A third party audit of the Integrated Management Systems, was completed successfully. The systems were also audited for compliance with the SA: 8000 Social Accountability Standard, ISO:50001 Energy Management Systems, and ISO:27001 Information Security Management Systems.

Despite COVID-19 pandemic, more than 15,000 Inspection calls were attended during FY 2021-22. All the inspections, sub vendor assessments and other quality related activities were undertaken in a well-planned manner via hybrid mode of physical and virtual visits.

To encourage and develop MSME manufacturers for supply of innovative & quality products, MSME vendor development programs were conducted during the year at various locations across the country. Special focus was kept on Micro and Small Enterprises owned by SC/ ST and Women entrepreneurs. Promoting Atmanirbhar Bharat/ Make in India, 34 new Micro/small vendors were approved during FY 2021-22 and existing vendors were encouraged to upgrade their equipment to higher voltage level. This shall improve available sources increasing vendor base, thus creating a more competitive environment.

11. Research and Development (R&D)

Your Company has been investing in R&D for new technologies and techniques, aimed at improving efficiency of its transmission assets to ensure high system availability and reliability.

A Centralized Circuit Breaker health indexing system was developed in-house, which has enabled transition towards predictive maintenance of circuit breakers, a critical element in system protection.

Your Company is developing a substation Inspection Robot in collaboration with IIT Kanpur to facilitate automation of routine inspection of switchyard equipment as well as data driven decision process using Artificial Intelligence / Machine Learning techniques, thus improving operational efficiency.

Your Company is setting up a Centre of Excellence (CoE) in Cybersecurity in Transmission and Grid operation at IISc Bangalore. This collaborative effort facilitates continuous research, monitoring, development, and demonstration focused on cybersecurity aspects in association with academia and industry towards cyber resilient transmission system.

12. Adoption of Latest Technology and Digital Transformation

Your Company has been taking up several initiatives towards adoption of latest technology and digital transformation. These initiatives gained pace during the pandemic and ensured business continuity despite the COVID-19 pandemic.

Some of the new developments in this regard are as follows:

â¢ PALMS V2.0 - It is an in-house Asset Health Indexing Software introduced in 2020 and for assessing real-time risk-based health indexing of POWERGRID transformers and reactors. This was upgraded during the year incorporating more advanced diagnostic methods based on various international standards and your Company''s experience in interpreting test results.

â¢ PGDARPAN - Your Company has developed in-house application software PGDARPAN (POWERGRID Digital Application for Routine Patrolling & Assessment of Network) for transmission line patrolling. The same has been used in your Company since August 2021. The PG DARPAN portal features a rich, highly customizable dashboard which enables ground patrolling of transmission lines and generation of reports, this helps the asset managers to monitor and take corrective action.

â¢ Repeater- less solutions - To adopt green technologies in order to reduce carbon emissions, your Company is implementing repeater-less solution for long haul communication links, replacing traditional repeater shelters having DG & AC systems. The solution involves use of Erbium Doped Fibre Amplifiers (EDFA) along with Remote Optical Pump Amplifier (ROPA) units passive devices in additional fibres of the OPGW to boost the signal levels. This technology will eliminate the need for traditional repeaters in long distance AC links with lengths up to 350 km.

â¢ Other Technology Tools - Your Company uses different technology tools to ensure better line availability such as aerial line patrol, temperature scanning, corona camera, high resolution video, digital camera, surveillance application-based transformers, reactors and line patrols and real-time data updates through online applications for efficient asset tracking.

13. Participation in GoI Initiatives13.1. Promotion of ''Make In India''

Your Company through continuous measures, has encouraged localization of various goods to be sourced for development/ operations of transmission system. Foreign manufacturers have been nudged to set-up facilities in India and thus promoting the Make in India initiative of the Government of India. With the Company''s efforts, new plants and facilities have been set-up in India over the past few years by a number of foreign manufacturers for equipment like GIS, transformers, reactors, STATCOM, OPGW, etc. paving way for a wider vendor base and emergence of a more efficient supply chain.

Your Company also promotes existing vendors

to upgrade their equipment to higher voltage level & cover more items to increase vendor base.

Further, the Company has given much impetus towards procuring from local suppliers in its various procurement verticals in line with the extant Government of India''s policy on the same. During FY 2021-22, procurement of about ^7250 crore was carried out through Domestic Competitive Bidding route, which is more than 90% of the total procurement done by the Company. Your Company is actively working for development of its vendor base in the domestic market by encouraging participation of local suppliers and promoting capacity building for existing vendors.

13.2. Promotion of Micro, Small and Medium Enterprises (MSME)

The Company has been complying with the guidelines issued by the Government from time to time for promotion of MSMEs. The Company is registered on (i) Receivable Exchange of India Limited (RXIL) (A NSE - SIDBI JV), (ii) Mynd Solutions Private Ltd (Mlxchange) and (iii) A TREDS Ltd. (Invoicemart) for Trade Receivable e-Discounting System (TReDS). Trade Receivables Discounting System (TReDS) is the platform for facilitating the financing of trade receivables from corporate and other buyers, including Government Departments and Public Sector Undertakings (PSUs), through multiple financiers. The Company is continuously pursuing with its MSMEs suppliers to get themselves on-boarded on TReDS Platforms. Suitable provisions have already been incorporated in the bidding documents of POWERGRID for procurement of various products and services rendered by Micro and Small Enterprises (MSEs) in line with the Public Procurement Policy of the Government of India. The Company has achieved the target of mandatory procurement of 25% out of total annual purchases of products and services rendered by Micro and Small Enterprises in line with Public Procurement Policy (Order 2012) read in conjunction with its amendment in November 2018.

In terms of the said policy, the total eligible value of annual procurement of goods produced and services rendered

by MSEs (including MSEs owned by SC/ ST and Women entrepreneurs) during FY 2021-22 was ?2,238 crore. The total procurement by the Company from MSEs (including MSES owned by SC/ST and Women entrepreneurs) was ?1,143 crore (51.07%).

The Company has taken various steps to encourage MSE participation in the procurement process across India. During this year, to encourage and develop Micro and Small manufacturers for supply of innovative & quality products, 18 vendor development programs have been organized through virtual platforms, wherein presentations were made, and discussions were held with representatives of numerous MSE''s of our country. Special focus was kept on MSE''s owned by SC/ ST and women entrepreneurs and their response in these meetings/webinars was overwhelming. Several MSME''s have been developed as sub-vendors and approved for supply of components for various equipment.

13.3. Procurement through Government e-Marketplace (GeM):

In line with Government of India mandate, procurement of goods & services in your Company is being done through GeM portal, which started in FY 2018-19 and in subsequent years, with persistent emphasis, this has continuously increased. During FY 2021-22, procurement of ?706 crore of goods & services was done through GeM portal which is almost double of that in FY 2020-21 (?352 crore).

14. Sustainable Growth

The principles of Environment, Social and Governance (ESG) are being embedded by your Company into business operations and the Company continues to attach importance to ESG ecosystem.

14.1. Environment and Social Management

Transmission projects are mostly environmentally benign due to absence of any chemical processes that may involve release of pollutants to environment or involving large scale excavation which may result in soil erosion. Also, due to inherent flexibility both in choosing most optimum line alignment as well as in finalizing the substation site, your Company avoids most of the associated social issues.

Your Company not only follows the applicable regulatory requirements but also practices Environmental and Social prudence in all its business activities to ensure that they become an inherent and integrated part of our project management process.

Your Company has taken many key initiatives like piloting the use of safer and greener natural Ester Oil in place of regular synthetic mineral oil in a 400 kV Reactor first time in the world, integration of Decision Support System (DSS) software developed by Forest Survey of India (FSI) for identification/ avoidance of environmental sensitive areas during the early stage of route alignment etc. Further, your Company has undertaken installation of digital water flow meter for monitoring groundwater extraction to optimize water consumption/uses and management of biodegradable waste through installation of composting machine in substation establishments. Besides, to reduce carbon footprint your company has taken initiative to replace diesel vehicles by electric vehicles & E-cart/Golf cart progressively in its office establishments/substations.

Transparency - Your Company, a pioneer in Sustainability Reporting in the Indian Power Sector released its 7th biennial Sustainability Report for FY 2019-21 in March 2022 based on internationally acclaimed and accepted "Global Reporting Initiative (GRI) Standards (Core)" duly validated by independent Accredited Assurance Provider. The report is available on the company''s website https://www.powergrid.in/sustainability-report.

Alignment with SDG''s - Your Company, in partnership with Global Reporting Initiative (GRI) South Asia, has taken several initiatives towards fulfillment of India''s commitment to United Nation''s Sustainable Development Goals (SDGs) Agenda, 2030 and has already aligned its activities with 13 SDGs out of total 17.

14.2. Corporate Social Responsibility (CSR)

As India''s largest Electric Power Transmission Utility, your Company undertakes several CSR initiatives aimed at social and economic development of areas and communities. Through these initiatives, we impact the lives of millions of people by promoting inclusive growth and addressing the basic needs of under privileged and weaker sections of society. Due to your Company''s nature of business in remote areas of India, our CSR activities generally benefit the rural population and marginalized communities.

During FY 2021-22,your Company has spent ?271.14 crore exceeding the CSR budget of

?257.07 crore. Further, 152 new CSR projects of ?420.83 crore were sanctioned during FY 2021-22.

During the year, the Company also contributed ?75 crore to PM CARES Fund towards COVID-19 pandemic.

Your Company undertakes CSR activities in areas of healthcare, drinking water & sanitation, education, skill

development, rural development and infrastructure like roads, community centers etc. These projects are conceived

in consultation with the stakeholders, primarily in the vicinity of its area of operations. Major CSR projects undertaken

and sanctioned by your Company during the year are as follows:

Major CSR Projects undertaken during FY 2021-22:

â¢ Assistance in COVID-19 vaccination programme through procurement of cold chain equipment for the states of Punjab, Mizoram, Sikkim and UT of Ladakh.

â¢ Financial assistance for construction of Nuclear Medicine Theranostics facility for patients undergoing Radioisotope Treatment at TMC/ACTREC for cancer patients at TATA memorial hospital, Mumbai.

â¢ Financial support for Tata Memorial Centre (TMC) for developing Modular Operation Theatres at women and child hospital, ACTREC campus, TMC, Navi Mumbai.

â¢ Financial assistance for Installation and Operationalization of 480 Smart classrooms in 240 Government Schools in 12 Districts of Haryana.

â¢ Installation of 2x50 NM3/Hr Capacity oxygen generation plant in Gurugram.

â¢ Financial assistance to National Foundation for Communal Harmony for education of 1632 violence affected students from Assam, Manipur and Chhattisgarh.

â¢ Financial Assistance for procurement of 10 Neonatal Ventilators and 10 ABG Machines for District Hospitals at Mewat, Faridabad and Gurugram.

â¢ Setting up of ITI, Shergarh, Jodhpur.

â¢ Supply & installation of 3,250 solar LED street lights in Himachal Pradesh.

â¢ Construction of Schedule Castes Senior Girls Hostel (50 Seater) at Tehsil Sarai in Singrauli district.

Important CSR projects sanctioned during FY 2021-22:

â¢ Funding "POWERGRID Endowment Scholarship" Merit-Cum-Means (MCM) Scholarship Programme for B.Tech students of Indian Institute of Technology, Madras (IITM).

â¢ Establishment of POWERGRID Gyan Kendra (PGK) by renovation and upgradation of Shaskiya Barmendra Jila Pustaklaya, Nagod, District Satna Madhya Pradesh.

â¢ Establishment of 100 bedded Paediatric Intensive Care Unit (PICU) at GSVM Medical College, Kanpur.

â¢ Supply of Medical equipment to Swami Ramanand Theerth Rural Government Medical College (SRTRGMC), Ambajogai, Beed district, Maharashtra.

â¢ Providing Medical Equipment and Instruments to the various Government health facilities in the State of Sikkim.

â¢ Financial Assistance for Construction of 100 Bedded District Hospital at Serchhip District in Mizoram, etc.

A complete list of all CSR Projects undertaken and sanctioned by the Company during FY 2021-22 are provided in Annexure-X of this Report.

15. Governance15.1. Right to Information

To promote transparency and accountability, an appropriate mechanism has been set up across your Company in line with ''Right to Information Act, 2005'' The Company has nominated Public Information officers and Appellate Authorities at Corporate, Regional Head Quarters and other offices to provide required information to the citizens under the provisions of Act.

The Company has also developed its own web based online RTI portal, which facilitates timely reply of RTI/Appeal to applicant by real time monitoring of all RTIs/ Appeals. The portal also facilitates auto generation of various RTI reports for internal and external stakeholders.

In FY 2021-22, around 1,065 RTI applications were received in the Company and processed timely as per the RTI Act, 2005. Training programs / awareness sessions for the Company''s CPIOs/PIOs/Appellate Authorities were organized for sensitization about their role in implementation of the RTI Act.

15.2. Commitment to Transparency and Ethical practices

Your Company advocates the principles of Transparency, Probity and Ethics in its management functioning. Vigilance Department of your Company performs Preventive, Pro-active as well as Punitive Vigilance and ensures that best ethical practices are followed.

a) Emphasis on Preventive Vigilance

To strengthen the organizational process and to minimize malpractices in various systems & activities of the organization, emphasis is laid on preventive vigilance. It focuses on the right types of systems or re-engineering processes for acting against potential threats.

During FY 2021-22, 89 surprise inspections, 20 process-on-line inspections and 12 Chief Technical Examiner (CTE) Type inspections were conducted. Pursuant to Vigilance inspections and observations/ recommendations, several system improvements have been implemented.

b) Preventive Vigilance workshops as part of capacity building

During FY 2021-22, various Preventive Vigilance workshops, webinars were conducted for non-vigilance personnel at the Corporate centre as well as at various regions of the Company. These workshops inter-alia cover contracts management, provisions of Conduct Discipline and Appeal (CDA) Rules, compliances of rules and policies, common irregularities, deliberation of case studies based on real cases, quality aspects as well as Ethics Management which enables the employees to identify and deal with ethical dilemma.

c) Vigilance Awareness

In pursuance of the directions of the Central Vigilance Commission, Vigilance Awareness Week was observed in your Company from 26th October to 1^st November 2021 in line with the theme for this year "Independent India @ 75: SelfReliance with Integrity; âtORS hqjr @ 75:

L VLrHMwj.â, with full vigor, following all Covid related Government guidelines.

Your Company employees and their family members celebrated the Vigilance Awareness week with great enthusiasm. 696 activities including various competitions viz. essay, quiz, slogan, and painting competition for kids were organized by your Company for its employees and

their family members wherein approximately 10,000 individuals participated. Walkathon was organized in around 285 establishments wherein employees along with their families participated. Nukkad Natak and Awareness Gram Sabhas were also organized during the week. The message of Vigilance Awareness Week 2021 was propagated through FM Channel, print and electronic media in national as well as regional languages. Stakeholders were also involved through vendor meets, which were conducted at Corporate Centre and all regions.

Integrity Pledge was conducted across all establishments of the Company, and it was extended to all the stakeholders. Around 20,000 employees and citizens took the Integrity Pledge.

Vigilance department journal; CANDOUR was released during the closing ceremony of Vigilance Awareness Week at the Corporate Centre, Gurugram. In line with the Commission''s guidelines, the magazine was released in digital form (e-CANDOUR) for employees and public.

15.3. Citizen''s Charter

16. People: Our Core Strength

Your Company has achieved excellent financial and operational results every year due to continuous alignment of HR practices with business objectives along with commitment of its strong motivated and competent workforce towards achieving Company goals. Your Company lays emphasis on organization culture that promotes continuous learning, creativity, sharing and development. Its Human Resource process and systems are designed to acquire, nurture, and empower professionals in line with core values of the Company in an equitable, collaborative, healthy and safe environment.

As on 31^st March 2022, the employee strength of your Company stood at 8,536 (exclusive of the employees on contract) of which women employees constituted 7.87%.

16.1. Human Resource Development

Your Company firmly believes that great businesses are built with great people and great teams. To this end, through well-articulated talent management and learning & development interventions, your Company has always endeavored to create a high trust, high performance work culture that brings out the best in people, enables and empowers them for continuous learning and be future ready to create best-in-class organizational capabilities for unmatched market competitiveness.

To scale up learning and development in Power Sector, your Company has been operating the state-of-art POWERGRID

Academy of Leadership (PAL) at Manesar, which imparts a wide range of training and development opportunities for its employees and other stakeholders in India and abroad.

During this year, your Company organized more than 300 training and development programs through virtual mode through PAL, other Employee Development Centers in the regions and associated premier educational institutes in India and abroad. The range of trainings imparted include induction program to new recruits as well as hands-on, managerial, behavioral and leadership training for its employees and also training programs for other utilities.

Some of the key Learning & Development interventions undertaken by the Company during the year includes the following:

â¢ Using a web-based Competency based Training Needs Assessment (CTNA), the Company has devised the Human Resource Development Action Plan for the financial year 2021-22 based on which the competencies of the employees are being upgraded to make them future ready.

â¢ To promote social learning, capture and share both tacit and explicit knowledge in the Company, the portal for Mentoring and Coaching program named "SANDARSHIKA" has been rolled out successfully.

â¢ Five employees were sponsored for a 15-month PGDM program by NTPC School of Business.

â¢ In the field of e-Learning the Company has undertaken following interventions:

- Developed 72 eLearning modules related to different business verticals and 9 Refresher courses related to Company information. 6,500 employees have benefited from these courses.

- Hosted 7 modules related to Power transmission for GOI''s ambitious "Mission Karmayogi" Programme.

- 1,500 employees have been sponsored for Harvard Manage Mentor Program to enhance Leadership competencies.

- Tie-up with Ministry of IT & Electronics, GOI and IT Industry body NASSCOM for their FutureSkills PRIME portal. This portal provides access to all employees of your Company to e-courses in emerging technologies and professional skills.

In the matter of stakeholder development, the Company has undertaken following interventions:

â¢ 1,100 apprentices have been engaged in different trades as per the Apprentice Act.

â¢ 350 contract staff have been imparted training under Recognition of Prior Learning (RPL) certification.

â¢ MoU has been signed among National Skill Development Corporation (NSDC), National Skill Development Fund (NSDF), Power Sector Skill Council (PSSC) and POWERGRID for Skill development training of 6000 unemployed youth in power Sector. Presently 2200 trainees are undergoing training across 20 locations in India.

â¢ Under the Northern Eastern Regional Power System Improvement (CBIS-NERPSIP) Project, the Company is undertaking Capacity Building and Institutional Strengthening program for State Power Utilities in 6 (six) states of NER (viz: Assam, Meghalaya, Mizoram, Manipur, Nagaland, Tripura) and Capacity Building under Comprehensive Scheme (Arunachal Pradesh & Sikkim - 2 states)

In our continual effort to meet and exceed the ever-changing expectations of our employees, your Company regularly updates its welfare policies in line with industry trends. During the year, in view of the second wave of COVID-19 pandemic that wreaked havoc around the nation, your Company introduced various initiatives for families of deceased employees to help them maintain a respectable standard of living. These rehabilitation initiatives included:

â¢ The Company has extended customized Training Programs for clients including NRPC, KIIFB, NPTI, POSOCO, HVPNL, DTL, REC, PFC, HPPTCL, NPMU, CSPTCL, MEA and Overseas Clients including KETRACO & PGCB.

16.2. Employee Welfare

â¢ Providing accommodation security to the family, increased insurance coverage of employees, securing various employee advances, providing a more comprehensive medical coverage to dependents of deceased employees, etc.

â¢ Introduced the ''SAKSHAM'' scheme to provide monetary assistance for education of wards of deceased employees and provide skill development opportunities and financial aid to spouse of deceased employees to build an earning potential within the family.

â¢ Your Company arranged several vaccination camps for regular and contractual employees, their families, Isolation facilities were setup at various locations for affected employees and dependents. Various other facilities viz. home collection of samples for COVID-19 testing, medical consultation through tele- medicine, etc. were also arranged to help employees and their families during these unprecedented circumstances.

â¢ Many webinars/ talks were also held by experts for employees on medical care, physical and mental wellbeing and lifestyle management during the pandemic.

â¢ Your Company introduced the Equal Opportunity Policy this year to demonstrate our commitment towards

promoting diversity and inclusion in the workforce. The Policy aims to create a harmonious workplace for all employees irrespective of their gender, nativity, community, religious beliefs, or physical and mental ability and enable them to achieve their full potential.

â¢ Your Company also rationalized its medical rules to promote health and well-being requirement of our employees and their families.

â¢ For the first time, your Company organized its Annual Cultural meet for all employees and their family members in virtual mode owing to COVID-19 pandemic situation where employees and their family members show-cased traditions/cultures of different geographies of country.

â¢ Your Company''s employees actively participated in Fit India Freedom Run 2.0 and other events organized across establishments of Company in commemoration of Azadi ka Amrit Mahotsav.

16.3. Grievance Redressal

Grievance redressal is always taken up with priority and your Company promptly redresses the grievances of its employees within the broad parameters of guidelines enumerated by Government of India and policy framework. Employees can lodge their grievances by way of an online portal. The Company has designated nodal officers at corporate & regional offices for systematic & prompt redressal of the grievances within stipulated time frames.

16.4. Ensuring Social Justice

Your Company has constituted a separate reservation cell to look after and safeguard the legal provisions for SC/ST/ OBC & PwD categories of employees.

the employees. To ensure effective discharge of duties across all establishments of your Company, separate liaison officer for each region has been nominated. The Company implements all directives and guidelines regarding reservation policy issued by Government of India. Annual inspection is also conducted to ensure implementation of directives issued by Government of India. Periodic meetings are also held with representatives of the association of SC/ ST & OBC to resolve issues, if any.

17. Prevention of Sexual Harassment at workplace

As per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made there under, the Company has Internal Complaint Committees (ICC), in place, to redress complaints received regarding sexual harassment. Your Company has been conducting training/workshop programs for both male and female employees sensitizing them on issues and the law/ Act relating to sexual harassment. Workshops on women empowerment, development and gender sensitization are also organized. Three complaints of sexual harassment were received during FY 2021-22 and all complaints has been disposed off in stipulated time as per the Guidelines.

18. Implementation of Official Language (Rajbhasha)

In pursuance of Government of India''s Rajbhasha policy to promote Indian languages and Rajbhasha "Hindi", your Company has made all round efforts to integrate and promote use of Hindi in its works at all levels. Your Company has proved its commitment to ensure the implementation of Rajbhasha policy and to achieve the goal as laid out in the Rajbhasha annual target given by Department of Official Language.

To ensure the increased use of Official language, various activities such as Annuvad Abhayaas Karyakram, Workshops, Trainings, motivational programmes have been organized. Computer trainings are being imparted to enhance the working knowledge in Hindi while using computers. Hindi classes are also being organized for non-Hindi speaking employees through Hindi Teaching Scheme.

of these programmes were organized by video conferencing in the financial year 2021-22. Also, various competitions throughout the year with special emphasis during Hindi Pakhwada, Vigilance Awareness Week, Swachchhta Pakhwada etc. along with departmental meetings as well as Official Language Implementation Committee (OLIC) meetings are also being conducted. Your Company has established one of the best Hindi libraries among Public Sector where popular/literary Magazines and newspapers have been made available for the employees.

The effort made by your Company has been applauded in several forums during the FY 2021-22. Your Company received the first prize for excellent implementation of official language for the year 2019-20 by Ministry of Power, during the year. The Company also received awards from "Town Official Language Implementation Committee (TOLIC), Rajbhasha Vibhag, Ministry of Home Affairs, Government of India and other agencies regarding Implementation of Official Language. The offices of the regional headquarters including Vadodara, Bangalore, Kolkata, and Nagpur along with other offices like Siliguri, Itarsi, Nellore, Madurai, Durgapur, Roorkee, Mandola, Dadri etc. have been honored. Besides, your Company''s efforts were also applauded during various inspections and discussions done by Hon''ble Committee of Parliament on Official Language on different occasions.

19. Stakeholder Engagement

Your Company focuses on engaging with all its stakeholders and building cordial relationships with them. This helps us in not only understanding their needs and expectations, but also helps us in recognizing opportunities and mitigating risks to our operations. We have a framework for engaging with our stakeholders which also includes categories of Stakeholder along with the respective modes of engagement.

For details, you may refer to the ''Value Creation'' section of this Report.

20. Management Discussion and Analysis

The Management Discussion and Analysis Report, as stipulated under Regulation 34(2) of the SEBI (LODR) Regulations, 2015 and pursuant to Clause 7.5 of DPE Guidelines on Corporate Governance, forming part of the Directors'' Report, is placed at Annexure-I of this Report.

21. Business Responsibility Report

The Business Responsibility Report, as stipulated under Regulation 34 (2) of the SEBI (LODR) Regulations, 2015, is given in Annexure-II and forms part of this Report.

22. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Pursuant to Section 134(3) (m) of Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, information relating to ''Conservation of energy, technology absorption and foreign exchange earnings and outgo'', is given in Annexure-III to this Report.

23. Auditors23.1. Statutory Auditors of the Company

The Statutory Auditors of the Company are appointed by the Comptroller & Auditors General of India. M/s. T R Chadha & Co LLP, M/s. Umamaheswara Rao & Co., M/s. B M Chatrath & Co LLP and M/s. P S D & Associates were appointed as Joint Statutory Auditors for FY 2021-22.

The Statutory Auditors have given an unqualified report. The report is self-explanatory and does not require any further comments by the Board.

23.2. Comptroller and Auditor General''s Comments

The Company has received ''Nil'' comments on the Financial Statements (Standalone and Consolidated) for the Year ended 31^st March, 2022 from the Comptroller and Auditor General of India (C&AG) under Section 143(6) of the Companies Act, 2013. The comments are placed at Annexure-IV.

23.3. Secretarial Audit

M/s Kumar Naresh Sinha & Associates, Practicing Company Secretary conducted Secretarial Audit of the Company for the financial year ended 31^st March, 2022. The Secretarial Audit Report is placed at Annexure-V.

The observations of Secretarial Auditor are as under:

1. The Company did not have requisite number of Independent Directors as required under Regulation 17 of SEBI (LODR) Regulations, 2015 and Para 3.1.4 of DPE Guidelines on Corporate Governance and the Company had a Woman Independent Director till 25^th July, 2021.

2. The composition of Audit committee was not in line with Regulation 18(1)(b) of SEBI (LODR) Regulations, 2015 from 23^rd July, 2021 to 14^th December, 2021; and

3. The Composition of Nomination and Remuneration Committee was not in line with Regulation 19(1)(c) of SEBI (LODR) Regulations, 2015 from 26^th July, 2021 to 14^th December, 2021.

Regarding above, it was explained that yours is a Government Company, the power to appoint Independent Directors vests with the Government of India and the Company has taken up the matter for appointment of requisite number of Independent Directors with Government of India.

23.4. Cost Auditors & Cost Records

The Company appointed M/s Dhananjay V. Joshi & Associates and M/s Bandyopadhyaya Bhaumik & Co., Cost Accountants as Cost Auditors for the FY 2021-22 under Section 148 of the Companies Act, 2013.

Your Company is maintaining Cost Accounting Records as prescribed under the Companies (Cost Record and Audit) Rules, 2014, specified by the Central Government under section 148(1) of the Companies Act, 2013.

24. Board & Committees24.1. Company''s Board

During FY 2021-22, Shri Ghanshyam Prasad, Jt. Secretary, Ministry of Power, Government of India has been appointed on the Board of Company as Part-time Government Nominee Director w.e.f. 21^st December 2021. Shri Onkarappa KN, Shri Chetan Bansilal Kankariya have been appointed as Independent Directors w.e.f. 17^th November, 2021 and Shri Ram Naresh Tiwari, as an Independent Director w.e.f. 18^th November, 2021.

Shri Dilip Nigam, Scientist ''G'', Ministry of New and Renewable Energy (MNRE), Government of India completed his tenure as a Government Nominee Director on 30^th April, 2022 and appointed again as Government Nominee Director w.e.f. 6^th June, 2022.

Shri Raghuraj Madhav Rajendran has been appointed as a Government Nominee Director w.e.f. 5^th August, 2022.

Shri Sunil Kumar Sharma and Smt. A.R. Mahalakshmi, Independent Directors have completed their respective tenure of 03 years on 22^nd July, 2021 and 25^th July, 2021, respectively.

Shri Mritunjay Kumar Narayan, Joint Secretary, Ministry of Power, Govt. of India demitted the post of Government Nominee Director w.e.f. 6^th December, 2021.

Smt. Seema Gupta completed her tenure as Director (Operations), on attaining the age of superannuation w.e.f. 31^st May, 2022.

Shri M.N. Venkatesan, Independent Director completed his tenure of 03 years on 10^th July, 2022.

Shri Ghanshyam Prasad, Jt. Secretary, Ministry of Power, Govt. of India demitted the post of Government Nominee Director w.e.f. 14^th July, 2022.

Shri M. Taj Mukarrum completed his tenure as Director (Finance), on attaining the age of superannuation w.e.f. 31^st July, 2022.

The Board places on record its appreciation and gratitude to Shri M. Taj Mukarrum, Smt. Seema Gupta, Shri Mritunjay Kumar Narayan, Shri Sunil Kumar Sharma, Smt. A.R. Mahalakshmi, Shri M.N. Venkatesan and Shri Ghanshyam Prasad for their contribution and support to the Company.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, reappointment of Shri Abhay Choudhary (DIN: 07388432) and Dr. Vinod Kumar Singh (DIN: 08679313), as Directors liable to retire by rotation, have been included in the Notice of Annual General Meeting.

24.2. Number of Meetings of the Board

Board of Directors met 17 times during FY 2021-22. Details regarding dates and attendance at the Board meetings are provided in the Report on Corporate Governance, which forms part of this report.

24.3. Committees of the Board

The Company has constituted Audit Committee, CSR Committee, Nomination and Remuneration Committee, Stakeholders'' Relationship Committee, Risk Management Committee and other Committees for operational convenience. The composition and scope of the aforesaid Committees are provided in the Report on Corporate Governance, which forms part of this report.

24.4. Declaration by Independent Directors

During the financial year, all the Independent Directors have met the requirements specified under Section 149 (6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (LODR) Regulations, 2015 for holding the position of ''Independent Director'' and necessary declaration from each Independent Director under Section 149 (7) of the Companies Act, 2013 and Regulation 25(8) of SEBI (LODR) Regulations, 2015 has been received.

Pursuant to Regulation 34(3) and Schedule V Para C Clause (10)(i) of SEBI (LODR) Regulations, 2015, M/s Naresh Kumar Sinha & Associates, Company Secretaries have issued Certificate of Non- Disqualification of Directors, who were on the Board of Directors during FY 2021-22.

24.5. Performance Evaluation of Directors

This has been provided in the ''Report on Corporate Governance'' section of this Report and you may refer it for details.

24.6. Policy on Director''s Appointment and Remuneration

The Company has framed a policy on the remuneration of the Directors, KMPs and employees. The said policy is available on our website at https://www.powergrid.in/sites/default/files/Investor Relation/Reports Filings/Code of Conduct Policies/04 Remuneration%20Policy.pdf

25. Compliances25.1. Risk Management Policy

Information on Risk Management Framework is covered in the Management Discussion and Analysis placed at Annexure-I of this Report.

25.2. Internal Financial Controls and Adequacy

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its businesses, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds, error reporting mechanism, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

25.3. Annual Return of the Company

25.4. Loans, Guarantees or Investments

Loans, Guarantees or investments under Section 186 of the Companies Act, 2013 form part of the notes to financial statements attached to this Report.

25.5. Contracts or Arrangements with Related Parties

Contracts or arrangements with related parties referred to in Section 188 (1) of the Companies Act, 2013, in the prescribed Form AOC-2, are given as Annexure-VIII of this Report. Further, attention of the members is drawn on Note No. 55 of the Financial Statement which sets out related party disclosure.

25.6. Subsidiaries and Joint Ventures

As on 31^st March 2022 the Company has 24 subsidiaries and 11 Joint Ventures Companies.

A statement containing salient features of the financials of our Subsidiaries and Joint Ventures are covered in the Management discussion and Analysis and annexed in the prescribed format AOC-1 as Annexure-IX of this Report.

25.7. Dividend Distribution Policy

The policy was adopted to set out the parameters and circumstance that will be considered by the Board in determining the distribution of dividend to its shareholders and/or retained profits earned by the Company. According to the

policy, Dividend for every financial year shall be decided by the Board considering various statutory requirements and Govt. guidelines, financial performance of the Company and other internal and external factors enumerated in the policy. The policy is also available on the Company''s website at https://www.powergrid.in/sites/default/files/ Dividend%20Distribution%20Policy.pdf

25.8. Significant Material Orders

There are no significant and material orders passed by the Regulators or Courts or tribunal impacting the going concern status and Company''s operations in future.

26. Annual Report on Corporate Social Responsibility

27. Particulars of Employees

The terms and conditions of the appointment of

Functional Directors are subject to the applicable guidelines issued by the Department of Public Enterprises (DPE), Government of India from time to time.

28. Insolvency and Bankruptcy Code, 2016

29. Reporting of Frauds by Auditors

During the year under review, none of the Auditors have reported to the Audit Committee or the Board, under Section 143(12) of the Companies Act, 2013 for any instances of fraud committed against the Company by its officers or employees.

30. Fixed deposits

We have not accepted any fixed deposits, including from the public and as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

31. Secretarial Standards of ICSI

The Company has followed the requirements prescribed under Secretarial Standard on Meetings of Board of Directors (SS-1) and General Meetings (SS-2) read with MCA circulars granting exemptions in view of the Covid-19 pandemic.

32. Material Changes & Commitments

There have been no material changes & commitments affecting the financial position of the Company, which have occurred between the end of the financial year and date of this report.

33. Directors'' Responsibility Statement

As required u/s 134(3) (c) & 134(5) of the Companies Act, 2013, the Directors confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

c. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. the Directors had prepared the annual accounts on a going concern basis.

e. the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

f. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

34. Acknowledgements

The Board of Directors would like to express their deep sense of appreciation for the guidance and co-operation received from Government of India, particularly Ministry of Power, Ministry of Finance, Ministry of Home Affairs, Ministry of External Affairs, Ministry of Statistics and Programme Implementation, Ministry of Environment & Forests, Ministry of Corporate Affairs, Central Electricity Regulatory Commission, Appellate Tribunal for Electricity, Central Electricity Authority, NITI Aayog, Department of Public Enterprises, Regional Power Committees, Office of the Comptroller and Auditor General of India, and other concerned Government departments/agencies at the Central and State level without whose active support, the achievements of the Company during the year under review would not have been possible.

Special thanks to our valued customers, State Governments and State power utilities and other clients, who have awarded various consulting works and reposed faith in Company''s capability to handle them. The Board also appreciates the contribution of contractors, vendors and consultants for successful implementation of various projects by your Company.

On behalf of Board of Directors, I would like to place on record our deep appreciation of the dedicated efforts and valuable services rendered by the employees contributing to the performance of the Company during the year 2021-22. The commitment displayed by the employees at all levels, particularly during the ongoing pandemic situation, is exemplary and praise-worthy. I would also like to thank the Executive team for their strong leadership, the employee unions for their support and all our employees for their commitment, enthusiasm, and dedication.

For and on behalf of the Board of Directors

(K.Sreekant) Chairman & Managing Director DIN: 06615674

Date: 5^th August, 2022 Place: Gurugram

For ensuring effective communication of

the existing as well as new substations with

Regional Load Despatch Centres (RLDCs) /

Mar 31, 2021

On behalf of the Board of Directors, it gives me immense pleasure in presenting the 32^nd Annual Report on the performance of the Company, together with the Audited Financial Statements for the financial year ended 31^st March 2021.

The financial year under review was extremely challenging due to ongoing COVID-19 pandemic. Electricity being an essential service, your Company rose to the challenges by COVID-19 pandemic and ensured reliable transmission of power and achieved yet another year of excellent performance in all areas of its operations.

Performance highlights of the Company are briefly mentioned here to give an overview of accomplishments on all fronts:

â¢ During FY 20-21, your Company achieved system availability of 99.78%. The trippings per line decreased to 0.36, which is lowest in last five years.

â¢ 7,403 circuit km (ckm.) of Extra High Voltage (EHV) transmission lines, 27,624 Mega Volt Ampere (MVA) transformation capacity, 13 new Substations (including subsidiaries and acquisitions) were added during the year.

â¢ Assets capitalized by the Company in FY 20-21 were '' 21,467 crore on-consolidated basis.

â¢ Important projects commissioned:

- Bipole 1 and associated HVAC and HVDC link under Â±800kV, 6000 MW, Raigarh - Pugalur - Trichur HVDC Transmission System, enabled Inter-Regional power transfer of 3,000 MW, to meet power demand of Southern Region.

- One symmetrical monopole of VSC HVDC link along with HVDC lines and HVDC cables under Â±320kV, 2000 MW, Pugalur - Trichur HVDC Transmission System has been commissioned.

- Transmission System for power evacuation from Ultra Mega Solar Parks of 2000MW at Tumkur (Karnataka) and 700MW at Banaskantha (Gujarat).

â¢ For ensuring effective communication for the existing as well as new Substations, 6,282 km of Optical ground wire (OPGW) was installed in FY 20-21.

â¢ Emerged successful in 5 TBCB projects associated with transmission strengthening scheme for evacuation of power from solar energy zones in Rajasthan (8.1 GW) under Phase-II. Out of above 5 projects, 2 projects have been acquired in FY 20-21. These 5 projects are having an aggregate annual levelized tariff of '' 515.84 crore.

â¢ Under Atmanirbhar Bharat Abhiyan, your Company, in collaboration with BHEL has successfully commissioned India''s first indigenously developed 400kV Optical Current Transformer along with Digital Substation components (IEDs and SCADA) at 400/220kV Bhiwadi Substation.

â¢ Your Company has Commissioned a fully digital 400/220kV Substation (including Bus Bar protection) with IEC 61850 Process Bus based Protection Automation and Control system. This has been successfully demonstrated at 400/220kV Malerkotla Substation.

â¢ On standalone basis, the Company Total Income at '' 40,527.11 crore during FY 20-21, increased by 5.77% & net Profit after Tax (PAT) at ''11,935.78 crore during FY 20-21, increased by 10.40%, as compared to previous year.

â¢ Dividend of '' 9.75 per share declared for FY 20-21. Interim dividend of '' 6.75 per share paid and final dividend of '' 3 per share recommended for approval of shareholders (adjusted for bonus) as compared to '' 7.5 per share in previous year.

â¢ Your Company has achieved remarkable collection efficiency of 103.78% of billing in FY 20-21, despite the ongoing COVID-19 pandemic situation in the country.

â¢ Featured as âFastest Growing Electric Utility in Asia Pacific'' for 7^th successive year under Platts top 250 Global Energy Company Rankings 2020 and globally positioned as the 4^th fastest growing electric utility. ¹

1. FINANCIAL PERFORMANCE

In FY 20-21, the Company has shown a stellar financial performance. The Financial Performance during year under review as compared to the previous FY 19-20 on standalone basis is summarized below:

(All Figures except per share data are in units as indicated)
Description	2020-21		2019-20		Y-o-Y
Description	'' (crore)	US $ (million)	'' (crore)	US $ (million)	Growth (%)
Revenue
Transmission Charges	36,456.92	4,960.13	34,876.35	4,745.08	4.53
Consultancy-Sale of Services	501.28	68.20	610.98	83.13	-17.95
Telecom	707.45	96.25	698.21	94.99	1.32
Other Income	2861.46	389.31	2132.43	290.13	34.19
Total Income	40,527.11	5,513.89	38,317.97	5,213.33	5.77
Profit After Tax (PAT)	11935.78	1,623.92	10811.18	1,470.91	10.40
Earnings per Share	'' 22.81	0.31(US $)	'' 20.67	0.28 (US $)	10.35
Book Value per Share	'' 133.00	1.81 (US $)	'' 123.17	1.68 (US $)	7.98
Gross Fixed Assets	234284.32	31,875.42	215190.84	29,277.67	8.87
Long Term Borrowings¹	141251.48	19,217.89	144979.64	19,725.12	-2.57
Net Worth	69578.84	9,466.51	64439.69	8,767.30	7.98
Debt Equity Ratio	67:33		69:31
Return on Net Worth	17.15%		16.78%

1.1. DIVIDEND PAYOUT & BONUS SHARE ISSUED

A final dividend of '' 3 per share is proposed for FY 20-21, in addition to first and second interim dividends aggregating to '' 6.75 per share paid (adjusted for bonus). The total dividend for the year thus amounts to '' 9.75 per share (adjusted for bonus) as compared to '' 7.5 in FY 19-20. The total dividend payout for the year amounts to '' 6,801.07 crore (including interim dividends of '' 4,708.43 crore). The final dividend shall be paid after approval at the Annual General Meeting. The total payout ratio for the year was 57% as compared to 54% for previous year.

Further, for the first time since inception, your Company has issued Bonus Shares in the ratio of 1:3 i.e.,1 (One) equity share of nominal value '' 10/- (Rupees Ten Only) each for every 3 (Three) equity shares of nominal value of '' 10/-(Rupees Ten Only) each to its shareholders. Post Bonus Shares issuance, the Paid-up capital of the Company stands increased to '' 6975.45 crore.

1.2. TRANSFER TO RESERVES

For the FY 20-21, appropriation of profit has been made as follows:

a) General Reserve: '' 6,000.00 crore

b) Self-Insurance Reserve: '' 278.79 crore

1.3. GOI SHAREHOLDING

During the year, the Govt. of India shareholding remained unchanged at 51.34%.

2. SIGNIFICANT DEVELOPMENTS2.1. SUBSIDIARIES ACQUIRED THROUGH TARIFF BASED COMPETITIVE BIDDING (TBCB)

Since 2011, the Company has been participating in the TBCB process mandated by GoI for allocating transmission projects. The projects so acquired are housed in project-specific wholly owned subsidiaries of the Company.

During the year under review, the Company emerged successful in five ISTS projects associated with renewable energy. Out of these, two projects were acquired in FY 20-21.

As on 31^st March 2021, eight TBCB subsidiaries were fully operational with total TBCB transmission assets comprising 59 transmission lines with 7,264 ckm & 7 Substations with aggregate transformation capacity of 16,050 MVA. Cumulatively, the Company, at the end of FY 20-21, owned 22 TBCB subsidiaries, the details of which are provided in the Management Discussion & Analysis Report (MD&A).

Separate section has been included on financial review of the Joint Venture Companies and Subsidiaries in MD&A.

2.2. TRANSFER OF SRINAGAR LEH TRANSMISSION SYSTEM (SLTS) TO POWERGRID

The flagship SLTS project was implemented by POWERGRID on consultancy basis under the PMDP scheme of Govt. of India. The project provides connectivity to the Ladakh region with the national grid, ensuring quality and reliable power supply. The project component includes transmission line of 375ckm traversing through snow bound hilly terrain and four new state-of-the-art 220/66kV Gas Insulated Substations along with 66kV inter-connection systems at Drass, Kargil, Khaltsi and Leh. The project was commissioned on 31^st January 2019 and was dedicated to the Nation by Hon''ble P.M. on 03^rd February 2019.

Upon reorganization of erstwhile State of Jammu & Kashmir into UTs of J&K and Ladakh, SLTS has been re-designated as an Inter State Transmission System (ISTS) and transferred to POWERGRID with effect from 31^st October 2019 (the date of formation of the two UTs of J&K and Ladakh).

2.3. ACQUISITION OF JAYPEE POWERGRID LIMITED (JPL)

JPL [a Joint Venture Company of POWERGRID (26%) and Jaiprakash Power Ventures Limited (74%)] was incorporated in 5^th October 2006 to evacuate power generated from 1000 MW Karcham Wangtoo Hydro Electric power project in Himachal Pradesh. The assets comprise two transmission lines of 449 ckm (400kV D/c Karcham-Wangtoo- Abdullapur transmission line and LILO of 400kV Baspa-Nathpa Jhakri transmission line at Wangtoo) which are under commercial operation since April 2012.

Your Company acquired 74% stake of Jaiprakash Power Ventures Limited at an aggregate consideration of '' 354.50 crore resulting in JPL becoming a wholly own subsidiary of POWERGRID w.e.f. 25^th March 2021. Consequent upon acquisition name of the Company has been changed from Jaypee POWERGRID Limited to POWERGRID Himachal Transmission Limited (PHTL).

2.4. SEPARATION OF CTU FUNCTIONS

Your company was designated as Central Transmission Utility (CTU) since 1998. Govt. of India has decided to separate the CTU functions from POWERGRID, initially by designating a subsidiary of POWERGRID incorporated for this purpose as the CTU followed by establishing it as a separate Government of India Company.

Your company incorporated a wholly owned subsidiary Central Transmission Utility of India Limited (CTUIL), on 28^thDecember 2020, which was notified by the Govt. of India as âCentral Transmission Utilityâ w.e.f. 01^st April 2021 to undertake and discharge all functions of CTU. Your Company continues to be a deemed Transmission Licensee under the Electricity Act,2003. As the CTU functions are not commercial oriented, the separation of CTU functions is not expected to have material impact on the business operations of the Company.

2.5. Monetisation of Transmission Assets through POWERGRID Investment Infrastructure Trust (PGInvIT):

In order to mobilise resources to meet future capital requirement for Companyâs growth, your company has undertaken monetization of assets through Infrastructure Investment Trust (InvIT) model. This is in accordance with GoI guidelines and your Company is the first CPSE to undertake asset recycling through InvIT structure.

In line with the approval accorded by the Govt. of India, your company monetized operational assets held through 5 TBCB Special Purpose vehicles (SPVs) with gross block value of about '' 7,200 crore comprising 3699 ckm of transmission lines and 3 Substations having 6630 MVA transformation capacity in Mayâ2021.

Details are covered in the Management Discussion & Analysis placed at Annexure-I of this Report.

3. OPERATIONAL PERFORMANCE3.1. ASSET MANAGEMENT

As on 31^st March 2021, the Companyâs total transmission assets including of its wholly owned subsidiaries consist of 1,321 transmission lines aggregating to 1,70,685 ckm., 261 Substations with an aggregate transformation capacity of 4,37,523 MVA. The assets include 1,429 transformers, 14 STATCOMs and 3 Static VAR Compensators (SVC), 4 Series Reactors, besides a number of Thyristor Controlled Series Compensators (TCSC)/ Fixed Series Compensators (FSC).

In FY 20-21, the Company achieved 99.78% availability of transmission network with number of trippings per line contained at 0.36. Proactive maintenance management practices monitored through a web-based dashboard for Annual Maintenance Plan launched during the year has helped the Company to achieve high operational performance of its large and highly complex transmission asset network despite the COVID-19 pandemic. Your Company also undertakes internal benchmarking on key performance indicators to evaluate operational performance to identify gaps for improvement, share key initiatives and achieve optimum operational performance.

Repair of GIS Substation equipment by the in-house maintenance teams of your company at 06 Substations during COVID-19 pandemic prevented long outages of system and resulted in considerable cost savings. Six HVDC convertor transformers were overhauled and one 765kV line reactor was repaired at site, saving both time and cost of transportation. It was the first time, that on-site repair of 765 kV class reactor was carried out by your company.

Refurbishment of Â±2x250MW HVDC Vindhyachal back-to-back and 1500MW bipole of Â±500kV HVDC Rihand-Dadri is being done to extend the life of projects which served the Indian Power System for more than 25 years. The Refurbishment of HVDC systems which is being done for the first time in India, will enhance the operating life of these HVDC assets by approximately 10 years, thereby benefitting the end consumer through continuing power supply at reduced cost.

State-of-the-Art, Travelling Wave Based Fault locators (TWFL) were installed in 43 transmission lines in FY 20-21 to accurately identify the fault location. With this 95 important transmission lines of your company have TWFL installed for better fault location and early restoration.

The Company, for the past many years, has been participating in the International Transmission Operation and Maintenance Study (ITOMS), a global O&M benchmarking platform, comprising 32 leading global power transmission utilities, where it has consistently ranked among the top performing transmission companies.

3.2. NATIONAL TRANSMISSION ASSET MANAGEMENT CENTRE (NTAMC), MANESAR & REGIONAL TRANSMISSION ASSET MANAGEMENT CENTRES (RTAMCS)

To facilitate remote operation of your company''s transmission system and monitoring of various parameters on real time basis at regional and national levels, NTAMC was set up at Manesar, near Gurugram, Haryana and RTAMCs were set up at various locations across the country. These state-of-the-art centres are manned round-the-clock by experts for effective monitoring and management of transmission assets.

Remote management of Substations has proved to be immensely beneficial during the FY 20-21 to ensure uninterrupted supply of power despite COVID-19 pandemic.

During the FY 20-21, Eight (8) additional Extra High Voltage (EHV) Substations were integrated with NTAMC for remote operation. At the end of FY 20-21, total 242 Substations are being operated remotely from these asset management centres.

3.3. ADOPTION OF LATEST TECHNOLOGY

Your Company uses various technological tools for ensuring better availability of transmission lines such as aerial patrolling of transmission lines, thermo-vision scanning, corona camera, high resolution video, digital camera, application-based monitoring of transformers, reactors and patrolling of lines & real time updation of data through online applications for effective monitoring of assets.

Your Company has commissioned, a full digital Substation (including Bus Bar protection) with IEC 61850 Process Bus based Protection Automation and Control system and successfully demonstrated by retrofitting of conventional control and protection system at 400/220kV Malerkotla Substation. This technology provides lot of flexibility in Engineering, faster commissioning, reduced down time and cost, enhanced diagnostics and ease in trouble shooting during asset management.

3.4. CYBER SECURITY

The cyber security initiatives are led by Chief Information Security Officer (CISO) through the Information Security Department in the Company. The Corporate Office, all the Regional Headquarters and 213 Substations of the Company are certified for ISO:27001 Information Security Management System. The Company undertakes extensive training programs for its staff and participates in programs & mock-drills organized by CERT-In and NCIIPC.

Further, the Company works in close liaison with the designated statutory bodies, namely Indian Computer Emergency Response Team (CERT-In) and National Critical Information Infrastructure Protection Centre (NCIIPC). The advisories issued by these institutions from time to time are complied with and shared with other Transmission Sector utilities. POWERGRID has also been given responsibility as the sectoral Computer Emergency Response Team (CERT) for the Transmission Sector by Ministry of Power.

3.5. SAFETY

Your Company is committed for maintaining a safe working environment for all its employees and ensuring best possible safe conditions of work, for which all necessary steps are taken to ensure that all known safety factors are considered during design, construction, operation and maintenance of machinery and equipment of Substations & transmission lines to the extent as applicable as per standards.

Safety policy, rules and guidelines are implemented by publishing/ notifying instruction, notices in Hindi, English and other vernacular languages for broader circulation and are monitored routinely by a three-tier safety setup (Corporate Centre, Region and site levels). Further, the contractual provisions for safety are reviewed and amended to augment the safety commitment by all working agencies with their feedback from time to time.

New technology adoption i.e. usage of induction helmet & band to alert the person working in vicinity of induction zone are being adopted for safety at sites. Tackles to climb on PSC poles and to aid positioning during tower erection are being developed to aid the persons climbing on PSC poles and tower erection works.

Safety audits/ inspections, trainings, safety briefings and mock-drills are carried out for all contract workers and POWERGRID staff at various O&M and construction sites. During FY20-21, about 400 construction site inspections, about 2,900 safety-training sessions for contractor employees, about 800 safety-training sessions for POWERGRID staff and about 920 mock-drills were carried out.

Daily safety briefings & pep-talk were delivered in local languages at all sites to educate workers on the hazards associated with works and how to identify them & safety measures that must be taken to prevent injury. Besides above, safety day & fortnight celebrations, involving employees and contractual workers are being conducted which help in creating awareness for adherence to safety.

4. DISASTER MANAGEMENT

The Company has in place a âDisaster & Crisis Management Planâ for taking swift actions during pre and post disaster conditions and for speedy restoration of damaged power infrastructure. It outlines a hierarchical set up of crisis/ disaster management at various levels for effectively and efficiently dealing with crises and disasters as well as roles/ responsibilities of different departments in disaster management.

Based upon the inputs of India Meteorological Department (IMD), the Company took preparatory steps before the onset of all cyclones during FY 20-21. No major damages were caused to your Company''s transmission network during major cyclones namely, Amphan, Nisarga, Nivar and Burevi due to advance preparedness and robust infrastructure,. The Company also extended its full support to the transmission and distribution utilities of the affected States by providing men and material for early restoration of their damaged transmission and distribution network.

5. PROJECT IMPLEMENTATION

The lockdown in the month of March & April 2020 to prevent the spread of COVID-19 and consequent restriction on movement of men and material had impacted project construction activities during the year. Various measures were taken to mitigate COVID-19 impact on project construction. Workers at site were provided various support during the lockdown period to tide over the situation.

Despite the constraints arising due to the pandemic, your Company''s strong project management practices resulted in addition of about 6,580 ckm of EHV transmission lines, about 27,320 MVA transformation capacity and 9 new Substations in FY 20-21. This includes 866.05 ckm. of EHV transmission lines, 6,420 MVA transformation capacity and 3 new Substation added during the year by the Company''s wholly owned TBCB subsidiaries.

Further, about 6,282 km of OPGW network was added during the year to support voice and data communication with Regional Load Dispatch Centres (RLDCs)/ State Load Despatch Centres (SLDCs) for effective grid management.

MAJOR TRANSMISSION ASSETS COMMISSIONED INTER-REGIONAL LINES

â¢ Â±800kV Raigarh - Pugalur LCC HVDC link along with Bipole-I (Pole-I and Pole-II, 3000 MW)

INTERCONNECTIONS WITH BANGLADESH

â¢ 400kV D/c Baharampur (PG) - Bheramera (B''desh) line (2^nd D/c line) - India portion

TRANSMISSION SYSTEM ASSOCIATED WITH ULTRA MEGA SOLAR PARKS

â¢ 400kV D/c Tumkur (Pavagada) PS - Devanahally (KPTCL) (Quad) line

â¢ 400kV D/c Hiriyur - Mysore line

â¢ 400kV D/c Banaskantha PS - Banaskantha (PG) line

TRANSMISSION SYSTEM FOR STRENGTHENING OF SOUTHERN REGION GRID

â¢ 400kV D/c Pugalur HVDC Station - Pugalur line

â¢ 400kV D/c Pugalur HVDC Station - Arasur line

â¢ LILO of 400kV D/c North Trichur - Cochin line at North Trichur HVDC Station

â¢ Â±320kV VSC HVDC Pugalur - North Trichur (Kerala) link (One Symmetrical monopole of 1000 MW)

OTHER IMPORTANT TRANSMISSION LINES

â¢ Additional line 400kV D/c line at P.K.Bari S/s & Silchar S/s. end for termination of 400kV D/c P.K. Bari - Silchar line.

â¢ 400kV D/c NNTPS Switch Yard - Ariyalur (Villupuram) line

â¢ 400kV D/c Rajarhat - Purnea line (Triple Snowbird)-balance portion

â¢ 400kV S/c (Quad) Tehri Gen. - Tehri Pooling Station line

TBCB LINES- Interstate Projects

â¢ 765kV D/c Ranchi (New) - Medinipur line (ERSS-XVIII)

â¢ LILO of both ckts of 400kV D/c Chandithala -Kharagpur line at Medinipur S/s (ERSS-XVIII)

â¢ LILO of both ckt of 400kV D/c Nabinagar-II - Gaya line at Chandauti S/s (ERSS-XXI)

- Intrastate Projects - (POWERGRID Jawaharpur Firozabad Transmission Limited)

â¢ LILO 765kV S/c Mainpuri - Gr. Noida line at Jawaharpur S/s

â¢ LILO of one circuit of 400kV D/c Agra South - Fatehabad (765kV) line at 400kV Firozabad S/s

â¢ LILO of 220kV Firozabad (220kV) - Agra (765kV PG) line at 400kV Firozabad S/s

â¢ LILO of 132kV S/c Etmadpur - Barhan line at 400kV Firozabad S/s

â¢ 132kV D/c Firozabad (400kV)-Narkhi line

As on 31^st March 2021, the inter-regional power transfer capacity of the transmission assets belonging to the Company and its subsidiaries was 90,090 MW and inter-regional power transfer capacity of the National Grid was 105,050 MW.

6. CAPITAL INVESTMENT, FUND MOBILIZATION & INVESTMENT APPROVAL of NEW PROJECTS

During FY 20-21, the Company made a consolidated capital investment of '' 11,150 crore on cash basis. To finance this investment, the Company mobilized '' 6,010 crore through bonds & term loans, '' 1,589 crore through External Commercial Borrowings (ECB)/ Suppliers'' Credit, '' 3,516 crore from Internal Resources and '' 35 crore through grants received from Power System Development Fund & from Central Financial Assistance (Ministry of New and Renewable Energy).

During the year, investment approvals for transmission projects under regulated tariff mechanism (RTM) worth about '' 1,092 crore have been accorded. Further, the Company also acquired projects estimated at '' 1,700 crore under TBCB mechanism during FY 20-21.

7. COMMERCIAL HIGHLIGHTS

Sharing of Inter-state transmission charges is governed by CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, as notified from time to time in line with the National Tariff Policy notified by Govt. of India and provisions of the Electricity Act, 2003. Presently, CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, 2020 are in vogue. These regulations came into force with effect from 1^st November 2020 superseding the CERC (Sharing of inter-state transmission charges and losses) Regulations, 2010. As per the Sharing Regulations, 2020, the Company, as the Central Transmission Utility (CTU), had the responsibility of billing & collecting transmission charges on behalf of all ISTS licensees in the country and disbursing to them till 31^st March 2021.

The Company effectively discharged the assigned responsibilities and achieved remarkable collection efficiency of 103.78% of billing in FY 20-21 despite the ongoing Covid-19 pandemic situation in the country.

Providing Relief to Various Stakeholders to Combat Financial Crisis on Account of COVID-19 Pandemic:

The revenues of the state utilities were impacted by the lower demand for power and overall reduction in economic activity during the lockdown period. In order to mitigate their hardship and keeping in view the advice of the Ministry of Power, Government of India, relief was provided by way of a one-time consolidated rebate of '' 1,078.64 crore in the billing for the month of April 2020 & May 2020 to various DISCOMs / Power Departments of the States and Union Territories for passing on the same to the end consumers. The rate of surcharge was reduced from 18% to 12% per annum for the bills that became due during the period from 24^th March 2020 to 30^th June 2020 and for all payments received through the Liquidity Infusion Scheme of PFC and REC under Atmanirbhar Bharat scheme. Under Atmanirbhar Scheme, an amount of '' 2,623.26 crore has been received during FY 20-21 by your company which significantly reduced the outstanding dues at the year end.

8. CROSS BORDER INTERCONNECTIONS

In FY 20-21, Muzaffarpur (India) - Dhalkebar (Nepal) 400kV D/c line was upgraded at its rated voltage. The cumulative power transfer capacity through cross-border interconnections with Bhutan, Bangladesh, Nepal and Myanmar increased to about 4,230 MW.) during the year. Additional links for interconnection with Nepal through the 400kV D/c Gorakhpur (India) - New Butwal (Nepal) (Quad) transmission line, with Bhutan through 400kV D/c Jigmeling (Bhutan) - Alipurduar (India) (Quad) transmission line are under implementation. The Government of India has mandated your company to implement the 765kV D/c Katihar - Parbotipur - Bornagar transmission line which provides connectivity between the states of Bihar and Assam through Bangladesh. Discussions are in progress with Bangladesh Government authorities for finalising the modalities for the implementation of this line.

9. INTEGRATION OF RENEWABELE ENERGY (RE), CONNECTIVITY, LONG TERM ACCESS (LTA) & MEDIUM-TERM OPEN ACCESS (MTOA)

The Company, as the Central Transmission Utility (CTU), in consultation with various stakeholders, had evolved a comprehensive transmission scheme for grid integration of various Renewable Energy Zones (66.5 GW) in the country. These transmission schemes are being taken up for implementation in a progressive manner. The Company, as the CTU, was also the nodal agency for processing & grant of Connectivity, Long Term Access (LTA) and Medium-Term Open Access (MTOA) to various applicants.

During FY 20-21, connectivity granted to 162 eligible applicants for a quantum of about 70,931 MW (cumulative 742 applicants for a quantum of about 3,00,324 MW as on 31^st March 2021) and LTA to 38 applicants for a quantum of about 9,916 MW (cumulative 313 applicants for a quantum of about 1,24,653 MW as on 31^st March 2021).

Also, based on available margins in the transmission capacity, MTOA has also been granted to 7 applicants for a total quantum of about 936 MW (cumulative 158 applicants for a total quantum of about 17,248 MW as on 31^st March 2021).

Your company ceased to be the CTU and CTUIL has been notified by the Government of India to carry out statutory functions as identified for CTU under the Electricity Act, 2003 and also other functions assigned to CTU by CERC w.e.f. 01^st April 2021.

10. OTHER BUSINESSES10.1 TELECOM BUSINESS - âPOWERTEL

Your Company is providing a range of services under its Unified License as National Long Distance (NLD) and Internet Service Provider - Category âA'' (ISP-âA'') service authorizations including point-to-point leased line bandwidth services, Internet Leased line, Tower co-location, MPLS based IP-VPN, SD-WAN, DDoS etc. in all parts of the country through its Pan India high capacity network.

During FY 20-21, the Company''s telecom network coverage increased to 71,673 km from 66,922 km at the end of previous year and the telecom backbone availability for the year was 100%. The Company extended support to its clients during the COVID-19 lockdown period by ensuring quick response to their upgradation and other customer service requests.

The Company is also exploring new businesses like setting up of Data Centres, use of transmission towers for telecom purposes by providing power to the telecom antennae, etc. With a vision to directly serve neighboring countries with reliable connectivity, your Company is proposing to obtain International Long Distance (ILD) service authorization from Department of Telecommunication (DoT) to serve Nepal, Bhutan and Bangladesh.

Further, your Company has received approval from GoI & CERC for formation of wholly owned subsidiary Company for Telecom business.

Details are covered in the Management Discussion & Analysis placed at Annexure-I of this Report.

BHARAT NET

Your Company is one of the implementing agencies for âBharat Net'' Phase-I project envisaged to provide broadband connectivity to Gram Panchayats (GPs), thus making valuable contribution to the initiatives of the Govt. of India for Digital India.

The Company has laid OFC for 10,739 GPs by the end of FY 20-21, out of 10,838 GPs allotted to the Company by Bharat Broadband Network Limited (BBNL) under Phase-I. The scope of work is spread across 39 districts in 5 States viz., Andhra Pradesh, Telangana, Himachal Pradesh, Jharkhand & Odisha.

10.2 CONSULTING SERVICES

Your Company, one among the largest power transmission utilities in the World, has developed expertise in its core areas such as power transmission projects, sub-transmission system, distribution management, load dispatch & communications, in India and abroad. Leveraging its capacity and experience, consulting services have been provided to a number of customers in India and worldwide.

DOMESTIC MARKET

Your Company, as a Consultant on behalf of Govt. of India, is implementing two important projects for strengthening of the Intra-State Transmission and Distribution Systems (33kV and above) namely âNERPSIP'' in Manipur, Meghalaya, Mizoram, Tripura, Nagaland & Assam and âComprehensive Scheme'' for strengthening of Transmission & Distribution in Arunachal Pradesh and Sikkim.

Further, the Company bagged 22 new consultancy assignments in FY 20-21. Major consultancy assignments received during the year include:

â¢ Consultancy services to THDC India Ltd for implementation of 400kV D/c line from their Khurja STPP to the 400kV switchyard of 765/400kV Aligarh SS (PG) and 400kV terminal bays at Aligarh S/s.

â¢ Consultancy services to OPTCL for restoration of 220kV D/c Pandiabili- Samagara Transmission Line.

â¢ Consultancy services to Lanco Teesta Hydro Power Ltd. (LTHPL) for Turnkey execution of 220kV D/c dedicated transmission lines from 500MW LTHPL Teesta VI HEP to POWERGRID Rangpo Pooling Station and associated bays at Rangpo.

â¢ 05 consultancy agreements were signed with different Renewable (Wind & Solar) developers for implementation of 220kV terminal bays at POWERGRID Substations.

INTERNATIONAL MARKET

On the International front also, the Company has been providing consultancy to various clients in Nepal, Bangladesh, Uganda and Fiji.

During the year, the Company secured new consultancy assignments in Fiji for Project Management and Construction supervision of 132kV transmission system.

The Company is under discussions with Africa50, which is an investment platform owned by 28 sovereign Governments in Africa and two Central banks and African Development Bank for investments in building transmission assets in Kenya under public-private partnership (PPP) model through a joint venture.

10.3. ENERGY MANAGEMENT

Realizing the significance of energy saving aspect for sustainable development, your Company is pursuing business opportunities in energy saving by way of conducting energy audits and implementation of Energy Efficiency & Sustainable development projects in various Govt. as well as private agencies, e.g. industries, institutions, commercial establishments, State Transmission Utilities, etc. Your Company is a BEE Grade-I Energy Service Company (ESCO) for investing /implementing energy efficiency projects and has a large pool of certified energy auditors/energy managers who are well qualified to offer energy efficiency solutions.

During the year, the Company signed MoU with CSIR-NEERI for long term association in the area of Energy Efficiency and Sustainable Energy. The MoU would facilitate setting up Waste to Energy plants, Solid Waste Management etc. in various establishments.

10.4. EV CHARGING INFRASTRUCTURE

The Company is promoting e-mobility by adopting Electric Vehicles (EV) for its own use and by installing fast EV charging stations across the country.

During the year, the Company set up eleven (11) more EV fast-charging stations. Now, POWERGRID is operating 16 public EV charging stations at Delhi, Gurugram, Hyderabad, Ahmedabad, Bengaluru, Kochi & Kozhikode. Work on additional 24 public EV charging stations is in progress in Delhi, Bengaluru, Mysuru and Shillong. POWERGRID is developing 11 EV charging stations in Shillong under Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) India scheme phase-II.

Discussions are in progress with various Municipal Corporations, DISCOMs, Metro Rail Authorities etc. for expanding Energy Vehicle Charging Station network.

11. QUALITY MANAGEMENT

The Company has developed and maintained systems & procedures aligned with Integrated Management System as per Publicly Available Specification, PAS 99:2012 integrating requirements of ISO 9001:2015 (Quality Management System), ISO 14001:2015 (Environment Management System) and ISO 45001:2018 (Occupational Health & Safety Management System).

The Integrated Management Systems were audited by a third party and POWERGRID has successfully passed all the standard requirements. Systems were also audited for maintenance of Social Accountability Standard, SA: 8000, Energy Management Systems as per ISO:50001 and Information Security Management Systems as per ISO:27001.

Further, the contract conditions require contractors to submit a quality assurance programme, aligned to ISO requirements.

Despite COVID-19 pandemic, all the inspections, sub vendor assessments and other quality related activities were undertaken in a well-planned manner using a mix of actual visits during low impact period of Covid-19 and virtual visits during severe Covid-19 pandemic conditions. Around 17,000 inspection calls were received & attended considering all Government guidelines/regulations during the year to ensure quality during manufacturing.

12. TECHNOLOGY DEVELOPMENT

Your Company has been at the forefront in adoption of state-of-the art technologies and undertakes applied research and development activities in pursuit of technological excellence in power transmission.

In the previous years, POWERGRID has catered to the internal research, analysis, testing, calibration and ever-growing asset management needs of the organization through its state-of- the-art laboratories. Apart from this, the laboratories have extended services to external clients for Dynamic testing, Conformance testing etc. of Intelligent Electronic Devices (IEDs), Compliance Testing of Phasor Measurement Units (PMU), Electric and Magnetic field measurement and analysis, etc.

During the year, in a boost to Atmanirbhar Bharat Abhiyan POWERGRID, in collaboration with BHEL has successfully commissioned India''s first indigenously developed 400kV Optical Current Transformer along with Digital Substation components (IEDs and SCADA) at 400/220kV Bhiwadi Substation of POWERGRID. This collaborative R&D project is a major step towards complete digitization of the Substation automation system.

Your Company has also developed an in-house simulation software for Electric and Magnetic Field (2D) analysis which could be used in the design verification in power transmission lines.

In a bid to secure the intellectual property rights of the Company, a patent application has been filed for âSystem and method for health assessment of Transformers and Reactors''. In addition, copyright has been received for two in-house software systems developed for UHV/EHV equipment condition monitoring and health assessment i.e. for the Transformer Online Condition Monitoring System (TOCMS) and POWERGRID Asset Life Management System (PALMS).

13. DIGITAL TRANSFORMATION:

Your Company has taken upvarious digital initiatives towards paperless working providing greater transparency and ease of doing business. These initiatives enabled business continuity during the covid lockdown facilitating work from home by its employees.

The Company has established an e-Tendering Portal-PRANIT certified by Standardization, Testing and Quality Certification Directorate (STQC), Ministry of Electronics and Information Technology, Govt. of India. With this, POWERGRID is now the only organization in India to have an e-Procurement solution on SAP Supplier Relationship Management (SRM).

Centralized Vendor Bill Processing facilities are being established through POWERGRID Payment Processing and Facilitation Centers (PPPFCs) at strategical locations to streamline the processes of verification of bills and release of payments, optimizing the resources, to enhance the transparency and accountability in the system.

The Company has successfully achieved SAP Customer Center of Expertise (CCoE) Certificate. This signifies that Company has the knowledge, capabilities and framework to bring forward continuous improvement and innovation in our ERP implementation.

14. CONTRIBUTION TO GOVT. OF INDIA SCHEMES - RURAL ELECTRIFICATION (RE) WORKS UNDER DEENDAYAL UPADHYAYA GRAM JYOTIYOJANA (DDUGJY)/ PRIME MINISTERâS DEVELOPMENT PACKAGE (PMDP)-2015

Rural Electrification Infrastructure works under DDUGY/PMDP schemes are under progress in 6 districts in J&K UT & 2 districts in Ladakh UT and Intra-state transmission works of 6 projects are under progress in J&K UT under PMDP.

Till date, under GoI''s DDUGJY/PMDP for rural electricity infrastructure and household electrification, the Company has implemented infrastructure work for rural electrification in 95 districts of 10 States in the country. Infrastructure has been created for electrification of 87,409 villages (i.e., partially electrified & un-electrified villages) and service connections have been provided to about 44 lakhs BPL households.

15. PARTICIPATION IN GOVT. OF INDIA INITIATIVES15.1 PROMOTION OF MAKE IN INDIAâ

The Company, through continuous measures, has encouraged local sourcing of various goods for development/ operations of transmission system.

With POWERGRID''s efforts, new plants and facilities have been set-up in India over the past few years by a number of foreign manufacturers for equipment like GIS, transformers, reactors, STATCOM, OPGW, etc., thereby paving way for a wider vendor base and emergence of a more efficient supply chain. As a result, your Company is able to reduce its import of transmission related equipment from 12.23% in FY 16-17 to 2.60% in FY 20-21.

The Company is actively working for development of its vendor base by encouraging local suppliers, MSE firms and existing vendors.

15.2 PROMOTION OF MICRO, SMALL AND MEDIUM ENTERPRISES (MSME)

The Company has been complying with the guidelines issued by the Government from time to time for promotion of MSMEs. The Company is registered on all the three (03) available Trade Receivable e-Discounting System (TReDS) platforms of (i) Receivable Exchange of India Limited (RXIL) (A NSE - SIDBI JV), (ii) Mynd Solutions Private Ltd (M1xchange) and (iii) A TREDS Ltd. (Invoicemart).

In terms of the above policy of the Govt. of India, the total eligible value of annual procurement of goods produced and services rendered by MSEs (including MSEs owned by SC/ ST and women entrepreneurs) during FY 20-21 was '' 2,332 crore. The total procurement from MSEs (including MSEs owned by SC/ST and women entrepreneurs) was '' 1,085 crore (46.51%). The Company has achieved the target of mandatory procurement of 25% out of total annual purchases of products and services rendered by Micro and Small Enterprises in line with Public Procurement Policy (Order 2012) read in conjugation with its amendment in November, 2018.

Total eligible value of annual procurement of goods produced and services rendered by MSEs (including MSEs owned by SC/ST and Women entrepreneurs) for FY 2021-22 is projected to be in the range of '' 1,100 crore.

During the year, in order to encourage and develop Micro and Small manufacturers for supply of innovative & quality products, MSE vendor development programs/webinars were conducted on virtual platform due to the COVID-19 pandemic. Special focus was kept on Micro and Small Enterprises owned by SC/ ST and Women entrepreneurs. The response of Micro and Small Enterprises in these virtual meetings/webinars was overwhelming. A number of Micro, Small & Medium Enterprises have been developed as sub-vendors and approved for supply of components for various equipment.

16. SUSTAINABLE GROWTH

Your Company''s activities are non-polluting in nature and their environmental impacts are negligible. The principles of Environment, Social and Governance (ESG) are being embedded by your Company into business operations and is continuing to attach highest importance to ESG ecosystem.

The Company is taking steps to align its sustainability related aspects with global requirements and is participating in assessment surveys carried out by MSCI, FTSE and S&P Global CSA annually, wherein Company gets an opportunity to benchmark its various parameters pertaining to ESG under electric segment having domestic & international peers.

Your Company is committed to use of green technologies to reduce carbon footprints by adoption of electrical vehicles for its usage and development of electrical vehicle charging infrastructure in association with various public utilities for achieving the national target of e-mobility. Further, your Company has installed rooftop solar PV plants of more than 6MWp at more than 70 locations which are cumulatively generating about 8 million units of electricity annually, thereby reducing Co2 emission of approximately 8000 MT per year. Establishment of additional 5 MWp Rooftop Solar PV systems in 66 locations is in progress.

16.1 ENVIRONMENT AND SOCIAL MANAGEMENT

POWERGRID, being a responsible corporate entity, addresses any residual environmental or social impacts associated with its business following the cardinal principles of Avoidance, Minimization and Mitigation as outlined in its Environmental and Social Policy & Procedure (ESPP) which was developed way back in 1998 and updated from time to time.

The acceptance of ESPP provisions by leading multilateral agencies like The World Bank in 2009 and The Asian Development Bank (ADB) in 2017 under their policy of Use of Country System (UCS) and Country Safeguard Systemâ (CSS) respectively is a reflection of our commitment and implementation record for E & S safeguard management.

POWERGRID, a pioneer in Sustainability Reporting in the Indian Power Sector released its 6^th biennial sustainability report for FY 2017-19 in September 2020 based on internationally acclaimed/accepted âGlobal Reporting Initiative (GRI) Standards (Core)â duly validated by independent Accredited Assurance Provider.

The Company, in partnership with Global Reporting Initiative (GRI) South Asia, has taken several initiatives towards fulfillment of India''s commitment to United Nation''s Sustainable Development Goals (SDGs) Agenda 2030 and has already aligned its activities with 11 SDGs out of total 17.

16.2. CORPORATE SOCIAL RESPONSIBILITY (CSR)

For social and economic development of communities, your Company undertakes CSR activities in areas of rural development, education, skill development, health & sanitation and other areas of national importance. The projects are conceived in consultation with the stakeholders, primarily in the vicinity of its area of operations.

The Company has spent '' 240.48 crore exceeding the prescribed CSR budget of '' 233.79 crore (2% of the average PBT of preceding three years) for the FY20-21. Further, 119 new CSR projects of '' 179.77 crore were sanctioned. Project-wise details are given at Annexure - X of this Report.

During the year, the Company contributed '' 70 crore to PM CARES Fund towards COVID-19 pandemic. Projects worth '' 28.05 crore were also undertaken towards providing more than 1.52 lakh packets of cooked meal, about 1850 MT ration items, 8530 PPE kits and other items to nearly 2.80 lakh beneficiaries at 276 locations in the vicinity of Substations/construction locations throughout the country.

The Company provided assistance in COVID-19 vaccination programme through procurement of cold chain equipment for supporting existing infrastructure for the States of Punjab, Mizoram, Sikkim and Ladakh.

The Company has supported establishment of a Hub and Spoke model Tele- ICUs at Sanjay Gandhi Post Graduate Institute of Medical Sciences (SGPGIMS), Lucknow and at their selected medical colleges in the State of Uttar Pradesh. The Company has also supported Tata Memorial Centre (TMC) for developing Modular Operation Theatres at Women and Child Hospital, ACTREC campus, TMC, Navi Mumbai.

The Company has provided financial Assistance towards Integrated Development of Kevadia town in Gujarat and for construction of 2.5 km, 10m wide road and fagade enhancement of public building along with associated works for re-development of Shri Badrinath Dham town as a Spiritual Smart Hill.

L7. GOVERNANCE17.1 RIGHT TO INFORMATION

In order to promote transparency and accountability, an appropriate mechanism has been set up across your Company in line with âRight to Information Act, 2005''. The Company has nominated Public Information officers and Appellate Authorities at Corporate, Regional Head Quarters and other offices to provide required information to the citizens under the provisions of Act.

In FY 20-21, around 1000 RTI applications were received in the Company and processed timely as per the RTI Act, 2005. Training programmes/ awareness sessions for the Company''s CPIOs/PIOs/Appellate Authorities were organized for sensitization about their role in implementation of the RTI Act.

The Company has also conducted third party audit of suo-motu disclosure as per section 4(1)(b) of RTI Act,2005 and also published the third-party report on POWERGRID website.

17.2. COMMITMENT TO TRANSPARENCY & VIGILANCE FUNCTION

The Company advocates the principles of Transparency, Probity and Ethics in its management functioning. Vigilance Department of your Company performs Preventive, Pro-active as well as Punitive Vigilance and ensures that best ethical practices are followed in the organization.

EMPHASIS ON PREVENTIVE VIGILANCE

To strengthen the organizational process and to minimize malpractices in various systems & activities of the organization, emphasis on preventive vigilance is given. Preventive vigilance focuses on the right types of systems or need for re-engineering proactive approach aimed at identification of opportunities and taking action against potential threats.

During FY 20-21, 56 surprise inspections, 30 process-on-line inspections and 17 Chief Technical Examiner (CTE) Type inspections were conducted. Pursuant to Vigilance inspections and observations/ recommendations, a number of system improvements have been implemented.

PREVENTIVE VIGILANCE WORKSHOPS AS PART OF CAPACITY BUILDING

During FY 20-21, various Preventive Vigilance Workshops, Webinars were conducted for non-vigilance personnel at the Corporate Centre as well as at various regions of the Company. These workshops inter-alia cover contracts management, provisions of CDA Rules, compliances of rules and policies, common irregularities, deliberation of case studies based on real cases, quality aspects as well as Ethics Management which enables the employees to identify and deal with ethical dilemma.

VIGILANCE AWARENESS

Vigilance Awareness Week 2020 was observed in POWERGRID from 27^th October to 2^nd November 2020 (pursuance to the directions of Central Vigilance Commission) in line with the theme for this year âVigilant India, Prosperous India", with full vigor, following all government guidelines regarding the pandemic.

POWERGRID employees and their family members celebrated the Vigilance Awareness Week with great enthusiasm. A total of 392 activities including various competitions viz. essay, quiz, slogan and painting competition for kids were organized by POWERGRID for employees and their family members wherein approximately 6000 individuals participated. The message of Vigilance Awareness Week 2020 was propagated through FM Channel, print and electronic media in national as well as regional languages. Stakeholders were also involved through vendor meets, which were conducted at CC and all regions.

Approximately 7400 POWERGRID employees across all locations took the Integrity Pledge through live transmission.

Journal of Vigilance department of POWERGRID (CANDOUR) was released during the closing ceremony of Vigilance Awareness Week at its Corporate Centre, Gurugram. In line with the Commission''s guidelines, the magazine was released in digital form (e-CANDOUR) for the employees and general public.

17.3. CITIZENâS CHARTER

18. PEOPLE: OUR CORE STRENGTH

Your company believes that its competent and motivated workforce is its core strength in delivering excellent financial and operational results, year after year. HR process and systems are designed to acquire, nurture and empower power professionals in line with organizational business objectives, core values of the company in an equitable, collaborative, healthy, safe environment. Emphasis is given for development of a culture of continuous learning, sharing and development.

As on 31^st March 2021, the employee strength of the Company stood at 8,766 as against 8,990 on 31^st March 2020, which is exclusive of the employees on contract. Women constituted 7.74% of its total workforce as on 31^st March 2021.

18.1 HUMAN RESOURCE DEVELOPMENT

POWERGRID Academy of Leadership (PAL), established by the Company at Manesar has been imparting a wide range of learning solutions not only for its employees but also to external stakeholders.

During the year, in view of COVID-19 pandemic, 620 training and development programs using virtual mode were organized by the Company through in-house facilities as well as premium educational institutes and centres of learning in India and abroad. The range of training & development imparted include induction programs to Executive Trainees besides hands-on/managerial/ behavioral/leadership training programs to employees and customized programs for external agencies.

Leveraging its people capabilities and infrastructure available at PAL for capacity development, in FY 2020-21, training programs have also been conducted by the Company for employees of other power utilities on consultancy basis.

During FY 20-21, various in-house developed video/text-based e-learning and refresher courses on Company information have been uploaded in POWERGRID E-Learning Portal, PRAGYAN. First batch of 500 employees have completed the Harvard Manage Mentor Program and subsequently second batch of 500 employees has been enrolled for this program.

POWERGRID has been accredited as Registered Education Provider of PMI, USA and 3 batches of Certified Project Management Program have been conducted online.

Basic/Advanced level online training programs on Accounting & Finance were organized by Corporate-HRD Consultancy Group under CBIS-NERPSIP Scheme for NER state utilities like AEGCL(Assam), MeECL, MePDCL, MePTCL (Meghalaya), TSECL (Tripura) etc.

More than 1000 apprentices have been engaged in different trades as per the Apprentice Act, 1961. MoU has been signed among National Skill Development Corporation (NSDC), National Skill Development Fund (NSDF), Power Sector Skill Council (PSSC) and POWERGRID for Skill development training to 6000 unemployed youth in the power Sector across 25 locations.

50 Employees have been sponsored for a customized 15 months PGDM program in Data Analytics, Machine Learning & Artificial Intelligence by IIIT Bangalore.

18.2. EMPLOYEE WELFARE

The Company is continuously updating its welfare policies in line with the industry trend and to meet the changing needs for its employees. Your Company, during the year, introduced work from home guidelines for employees and has taken various measures for smooth functioning during COVID-19 situation.

Many webinar/ talks were held during the period by experts for employees on medical care, wellbeing and lifestyle management during the pandemic. Isolation facilities were setup at various locations for affected employees and dependents. Various facilities viz. home collection of samples for COVID-19 testing, medical consultation through telemedicine and provision of non-refundable advance to members of the PF-Trust were introduced.

A dedicated COVID Communication webpage / web repository created on Intranet for easy access and dissemination of information related to COVID-19 issued by POWERGRID and Govt. authorities including various circulars, guidelines, SOP''s, Do''s and Dont''s etc.

Your Company has introduced comprehensive reward and recognition scheme - PRATIPHAL (POWERGRID Rewarding & Appreciating Teams & Individuals by Promoting Higher Accomplishments and Learning) to promote and reinforce achievement oriented high-performance work culture.

18.3. GRIEVANCE REDRESSAL

In POWERGRID, grievance redressal is always taken up with priority. Your Company promptly redresses the grievances of its employees within the broad parameters of guidelines enumerated by Govt. of India and policy framework. An âEmployee Grievance Portal'' is in place for the same. The Company has designated nodal officers at corporate & regional offices for systematic & prompt redressal of the grievances within stipulated time frames.

18.4. ENSURING SOCIAL JUSTICE

POWERGRID has constituted a separate reservation cell to look after and safeguard the legal provisions for SC/ST/ OBC & PwD categories of employees.

The reservation cell assists the Liaison Officer who looks after the welfare & safeguard of SC/ ST/ OBC & PwD employees. Liaison Officer also ensures that there is no discrimination on the basis of caste, religion & disabilities amongst the employees. To ensure effective discharge of duties across all establishments of POWERGRID, separate liaison officer for each region has been nominated. The Company implements all directives and guidelines with regard to reservation policy issued by Govt. of India. Annual inspection is also conducted to ensure implementation of directives issued by Govt. of India. Periodic meeting is also held with representatives of the association of SC/ ST & OBC to resolve issues, if any.

The Company has taken several administration-related issues during last year to support women employees such as âSkip-the-queue in cafeteria'' and earmarked parking slots for expecting mothers at Corporate Centre etc. In the unprecedented times of Pandemic, all out efforts have been made to ensure work life balance for women employees.

âFlexi timingsâ and âwork from homeâ options have been given for pregnant women employees and mothers with young children during COVID-19 period.

19. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the sexual harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made here under, the Company has Internal Complaint Committees (ICC), in place, to redress complaints received regarding sexual harassment. POWERGRID has been conducting training/workshop programs for both male and female employees sensitizing them on issues and the law/ Act relating to sexual harassment. Workshops on women empowerment, development and gender sensitization are also organized. There was one complaint of sexual harassment filed during FY 2020-21 and complaint has been disposed off in stipulated time as per the Guidelines.

20. IMPLEMENTATION OF OFFICIAL LANGUAGE (RAJBHASHA)

To promote Rajbhasha âHindiâ, POWERGRID has made all round efforts to integrate and promote use of Hindi in its works at all levels. Various Workshops, Trainings and motivational programmes were organized at every unit of POWERGRID by video conferencing in the FY20-21.

To publicize Hindi, various competitions throughout the year with special emphasis during Hindi Pakhwada, Vigilance Awareness Week, Swachchhta Pakhwada etc along with departmental meetings as well as Official Language Implementation Committee (OLIC) meetings are also being conducted. Attractive incentive schemes for employees working in Hindi have been implemented as per the government guidelines. Also, various award and reward schemes have been introduced to encourage employees to actively participate in promotion of Hindi, by giving articles/write-ups for in-house magazines, reading library books etc.

Various awards were conferred to your Company''s offices by Town Official Language Implementation Committee (TOLIC) and Rajbhasha Vibhag, Ministry of Home Affairs, Govt. of India regarding best Implementation of Official Language. Besides, POWERGRID''s efforts were also applauded during various inspections and discussions done by Hon''ble Committee of Parliament on Official Language on different occasions.

21. STAKEHOLDER ENGAGEMENT

Leveraging upon its social media presence, POWERGRID has been at the forefront to engage with its virtual audiences, providing real time access to information through social media viz. Facebook, Twitter, Youtube and Linkedin. A dedicated Communication Lounge on the website also provides a one-stop solution to all communication requirements.

For internal stakeholders, various communication vehicles viz. e-magazines, âCommunique'' and âCUE''; display magazine âLOUNGE'', short films videos, creatives, and digital quarterly magazines are being utilised to regularly apprise about developments, achievements, events & showcases viewpoints of management and employees.

Positive stories of hope, recovery and brand citizenship behavior are being disseminated amongst the POWERGRID family, and such concerted efforts have led to recognition from industry, as Team Corporate Communications has been ranked 18^thin the list of India''s Top 30 Corporate Communication Teams across private and public sector by a reputed independent magazine.

22. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis, forming part of the Directors'' Report, is placed at Annexure-I of this Report.

23. BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report, as stipulated under Regulation 34 (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is given in Annexure-II and forms part of this Report.

24. AUDITORS24.1. STATUTORY AUDITORS OF THE COMPANY

The Statutory Auditors of the Company are appointed by the Comptroller & Auditors General of India. M/s. T R Chadha & Co. LLP, M/s. Umamaheswara Rao & Co., M/s. B M Chatrath & Co. LLP and M/s. P S D & Associates, were appointed as Joint Statutory Auditors for FY 2020-21.

The Statutory Auditors have given an unqualified report. The report is self-explanatory and does not require any further comments by the Board.

24.2. COMPTROLLER AND AUDITOR GENERALâS COMMENTS

The Company has received âNil'' comments on the Financial Statements (Standalone and Consolidated) for the Year ended 31^st March 2021 from the Comptroller and Auditor General of India under Section 143(6) of the Companies Act, 2013. The comments of C&AG is placed at Annexure-IV.

24.3. SECRETARIAL AUDIT

Kumar Naresh Sinha & Associates, Practising Company Secretary has conducted Secretarial Audit of the Company for the financial year ended March 31, 2021. The Secretarial Audit Report is placed at Annexure-V.

The Secretarial Auditor has observed that provisions of Regulation 17(1) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Para 3.1.4 of DPE Guidelines on Corporate Governance with regard to Composition of the Board of Directors have not been complied with during the financial year.

In regard to above, it was explained that POWERGRID, being a Govt. Company, the power to appoint Independent Directors vests with the Govt. of India and the Company has taken up with the Govt. of India for appointment of requisite number of Independent Directors.

24.4. COST AUDITORS OF THE COMPANY

The Company appointed M/s Dhananjay V. Joshi & Associates, Cost Accountants and M/s Bandyopadhyaya Bhaumik & Co., Cost Accountants as Cost Auditors for the FY 2020-21 under Section 148 of the Companies Act, 2013.

25. BOARD & COMMITTEES 25.1. COMPANYâS BOARD

During FY 2020-21, Shri M. Taj Mukarrum assumed the charge of the post of Director (Finance) w.e.f. 04.07.2020, in terms of the Ministry of Power order dated 03.07.2020. Mrs. Seema Gupta, Director (Operations) demitted the additional charge of the post of Director (Finance) on 04.07.2020.

Shri Abhay Choudhary assumed charge of post of Director (Projects) w.e.f. 1^st Novemebr,2020. Shri Rajeev Kumar Chauhan demitted the office of Director (Projects) on 31^st October,2020 on attaining the age of superannuation.

Shri Mritunjay Kumar Narayan, Jt. Secretary, Ministry of Power, Govt. of India and Shri Dilip Nigam, Scientist âG'', Ministry of New and Renewable Energy, Government of India have been appointed on the Board of Company as Part-time Government Nominees Directors w.e.f. 5^th November,2020 and 5^th January,2021 respectively. Shri Tanmay Kumar, Jt. Secretary, Ministry of Power was on the Board of POWERGRID from 18^th March,2020 to 5^th November,2020.

Shri Manoj K. Mittal, Shri Sunil Kumar Sharma and Smt. A.R. Mahalakshmi, Independent Directors, have completed their respective tenure of 03 years respectively on 11^th September,2020; 22^nd July,2021 and 25^th July,2021.

The Board placed on record appreciation and gratitude to Shri Rajeev Kumar Chauhan, Sh.Tanmay Kumar, Shri Manoj K. Mittal, Shri Sunil Kumar Sharma, Smt. A.R. Mahalakshmi for their contribution and support to the Company.

In accordance with the provisions of the Companies Act and the Articles of Association of the Company, the resolutions w.r.t. reappointment of Shri Vinod Kumar Singh (DIN: 08679313) and Shri M. Taj Mukarrum (DIN: 08097837), as Directors liable to retire by rotation; and appointment of Shri Abhay Choudhary as Director (Projects) have been included in the Notice of Annual General Meeting.

25.2. NUMBER OF MEETINGS OF THE BOARD

Board of Directors met 10 times during FY 2020-21. Details regarding dates and attendance at the Board meetings are provided in the Report on Corporate Governance, which forms part of this report.

25.3. COMMITTEES OF THE BOARD

The Company has Audit Committee, CSR Committee, Nomination and Remuneration Committee, Stakeholders'' Relationship Committee, and other Committees for operational convenience. The composition and scope of the aforesaid Committees are provided in the Report on Corporate Governance.

Report on the Corporate Governance is enclosed at Annexure-VI, and the certificate thereon, issued by Practicing Company Secretary pursuant to Schedule V Para E of SEBI LODR, 2015 is attached at Annexure-VII to this Report.

25.4. DECLARATION BY INDEPENDENT DIRECTORS

During the financial year, all the Independent Directors have met the requirements specified under Section 149 (6) of the Companies Act, 2013 for holding the position of âIndependent Director'' and necessary declaration from each Independent Director under Section 149 (7) was received.

Pursuant to Regulation 34(3) and Schedule V Para C Clause (10)(i) of SEBI LODR, 2015 Naresh Kumar Sinha & Associates, Company Secretaries have issued Certificate of Qualification of Directors, who were on the Board of Directors during FY 2020-21.

25.5. PERFORMANCE EVALUATION OF DIRECTORS

The Ministry of Corporate Affairs (MCA) vide Notification dated 5^th June,2015 has exempted Government Companies from the provisions of Section 178 (2) of the Companies Act, 2013 (the Act), which provides for manner of evaluation of performance of Board, its Committees and Directors by Nomination and Remuneration Committee. The requirement of mentioning a statement on the manner of formal evaluation of performance of directors in Boards'' Report as per section 134(3) (p) of the Act has also been done away with for Government Companies, where the directors are evaluated by the Ministry or Department of the Central Government which is administratively in charge of the company, as per its own evaluation methodology. Further, MCA vide its notification dated 5^th July,2017 has made an amendment in the Schedule IV of the Act, whereby it has exempted Government Companies from complying with the requirement of performance evaluation by the Independent Directors of non-independent directors and Chairman and performance evaluation of the Independent Directors by the Board, if the concerned departments or ministries have specified these requirements.

The Department of Public Enterprises (DPE) has laid down a mechanism for performance appraisal of all Functional Directors. DPE has also initiated evaluation of Independent Directors.

The Company enters into Memorandum of Understanding (MoU) with Ministry of Power (MoP) every year wherein Company is evaluated on various financial and non-financial parameters. The performance of the Company & Board of Directors is evaluated by the Department of Public Enterprises in terms of MoU entered into with MoP.

In terms of Regulation 25 of SEBI LODR, 2015, the performance of the Board as a whole and non-independent directors including Chairman & Managing Director were evaluated by the Independent Directors in a separate Meeting held by them on 3^rd September, 2020.

25.6. POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION

The Company has framed a policy on the remuneration of the Directors, KMPs and employees as required under the provisions of Section 178 of the Act. The said policy is available on our website at https://www.powergridindia.com/ sites/default/files/Investor Relation/Reports Filings/Code of Conduct Policies/04 Remuneration%20Policv.pdf

26. COMPLIANCES26.1. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 134(3) (m) of Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules,2014 information relating to âConversation of energy, technology absorption and foreign exchange earnings and outgo'', is given in Annexure-III to this Report.

26.2. RISK MANAGEMENT POLICY

Information on Risk Management Framework is covered in the Management Discussion and Analysis placed at Annexure-I of this Report.

26.3. INTERNAL FINANCIAL CONTROLS AND ADEQUACY

26.4. ANNUAL RETURN OF THE COMPANY

In accordance with Section 92(3) read with Section 134 (3) (a) of the Companies Act, 2013, Annual Return(s) of the Company are available on the web-site of the Company and can be accessed at https://www.powergrid.in/sites/ default/files/Draft-MGT-7 20-21-Final%20Version.pdf

26.5. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Loans, Guarantees or investments under Section 186 of the Companies Act, 2013 form part of the notes to financial statements attached to this Report.

26.6. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties referred to in Section 188 (1) of the Companies Act, 2013, in the prescribed Form AOC-2, are given as Annexure VIII of this Report. Further, attention of the members is drawn on Note No. 56 of the Financial Statement which sets out related party disclosure.

26.7. SUBSIDIARIES AND JOINT VENTURES

As on 31^st March 2021 the Company has 24 subsidiaries and 10 Joint Ventures Companies.

A statement containing salient features of the financial statements of our Subsidiaries and Joint Ventures are covered in the Management discussion and Analysis and also annexed in the prescribed format AOC-1 as Annexure IX of this Report.

26.8. DIVIDEND DISTRIBUTION POLICY

As per regulation 43A of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (the Listing Regulations), the top 500 listed companies shall formulate a dividend distribution policy. Accordingly, the policy was adopted to set out the parameters and circumstance that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retained profits earned by the Company. The policy is also available on the Company''s website: https://www.powergrid.in/sites/default/files/Dividend%20Distribution%20Policv.pdf

26.9. SIGNIFICANT MATERIAL ORDERS

There are no significant and material orders passed by the Regulators or Courts or tribunal impacting the going concern status and Company''s operations in future.

27. DIRECTORSâ RESPONSIBILITY STATEMENT

As required u/s 134(3) (c) & 134(5) of the Companies Act, 2013, The Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors had prepared the annual accounts on a going concern basis;

e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

28. AWARDS & ACCOLADES

â¢ During the year, your Company ranked 2nd among Indian PSUs in Forbes âThe World''s Best Employer 2020 List''. Globally positioned as the 305th in the World''s Best Employer 2020 List.

â¢ Received SKOCH-Silver award for transformational performance in response to the COVID-19 pandemic & Skill development & employment generation program for sustainable growth of 200 underprivileged Women in Damoh district of MP.

â¢ Recognized as one of the Best Workplaces in Industrial services for 2020 by Great Place to Work Institute, India.

â¢ Received the prestigious GREENTECH award in COVID response category for CSR.

â¢ In recognition to our significant achievements in Learning & Development, the Company has won SHRM HR Excellence Award for its Excellence in Learning & Development.

29. ACKNOWLEDGEMENTS

The Board of Directors would like to express their deep sense of appreciation for the guidance and co-operation received from Govt. of India, particularly Ministry of Power, Ministry of Finance, Ministry of Home Affairs, Ministry of External Affairs, Ministry of Statistics and Programme Implementation, Ministry of Environment & Forests, Ministry of Corporate Affairs, Central Electricity Regulatory Commission, Appellate Tribunal for Electricity, Central Electricity Authority, NITI Aayog, Department of Public Enterprises, Regional Power Committees, Office of the Comptroller and Auditor General of India, and other concerned Govt. departments/agencies at the Central and State level without whose active support, the achievements of the Corporation during the year under review would not have been possible.

The Directors also acknowledge the valuable suggestions and guidance received from the statutory auditors during the audit of accounts of the Company for the year under review. The Board also conveys its sincere thanks to national and international financial institutions, multilateral financial institutions, domestic & international credit rating agencies for their assistance, continued trust and confidence reposed in the Company.

On behalf of Board of Directors, I would like to place on record our deep appreciation of the dedicated efforts and valuable services rendered by the employees contributing to the performance of the Company during the year 2020-21. The commitment displayed by the employees at all levels, particularly during the ongoing pandemic situation, is exemplary and praise worthy. I would also like to thank the Executive team for their strong leadership, the employee unions for their support and all our employees for their commitment, enthusiasm and dedication.

For and on behalf of the Board of Directors(K. Sreekant) Chairman & Managing Director

Date: 26^th August, 2021 Place: New Delhi

Your Company was the only Indian PSU to feature in ATD (Association for Talent Development) BEST Award 2021 winner list along with 7 Indian organizations.

Mar 31, 2018

Directors'' Report

To,

Dear Shareholders,

The Board of Directors have the pleasure of presenting the 29^th Annual Report on performance of Power Grid Corporation of India Limited (POWERGRID, the Company) during the financial year ended March 31, 2018 together with the Audited Financial Statements.

Continuing its long track record of sterling performance, your Company once again performed exceedingly well as is evident from the excellent results and achievements in all areas.

In FY 2017-18, Transmission assets consisting of 9,072 circuit kilometre (ckm.) of Extra High Voltage (EHV) transmission lines, 41,620 Mega Volt Ampere (MVA) transformation capacity with 15 new substations have been added.

Some of the major achievements of the Company during FY 2017-18 are:

- Asset Capitalization of 7 27928 crore (incl. TBCB projects).

- Capital Investment of 7 25791 crore against target of 7 25000 crore.

- Transmission system availability maintained at 99.81% with number of tripping per line contained at 0.60.

- Inter-Regional power transfer capacity of 11,400 MW added by the Company. With this, cumulative Inter-Regional power transfer capacity of the National Grid stood at 86,450 MW at the end of March, 2018.

- Total Income of 730,766.32 crore and Profit After Tax (PAT) of 78,238.96 crore.

- Interim Dividend of 7 2.45 per share (Face Value 710/- each) paid and in addition recommendation made for 72.80 per share as final dividend for the FY 2017-18, subject to approval of shareholders.

- Highest ever, over 12,000 km of Optical Ground Wire (OPGW) installed. 57,000 km OPGW network commissioned up to 31.03.2018 to support requirement of reliable voice and data communication with RLDCs to facilitate effective grid management.

- Telecom revenue rose to 7606.59 crore in the financial year ended on 31^st March 2018 from 7497.36 crore in the previous year.

- Consultancy revenue increased to 7662.18 crore in the financial year ended on 31^st March 2018 from 7582.43 crore in the previous year.

- Won tow projects under TBCB route - ERSS XXI Transmission Limited and WR-NR Power Transmission Limited.

1. FINANCIAL PERFORMANCE

In FY 2017-18, the Company has shown a stellar financial performance. The Financial Performance during FY 2017-18 as compared to the previous year 2016-17 is summarized below:

(All Figures except per share data is in units as indicated)

	2017-18		2016-17		Y-o-Y Growth
Description	INR (Rs, crore)	US$ (million)	INR (7 crore)	US $ (million)	Y-o-Y Growth
Revenue Transmission Charges	28483.69	4377.08	24630.28	3784.93	15.65%
Consultancy-Sale of Services	662.18	101.76	582.43	89.50	13.69%
Telecom	606.59	93.21	497.36	76.43	21.96%
Other Income	1013.86	155.80	866.63	133.17	16.99%
Total Income	30766.32	4727.86	26576.7	4084.04	15.76%
Profit After Tax (PAT)	8238.96	1266.08	7520.15	1155.62	9.56 %
Earnings per Share	715.75	US$ 0.24	714.37	US$ 0.22	9.60%
Book Value per Share	7104.01	US$ 1.6	795.20	US$ 1.46	9.25%
Gross Fixed Assets	177100.25	27214.96	149730.18	23009.01	18.28%
Long Term Borrowings*	130212.96	20009.8	117197.91	18009.78	11.11%
Net Worth	54414.96	8361.94	49807.25	7653.87	9.25%
Debt Equity Ratio	71:29		70:30
Return on Net Worth	15.14%		15.10%

* Including current maturities of long term borrowings.

Convenience conversion atlUS$ = 65.0746 INR as on 31.03.2018.

2. DIVIDEND

For FY 2017-18, your Company has proposed a final dividend of Rs,2.80 per share in addition to Rs,2.45 per share of interim dividend paid in February''18, taking total dividend to Rs,5.25 per share. The total dividend payout for the year amounts to Rs,2746.58 crore (including an interim dividend of Rs,1281.74 crore). The final dividend shall be paid after your approval at the Annual General Meeting.

3. MoU PERFORMANCE

For its performance against MoU with Ministry of Power, the Company has been rated ''Excellent'' yet again for financial year 2016-17. It is noteworthy that the Company has been consistently rated ''Excellent'' since 1993-94, the year it started signing the MoU.

4. OPERATIONAL EXCELLENCE

4.1 Asset Management

As on 31^st March 2018, the transmission assets owned and operated by the Company stood at 1,48,149 ckm. of Extra High Voltage (EHV) transmission lines and 234 nos. EHVAC & High Voltage Direct Current (HVDC) substations with 3,31,163 MVA transformation capacity. During the FY 2017-18, the Company maintained availability of the transmission network at 99.81% which is comparable to international standards. Number of tripping per line (unplanned) contained to 0.60, indicating high reliability of the transmission system.

To accomplish the mammoth task of maintaining such large and highly complex transmission network to ensure reliable operation, your Company plans maintenance activities for every asset well in advance. Your Company believes in ''preventive maintenance'' over ''breakdown maintenance'' and is committed to adopt the best of technological tools to maintain its assets to achieve the optimum operational performance. Some of such techniques/systems are given herein below:

4.1.1 Condition Monitoring Techniques for substation Equipment

The Company has adopted state-of-the-art condition monitoring techniques like Frequency Response Analysis for Transformers & Reactors, Dynamic Contact Resistance Measurement for Circuit Breakers, Third Harmonic Resistive Current measurement for Surge Arrestors, Thermo-vision scanning of substation equipment, etc., for detection of defects at incipient stage. In addition, periodic oil parameter checks, Dissolved Gas Analysis (DGA) of Transformers & Reactors and their bushings, particle counts and inhibitor content test are very useful for diagnosis of problems and life enhancement of the Transformers/Reactors.

4.1.2 Use of process bus for digital substations

Your Company has introduced process bus architecture by connecting Circuit Breakers, Isolators and Current Transformers/ Potential Transformers through Optical fibers Ethernet using IEC 61850 protocol for avoiding complex protection, control & measurement cables. This would pave way towards digital substations.

4.1.3 Online Transient Monitoring system

On line Transient monitoring system are being introduced at 765kV and 400kV substations to monitor switching and lightning surges. This will help in analyzing condition of the substation equipment as well as in failure investigations.

4.1.4 National Transmission Asset Management Centre, Manesar (NTAMC)

NTAMC, set up for managing the assets and monitoring various parameters remotely on real time basis has been managing 172 substations remotely, at the end of FY 2017-18.

4.2 O&M Benchmarking in POWERGRID

POWERGRID has been involved in both external and internal benchmarking processes to achieve the next level of performance.

4.2.1 External Benchmarking

Since 2010, POWERGRID has been a part of International Transmission Operation and Maintenance Study (ITOMS) - a global O&M benchmarking platform, where 32 leading global power transmission utilities are benchmarked against each other in various categories related to Operation & Maintenance practices. The study is carried out in respect of performance level achieved, cost incurred in maintenance and key practices associated in maintenance of equipment and the results of each utility are discussed and best maintenance practices are shared between different utilities. Since its participation in ITOMS, POWERGRID has gradually improved its performance in both Line and substation categories. In the last ITOMS cycle 2017, POWERGRID was rated in first quadrant for performance in both the major categories of Maintenance of Transmission Lines and substations - which denotes achievement of high performance efficiency along with low cost incurred on maintenance.

4.2.2 Internal Benchmarking

A comprehensive annual benchmarking system has been developed and started by POWERGRID since 2016-17 for evaluation of operational performance of various regions. Based on the results, the best practices of various regions are shared with other regions during Annual O&M conference.

The purpose of Internal Benchmarking is to identify gaps in operational practices of various regions, identify key initiatives and focus areas and bring performance of all the Regions on same operational platform.

Since September 2017, a concise monthly benchmarking system has also been developed for benchmarking of regional O&M performance on a monthly basis for critical parameters.

4.3 Adoption of latest technology for better availability of transmission lines

4.3.1 Aerial Patrolling of Transmission lines

In line with the best international practices and for optimal utilization of resources, Aerial patrolling of transmission lines is being carried out by your Company using helicopters to identify transmission line defects. Helicopters equipped with Gimbal mounted LIDAR (Light Detection and Ranging), Thermo-vision Camera, Corona Camera, High resolution Video and Digital camera are being deployed to identify the defects and taking corrective measures.

4.3.2 App based Patrolling

Your Company has adopted an android based application for patrolling of transmission lines for live updation of data and effective monitoring of critical locations. Plan of patrolling for each cycle can be created and monitored effectively via this App. Actual patrolling of each tower and defects rectification can be ensured through the app. It will progressively replace offline reports preparation and documentation.

4.4 Cyber Security

Your Company understands criticality to ensure cyber security of the inter-state transmission infrastructure. Information Security Policy and Procedures have been put in place. Its Corporate Office has been certified for ISO: 27001 Information Security Management System Standard. The Regional Headquarters are also in the process of being certified for ISO: 27001.

Compliance to Guidelines of The Indian Computer Emergency Response Team (CERT-in) and National Critical Information Infrastructure Protection Centre (NCIIPC) have been ensured.

In view of possible risks due to Cyber-attacks, all Grid connected intelligent control equipment are kept isolated (air-gapped) from external data communication systems. Also, in large part of networks, digital signals controlling operation of critical equipment are kept further confined and isolated by design to prevent any large scale cascade event.

A senior executive has been designated as Chief Information Security Officer, who reviews Cyber Security preparedness.

4.5 Advance Infrastructure for Grid Management

In the process of continuous up gradation and keeping in line with latest technological development in Grid Management, Company has been implementing Advance Infrastructure projects.

4.5.1 Unified Real Time Dynamic State Measurement (URTDSM)

Under URTDSM, 1314 nos. of Phasor Measurement Units (PMUs) have been installed covering 316 nos. of substations, out of which 1165 PMUs have already been integrated with RLDCs, as on 31.03.2018.

4.5.2 Up-gradation of EMS/SCADA System

Up-gradation of all 57 Control Centres have been completed with addition of new features like web based scheduling, cyber security, main & backup control centres. The communication network has also been upgraded to meet the requirement of upgraded control centres. During the year, 188 nos. OPGW links have been commissioned connecting 70 additional substations.

5. PROJECT IMPLEMENTATION

5.1 Project Management

In order to extract the maximum commercial benefits by implementing the transmission projects within the timelines, detailed planning is done to handle complex geographical as well as socio-economic issues. Integrated Project Management and Control Systems (IPMCS) and Enterprise Resource Planning (ERP) are some of the tools used for planning & implementation of the projects. Besides regular project review meetings at different levels of the management, have helped to identify any hindrances well in advance to enable timely corrective actions.

Also, to continuously improve the performance, interactive meets with Industry partners are organized regularly to share best practices and to resolve common issues through feedback and consultative process. Apart from business interactions, to encourage performance through positive reinforcement, your Company also felicitated various suppliers/contractors for their performance under different categories. Investment approvals for transmission projects worth about Rs, 4,000 crore have been accorded during the year.

5.2 Physical Achievements

On physical achievements front, your Company has been successful on a number of counts, whether it is completing long overdue projects, matching completion of Associated Transmission System (ATS) for generation linked projects, execution of large HVDC projects or inter regional links.

5.2.1 During the year, some of the long stalled/held up transmission projects were completed through Company''s persistent efforts and support from State Governments, Ministry of Power, GoI and other Government agencies. The list of such projects includes:

- 400kV Double Circuit (D/C) Aurangabad-Boisar transmission line;

- 765 kV D/C Aurangabad-Padghe transmission line & 765/400kV Padghe GIS;

- 400 kV D/C Kudus-Kala transmission line;

- LILO of 400 kV D/C Neelmangla-Hoody transmission line at Yelahanka & 400/220 kV substation at Yelahanka;

- 400kV D/C Sasaram-Daltonganj transmission line, 400/220kV substation at Daltonganj;

- 400kV D/C Dehradun-Abdullapur transmission line;

- 400kV D/C Kishenpur-New Wanpoh transmission line;

- 400kV D/C Kameng-Balipara transmission line;

- 132kV Single Circuit (S/C) Pasighat-Roing-Tezu transmission line & 132/33kV Roing and Tezu substations.

5.2.2 The list of the completed generation linked schemes includes:

- ATS for Kakrapar APP 3&4, RAPP - 7&8, Solapur STPS, Darliparli TPS;

- Evacuation scheme for Nabinagar TPS, Rewa & Pavagada Solar Parks, Kishanganga & Kameng HEPs.

5.2.3 Important Inter-Regional schemes completed include:

- Pole IV of Â± 800 KV Biswanath - Chariyali / Alipurduar - Agra HVDC multi-terminal Transmission System.

- 2^nd Pole of Â± 800 kV HVDC Champa-Kurukshetra link.

- 765 kV D/C Jabalpur-Orai-Aligarh, (WR-NR Inter-Regional strengthening link);

- 765 kV D/C Nizamabad-Hyderabad transmission line, part of Wardha-Hyderabad link;

- LILO of Satna Gwalior 765kV 2xS/C line at Orai substation; and

6. CAPITAL INVESTMENT AND FUND MOBILIZATION

During the year, your Company made a capital investment (CAPEX) of Rs,25791 crore. For this, Rs,13760 crore were mobilized through private placement of bonds & term loans, Rs,4947 crore were mobilized through External Commercial Borrowings (ECB)/Supplier Credit, Rs,6698 crore from Internal Resources and Rs,386 crore utilized from Grant received from PSDF & Central Financial Assistance (CFA) from MNRE.

During recent years, your Company has mobilized funds from internal resources and successfully arranged borrowing from domestic as well external sources at competitive rates. The major source of borrowing is from private placement of domestic bonds. For financing of CAPEX, your Company had also tapped other sources, which include commercial Bank loans, loans from bilateral and multilateral funding agencies.

During the year, your Company set up its first Medium Term Note (MTN) Program of USD 1 bn to offer debt securities for mobilization of funds from international market in one or more tranches.

7. COMMERCIAL PERFORMANCE

The Company primarily provides transmission service to various Designated Inter-State Transmission System Customers (DICs) comprising mainly the State Utilities owned by respective State Governments, private utilities, Independent Power Producers (IPPs) / Bulk Customers (like Railways), etc. The transmission charges payable by the DICs are determined as per the Central Electricity Regulatory Commission (Terms &Conditions ofTariff) Regulations, 2014.

With effect from 01.07.2011, the recovery of transmission charges are based on the Point of Connection mechanism for sharing of Transmission charges as per the Central Electricity Regulatory Commission (Sharing of Inter-state Transmission Charges & Losses) Regulations, 2010 and subsequent amendments thereof. As per the mechanism, POWERGRID as Central Transmission Utility (CTU), raises bills for transmission charges on the beneficiaries - Designated ISTS Customers (DICs), on behalf of all the Inter-State Transmission System (ISTS) Licensees in the Country and collects & disburses the payments to the Licensees as per the provisions of the said Regulations.

7.1 Billing and Realization

Company''s billing and collection methodology for transmission charges is robust and ensures prompt payment from its customers in majority of the cases. During FY 2017-18, your Company achieved a revenue realization efficiency of 98.92%.

Your Company has been effectively discharging all the activities/ coordination related to its responsibilities as CTU for Billing, Collection and Disbursement functions under the Central Electricity Regulatory Commission (Sharing of inter-State Transmission charges and Losses) Regulations, 2010.

7.2 Payment Security Mechanism

The Sharing Regulations provide a time period of 60 days for the DICs to make payment against the bills raised on them. In order to ensure better realization leading to improved cash flow and reduction of trade receivables, the Company, with the consent of other ISTS Licensees in the Country, has evolved a Graded Rebate Policy wherein a graded rebate is provided for payments made within 60 days, which is being availed by many utilities.

The Company enjoys a robust payment security mechanism in the form of Letter of Credit and regulatory provisions to undertake curtailment of Short term Open Access (STOA) of defaulting DICs to recover the transmission charges.

Besides the above regulatory mechanisms, the dues of State Utilities are also secured by a Tri-Partite Agreement (TPA) signed amongst the Gol, RBI, and the concerned State Government during 2003 as a part of securitization of dues of State Utilities towards the Power CPSUs in the Country that included POWERGRID also. The TPA provides that if there is any default in payment of current dues for more than 90 days by any State Utility to the CPSU, the outstanding dues can be deducted by Gol from the State allocation funds maintained with RBI and paid to the CPSU. The TPA was valid till October, 2016 which is being presently extended for another 10 years. Majority of the States have executed the agreements for extension of the TPAs (25 out of 29 states and 2 out of 4 Union territories signed the TPA) and the matter is being pursued with the remaining States/ Union Territories.

8. TARIFF BASED COMPETITIVE BIDDING PROJECTS

Your Company is performing well in the competitive environment under Tariff Based Competitive Bidding (TBCB). The details in this regard have been presented in Report on Management Discussion and Analysis.

9. NATIONAL GRID AND CROSS-BORDER INTERCONNECTION

9.1 In order to ensure seamless power flow across different Regions and for optimum utilization of resources spread across the Country, a strong National Grid is required. In pursuit of this, Company has taken up a number of Inter-Regional transmission lines.

In FY 2017-18, Â±800 kV Champa Pool-Kurukshetra HVDC Pole-2 of Bipole-1 (1500MW), Jabalpur-Orai 765 kV D/C line (4200 MW), LILO of Satna Gwalior 765 kV S/C line at Orai (4200 MW) and Pole IV (1500 MW) of Â± 800 KV Biswanath - Chariyali / Alipurduar - Agra HVDC multi-terminal Transmission System were completed. With these, Inter-Regional power transfer capacity of the National Grid is increased by 11400 MW and cumulative Inter-Regional power transfer capacity of the National Grid stands at 86,450 MW. With commissioning of new Inter-Regional lines in the future, this capacity is likely to be enhanced to about 1,18,000 MW by the end of 2021-22.

9.2 Cross-Border Interconnections

The electrical interconnections with neighboring countries, Nepal, Bhutan and Bangladesh, are being further strengthened for

increased exchange of power. Some of the upcoming and planned interconnections are as under:

9.2.1 Inter Connections with Nepal

- Gorakhpur New (India)-New Butwal (Nepal) 400kV D/C (Quad) line - Planned.

- 400kV D/C Transmission line from Arun 3 Hydro Project in Nepal to Bathnaha (India-Nepal Border) with estimated cost of Rs, 1000 crore-being taken up by POWERGRID on consultancy basis.

9.2.2 Inter Connections with Bhutan

- For evacuation of power from various upcoming hydro power projects (HEPs) in Bhutan, Punatsangchu-I HEP (Bhutan)

- Alipurduar (India) and Jigmeling - Alipurduar 400kV D/C (Quad) lines - under implementation.

9.2.3 Interconnections with Bangladesh

- Baharampur (India) - Bheramara (Bangladesh) 400kV D/C 2^nd line - under implementation

- Katihar (India)-Parbotipur (Bangladesh)-Bornagar (India) 765 kV D/C line (to be initially operated at 400 kV) along with 500 MW HVDC Back-to-Back terminal at Parbotipur (another 500 MW terminal would be installed with 765 kV operation of the line) - Planned.

10. CONNECTIVITY, MEDIUM TERM OPEN ACCESS (MTOA) & LONG TERM ACCESS (LTA)

POWERGRID, as CTU is the nodal agency for processing & grant of Connectivity, Long Term Access (LTA) and Medium Term Open Access (MTOA) to various applicants. Relevant regulations, procedures, guidelines and related documents for Connectivity, MTOA and LTA applications and status thereof are available online on Company''s website.

Out of total Connectivity & LTOA/LTA granted, as on March 31, 2018, 131 numbers of Connectivity for 91,406 MW and 209 nos. of LTOA/ LTA for 98,642 MW are in place. In addition, based on the transmission capacity margins availability, the MTOA has also been granted to 133 nos. of applications for a quantum of 14,368 MW cumulative capacity, out of which MTOA of 1576 MW granted to 17 nos. of applicants are in place.

11. QUALITY MANAGEMENT

Various quality improvement measures have been initiated and implemented to get quality products as below:

11.1 Implemented Quality Index Number (QIN) system for grading of EHV transformer and reactor suppliers. This has resulted in motivation for good suppliers and also sets a benchmark for other vendors. Systems are also developed for undertaking intelligent inspections of additional new items by way of reducing the requirement of inspections in case of qualified & excellent vendors. The time, thus saved, is utilized to exert more focus on process inspection at other vendors to upgrade and develop them towards excellence.

11.2 Your Company has been audited for revised and latest version of ISO 9001 & ISO 14001. Your Company has been granted revised certifications for Quality Management & Environment Management Systems successfully. It is also certified for Integrated Management Systems as per PAS 99:2012 integrating the requirement of ISO 9001:2015, ISO 14001:2015 and OHSAS 18001:2004.

11.3 Theme based discussions on various equipment have been arranged to discuss on continual improvements in line with ISO 9001:2015 requirement.

11.4 Encouraged a number of existing vendors to upgrade their equipment to higher voltage level & cover more items to increase vendor base thus creating more competitive environment.

11.5 "Make in India" campaign has been given a great push. Some overseas manufacturers have established their units in India for manufacturing of STATCOM, SVC, 765kV Gas Insulated substations, RIP bushings and 765kV transformers/reactors. To foster efforts to promote "Make in India", National High Power Test Laboratory Pvt. Ltd. (NHPTL), a Joint Venture Company with NTPC, NHPC, DVC & CPRI has been set-up with the objective to establish a State-of-the-Art on-line High Power Short Circuit Test Facility in India. This laboratory will be extremely beneficial for Indian power sector and manufacturers of high power electrical equipment of India and neighboring countries. The present status of the Company has been covered under the section on Joint Ventures in the Management Discussion and Analysis.

12. PROMOTION OF MICRO AND SMALL ENTERPRISES (MSES)

Your Company supports and encourages procurement from MSEs. It has taken various initiatives in line with Govt. of India Public Procurement Policy (PPP) for Micro and Small Enterprises (MSEs). The annual procurement plan related to Goods and Services for which MSEs may participate directly in bidding has been made available on website. The Company is continuously making efforts to increase its MSE vendor data base.

13. ENTERPRISE RESOURCE PLANNING

Project "RUPANTAR", the Enterprise Resource Planning (ERP) initiative of the Company has been implemented successfully and the processes and systems have been stabilized in all the regions of the Company. Presently, majority of the key processes related to the business are running on ERP. E-tendering for the domestic bids has also been taken up in ERP system and 780 numbers of packages have been floated till March 2018. Roll out of GST was one of the major changes brought about by Govt, of India during the year. Necessary changes in ERP system to comply with GST requirements have been incorporated.

14. TECHNOLOGY DEVELOPMENT

Your Company has been at the forefront to adopt the latest advancements in the bulk power transmission, so as to result in technological excellence and improvement of efficiency. In this direction, Company has established an Advanced Research and Technology Centre at Manesar (Haryana) with state-of-the-art laboratories for power system analysis, advanced diagnostics, digital substation, material science, engineering design etc. This centre aims to help in knowledge assimilation, enhancement and dissemination as well as adoption of innovative technologies in power sector.

The prestigious 1200kV National Test Station, utilization of Geographic Information System Tools, application of Process Bus Technology in substation Automation System and In-house software tools for Real time Monitoring of Transformers and Reactors are among the major initiatives taken by the Company in this direction in recent years.

14.11200kV National Test Station

Your Company is carrying out long term field operation and performance monitoring at its 1200kV National Test Station, established at Bina, Madhya Pradesh in collaboration with Indian equipment manufacturers for getting the 1200kV equipment developed in India for future.

14.2 Geographic Information System Tools

Your Company is utilizing Geographic Information System Tool like ''Bhuvan'' for mapping its transmission assets, route alignment during planning of new transmission lines and for disaster management studies.

14.3 Process Bus Technology

The Company is implementing the process bus technology in new substations and renovation of aged substations based on the experience gained from pilot implementations. Besides reduction of footprint by replacing large amount of copper cables with minimal fibre optic cables, it is expected to ease the maintenance and trouble-shooting in future and the restoration time is also expected to be extremely low in case of any eventuality. Process Bus technology is being implemented for retrofitting aged protection system at Malerkotla substation and in a Greenfield project at 220/66kV GIS substation at Chandigarh.

14.4 Software Tools for monitoring of Transformers and Reactors

Your Company is developing in-house software tools for centralized real time monitoring of transformer and reactors by integrating the sensors installed in these equipment across the Country. Online monitoring of transformers/reactors is aimed at detecting early stages of faults initiation and hence reducing sudden catastrophic failures of the same.

14.5 Introduction of RIP bushings in 800kVTransformers and Reactors

Your Company took up development of Resin Impregnated Paper (RIP) condenser bushings for 800kV Transformers and Reactors to minimize catastrophic failures.

15. TOWARDS SMART GRID DEVELOPMENT

Your Company is continuously focusing towards improving reliability, security, and efficiency of the grid through applications of intelligent smart grid technologies. Your Company is delivering smart grid solutions to the utilities and vertically expanding the client base, making Smart Grid a promising business area.

Your Company offers wide range of smart grid solutions covering distribution infrastructure, advanced metering infrastructure, intelligent outage management, electric vehicle charging stations, power quality management, net metering, renewable energy management center, battery energy storage system, roof top solar integration etc. Currently, your company is extending consultancy services to eight (8) utilities for implementation of smart grid project situated at various locations.

15.1 Battery Energy Storage System

Recognizing the importance of Battery Energy Storage Systems in Indian context to address challenges in increasing penetration of renewable, E-mobility etc., your company has taken a pioneering step in establishing a pilot project for Grid connected Battery Energy Storage System. It consists of two different types of battery technologies (Advanced Lead Acid & Lithium Ion Phosphate) with Battery Management System integration with network at Puducherry. The pilot system has demonstrated the capabilities for frequency regulation and energy time shift applications. The findings of the energy storage project would also be helpful in deployment of large scale energy storage system to address intermittency, variability of renewable.

15.2 Smart Transmission

Your Company has undertaken full scale implementation of real time smart transmission projects applying State-of-the-Art Wide Area Measurement System (WAMS) using advance synchrophasor technology in the grid. This Unified Real Time Dynamic State Measurement (URTDSM) project involves placement of Phasor Measurement Units (PMUs) at all 400 kV and above substations, generation switchyards of 220 kV and above, HVDC terminals and Phasor Data Concentrator (PDC) at SLDC, RLDC & NLDC control centres along with backbone communication infrastructure, which has enhanced the efficiency of the overall grid management.

15.3 Smart Grid Knowledge Centre

To bring awareness on application of Smart Grid technologies and its demonstration in a holistic manner, your Company has established Smart Grid Knowledge Center at Manesar equipped with various working models and functionalities. These working models shall provide learning environment and capacity building on different smart grid attributes to various stakeholders.

15.4 EV Charging Infrastructure

As a step towards e-mobility, the Company is undertaking a pilot project of establishing e-taxi charging stations at two locations on Hyderabad Metro Corridor. Discussions are in progress to deploy charging and swapping stations in some other cities.

16. INTEGRATION OF RENEWABLES

Your Company is playing a key role for integration of renewable energy resources into the Grid. High Capacity Green Energy Corridors are under implementation, which will serve dual purpose to facilitate interconnection of large scale renewable into the National Grid as well as enlarging the balancing area to address renewable volatility. In addition, transmission schemes for 7200 MW Ultra Mega Solar Power Parks worth Rs, 4300 crore are also under implementation in various States as part of Green Energy Corridors-II.

Renewable Energy Management Centres

Your Company is taking-up the challenging and flagship responsibility of establishment of Renewable Energy Management Centers (REMC) at 11 (eleven) locations in various RE resource rich states viz. Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra, Gujarat, Madhya Pradesh, Rajasthan and regional load dispatch centers at SR, WR, NR as well as at National Load Dispatch Centre. This would enable forecasting of renewable resources and efficient management of variable renewable generation ensuring grid stability & security. Upon implementation of REMCs by your Company, these will be handed over to respective owners, i.e. State LDCs/POSOCO (Load Dispatch Centers/Power System Operations Corporation Limited).

To facilitate penetration of clean energy resource like Solar as well as distributed (roof top) Solar PV in the Andaman''s grid, your Company is nominated for establishing Energy Management Centre (EMC) for monitoring, control & forecasting of renewable resources at South Andaman.

17. ENERGY EFFICIENCY

Your Company is a BEE Grade-I Energy Service Company (ESCO) for undertaking energy efficiency projects. Being in energy sector and having large pool of certified energy auditors/energy managers spread across the length and breadth of the Country, the Company can understand the nuances of energy saving much better as a result of which in a short time span, your Company has set a benchmark for itself as an Energy Efficiency solution provider among industries and other commercial establishments. In order to take this ahead, the Company is in discussion with various governments agencies such as Distribution Companies (DISCOMs), municipalities and industries to implement projects similar to ESCO model such as replacement of agricultural and municipal pumps etc., leading to reduction in energy consumption for sustainable development and defer capacity addition.

As per ''Alliance for an Energy Efficient Economy (AEEE)'' a report titled ''Transforming Energy Services Sector in India: Towards Building a Billion Dollar ESCO market'' - August 2017, India has a market size of around ''93,000 crore to '' 1,20,000 crore across four verticals -Commercial Buildings, Industries, Agriculture and Municipalities . This market is having potential opportunity for your Company to execute the energy efficiency projects in diverse fields. The Company''s project implementation capabilities and pan-India presence provides a competitive advantage over others for taking up such project.

Your Company has carried out energy audits of various heavy and medium industries, institutions, commercial establishment, municipalities and other water management systems of canals & irrigation departments and is also carrying out third party consultancy for base-lining work which is a basic need for implementation of Energy Efficiency solutions / ESCO projects.

18. TELECOM BUSINESS-''POWERTEL''

Your Company is leveraging its Country wide transmission infrastructure for its diversified telecom business under the brand name ''POWERTEL''. The Company provides a range of services under its Unified License with National Long Distance (NLD) and Internet Service Provider - Category ''A'' (ISP-''A") Service authorizations.

The Company has been displaying excellent performance in the areas of providing telecom bandwidth, MPLS based Virtual Private Network (VPN), internet and other communication services to Telecom Service Providers, Government departments and enterprise customers. The network, which includes more than 650 Points of Presence (PoP), has increased to 47,735 km as at the end of FY 2017-18 from 41,988 km in the previous year registering a growth of 13.68%. Similarly, the capacity served has increased to 8 Tbps from 3 Tbps. Capacity up to 100 Gbps is deliverable on point-to-point domestic leased circuit (DLC) and up to 10 Gbps on MPLS/ VPN ports. The new orders received by Company include bulk bandwidth orders from BSNL, 5 years'' MPLS VPN deal with EESL and 3 years'' MPLS VPN order from NHAI.

Telecom Backbone Availability for the FY2017-18 was 99.9%.

18.1 Bharat Net

As a part of digital India initiative of the Govt., to connect 250,000 Gram Panchayats (GP) in the Country by utilizing existing fibres, your Company is laying optical fibre cables to connect to Gram Panchayats wherever necessary. In the revised scope under phase-I, the Company has been allotted work for development of network in 39 districts spread across States of Andhra Pradesh, Telangana, Himachal Pradesh, Jharkhand & Odisha by Bharat Broadband Network Limited (BBNL), covering about 10,440 GPs. Your Company has exceeded its Phase-I target of laying OFC to 7,196 GPs corresponding to overall 1 lakh GPs by connecting 7,635 GPs.

In Phase-II of project, Company has been allocated 2 states, i.e. Uttarakhand (5,706 GPs) and Himachal Pradesh (2994 GPs). Survey work and tendering activities of contracts for implementation of projects are under progress.

18.2 Modernisation of Railways Signalling System

Report for Joint Venture Company with RailTel Corporation for establishment of High Speed Mobile Communication Corridor (HSMCC) for Indian Railways to improve its signalling has been submitted to Railway Board.

18.3. Telecom Tower Business

Company has approached CERC for usage of transmission towers for installation of Base Transceiver Station (BTS) wherein the telecom equipment shall run on induced power.

18.4 Enterprise and Internet Service Provider Business

Connectivity to Enterprise Segment Customers is provided on Company''s Multi-Protocol Label Switch (MPLS) Cloud. Company provides both Layer-2 and Layer-3 VPNs with port capacity ranging from 2Mbps to lOGbps.

Company is peered with global content providers for providing IP Transit services to ISPs. The IP Transit service reduces cost and enhances service quality of hosted content for ISPs and in turn enables them to offer better internet services at lower price to their users.

Company''s extensive backbone telecom network with its local access partners has eliminated the location disadvantage of small towns towards accessibility and affordability of high speed internet. It has the potential to bridge the so called digital divide and be a change agent towards realizing the vision of ''Digital India''.

19. BUSINESS DEVELOPMENT & CONSULTING SERVICES

Your Company has developed expertise in its core areas of power transmission, sub-transmission, load dispatch and communications (LD&C), and related to area of Smart Grid, distribution management, etc. The project management and technical capabilities of your Company have been endorsed by various clients in the past.

19.1 Domestic Market

25 nos. consultancy assignments have been received by the Company in domestic market, having estimated Project cost of Rs,1528 crore (excluding TBCB projects). Some of the major assignments bagged in the year are Strengthening of Sub-transmission works and Rural Electrification works in the state of J&K under Prime Minister Development Programme (PMDP) with estimated cost of Rs,426 crore and Rs,489 crore respectively.

Your Company is providing consultancy services to Indian Railways for electrification of 761 rkm with estimated project cost of Rs,890 crore under Central, East Central, South East Central & South West Railway zones. Proving its excellent execution skills, your Company has completed the electrification of Mansi-Saharsa-Dauram Madhepura Section, ahead of stringent target completion date, matching with rolling out of the Electric Locomotive from the newly constructed facility of Indian Railways at Madhepura. The works on other three sections under different Railways zones are in full swing with active co-operation from Indian Railways. It is expected that successful execution of these electrification works by the Company shall pave the way for getting more such consultancy businesses from Indian railways shall further add to existing consultancy order basket.

Company is executing transmission works in difficult geographic terrain areas for implementation of NER Power System Improvement Project funded by The World Bank & Gol in 6 States of NER and Comprehensive Scheme for Strengthening of Transmission & Distribution in Arunachal Pradesh & Sikkim. The Company is also implementing transmission project in J&K to provide grid connectivity and reliable power supply to the strategically important Ladakh region. Under this work, Company has successfully commissioned part of 220 kV D/c Srinagar-Alusteng Line, i.e. 220/66 kV Leh and Khalsti GIS S/s alongwith Leh-Khalsti Line. In addition, other important consulting assignment under implementation includes strengthening of transmission network in Delhi.

19.2 International Business

On the International front, your Company has been providing consultancy to various clients in 20 countries. As on 31.03.2018, a total of 15 projects are going-on internationally.

During the year, the Company secured a number of prestigious International Consultancy assignments with multilateral funding on competitive bidding basis.

In 2017-18, your Company has signed eight (08) nos. of consultancy agreement for new projects / extension and augmentation of on-going projects.

Under the Indian Technology and Economic Co-operation (ITEC) scheme of MEA, Gol, participants from different African countries were trained. With this platform, Company is likely to forge long term relations and acquaintances with decision makers and other executives from International Utilities. Apart from getting regular business for POWERGRID Academy of Leadership (PAL), this opportunity will also showcase Company''s capacity building prowess in international markets to secure further business in Consultancy /EPC contracts.

20. Contribution in Govt, of India Schemes

20.1 Rural Electrification (RE):

Under Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) Scheme for rural electricity infrastructure and household electrification, Company has been executing infrastructure work for rural electrification.

Presently, RE work in Uttar Pradesh (UP) and Odisha assigned to the Company are under implementation. In Odisha, RE work in 15 districts at an estimated cost of around Rs, 2200 crore, involving electrification of about 14,300 villages and providing service connections to about 2.9 lakh BPL households is under progress and expected to be completed by Dec''18. In UP, RE work of 4 districts at an estimated cost of around Rs, 550 crore is expected to be completed by Dec''18.

During FY 2017-18, infrastructure was created for electrification in 4,279 nos. of partially electrified / un-electrified villages. Service connections were provided to about 1,11,600 BPL households.

Your Company is also implementing RE works in 8 districts of J&K in under DDUGJY/PMDP with sanctioned cost of Rs,489 crore involving electrification of 1,737 villages and 26,884 nos BPL household connections.

20.2 SAUBHAGYA- Pradhan Mantri Sahaj Bijli Har Ghar Yojana

To ensure last mile connectivity and electricity connection to all the remaining un-electrified households in the Country, Government of India has launched Sahaj Bijli Har Ghar Yojana (SAUBHAGYA) with the target to provide connections to all un-electrified households by Decemebr, 2018. Your Company is implementing SAUBHAGYA Scheme in Odisha in 15 districts with scope of 4.44 lakhs non-BPL connections and in UP with 11,000 nos. non-BPL connections.

20.3 Integrated Power Development Scheme (IPDS)

Your Company has completed the arduous task of underground cabling under IPDS work in Old Kashi area of Varanasi Town assigned by Purvanchal Vidyut Vitaran Nigam Limited (PuVVNL), which involved conversion of overhead distribution network to underground and connecting to exiting consumers. Under this, total 1510 km HT and LT Power cabling work has been completed and 50,000 consumers have been connected to the new underground system.

This has resulted in improvements in the form of substantial reduction of AT&C losses in the area, reduction in consumer complaint, augmentation in power transformation capacity, increase in revenue collection due to increase in number of metered consumers, availability of quality power to the consumers, enhanced safety and aesthetics of the area.

21. CITIZEN''S CHARTER

Citizen''s Charter has been formulated for the Company providing a visible front of its vision, mission, objectives, Company profile, commitments, expectations from citizens, Integrated Management Policy, services offered, values and standards of services, access to information and grievance redressal. The Citizens'' Charter is available on the Company''s website.

22. PEOPLE: OUR CORE STRENGTH

22.1 Talent Acquisition & Development

Your Company, being a service organization, relies heavily on the strengths of its employees who are the key to deliver excellent results, year after year. Thus, HR processes are designed to attract best talents from the premier institutes and develop them to deliver high quality output. Through its learning initiatives, your Company is able to respond to challenges and is able to adapt to an ever changing business environment, competition and to changing global markets. The continuous learning ensures updated people with customer centric attitude for better business outcome.

Your Company''s practices are continuously aligned with technological development and competitive environment. Your Company aims to prepare for future challenges; making the organization future ready. Your Company has been pioneer in several smart learning and development initiatives and its practices like ''Online HRD Management Systems'' have been recognized all across the industry.

In the year 2017-18, your Company has conducted organization wide training and development programmes and other systems & process development interventions based on Organization Need Assessment (ONA) & Competency Based Training Needs Assessment (CBTNA). Apart from this, your Company has conducted various programs for employees at premier institute like IIMs, IITs, NITs and ICAI etc.

Company''s sustained efforts, as above, have resulted in higher productivity and output, which is proved by the fact that in 2017-18, profit per employee, circuit kilometer per employee and MVA per employee have gone up to Rs, 87.05 lakhs, 15.65 ckm and 34.99 MVA from Rs,80.46 lakhs, 14.88 ckm. and 30.98 MVA respectively in previous year.

Further, Power Sector is under transformation and Government of India is aiming to provide 24x7 affordable and reliable power to everyone. In line with this, the Company has to adopt the latest technologies and accordingly train manpower of its stakeholders also. To this end, Company is providing training for policy, procedures & system up-gradation to other power utilities.

POWERGRID Academy of Leadership (PAL), a state-of-the-art, world class Institute established at Manesar has been providing a wide range of training, which includes induction, hands-on, managerial and behavioral programs to its employees, and for various other power utilities at national and international levels.

Appreciating the notable people friendly practices, Company has been recognized as one of the "India''s Best Companies to Work" for two consecutive year 2017 and 2016 by''The Great Place to Work Institute''.

22.2 Employee Welfare

The Company is continuously updating its welfare policies in line with industry trend and to meet the changing needs for its employees. Issues are successfully addressed through the National and Regional Bipartite Committee (PNBC/PRBC), a joint consultative forum comprising management and workmen representatives elected through secret ballot.

At all establishments, cultural Programs are regularly conducted for promoting healthy community living. Various festivals are celebrated collectively by organizing Milan Samaroh, cultural activities etc.

The Company also organizes Intra & Inter-Regional Sports Competitions for Kabaddi, Cricket, Volleyball, Chess, and Badminton etc. and participates in the Inter-PSU Sports meets as well. Your Company team has emerged winners in Table Tennis, National Management Games, Asian Management Games and other sports/games meets and bagged a number of awards.

One of the employees, Sh. J. Mukherjee stood first in National Games for ''Persons with Disability'' (PwD) in table tennis conducted by Ministry of Youth Affairs and Sports. He also represented Indian team in International Paralympic games held in Jordan and won the bronze medal for the Country.

Company has a comprehensive medical treatment policy that covers both in-patient and out-patient procedures for its employees as well as their families. Employees also have the facility to undergo preventive health check-ups to ensure that any medical condition does not go unchecked. Company has empanelled the best hospitals in the cities/towns surrounding its numerous establishments to ensure that employees get the best of healthcare facilities. Further, Company has also tied up with visiting medical consultants at its major establishments on a regular basis to provide initial consultation to employees at their place of work.

22.3 Ensuring Social Justice

POWERGRID has constituted a separate reservation cell to look after and safeguard the legal provisions for SC/ST/OBC & PwD categories of employees.

The reservation cell assists the Liaison officer who looks after the welfare & safeguards of SC/ST/OBC & PwD employees. Liaison officer also ensures that there is no discrimination on the basis of caste, religion & disabilities amongst the employees. To ensure effective discharge of duties by liaison officer across all establishments of POWERGRID, separate liaison officer for each region has been nominated. The Company follows all directives & guidelines with regard to reservation Policy issued by Government of India.

22.4 Grievance Redressal

In POWERGRID, grievance redressal is always taken-up on priority. Be it employee grievance or public grievance, both are given utmost importance and resolved promptly. A dedicated team monitors and ensures grievances are redressed without any delay. Each and every grievance is resolved impartially under strict & unbiased framework after thoroughly analysing the facts and data. The same is reviewed by the Top Management regularly. The employee grievance is accorded Top Priority and the Company has 3-Tier structure for expeditious resolution of grievance within the broad framework of policy guidelines.

23. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibitions and Redressal) Act, 2013, and Rules made there under, Internal Complaint Committees (ICC) are in place to redress complaints received regarding sexual harassment. POWERGRID has been conducting training / workshop both for male and female employees sensitizing them about the issues and law relating to Sexual Harassment. During the year, POWERGRID conducted 06 such training programmes across the organization. During the year, no complaint of sexual harassment has been received.

24. IMPLEMENTATION OF OFFICIAL LANGUAGE (RAJBHASHA)

POWERGRID is aware about its constitutional, cultural and social responsibilities. POWERGRID has reaffirmed its vow to ensure the best implementation of Rajbhasha. Various activities such as Translation Practice Programme, Workshops, Trainings etc. are organized at every unit of your Company to ensure the extended use of Rajbhasha. Computer trainings are being imparted to enhance the working knowledge in Hindi on computers. Hindi classes are also being organized for non-Hindi speaking employees through Hindi Teaching Scheme as per Govt. norms. Lectures on wide spectrum of topics such as heritage, social and cultural concerns are also being delivered by eminent scholars on regular basis to change the mindset of the employees towards increased working in Hindi. Following Govt. of India''s Rajbhasha Policy regarding promotion of all Indian languages and Rajbhasha "Hindi", your Company has made comprehensive efforts to enhance and boost use of Hindi in its official work across the levels.

Various activities are undertaken to promote Hindi. Every year, a number of events are organised, prominent among them are Akhil Bhartiya Rajbhasha Sammelans, Kavi Sammelans (poetry sessions), plays, publication of monthly articles in Hindi via emails, sending wishes/ information via Hindi SMS on different occasions such as Hindi Diwas, Diwali, Holi, Eid and X-mas etc. Also, various Hindi competitions throughout the year are conducted especially during Hindi Pakhwada, Swachchta Pakhwada, Vigilance Awareness Week, Qaumi Ekta Saptaah, Pt. Deen Dayal Upadhyay Janm Diwas etc. In addition, departmental review meetings to implement official language as well as Town Official Language Implementation Committee (TOLICs) meetings are also conducted. Attractive incentive schemes for employees working in Hindi have been implemented as per the government guidelines.

Your Company has established one of the best Hindi libraries among Public Sectors where over 14,500 books and 53 Hindi Magazines on various topics & 16 Hindi daily newspapers are available for the employees.

The efforts made by your Company in implementation of official language were appreciated in several fora during the year 2017-18. Various awards have been conferred by different TOLICs under the aegis of Ministry of Home Affairs, Govt. of India regarding best Implementation of Official Language. Besides, POWERGRID''s efforts were also applauded during various inspections and discussions done by ''Parliamentary Committee on Official Language'' and by ''Hindi Advisory Committee''.

25. CORPORATE IMAGE ENHANCEMENT

Company has been persistently working towards communicating with the masses and disseminating authentic information in time to its stakeholders, endorsing the positive perception about the Company.

The positive perception helps it to implement its projects timely. The various face to face interactions of the management with the analysts and stakeholders during the quarterly Analysts and Press Meets have been instrumental in bringing forth the transparent work culture of the organization, the work ethics and principles it has nurtured and adopted through the years. In order to facilitate communication with the masses with regard to achievements, growth & recent developments on operational and financial fronts of the Company, numerous press communiquÃ© have been issued and widespread coverage has been ensured.

Company has been executing its projects and operations in extremely challenging conditions. From time to time, landmark accomplishments have been highlighted through a proper media management strategy ensuring precise and timely dissemination of information which has helped the Company earn widespread appreciation and applause from both from within the country as well as across the globe.

The Company participated in various national exhibitions as well as international exhibitions held in Russia, Bangladesh etc. It also took part in industrial fairs where its efforts and the pace with which the Company has adopted state of the art technologies for meeting the global challenges have been lauded by one and all. The Company also sponsored a number of sports, cultural and other programs for maximizing its reach to the general public and creating brand awareness for the Company.

The Company is also utilizing the digital media platforms like Face book, Twitter and YouTube for reaching out to the social media savvy generation and connecting with the youth of the Country. The digital media posts provide prompt feedbacks and are instantaneous in their reach.

26. RIGHT TO INFORMATION

In order to promote transparency and accountability, an appropriate mechanism has been set up across the Company in line with ''Right to Information Act, 2005''. Company has nominated CPIO/ Appellate Authorities at its Corporate Office and Regional offices across the Country to provide required information under the provisions of Act.

In FY 2017-18, total 1568 nos. of RTI applications were received in the Company and processed as per the Act. RTI Awareness Programs/ Workshops were organized on regular basis to apprise Employees with latest updates on the RTI Act, 2005 and Central Information Commission (CIC) decisions.

27. COMMITMENT TO TRANSPARENCY & VIGILANCE FUNCTION

Recognizing the importance of good governance, your Company advocates the principles of Transparency, Probity and Ethics in its management functioning. The Vigilance Department of your Company functions as an integral part of the management. The department ensures that best ethical practices are followed in the organization.

27.1 Emphasis on Preventive Vigilance

Although the Vigilance performs preventive, proactive, as well as punitive functions to strengthen the organizational process and to minimize the malpractices in the various systems and activities of the organization, the main emphasis is laid on preventive and proactive vigilance. While preventive vigilance focuses on whether the right type of systems exist or need to be re-engineered, proactive vigilance aims at the identification of opportunities and in taking pro-active action against potential threats. During the period, 42 Surprise inspections and 55 Chief Technical Examiner (CTE) Type inspections/Process-on-line inspections were conducted. Pursuant to Vigilance inspections and observations/recommendations, many system improvements in various functions of the organizations have been taken up.

27.2 Preventive Vigilance Workshops as part of Capacity Building

As part of Capacity Building, Workshops on Preventive Vigilance were conducted at the Corporate Centre as well as at various Regions of the Company. During the period, 28 Preventive workshops were conducted for 757 non-vigilance executives. The Preventive Vigilance Workshops contain module of Ethics Management which enable the employees to identify and deal with ethical problems developing their moral intuitions, which are implicit in everyday choices and actions.

27.3 Vigilance Awareness

In pursuance of the directions of Central Vigilance Commission, the Vigilance Awareness Week 2017 was observed by POWERGRID in all its offices across the Country from 30.10.2017 to 04.11.2017 in line with the theme for this year "My Vision - Corruption free India".

Vigilance Awareness Week was celebrated with great enthusiasm and fervor across all offices in India and abroad (Bhutan & Nepal) along with the management, all its employees and their family members.

The week commenced with the Integrity Pledge administered by Sh. K Sreekant, Director (Finance), in the Corporate Office. The messages from Hon''ble President of India, Hon''ble Vice President of India & Chief Vigilance Commissioner (CVC) were also read out by Senior Officers to the gathering.

In line with the directive of CVC and in order to ingrain ethical values in young children in school/college, 37 Integrity Clubs have been formed by the Company. The new concept of CVC regarding formation of Integrity Club has been highly appreciated by the school authorities. Various activities related to enhancing ethical and moral values shall be sponsored through these clubs in future. Outreach activities were conducted which included Nukkad Natak at Public Places. Gram Sabhas were also conducted at various places near the sites where the Company is located. Journal of Vigilance department (CANDOUR) was released during the closing ceremony of Vigilance Awareness Week. In line with Go Green Initiative of the Company, it was released in digital form (e-CANDOUR).

28. ENVIRONMENT AND SOCIAL MANAGEMENT

Your Company''s commitment towards practicing Environmental and Social (E & S) prudence stems from the realization that the ultimate goal of any business activity is not limited to financial profitability but includes wider and much desired societal welfare. Your Company, as part of its corporate philosophy is committed at all levels to internalize the negative externalities associated with its business processes including environmental impacts, social concerns and safety issues. In this regard, the Company has integrated environmental and social management procedures into its corporate operations in 1998 by enunciating Environmental and Social Policy & Procedures (ESPP). The acceptance of ESPP provisions by leading multilateral agencies like The World Bank in 2009 and Asian Development Bank (ADB) in 2017 under their policy of''Use of Country System (UCS)'' and ''Country Safeguard System (CSS)'' respectively is a reflection of the Company''s commitment and implementation record for E & S safeguard management. The Company has now attained the unique distinction of becoming the first organization in the world, whose safeguard policy (ESPP) has been accepted by two major multilateral agencies viz. The World Bank&ADB.

Your Company, the leader in Sustainability Reporting in the Indian power sector, released its 5^th biennial Sustainability Report in January, 2018 based on internationally acclaimed/accepted GRI-G4 Guidelines. The report is externally assured by M/s Intertek India Private Limited following International Standards like Accountability, UK Standards ''AA1000:2008 APS'' and ''AA1000:2011 SES''. This report apart from showcasing Company''s achievements gives all stakeholders a clear picture of contributions to sustainable development through its activities.

The Company is fully conscious of the need to conserve natural resources and avoid ecological sensitive area, eco-sensitive zones, forest, sanctuaries, national parks, tiger/biosphere reserves and Coastal Regulations Zone (CRZ) areas as far as possible through optimization of route alignment. Following the basic principle of avoidance & minimization, which is one of the guiding principles of our ESPP, involvement of forest land has been reduced progressively from 6% in 1998 to 2.26% last year. Other key measures taken by the Company towards sustainable development are technological initiatives like design and installation of innovative towers for conservation of Right of Way (RoW) and reduce tree felling, rain water harvesting system, installation of LED bulbs, solar lights, fuel catalysts devices for DG sets etc. Further, in order to achieve the Intended Nationally Determined Contributions (INDCs) target of the Country, the Company is playing a key role in integration of renewable energy resources by establishing high capacity ''Green Energy Corridors'' dedicated to renewable energy including solar parks across the Country. Such initiatives not only reduce the dependency on thermal generation but also provide boost to renewable generation by providing reliable grid connectivity.

In line with Govt, of India''s commitment to United Nation''s Sustainable Development Goals (SDGs) Agenda 2030, your Company in partnership with Global Reporting Initiative (GRI) South Asia has taken several initiatives towards fulfillment of such goals. Out of 17 SDGs, the Company''s activities are already aligned in 11 goals. Towards commitment to continual improvement, the Company has collaborated with Wildlife Institute of India (WII) for a comprehensive study titled, "Assessment of Impacts of power lines on Avifauna in the Arid planes of Western Gujarat''. The outcome of the study will help transmission and distribution utilities in formulating and implementing better safeguard measures for Avifauna protection, which in turn, is in line with SDG 15 of the UN.

Towards sustainability and green initiative, your company is installing Rooftop Solar PV Systems in 55 locations of its own premises across the Country.

For POWERGRID''s Sustainability Report 2015-17, visit POWERGRID''s website: www.powergridindia.com

29. CORPORATE SOCIAL RESPONSIBILITY

Your Company discharges its Corporate Social Responsibility (CSR), by committing itself to contribute to the society, through initiatives that have positive impact on society at large, especially the community in the neighborhood of its operations. The main objective of CSR initiatives are the improvement in the quality of life of marginalized and under-privileged sections of the society residing around its areas of operation. With this approach, the Company carries out various CSR activities with thrust on Rural Development/Infrastructural Development, Skill Development, Health, Education, Environment, etc.

During the FY 2017-18, your Company spent Rs,157.99 crore and sanctioned 145 nos. of CSR Projects costing Rs,237.60 crore to be executed in 2-3 years. Focus areas ofyour Company''s CSR activities during FY 2017-18 were projects involving infrastructure development in rural areas, like Installation of solar street lights, drinking water facility, water filtration plant, construction of community centres, internal roads, culverts, construction of class rooms, toilets, supply of desk & benches in village schools, providing ambulances, conducting health checkup camps, infrastructure support in government hospitals/Community Health Centre/Primary Health Centre etc.

To help economically weak patients undergoing treatment in AIIMS, New Delhi and their attendants, your Company has constructed ''POWERGRID Vishram Sadan'' at J.P. Apex Trauma Centre, AIIMS, New Delhi which has become functional. One more ''POWERGRID Vishram Sadan'' is being constructed at King George Medical University, Lucknow, and another two Vishram Sadans have been sanctioned during 2017-18, for Indira Gandhi Institute of Medical Science, Patna and Guwahati Medical College & Hospital, Guwahati.

During the year, the Company has participated in the ''Swachh Bharat Abhiyaan''. Company''s employees and their family members, in more than 150 locations across the Country, voluntarily undertook Shram Daan. Besides upkeep of 25 wards of Varanasi City, comprehensive improvement for Iconic places - Baidyanath Dham for its overall improvement and plan including cleaning of entire premises, have been taken up. As part of Swachhta initiative, besides construction of toilet blocks in Government Schools, more than 30,000 twin-bin dustbins are in various stages of installation, across the Country. Truck mounted sweeping machine with vacuum cleaner have also been provided to Municipal Corporation, Faridabad.

During the year, Company has successfully completed training of 5000 youths in 33 location across the Country through a first of its kind of collaboration with the National Skill Development Fund (NSDF) and National Skill Development Corporation India (NSDC) for imparting skill development training to youths. Further, to impart high end training to youths, the Company, besides its owned and operated Skill Development Centre imparting training on Transmission Line Tower Erection in eight of its substations in Assam, Manipur &West Bengal, has tied up Indo-German Institute for Advanced Technology (IGIAT), Vizag, Indo German Tool Room (IDTR), Indore for imparting high-end skill training to youths on a residential basis in their campus. About 1000 youths were trained during FY 2017-18 and most of them were gainfully employed.

The Company is implementing the project of''Improving Rural Livelihoods through Farmer-centric Integrated Watershed Management''on 10,000 hectares of land in Kurnool (Andhra Pradesh) & Kudgi (Karnataka) through ICRISAT (The International Crops Research Institute for the Semi-Arid Tropics). The various initiatives under this project has resulted in improvement of Crop productivity by 10-40% and water storage capacity of about 95,000 cu. mtrs., resulting in conservation of about 1,45,000 cu. mtrs. of water.

1359 students of Assam, Manipur and Chhattisgarh, who have been rendered orphan/destitute due to various forms of societal violence, were provided scholarships through National Foundation for Communal Harmony (NFCH) for continuing their education.

Details of the CSR policy are available on Company''s website, at http://10.100.18.171/sites/default/flles/CSR_Policy_2015_0.pdf. The Annual Report on our CSR activities is enclosed as Annexure XI of the Board''s Report.

30. BHARAT-22 Exchange Traded Fund (ETF)

Under BHARAT-22 Exchange Traded Fund (ETF) launched by the Government of India, the Government of India had sold 5,15,20,439 no. of equity shares of POWERGRID i.e. 0.98% in November, 2017 and 2,99,37,858 no. of equity shares of POWERGRID i.e. 0.57% have been divested in Further Fund Offer (FFO) of Bharat 22 ETF in June, 2018.

31. MANAGEMENT DISCUSSION AND ANALYSIS

In addition to the issues in the Directors'' Report, some issues have been brought out in Report on Management Discussion and Analysis placed at Annexure-I forming part of this Report.

32. BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report as stipulated under Regulation 34 (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is given in Annexure-II and forms part of the Annual Report.

33. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As per requirements of disclosures under Section 134(3) (m) of Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules,

2014 information relating to conversation of energy, technology absorption and foreign exchange earnings and outgo, information is given in Annexure-III to this Report.

34. RISK MANAGEMENT POLICY

Information on Risk Management Framework is covered in the Management Discussion and Analysis Report at Annexure-I of this Report.

35. INTERNAL FINANCIAL CONTROLS AND ADEQUACY

36. STATUTORY AUDITORS OF THE COMPANY

The Statutory Auditors of your Company are appointed by the Comptroller & Auditors General of India. M/s S. K. Mittal & Co., M/s R. G. N. Price & Co., M/s Kothari & Co. and M/s Parakh & Co. were appointed as Joint Statutory Auditors for the financial year 2017-18.

The Statutory Auditors have given an unqualified report. The report is self-explanatory and does not require any further comments by the Board.

37. COMPTROLLER AND AUDITOR GENERAL''S COMMENTS

Company has received ''NIL'' comments on the Accounts for the Year ended March 31, 2018 by the Comptroller and Auditor General of India under Section 143(5) of the Companies Act, 2013. Copy of the same is attached in Annexure-IV to this Report.

38. SECRETARIAL AUDITOR

Kumar Naresh Sinha & Associates, Practicing Company Secretaries have conducted Secretarial Audit of the Company for the financial year ended March 31, 2018. The Report forms part of this Annual Report (Annexure-V).

The Secretarial Auditors have reported that during the period under review, the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above, subject to the following observations:

1. The Company has not complied with the provisions of Section 149 of the Companies Act, 2013 read with Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of the appointment of requisite number of Independent Directors on the Board.

2. The Company has not complied with the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulation,2015 with respect to constitution of Nomination and Remuneration Committee, up to 18^th September, 2017.

3. The Company has not filed certain e-forms relating to creation of charges with the office of the Registrar of Companies where the Permanent Account Number (PAN) of the Lenders are not available, which is mandatory.

The explanation on the observation given by the Secretarial Auditors are as under:

1. Your Company, being a Govt. Company within the meaning of Section 2 (45) of the Companies Act, 2013 (the Act), the power to appoint Directors vests with the President of India. Against the requirement of seven Independent Directors on your Company''s Board during the year, only three posts have been filled up - Shri Jagdish Ishwarbhai Patel on 17.11.2015, Shri Tseten Dorji on 16.02.2017 and Shri Manoj Kumar Mittal on 12.09.2017.

Thus, the Company has not been able to comply with the provision of Section 149 of the Act and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as observed by the Secretarial Auditor. The matter has already been taken up with Administrative Ministry for Ailing up of four existing vacancies of Independent Director on the Board of your Company.

2. The Board had only two non-executive directors (Independent Directors) till 31^st August, 2017. With the appointment of one more non-executive director on the Board, Nomination and Remuneration Committee was reconstituted by the Board in its meeting held on 19^th September, 2017 and thereafter the constitution of Committee was in accordance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

3. Your Company could not file certain e-forms relating to charges in MCA21, wherein the Lenders are Multilateral Agencies - The World Bank, ADB and IFC for non-availability of PAN of these Agencies. PAN is a mandatory fill under e-filing in MCA-21.

39. COST AUDITORS OF THE COMPANY

Your Company appointed M/s R. M. Bansal & Co., Cost Accountants and M/s Chandra Wadhwa & Co., Cost Accountants as Cost Auditors for the Financial Year 2017-18 under Section 148 of the Companies Act, 2013.

The Cost Audit Reports for the FY 2017-18 will be filed with the Cost Audit Branch, Ministry of Company Affairs before due date, i.e. September 27, 2018.

40. EXTRACT OF ANNUAL RETURN

In accordance with Section 134 (3) (a) of the Companies Act, 2013 an extract of the annual return in the prescribed format in MGT-9 is given as Annexure VI of this Report.

41. COMPANY''SBOARD

Your Company''s composition of Board of Directors underwent some changes during the year 2017-18. During the year, Ms. Jyoti Arora and Shri Pradeep Kumar ceased to be Govt. Nominee Directors on 05.07.2017 and 31.07.2017, respectively. Ms. Shalini Prasad, Additional Secretary, MoP was appointed as Govt. Nominee Director on 14.08.2017 in place of Ms. Jyoti Arora and she ceased to be director on

30.08.2017. Ms. Bharati, Joint Secretary, MoP was appointed as Govt. Nominee Director w.e.f. 31.08.2017 in place of Ms. Shalini Prasad. Shri Manoj Kumar Mittal was appointed as non-official part time Director (Independent Director) w.e.f. 12^th September, 2017.

Shri R. P. Sasmal, Director (Operations) and Shri Prabhakar Singh, Director (Projects) demitted the office on 28^th February, 2018 and 30^th June, 2018, respectively upon attaining the age of superannuation. The Board places on record the appreciation and gratitude to Shri R. P. Sasmal and Shri Prabhakar Singh for their significant contribution and support to the Company.

Ms. Seema Gupta assumed the charge of Director (Operations) with effect from 1^st March, 2018. The Ministry of Power vide Office Order dt. 09.07.2018, has entrusted the additional Charge to Ms. Seema Gupta, Director (Operations) for the post of the Director (Projects).

Shri Sunil Kumar Sharma and Smt. A. R. Mahalakshmi were appointed as Independent Directors w.e.f. 23.07.2018 and 26.07.2018, respectively vide Ministry of Power Office Order dt. 17.07.2018.

In accordance with the provisions of Section 160 of the Companies Act, 2013 read with Article 31 (iii) of the Articles of Association of the Company, Shri K. Sreekant, Director (Finance), shall retire by rotation at the ensuing Annual General Meeting of your Company and being eligible, offers himself for re-appointment.

42. NUMBER OF MEETINGS OF THE BOARD

Board of Directors met 12 times during the financial year 2017-18. Details regarding dates and attendance of the Board meetings are provided in the Report on Corporate Governance, which forms part of this Report.

43. COMMITTEES OF THE BOARD

Your Company has Audit Committee, CSR Committee and other Committees. The composition and scope of the Committees are provided in the Report on Corporate Governance.

The Report on the Corporate Governance (Annexure-VII), forming part of this Report, together with the Certificate thereon is given in Annexure-VIII to this Report.

44. DECLARATION BY INDEPENDENT DIRECTORS

During the year, all the Independent Directors have met the requirements specified under Section 149 (6) of the Companies Act, 2013 for holding the position of ''Independent Director'' and necessary declaration from each Independent Director under Section 149 (7) was received.

45. PERFORMANCE EVALUATION OF DIRECTORS

Section 178 (2) of the Companies Act, 2013 requires performance evaluation of every Director by the Nomination & Remuneration Committee. However, Ministry of Corporate Affairs (MCA) vide General Circular dated 5^th June, 2015 has exempted Government Companies from the aforesaid provisions where Directors are evaluated by the Ministry or Department of the Central Government which is administratively in charade of the Company. or. as the case may be. Similar exemption was requested from SEBI under the SEBI LODR.

Further, MCA, vide notification dated 05^th July 2017, has also amended Schedule IV of the Companies Act, 2013 ''Code for Independent Directors'' as per which the performance evaluation of the Board by the Independent Directors has been exempted for government companies.

The appointment, tenure and remuneration of Directors are decided by the President of India. Remuneration paid to Chairman & Managing Director and Functional Directors are as per terms and conditions determined by the Department of Public Enterprises (the DPE), Govt. of India. The DPE has also laid down a mechanism for performance appraisal of all Functional Directors.

Your Company enters into Memorandum of Understanding (MoU) with Ministry of Power (MoP) every year wherein Company is evaluated on various financial and non-financial parameters. The performance of the Company & Board of Directors is evaluated by the Department of Public Enterprises.

46. POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

Your Company has framed a policy on the remuneration of the Directors, Key Managerial Personnel (KMPs) and employees as required under the provisions of Section 178 of the Act. The said policy is available on our website at https://www.powergridindia.com/sites/default/ files/Investor_Relation/Reports_Filings/Code_of_Conduct_Policies/04_Remuneration%20Policy.pdf

47. PARTICULARS OF EMPLOYEES

As per provisions of Section 197(12) of the Companies Act, 2013 read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every listed company is required to disclose the ratio of the remuneration of each Director to the median employee''s remuneration and details of employees receiving remuneration exceeding limits as prescribed from time to time in the Directors'' Report.

However, as per notification dated 5^th June, 2015 issued by the Ministry of Corporate Affairs, Government Companies are exempted from complying with provisions of Section 197 of the Companies Act, 2013. Therefore, such particulars have not been included as part of Directors'' Report.

48. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Loans, Guarantees or investments under Section 186 of the Companies Act, 2013 form part of the notes to financial statements (Note No. 59) provided in this Annual Report.

49. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties referred to in Section 188 (1) of the Companies Act, 2013, in the prescribed Form AOC-2, are given as Annexure IX of the Directors'' Report. Further, attention of the members is drawn on Note No. 59 of the Financial Statement which sets out related party disclosure.

50. SUBSIDIARIES AND JOINT VENTURES

As on 31^st March 2018 your Company has 13 subsidiaries and 13 Joint Ventures Companies.

A statement containing salient features of the financial statements of our Subsidiaries and Joint Ventures are covered in the Report on Management Discussion and Analysis and also annexed in the prescribed format AOC-1 as Annexure X.

51. DIVIDEND DISTRIBUTION POLICY

As per regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations), the top 500 listed companies shall formulate a dividend distribution policy. Accordingly, the policy was adopted to set out the parameters and circumstance that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retained profits earned by the Company. The policy was approved by the Board in its meeting held on 29^th May 2017. The policy is also available on the Company''s website https://www.powergridindia.com/sites/default/files/Dividend%20Distribution%20Policy.pdf

52. SIGNIFICANT MATERIAL ORDERS

There are no significant and material orders passed by the Regulators or Courts or tribunal impacting the going concern status and Company''s operations in future.

53 DIRECTORS'' RESPONSIBILITY STATEMENT

As required u/s 134(3)(c) & 134(5) of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

54. ACCOLADES & AWARDS

During FY 2017-18, the Company has been conferred following important awards/ accolades:

- Fastest Growing Electric Utility in Asia for fourth successive year- as per Platts Top 250 Global Energy Company Rankings (2017, 2016, 2015 & 2014).

- India''s Best Companies to Work for, 2017 as per The Great Place to Work Institute''s prestigious list - Highest ranked Power Sector PSU and 2^nd highest placed PSU

- Best Risk Management Framework & Systems Award in ''Power'' and ''PSU'' categories at the 4^th India Risk Management Awards presented by ICICI Lombard &CNBC TV18.

- CBIP Award 2018 for Best Performing Power Transmission Utility by Central Board of Irrigation and Power recognizing the Company''s contribution for emerging as the enabler for a vibrant Electricity Market in the country by consistently implementing transmission systems, setting new benchmarks in Performance and technological advancements.

- SCOPE Award for Excellence and Outstanding Contribution to the Public Sector Management - Individual Leadership Category-I (Maharatna/ Navratna CPSE) 2016-17 to CMD, POWERGRID

- Best CEO Award for Power and PSU (except BFSI) categories to CMD, POWERGRID at the Business Today Best CEO Awards

- Dun & Bradstreet (D&B) Corporate Award 2017 for best performing Company in Power Sector; other D&B awards viz. D&B Infra Award and D&B PSU Award

- CEPM Honorary Fellowship Award by Centre for Excellence in Project Management (CEPM) to CMD, POWERGRID during 25^th Global Symposium 2017

- Golden Peacock Award for Excellence in Corporate Governance - 2017 in Corporate Governance.

- Golden Peacock Award 2017 for Corporate Social Responsibility in Power Sector, by the Institute of Directors.

- Best Issuer on Electronic Debt Bidding Platform-PSU awarded by National Stock Exchange of India Limited (NSE).

- India Pride Award by Dainik Bhaskar group towards Company''s contribution towards National Growth in Energy & Power Sector Category.

- Accreditation to POWERGRID SR-II Regional Headquarter Building with Four Star Rating Shield under ''GRIHA'' (Green Rating for Integrated Habitat Assessment), an initiative by New & Renewable Energy, Govt of India.

55. ACKNOWLEDGEMENTS

Your Board of Directors would like to express their deep sense of appreciation for the guidance and co-operation received from Government of India, particularly Ministry of Power, Ministry of Finance, Ministry of Home Affairs, Ministry of External Affairs, Ministry of Statistics and Programme Implementation, Ministry of Environment & Forests, Ministry of Corporate Affairs, Central Electricity Regulatory Commission, Appellate Tribunal for Electricity, Central Electricity Authority, NITI Aayog, Department of Public Enterprises, Regional Power Committees, Office of the Comptroller and Auditor General of India, and other concerned Govt, departments/agencies at the Central and State level without whose active support, the achievements of the Corporation during the year under review would not have been possible.

56. Special thanks to our valued customers, State Governments and State power utilities and other clients, who have awarded various consulting works and reposed faith in Company''s capability to handle them. The Board also appreciates the contribution of Contractors, Vendors and Consultants for successful implementation of various projects by the Company.

Your Directors also acknowledge the valuable suggestions and guidance received from the statutory auditors during the audit of accounts of the Company for the year under review. The Board also conveys its sincere thanks to national, international financial institutions, multilateral Financial Institutions, domestic & international Credit rating agencies for their assistance, continued trust and confidence reposed in your Company.

On behalf of Board of Directors, I would like to place on record our deep appreciation of the dedicated efforts and valuable services rendered by the members of your Company Family in the Company''s achievements during the year 2017-18. I would also like to thank the Executive team for their strong leadership, the employee unions for their support and all our employees for their commitment and enthusiasm to achieve our aim to be the world''s premier transmission utility.

For and on behalf of the Board of Directors &iff-

Place: New Delhi (I. S. Jha)

Date: 6^th August, 2018 Chairman & Managing Director

DIN 00015615

Mar 31, 2017

To,

Dear Members,

The behalf of the Board of Directors, I am delighted to present the 28^th Annual Report on performance of the Company during the financial year ending March 31, 2017 together with the Audited Financial Statements.

Your Company is one of the largest and best managed transmission utilities in the world and continues to set new benchmarks of Financial, Physical and Operational performance. FY 2016-17 has been yet another year of achievement for the Company. In the area of project commissioning, the Company recorded a capitalization of approx. Rs.31,000 crore (incl. TBCB projects). With commissioning of new transmission assets comprising 9,723 circuit kilometre (ckm) of Extra High Voltage (EHV) transmission lines and 34,696 Mega Volt Ampere (MVA) transformation capacity with 12 new sub-stations, total transmission assets of the Company have increased to 1,39,077 ckm and 2,89,543 MVA transformation capacity with 219 substations.

Performance highlights of the Company during FY 2016-17 are briefly mentioned here to give an overview of accomplishments on all fronts:

- Capital investment of Rs.24,429 crore against a target of Rs.23,000 crore.

- âExcellentâ MoU rating notified by Government of India for financial year 2015-16.

- Investment approval accorded for transmission projects worth about Rs.36,500 crore.

- Maintained transmission system availability at 99.79% with number of tripping per line limited at 0.68 for the year.

- Revenue from operations of Rs.25,716.54 crore (year-on-year increase of 24%) and Profit after Tax of Rs.7,520.15 crore (year-on-year increase of 26%).

- Interim Dividend of Rs.1.00 per share (face value Rs.10/- each) has been paid and in addition, Final Dividend of Rs.3.35 per share for the Financial Year 2016-17 recommended, subject to approval of shareholders.

- Pole-I (1500 MW) of Â±800kV HVDC Bipole transmission line from Champa - Kurukshetra (route length 1288 ckm) has been commissioned in March, 2017.

- Inter-regional power transfer capacity of 15,000 MW has been added. With this, cumulative inter-regional power transfer capacity of the National Grid stood at 75,050 MW at the end of March, 2017.

- Bagged one more project during the year under Tariff Based Competitive Bidding (TBCB) - âEstablishment of Transmission System for 765kV Eastern Region Strengthening Scheme (ERSS-XVIII)â.

- Telecom revenue rose to Rs.503.83 crore (year-on-year increase of 28%).

XII PLAN PERFORMANCE

It is a matter of great pleasure to inform you that against CAPEX target of Rs.1,10,000 crore for XII Plan, the Company has made a capital expenditure of Rs.1,12,664 crore. Also, thrust was given to completion of projects and total capitalization achieved during XII Plan is over Rs.1,17,000 crore (including TBCB Projects).

About 46,000 ckm of transmission line has been added along with 1,65,000 MVA of transformation capacity addition in the XII plan. Also, cumulative Inter-Regional capacity has been augmented to 75,050 MW against a target of 72,350 MW. This will give a huge push to One Nation - One Grid - One Price.

FINANCIAL PERFORMANCE

In FY 2016-17 the Company has shown a stellar financial performance. The Financial Performance as compared to the previous year 2015-16 is summarized below:

(Figures in Rs. crore, except per share data)

Description	2016-17	2015-16#	Y-o-Y Growth
Transmission Charges	24630.28	19808.10	24.34 %
Consultancy-Sale of Services	582.43	465.46	25.13%
Telecom	503.83	392.25	28.45%
Revenue from Operations	25716.54	20665.81	24.44%
Other Income	864.92	577.49	49.77(%)
Total Income	26581.46	21243.30	25.13%

Profit After Tax (PAT)	7520.15	5948.50	26.42%
Earnings per Share (Rs.)	14.37	11.37	26.39%
Book Value per Share (Rs.)	95.20	83.74	13.69%
Gross Fixed Assets	149730.18	121336.82	23.40%
Long Term Borrowings*	117197.91	106254.91	10.30%
Net Worth	49807.25	43811.23	13.69%
Debt Equity Ratio	70:30	71:29
Return on Net Worth	15.10%	13.58%	_

* Including current maturities of long term borrowings.

# As per Ind-AS.

Dividend Payout

For FY 2016-17, the Company has recommended a final dividend of Rs.3.35 per share in addition to Rs.1.00 per share of interim dividend taking total dividend to Rs.4.35 per share. The final dividend shall be paid after your approval at the Annual General Meeting. The total dividend payout for the year amounts to Rs.2,275.74 crore (including an interim dividend of Rs.523.15 crore).

OPERATIONAL EXCELLENCE

Asset Management

The Company owns and operates about 85% of the total EHV/UHV Transmission network of the Country. As on 31^st March, 2017, the transmission assets owned and operated by the Company stood at 1,39,077 ckm, of Extra High Voltage (EHV) transmission lines and 219 nos. EHVAC & High Voltage Direct Current (HVDC) sub-stations with about 2,89,543 MVA MVA transformation capacity.

During the FY 2016-17, the Company maintained availability of the transmission network at 99.79% which is comparable to international standards. The number of tripping per line (unplanned) was contained to 0.68 for the year, indicating high reliability of POWERGRID transmission system.

Maintenance activities are planned well in advance and an âAnnual Maintenance Planâ is chalked out for every asset through live line or shutdown maintenance, as per technical feasibility.

The Company is proactively managing the maintenance and refurbishment of the transmission assets in order to minimize the tripping of lines especially that caused due to fog, pollution and other natural vagaries. The Company is committed to adopt the best of technological tools available for better operational performance and in this direction following latest technology has been adopted by the Company:

- Adoption of latest condition monitoring techniques for Substation Equipments

State-of-the-art condition monitoring techniques for substation equipments for detection of defects at incipient stage. These include Frequency Response Analysis for Transformers and Reactors, Dynamic Contact Resistance Measurement for Circuit Breakers, Third Harmonic Resistive Current measurement for Surge Arrestors, Thermo-vision scanning of substation equipments etc. These techniques have proved to be very useful in detection of defects at an early stage. Preventive/ corrective actions were taken in advance and major failures were averted. In addition, periodic oil parameter checks, Dissolved Gas Analysis (DGA) of Transformers/ Reactors and its bushings, particle counts, inhibiter content test are very useful for diagnosis of the problems and life enhancement of the Transformers, which POWERGRID implemented successfully.

- Substation Automation

POWERGRID has introduced process bus architecture by connecting Circuit Breakers & Isolators and CT/ PTs through Optical fibers Ethernet using IEC 61850 protocol for avoiding complex protection, control & measurement cables. This will pave ways towards digital substations.

State-of-the-art âNational Transmission Asset Management Centreâ (NTAMC) at Manesar, Haryana has been managing 122 substations remotely at the end of FY 2016-17 and presently 150 substations are being managed remotely. This has made operations smoother and helped in increasing visibility of the various parameters of the grid so as to ensure continued availability of the network. Your Company foresees the importance of automation in the transmission sector and NTAMC is a formidable step in that direction.

In order to share knowledge with various power sector agencies within the country and across the globe, the Company organised various National and International conferences and meets. An International Conference on âBest O&M Practices for EHV and UHV AC & DC Transmission System Assetsâ was held at Gurgaon. The theme for the conference was 765kV AC, UHVDC & GIS Operation & Maintenance. Eminent experts from CIGRE-France, Hydro Quebec-Canada, BC Hydro-Canada, CRIEPI-Japan, TransGrid-Canada, IREQ-Canada, UMS Group-USA and AAM Australia participated.

The regional peer group meeting for International Transmission Operation and Maintenance Study (ITOMS-2017) was hosted. The meeting was organised for Asia-Africa-Middle East region and was facilitated by UMS Group, USA. Delegates from different Utilities from Malaysia, Oman, UAE and USA participated in the conference.

CYBER SECURITY

POWERGRID is committed to ensure cyber security of the critical infrastructure. Information Security Policy and Procedures have been put in place. POWERGRID Corporate Office has been certified for ISO:27001 Information Security Management System Standard. The Regional Head Quarters are also in the process of being certified for ISO:27001. Compliance to guidelines of CERT-in and NCIIPC have been ensured. In view of possible risks due to Cyber-attacks, all Grid connected intelligent control equipment are kept isolated (air-gapped) from external data communication systems. Further, in large part of networks, digital signals controlling operation of critical equipment are kept further confined and isolated by design to prevent any large scale cascade event. A senior executive is designated as POWERGRIDâs Chief Information Security Officer, who reviews Cyber Security preparedness.

DISASTER MANAGEMENT

In the event of any natural calamity or disaster, the Company has been at the fore front in providing relief to the countrymen and has contributed in restoration of power in affected areas.

Support was promptly extended in Tamil Nadu to restore EHV transmission lines, which were damaged due to cyclone Vardah near Chennai in December, 2016. As an immediate relief, POWERGRIDâs Task Force rushed to the affected areas and deployed its Emergency Restoration System (ERS) Team for extending necessary assistance to Tamil Nadu Transmission Company (TANTRANSCO).

Relief camps were also organized in cyclone affected areas and relief materials like food packets, water bottles, bed sheets, Mosquito mats, Toilet kits etc. were distributed to about 1000 affected families. Efforts of POWERGRID for extending the timely assistance were acknowledged and created confidence and goodwill in people.

PROJECT IMPLEMENTATION

Your Company is an infrastructure provider and its growth is largely dependent on the efficient implementation of the transmission projects. Your Company has an exceptional record of implementing challenging transmission projects running over hundreds of kilometres of length across tough terrains and involving socio-economic issues. To ensure that power evacuation and system strengthening projects complete matching with system requirement, detailed planning has been done during implementation and progress is reviewed at various levels to take corrective actions. Your Company uses latest project management tools such as Enterprise Resource Planning (ERP), Integrated Project Management and Control Systems and regular Project Review meetings are organised at the top management level to proactively assess any obstacles in project execution and its timely resolution.

Also, interactive meet with Industry partners have been organised to continuously improve our performance. Apart from business interactions, POWERGRID also felicitated various suppliers/contractors for their performance during FY 2016-17 under different categories.

During the year, a number of important transmission projects have been commissioned/completed, which inter-alia include:-

- Â±800 kV Champa - Kurukshetra HVDC Bi-pole-1(Pole-I) link,

- Pole-II & III of Â±800 kV Biswanath Chariyali/Alipurduar - Agra HVDC mutli terminal transmission systems,

- 765 kV double circuit (D/c) Wardha - Nizamabad line,

- 765 kV D/c Gaya- Varanasi line,

- 765 kV D/c Varanasi - Kanpur - Jhatikara line,

- 765 kV D/c Angul - Srikakulam line,

- 765 kV D/c Srikakulam - Vemagiri line (TBCB),

- 765 kV D/c Raipur - Wardha (2^nd) line,

- 765kV D/c Tuticorin - Salem (charged at 400 kV),

- 400 kV D/c Ranchi - Chandwa - Gaya line.

FINANCIAL MANAGEMENT

In the FY 2016-17, the Company continued to show sustained performance in all its business areas, enhancing the value for the shareholders. Your Company has achieved Total Income of Rs.26,581.46 crore and net profit of Rs.7,520.15 crore.

Capital Investment and Fund Mobilization

Your Company made a capital investment (CAPEX) of Rs.24,429 crore during the year 2016-17. For the CAPEX of FY 2016-17, Rs.14,806 crore was mobilized through private placement of bonds & term loan, Rs.3,037 crore was mobilized through External Commercial Borrowings (ECB)/Suppler credit and Rs.6,586 crore was utilized from Internal Resources.

During recent years, for financing of CAPEX, POWERGRID has mobilized funds from internal sources and successfully arranged borrowing from domestic as well external sources at most competitive prevailing rates. The major source of borrowing is private placement of domestic bonds. For financing of CAPEX, POWERGRID had also tapped other sources, which includes commercial bank loans, Supplier credit and sovereign guaranteed loan from multilateral funding agencies (ADB, World Bank).

COMMERCIAL PERFORMANCE

As per Central Electrical Regulatory Commission (Sharing of inter-State Transmission Charges and Losses) Regulations, 2010, the Company has been assigned the responsibility for carrying out the activities such as raising of transmission charges bills on behalf of all Inter-State Transmission System (ISTS) Licensees, collecting the amount and distributing the same to them.

Your Company is fulfilling the assigned responsibilities effectively and achieved collection efficiency above 99% for FY 2016-17.

DEVELOPMENT OF NATIONAL GRID

Towards the strengthening of National Grid, a number of inter-regional transmission lines have been commissioned and more such lines are under construction. In FY 2016-17, Â±800kV Champa Pool - Kurukshetra HVDC Pole-I of Bipole-1 (1500MW), Angul-Srikakulum 765kV D/c, Wardha - Nizamabad 765kV D/c and Â±800kV Biswanath Chariali - Agra multi terminal HVDC transmission line with new HVDC terminal at Alipurduar with 1500 MW capacity transmission systems have been completed. As a result, cumulative inter-regional power transfer capacity of the National Grid has been enhanced from 57,450 MW to 75,050 MW (about 30% growth) during the FY 2016-17. By the end of 2021-22, the inter-regional power transfer capacity of the National Grid is likely to be enhanced to about 1,18,000 MW.

The enhancement of transmission capacity due to above inter-regional links has augmented pan-India electricity market and during FY 2016-17. Further, more than 138 billion units (BUs) inter-regional energy transfer was facilitated across the nation, which is an increase of about 18% over the previous year.

CONNECTIVITY, MEDIUM TERM OPEN ACCESS (MTOA) & LONG TERM ACCESS (LTA)

Your Company, as Central Transmission Utility (CTU), is the nodal agency for processing & grant of Connectivity, Long Term Access (LTA) and Medium Term Open Access (MTOA) to various applicants. Relevant regulations, procedures, guidelines and related documents for Connectivity, MTOA and LTA applications and status thereof are available online on our website.

As of March 31, 2017, the Company has granted Connectivity to 136 nos. of eligible applications for a quantum of 95,800 MW and LTOA/LTA to 204 nos. applications for a quantum of 99,260 MW. In addition, based on the transmission capacity margins availability, the MTOA has also been granted to 106 nos. of applications for a quantum of 12,204 MW cumulative capacity.

QUALITY MANAGEMENT

The Quality Management System in the Company is an enabler for best practises built around the philosophy of prevention rather than detection. To ensure quality, while procuring goods at competitive prices, a lot of effort has been put on quality assurance and various quality improvement measures have been initiated and implemented to get better quality products.

- During FY 2016-17, Smart inspections amounting to approx Rs.20,000 crore worth of material/equipment were carried out to enable record asset capitalization during the year.

- With target to move towards zero product inspection as per POWERGRID quality policy, inspections at some of the manufacturing units of towers, conductor, cables, transformer oil etc. have been reduced after thorough process audits at works as per standardized guidelines. Saved man-days were used for process audits at other manufacturing units for system improvements. This has contributed to whole sector as such.

- Rigorous Field Quality Audits were carried out during the year from Corporate Centre as well as at Regional level to ensure strict implementation of Field Quality Plans. This has ensured better awareness, better response from executing agencies and timely corrective actions. An independent team for Field Quality Assurance has been formed at Corporate Centre to take various preventive and pro-active actions.

- âMake in Indiaâ initiative has been given a great push during the period. Most of 765kV Class Transformers/ Reactors and even some of GIS equipment/STATCOM/SVC are presently being supplied indigenously.

- A number of Micro, Small & Medium Enterprises have been developed as sub-vendors and approved in India for supply of components for various equipment, including for new factories set up, which in turn have resulted in employment generation in the country.

- The Company, in association with MSME Development Institute, Okhla, New Delhi organised âNational Vendor Development Programme cum Industrial Exhibition for Micro & Small Enterprises for the benefit of MSME sector and thereby promote âMake in Indiaâ objective of the Govt. of India.

- Developed and maintained systems and procedures aligned with integrated management system comprising ISO 9001 for Quality Management System, ISO 14001 for Environmental Management System and OHSAS 18001 for Occupational Health and Safety Management System. The certification has been maintained after rigorous audits by BSI Group India. Systems were also audited for maintenance of Social Accountability standard, SA 8000, Energy Management Systems as per ISO 50001 and for Information Security Management Systems as per ISO 27001.

ENTERPRISE RESOURCE PLANNING

Project âRUPANTARâ, the Enterprise Resource Planning (ERP) initiative of the Company has been implemented successfully and the processes and systems have been stabilized in all the regions of the Company. Presently, majority of the key processes related to the business are running on ERP. E-tendering for the domestic bids has also been taken up in ERP system on pilot basis. In order to provide stability and reliability to ERP system, a Disaster Recovery Centre has been established at Bangalore.

TECHNOLOGY DEVELOPMENT

Your Company is always at the forefront for adopting latest advancement in technology as well as carryout applied research and development activities in pursuit of technological excellence in power transmission. Notable amongst them during FY 2016-17 are the prestigious 1200kV National Test Station, utilization of Geographic Information System Tools and the application of Process Bus Technology in Substation Automation System.

1200kV National Test Station

Your Company has successfully commenced power flow through 1200kV National Test Station in the month of May, 2016. For this project of national importance, the Company has collaborated with Indian equipment manufacturers for getting the 1200kV equipment developed, which have been presently installed, charged at 1200kV voltage and loaded at the test base in Bina, Madhya Pradesh for long term field operation and performance monitoring.

Geographic Information System Tools

Your Company has initiated utilizing Geographic Information System Tools like Bhuvan on pilot basis for mapping its transmission assets, for route alignment during planning of new transmission lines and for disaster management studies.

Innovation Portal

Your Company has established an Innovation portal wherein a platform is provided to all its employees to put forth their new and innovative ideas related to technology and management. These ideas are reviewed by the top level management so as to assess the techno-economic feasibility and benefits.

Process Bus Technology

Gaining experience from the pilot projects on Process Bus Technology at Bhiwadi and Neemrana, the Company has initiated the project at Malerkotla substation for retrofitting conventional protection and control schemes with advanced automation systems. The new scheme is expected to ease the maintenance and troubleshoot in future and also restoration time will be extremely low in case of any eventuality. Also, the replacement of large amount of copper cables with minimal fiber optic cables is expected to optimize space requirement.

SMART GRID

Your Company continues its journey of delivering value to its stakeholders through applications of intelligent technologies towards Smart Grid. Your Company is continuously enhancing its abilities through in-house research & demonstration projects in the field of Smart Grid & Energy Efficiency. It has been continually adding advanced attributes to the utility projects to bolster the success story in the above fields. Smart Grid vertical is expanding its customer base and new projects are getting added, making Smart Grid a promising business area in future.

Your Company has garnered valuable experience in implementation of Smart Grid applications in last few years and presently providing consultancy for nine (9) projects covering distribution infrastructure, advanced metering infrastructure, intelligent outage management, electric vehicle charging stations, power quality management, distributed generation, net metering etc. Your Company is closely associated with implementation of Smart Grid at Varanasi & Gurgaon as part of Governmentâs endeavour towards Smart City development.

Towards smart transmission, your Company is implementing Phasor Measurement Unit (PMU) based Unified Real Time Dynamic State Measurement (URTDSM) project, integrating all State and Central grids for Wide Area Measurements (WAMS). In addition, analytics using PMU data are being developed in association with IIT Bombay. Synchronized measurements integrated with high end analytics will facilitate improved monitoring, visualization and enhanced situational awareness of the grid events on real time towards grid reliability improvement.

Your Company is also exploring new opportunities towards implementation of charging infrastructure for Electric Vehicles as well as venturing into Smart City projects.

Integration of Renewables

Your Company is playing a key role for integration of renewable energy resources into the grid. A high capacity Green Energy corridor is under implementation by your Company which will serve dual purpose to facilitate interconnection of large scale renewable, into the National grid as well as enlarging the balancing area to address renewable volatility. In addition, transmission schemes for 7200 MW Ultra Mega Solar Power Parks worth Rs.4300 crore are also under implementation in various states as part of Green Energy Corridors-II. Apart from Green Energy Corridor implementation and grid-integration of ultra-mega solar parks, it has established countryâs first grid interactive energy storage pilot project with different battery technologies. The findings of the energy storage project would be helpful in its large scale deployment to address intermittency and variability of renewable generation.

Your Company is taking up the challenging and flagship responsibility of establishment of maiden Renewable Energy Management Centers (REMC) at 11 (eleven) locations in various RE resource rich state viz. Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra, Gujarat, Madhya Pradesh, Rajasthan, regional load dispatch centers at SR, WR, NR as well as at National Load Dispatch Centre. This would enable forecasting of renewable resources and efficient management of variable renewable generation ensuring grid stability & security. Upon implementation of REMCs by POWERGRID, they will be handed over to respective owners i.e. State LDC/POSOCO.

ENERGY EFFICIENCY

Your Company has taken a lead role in identification of Energy Efficiency business opportunities by way of carrying out Energy Audits of various heavy and medium industries, institutions, commercial establishment, municipalities and other water management systems of canals & irrigation departments. Energy audits undertaken and efficiency measures suggested by the Company shall enable prevention of CO2 emissions and defer capacity addition requirement.

Your Company is also a BEE Grade-I Energy Service Company (ESCO) for undertaking energy efficiency projects in various industries and other third party consultancy for base lining work.

Indian power industry is in the age of revolutionary transformations and extensive advancements. Equipped with approximately 90 Energy Auditors/Energy Managers, your Company is well prepared to stand as a key enabler in the challenging environment, by offering Energy Efficiency Solutions. Recently, Distribution Companies have been added under Perform-Achieve-Trade (PAT) scheme of GoI. Your Company, being one of the pioneers in Transmission Sector and is also dealing in Distribution Sector through Rural Electrification Program of GOI can provide Energy Audits and Energy Efficiency Solutions in Distribution Sector.

âPOWERTELâ - TELECOM SERVICES ON TRANSMISSION INFRASTUCTURE

The Company has been creating value to its shareholders by leveraging its country wide transmission infrastructure for telecom business under the brand name âPOWERTELâ. The existing National Long Distance (NLD) and Internet Service Provider - Category âAâ (ISP-âAâ) licenses have been migrated to Unified License for providing telecom services.

The Company has established itself as an important player in providing telecom bandwidth, Virtual Private Network (VPN), internet and other communication services to Telecom Service Providers and enterprise customers. Major achievements during the FY 2016-17 are as under:

Parameter	End of FY 2015-16	End of FY 2016-17	% Change
Total network Coverage	36,563 km	41,988 km	( ) 14.8%
Number of points present (PoPs)	595	662	( ) 11.26%

Telecom Backbone Availability for the FY2016-17 was 99.9%.

National Knowledge Network (NKN)

Under NKN project devised by Govt. of India, which connects knowledge centres across the Country such as Indian Institutes of Technology (IITs), Indian Institute of Science (IISc) etc., on a high speed connectivity, 36 links of 10 Gbps each, 114 links of 1Gbps/100 Mbps and 450 links 100 Mpbs / 1 Gbps have been implemented.

National Optical Fibre Network (NOFN)

As a part of digital India initiative of the Govt., to connect 250,000 Gram Panchayats (GP) in the Country by utilizing existing fibres BSNL, Railtel & POWERGRID are laying optical fibre cables to connect to Gram Panchayats wherever necessary. In the revised scope, the Company has been allotted work for development of NOFN network in States of Andhra Pradesh, Telangana , Himachal Pradesh, Jharkhand & Odisha by Bharat Broadband Network Limited (BBNL), covering about 36,000 GPs. Upto the FY 2016-17, 6699 GPs have been connected through incremental fiber. Further, 4454 GPs have been connected End to End and broadband is operational in 1133 GPs.

Multiprotocol Label Switching (MPLS) System

Connectivity to Enterprise Segment Customers is provided on POWERGRIDâs MPLS Cloud. POWERGRID provides both Layer-2 and Layer-3 VPNs with port capacity ranging from 2Mbps to 10Gbps. POWERGRID also provides reliable Internet Connectivity solutions over its Internet cloud of different capacities ranging from 2Mbps to 1Gbps. POWERGRID is peered with global content providers for providing IP Transit services to ISPs. The IP Transit service reduces cost and enhances service quality of hosted content for ISPs and in turn enables them to offer better internet services at lower price to their users. Companyâs extensive backbone telecom network with its local access partners has eliminated the location disadvantage of small towns towards accessibility and affordability of high speed internet. It has the potential to bridge the so called digital divide and be a change agent towards realizing the vision of âDigital Indiaâ. Towards this, MPLS VPN / Internet deals have been signed with a number of important domestic customers.

BUSINESS DEVELOPMENT & CONSULTING SERVICES

Your Company has developed the expertise in its core areas of power transmission, sub-transmission, distribution management, load dispatch and communication (LD&C), Smart grid etc. Leveraging its capacity and experience as a consultant, the Company is executing works with a project cost of Rs.17,000 crore on pan-India basis.

During FY 2016-17, the Company has achieved domestic consultancy revenue of Rs.582.43 crore, which is 25% higher w.r.t. previous years revenue of Rs.465.46 crore.

During 2016-17, 26 nos. Consultancy assignments have been acquired on domestic front, having estimated Project cost of Rs.1500 crore. Some of the major assignments bagged include Railway track electrification works for four different Zonal Railways & Techno-managerial services for implementation of 220kV & 132kV transmission system for Railways.

Presently, Track Electrification of 761 rkm (with Rs.890 crore estimated project cost under Central Railway, East Central Railway, South East Central Railway & South West Railway) has been entrusted to POWERGRID in NovRs.16. Actions for award of works and execution thereafter, on all four sections under different Railways zones have been taken-up with active co-operation from Indian Railways. It is expected that successful execution of these electrification works by POWERGRID shall pave the way for getting more such consultancy business from Indian Railways keeping the long term railways electrification targets in India and shall further add to existing consultancy order basket.

Further, the Company is also providing consultancy services to Railways for numerous transmission lines and substations (with estimated approximately project cost of about Rs.358 crore) for providing up-stream transmission connectivity for traction substations of Railways.

POWERGRID is executing Govt. of Indiaâs important projects in difficult geographic terrain areas of NER and State of J&K.

North Eastern Region Power System Improvement Project (NERPSIP)

POWERGRID is implementing transmission and distribution works under NERPSIP in states of Assam, Meghalaya, Manipur, Mizoram, Nagaland & Tripura which is being funded by GOI and World Bank ( 50:50 Basis) at a sanctioned cost of Rs.5111.33 crore. The project envisages construction of 34 nos. new EHV sub-stations along with 2114 km. of EHV transmission lines and 85 nos. new Distribution Sub-stations along with 1891 km. of 33 kV transmission lines.

Comprehensive Scheme for Strengthening of Transmission & Distribution System for Arunachal Pradesh & Sikkim

POWERGRID is implementing transmission & distribution works under Comprehensive Scheme for Strengthening of T&D system- Arunachal Pradesh & Sikkim which is being funded by GOI at a sanctioned cost of Rs.4754.42 crore. The project envisages construction of 43 nos. New EHV sub-stations along with 2493 km. of EHV transmission lines and 70 nos. new distribution substations along with 1923 km. of 33kV transmission lines.

Connectivity of Leh/ Kargil Area with NR Grid at 220 kV level

To provide grid connectivity and reliable power supply to the strategically important Ladakh region, Govt. of Indiaâs 220kV Srinagar - Drass -Kargil - Khalsti - Leh Line & associated system is being implemented by POWERGID on consultancy basis at a sanctioned cost of about Rs.1788 crore.

In addition, other important consulting assignments under implementation include strengthening of transmission network in Delhi and execution of transmission system for evacuation of power from Lalitpur power plant of Uttar Pradesh.

INTERNATIONAL BUSINESS

On the International front, your Company has so far established footprints in 19 countries. At present, a total of 14 projects are going-on in various countries.

A Memorandum of Co-operation with Norwegian Centre of Expertise (NCE) - Smart Energy Markets has been signed by the Company which envisages cooperation between NCE, Norway and POWERGRID to work in fields of Smart Grid, Capability development and other related areas.

Also, the Company signed a Contract Agreement with Fiji Electricity Authority for Consultancy Assignment for Design and Preparation of Tender Specification for the construction of the 132kV Transmission Line, 132kV Switching Station and 132/33kV substation in Fiji.

The Company signed an MoU with Abu Dhabi Water & Electricity Authority (ADWEA). The MoU inter-alia envisages cooperation between ADWEA & its group companies and POWERGRID to work in areas like smart grid, EHV transmission technologies etc. & providing capability development and training in the fields of Operation and Maintenance, Power Transmission and Distribution. POWERGRID shall also assist ADWEA in setting up an advanced âWorld Class Capability Development Institute in UAE.

Under the Indian Technology and Economic Co-operation (ITEC) scheme of MEA, GoI, a total of sixty International / African participants are proposed to be trained in the calendar year 2017. With this platform, POWERGRID is likely to forge long term relations and acquaintances with decision makers and other executives from International Utilities. Apart from getting regular business for POWERGRID Academy of Leadership (PAL), this opportunity will also showcase Companyâs capacity building prowess in International markets to secure further International Business in Consultancy /EPC contracts.

CROSS-BORDER INTERCONNECTIONS

The electrical interconnections with neighbouring countries, Nepal, Bhutan and Bangladesh, are being further strengthened for increased exchange of power. Some of the upcoming and planned interconnections are as under:

Between India and Nepal

- Gorakhpur New (India) - New Butwal (Nepal) 400kV D/c (Quad) line - Planned Between India and Bhutan

- For evacuation of power from various upcoming hydro power projects (HEPs) in Bhutan, Punatsangchu-I HEP (Bhutan) - Alipurduar (India) and Jigmeling - Alipurduar 400kV D/c (Quad) lines - under implementation.

Between India and Bangladesh

- Baharampur (India) - Bheramara (Bangladesh) 400kV D/c 2^nd line - under implementation

- Katihar (India) - Parbotipur (Bangladesh) - Bornagar (India) 765 kV D/c line (to be initially operated at 400 kV) along with 500 MW HVDC Back-to-Back terminal at Parbotipur (another 500 MW terminal would be installed with 765 kV operation of the line) - Planned.

CONTRIBUTION IN DISTRIBUTION REFORMS

Rural Electrification (RE)

Under Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) scheme for rural electricity infrastructure and household electrification, your Company has been executing infrastructure work for rural electrification.

During FY 2016-17, infrastructure was created for electrification in 4365 nos. of partially electrified / un-electrified villages. Service connections were provided to about 77,000 BPL households. Cumulatively, till March, 2017, infrastructure has been created for electrification of about 79,000 villages in 70 districts of 9 states. Further, service connections have been provided to about 37.5 lakh BPL households, cumulatively.

Presently, RE work in Uttar Pradesh (UP) and Odisha assigned to POWERGRID under XI Plan Phase-II/ XII Plan are under implementation. In Odisha, RE work in 15 districts at an estimated cost of around Rs.1800 crore, involving electrification of about 11,900 villages (Un-electrified villages-590 and Partially electrified villages 11,307) and providing service connections to about 3 lakh BPL households is under progress and expected to be completed by MarchRs.18. In UP, RE work of 4 districts at an estimated cost of around Rs.500 crore is expected to be completed by Dec.Rs.17.

Integrated Power Development Scheme (IPDS)

The implementation of IPDS work in Old Kashi area of Varanasi Town assigned by Purvanchal Vidyut Vitaran Nigam Limited (PuVVNL) involves conversion of existing overhead distribution network to underground and connecting to existing consumer connection to the new underground system. So far, 1000 km cabling work has been completed out of total scope of 1340 km. Further, 30,000 consumers have also been connected to the new underground system.

OUR PEOPLE, OUR STRENGTH

Talent Acquisition & Development

Your Company places human resource as key to its growth. During the year 2016-17, profit per employee has been increased to Rs.80.46 lakh from Rs.65.68 lakh in previous year. Also, during the year circuit kilometer per employee and MVA per employee have gone up to 14.86 ckm & 30.87 MVA from 14.25 ckm & 28.15 MVA respectively in previous year.

Human Resource Development through its training development interventions have played a key role to upgrade the workforce to adopt new technologies, systems and practices and make the workforce ready to face the future challenges.

In the year 2016-17 the Company has conducted organisation wide training programmes and other systems & process development interventions based on Organisation Need Assessment (ONA) & Competency Based Training Needs Assessment (CBTNA). To this end, the Company has provided training to its employees in-line with National Training Policy.

As a part of system upgradation, this year in consultation with the experts from all business verticals across the Company, the functional and behavioural competencies were updated. The online training portal has also been upgraded to capture functional & behavioural competencies and the same were validated at two levels through online workflows. Competencies were revisited & customised training basket was offered online to employees to capture their relevant training choices.

Considering the vast number of projects including of joint ventures and subsidiaries being executed by POWERGRID, skills sets of employees of POWERGRID and stakeholders are being upgraded on continuous basis. Notably, the Company is providing training for policy, procedures & system up gradation to power utilities in North Eastern Region.

POWERGRID Academy of Leadership (PAL), a state-of-the-art, world-class Institute at Manesar has been providing a wide range of training including induction, hands-on, managerial and behavioural programs to employees in POWERGRID, and various power utilities at national and international levels.

Appreciating the notable people practices, the Company has been recognized as one of the Indiaâs Best Companies to Work by the Great Place to Work Institute and its rank has been upgraded to 31 from last year 58 out of 700 companies. It has also been conferred with âInnovative Training Practicesâ award by ISTD.

Employee Welfare

The Company is continuously working on formulating new welfare policies and amending the existing ones to meet the changing needs, for its employees. Issues related to workmen are successfully addressed through the National and Regional Bipartite Committee (PNBC/PRBC), a joint consultative forum comprising management and workmen representatives. Cultural Programmes are regularly conducted for promoting healthy community living. Various festivals like Diwali, Holi, New Year, Raising Day etc. are celebrated collectively by organising Milan Samaroh, cultural activities etc.

The Company also organises Intra & Inter-regional Sports Competitions for Kabaddi, Cricket, Volleyball, Chess, and Badminton etc. and participates in the Inter-PSU Sports meets as well. Your Companyâs team has emerged winners in Table Tennis, National Management Games and other sports meets and bagged a number of awards.

The 3^rd International Day of Yoga was celebrated in all offices of POWERGRID by organising practise sessions and behavioural sessions through informative talks on Yoga. Employees and their families participated in large numbers and benefited.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibitions and Redressal) Act, 2013, and Rules made thereunder, the company has constituted Internal Complaint Committee (ICC) to redress complaints received regarding sexual harassment. POWERGRID has been conducting training / workshop both for male and female about issues and law pertaining to Sexual harassment. Last year POWERGRID has conducted 07 such training programmes across the organization covering 189 employees. During the F.Y. 2016-17, two complaints of Sexual harassment have been received and the same have been disposed.

CITIZENâS CHARTER

Citizenâs Charter has been formulated for the Company providing a visible front of its vision, mission, objectives, Company profile, commitments, expectations from citizens, Integrated Management Policy, services offered, values and standards of services, access to information and grievance redressal. The updated Citizensâ Charter is available on POWERGRID website.

IMPLEMENTATION OF OFFICIAL LANGUAGE (RAJBHASHA)

In pursuance of Govt. of Indiaâs Rajbhasha Policy to promote Indian languages and Rajbhasha âHindiâ, it has made all round efforts to integrate and promote use of Hindi in its works at all levels. POWERGRID has proved its commitment to ensure the implementation of Rajbhasha.

To ensure the increased use of Official language, various activities such as Anuvaad Abhyaas Karyakram (Translation Practice Programme), Workshops, Trainings, motivational programmes are organized at every unit of the Company. Computer trainings are being imparted to enhance the working knowledge in Hindi on computers. Hindi classes are also being organized for non-Hindi speaking employees through Hindi Teaching Scheme. Lectures on heritage, social and cultural concerns are also being delivered by eminent scholars on regular basis to change the mindset of the employees for working in Hindi.

Various activities are undertaken to publicize Hindi. Every year, Akhil Bhartiya Rajbhasha Sammelans, Kavi Sammelans (Poetry sessions), Plays, publication of monthly articles in Hindi via emails, Sending wishes/informations via Hindi SMS on different occasions such as Hindi Diwas, Diwali, Holi and Eid etc. are most prominent among those. Also, various competitions throughout the year with special emphasis during Hindi Pakhwada, along with departmental meetings as well as OLIC meetings are also being conducted. Your Company has established one of the best Hindi libraries at Corporate Centre along with 100 other Hindi Libraries at various establishments of the Company, where popular/literary Magazines and News Papers have been made available for the employees.

Attractive incentive schemes for employees working in Hindi have been implemented as per the government guidelines. Also, various awards and reward schemes have been introduced to encourage employees to actively participate in promotion of Hindi, by contributing to articles/write-ups for in-house magazines, reading library books etc.

The effort made by the Company has been applauded in several forums during the year 2016-17 which includes Rajbhasha Shields consecutively for two years at the annual meet of Hindi Advisory Committees convened by MoP on 08.01.2017. Various awards have been given by different Town Official Language Implementation Committee (TOLICs) under the aegis of Ministry of Home Affairs, Govt. of India regarding best Implementation of Official Language. Also, POWERGRIDâs efforts were applauded during various inspections and discussions done by Honâble Committee of Parliament on Official Language on different occasions.

RIGHT TO INFORMATION

In order to promote transparency and accountability, an appropriate mechanism has been set up across the Company in line with âRight to Information Act, 2005â. Your Company has nominated CPIO/ Appellate Authorities at its Corporate Office and Regional offices across the Country to provide required information to the citizens under the provisions of Act. In FY 2016-17, all 346 RTI applications received were disposed of timely. The various appeals received under the Act were also addressed suitably.

COMMITMENT TO TRANSPARENCY & VIGILANCE FUNCTION

Your Company advocates the principles of Good Governance, Transparency, Probity and Ethics in its management functioning. The Vigilance Department of POWERGRID functions as an integral part of the management. The department ensures that best ethical practices are followed in the organization.

Emphasis on Preventive Vigilance

Although the Vigilance Department performs preventive, proactive, as well as punitive function to strengthen the organizational process and to minimize the malpractices in the various systems and activities of the organization, the main emphasis is laid on preventive and proactive vigilance. While Preventive Vigilance focuses on whether the right type of systems exist or need to be re-engineered, proactive vigilance aims at the identification of opportunities and in taking pro-active action against potential threats. During the period, 40 Surprise inspections and 50 CTE Type inspections/Process-on-line inspections were conducted. Pursuant to Vigilance inspections and observations/recommendations, many System Improvements in various functions of the organisations have been taken up.

Preventive Vigilance Workshops as part of Capacity Building: As part of Capacity Building, Workshops on Preventive Vigilance were conducted at the Corporate Centre as well as at various Regions of the Corporation. During the period, 20 Preventive workshops were conducted for 579 non-vigilance executives. Also, 6 RTI Workshops were organized for 175 employees of the Corporation. The Preventive Vigilance Workshops contain module of Ethics Management which enable the employees to identify and deal with ethical problems developing their moral intuitions, which are implicit in everyday choices and actions.

Vigilance Awareness Week 2016: As per the directive of the Central Vigilance Commission, this year the Vigilance Awareness Week was organized in POWERGRID from 31^st October to 5^th November, 2016. The weeklong activity started with the administration of pledge to all employees by CMD, CVO and all Directors. The organizationâs website was used to propagate the message and also to encourage the employees to participate in the e-pledge. Eminent speakers were invited, including Dr. T.M. Bhasin, Vigilance Commissioner who addressed the employees at POWERGRID Corporate Centre and also inaugurated the in-house journal of the Vigilance Department, âCandourâ on the occasion.

During the Vigilance Awareness Week, 2016, vendorsâ meets were organized and such meets/camps were utilized for interaction with the vendors and taking feed-back from them. POWERGRID organized events in 121 colleges and 115 schools across the country. At many rural areas, Gram Sabhas were also organized as directed by the Central Vigilance Commission to spread the message of the Commission. The media like Doordarshan, News Channels, FM Radio channel were also engaged to disseminate the message of the Commission in encouraging citizens to take the Integrity Pledge. POWERGRID also organized street plays by engaging reputed theatre groups to propagate the theme of the Commission. Simultaneously, at many places roadshows were also organized involving employees and their families and in many places involving school and college students.

ENVIRONMENT AND SOCIAL MANAGEMENT

POWERGRID, being a responsible corporate entity, always endeavours to protect and conserve environment in areas of its activities from inception to operation stage. It developed a comprehensive Environmental and Social Policy & Procedures (ESPP) in 1998 and has upgraded the same from time to time, in line with the international best practices, to pre-empt possible environmental and social issues. Recently, Asian Development Bank (ADB) accepted POWERGRIDâs ESPP under its policy of âCountry Safeguard Systemâ (CSS) as the first organization in the Asia whose safeguard system has been recognized to match international good practices. The World Bank too has accorded its acceptance for ESPP under their policy of Use of Country System (UCS) in 2009. With this, POWERGRID has now attained the unique distinction of becoming the first organization in the world, whose safeguard policy (ESPP) has been accepted by two major multilateral agencies viz. The World Bank & ADB.

POWERGRID is also pioneer in the field of Sustainability Reporting in the Indian Power Sector published its 3^rd biennial Sustainability Report in September, 2015. This report also attained the highest possible rating of âA â and also externally assured by accredited assurance provider M/s Intertek India Private Limited based on Global Reporting Initiative (GRI-G3) guidelines including Electric Utilities Sector Supplement (EUSS) and International Standards like Accountability, UK Standard AA 1000 APS (2008) and AA1000 SES (2011). The 4^th such report is under preparation following the GRI-G4 guidelines.

POWERGRID is fully conscious of the need to conserve natural resources and avoids forest, ecological sensitive areas like Wildlife Sanctuaries/ National Parks/Biosphere Reserves and Coastal Regulation Zone areas as far as possible through optimization of route alignment. Through careful route selection POWERGRID completely avoided Nongkhyllem Wildlife Sanctuary in Meghalaya for 220kV D/c Byrnihat-Mawngap-New Shillong line under NERPSIP. However, in case of 765kV D/c Bhuj - Banaskantha line where avoidance of Wild Ass Sanctuary in Gujarat couldnât be possible due to its strategic location and size, POWERGRID carried out Biodiversity Assessment Studies by Independent Experts and implementing specific mitigation measures to minimize adverse impact on wildlife/biodiversity of areas. Following the basic principle of avoidance & minimization, involvement of forest, has been reduced progressively from 6% in 1998 to 2.26% at present. However, in some cases where involvement of forest area becomes unavoidable, forest clearance is obtained under Forest (Conservation) Act, 1980.

Apart from above, the Company has taken various initiatives to fulfil its commitment towards the goal of sustainable development and to address the possible environmental externalities associated with its business processes. Key initiatives in this regard are:

- Design & Installation of innovative towers such as multi-circuit & pole towers in lines have not only conserved the precious Right of Way (RoW) but also substantially reduced felling of trees as well as facilitated conservation of wildlife in ecologically sensitive areas.

- Installation of Gas Insulated Switchyard (GIS), instead of Air Insulated Switchyard (AIS) in the vicinity of habitation/town areas substantially reduce land requirement and also helped in conservation of precious land resource.

- Rain Water Harvesting in all new substations not only conserved precious water resources but also enhanced ground water table in the areas of near vicinity.

- Installation of LED bulbs & solar street lighting in substation, fuel catalysts devices for DG sets etc.

- Installed a 40kWp Solar PV System at RHQ Building, Nagpur in addition to 50kWp Solar PV System at Gurgaon Office Complex resulted in reduction of about 47 tons of CO₂ annually.

- Also, more than 15,000 trees were planted in 175 locations.

- The Company is providing professional and financial support to Varanasi Nagar Nigam for efficient and effective collection, storage, transportation system and decentralized composting for MSW Waste in 25 wards of Varanasi.

- Renovation of village ponds.

- Using fly ash bricks, wherever possible for construction of new buildings.

Procurement from Micro & Small Enterprises (MSEs)

The Government of India has notified a Public Procurement Policy for Micro and Small Enterprises (MSEs), Order 2012. In terms of the said policy, the total eligible value of annual procurement of goods produced and services rendered by MSEs (including MSEs owned by SC/ ST entrepreneurs) during financial year 2016-17 was Rs. 3,410 Crore. The total procurement form MSEs (including MSES owned by SC/ST entrepreneurs) was Rs. 777 Crore (22.79%).

Total eligible value of annual procurement of goods produced and services rendered by MSEs (including MSES owned by SC/ST entrepreneurs) for financial year 2017-18 is projected to be in the range of Rs. 1000 Crore.

For enhancement of procurement from MSEs, annual procurement plan along with other relevant details related to procurement from MSEs are uploaded on POWERGRIDâs website for benefits of MSEs. Further to look into and address the grievances/concerns raised by any MSEs, a high level committee is also in place in the organization. A nodal officer is also designated to look into the aspects related to procurement from Micro & Small Enterprises owned by SC/ST Entrepreneurs.

Your Company has been participating and organizing MSEs related programmes on regular basis.

MANAGEMENT DISCUSSION AND ANALYSIS

In addition to the issues in the Directorsâ Report, some issues have been brought out in report on Management Discussion and Analysis placed at Annexure-I.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report as stipulated under Regulation 34 (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is given in Annexure-II and forms part of the Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As per requirements of disclosures under Section 134(3) (m) of Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 information relating to conversation of energy, technology absorption and foreign exchange earnings and outgo, information is given in Annexure-III to this Report.

RISK MANAGEMENT POLICY

Information on Risk Management Framework is covered in the Management Discussion and Analysis Report at Annexure-I of this Report.

INTERNAL FINANCIAL CONTROLS AND ADEQUACY

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its businesses, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds, error reporting mechanism, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

STATUTORY AUDITORS OF THE COMPANY

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India. M/s S. K. Mittal & Co., M/s R. G. N. Price & Co., M/s Kothari & Co. and M/s Parakh & Co. were appointed as Joint Statutory Auditors for the financial year 2016-17.

The Statutory Auditors have given an unqualified report. The report is self-explanatory and does not require any further comments by the Board.

COMPTROLLER AND AUDITOR GENERALâS COMMENTS

Company has received âNILâ comments on the accounts for the year ended March 31, 2017 by the Comptroller and Auditor General of India under Section 143(5) of the Companies Act, 2013. Copy of the same is attached in Annexure - IV to this report.

SECRETARIAL AUDITOR

Kumar Naresh Sinha & Associates, Practising Company Secretary has conducted Secretarial Audit of the Company for the financial year ended March 31, 2017. The report & observations of the Secretarial Auditor and Explanation by the Board thereon forms part of this Annual Report (Annexure-V).

COST AUDITORS OF THE COMPANY

Your Company appointed M/s K. G. Goyal & Associates, Cost Accountants and M/s R. M. Bansal & Co., Cost Accountants as Cost Auditors for the Financial Year (FY) 2016-17 under Section 148 of the Companies Act, 2013.

The Cost Audit Reports for the FY 2016-17 will be filed with the Cost Audit Branch, Ministry of Company Affairs before due date, i.e. September 27, 2017.

EXTRACT OF ANNUAL RETURN

In accordance with Section 134 (3) (a) of the Companies Act, 2013 an extract of the annual return in the prescribed format in MGT-9 is given as Annexure VI of this Report.

COMPANYâS BOARD

Your Companyâs composition of Board of Directors underwent some changes during the year 2016-2017. During the year, Shri K. Sreekant assumed the charge of Director (Finance) with effect from 1^st September, 2016. Shri R. T. Agarwal demitted the office of Director (Finance) on 31^st August, 2016 upon attaining the age of superannuation. The Board placed on record appreciation and gratitude to Shri R. T. Agarwal for the significant contribution and support to the Company extended as Director (Finance).

Shri Prabhakar Singh assumed the charge of Director (Projects) with effect from 8^th February, 2017. Prior to his appointment, Shri R. P. Sasmal, Director (Operations) was holding additional charge of Director (Projects).

Shri Tse Ten Dorji and Smt. Jyotika Kalra were appointed as non-official part time Directors (Independent Director) w.e.f. 16^th February, 2017. Smt. Jyotika Kalra, consequent to her appointment as member of the National Human Rights Commission, has resigned from the post of Independent Director with effect from 6^th April, 2017.

Smt. Jyoti Arora and Dr. Pradeep Kumar on being relieved from the Ministry of Power on 5^th July, 2017 (A/N) and 31^st July 2017 (A/N) respectively have ceased to be Directors on the Board of POWERGRID in terms of Article 31(iv) of the Articles of Association of POWERGRID. The Board placed on record appreciation and gratitude to Smt. Jyoti Arora and Dr. Pradeep Kumar for their contribution and support to the Company.

Ministry of Power vide its Order No. 25-11/4/2017-PG dated 3^rd August, 2017 has conveyed the appointment of Smt. Shalini Prasad, Additional Secretary, Ministry of Power as Part-time Director (Government Nominee Director), in place of Smt. Jyoti Arora.

In accordance with the provisions of Section 160 of the Companies Act, 2013 read with Article 31(iii) of the Articles of Association of the Company, Shri Ravi P. Singh, Director (Personnel), shall retire by rotation at the ensuing Annual General Meeting of your Company and being eligible, offers himself for re-appointment.

NUMBER OF MEETINGS OF THE BOARD

Board of Directors met 13 times during the financial year 2016-2017. Details regarding dates and attendance of the Board meetings are provided in the Report on Corporate Governance, which forms part of this report.

COMMITTEES OF THE BOARD

POWERGRIDâs has Audit Committee, CSR Committee and other Committees. The composition and scope of the Committees are provided in the Report on Corporate Governance.

A report on the Corporate Governance (Annexure-VII), forming part of this report, together with the Certificate thereon is given in Annexure-VIII to this Report.

DECLARATION BY INDEPENDENT DIRECTORS

During the year, all the Independent Directors have met the requirements specified under Section 149 (6) of the Companies Act, 2013 for holding the position of âIndependent Directorâ and necessary declaration from each Independent Director under Section 149 (7) was received.

PERFORMANCE EVALUATION OF DIRECTORS

Ministry of Corporate Affairs (MCA) vide General Circular dated 5^th June, 2015 has exempted Government Companies from the provisions of Section 178 (2) which requires performance evaluation of every Director by the Nomination & Remuneration Committee where Directors are evaluated by the Ministry or Department of the Central Government which is administratively in charge of the Company, or, as the case may be, the State Government as per its own evaluation methodology. Similar exemption has been requested from SEBI under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which is under consideration.

Further, MCA vide notification dated 05^th July 2017 has also amended the Code for Independent Directors, as per which the performance evaluation of the Board by the Independent Directors has been exempted for Government companies.

The appointment, tenure and remuneration of Directors are decided by the President of India. Remuneration paid to Chairman & Managing Director and Functional Directors are as per terms and conditions determined by the Department of Public Enterprises (the DPE), Government of India. The DPE has also laid down a mechanism for performance appraisal of all Functional Directors. Independent Directors are paid only sitting fee per Board / Committee meeting attended.

POWERGRID enters into Memorandum of Understanding (MoU) with Ministry of Power (MoP) every year wherein Company is evaluated on various financial and non-financial parameters. The performance of the Company and Board of Directors are evaluated by the DPE in terms of MoU entered into with MoP.

POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION

POWERGRID has framed a policy on the remuneration of the Directors, Key Managerial Personnel and employees as required under the provisions of Section 178 of the Act. The said policy is available on our website at: https://www.powergridindia.com/sites/default/files/Investor_Relation/Reports_Filings/Code_of_Conduct_Policies/04_Remuneration%20Policy.pdf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Loans, Guarantees or investments under Section 186 of the Companies Act, 2013 form part of the notes to financial statements (Note No. 60) provided in this Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties referred to in Section 188 (1) of the Companies Act, 2013, in the prescribed Form AOC-2, are given as Annexure IX of the Directorsâ Report. Further, attention of the members is drawn on Note No. 60 of the Financial Statements which sets out related party disclosure.

PARTICULARS OF EMPLOYEES

As per provisions of Section 197(12) of the Companies Act, 2013 read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every listed company is required to disclose the ratio of the remuneration of each Director to the median employeeâs remuneration and details of employees receiving remuneration exceeding limits as prescribed from time to time in the Directorsâ Report.

SUBSIDIARIES AND JOINT VENTURES

During the year, shares of Power System Operation Corporation Limited (POSOCO) were transferred to Government of India on 2^nd January, 2017. As on 31^st March, 2017 POWERGRID had 11 subsidiaries.

There is no change in the number of joint ventures during the year. Further a statement containing salient features of the financial statements of our subsidiaries in the prescribed format AOC-1 is enclosed as Annexure X.

CORPORATE SOCIAL RESPONSIBILITY

Your Company believes in Corporate Social Responsibility (CSR) as a commitment to its stakeholders to conduct business in an economically, socially and environmentally sustainable manner that is transparent and ethical. Stakeholders include persons directly impacted by the activities of the Company, local communities, environment and society at large. It primarily focuses on inclusive social-economic growth for development of marginalized and under-privileged sections of the society residing around its areas of operation. With this approach, your Company carries out various CSR activities with thrust on Rural Development/Infrastructural Development, Skill Development, Health, Education, Environment, etc.

During the FY 2016-17, your Company spent Rs.147.27 crore and sanctioned 171 nos. of CSR Projects costing about Rs.180 crore to be executed in next 2-3 years.

During the year, your Company completed the construction of the âPOWERGRID Vishram Sadanâ at J.P. Apex Trauma Centre, AIIMS, New Delhi.

Also, your Company has participated in the âSwachh Bharat Abhiyaanâ. POWERGRID employees and their family members, in more than 150 locations across the country, voluntarily undertook âShram Daanâ, and contributed more than 60,000 manhours towards this end. Further, POWERGRID has contributed an amount of Rs.30 crore to the âSwachh Bharat Koshâ of the Govt. of India.

A number of employees of your Company pledged to Donate their Organs and also participated in voluntary blood donation camps organized by the Company.

During the year, your Company has contributed to the National Skill Development Fund for imparting skill development training to youths, through National Skill Development Corporation India (NSDC). As part of this endeavor more than 3500 youths have been trained in various trades in 24 locations across the country. Further, to impart high-end training to youths, POWERGRID tied up with CIPET, Indo Danish Tool Rooms (IDTR), Jamshedpur, Indo German Institute for Advanced Technology (IGIAT), Vizag, Indo German Tool Room (IDTR), Indore. In 10 such locations more than 1100 youths were trained and most of them were gainfully employed.

The project of âImproving Rural Livelihoods through Farmer-centric Integrated Watershed Managementâ on 10,000 hectares of land in Kurnool (Andhra Pradesh) & Kudgi (Karnataka) through ICRISAT (The International Crops Research Institute for the Semi-Arid Tropics) are also under progress satisfactorily. The various initiatives under this project have resulted in improvement of Crop productivity by 15-22% resulted in conservation of about 45,000 m³ of water.

Further, scholarships to more than 1200 students of Assam & Manipur, in NER have been provided through National Foundation for Communal Harmony (NFCH) to continue their education. Also, scholarships to 75 talented footballers, through Subroto Mukherjee Sports & Educational Society of the Indian Air Force, for pursing their talent in football have been provided. A Working Women Hostel is being constructed at Nuh, Haryana under CSR for the benefit of women. Also, Boyâs hostel at Pt. Ravishankar Shukla University, Raipur was completed and formally handed over.

Besides a large number of projects involving infrastructure development in Rural Areas, like Installation of solar street lights, handpumps Drinking water facility, Water storage and distribution network, construction of Community Centres, Internal Roads, culverts, construction of class rooms, toilets, supply of desk & benches in village schools, Providing ambulances, conducting health check-up camps, infrastructure support in government hospitals/Community Health Centre/Primary Health Centre were also undertaken during FY 2016-17.

Details of the CSR policy are available on our website, at http://10.100.18.171/sites/default/files/CSR Policy 2015 0.pdf. The Annual Report on our CSR activities is enclosed as Annexure XI of the Boardsâ Report.

DIVIDEND DISTRIBUTION POLICY

As per regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations), the top 500 listed companies shall formulate a Dividend Distribution Policy. Accordingly, the policy was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retained profits earned by the Company. The policy is also available on the Companyâs website: https://www.powergridindia.com/sites/default/files/Dividend%20Distribution%20Policy.pdf.

SIGNIFICANT MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunal impacting the going concern status and Companyâs operations in future.

DIRECTORSâ RESPONSIBILITY STATEMENT

As required under Sections 134(3)(c) & 134(5) of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACCOLADES & AWARDS

The exemplary performance of the Company has been acknowledged and praised by the Govt. of India and other prestigious organisations & institutions in form of various awards/ accolades in various categories from time to time.

During FY 2016-17, the Company has been conferred following important awards/accolades:

As per Platts Top 250 Global Energy Company Rankings - Fastest Growing Electric Utility in Asia for three successive years (2016, 2015, and 2014).

CBIP Award âBest Performing Transmission Utility 2016â.

âClean Energy Awardâ- 2016 for best power transmission Utility Company in India for its remarkable efforts in the field of sustainable development and promoting clean energy transmission in India by AI Global, UK.

âGold Trophy for Top Exporter in the Medium categoryâ of the year 2013-14 by Engineering Exports Promotion Council (EEPC) under the aegis of Ministry of Commerce.

âBest Risk Management Practiseâ Award at the 3^rd India Risk Management Wards in PSU category by CNBC TV18. This award is given to the firms who have significantly added to the understanding and practise of Risk Management.

âIndustry Excellence Awards 2017â in the category of âEnergy & Powerâ on the occasion of BRICS International Conclave for MSMEs & start-ups organised by âStepup 360â& BRICS International Forumâ and supported by MSME-DI New Delhi.

âNorth American Synchrophasor Initiative (NASPI) Awardâ for Outstanding Utility during 2016-17.

âDelhi Management Association Award 2016â for âImproving Rural Livelihoods and Protecting Environment through Farmer-centric Integrated Watershed Managementâ under CSR

âSCOPE Award 2016â for âInnovative Stakeholders Engagementâ by POWERGRID.

ACKNOWLEDGEMENTS

Our Board of Directors would like to express their deep sense of appreciation for the guidance and co-operation received from Government of India, particularly Ministry of Power, Ministry of Finance, Ministry of Home Affairs, Ministry of External Affairs, Ministry of Statistics and Programme Implementation, Ministry of Environment & Forests, Ministry of Corporate Affairs, Central Electricity Regulatory Commission, Appellate Tribunal for Electricity, Central Electricity Authority, NITI Aayog, Department of Public Enterprises, Regional Power Committees, and other con-cerned Govt. departments/agencies at the Central and State level as well as from Securities and Exchange Board of India, National Stock Exchange of India Ltd., and BSE Ltd., Mumbai without whose active support, the achievements of the Corporation during the year under review would not have been possible.

Special thanks to our valued customers, State Governments and State power utilities and other clients, who have awarded various consulting works and reposed faith in Companyâs capability to handle them. The Board also appreciates the contribution of Contractors, Vendors and Consultants for successful implementation of various projects by the Company.

Our Directors also acknowledge the valuable suggestions and guidance received from the statutory auditors during the audit of accounts of the Company for the year under review. The Board also conveys its sincere thanks to national/ international financial institutions/ multilateral Financial Institutions (The World Bank & Asian Development Bank)/ Banks/ national (CARE, ICRA & CRISIL) & international (Standard & Poor and Fitch Ratings) credit rating agencies for their assist-ance, continued trust and confidence reposed by them on POWERGRID.

On behalf of Board of Directors, I would like to place on record our deep appreciation of the dedicated efforts and valuable services rendered by the members of the POWERGRID Family in the Companyâs achievements during the year 2016-17. I would also like to thank the Executive team for their strong leadership, the employee unions for their support and all our employees for their commitment and enthusiasm to achieve our aim to be the worldâs premier transmission utility.

For and on behalf of the Board of Directors

(I. S. Jha)

Chairman & Managing Director

Place: New Delhi

Date: 9^th August, 2017

Mar 31, 2015

To, Dear Shareholders, Ladies & Gentlemen,

The am delighted to present on behalf of the Board of Directors, the 26th Annual Report on the performance of your Company during the financial year ending March 31, 2015 together with Audited Financial Statement, Auditors'' Report and Review of the Accounts by the Comptroller and Auditor General of India for the review period.

Financial year 2014-15 marked the completion of 25 glorious years of your Company. In this ''Silver Jubilee'' year, it maintained its growth momentum and saw a number of splendid achievements on all fronts.

In the area of project execution, your Company recorded a capitalization of Rs. 21,760 Crore, which is the highest ever in a single financial year of its history. The Company''s meritorious performance and continuous thrust on commissioning of transmission assets has resulted in higher revenue & earnings, thereby added value for its stakeholders. The successful addition of transmission assets has facilitated seamless power transfer in the Country. A strong and highly integrated inter-State transmission system has enabled development of the vibrant power market and provided momentum to growth of the power sector.

Your Company commenced implementation of Green Energy Corridors across the Country, giving boost to renewable generation by facilitating its integration with the National Grid, displaying the Company''s efforts towards realization of sustainable and inclusive growth. In the area of operational excellence, ''National Transmission Asset Management Centre (NTAMC)'' and ''Enterprise Resource Planning (ERP)'' have been operationalized. These state-of-the-art technological advances have enabled increased transparency & efficiency in asset management and facilitated remote visibility & operation of POWERGRID''s transmission system established across the Country.

Your Company has been given ''Navratna'' status by Govt. of India and it continued to display "Excellent" performance by exceeding most of the targets under the ''Memorandum of Understanding (MoU) signed with Ministry of Power (MoP), Government of India for FY 2014-15''. Based on its performance against the MoU targets, the Company is poised to be rated ''Excellent'' for the year 2014-15, thereby maintaining the record of the getting ''Excellent'' rating year after year over two decades since signing of its first Moll.

Major achievements by your Company on various fronts are mentioned below:

- Capital investment of Rs. 22,456 Crore

- Assets capitalization of about Rs. 21,760 Crore.

- Commissioned new transmission assets comprising about 8,830 circuit kilometre (ckm) of Extra High Voltage (EHV) transmission lines, 8 new sub-stations and 25,786 Mega Volt Ampere (MVA) transformation capacity.

- Investment approval accorded for 33 new transmission projects worth more than Rs. 25,500 Crore.

- Maintained transmission system availability at 99.87% with number of trippings per line limited at 0.53 for the year.

- During the year, a number of large projects were commissioned including important elements, viz. 765 kV D/C Wardha-Aurangabad lines 1 & 2, 765 kV D/C Raipur-Wardha & 765kV Champa-Raipur lines for evacuation of power from IPP Projects in Chhattisgarh, 765 kV D/C Nellore-Kurnool, 765kV D/C Kurnool-Thiruvalam for Southern Region Grid Strengthening, 765kV 2xS/C Angul-Jharsuguda 765kV D/C Jharsuguda- Dharamjaygarh and 765kV S/C Satna-Gwalior-II lines.

- During the year, inter-regional power transfer capacity of 4,200 MW has been added by the Company. The cumulative inter-regional power transfer capacity of the National Grid stood at about 46,450 MW at the end of March, 2015.

FINANCIAL PERFORMANCE

(Figures in Rs. Crore, except per share data)

Description 2014-15 2013-14 Y-o-Y Growth

Revenue

Transmission Charges 16,521 14,327 15.3%

Consultancy-Sale of Services 381 333 14.4%

Consultancy-Sale of Products 0 294 -

Telecom 275 276 -0.4%

Other Income 603 491 22.8%

Total Income 17,780 15,721 13.1%

EBIDTA 15,354 13,427 14.4%

Profit After Tax (PAT) 4,979 4,497 10.7%

Earnings per Share (Rs.) 9.52 9.36 1.7%

Book Value per Share (Rs.) 72.71 65.78 10.5%

Gross Fixed Assets 118,264 96,504 22.5%

Long term borrowing* 93,845 80,470 16.6%

Net Worth 38,037 34,413 10.5%

Debt Equity Ratio 71:29 70:30 -

- including current maturities of long term borrowings

OPERATIONAL EXCELLENCE

Asset Management

As on April 1, 2015, the transmission assets owned and operated by your Company stand 115,637 ckm. of Extra High Voltage (EHV) transmission lines and 192 nos. EHVAC & High Voltage Direct Current (HVDC) sub-stations with 231,709 MVA transformation capacity.

Managing such widely spread assets across the Country has been an extraordinary task involving meticulous planning and observing stringent procedures. Maintenance activities are planned well in advance and an "Annual Maintenance Plan" is chalked out for every asset through live line or shutdown maintenance, as per technical feasibility. In the event of tower damage due to natural calamities or otherwise, Emergency Restoration System (ERS) is being used for restoration of damaged transmission towers in shortest possible time. Further, POWERGRID has taken initiative for development of mobile sub-station (truck mounted) for emergency restoration in case of eventuality.

In spite of the challenging conditions, during the FY 2014-15, your Company maintained availability of the transmission network at 99.87% which is comparable to international standards. The number of tripping per line (unplanned) stood at 0.53 for the year, indicating high reliability of POWERGRID transmission system. This performance could be maintained through training, deployment of advanced techniques including use of helicopters for live line aerial patrolling, hot line maintenance upto 765 kV voltage level, equipment conditioning monitoring including dynamic testing, thermo-vision scanning, frequency response analysis of the transformers and reactor''s etc.

With rapid increase in asset base of your Company, urgent need was felt to provide expert handling to the equipment spread all across the Country. In view of this, National Transmission Asset Management Centre (NTAMC) has been established for remote operation and monitoring of the substations, which is manned by experts on 24X7 basis to provide expert handling to system & equipment. The project constitutes of three distinct areas such as SCADA (Supervisory Control and Data Acquisition System), for gathering of electrical data & control of the switchgear of sub-station, RAS (Remote Accessibility System) and VMS (Video Monitoring System) which can be remotely controlled from the NTAMC and which is used to keep a close watch on the substation switch yard & its premises.

At the end of FY 2014-15, 75 substations are being operated through remote operation including 44 substations without operating staff. MSH (Maintenance Service Hub) facility has been established where specialised group of experts of all areas like control & protection, switchyard equipment, transformer & reactor are available to carry out repair/overhauling of equipment as & when required.

International Benchmarking of POWERGRID O&M practices

In order to improve further, POWERGRID O&M practices are regularly being benchmarked internationally through "International Transmission Operation and Maintenance Study" (ITOMS) carried out by UMS, USA. In ITOMS studies/ benchmarking, about 28 large Power Transmission Utilities across the Globe participate and their performances are evaluated and benchmarked. POWERGRID carried out benchmarking of all its 9 Regions with each other and with other member Utilities of ITOMS to identify areas of improvement. As per ITOMS benchmarking, your Company has been maintaining high performance in its sub-stations & transmission lines operations.

Disaster Management

Being a sound customer centric organisation, your Company has been contributing in restoration of power in areas hit by natural calamities in the Country. This was evident when the State of Jammu & Kashmir (J&K) saw the devastating flood in its history of last 60 years, disrupting the electricity supply in most of the areas of the State. For quick restoration of power in the State, your Company took charge as Nodal Agency to assist J&K Power Department by taking immediate measures such as deployment of manpower, tools & tackles for restoration of flood affected distribution system, diversion of the material to J&K from far-flung States, deployment of Emergency Restoration System (ERS), quick procurement of Distribution Transformers, etc.

Yet again, when unseasonal torrential rainfall caused flood like situation in the State of J&K, landslides were reported at various places and tower collapse was reported in 132 kV Salal-Jammu transmission line. Immediate dispatch of ERS was arranged and erection carried out in a very short time.

Similarly in Andhra Pradesh in October, 2014, after cyclone ''HUDHUD'', support was provided to restore power in the affected areas of three (3) districts, namely Vishakhapatnam, Srikakulam & Vijayanagaram. Wide-spread damage in these three districts had taken place on account of tripping of lines connecting to the area from Khammam, Vijayawada, Vemagiri, in AP and 400kV in feed from Jeypore ( Odisha). Approximately, 1000MW load had crashed due to failure of downstream sub-transmission & distribution network of AP Transco & Discoms in above three districts. Besides, towers collapse was reported in a number of 400KV & 220KV transmission lines in the area and number of bay equipment at 400kV Gazuwaka (POWERGPJD), Simhadri (NTPC) & Kalpaka (APTRANSCO) were also damaged. A team comprising senior officials was sent to site immediately to restore the damaged system. Restoration of distribution system was also carried out.

Your Company''s actions have been lauded by everyone including media and Government, which has further boosted the determination to be ready to face such calamities.

PROJECT IMPLEMENTATION

Your Company has been putting continuous thrust on commissioning of its transmission projects to extract maximum commercial benefits through its Integrated Project Management and Control System (IPMCS).

On project implementation front, your Company has commissioned about 8,830 ckm of EHV (Extra High Voltage) transmission lines and 25,786 MVA transformation capacity with 8 new sub-stations during the year, which includes a number of large projects, including important elements such as 765 kV D/C Wardha-Aurangabad lines 1 & 2, 765 kV D/C Raipur-Wardha & 765kV Champa-Raipur lines for evacuation of power from IPP Projects in Chhattisgarh, 765 kV D/C Nellore-Kurnool, 765kV D/C Kurnool-Thiruvalam for Southern Region Grid Strengthening, 765kV S/C Satna-Gwalior-II & 765kV 2xS/C Angul-Jharsuguda transmission lines. Also, through commissioning of 765kV D/C Jharsuguda- Dharamjaygarh line, 4,200 MW inter-regional power transfer capacity has been added by your Company.

Also, your company has provided active support in the completion of critical 765kV Raichur-Solapur circuit-2 transmission line, which was being implemented through Private Sector participation.

FINANCIAL MANAGEMENT

In the FY 2014-15, your Company continued to show exceptional performance in all its business areas, enhancing the value for the shareholders. Your Company has achieved turnover of Rs. 17,780 Crore and Profit after Tax (PAT) of Rs. 4,979 Crore as compared to Rs. 15,721 Crore and Rs. 4,497 Crore respectively during FY 2013-14 on standalone basis.

On consolidated basis, PAT crossed the Rs. 5000 crore mark, registering at Rs. 5046 crore in FY 2014-15. The turnover on consolidated basis increased to Rs. 18233 crore from Rs. 16146 crore in FY 2013-14.

Capital Investment and Fund Mobilization

In line with its increased target of Rs. 1,10,000 Crore from Rs. 1,00,000 crore capital expenditure target for the XII Plan, Capital investment (CAPEX) of Rs. 22,456 Crore has been made during the year 2014-15 and cumulatively Rs. 65,651 Crore CAPEX has been achieved. For the CAPEX of FY 2014- 15, Rs. 13,014 Crore were mobilised through private placement of bonds & term loan, Rs. 3,070 Crore were mobilised through External Commercial Borrowings (ECB)/Suppler credit and balance Rs.6372 crore was met through internal resources generated & FPO proceeds.

Dividend Payout

For FY 2014-15, your Company has proposed a final dividend of Rs. 1.31 per share in addition to Rs. 0.69 per share of interim dividend paid in March, 2015. The final dividend shall be paid after your approval at the Annual General Meeting. Thus, the total dividend payout for the year amounts to Rs. 1,046 Crore (including an interim dividend of Rs. 361 Crore).

Particulars of loans, Guarantees or investments.

Loans, Guarantees or investments under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual report.

Particulars of contracts or arrangements with related parties

Particulars of contracts or arrangements with related parties referred to in Section 188 (1) of the Companies Act, 2013, in the prescribed Form AOC-2, are given as Annexure X of the Directors'' Report. Further, attention of the members is drawn on Note No. 2.47 of the Financial Statement which sets out related party disclosure.

Transfer to Reserves

Your company has proposed to transfer Rs. 2400.00 crore to the general reserve and an amount Rs. 1763.00 crore to other reserves.

Statement containing salient features of financial statements of subsidiaries, associate and Joint Ventures Companies

Statement containing salient features of financial statements of subsidiaries, associate and Joint Ventures Companies as required under Section 129 (3) of the Companies Act, 2013, in the prescribed Form AOC-1, is given as Annexure XI to the Director''s Report.

Consolidated Financial Statement

As per the requirements of the Companies Act, 2013, the Audited Consolidated Financial Statement is provided in the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required u/s 134 (3)(c) & 134 (5) of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the Annual Accounts on a going concern basis; and

(e) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

COMMERCIAL PERFORMANCE

As per Central Electrical Regulatory Commission (Sharing of inter-State Transmission Charges and Losses) Regulations, 2010, your Company as the Central Transmission Utility (CTU) of the Country, has been entrusted the responsibility for billing, collection & disbursement of transmission charges bills on behalf of all Inter-State Transmission System (ISTS) Licensees. In this regard, bills on transmission charges are prepared, raised and uploaded on the website portal for Designated ISTS Customers (DICs), including the payment details by the customers.

Your Company is fulfilling the assigned responsibilities effectively and displayed excellent collection efficiency of 97%.

PERFORMANCE AGAINST COMPETITION

Your Company is able to do well in spite of stiff competition and displayed impressive performance under Tariff Based Competitive Bidding (TBCB). During the year FY 2014-15, your Company won three out of four projects put up for bidding under the TBCB route, namely Transmission System Strengthening associated with Vindhyachal-V, Transmission System associated with Gadarwara STPS (2X800 MW) of NTPC Part-A and Transmission System associated with Gadarwara STPS (2X800 MW) of NTPC Part-B. As on 31.3.2015, your Company has won total eight (8) projects through TBCB since its participation.

DEVELOPMENT OF NATIONAL GRID

A strong National Grid enables seamless power flow across the regions and optimum utilization of resources across the Country. Working in this direction, your Company successfully achieved ''One Nation-One Grid-One Frequency'' in the year 2013-14. During the year under consideration, the Company commissioned 765kV D/c Jharsuguda-Dharamjaygarh transmission line, increasing the power transfer capacity between Eastern Region and Western Region by 4,200MW. As a result, the total inter-regional power transfer capacity of the National Grid stands at 46,450 MW as on March 31, 2015. Also to increase the inter-regional power transfer capacity of the National Grid, your Company is executing a number of projects, some of which include high capacity HVDC links. By the end of XII Five Year Plan, it is expected that the inter-regional power transfer capacity of the National Grid will be about 72,250 MW.

GRID MANAGEMENT AND OPEN ACCESS

Power System Operation Corporation Limited (POSOCO), a fully owned subsidiary of your Company, has been managing the national grid successfully. POSOCO, through National Load Despatch Centre (NLDC) and Regional Load Despatch Centres (RLDCs) has been facilitating transfer of power through bilateral and multi-lateral transactions and is playing important role for creating vibrant electricity market in the Country. POSOCO has been designated as the nodal agency for Renewable Energy Certificate (REC) Mechanism, transmission pricing, Short Term Open Access (STOA) in transmission, Deviation Settlement Mechanism, Power System Development Fund (PSDF) management, etc.

During FY 2014-15, to meet the demands in the Country, about 84.36 Billion Units (BUs) of inter-regional energy transfer was facilitated, across the nation using pan-India inter-regional transmission links.

Under Short Term Open Access (STOA), 12,106 nos. of bilateral transactions and 25,942 nos. of collective transaction were approved, allowing energy transfer of 52.55 BUs through bilateral transactions and 28.38 BUs through collective transactions, totaling up to 38,048 approved transactions and 80.93 BUs of approved energy in the FY 2014-15.

Further, your Company, as Central Transmission Utility (CTU), is the nodal agency for processing & grant of Connectivity, Long Term Access (LTA) and Medium Term Open Access (MTOA) to various applicants. Out of 209 Connectivity applications for about 2,10,000 MW capacity received, Connectivity was granted to 90 numbers. of eligible applications of 77,600 MW capacity. As on March 31, 2015, the Company granted LTA to 201 applications of 152,000 MW capacity. Also based on the transmission margins availability, the MTOA was granted to 76 numbers. of applications of 5,100 MW capacity.

QUALITY MANAGEMENT

With the present state of economy & financial issues, the manufacturers are facing tough competition from indigenous as well as international manufacturers. To ensure quality while procuring goods at competitive prices, various quality assurance improvement measures have been initiated and implemented to get better quality products. Process/surveillance audits were carried out to create win-win partnership with suppliers and to get better quality products at low costs.

With vast geographical spread of work & large number of high capacity transmission lines and sub-stations with state-of-Art technology under implementation, capacity building is one of the major challenges. In this direction, your Company has established its ''POWERGRID Academy of Leadership'' at Manesar for capacity building of its staff as well as for power sector-domestic & international. Further, to have self-reliance of indigenous development of High technology / critical products, your Company has mandated its international suppliers to set up manufacturing facilities in India in the field of 765kV Transformer/Reactors, 800kV HVDC equipment, GIS & major equipment, etc.

Your Company continues to do process audits in the manufacturing units of various vendors, sub-vendors & even further below in supply chain to achieve the target of zero product inspection. Activities like calibration of key testing instruments & their validation were undertaken on topmost priority so as to improve quality systems at the manufacturer''s works. Quality audits at sites were also undertaken during the year for instant feedback and to take appropriate corrective action apart from web based feedback system.

In order to ensure quality of product with required technical specifications and to meet project completion target, a number of activities have been undertaken by your Company like defining proper processes for quality manufacturing, quick approval of quality plan of various items and smart inspection of materials. For on time issue of CIP (Customer Inspection Points) /MICC (Material Inspection Clearance Certificate), testing and manufacturing of various critical items, continuous follow up with manufacturers were undertaken.

Another milestone was achieved during the year when two of the Regional Offices of POWERGPJD, i.e. Nagpur (Western Region-I) & Shillong (North-East Region) were awarded certification for their Energy Management Systems under ISO 50001.

Your Company developed and maintained systems and procedures aligned with integrated management system comprising ISO 9001: 2008 for Quality Management System, ISO 14001: 2004 for Environmental Management System and OHSAS 18001: 2007 for Occupational Health and Safety Management System. The certification has been maintained upon rigorous audits by BSI Management Systems.

TECHNOLOGY DEVELOPMENT

Your company gives priority to research and development activities with potential for environmental, social and national interests by incorporating advanced technology solutions in the field of power system. In this direction, your company is setting up State-of-the-Art research and testing laboratories POWERGRID Advanced Research and Technology Centre at Manesar in the field of transmission, renewable integration, power system simulation, material science, advanced equipment diagnostics, smart grid, energy efficiency, control and automation, engineering design etc. This R&D centre shall cater to the research needs of POWERGRID and the country as a whole as well as capacity building of various stakeholders in this field.

The focus areas in development of transmission system across the country and trans-country as well are conserving the Right of Way (RoW), minimizing impact on natural resources, indigenization of technology and maintaining high network availability. To address these aspects, your company has developed new type of tower design including multi circuit type, digital substation through process bus architecture, air core reactor suitable for HVDC terminal etc.

Further, your Company as a part of its technology development process is carrying out a demonstration project on High Temperature Superconductor (HTS) cable system at 220kV voltage level. Being a technology in its development and demonstration stage worldwide, which is known for bulk power transmission with negligible losses on reduced right-of-way, the first-hand experience gained from this R&D project will boost your company''s thrust towards adoption of cutting edge technologies for safe, secure and reliable operation of grid. The operational experience and maintenance know-how gained from the project will pave way for future deployment of this state-of-the art technology in Indian grid.

Your company is considering a pilot project on Fault Current Limiter. The search for a solution to address the issue of rising fault current levels in Indian grid and at the same time which doesn''t affect the reliable operation of the grid leads your company to advanced fault current limiters. These Fault Current Limiters offer a promising solution to tackle the rising fault levels with its unique features in comparison to conventional methods for fault current limitation viz. bus splitting, series reactors etc.

Towards maintaining high network availability by maintaining proper insulation level of EHV transmission line, pollution measurements on pan India basis is being carried out to create base line pollution mapping data facilitating review of EHV lines insulation requirement which is first of its kind in the country.

SMART GRID TECHNOLOGY

Your company has pioneered for development of Smart Grid leading towards Smart City in the country for bringing efficiency encompassing entire power supply value chain.

Your company is implementing one of the world''s largest Wide Area Measurement System(WAMS) through deployment of State-of-the- Art Phasor Measurement Units(PMU) as part of Smart transmission. It covers deployment of PMUs at all 400kV and above substations at State and Central level as well as generation switchyards of 220kV & above across the country as part of Unified Real Time Dynamic State Measurement(URTDSM) scheme. Real time measured system information using fibre optic communication network are to be integrated at State Load Despatch Centres(SLDC), Regional Load Despatch Centres (RLDC) and National Load Despatch Centre(NLDC) for improved visualization and enhanced situational awareness of system operators and planners. Analytics using above data are being developed in association with IIT, Bombay to enhance the efficiency & security of the overall grid management.

Towards smart distribution, after demonstration of various Smart Grid attributes at Puducherry in a comprehensive manner through open collaboration, your company is also extending services for implementation of Smart Grid projects in various states like Himachal Pradesh, Punjab, West Bengal, Tripura, Chhattisgarh, Rajasthan, Haryana, Karnataka and Puducherry. Your company has also submitted project report to Govt. of Haryana on development of smart grid leading towards smart city Gurgaon to provide 24x7 quality power including catering growing demand and make Gurgaon Diesel generator set free city.

Towards facilitating increasing penetration of renewables in the overall generation capacity portfolio, your company has pioneered in implementation of battery energy storage systems of about 1 MW capacity as pilot project in Puducherry to evaluate different battery and its control technologies for proof of concept, areas of application, policy advocacy etc. in Indian context for large scale deployment.

Quality of power is one of the major concerns now in India for performance improvement of process and maintaining health of electrical network equipment. Recognizing its importance, your company has taken initiative to measure various power quality parameters at different cities on pan India at all voltage level to create base line data repository for identification of mitigating measures and application of technological solutions. Already measurements at more than 150 cities/towns completed across the country.

Your company is indigenously developing/developed smart products like smart meter, data concentrator unit, home energy management system, micro grid controller, active power filter etc. for varied applications and applied for patent.

To bring awareness about Smart Grid technologies and its demonstration in a holistic manner, your company is establishing a Smart Grid Knowledge Center equipped with working model of various technologies at POWERGRID Advance Research and Technology Centre (PART) at Manesar. This shall facilitate dissemination of knowledge on smart grid technologies in a learning environment as well as capacity building of utility/consumer and other stakeholders.

Your company also operates Secretariat of the prestigious "India Smart Grid Task Force(ISGTF)" of Ministry of Power, Govt. of India for activities related to Smart Grid.

GRID INTEGRATION OF RENEWABLE ENERGY SOURCES

Integration of Renewable Energy(RE) sources into the grid is one of the top priority of Govt. of India towards energy security and environmental sustainability. In this direction, your company has evolved Green Energy Corridors comprising intra state and inter state transmission infrastructure to facilitate integration of envisaged renewable capacity addition of about 33 GW in 12th plan in RE resource rich states at an estimated cost of about Rs. 38,000 cr. Inter State Transmission System(ISTS) as part of Green Energy Corridors is being implemented by your company. Further, your company has also evolved transmission schemes for integration of proposed ultra mega solar power parks of about 22,000MW in various states as part of Green Energy Corridors-II. Govt. of India also assigned your company to develop Inter State transmission system for nine(9) solar parks of capacity about 10,000 MW in seven(7) states. Implementation of transmission scheme for one(1) solar park in Andhra Pradesh is under progress.

ENERGY EFFICIENCY

Energy conservation through energy efficiency measures plays an important role to address energy saving aspect towards sustainability. Your company initiated activities in identification of energy saving opportunities through carrying out energy audits of various industries including Integrated Steel Plant at Bokaro & Bhilai, SAIL, institutions and other commercial establishments. Your company has more than 70 Bureau of Energy Efficiency (BEE) certified Energy Auditors/Managers. So far through energy audits, energy saving potential equivalent to 4750 MU with avoidable generation of about 900MW has been identified besides reduction in C02 emission. Towards demand side management, your company replaced 1337 old agricultural pumps with energy efficient pumps in Mandya district, Karnataka resulted into energy saving more than 35% with about 3MW load reduction.

Your company is also a BEE Grade-I Energy Service Company (ESCO) to implement energy efficiency solutions. In-house designed Waste heat recovery systems for steel re-rolling mills and implemented at various industries.

Your Company has released a study report "Negawatt Makes-a-Watt" i.e, Energy efficiency opportunities in India covering eighteen(18) energy intensive sectors in the country. Savings more than 20% in electrical energy, 12% in Coal and 7% in oil can be achieved per annum at an investment of Rs.12 lakh crore over a period of 5 years.

''POWERTEL'' - TELECOM SERVICES ON TRANSMISSION INFRASTUCTURE

Your Company is leveraging its Country wide transmission infrastructure with its diversified business portfolio of Telecom under the brand name ''POWERTEL''. During the FY 2014-15, total network coverage has been increased by 12% to 33,241 kms from the earlier reach of 29,641 kms. Number of Points of Presence (PoPs) locations have been increased to 352 from the earlier coverage of 317 PoPs and 44 new customers were added, resulting in increase in total customer base to 187 numbers and a growth of 25% over previous year.

Telecom Backbone Availability for the year 2014-15 was 99.97% better than in the previous year. Total Revenue (including revenue from internal sources) from Telecom Business for FY 2014-15 was Rs. 300.95 Crore as against Rs. 288.21 Crore in the previous year.

Your Company has signed an agreement with Bharat Sanchar Nigam Limited (BSNL) to improve the telecommunication connectivity with the North-Eastern States including Sikkim. It envisages the provisioning of bandwidth on optical fibre media laid over existing high tension electric transmission network of your Company. After completion of the proposed connectivity, the reliability of the telecom services shall improve substantially in North-Eastern region including Sikkim. Your Company has successfully completed the prestigious NKN (National Knowledge Network) project assigned by Govt. of India, which connects all knowledge centres across the Country such as Indian Institutes of Technology (IITs), Indian Institute of Sciences (IISCs) etc., on a high speed connectivity.

National Optical Fibre Network (NOFN)

As a part of Government of India plan to connect 250,000 Gram Panchayats (GP) in the Country by utilizing existing fibres of PSUs (BSNL, Railtel and POWERGRID) and laying incremental fibre to connect to Gram Panchayats wherever necessary, Your Company has been allotted work for development & maintenance of NOFN network in States viz. Telangana, Himachal Pradesh, Jharkhand & Odisha by Bharat Broadband Network Ltd (BBNL). Survey work has been completed in all states. Awards have been placed progressively for supply of duct & accessories and trenching & laying work. 977 nos of Gram Panchayats have been connected with fibre till 31st March 2015.

BUSINESS DEVELOPMENT & CONSULTANCY

Your Company, one among the largest power transmission utility in the world, has developed the expertise in its core areas such as power transmission, sub-transmission, load dispatch and communications (LD&C) etc.

Leveraging its capacity and experience, Consulting services have been provided to a number of customers in India and worldwide. During FY 2014-15, forty (40) Consultancy assignments were secured. During the fiscal 2015, the Company achieved Consultancy Revenue ofRs. 381 Crore from Consulting services.

DOMESTIC

Keeping its commitment to assist State Utilities for an inclusive, healthy and sustainable growth, your Company undertook a number of assignments on behalf of Utilities and other clients covering areas of Transmission, Sub-transmission, Distribution, Load Dispatch & Telecommunication, Smart Grid application, Energy Efficiency, HR Management and Development etc. Major Assignments include Comprehensive Scheme for Strengthening of Transmission & Distribution System in Arunachal Pradesh & Sikkim (Estimated project cost of Rs. 4209 Crore), Strengthening of 400 kV & 220 kV Transmission System of Delhi Transco Ltd (Estimated project cost of Rs. 932 Crore) and Srinagar - Leh Transmission System (Estimated project Cost ofRs. 1788.41 Crore).

In order to expand consultancy market even farther, exploratory forays are being persistently charted out in Oil sector, Railways, Industrial Corridors, etc. which are likely to bear fruit in near future.

Some of the engagements in green-shoot areas like Smart Grid / Non-conventional Renewable Energy and Energy Efficiency initiated by the Company also have potential opportunities to contribute towards income from consulting services.

INTERNATIONAL

Your Company secured a total of 10 assignments with consulting fee of about Rs. 3,700 Lakhs during FY 2014-15, in international arena. Your Company has now international presence in a number of countries of Asia, Africa & Eurasia regions. Countries in which consulting services are being provided include in Afghanistan, Bangladesh, Bhutan, Congo, Ethiopia, Nigeria, Nepal, Kazakhstan, Kenya, Kyrgyz Republic, Myanmar, Senegal, Tajikistan, Tanzania, Uzbekistan etc.

During the FY 2014-15, your Company successfully completed the contract worth USD 64.01 million awarded by Myanmar Electric Power Enterprise (MEPE), within time schedule, for supply of Goods and related Services for 230kV Transmission System associated with Thahtay Chaung Hydro Power Project in Myanmar.

INTERNATIONAL COOPERATION

The proposed cross-country grid is being envisaged for harnessing SAARC nations'' capacities and resources to address growing energy needs of the region. Presently, India has interconnections with Nepal, Bhutan and Bangladesh, which are being strengthened for mutual exchange of power. With these interconnections, while the county imports around 1,500 Megawatt (MW) of power from Bhutan, it exports around 500 MW power to Bangladesh and 150 MW power to Nepal.

Further, for evacuation of power from various upcoming hydroelectric power projects(HEPs) in Bhutan, Punatsangchu-I HEP (Bhutan) - Alipurduar (India) 400kV Double Circuit (D/c) line between countries Bhutan & India, is under implementation and expected to be ready by 2017. Also, for transfer of bulk power, interconnection between India and Nepal through 400 kV Dhalkebar (Nepal) - Muzaffarpur (India) D/c transmission line is under implementation. Further, to augment the power transfer capacity of India - Bangladesh asynchronous interconnection through 400kV (charged at 132kV) Surajyamaninagar (India) - Comilla (South) (Bangladesh) line, addition of another 500MW power terminal module at Bheramara is being firmed up, which will increase the power transfer capability between the two nations by 500MW. For interconnection between India and Sri Lanka through a Â±400kV, 500/1000MW under-sea HVDC line, feasibility studies carried out and reports under review. Discussion for interconnection between India and Pakistan through Amritsar (India) - Lahore (Pakistan) line are being held at Government level.

CONTRIBUTION IN DISTRIBUTION REFORMS

Under DDUGJY (Deendayal Upadhyaya Gram Jyoti Yojana) scheme (including erstwhile RGGVY) for rural electricity infrastructure and household electrification, your Company has been executing infrastructure work for rural electrification in sixty-seven (67) districts of nine (9) States in the Country of a base cost of about Rs. 7,409 Crore.

Almost all of the X / XI plans schemes have been completed. Work in 4 districts in Uttar Pradesh (UP) assigned to POWERGRID under XI Plan Phase-II and XII Plan are under implementation.

During FY 2014-15, infrastructure was created for electrification in 581 nos. of partially electrified villages. Also, 2666 nos. of villages were energised. Cumulatively, till March, 2015, infrastructure has been created for electrification of 71,622 villages. Further, service connections were provided to about 35.9 lakh BPL households.

For rural electrification under DDUGJY, your Company has been engaged for execution of projects under the XII Plan in 15 districts of Odisha having sanction cost of about Rs. 1767 Crore and earning potential ofRs. 159 Crore.

XII PLAN PROGRAMME

The Capex plan of your Company has been increased to Rs. 1,10,000 Crore from Rs. 1,00,000 Crore envisaged earlier for XII Plan mainly due to additional transmission infrastructure of various inter-State transmission systems including Green Energy Corridors projects.

Your Company has already made a capital expenditure of Rs. 65,651 Crore in the first three years of the plan period. Based on the ratings given by both domestic and international credit agencies, your Company do not foresee any difficulty for resource mobilisation. The funding for capital expenditure are planned to be met through loans from multilateral institutions such as The World Bank, Asian Development Bank, Supplier''s Credit, External Commercial Borrowings through bonds / notes, besides loans from domestic market and through private placement of bonds.

ERP IMPLEMENTATION & IT

Project "RUPANTAR", the Enterprise Resource Planning (ERP) initiative of your Company has been implemented successfully in the year 2014-15.

Subsequent to completion of the User Acceptance Testing of the business solutions, pilot Go-live of ERP took place in August 2014. After the stabilization of the pilot region, roll out to balance regions was also taken up and completed during October 2014 to February 2015. Presently, majority of the key processes related to the business are running on ERP. Also, a Disaster Recovery Site is being established at Bangalore.

Your Company continues to provide latest IT solutions for betterment of its business process. Both Internet and Intranet have been provided in offices and site locations all over the Country for seamless connectivity and effective working environment. Recruitment process is being conducted for self and for few other companies through online application portal, which is designed, developed and maintained through in-house expertise. Further, various applications like online status of "Swachh Bharat Abhiyaan" (Clean India Mission) works, Inspection Management System, Vigilance Inspection System and Attendance Management System etc. are developed, run and maintained in-house for assisting the business operations.

The Company has also taken up a major technology upgradation of IT infrastructure such as implementation of cloud, security policy, Information Security Management System (ISMS), etc. Further, ISO:27001 Certification for ISMS is also being implemented initially at Corporate Centre.

Your Company has established video conferencing facilities at Corporate Centre, all regional Headquarters, all major Project Headquarters as well as at most of the substations. Video Conferencing is extensively used to carry out meetings, discussions and trainings within and outside POWERGRID network.

ENVIRONMENT AND SOCIAL MANAGEMENT

Your Company, since its inception is working to harmonise environment conservation with all aspects of its projects. Your Company''s activities are non-polluting in nature and their environmental impacts are negligible. Your Company is committed to conservation of natural resources, reducing impact on nature and increasing the service value by use of efficient and safe technology practices.

Key initiatives taken by your Company towards sustainable development are technological initiatives for conservation of precious Right of Way (ROW), rain water harvesting system which is now an integral part of every new substation design, installation of LED bulbs, solar lights, fuel catalysts devices for DG sets etc. Your Company has substantially reduced the land requirement by utilizing new technology like Gas Insulated Substation (GIS) which requires less than one-third (1/3rd) of the land compared to conventional Air insulated Substation (AIS). In order to reduce Carbon footprint, waste paper are used to produce recycled paper for printing of our office stationery like letter heads, writing pads, visiting cards, envelopes etc. This has resulted in reduction in use/procurement of fresh paper.

For the FY 2014-15 your Company have obtained final forest clearance for 29 transmission lines involving 34 forest proposals involving diversion of about 1760 hectares and in-principle forest clearance for 22 transmission lines involving 32 forest proposals for diversion of about 1680 hectares. Some of the major lines for which such forest clearances are obtained include 765 kV Angul-Jharsuguda, 400 kV D/C Dehradun- Abdullapur, 132 kV S/C Tezu-Namsai, 765 kV D/C Dharamjaygarh-Jabalpur etc.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) is a commitment of your Company to its stakeholders to conduct business in an economically, socially and environmentally sustainable manner that is transparent and ethical. It primarily focuses on inclusive social-economic growth for development of marginalized and under-privileged sections of the society residing around its areas of operation. With this approach, your Company carries out various CSR activities with thrust on Rural Development/Infrastructural Development, Livelihood Generation, Health, Education, Tree plantation, Environmental, Relief/Restoration during National Calamities etc.

During the FY 2014-15, your Company spent Rs. 47.42 Crore on various CSR activities, which was 75% higher than amount spent of CSR activities during FY 2013-14.

During the year under review, your Company has also participated in the "Swachh Bharat Abhiyaan" by constructing about 10,000 toilets in about 4,500 Government schools in several states of India. It has also undertaken Projects of imparting skill development trainings for industry employment/ self - employment to about 7500 youths departmentally and in association with National Skill Development Corporation (NSDC), National Handicapped Finance and Development Corporation (NHFDC), ITCOT etc. Your Company also distributed aids & appliances to People with Disabilities in association with ALIMCO and arranged "Health Check-up camps" at 30 locations.

Annual Report on corporate social responsibility (CSR) activities and spend of CSR Amount is given at Annexure XII of this Report.

PEOPLE, OUR CORE STRENGTH

Attracting Talent, Nurturing & Development of Human Capital

Employees are main resources for your Organization. During FY 2014-15, your Company inducted about 321 personnel at various levels viz. Executives, Supervisors & Workmen. Executives recruited through open advertisement on all India basis from reputed engineering and management institutes. Recruitment of non-executives was carried out through employment exchanges and local advertisement at regional level. As on March 31, 2015, the total number of employees of your Company stood at 9,033.

Your Company''s Human Resource Development (HRD) interventions are directed towards learning new competencies and to reinforce good work practices & change workplace behaviour as per the organizational needs. The Company has been able to link the Individual Development Plans (IDP) of employees as per the business requirement, which helps the organization to keep updating the competencies of employees to meet current and future requirements. In order to align with growing competitive business environment, your Company imparted training/ hands on training on major equipment and their operation & maintenance, new Land Acquisition Act, Certified Project Management Programmes, latest survey techniques, networking skills and overhead power line design program, etc.

The yearly Action Plan HRD has been based on ''Organisational Need Analysis (ONA)'' and Training Needs Assessment (TNA)''. Competency Analysis and Skill Gap Analysis have been carried out for various functions in your Company by keeping in view the existing/emerging business scenario. Skill development programmes in the areas of transmission line construction, tower erection & stringing for unemployed / under- employed youths have been conducted at various locations in the Country and more than 600 such youths were trained during FY 2014-15. For conducting such trainings, necessary infrastructure has been created in POWERGRID sub-stations. Cumulatively, about 1600 persons have been trained up to 31.03.2015 under this initiative for enhancing the availability of skilled manpower for construction jobs in the field of transmission.

In addition, during FY 2014-15, training has been imparted to employees/ participants from Haryana Vidyut Prasaran Nigam Ltd.(HVPNL), Bhakra Beas Management Board(BBMB), Powergrid Company of Bangladesh Ltd. (PGCB), Kenya Electricity Transmission Company Limited (KETRACO), Ceylon Electricity Board, Nepal Electricity Authority, Bhutan Power Corporation, Tanzania Electric Supply Company Limited and US Energy Association, under consulting services basis.

Employee Welfare

Your Company undertakes requisite changes in various policies from time to time in line with the needs and welfare of employees. It has empanelled various hospitals nearby to its establishments including Corporate Centre for the healthcare of employees and their dependents. The issues related to workmen are successfully addressed through the National and Regional Bipartite Committee (PNBC/PRBC), a joint consultative forum comprising management and workmen representatives.

An effective work culture has been established in the Company through empowerment, transparency, decentralization and practice of participative management. Industrial relations scenario in the Company has been cordial and no man-days were lost in FY 2014-15. Healthy community living is spread through periodically conducted cultural programmes for celebrating various occasions like Diwali get-together, Holi Milan, New Year, Raising Day, etc. in all establishments of the Company. Quality food is served to the employees in the ISO 22000:2005 conferred Cafeteria, Office and Food Lounge of Multi-Purpose hall.

Your Company also conducts various sport competitions for boosting the interest of employees in sports and games at intra and inter-regional level for Kabaddi, Cricket, Volleyball, and Badminton etc. Your Company also participates regularly in Inter-PSU Sports meet and its players stood meritorious in Table Tennis, Cricket, Carom, Badminton & Kabaddi tournaments and bagged a number of awards.

On the occasion of Silver Jubilee Celebrations a Mini-Marathon was organised at Corporate Centre, Gurgaon in which employees including CMD & Directors participated with their family members enthusiastically.

Prevention of Sexual Harassment at Workplace

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (''Act'') and Rules made thereunder, your Company has constituted Internal Complaints Committees (ICC).

Citizen''s Charter

Citizen''s Charter has been formulated for the Company providing a visible front of its vision, mission, objectives, commitments, terms of service and its obligation to various stakeholders. In this, information is available about Company''s schemes, policies, project plans of the corporation and issues of general interest to stakeholders.

Implementation of Official Language

Your Company, being sensitive towards our heritage, social and cultural concerns, continues to prove its commitment for implementation of Official Language Policy of Govt, of India.

Your Company has been encouraging and putting all efforts for promotion of usage of ''Hindi'' in all aspects of management in all levels of the Corporation. Further, the Company has organized various events such as workshops to impart training in translation, enhancing working knowledge through organizing computer trainings and Hindi classes, etc. for increased use of Official language. Events like Akhil Bhartiya Rajbhasha Sammelan, Kavi Sammelans (poetry sessions), Kavita Pratiyogita, Hindi plays and various competitions for employees & their families are organized. Publication of Hindi magazines and circulation of Hindi newspaper to all departments is also being done to encourage Hindi writing and reading. To provide further inspiration, employees are nominated for external Hindi training programs which further educate & encourage the employees to work in Hindi.

Various forums such as Parliamentary Committees on Official Language, Advisory Committee on Official Language and Town Official Language Implementation Committee (TOLIC) have applauded the efforts made by your Company for implementation of Rajbhasha & receiving many accolades.

Corporate Image through Communication Management

Communication Management is an important and powerful weapon for building a strong corporate brand identity to strengthen and modify its relationship with the internal and external stakeholders. Keeping in mind the need for sustained, timely and bona fide communication interventions, your Company has adopted various communication strategies to highlight itself as a major power transmission infrastructure giant contributing significantly towards development of national economy.

Your Company has been issuing various press communiquÃ© to highlight growth, achievements, and developments with a view to maintain regular interaction with the public. Your Company organizes ''Quarterly Press & Analysts'' Meet'' to facilitate face to face interaction with the journalists, analysts and stakeholders which is aimed at winning the trust of the masses through imparting information in a transparent way.

To showcase its technologies and strengths, your Company participated in the ''India International Trade Fair (IITF) 2014'' and Vibrant Gujarat'' targeted towards the common masses and focused clients. Your Company also participated in other business oriented exhibitions in Mumbai, Delhi and the Country of Tanzania to reach out to the target audience for pitching the business.

Communication is not effective unless and until it reaches out to the employees who are the pillar of any organization. To achieve this, your Company deploys various internal communication tools such as monthly newsletters, house journals, wall magazines, lounge and regular media updates. Beside this, Company regularly organizes open house for face to face interaction between management and employees. Company has prepared a corporate movie to showcase its journey on the occasion of Silver Jubilee year. A motivated theme song was also prepared for the employees. All these communication tools have helped individual in gaining an understanding about the organization''s culture & function and making them a brand ambassador of the Company.

RIGHT TO INFORMATION

In order to promote transparency and accountability, an appropriate mechanism has been set up across your Company in line with ''Right to Information Act, 2005''. Your Company has nominated CPIO/ Appellate Authorities at its Corporate Office and Regional offices across the Country to provide required information to the citizens under the provisions of Act.

RENEWED COMMITMENT TO TRANSPARENCY & VIGILANCE FUNCTION

Vigilance Department of your Company performs Preventive, Pro-active as well as Punitive Vigilance. However, the emphasis has been shifted from "Punitive Vigilance" to "Preventive and Pro-active Vigilance". Your Company has taken a number of initiatives to inculcate good governance within the organization. Some of these initiatives are given hereunder:

Process (Online) Inspection

Using this technique, inspections are planned in such a manner that critical pre-award and post-award activities are inspected during execution of works. Process (On-line) Inspection is done in order to check whether there are any shortcomings or not, thereby providing an opportunity for rectification of the defects before the work is completed. Since the focus is more on prevention, critical observations made during such inspections help the management in preventing similar irregularities during the later stages of execution of the projects.

Web Based Vigilance Information Network System (VINS)

With a view to leverage Technology in our work, Vigilance Information Network System (VINS) has been devised by your Company in collaboration with the IT Department, which has significantly cut down time, efforts and cost of working resulting into higher efficiency.

Workshop on Ethics & Values

Every year, two (2) workshops on Ethics & Values are conducted by the Regional Vigilance Department as well as Corporate Centre. These are aimed at encouraging value based ethical decision by the employees. Further, Preventive Vigilance Workshops are also conducted by Vigilance Department for non-vigilance executives. With a view to create awareness among the employees, RTI workshops are organized by Corporate as well as Regional Vigilance Department.

Vigilance Awareness Week 2014

Vigilance Awareness Week was observed in POWERGRID from October 27, 2014 to November 1, 2014. In keeping with the theme ''Combating Corruption- Technology as an Enabler'', various competitions were organized for the employees as well as for their family members, talk on ethics & values and on anti-corruption topics were delivered by eminent personalities. The week concluded with the release of in-house journal of the Vigilance Department ''Candour'' by Shri Pratyush Sinha, former Central Vigilance Commissioner.

ACCOLADES & AWARDS

The excellent performance of your Company has been recognised and appreciated by the Govt. of India and other prestigious organisations & institutions in form of various awards/ accolades in various categories from time to time.

Your Company has been rated ''Excellent'' for its performance as per MoU 2013-14 signed with the Ministry of Power and based on its performance poised to get ''Excellent rating'' for MoU 2014-15 as well.

Your Company has been conferred with the prestigious "ICSI National Award for Excellence in Corporate Governance" for 2014 by Institute of Company Secretaries of India (ICSI) in recognition of the highest levels of transparency and governance practices adopted by the Company.

Your Company proved its mettle on global front by positioning itself in the "Forbes List of Global 2000 Largest and Most Powerful Public Companies", and also "fastest growing electric utility in the world" as per M/s Platts (a division of McGraw-Hill Companies).

"The Economic Times" at its Power Focus 2nd Annual Summit awarded your Company for its remarkable contribution in the Power Sector.

Your Company has been conferred with "CBIP Award" for the best performing Transmission Utility and your CMD has been felicitated with the "Power Persona of The Year Award" by CBIP in recognition of his contribution for accelerated development of power sector.

Your CMD has also been bestowed the prestigious "IEF Meritorious Energy Service Award"

Director (Finance) of your Company, Shri R. T. Agarwal, has been felicitated with the "CA-CFO-Power Sector Award" by the Institute of Chartered Accountants of India in recognition of exceptional performance as CA-CFO in Power Sector for the Year 2014.

MANAGEMENT DISCUSSION AND ANALYSIS

In addition to the issues in the Directors'' Report, some issues have been brought out in report on Management Discussion and Analysis placed at Annexure-I.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report as stipulated under Clause 55 of the Listing Agreement with the Stock Exchanges is given in Annexure-II.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As per requirements of disclosures under Section 134(3) (m) of Companies Act,2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 information relating to conversation of energy, technology absorption and foreign exchange earnings and outgo, is given in Annexure-III to this Report.

Auditors'' Report

The qualification in Statutory Auditors'' report and managements reply thereto is given at Annexure - IV to this Report.

COMPTROLLER AND AUDITOR GENERAL''S COMMENTS

Company has received ''NIL'' comments on the standalone accounts for the year ended March 31, 2015 by the Comptroller and Auditor General of India under Section 143(5) of the Companies Act, 2013. C&AG comments on the consolidated accounts and management''s reply thereto are attached as Annexure-V to this Report.

Performance Audit

The Performance Audit has been conducted by C&AG to assess the effectiveness of ''Planning & Implementation of transmission projects by POWERGRID during XI Plan (2007-2015) and Grid Management by POSOCO.'' The Performance Audit report was placed before the Committee on Public Undertakings in August, 2015. The points forwarded by the Committee in the said report have been duly replied by the management.

Composition of the Board

Your Company''s composition of Board of Directors underwent some changes during the year 2014-15. Shri Santosh Saraf and Smt. Rita Sinha, non-official part time directors ceased to be Directors on the Board of the Company w.e.f. December 27, 2014. The Board wishes to place on record its deep appreciation and gratitude for the significant contribution and support to the Company extended by them during their tenure as Directors of the Company.

As on 31st March, 2015, the Board comprised Twelve Directors out of which five were whole-time Directors including the Chairman & Managing Director, two Government nominees and five Independent Directors.

In accordance with the provisions of Section 160 of the Companies Act, 2013 read with Article 31 (iii) of the Articles of Association of the Company, Shri Ravi P. Singh, Director (Personnel) and Shri R.P. Sasmal, Director (Operations) shall retire by rotation at the Annual General Meeting of your Company and being eligible, offer themselves for re-appointment.

Number of meetings of the Board

The details of number of Board / Committee meetings held during the year are provided in the Report on Corporate Governance, which forms part of this report.

Declaration by Independent Directors:

All the Independent Directors have met the requirements specified under Section 149 (6) of the Companies Act, 2013 regarding holding the position of ''Independent Director'' and necessary declaration from each Independent Director under Section 149 (7) has been received.

Performance Evaluation of Directors:

The requirement of performance evaluation of directors under Section 178(2) of the Companies Act, 2013 has been done away with for Government Companies vide Ministry of Corporate Affairs'' Notification dt. 5th June, 2015. The Independent Directors in their separate meeting has reviewed the work assigned to them under Schedule IV of the Companies Act, 2013, including performance evaluation of Directors and the Board.

Further, the appointment, tenure and remuneration of Directors is decided by the President of India. Remuneration paid to Chairman & Managing Director and Functional Directors are as per terms and conditions determined by the Department of Public Enterprises, Govt. of India. Independent Directors are paid only sitting fee per Board / Committee meeting attended. POWERGRID enters into Memorandum of Understanding (Moll) with Ministry of Power every year wherein Company is evaluated on various financial and non-financial parameters.

Secretarial Audit

M/s Chandrasekaran & Associates, Practising Company Secretary has conducted Secretarial Audit of the Company for the financial year ended March 31, 2015 from. The Report forms part of this Annual Report at Annexure-VI.

The Secretarial Auditor in his report has made the following observations:

"During the period under review the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following observations:

1. The Company has complied with the provisions of Section 149 of the Companies Act 2013 and clause 49 of Listing Agreement except with respect to the requirement of appointment of minimum number of Independent Directors since 27.12.2014.

2. The Company has not filed certain e-forms relating to creation of charges with the office of the Registrar of Companies where the Permanent Account Number (PAN) of the lenders are not available, which is mandatory."

Further, the explanation given by the Board on the observation given by the Secretarial Auditor are as under;

1. POWERGRID, being a Govt. Company within the meaning of Section 2 (45) of the Companies Act, 2013, the power to appoint Directors vests with the President of India. The matter has already been taken up with administrative ministry for filling two existing vacancies of Independent Directors on the Board of POWERGRID.

2. POWERGRID could not file certain e-forms relating to charges in MCA21, wherein the Lenders are Multilateral Agencies-World Bank, ADB and IFC for non-availability of PAN of these Agencies. PAN is a mandatory fill under e-filing in MCA-21.

Extract of Annual Return

In accordance with Section 134 (3) (a) of the Companies Act, 2013, the extract of the annual return in the prescribed format in MGT-9 is given as Annexure VII of this Report.

Committees of the Board

The Company has Audit Committee, CSR Committee and other Committees in place. The composition and scope of the Committees are provided in the Report on Corporate Governance.

A report on the Corporate Governance (Annexure-VIII), forming part of this report, together with the Certificate thereon is given in Annexure-IX to this Report.

Risk Management Policy

A Statement indicating development and implementation of a risk management policy of the Company including major elements of risk are given in the Management Discussion and Analysis Report at Annexure-I of this Report.

STATUTORY AUDITORS OF THE COMPANY

The Statutory Auditors of your Company are appointed by the Comptroller & Auditors General of India. M/s S. K. Mehta & Co., M/s Chatterjee & Co., and M/s Sagar & Associates were appointed as Joint Statutory Auditors for the financial year 2014-15.

COST AUDITORS OF THE COMPANY

Your Company appointed M/s. K. G. Goyal & Associates, Cost Accountants and M/s. R. M. Bansal & Co.,Cost Accountants as Cost Auditors for the Financial Year (FY) 2014-15 under Section 148 of the Companies Act, 2013.

The Cost Audit Reports for the FY 2014-15 will be filed with the Cost Audit Branch, Ministry of Company Affairs before due date i.e. September 27, 2015.

ACKNOWLEDGEMENTS

The Board of Directors, with deep sense of appreciation, acknowledges the guidance and co-operation received from Govt. of India, particularly Ministry of Power, Ministry of Finance, Ministry of Home Affairs, Ministry of External Affairs, Ministry of Statistics and Programme Implementation, Ministry of Environment & Forests, Central Electricity Regulatory Commission, Appellate Tribunal for Electricity, Central Electricity Authority, Department of Public Enterprises, Regional Power Committees, and other concerned Govt. departments/agencies at the Central and State level as well as from Securities and Exchange Board of India, National Stock Exchange of India Ltd., and Bombay Stock Exchange Ltd., Mumbai without whose active support, the achievements of the Corporation during the year under review would not have been possible.

Board''s special appreciation and thanks are to our valued customers, State Governments and State power utilities and other clients, who have awarded various works on consulting services basis and reposed faith in Company''s capability to handle them. The Board also appreciates all its the contribution of Contractors, Vendors and Consultants for successful implementation of cvarious projects by the Company.

The Directors take this opportunity to thank the Principal Director of Commercial Audit and Ex-Officio Member Audit Board-Ill for the cooperation during the year. The Directors also acknowledge the valuable suggestions and guidance received from the statutory auditors during the audit of accounts of the Company for the year under review. The Board also records its appreciation to national/ international financial institutions/ multilateral Financial Institutions (The World Bank & Asian Development Bank)/ Banks/ national (ICRA & CRISIL) & international (Standard & Poor and Fitch) credit rating agencies for their assistance, continued trust and confidence reposed by them on POWERGRID.

On behalf of Board of Directors, I would like to place on record our deep appreciation of the dedicated efforts and valuable services rendered by the members of the POWERGRID family, in the Company''s achievements during the year 2014-15. I would also like to thank the Executive team for their strong leadership, the employee unions, for their support and all our employees for their commitment to achieve the aim to be the world''s premier transmission utility.

For and on behalf of the Board of Directors

(R. N. Nayak)

Chairman & Managing Director

Place: New Delhi

Date: 10.08.2015

Mar 31, 2014

Dear Shareholders,

Ladies & Gentlemen,

It gives me immense pleasure to present on behalf of the Board of directors, the 25th Annual Report on the performance of your Company during the financial year ending March 31, 2014 together with Audited Statement of Accounts, Auditors'' Report and Review of the Accounts by the Comptroller and Auditor General of India for the review period.

It is a matter of pride that this "Navratna" Company, having been formed in 1989, is presently in its "Silver Jubilee" year. It is another happy coincidence that with the commissioning of Raichur-Solapur 765kV Single Circuit line, the work of synchronously connecting the nation, with One Nation, One Grid, One Frequency was also successfully completed in this year. This has led to the emergence of one of the largest electrical grids operating at a single frequency in the world. during these years of electrical unification, the Company displayed its proficiency in all its areas of operation and this has led to a continuous, holistic and inclusive growth of inter-State transmission System. The addition in transmission system, together with efficient operation of such a large network, has indeed contributed phenomenally in development of infrastructure in the country.

Your Company''s sustained performance, reflected through continuous asset creation, increasing revenues, and resultant profits, has also led to creation of value for its shareholders and speaks volumes of its growth journey and operational excellence. Your Company''s strategic importance in development of the country''s power sector has further enhanced its reputation not only within the country but also globally. The confidence of the international investor community, enjoyed by your Company, was evident through their overwhelming response to its second Follow-on Public offer which witnessed a huge interest from the international investors.

Your Company once again demonstrated consistency in exceeding most of the performance targets agreed under the Memorandum of Understanding signed with Ministry of Power (MoP), Government of India for FY 2013-14 and is poised to be rated ''Excellent'' in MoU parameters thus consistently maintaining the record of Excellence year after year since its first MoU signed in 1993-94.

Based on overall performance, your Company stood at top amongst the assessed Companies in the Power Generation and Transmission Syndicate for the FY 2012-13.

Major achievements by your Company during FY 2013-14 on various fronts are mentioned below:

- Capital investment of Rs. 23,158 Crore

- Commissioned new transmission assets comprising about 6,604 circuit kilometre (Ckm) of Extra High Voltage (EHV) transmission lines,

17 new sub-stations and 41,160 Mega Volt Ampere (MVA) transformation capacity.

- Capitalisation of transmission assets worth Rs. 15,904 Crore

- Investment approval accorded for 19 new transmission projects worth about Rs.8,548 Crore.

- Maintained transmission system availability at 99.92% with number of trippings per line limited at 0.56.

- An important landmark, i.e. synchronous interconnection of all-India National Grid, has been achieved through successful commissioning of Raichur (Karnataka) - Solapur (Maharashtra) 765kV Single Circuit line on december 31, 2013.

- Total inter-regional power transfer capacity of 6,300Mw was added during the year thereby enhancing the cumulative inter-regional power transfer capacity of National Grid to about 37,950 Mw at the end of March, 2014.

- International interconnection has been established between India and Bangladesh with the commissioning of Bheramara (Bangladesh)

- Baharampur (India) 400kV d/c line, along with 500Mw High Voltage direct Current (HVdC) back-to-back terminals at Bheramara. The interconnection was inaugurated jointly by Hon''ble Prime Ministers of India and Bangladesh.

FINANCIAL PERFORMANCE

Your Company recorded an impressive financial performance during FY 2013-14 as detailed below, achieving a turnover of Rs. 15,721 Crore and Net Profit of Rs. 4,497 Crore as compared to Rs. 13,329 Crore and Rs. 4,235 Crore during FY 2012-13, registering an increase of 17.9% and 6.2%, respectively.

Your Company continues to show improved performance in all its business areas including Telecom and Consultancy, enhancing the value for the shareholders.

(Fig. in Crore except EPS & Book value)

Description 2013-14 2012-13 Y-o-Y Growth

Revenue

Transmission Charges 14,250 12,163 17.2%

Consultancy - Sale of Service 333 229 45.4%

Consultancy Â Sale of Product 294 86 241.9%

Telecom 276 231 19.5%

other operating Income 77 49 57.1%

other Income 491 571 -14%

Total Income 15,721 13,329 17.9%

Profit After Tax (PAT) 4,497 4,235 6.2%

Earnings per Share (Rs.) 9.36 9.15 2.3%

Book Value per Share(Rs.)65.78 56.62 16.2%

Gross Fixed Assets 96,504 80,600 19.7%

Long term borrowing* 80,470 66,188 21.6%

Net Worth 34,413 26,213 31.3%

Debt Equity Ratio 70:30 72:28

Investment 23,158 20,037 15.58%

Capital Investment and Fund Mobilization

During the year under review, your Company made an investment of Rs. 23,158 Crore (15.58% higher than previous year) for implementation of its projects in line with its capex-programme under XII Plan. For this, funds of about Rs.15,528 Crore were mobilised through private placement of bonds, and proceeds of ongoing Supplier''s credit, SBI Line of credit, and loans from multilateral funding agencies like The world Bank, Asian development Bank. In addition, the accrued internal resources and FPo proceeds amounting to about Rs. 7,630 Crore were utilized for funding equity component of the investment.

Your Company''s second Follow-on Public offer of equity shares comprising fresh issue of 13% of existing paid-up equity capital and disinvestment of 4% by Govt. of India was successfully concluded. The issue price was finalized at the upper band of Rs.90 and was oversubscribed 6.74 times overall. while your Company received Rs. 5,321 crore from the proceeds, the Govt. of India received Rs. 1,637 Crore.

At the beginning of the year 2013-14, your Company''s International Credit Rating by both Standard & Poor''s (S&P) and Fitch Ratings Ltd. (Fitch) was BBB- (outlook Negative) which was consistent with India''s sovereign rating. In June, 2013, Fitch Ratings revised the outlook on sovereign rating to ''Stable'' from ''Negative'' and accordingly your Company''s rating by Fitch was raised to BBB- (outlook Stable). The Company continues to have its rating as ''AAA/ stable'' (triple A with stable outlook) by CRISIL, ICRA and CARE ratings domestically.

Dividend Payout

Your Company has been regularly paying dividend @30% of PAT as prescribed under dPE guidelines. For FY 2013-14, your Company has proposed a final dividend of Rs.1.31 per share in addition to Rs. 1.27 per share of interim dividend paid in March, 2014. The final dividend shall be paid after your approval at the Annual General Meeting. Thus, the total dividend payout for the year amounts to Rs. 1,350 Crore (including an interim dividend of Rs. 665 Crore) as against Rs. 1,273 Crore paid during the previous year. The total dividend payout including dividend tax accounts for 35% of Profit after Tax of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required u/s 217 (2AA) of the Companies Act, 1956, your directors confirm that:

i. in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

ii. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii. the directors have taken proper and sufficient care in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the directors have prepared the annual accounts on a going concern basis.

COMMERCIAL PERFORMANCE

As per Central Electricity Regulatory Commission (Sharing of inter-State Transmission Charges and Losses) Regulations, 2010, your Company, as the Central Transmission Utility (CTU) of the country, has been assigned the responsibility for carrying out activities such as raising of transmission charge bills on behalf of all the Inter-State Transmission System (ISTS) Licensees, collecting the amount and disbursing the same to them. In this regard, bills of transmission charges are prepared, raised and uploaded on the website portal for designated ISTS Customers (dICs), including the payment details by the customers.

It is a matter of pride that the Company achieved about 99% realisation of transmission tariff during FY 2013-14.

OPERATIONAL EXCELLENCE

As on April 01, 2014, the transmission assets owned and operated by your Company stand at about 106,804 Ckm of Extra High Voltage (EHV) transmission lines and 184 Nos. EHVAC & High Voltage Direct Current (HVDC) sub-stations with about 205,923 MVA transforma tion capacity. Your Company continues to wheel about 50% of the total power generated in the country.

Maintaining such a large and highly complex transmission network has been an extremely difficult and challenging task. This has been achieved through deployment of state-of-the-art operation and maintenance techniques, which are at par with international standards. Maintenance activities are planned well in advance and an "Annual Maintenance Plan" is chalked out for every asset such that ''Preventive maintenance'' takes precedence over ''breakdown maintenance''.

Your Company introduced aerial patrolling of transmission lines using helicopter for the first time in India. Transmission line defects are identified by deploying helicopter equipped with Gimbal mounted LIdAR (Light Ranging and detection), Thermo-vision Camera, High resolution digital Video cameras. while Hotline maintenance of 400kV transmission line is already in vogue, your Company is also planning to introduce Hotline maintenance of transmission lines of 765 kV voltage level using Helicopter. To intercept major failures and prevent them, your Company has adopted state-of-the-art condition monitoring techniques, such as ''Frequency Response Analysis'' for Transformers and Reactors, ''dynamic Contact Resistance Measurement'' for Circuit Breakers, ''Third Harmonic Resistive Current measurement'' for Surge Arrestors, ''Thermo-vision scanning'' etc. The Company has also started online monitoring of 765kV equipment (transformers and reactors) for measurement of critical parameters.

Your Company deploys State-of-the-Art ''Emergency Restoration System'' for immediate restoration of collapsed transmission lines due to natural calamities before permanent restoration work is taken up. Your Company has also taken initiative for development of Emergency Restoration System (ERS) for sub-stations of 400kV level using mobile substations mounted on trailer to restore power during emergency and extremely critical situation, wherein whole/ major part of substation is affected.

With a view to optimize its operation and maintenance manpower and efficiently deploying them, your Company is establishing "National Transmission Asset Management Centre (NTAMC)" at Manesar, Haryana for centralised remote monitoring, operation & control of sub- stations.

At the end of 2013-14, fifty-one (51) substations are being operated through remote operation and twelve (12) substations are unmanned. Maintenance Service Hub facility has also been established where specialised group of experts are available for immediate deployment in the event of requirement.

The result of consistent efforts and round the clock monitoring is demonstrated through your Company''s high operational performance during the year in terms of transmission system availability (99.92%) and the number of tripping per line (0.56).

International Benchmarking of O&M practices

with an aim of continual improvement, o&M practices of your Company are being benchmarked internationally through "International Transmission operation and Maintenance Study" (IToMS) carried out by UMS, USA. In IToMS studies/ benchmarking, twenty-eight (28) power transmission utilities across the globe participated and their performances are evaluated and benchmarked. As per the studies, your Company''s overall performance stood in the best quadrant (i.e. low cost and high performance). In addition, performance benchmarking of all nine (9) Regions amongst each other and the region(s) with external member Utilities of IToMS, was also carried out to identify areas of improvement.

PROJECT IMPLEMENTATION

Your Company continues to put in its best efforts to complete its transmission projects within scheduled timelines, thereby extracting the maximum commercial benefit. The Company achieves this through its Integrated Project Management and Control System (IPMCS), timely review meetings, intensive monitoring by top management through video conferencing/ regular site visits and undertaking various pre-emptive initiatives.

As a result of above steps and with the dedicated efforts of the employees, assets worth about Rs. 15,904 Crore were capitalized by your Company during the year 2013-14, adding about 6,604 ckm transmission lines, 17 sub-stations and about 41,160 MVA transformation capacity in the transmission system. Some of the major transmission assets commissioned during the year include 765kV transmission lines such as Sasaram-Fatehpur (S/c), Raichur-Solapur (S/c), Ranchi-wR Pooling Station (S/c), Fatehpur Â Agra (S/c), Jabalpur Pooling Station Â Bina (d/c), Raigarh (Kotra) Â Raipur (d/c). The projects were completed in spite of severe constraints faced during its implementation including challenging terrains, severe Right-of-way (Row) problems. The implementation of High Capacity Power Transmission Corridors is underway and some elements under the same have already been commissioned.

During the year, investment approval was accorded for 19 new projects with an estimated cost of about Rs. 8,548 Crore, which involves about 5,530 ckt km of transmission lines, 4 new sub-stations and transformation capacity of about 12,730 MVA were taken up for implementation.

DEVELOPMENT OF NATIONAL GRID

In its ''Silver Jubilee'' year, your Company achieved one of the major objective of its formation. Nationwide synchronous power grid is established upon successful commissioning of 765kV S/c Raichur Â Sholapur line on 31st december, 2013. with this, ''One Nation - One Grid Â One Frequency'' has become a reality. Your Company has also commissioned 765kV S/c Sasaram Â Fatephur and 765 kV S/c Ranchi-wR Pooling Station inter-regional lines, having 2100 Mw power transfer capacity each. Thus, in this F Y, your Company has added a total inter-regional power transfer capacity of 6,300 Mw, thereby adding total capacity of 8,300 Mw during the first two years of the XII plan period. At the end of 2013-14, the inter-regional power transfer capacity of 37,950 Mw has been established.

By the end of XII Five Year Plan, inter-regional power transfer capacity is envisaged to be 72,250 Mw.

PERFORMANCE AGAINST COMPETITION

Your Company continued to display impressive performance under Tariff Based Competitive Bidding (TBCB) by excelling over its competitors. during the year 2013-14, your Company acquired two Special Purpose Vehicles (SPVs), namely ''Vizag Transmission Limited'' and ''Unchahar Transmission Limited'' for the projects Transmission System for System Strengthening in Southern Region for Import of Power from Eastern Region and Transmission System for ATS of unchahar TPS, respectively. As on March 31, 2014, the Company has secured 5 projects under TBCB, and has won about 40% of the projects floated under TBCB since January, 2011.

GRID MANAGEMENT AND OPEN ACCESS

Power System operation Corporation Limited (POSOCO), a wholly owned subsidiary of your Company, continues to look after the grid management of the country. POSOCO with its state-of-the-art Unified Load despatch & Communication (ULdC) facilities in place, carries out the function efficiently and transparently. Further, National and Regional Load despatch Centres (NLdC & RLdCs) are upgraded and modernised continuously to establish an effective grid management infrastructure in the country.

During 2013-14, to meet the demands in the country, about 78.38 Billion units (Bus) of inter-regional energy transfer was facilitated, across the nation using pan-India inter-regional transmission links and RLdCs.

Under Short Term open Access (STOA), your Company has approved about 33,917 transactions, 10,290 nos. bilateral transactions and 23,627 nos. collective transactions, involving 87 BUs of energy transfer in FY 2013-14 as against 32,139 transactions and about 73 BUs of energy transferred during FY 2012-13.

Your Company, as Central Transmission Utility (CTU), is the nodal agency for processing & grant of Connectivity, Medium Term open Access (MToA) and Long Term Access (LTA) of various applicants. Till March 31, 2014, the Company granted LTA to 148 nos. of applications for 80,000 Mw capacity, out of 223 applications received in all. Further, connectivity was granted for 79 nos. of eligible applications for 70,000 Mw capacity out of 190 applications received for about 195,000 Mw capacity in all. Till 31st March 2014, 127 applications were received for MToA and MToA was granted to 48 nos. of applications in all for about 4,500 Mw capacity.

QUALITY MANAGEMENT

Your Company has put in lot of effort in identifying and implementing various quality improvement measures during the year 2013-14. By way of carrying out continuous process/ surveillance audits, your Company created win-win partnership with suppliers to get superior quality product including reduction in cost.

with the increased area of work & value of supply of equipment/ materials, capacity building remains one of the major challenges for the Company. Inclusion of new vendors upon assessment and developing new sub-vendors especially for 765 kV transformers, reactors, transmission towers were undertaken on priority to meet project requirements.

Process audits are continued to be carried out in the manufacturing units of various vendors, sub-vendors & even further below in supply chain, which are spread all over the country, to achieve the target of zero product inspection. Quality audits at sites were also undertaken during the year for instant feedback and to take appropriate corrective action.

Your Company undertook various activities to ensure that the equipment/material conform to the technical specifications and are supplied in time to meet the completion targets of the projects, such as defining proper processes, quick approval of Quality plans, intelligent inspection of materials (in process & before acceptance). during the year, continuous follow up with manufacturers for timely manufacturing, testing of various critical items and issue of requisite clearances were expedited.

Your Company continues to develop and maintain systems & procedures aligned with Integrated Management System comprising ISo 9001: 2008 for Quality Management System, ISo 14001: 2004 for Environmental Management System and oHSAS 18001: 2007 for occupational Health and Safety Management System. The certification has been maintained after rigorous audits by BSI Management Systems. Your Company also completed implementation of PAS 99 in ER-I and SR-II during FY 2013-14.

TECHNOLOGY DEVELOPMENT

Your Company has been at the forefront in adoption of state-of-the art technologies for improving the efficiency in power transmission and for overcoming the challenges associated with establishment of high capacity power transmission corridors and the National Grid.

One of the key focus areas is the adoption of transmission of power at higher voltage level. Implementation of Â±800kV HVdC & development of 1200kV Ultra-High-Voltage AC (UHVAC) system are important milestones in this direction.

800kV Multi-Terminal HVDC System

HVDC system facilitates bulk power transmission over long distances with power controllability, reduced Row and transmission losses. Implementation of Â±800 kV, 6,000 Mw multi-terminal HVdC system of around 2,000 kms. from North Eastern Region (NER) (Biswanath Chariali in Assam and Alipurduar of west Bengal) to Northern Region (NR) (Agra in Uttar Pradesh) is progressing well. during the year, 7 Converter transformers were transported from Haldia port in west Bengal to Biswanath Ghat in Assam over Brahmaputra River on Barges and delivered at site. Upon completion, it shall be one of the largest multi-terminal HVdC systems in the world at this voltage level.

1200kV UHVAC Transmission System

The 1200kV UHVAC technology, the highest voltage level in the world, is being developed indigenously by your Company in collaboration with 35 Indian manufacturers under Public Private Partnership (PPP) and 1200kV UHVAC National Test Station at Bina, Madhya Pradesh has been established for the same. The 1200kV Single Circuit (S/c) and double Circuit (d/c) test lines were successfully test charged along with one 1200kV bay and field tests are undergoing. Installation and charging of 2nd 1200kV single phase Circuit Breaker in the first bay of 1200kV National Test Station, Bina was completed in december, 2013. Further, erection of 2 units of transformer for single phase units of the transformer bank in the second bay of the 1200kV test was also completed.

Besides above, during the year, your Company also conducted feasibility study on ''Superconducting Fault Current Limiter (SFCL)'' and formulated a pilot project on Energy Storage in terms of technology, capacity, etc..

Envisioning setting up of a world class laboratory for carrying out research and development in power transmission area, your Company is establishing POWERGRID Advanced Research and Technology Centre (PART) at Manesar, Gurgaon, with state-of-the-art laboratories for power system analysis, advanced equipment diagnostics, smart grid in transmission and distribution, energy efficiency, power system control and automation, material science and engineering design. Further, your Company is also establishing a transmission line research lab to carry out validation of transmission line design and subsequent optimization.

Your Company, in the quest to achieve fully digitized substations, is in the process of introducing Process Bus technology for substations. Your Company is also in the process of mapping pollution intensity of various regions of the Country on a geographical map. This activity shall enable efficient and effective transmission line designs, particularly in high pollution and fog affected areas.

SMART GRID TECHNOLOGY

Your Company continues to take pioneering steps in bringing Smart Grid technology in entire value chain of electricity in the country. In order to promote smart grid technologies, your Company has developed Smart Grid pilot project in the country through open collaboration, at Puducherry. Almost all the attributes of Smart Grid viz Advance Metering Infrastructure (AMI), outage Management System (oMS), demand Response, Power Quality Management (PQM), Renewable Integration through net-metering, Smart Home Energy Management System, Electric Vehicles, Street Light Automation System etc. have been successfully integrated at Smart Grid control centre at Puducherry through latest communication technologies to showcase technology efficacy in a holistic manner. Further, your Company has also prepared project reports for smart grid solutions for Indiranagar (Bangalore), Paradeep Port Trust and Goa.

Recognizing experience and expertise in the field of smart grid development, eight (8) utilities have appointed your Company as Advisor-cum- Consultant for implementation of smart grid project at an estimated cost of about Rs. 200 Crore during FY 2013-14.

Your Company has undertaken full scale implementation of real time smart transmission projects applying State-of-the-Art wide area measurement system (wAMS) using advance synchrophasor technology in the grid. This Unified Real Time dynamic State Measurement (URTdSM) project involves placement of Phasor Measurement Units (PMUs) at all 400 kV and above substations, generation switchyards of 220 kV and above, HVdC terminals and Phasor data Concentrator (PdC) at SLdC, RLdC & NLdC control centres along with backbone communication infrastructure, which has enhanced the efficiency of the overall grid management.

With the growing need of energy storage to facilitate integration of renewables, your Company is implementing Battery energy storage pilot project at Puducherry to evaluate different technologies for proof of concept, application(s), policy advocacy etc. in Indian context. Your Company has also taken lead initiative to establish base line data repository on power quality parameters through field measurement at various voltage level on pan India basis. It also involves identification of mitigating measures/ devices like active harmonic filter, automatic power factor controller etc.

Your Company has been indigenously developing smart products like smart meter, data concentrator unit, home energy management system, micro grid controller, smart cap utilizing solar energy, active filter etc. for varied applications.

INTEGRATION OF RENEWABLES

Your Company has developed comprehensive master plan for grid integration of envisaged renewable generation capacity addition during the XII Five Year Plan through Green Energy Corridors across India. The plan covers intra-state & inter-state transmission systems and mitigating measures for grid interconnection of variable & intermittent renewable energy. It also includes other control infrastructure like forecasting tool for renewable generation, establishment of renewable energy management centers, provisions for flexible generation, energy storage, smart grid applications like demand side management & demand response etc. Under this, your Company has been assigned the implementation of inter- State Transmission System portion of the scheme, setting up of Renewable Energy Management Centres and control infrastructure to be included in the Kfw/GIZ, Germany proposal by Ministry of Power, GoI. Your Company has been taking various actions under this and implementation is expected to commence shortly.

The country has huge renewable energy potential through solar and wind, of the order of about 300Gw, at desert/ cold desert waste land in Kutch, Thar, Lahaul & Spiti and Ladakh. To harness the same, your Company has also evolved an integrated development plan for establishment and grid integration of 300Gw capacity addition by 2050 at an estimated cost of Rs. 43.75 lakh Crore, through hybrid transmission corridors utilizing High Voltage direct Current (HVdC) (including VSC based) as well as 1200kV UHV AC/ High temperature superconductor technologies, etc.. A report on the plan, dESERT PowER INdIA Â 2050, has been submitted to Ministry of Non-Renewable Energy (MNRE), Ministry of Power (MoP), Ministry of Finance, Planning Commission, Central Electricity Authority (CEA) and Central Electricity Regulatory Commission (CERC).

Your Company has developed plan for installation of rooftop solar Photo Voltaic (SPV) for residential consumers, commercial building, metro stations & tracks and solar street lights for delhi towards sustainability. It covers generation of about 2300 Mwp. A comprehensive report, GREEN dELHI, was prepared and submitted by your Company to Govt. of delhi, MNRE, MoP, Planning Commission, CEA and CERC.

ENERGY EFFICIENCY

India is one of the world''s emerging economic giants, with ever-increasing energy demand. It is facing formidable challenges in meeting its energy needs and sustainable development. Energy conservation through energy efficiency measures shall play an important part to address these challenges to a large extent. Considering potential in this field, your Company has initiated activities in carrying out energy audits of various establishments such as steel industries, cable industries, structural industries, Port Trusts, Airports, Institutions, etc and providing recommendations/ smart solutions for energy efficiency improvement.

In a short time span, your Company has set a benchmark for itself as an Energy Efficiency solution provider. The Company is known as a major Energy Auditing firm in the country with more than fifty (50) Bureau of Energy Efficiency (BEE) Certified Energy Auditors/ Managers. Your Company has also obtained certification under BEE Grade-I Energy Service Company (ESCo) for undertaking implementation of energy efficiency projects on shared saving basis.

Your Company has indigenously designed and developed waste heat recovery system executed projects and the same are operating successfully, enabling huge fuel/ energy savings.

Towards energy conservation, your Company has also undertaken project on demand Side Management in Karnataka for replacement of old agricultural pumps with energy efficient pumps.

Another milestone was achieved during the year when the Corporate office at Gurgaon and two Regional offices at Jammu & Hyderabad were awarded ISo 50001 certification for its efficient and effective Energy Management System.

''POWERTEL'' - TELECOM SERVICES ON TRANSMISSION INFRASTuCTuRE

Your Company diversified into Telecom business under the brand name ''POWERTEL'' to expand its revenue stream by installing overhead optic fibre network using oPGw (optical Ground wire), leveraging its existing countrywide transmission infrastructure. Your Company has an all India Broad Band Telecom Network of about 29,640 km, providing connectivity to all metros, major cities, towns, State capitals including remote areas of North-Eastern Region, Jammu & Kashmir etc. and covering about 317 Points of Presence (PoPs) across the country from where services are being rendered. Your Company possesses, Infrastructure Provider Category-I (IP-I), Internet Service Provider ''A'' (ISP ''A'') and National Long distance (NLd) Service License to provide a variety of Telecom services. during the year 2013-14, the availability of Telecom Backbone system was maintained at 99.94%. Your Company added 32 new customers, increasing its customer base to 150. The income from Telecom increased to about Rs. 276 Crore in FY 2013-14 from Rs. 231 Crore in FY 2012-13.

National Knowledge Network (NKN)

National Knowledge Network (NKN) is a multi-gigabit network, devised by the Govt. of India with the purpose to provide a unified high speed network backbone for educational institutions in India such as Indian Institutes of Technology (IITs), Indian Institute of Science (IISc) etc. on high speed connectivity. Your Company was one of the implementing partners of this prestigious project and the scheme has been operational. An amount of about Rs. 700 Crore has been received against advance from National Informatics Centre (NIC) against NKN order till March 31, 2014.

National Optical Fiber Network (NOFN)

The Government of India envisaged the setting up of National optical Fiber Network (NoFN) for providing connectivity to all the 250,000 Gram Panchayats (GPs) in the country. Your Company is a member of Advisory Body and Core Committee of the ambitious NoFN project, which utilizes existing optical fiber facilities of Bharat Sanchar Nigam Limited (BSNL), POWERGRID and RailTel Corporation of India Limited to connect the Gram Panchayats.

Under this, your Company has been allotted work for development & maintenance of NoFN network in four States viz. Andhra Pradesh, Himachal Pradesh, Jharkhand & odisha by Bharat Broadband Network Ltd (BBNL), covering about 36,000 GPs. The work is to be carried out in about 89 districts covering 1,769 blocks across these four States. The estimated cost of the project for these states would be about Rs. 2,700 Crore. Under Phase-1 of this, your Company received Sanction Letter from BBNL in october 2013 and has submitted to them Phase-1 plan consisting of 37 districts, 670 Blocks and 14,000 Gram Panchayats.

BUSINESS DEVELOPMENT - CONSULTANCY

Domestic

During the year under review, the Company secured thirty seven (37) new consultancy assignments. These include the project of national importance for construction of 220kV Transmission System from Alusteng (Srinagar) to Leh and 66kV interconnection system for drass, Kargil, Khalsti & Leh substations in J&K entrusted by the Govt of India. Your Company also signed agreements with six States of North Eastern region (NER) (Assam, Meghalaya, Mizoram, Manipur, Nagaland and Tripura) to act as ''Project design cum Implementation Supervision Consultant'' for implementation of ''NER Power System Improvement Project'' with The world Bank assistance.

Your Company continues to assist the State Utilities in development of their Transmission & distribution (T&d) infrastructure. one such major assignment includes construction of 765 kV Transmission System associated with Lalitpur Thermal Power Plant (2000Mw) on behalf of the transmission utility of Uttar Pradesh (UPPTCL). In addition, towards Capacity Building assignments during the FY 2013-14, Training was imparted to the employees of transmission utilities in Maharashtra (MSETCL), Madhya Pradesh (MPPTCL), Bhakra Beas Management Board (BBMB) and damodar Valley Corporation (dVC).

In order to broaden the consultancy avenues, exploratory initiatives have been undertaken into oil sector & Railways, which are expected to fructify into business assignments in near future.

International

In the international arena, during the year, your Company secured seven (7) new assignments having total project cost of about Rs. 140 Crore. The Company made inroads in four new countries and provided Consulting Services in 15 countries, viz. Nepal, Bhutan, Bangladesh, Afghanistan, Sri Lanka, Myanmar, UAE, Nigeria, Ethiopia, Kenya, Tajikistan, Congo, Senegal, Kyrgyz Republic, and Pakistan.

During the year under review, among other notable achievements, was the commencement of Management Consultant Project in Ethiopia for a period of 2 years for Establishment & Management of new Ethiopian Electric Power Company, leading to successful formation of a new Utility viz. Ethiopian Electric Utility (EEU) at Ethiopia with its first CEo from your Company. This year also marked completion of prestigious inter-country 400kV asynchronous interconnection link between India and Bangladesh in September, 2013 wherein your Company provided Consulting Services from pre-award to final commissioning stage to Power Grid of Bangladesh for their portion of linked Transmission System in Bangladesh. Your Company has successfully fulfilled its consulting service obligations for export of goods amounting to about US$ 64 million for 230kV transmission lines and substations associated with the Thahtay Chaung Hydro Power Project in Myanmar. Your Company has been appointed as Consultant through International Competitive Bidding for 1000Mw HVdC Interconnection between Tajikistan, Kyrgyz Republic, Afghanistan and Pakistan.

During the year, your Company has earned revenue of Rs. 627 Crore (including about Rs.294 Crore from sale of products) from domestic and International consultancy.

INTERNATIONAL COOPERATION

Once fully developed, South Asian Association for Regional Cooperation (SAARC) Grid shall go a long way in harnessing capacities and resources of SAARC Nations to address the growing energy needs in the region. Your Company continues to strive for preparing a roadmap for the same. Presently, a number of interconnections exist between India & Nepal and India & Bhutan, which are being strengthened for mutual exchange of power.

A milestone has been achieved in this direction with the commissioning of an asynchronous interconnection between countries India & Bangladesh, through 500 Mw High Voltage direct Current (HVdC) back-to-back terminal along with Bheramara (Bangladesh) - Baharampur (India) 400kV d/c line in September, 2013, enabling power flow of the order of 500Mw from India to Bangladesh.

Also, for evacuation of power from various upcoming hydro electric power projects (HEPs) in Bhutan, Punatsangchu-I HEP (Bhutan) Â Alipurduar (India) 400kV double Circuit (d/c) line between countries Bhutan & India, is under implementation and expected to be completed by 2015. Also, for transfer of bulk power, interconnection between India and Nepal through 400 kV dhalkebar (Nepal) - Muzaffarpur (India) d/c transmission line is under implementation. Feasibility study for interconnection between India and Sri Lanka through an under-sea HVdC bipole line is under finalization. Further, discussions for interconnection between India and Pakistan through Amritsar (India) - Lahore (Pakistan) line are being held at Government level.

CONTRIBUTION IN DISTRIBUTION REFORMS

Under "Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY)" scheme for rural electricity infrastructure and household electrification, your Company has been assigned about one-third of the total works for execution of rural electrification covered in sixty-five (65) districts of nine (9) States in the country at a base cost of about Rs.7,230 Crore. Most of the schemes have already been completed/ nearing completion.

During FY 2013-14, infrastructure was created for electrification in 2,388 villages out of which 2263 were partially electrified and 125 were un-electrified villages. Also, 5,315 villages were energised including 632 un-electrified villages. Service connections were provided to about 85,460 BPL households. Cumulatively, till March, 2014, infrastructure has been created for electrification of 71,042 villages including 32,588 un- electrified villages. Further, service connections were provided to about 36.22 Lakh BPL households.

In addition, RGGVY works in four (4) districts of Uttar Pradesh, namely deoria, Siddhartnagar, Pratapgarh, Kushinagar have been assigned to your Company.

XII PLAN DEVELOPMENT PROGRAMME

Your Company has made an ambitious plan to invest more than Rs. 100,000 Crore during the XII plan, matching with the envisaged generation capacity addition. This investment is mainly towards development of transmission infrastructure for implementation of various inter-State transmission systems including High Capacity Power Transmission Corridors (HCPTCs), inter-regional links for grid strengthening, system strengthening schemes etc.. out of the above capex-plan, your Company has already made a capital expenditure of Rs. 43,195 Crore in the first two years of the plan period. The funding for capital expenditure are planned to be met through loans from multilateral institutions such as The world Bank, Asian development Bank, Supplier Credit, External Commercial Borrowings through bonds / notes, besides loans from domestic market through private placement of bonds. Based on the ratings by both domestic and international credit agencies, your Company do not foresee any difficulty in resource mobilisation.

Your Company has planned to add transmission network comprising about 40,000 ckm of transmission lines and about 100,000 MVA of transformation capacity during the XII Plan. out of this, the Company has already commissioned about 13,760 ckm of EHV transmission lines and about 81,390 MVA of transformation capacity in the first two years of the XII Plan.

ERP IMPLEMENTATION & IT

The implementation of Enterprise Resource Planning (ERP) system for efficient, effective and organized business process is in advanced stage and is expected to ''Go Live'' in 2014-15. during the year, various landmarks have been achieved by the ERP team such as finalization of Business Blue Print for the key processes related to the Company, mapping of the business processes on SAP ERP system, implementation of ERP data Centre at Manesar and imparting training to around 450 power users.

On IT front, your Company continues to espouse latest technologies for the betterment of its business processes. Secure wi-Fi connectivity has been provided in offices and other premises for seamless connectivity and efficient working environment. Your Company continues to carry out recruitment process through online application portal, which is designed, developed and maintained by in-house talent. The same service was also provided to few other organizations to carry out their recruitment drive online. Further, various applications like Inspection Management System, Vigilance Inspection System, and Attendance Management System etc. are developed, run and maintained in-house for assisting the business operations.

The Company has also taken up major technology upgradation of IT infrastructure and has planned to enter cloud enabled computing environment by next year. Apart from Consultant appointed for Cloud Computing, your Company has also appointed a consultant for the implementation of Information Security Management System (ISMS) and for accrediting ISo:27001 Certification.

SUSTAINABLE DEVELOPMENT AND CORPORATE SOCIAL RESPONSIBILITY

Realising its obligation and commitment towards Sustainable development, your Company has taken many initiatives such as construction of National Transmission & Asset Management Centre (NTAMC) Building at Manesar as per Green Rating for Integrated Habitat Assessment (GRIHA) norms, along with 50kw solar plant, and installation of waste Paper Recycling Plant, etc. Your Company is on the way to progressively phase out the use of conventional paper and its procurement in Corporate office as the Company''s letterheads, visiting cards,envelopes, writing pads etc. are being prepared with recycled paper produced in-house. These initiatives are not only testimony of Company''s commitment towards Sustainable development but a firm step in conserving precious ecological resources and reduction of carbon footrpint.

Your Company feels the social pulse of the milieu in which it operates. It believes in inclusive growth and undertakes various social initiatives emphasizing on socio-economic and integral development of areas / communities primarily in and around its areas of operations. with this approach, the Company carries out various community development activities such as Skill development & Capacity Building, livelihood generation, healthcare, education, plantation, sanitation, drinking water, besides infrastructure developments like classrooms, roads, community centres etc..

During the year under review, the Company trained sixty-two (62) youths under the ''Skill development Programme on Transmission line Tower Erection'' in the backward district of Kokrajhar, Assam. other skill development / livelihood training programs imparted to unemployed youth are in the field of tailoring, cutting/ stitching, embroidery, automobile repairing, handloom weaving, food & fruit processing, repairing of household appliances, etc. to secure employment or to be self-employed. The Company also installed hand pumps and improved drainage facilities in Banka (Bihar). The Company also provided 1109 mandays training to employees/ other stakeholders on CSR/ sustainability/ environment conservation. Besides above, energy conservation techniques were installed in five (5) substations establishments under CSR. The Company also published Annual CSR & Sustainability Performance Report for 2012-13 and Annual Target Booklet for 2013-14. Your Company also initiated a project on restoration of village ponds in Chhattisgarh. during the FY 2013-14, the Company made an expenditure of Rs. 21.66 Crore on CSR activities, 0.51% of PAT of the preceding year.

Under its Corporate Social Responsibility initiative, your Company has entered into an agreement with AIIMS, New delhi in March, 2014 for the construction of a 10 storey, 325 beds dharamshala named as (POWERGRID Vishraam Sadan)" inside the premises of Jai Prakash Narayan Apex Trauma Centre (JPNATC), New delhi.

Memorandums of Understanding (MoUs) were also signed with International Crop Research Institute for Semi-Arid Tropics (ICRISAT) for water shed management projects in one village each in Andhra Pradesh and Karnataka.

Your Company extended a financial assistance to ''Chief Minister''s Relief Fund'' for mitigating the sufferings of the victims of cyclone ''Phailin'' in odisha. Employees of your Company have also contributed their one day salary to the ''Prime Minister''s Relief Fund'' for assisting flood victims of the State of Uttarakhand.

PEOPLE, OUR CORE STRENGTH

Attracting Talent, Nurturing & Development of Human Capital

Employees are the pillars of your organization. during FY 2013-14, your Company inducted two hundred sixty-nine (269) personnel at various levels viz. Executives, Supervisors, workmen. while executives were recruited through open advertisement on all India basis/ campus selection from reputed engineering and management institutes, recruitment of non-executives were carried out through employment exchanges and local advertisement at regional level.

Your Company''s Human Resource development is primarily aimed at learning new competencies, reinforcing good work practices & workplace behaviour, as per organizational needs. The Company encourages innovation, meritocracy and the pursuit of excellence. Employees are synchronously updated and upgraded with changes in technology, strategy and growing competitive business environment, in terms of their knowledge, skill and outlook.

Your Company continue to assess the developmental needs of the employees using online ''Training Need Assessment'' process and link the same with the organisational/ business necessities to enrich its employees with requisite proficiencies. Further, trainings on latest technology and certification courses such as certified Project Management & Risk Management programmes, Latest survey techniques & PLS CAdd, Networking Skills, Hands on training on Transformer & Reactor are promoted to enable employees to be in line with the best in class. during the year, an average 5.96 training mandays / employee was achieved towards training in areas of management development, technological development, behavioural development, etc.

To establish new business area of Energy Auditing, your Company trained additional group of executives for National Certification Examination for Energy Auditors and subsequent accreditation by Bureau of Energy Efficiency (BEE).

Also, for enabling senior executives in their career advancement, Transformational Leadership Programme (TLP) and Transformation Management Programmes (TMP) were conducted at reputed institutions. Apart from focussed functional and behavioural development of its employees, your Company also conducted Programmes on women Empowerment and Empowerment of employees by self-growth (for reserve category employees) and special programme for differently abled employees.

As a part of your Company''s Competency Assessment and Skill Gap Analysis, Corporate HRd, along with external consultant, has updated the Competency directory (both functional and behavioural) for various functions in the Company keeping in view the existing/ emerging business of your Company. Based on this analysis, updated directory assessment centre of one hundred thirty-three (133) nos. executives of deputy General Managers (dGMs) level across the Company has been completed.

Further, for overall skill development in the country, particularly in the area of Power Transmission Line Construction, Capacity Building Programmes are being conducted with the help of Transmission Line (TL) construction contractors under Public Private Partnership (PPP) mode.

To leverage capabilities and resources with other institutions in the area of training, your Company, during FY 2013-14, signed MoUs with IIT, Roorkee, ASCI, Hyderabad, Fore School of Management, New delhi, Asia Pacific Institute of Management, New delhi, Jaipuria Institute of Management, Noida and ITM University, Gurgaon. POWERGRID Academy of Leadership (PAL) being established by your Company at Manesar, near Gurgaon is in advanced stage of completion and expected to reap the benefits soon.

As a part of HRd consulting, your Company trained power professionals from both domestic and overseas utilities, including SAARC nations.

Employee Welfare

Your Company regards its employees as its core strength and, thus, undertakes requisite changes in various policies from time to time for their welfare.

A focused initiative to build employee health and well-being is also in place. The program creates awareness on prevention of lifestyle diseases, encourages employees to make positive health choices and builds a healthy workplace. Similarly, several welfare initiatives such as yoga, counselling, recreational and developmental programmes are available to the employees and their families to promote work-life balance. Eleven (11) Nos. of medical and health check-up camp were organized for employees by your Company.

Your Company has a very effective Grievance Redressal System through which almost all the grievances of the employees are settled, leading to employee satisfaction. These consistent efforts in all directions have resulted in very low attrition rate of less than 1% during the year under review.

During the year, your Company formed ''Internal complaints committees'' as per Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013, reflecting its commitment to provide a safe and caring environment to female employees.

Your Company successfully continues to address the issues related to workmen through the National and Regional Bipartite Committee (PNBC/ PRBC), a joint consultative forum comprising management and workmen representatives. during the year, four (4) meetings with the employees'' representatives were held and the Industrial Relations scenario in the Company has been cordial, leading to no man day loss.

Quality food is served to the employees in the ISo 22000:2005 accredited Cafeteria in the Corporate office and Food Lounge of Multi Purpose hall of your Company. Healthy community living is spread through periodically conducted cultural programmes for celebrating various occasions like Independence day, Republic day, diwali get-together, Holi Milan, New Year, Raising day, etc. in all establishments of the Company.

The Company also conducts various sports competitions, for boosting the interest of employees in sports and games, at intra and inter-regional level for Kabaddi, Cricket, Volleyball, Badminton etc. and participates regularly in Inter-PSU Sports meet also.

Citizen''s Charter

Citizen''s Charter has been formulated for the Company providing a visible front of its vision, mission, objectives, commitments, terms of service and its obligation to various stakeholders. In this, information is available about Company''s schemes, policies, project plans of the corporation and issues of general interest to stakeholders.

Implementation of Official Language

In compliance with the official Language Act, 1963, official Language Rules, 1976 and orders issued by the Government of India from time to time, efforts were made to increase use of Hindi in official work during the year. In all offices of the Corporation, Rajbhasha Committees are functioning for overseeing implementation of official Language effectively and to review the progress of implementation including adherence to policies and the Annual Programme as circulated by the deptt. of official Language, Govt. of India. Your Company is continuously making efforts for the propagation and successful implementation of the official Language Policy. The official Language Implementation Committees both at Corporate and Regional levels held their quarterly meetings regularly to monitor and review the progress made in this direction.

Various forums such as Parliamentary Committees on official Language, Advisory Committee on official Language and Town official language Implementation Committee (ToLIC) have applauded the efforts taken by your Company for implementing Rajbhasha. Your Company also received many accolades on Rajbhasha implementation.

Corporate Image through Communication Management

Communication Management is essential for establishing a strong Corporate Brand Identity and for strengthening the relationship with its stakeholders.

With the ever increasing competition amongst the corporate majors across the globe, Globalisation has manifested its trait making it obligatory for the corporate giants to establish and maintain a strong mutual understanding between the organisation and its stakeholders through well planned and persistent communication interventions dedicated with the aim to acquire and retain good reputation for the Company. Bearing in mind the need for sustained, timely and bona fide communication interventions, your Company has adopted various communication strategies to appropriately highlight itself as an infrastructure major contributing substantially towards development of a sturdy national economy.

Your Company has been issuing various press communiquÃ© for highlighting achievements, growth, recent developments, thereby maintaining a regular interaction with the masses. The Company also organises Quarterly Press & Analysts'' Meet to facilitate face to face interaction of the management with the eminent journalists, analysts and stakeholders. This has helped in winning the trust of the masses and stakeholders.

During the execution of the Company''s second Follow-on Public offer, the focal strengths and expertise of the Company were presented to the investors in various campaigns comprising print and electronic media, outdoor hoardings including investor road shows on pan India basis.

Your Company also participated in the India International Trade Fair (IITF) 2013 exhibition by displaying a stall based on the theme of inclusive growth. Your Company also participated in business oriented exhibitions in Mumbai and delhi and in the country of Tanzania during the year to reach out to focal clients and the common masses.

with a view to disseminate information regarding Company''s mission, goals, strategies, achievements & events and viewpoints of management, your Company deploys various internal communication tools such as monthly newsletters, house journals, wall magazines, lounge and regular media updates.

GRIDTECH

Your Company successfully organised the GRIdTECH 2013, the 4th International Exhibition and Conference on Transmission, distribution, Smart Grid, Renewable Energy and Load dispatch in which a large number of exhibitors showcased their state-of-the-art products in the field of transmission, distribution, grid management, and smart grid. one of the distinct features of the exhibition was ''Student Innovation Centre'' wherein students from a number of engineering colleges displayed their projects mainly in the areas of Smart-Grid, Robotics, etc.

RIGHT TO INFORMATION

In order to promote transparency and accountability, an appropriate mechanism has been set up across your Company in line with ''Right to Information Act, 2005''. Your Company has nominated CPIo/ Appellate Authorities at its Corporate office and Regional offices across the country to provide required information to the citizens under the provisions of Act.

RENEWED COMMITMENT TO TRANSPARENCY & VIGILANCE FuNCTION

Good governance plays a very significant role in building the trust of the Stakeholders and eventually in making an organization successful and sustainable. with this goal, your Company strives to focus mainly on preventive Vigilance and achieve good governance by emphasising transparency, integrity, accountability, fairness, equity and adherence to rules, regulations and the laws of the land.

Your Company uses technology in the form of e-payments, e-billing, e-procurement and reverse auction, e-auction, uploading of contract documents as well as award details, vendor registration, online tracking of bill status, online inspection Management system, etc. for preventive action. Vendor meets have also been conducted as a step towards confidence building of stakeholders. As part of Preventive Vigilance, various inspections, in the form of surprise and process online were conducted, apart from CTE type inspections. Adequate cost compensations were effected on cases not conforming to technical specifications or conditions of contract. A number of complaints, received from internal as well as outside agencies, were taken up for verification, earnestly. on the basis of investigations conducted into these complaints, disciplinary actions, wherever appropriate, were also initiated. The Vigilance department has, on its part, also introduced a number of measures to inculcate good governance within the organization. while, process on line inspection are being conducted at the regions of works which are at a critical stage of execution, bulk SMS are being sent to all employees regularly in order to acquaint them with Conduct, discipline and Appeal Rules. online complaint handling system and continuous improvement in systems and procedures are also steps taken in the same direction. during the year FY 2013-14, the Company continued its focus on the following spheres of functioning, like communication of assessment to the concerned bidders, incorporation of provision relating to conflict of interest, installation of surveillance cameras to increase security, putting contract evaluation rooms under IT enabled surveillance, storage of materials at construction sites, etc.

Pursuant to vigilance observations, system improvement has been taken up in areas such as classification for foundations of tower, identification of safety measures to be exercised during the erection in transmission lines, adherence to specifications & field quantity norms and adoption of common approach for preparation of cost estimates. Further, as a part of capacity building, your Company conducted various workshops on Preventive Vigilance, Ethics and on the RTI Act, both at Corporate Centre and in the Regions.

Your Company organized ''Vigilance Awareness Week 2013'', under the theme "Promoting Good Governance Â Positive Contribution of Vigilance", during which various competitions were organized for the employees as well as for their family members. In addition, talk on ethics & values and on anti-corruption topics were delivered by eminent personalities.

ACCOLADES & AWARDS

The excellent performance of your Company has been recognised and appreciated by the Govt. of India and other prestigious organisations & institutions in form of various awards/ accolades in various categories from time to time.

Your Company has been rated ''Excellent'' for its performance as per MoU 2012-13 signed with the Ministry of Power.

Your Company also received four (4) Gold Shields and one (1) Silver Shield under ''Comprehensive Award Scheme for recognizing meritorious performance in Power Sector'' for Transmission System Availability and Early Completion of Transmission Projects for the year 2011-12 and 2012-13 from Ministry of Power.

Your Company was also conferred Award for Corporate HR Excellence in Power Sector by 7th ENERTIA Awards 2013, for being India''s best place to work for Power Professionals and Power Engineers and "e-India PSE 2013 Award" for its "online Human Resource development Management System".

Your Company was conferred the Power Line Award 2013 for being the ''Best Performing Transmission Company''.

Your Company was bestowed with "Top Infrastructure Company" under the category ''Power Transmission'' by dun & Bradstreet.

during the year 2013, your Chairman & Managing director was ranked in ''2013-All Asia executive Team Â Best CEos'' by ''Institutional Investors'', a highly rated North American magazine on international financial market matters.

Your CMd has also been conferred with the "Eminent Electrical Engineer Award" by the Institution of Engineers (India), the largest professional body of Engineers in India.

Your Company has won the runners-up trophy of National Championship of Business Management Simulations - 2013 conducted by All India Management Association (AIMA) and represented India in the Asian Championship.

MANAGEMENT DISCuSSION AND ANALYSIS

In addition to the issues in the directors'' Report, some issues have been brought out in report on Management discussion and Analysis placed at Annexure-I of this Report.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report as stipulated under Clause 55 of the Listing Agreement with the Stock Exchanges is given in Annexure-II and forms part of the Annual Report.

PARTICULARS OF EMPLOYEES

The particulars of employees of the Corporation who were in receipt of remuneration in excess of the limit prescribed under Section 217 (2A) of the Companies Act, 1956 is given in Annexure-III to this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As per requirements of disclosures under Section 217(1) (e) of Companies Act,1956 read with Rule 2 of the Companies (disclosures of Particulars in the Report of Board of directors) Rules, 1988 information relating to conversation of energy, technology absorption and foreign exchange earnings and outgo, information is given in Annexure-IV to this Report.

COMPTROLLER AND AUDITOR GENERAL''S COMMENTS

Company has received ''NIL'' comments on the accounts for the year ended March 31, 2014 by the Comptroller and Auditor General of India under Section 619(4) of the Companies Act, 1956. Copy of the same is attached in Annexure-V to this Report.

CORPORATE GOVERNANCE

A report on the Corporate Governance (Annexure-VI), forming part of this report, together with the Certificate thereon is given in Annexure- VII to this report.

Your Company has got its Secretarial Compliance Audit conducted for the financial year ended March 31, 2014 from M/s Chandrasekaran & Associates, Practising Company Secretary. Their Report forms part of this Annual Report (Annexure-VIII).

STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956.

The statement pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary Companies forming part of this Report is given in Annexure-IX.

STATUTORY AUDITORS OF THE COMPANY

The Statutory Auditors of your Company are appointed by the Comptroller & Auditors General of India. M/s S. K. Mehta & Co., M/s Chatterjee & Co., and M/s Sagar & Associates were appointed as Joint Statutory Auditors for the financial year 2013-14.

COST AUDITORS OF THE COMPANY

Your Company appointed M/s. K. G. Goyal & Associates and M/s. S. C. Mohanty & Associates as Cost Auditors for the Financial Year 2013-14 under Section 233B of the Companies Act, 1956.

The due date for filing Cost Audit Reports for the financial year 2013-14 with the Cost Audit Branch, Ministry of Company Affairs is September 30, 2014 and the same will be filed within the stipulated time.

COMPANY''S BOARD

Your Company''s composition of Board of directors underwent some changes during the year 2013-14. Shri Rakesh Jain, JS&FA, MoP, and Smt. Rita Acharya ceased to be directors on the Board of the Company w.e.f. July 08, 2013 and February 28, 2014, respectively. The Board wishes to place on record its deep appreciation and gratitude for the significant contribution and support to the Company extended by Shri Rakesh Jain and Smt. Rita Acharya during their tenure as director of the Company.

Dr. Pradeep Kumar, Joint Secretary & Financial Advisor (JS&FA), Ministry of Power (MoP) was appointed on the Board w.e.f. September 10, 2013 and Smt. Jyoti Arora Joint Secretary (Transmission) was appointed on the Board w.e.f. March 20, 2014.

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Article 31 (iii) of the Articles of Association of the Company, Shri R.T. Agarwal, director (Finance) and Shri I.S. Jha, director (Projects) shall retire by rotation at the Annual General Meeting of your Company and being eligible, offer themselves for re-appointment.

ACKNOWLEDGEMENTS

The Board of directors, with deep sense of appreciation, acknowledges the guidance and co-operation received from Govt. of India, particularly Ministry of Power, Ministry of Finance, Ministry of Home Affairs, Ministry of External Affairs, Ministry of Statistics and Programme Implementation, Ministry of Environment & Forests, Central Electricity Regulatory Commission, Appellate Tribunal for Electricity, Central Electricity Authority,

Planning Commission, department of Public Enterprises, Regional Power Committees, and other con cerned Govt. departments/agencies at the Central and State level as well as from Securities and Exchange Board of India, National Stock Exchange of India Ltd. and BSE Ltd., Mumbai without whose active support, the achievements of the Corporation during the year under review would not have been possible.

Board''s special appreciation and thanks are to our valued customers, State Governments and State power utilities and other clients, who have awarded various consulting works and reposed faith in Company''s capability to handle them. The Board also appreciates the contribution of Contractors, Vendors and Consultants for successful implementation of various projects by the Company.

The directors take this opportunity to thank the Principal director of Commercial Audit and Ex-officio Member Audit Board-III for the cooperation during the year. directors also acknowledge the valuable suggestions and guidance received from the statutory auditors during the audit of accounts of the Company for the year under review. The Board also conveys its sincere thanks to national/ international financial institutions/ multilateral Financial Institutions (The world Bank & Asian development Bank)/ Banks/ national (ICRA & CRISIL) & international (Standard & Poor and Fitch) credit rating agencies for their assist ance, continued trust and confidence reposed by them on POWERGRID.

On behalf of Board of directors, I would like to place on record our deep appreciation of the dedicated efforts and valuable services rendered by the members of the POWERGRID Family in the Company''s achievements during the year 2013-14. I would also like to thank the Executive team for their strong leadership, the employee unions for their support and all our employees for their commitment and enthusiasm to achieve our aim to be the world''s premier transmission utility.

For and on behalf of the Board of directors

(R. N. Nayak) Chairman & Managing Director Place: New Delhi Date : 04.08.2014

Mar 31, 2013

To, Dear Shareholders,

Ladies & Gentlemen,

The am delighted to present, on behalf of the Board of Directors, the 24th Annual Report on the performance of your Company during the financial year ending March 31, 2013 together with Audited Statement of Accounts, Auditors'' Report and Review of the Accounts by the Comptroller and Auditor General of India for the review period.

Your Company has earned the reputation as one of the largest and best managed transmission utilities in the world with its remarkable growth in the last two decades and carries about half of the country''s total generated power. Your Company continues to play a critical role in development ofthe Country''s power sector with its various techno-managerial initiatives in inter-State power transmission system along with transparent and effective grid operation in the Country.

Your Company has been selected for ''MoU Excellence Award'' for FY 2010-11 by Department of Public Enterprises (DPE), Ministry of Heavy Industries & Public Enterprises for being the top performer in the Energy Syndicate. Further, based on overall performance, the Company has been rated ''Excellent'' by DPE for the FY 2011-12. Based on the approved score, POWERGRID stand top among the assessed Companies in the Power Generation and Transmission syndicate for the FY 2011-12 and expected to receive the "MoU Excellence Award" again.

Your Company has put on a remarkable performance in FY 2012-13 with achievements exceeding most of the targets under Memorandum of Understanding (MoU) signed with Ministry of Power (MoP), Government of India and poised to get ''Excellent'' rating for FY 2012-13; continuously since signing of its first MoU in FY 1993-94.

Performance highlights of the Company during FY 2012-13 are briefly mentioned here to give an overview of accomplishments in all fronts:

- Made an investment of Rs.20,037 Crore, an increase of about 13% over last year.

- Added about 7,156 circuit kilometre (Ckm) of Extra High Voltage(EHV) transmission lines, 17 new sub-stations and transformation capacity of more than 40,230 Mega Volt Ampere (MVA).

- Assets commercialisation of about Rs.17,213 Crore.

- Investment approval accorded for 24 new transmission projects worth about Rs.12,579 Crore.

- 1200kV Ultra High Voltage (UHV) AC National Test Station at Bina, Madhya Pradesh was test charged and then dedicated to the Nation by Hon''ble Union Minister of State (l/C)for Power.

- Attained 99.90% Transmission system availability with number of trippings per line limited at 0.58.

- Inter-regional power transfer capacity of National Grid has been enhanced by 2,000 MW in the year and cumulative capacity stood at about 29,750 MW by end of March, 2013. Further, in the month of May 2013, the inter-regional power transfer capacity has been increased by 2,100 MW to 31,850 MW.

FINANCIAL PERFORMANCE (Figures in Rs. crore, except per share data)

Description 2012-13 2011-12 Y-o-Y Growth

Income

Transmission Charges 12,163 9,544 27.4%

Consultancy 315* 290 8.6%

Telecom 231 201 14.9%

Other Operating Income 49 129 (62.0%)

Other Income 571 621 (8.1%)

Total Income 13,329 10,785 23.6%

Profit After Tax (PAT) 4,235 3,255 30.1%

Earnings per Share (Rs.) 9.15 7.03 30.2%

Book Value per Share (Rs.) 56.62 50.73 11.6%

Gross Fixed Assets 80,600 63,387 27.2%

Long term borrowing ** 66,188 51,752 27.9%

Net Worth 26,213 23,488 11.6%

Debt Equity Ratio 72:28 69:31

Commercialisation of Assets 17,213 13,045 31.95%

*including consultancy income from sale of products **including current maturities of long term borrowings

OPERATIONAL EXCELLENCE

Transmission assets owned and operated by your Company as on April 1, 2013 has crossed the benchmarking values of 1,00,000 Ckm & 1,50,000 MVA and stands at about 1,00,200 Ckm of Extra High Voltage (EHV) transmission lines, 167 EHVAC & High Voltage Direct Current (HVDC) sub-stations and 1,64,763 MVA transformation capacity which spread over the length and breadth of the country. Using this vast transmission network your Company wheels about 50% of the total power generated in the country.

During the year 2012-13, the average availability of these transmission systems was maintained at 99.90% by your Company with the number of trippings per line limited at 0.58. This high availability of transmission network is consistently maintained by your Company through deployment of technologically advanced operational techniques such as Hot Line Maintenance, Hotline Washing of Insulators with the use of helicopters, Equipment Condition Monitoring techniques including Dynamic Testing of relays, Thermo-vision Scanning, Frequency Response Analysis (FRA) for transformers and reactors, large scale automation of sub-stations, etc. Presently, 43 sub-stations of your Company are being operated remotely and many new sub-stations are being designed for remote operation.

The establishment of the "National Transmission Asset Management Centre (NTAMC)" for centralised remote monitoring, operation & control of sub-stations is nearing completion which will further improve the efficiency and transparency in the operation of the transmission system in the Country.

Your Company has developed for implementing a "Maintenance Service Hub" concept in which specialist manpower is pooled into a hub for undertaking the maintenance of number of sub-stations within a close range. This innovative concept shall enable your Company to enrich your manpower with the multifarious knowledge of its huge network of transmission lines & substations with various types of equipments in terms of makes, technology and ratings.

These technological interventions shall also facilitate rationalization of manpower in the field of O&M and this year your Company has achieved more than 1% manpower rationalization on this account.

Your Company has taken a proactive step to restrain the trippings of transmission lines caused due to fog and pollution in various parts of the country by replacing the conventional insulators with polymer insulators. Replacement of insulators in the critical lines / stretches in Northern Region has been completed and replacement of insulators in other parts ofthe country is in progress. This has significantly reduced pollution related trippings in the country. Further, to facilitate optimum selection of insulators for new transmission lines, your Company is conducting pollution mapping in Northern Region and these pollution measurements are being carried out at more than 150 locations ofthe Company and 108 locations ofState Transmission Utilities (STUs). These corrective measures will further minimize the probability of occurrence of flashover in lines passing through pollution affected areas besides optimization of transmission line cost. Pollution mapping of Southern and Eastern Regions are also being taken up by your Company. In addition, advance actions are being taken like cleaning of conventional insulators as a part ofwinter preparedness in less polluted stretches to avoid pollution related trippings.

Your Company has placed state-of-the-art Emergency Restoration Systems (ERS) for transmission lines at strategic locations to enable restoration within shortest possible time of collapsed transmission line towers caused by the eventualities of natural calamities such as earthquake, cyclone, landslide, & sabotage, etc. Additionally, to alleviate the similar eventualities in case of substations, your Company is in the process of procuring a mobile 400/220 kV ERS for substation for quick deployment & restoration of 400kV substation in2to 4 weeks time which otherwise takes several months.

Your Company''s vast nationwide spread transmission network passes through various geographical areas including tough terrains such as snow bound area, deep forest. In these terrains to monitor the condition of transmission lines, a faster and efficient patrolling system was necessitated. Taking this into consideration, your Company has taken up aerial patrolling of transmission lines using helicopters for identifying visual and thermal defects in transmission lines caused due to environmental stresses and thereby to minimize the breakdown nature of maintenance work. To start with this, award for aerial patrolling through helicopters of about 15,000 route kms of transmission lines has already been placed. Further, your Company is also exploring more contemporary techniques such as Robotic Technology for condition monitoring of conductor, earthwire & hardware, etc.

PROJECT IMPLEMENTATION

Best efforts are being put in by your Company for implementing its transmission projects within stipulated time frame to derive commercial benefits. Your Company has developed the Integrated Project Management and Control System (IPMCS) for effective planning, implementation, monitoring and management of the transmission projects. Further, to optimise the implementation time schedule of the projects, various actions have been undertaken including total project review and monitoring using IPMCS and Project Review Meetings at regular intervals through video conferencing. Pre-emptive measures and advance actions on various project linked activities such as land acquisition, state-of-the-art survey techniques and soil investigations, tender activities, funding tie-up, etc., were also undertaken in parallel with project investment approval process.

These well developed system of implementation process has once again resulted in exceptional output and projects worth about Rs.17,213 Crore were commercialised during the year, adding about 7,156 Ckm, 17 sub-stations and transformation capacity of more than 40,230 MVA in the transmission system. Your Company also timely commissioned notable major 765kV and 400kV transmission lines such as 765kV Sasan-Satna-Bina, 765kV Fatehpur-Agra, 765kV Moga-Bhiwani, 765kVJhatikalan-Bhiwani, 400kV D/C Maithon-Koderma, 400kV D/C Mundra-Jetpur, 400kV D/C Chamera Pooling Station-Jallandhar, 400kV D/C Raipur-Wardha inspite of severe constraints faced including challengingterrains, severe Right-of-Way(RoW) problems.

Implementation of High Capacity Power Transmission Corridors (HCPTCs) is progressing as per schedule with completion in a phased manner matching with generation projects. In fact, some of the elements under HCPTCs of Chhaffisgarh and Odisha have already been commissioned in FY 2012-13 and balance elements of HCPTC''s are expected to be completed progressively by FY 2015-16.

During the year, 24 new projects with an estimated cost of about Rs. 12,579 Crore involving about 5,530 Ckt km of transmission lines, 4 new sub-stations and transformation capacity of about 12,730 MVAand supply & installation of 5,207 km of OPGW fibre optic cable were approved and taken up for implementation.

FINANCIAL MANAGEMENT

The Financial performance of your Company in FY 2012-13 has been impeccable, achieving a turnover of Rs.13,329 Crore and Net Profit of Rs.4,235 Crore as compared to Rs.10,785 Crore and Rs. 3,255 Crore respectively during FY 2011-12, growth of about 24% in turnover and 30% in Net Profit. The gross asset base of the Company has been enhanced to Rs.80,600 Crore from Rs. 63,387 Crore in 2011-12, an increase ofabout 27%.

Your Company continues to show improved performance in all its business areas including Telecom and Consultancy businesses, enhancing the value for the shareholders.

Capital Investment and Fund Mobilization

Your Company continues to explore new opportunities for raising long tenure debt from both domestic and international debt investors, for meeting its capex-programme in XII Plan, in addition to debt funding from multilateral funding agencies like The World Bank and ADB.

In this direction, during the year, your Company signed loan agreements with International Finance Corporation (IFC) and Infrastructure Crisis Facility Debt Pool Limited Liability Partnership (ICF Debt Pool LLP) in July, 2012 for a total amount of US$270 million for funding various transmission projects. Further, your Company made its maiden foray into foreign currency markets in January, 2013 and raised US$500 million through issuance of 10 year Foreign Currency Bonds (FCB) at an attractive coupon rate of 3.875% p.a. This maiden issue from your Company received an overwhelming response from the investing community and was over-subscribed nearly 19 times. The Bonds are currently listed in Singapore stock exchange.

In line with its targeted XII Plan capex-programme, your Company during the financial year 2012-13, made a capital investment of Rs. 20,037 Crore which was about 13% higher than last year. AboutRs. 15,700 Crore of the capital investment was mobilised through private placement of bonds in domestic market with attractive coupon rates, Supplier''s credit, proceeds of ongoing SBI Line of Credit, foreign currency bonds and loans from IFC, ICF Debt Pool LLP, multilateral funding agencies like The World Bank, Asian Development Bank etc. In addition, the accrued internal resources and FPO proceeds amounting to about Rs.4300 Crore were utilized for funding equity component of the Company.

During the FY 2012-13, your Company was rated by International credit rating agencies, Standard & Poor''s Rating Services (S&P) and Fitch Ratings, for the first time. Both the agencies have rated your Company at BBB - (outlook negative), consistent with Gol Sovereign Rating. Consequent upon revision of Sovereign rating to ''Stable'' from ''Negative'' recently by ''Fitch Ratings'', the rating of your Company now stands as BBB- (outlook Stable). The Company continues to have its rating as AAA/stable (triple AAA with stable outlook) by CRISIL, ICRA and CARE ratings domestically.

Dividend Payout

For FY 2012-13, your Company has proposed a final dividend ofRs. 1.14 per share in addition toRs. 1.61 per share of interim dividend paid in February, 2013. The final dividend shall be paid after your approval at the Annual General Meeting. Thus total dividend payout for the year amounts to Rs. 1,273.18 Crore (including an interim dividend of Rs. 745.39 Crore) as against Rs. 976.89 Crore paid during the previous year. The total dividend payout including dividend tax accounts for 34.99% of Profit after Tax of the Company.

Your Company values its shareholders and hence determined to pursue its dedication to build and maintain relationships with them by creating wealth for its stakeholders through deploying cutting edge technology, adopting global best practices, optimum utilization of resources and sustainable development.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required u/s 217 (AA) ofthe Companies Act, 1956, your Directors confirm that:

i. In the preparation of the Annual Accounts, the applicable accounting standards have been followed;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view ofthe state of affairs ofthe Company at the end ofthe financial year and of the profit of the Company for that period;

iii. The Directors have taken proper and sufficient care in accordance with the provisions ofthe Act for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the annual accounts on a going concern basis.

COMMERCIAL PERFORMANCE

With effective from July 1, 2011, Point of Connection (PoC) Charges tariff sharing mechanism has been implemented in the transmission sector for Sharing of Transmission Charges and Losses through Central Electricity Regulatory Commission Regulations, 2010. As the Central Transmission Utility (CTU) ofthe Country, your Company has also been assigned the responsibility of carrying out activities like raising of transmission charge bills on behalf of all the Inter-State Transmission System (ISTS) Licensees (presently 13 nos.), collecting the amount and disbursing the same to them. In this regard bills of transmission charges are prepared, raised and uploaded on the website portal for about 71 Designated ISTS Customers (DICs) including payment details by the customers.

It is a matter of pride that in FY 2012-13, Your Company had achieved a 100% realisation of transmission tariff with highest ever monthly realization of transmission tariff achieved in the month of March, 2013.

DEVELOPMENT OF NATIONAL GRID

Recognizing the need for development of National Grid, thrust was given to enhance the capacity of National Grid in a phased manner. In this direction, your Company had established/ planned various inter-regional links as a part of different generation projects/grid strengthening schemes. The Inter-regional power transfer capacity ofthe National grid has been planned to increase to about 65,550 MW at the end of XII Plan, by adding about 38,000 MW during XII Plan matching with generation capacity addition programme and power transfer requirement across the regions. In line with this, your Company has added 2,000 MW of inter-regional power transfer capacity in FY 2012-13 through upgradation of both 765 kV Gwalior-Agra single circuit transmission lines to 765 kV voltage level from 400 kV voltage level. The cumulative inter-regional powertransfer capacity at the end of first year ofthe XII plan stood at about 29,750 MW.

All India synchronous grid is envisaged for facilitating bulk transfer of power across regional boundaries and to achieve optimal utilization of the resources in the Country. Towards this, presently regional grids of Northern, Eastern, Western and North-Eastern Regions (NEW grid) are already connected through synchronous interconnections and Southern Region (SR) is connected to this NEW grid through over4,000 MW capacity HVDC links. Synchronous interconnection of SR with NEW grid is envisaged through high capacity 765 kV S/c Raichur - Sholapur lines (2 Nos.). One of the above lines is under implementation by private sector and the other line is being implemented by POWERGRID. Both the lines are envisaged to be completed by 2014.

GRID MANAGEMENTAND OPEN ACCESS

Your Company has been instrumental in providing an efficient, reliable, smooth and transparent grid operation and management in the Country. The grid management function in the Country is continued to be looked after by Power System Operation Corporation Limited (POSOCO), a fully owned subsidiary of your Company, with its state-of-the-art Unified Load Despatch & Communication facilities. These facilities are being updated continuously to further improve quality and economy in operation of power systems besides improving data availability, visibility and transparency.

Your Company''s strong transmission network and modernised RLDCs have facilitated about 66 billion units (BUs) of inter-regional energy transfer across the Country during FY 2012-13, as compared to previous year''s energy transfer of about 59 BUs, meeting more demand in energy deficit regions.

During the year, 32,139 transactions involving about 73 BUs of energy were approved under Short Term Open Access (STOA) compared to 24,111 transactions and about 67 BUs of energy during FY 2011-12.

Your Company, as CTU, is the nodal agency for processing & grant of Connectivity, Long Term Open Access/ Long Term Access (LTOA/LTA) and Medium Term Open Access (MTOA) of various applicants. Towards this, as on March 31st, 2013, the Company had granted LTOA/LTA to 151 nos. of applicants with 83,060 MW LTA capacity out of 214 applications with LTOA/LTA sought for about 1,29,408 MW. Some of the LTOA/ LTA applications were withdrawn/closed due to non-satisfactory progress ofthe IPP generation projects. Further, POWERGRID received 180 Connectivity applications for about 1,74,450 MW, out of which connectivity has been granted to 80 nos. of applications for 69,074 MW. The MTOA was granted to 44 nos. of applications for 4,267MW. 27 nos. of MTOA applications were withdrawn/closed as the complete Available Transfer Capability (ATC) was already allocated and some applications are under process.

Unfortunately, there were two major grid disturbances on 30th and 31st July, 2012, which resulted in failure of Northern Regional Grid in first day and that of Northern, Eastern and North-Eastern regional grids by the disturbance occurred on the following day. Restoration ofthe affected areas was taken up immediately on both the days and majority system was normalized in about six to eight hours on respective days itself. An Enquiry Committee headed by Chairperson, CEA was constituted by Gol for investigation of causes for these two grid disturbances in July, 2012. Government of India is monitoring the implementation ofthe Enquiry Committee''s recommendations. Various measures are being taken by POWERGRID, POSOCO and Government of India for secure grid operation such as third party protection audit, advising State utilities to maintain grid discipline & draw power from grid within the schedule, formulation of Islanding schemes in different States, review of Unscheduled Interchange (Ul) mechanism, preparation of comprehensive defence plan covering under-frequency, rate of change of frequency under voltage, system protection schemes to cover large generation and transmission line outages, advise to utilities to prepare outage plans for generating units and transmission lines in consultation with Regional Power Committees and review of transmission planning criteria, etc. Further, petitions have also been filed in Central Electricity Regulatory Commission (CERC) by various Regional Load Despatch Centres including the National Load Despatch Centre on various issues inter-alia, modification in congestion charge procedure, modification in Ul charges and related matters, further tightening the frequency band, primary response from generators etc. In addition, Government of India is contemplating necessary amendments in Electricity Act, 2003 for mitigating the issues in Grid Operation.

QUALITY MANAGEMENT

Your Company with an aspiration to achieve absolute customer satisfaction is continuously endeavouring to provide cost effective & quality services to its valued customers. To achieve this, the Company is taking necessary steps to implement requisite quality measures in each and every step of its chain of operation right from conceptualization of project to commissioning and subsequently during operational phase. Your Company is following Standard Manufacturing Quality Plan at both national & international level while inspection at various manufacturing stages and also adheres to standard Operation and Maintenance (O&M) manuals for operation & maintenance of its transmission system. Further, to improve quality, various techniques are being adopted to identify the areas of improvement and develop action plan for continuous quality improvement in all of its activities.

During the year 2012-13, the certification on Integrated Management System was reviewed and revised certification was acclaimed based on the evaluation of implementation of latest systems and procedures. Your Company is presently certified for Integrated Management System as per Publicly Available Specification, PAS 99:2006 integrating requirements of ISO 9001:2008 (Quality Management System), ISO 14001:2004 (Environment Management System) and OHSAS 18001:2007 (Occupational Health & Safety Management System). Your Company has re-confirmed its certification of the entire Corporation for Social Accountability Standard (SA 8000:2008) after auditing of its establishments for social accountability systems.

Capacity building, being one ofthe major challenge specially in multi-tasking environment under wide area operation, vendor development have been taken-up on priority to meet project requirements both, in execution and supply of 765/400kV equipment.

With zero product inspection as the ultimate goal, your Company has taken up process audits at a number of manufacturing units spread all over the country & also at overseas, at their works. Appropriate corrective actions are also being taken up based on Quality Audit feedback. Further, for asserting quality during transportation, storage, erection and commissioning activities during implementation of projects, Quality Audit on implementation of Field Quality Plans was also carried out.

TECHNOLOGY DEVELOPMENT

Your Company gives priority to research and development activities with potential for social, environmental & national benefits by incorporating advance technology solutions to gear up for future challenge.

The major areas of concern in development of transmission network in the Country are conserving the precious Right of Way (RoW), minimizing impact on natural resources, coordinated development of cost effective transmission corridor and flexibility in upgradation of transfer capacity of lines. In order to address these issues, your Company is deploying technologies such as Multi Circuits, Compact & Tall Towers, High Surge Impedance Loading Lines, Fixed & Thyristor controlled Series Compensation, High Temperature Low Sag (HTLS) Conductors, etc.

Experienced with construction of 765kV Extra-High-Voltage AC (EHVAC) & Â±500kV HVDC transmission system, Your Company is now implementing next higher transmission voltages of Â±800kV HVDC &working on 1200 kV Ultra-High-Voltage AC (UHVAC) system to achieve efficient utilization of RoW and increased power transfer capability for transfer of bulk power over long distances.

800kV Multi-Terminal HVDC System

Implementation of Â±800kV, 6,000 MW multi-terminal HVDC system of around 2,000 km from North Eastern Region (NER) (Biswanath Chariali in Assam and Alipurduar of West Bengal) to Northern Region (NR) (Agra in Uttar Pradesh) is progressing well and commissioning shall be in 2015-16. Upon completion, it shall be one of the largest multi-terminal HVDC systems in the world at this voltage level. HVDC system at 800kV level is particularly used for bulk power transmission over long distance with reduced RoW and losses.

1200kV UHVAC Transmission System

The 1200kV UHVAC technology, the highest voltage level in the world, is being developed indigenously by your Company in collaboration with 35 Indian manufacturers. This is one ofthe unique R&D projects in Public-Private Partnership model. In this, a 1200kV National Test Station is being established by the Company to facilitate indigenous development of UHVAC technology. The 1200kV Single Circuit (S/c) and Double Circuit (D/c) test lines were successfully test charged along with one 1200kV Bay at 1200kV UHVAC National Test Station at Bina, Madhya Pradesh and field tests are currently undergoing. Hon''ble Union Minister of State (l/C) for Power has dedicated the 1200kV Ultra High Voltage (UHV) AC National Test Station at Bina, Madhya Pradesh to the Nation in December, 2012.

Other technological initiatives such as Pollution & Lightning mapping, Emergency Restoration Systems for 400kV substation (Mobile substation), Process bus architecture for Substation Automation System, Transmission Line Arrestors, Mobile Test Van, 33kV Mobile Capacitor Bank & High Temperature Superconductor Technology for bulk power transmission, fault current limitation (Superconducting Fault Current Limiter) and energy storage (Superconducting Magnetic Energy Storage) applications are being taken up/ explored by your Company for their viability in Indian PowerSystem to ensure more efficient, safe, secure & reliable operation of Grid.

SMART GRID TECHNOLOGY

Your Company continues to take pioneering steps in bringing Smart Grid technology in all facets of power supply value chain in the country. First Smart Grid Control Center in the Country has been established at Puducherry by your Company through open collaboration with more than 70 organizations & academic institutions. Under this, important Smart Grid attribute i.e. Advanced Metering Infrastructure (AMI) has been implemented and other functionalities like Outage Management System, Demand Response, Microgrid, etc. are being taken up in a progressive manner. This Smart Grid pilot project would be very helpful to demonstrate technology efficacy, evolution of commercial mechanism and suitable regulation, formulation of interoperability framework, indigenization of technology and renewable integration, etc. which can be scalable and replicable at other places in the Country for overall benefits to both consumers and utilities.

In addition, efficient street light management system has been implemented at Puducherry which has resulted in reduction of energy consumption for street lighting by about 15%. Further, development of Smart Home Energy Management System is being carried out in association with IIT, Kharagpur to facilitate consumers in energy management process through remote operation. Towards green energy initiatives, installation of 50kWp roof-top solar PV plant at NTAMC building, Manesar is under progress.

In addition to preparing Project Report for Smart Grid implementation by various distribution utilities/cities, your Company has prepared the feasibility report for upcoming green field project at Dholera SIR, coming under Delhi- Mumbai Industrial Corridor (DMIC).

Your Company has taken leadership initiative for implementation of Smart Grid Technology in transmission also. Towards this, the Company has executed Wide Area Measurement System (WAMS) pilot project in four (4) regions and is under progress in the Eastern Region. Under this initiative, presently about 40 nos. Phasor Measurement Units (PMUs) are in operation, facilitating dynamic real time measurements and better visualization of power system which are useful in monitoring safety & security of the grid along with enhanced situational awareness and taking control/corrective actions.

For full scale implementation of WAMS technology on pan India basis, your Company has proposed "Unified Real Time Dynamic State Measurement System (URTDSM)" scheme integrating State and Central grids, i.e. PMU placement at all HVDC, 400kV and above substations / generating stations including 220 kV level and PDC (Phasor Data Concentrator) at strategic locations. The Scheme shall enhance the efficiency in overall grid management in electricity open market regime. Total estimated cost of the URTDSM project is aboutRs. 655 Crore.

GREEN ENERGY CORRIDORS - GRID INTEGRATION OF RENEWABLE ENERGY

Integration of Renewable Energy Resources with grid is the top priority worldwide for energy security and also for carbon emission reduction. Government of India is taking various initiatives in the area of renewable energy capacity addition and about 42 GW of generation is envisaged in XII plan. Your Company has taken a lead initiative and developed a comprehensive master plan, Green Energy Corridors, which has been released by Ministry of Power and Ministry of New & Renewable Energy (MNRE) for integration of renewables coming up country- wide in XII plan.

This covers identification of transmission requirement at inter-State and intra-State level for grid integration of envisaged renewable capacity addition. Further, to address the intermittency and variability characteristics of renewable generation, other control infrastructure like forecasting of renewable generation and demand, Real time measurement/monitoring through Synchrophasor technology, flexible generation, ancillary reserves, Demand-side & demand response management and energy storage, establishment of Renewable Energy Management Centers (REMC) etc. is also identified.

A Joint Declaration of intent is also signed between Govt, of India & Govt, of Germany for cooperation in the field of integration of renewable energy sources in the form of providing financial assistance through soft loan of about 1 billion euro by Germany to develop prioritized Inter- State & Intra-State transmission systems i.e. Green Energy Corridors as well as sharing oftechnical expertise in the above field.

PERFORMANCE IN TELECOM

Your Company is leveraging its countrywide transmission infrastructure diversified into Telecom business under the brand name ''POWERTEL'' to expand its revenue base. Your Company has an all India Broad Band Telecom Network of about 29,300 km with connectivity provided to all metros, major cities, towns, State capitals including remote areas of North-Eastern Region, Jammu & Kashmir etc. covering about 290 Points of Presence (PoPs) across the country from where services are being rendered. Your Company is the only utility in the Country providing Telecom Services on overhead optic fibre network using Optical Ground Wire (OPGW) on power transmission lines and possess Infrastructure Provider Category-1 (IP-1), Internet Service Provider ''A'' (ISP ''A'') and National Long Distance Service License (NLD) to provide a variety of Telecom services.

Availability of Telecom Backbone system was maintained at 99.92% during FY 2012-13. The income from Telecom in FY 2012-13 has increased to about Rs.231 Crore from Rs.201Crore in FY 2011-12. The revenue from our telecommunication business is mainly on account of leasing of bandwidth on our fibre-optic links to various customer segments viz, Telecom Service Providers, Government Departments, Multi National Companies (MNCs), media etc.

National Knowledge Network (NKN)

Your Company is one of the implementing agencies of the prestigious National Knowledge Network (NKN) project devised by Govt, of India which plans to connect all knowledge centres across the Country such as Indian Institutes of Technology (IITs), Indian Institute of Science (lISc) etc., on high speed connectivity. Total expected revenue to the Company under this project over a period of 10 years is aboutRs. 900 Crore. Total advance amount received from National Informatics Centre (NIC) against NKN order is Rs. 640.85 Crore till March 31, 2013. National Optical Fiber Network (NOFN)

Your Company is a member of Advisory Body and Core Committee of the ambitious National Optical Fiber Network Project through which Government of India plans to connect 2,50,000 Gram Panchayats (GPs) on Optical Fiber network utilizing existing facilities of Bharat Sanchar Nigam Limited (BSNL), POWERGRID and RailTel Corporation of India Limited at an estimated cost of Rs. 20,000 Crore with completion period of 24 months. As a part of this, your Company has completed a pilot project at Parawada Block, Viskhapatnam District (Andhra Pradesh) in October 15, 2012 utilizing existing fibers of BSNL & POWERGRID and laying incremental fiber wherever required.

Under this, your Company has received an allotment letter from Bharat Broadband Network Ltd (BBNL) for development & maintenance of NOFN network in four States viz. Andhra Pradesh, Himachal Pradesh, Jharkhand & Odisha covering about 36,000 GPs. The work is to be carried out in about 89 districts covering 1,769 blocks across these fourStates. The estimate cost of the project for these four States would be about Rs. 2,700 Crore. As a part of this, your Company has signed a MoU with BBNL for developing NOFN network in 4 States on Build, Operate and Maintain basis, on December 04, 2012. Presently, survey activities are under progress.

BUSINESS DEVELOPMENT & CONSULTANCY

Your Company continues to showcase its leadership in its core areas such as Power Transmission, Sub-transmission, Distribution and Telecom utilising the techno-commercial proficiency to offer consultancy services worldwide.

On the domestic front, during FY 2012-13, the Company has bagged 26 new assignments aggregating to a project cost ofRs.715 Crore, with continued & unbounded trust in your Company by Public & Private utilities alike. To enhance customers'' base, business promotion activities have been undertaken by your Company with various Central Public Sector Undertakings like SAIL, RINL, DMIC, DFCC, Railways, etc. & succeeded in bagging contract with SAIL for providing technical services to four plants of SAIL. In addition, being the front runner in Smart Grid implementation in the Country, our initiatives to provide technical services for Smart Grid / Smart City applications are expected to bear fruit and bring number of consultancy assignments in near future.

Further, your Company has undertaken an international Joint Venture (JV) with Nepal. As a result of this, Cross border Power Transmission Company Ltd., (CPTC) became operational this year, which has 10% equity participation from Nepal Electricity Authority. This Company shall implement Indian portion of Indo-Nepal link (Muzaffapur, India to Dhalkebar, Nepal). For Nepalese portion of this international link, your Company shall be participating 26% equity in another international JV Company i.e., Power Transmission Company Nepal Ltd., (PTCN).

In international arena, during the year, your Company had bagged 9 (nine) new assignments having project cost of Rs. 332 Crore. At the end of the FY 2012-13,17 assignments were under execution with footprint in 11 countries viz. Nepal, Bhutan, Bangladesh, Afghanistan, Sri Lanka, Myanmar, UAE, Nigeria, Ethiopia, Kenya &Tajikistan.

During the year, your Company has earned revenue ofRs. 315 Crore from consultancy business including consultancy income from sale of products, surpassing previous year''s revenue ofRs. 290 Crore.

SAARC Grid

Your Company continues to play an active role in preparing a roadmap for developing South Asian Association for Regional Cooperation (SAARC) market for electricity to develop a cross country power-grid, harnessing each other''s capacities and resources to address the growing energy need in the region. Presently, various interconnections exist between India & Nepal and India & Bhutan and these are being strengthened for mutual exchange of power. For evacuation of power from various upcoming Hydro Electric Power (HEPs) in Bhutan, Punatsangchu-I HEP (in Bhutan) - Alipurduar (in India) 400 kV Double Circuit (D/c) line between Bhutan & India is under implementation and expected to be completed by 2015. Further, an asynchronous interconnection between India & Bangladesh through 500 MW High Voltage Direct Current (HVDC) back-to-back terminal along with Bheramara (Bangladesh) - Baharampur (India) 400kV D/c line is under implementation and expected to be completed by 2013. For transfer of bulk power, interconnection between India and Nepal through 400 kV Dhalkebar (in Nepal) - Muzaffarpur (in India) D/C transmission line is under implementation. For interconnection between India and Sri Lanka, feasibility study for a Â±400kV, 500/1000MW under-sea HVDC bipole line is under finalization. Further, discussions at Government level are being held for interconnection between India and Pakistan through Amritsar (India) - Lahore (Pakistan) line.

EXPLORING NEW HORIZONS

Your Company continues to pursue its exploration towards backward integration and is forming Joint Venture Companies with the prime producers of raw material for manufacturing of major transmission equipment. In this direction, your Company has signed MoU with SAIL for manufacturing of transmission line towers and its parts including Research & Development facilities in addition to the MoUs signed earlier with National Aluminium Company Limited (for Conductors) and Rashtriya Ispat Nigam Limited (for transmission line towers). These facilities are envisaged to cater to domestic/ international market.

Further, with a view to spur the development of sub-transmission system in the Country by providing support to States, your Company has formed Joint Venture Companies (JVCs) namely Bihar Grid Company Limited with Bihar State Power (Holding) Company Limited and Kalinga Bidyut Prasaran Nigam Private Limited with Odisha Power Transmission Corporation Limited, on 50:50 equity participation basis for development of Intra-State Transmission System in the State of Bihar & Odisha, respectively. Various regulatory / statutory approvals in respect of the above are under process. Further, discussions are under process for forming a similar Joint Venture Company with other State(s).

CONTRIBUTION IN DISTRIBUTION REFORMS

Govt, of India''s "Rajiv Gandhi Grameen Vidyutikaran Yojana(RGGVY)" scheme for Rural Electricity Infrastructure and Household Electrification was launched for the attainment of the National Common Minimum Programme of providing access to electricity to all Rural Household. Your Company has taken a lead role in implementation of RGGVY works and has been assigned one-third of the total works for execution of rural electrification covered in 68 districts of nine States in the Country of a base cost of about Rs. 7,230 Crore. Most of the schemes have already been completed. During FY 2012-13, infrastructure was created for electrification in 3,852 villages out of which 146 were un-electrified villages and 8,053 villages were energised out of which 1,115 villages were in un-electrified category. Service connections were provided to about 1.82 Lakh BPL households. Cumulatively, till March, 2013, infrastructure has been created for electrification of 68,654 villages out of which 32,463 were un-electrified villages and service connection to about 35.37Lakh BPL households were provided.

XII PLAN INVESTMENT PROGRAMME

In XII Plan, your Company had planned to make an investment of Rs. 1,00,000 Crore matching with the envisaged generation capacity addition. This investment is mainly for implementation of various inter-state transmission systems including High Capacity Power Transmission Corridors (HCPTCs), inter-regional links for grid strengthening, system strengthening schemes, etc. Out of the planned Rs.1,00,000 Crore, your Company has already made a Capital expenditure of Rs.20,037 Crore in the first year of the Plan i.e. FY 2012-13. During the XII plan, transmission network addition of about 40,000 ckm of transmission lines and about 1,00,000 MVA of transformation capacity has been envisaged in which your Company has already commissioned 7,156 Ckm of EHV transmission lines and transformation capacity of more than 40,230 MVA in FY 2012-13.

To meet the CAPEX of Rs.1,00,000 crore, your Company has to raise a Debt of about Rs.70,000 Crore of which about Rs.38,800 crore, i.e. 54%, has already been tied up through funding from various mechanisms. Further, your Company has excellent credit rating by both domestic and international credit agencies and thereby do not foresee any difficulty for resource mobilisation. The Loan requirements are planned to meet through Loans from multilateral institutions like The World Bank, Asian Development Bank, Supplier Credit, External Commercial Borrowings through bonds / notes besides loans from domestic market through private placement of bonds.

ERP & IT

Your Company is establishing the Enterprise Resource Planning (ERP) system in its organization to manage the massive information flows in the system. The main package of ERP Project has been awarded to M/s Tata Consultancy Services (TCS) which includes development of Data Centre, Disaster Recovery Centre and augmentation of communication network. The pilot project ofthe same is expected to be operational during FY 2013-14. The pilot project will cover the Company''s Corporate Centre in Gurgaon and one of its regional headquarters.

During the year, your Company had provided Laptops and data-cards to the employees for efficient accomplishment of their functions with swifter & easier storage, usage, transfer and retrieval of data. Further, utilising the skills & in-house expertise, the Company has systematically developed various software applications to smoothening its functional areas. The Company has also renewed its website in a contemporary fashion to make it more user friendly. Being located in pan India basis, advanced communication system has became essential and to actualize that the Company had installed High Definition Multi-conference Unit (MCU) at Corporate Office, Gurgaon including Video Wall System. Your Company has taken the necessary steps for is0:27001 certification and for implementation of the necessitated Information Security Management System (ISMS) across the organization tendering is in process.

SUSTAINABLE DEVELOPMENT

Major concern that globe is facing now is the environmental degradation and increasing threat of climate change. The transmission projects being implemented by your Company are environmentally clean and involve neither disposal of solid waste, effluents or hazardous substances in land, air or water nor large scale excavation which may result in soil erosion.

However, your Company has proactively formulated and followed the Environmental and Social Policy & Procedures (ESPP) for the conservation of forests, flora & fauna, resettlement & rehabilitation. Following the principle of Avoidance, Minimization and Mitigation, your Company ensured to evade Great Indian Bustard Sanctuary in Madhya Pradesh and Achanakmar-Amarkantak Biosphere Reserve in Chhaffisgarh during construction of765 kV Indore-Dahod and 765 kV Dharamjaigarh-Jabalpur lines respectively.

Your Company was the first Company in power sector to come out with the ''Sustainability Report'' in March, 2010 and second such report has been published in March, 2013, providing all stakeholders a clear picture of our contribution to sustainable development through its activities. The report is based on GRI-G3 guidelines. International Standards like Accountability, UK Standard "AA1000:2008 APS and AA1000:2011 SES" have been followed to make the process more inclusive.

The Company has taken various initiatives towards sustainable development and in the direction of reducing its carbon footprint. Towards this, the Company has adopted Rain Water Harvesting facility in its establishments. Every substation being constructed now is provided with rain water harvesting systems. In addition, energy efficient Light Emiffing Diode (LED) bulbs and Solar lights are being provided in new substations to reduce in-house consumption of energy. A waste paper recycling plant has been installed at Gurgaon substation and with the produced recycled papers letter heads and business cards are being printed. New buildings are being constructed as per Green Building norms. Your Company with an initiation to reduce the energy consumption has undertaken Energy audit at 12 of its sub-stations during FY 2012-13 and based on its reports necessary actions undertaken for improvement.

Your Company is focusing on more number of high capacity transmission systems which will help in utilizing the right-of-way in an optimal manner and minimizing the loss of forest, flora & fauna and natural resource like land, etc.

CORPORATE SOCIAL RESPONSIBILITY

Your Company, emphasizing on socio-economic and integral development of areas/ communities primarily in and around its areas of operations, carries out various community development activities such as Skill Development & Capacity Building, livelihood generation, healthcare, education, plantation, sanitation, drinking water besides infrastructure developments like classrooms, roads, community centres etc.

During the FY 2012-13, the Company made an expenditure of Rs. 21.75 Crore [0.67% of Profit After Tax (PAT) of the preceding year] for carrying out about 440 CSR projects including 19 in education sector, 152 in the area of infrastructure, 140 in healthcare and 131 for livelihood. During this period, about 1.09 lakh tree saplings were also planted by your Company in different parts of the Country.

Towards various skill development programmes, the Company has given more emphasis on training youths in the area of "Transmission Line Tower erection" which is being conducted in association with leading EPC Contractors. During the year, 258 candidates were trained under this program and most of them were gainfully employed in the transmission industry. Other skill development / livelihood training programs imparted to unemployed youth are in the field of tailoring, cuffing/ stitching, embroidery, automobile repairing, handloom weaving, food & fruit processing, repairing of household appliances, etc. to secure employment or be self-employed.

An extensive programme on Maternal & Child Healthcare was organised in 15 villages of Gurgaon, Mewat & Jhajjar districts of Haryana. A total of 72 health camps in different villages of these 3 districts were conducted under this program during FY 2012-13.

Further, your Company is in the process of establishing 4 nos. Industrial Training Institutes (ITIs) with 2 nos. each in the States of J&K and Odisha. Consequently upon establishment of these ITIs, the same shall be handed over to the concerned State Government for operation and maintenance.

PEOPLE, OUR CORE STRENGTH

Attracting Talent, Nurturing & Development of Human Capital Our employees are the most important asset and their incessant growth is the most treasured investment. Your Company encourages and initiates various programmes for bolstering and enriching the continuous development of the knowledge horizon ofthe employees.

In order to align the human resource development strategy with the business objectives, the Company conducted Organization Need Assessment (ONA) capturing the organizational requirement for competency enhancement of employees and then conducted online Training Need Assessment (TNA) for individual employees. Through the online TNA process, your Company has been able to link the development plans of employees with Performance Management System which helps the organization to keep updating the competencies of employees to meet current and future requirement.

Apart from focussed functional and behavioural development of its employees, the Company conducted series of certified Learning & Development Programs on Regulatory Framework in Power Sector and certified workshop on Earned Value Management System for top and senior level executives as part of their strategic development. During the year, an average 5.95 training mandays per employee has been achieved to equip employees for leadership development, technological enhancement and future challenges.

During FY 2012-13, POWERGRID has inducted 117 personnel at various levels viz., executives, supervisors, workmen through open advertisement on all India basis and campus selection from reputed engineering and management institutes for executives, and for non-executives through employment exchanges and local advertisement at regional level.

New initiative of Mentorship Development has been taken under which young executives are guided by the mentors who nurture, guide and direct them to integrate with the system and values of the organization and counsel them on regular basis. Seffing the tone for new business areas in Energy Auditing, the Company has trained group of executives for undergoing through the process of National Certification Examination for Energy Auditors and subsequent accreditation by Bureau of Energy Efficiency (BEE).

To create a vibrant workforce rising to opportunities and challenges in Company''s future business context, POWERGRID Climate Survey 2012- 2013 was conducted amongst executive and supervisor level employees with a view to capture the key factors of employee satisfaction, employee engagement and the existing organisational cultural capabilities and the future cultural capabilities.

Your Company has started running its own Hot Line Training Centre at Hyderabad duly accredited by Central Electricity Authority (CEA). This centre is the only accredited Hotline Training Centre in India and has been set up to provide in-depth approach and training for technical and practical know-how of live line maintenance.

During the FY 2012-13, your Company has signed Memorandum of Understanding (MoUs) with IIM, Lucknow, IIM, Bangalore, CPRI, Bangalore, IIT, Chennai and IIFT, New Delhi which will enable the organization to leverage each other''s capability and resources in areas of pedagogy, training, research and innovation in systems, process, etc.

Employee Welfare

Your Company undertakes requisite changes in various policies from time to time in line with the needs and welfare of employees. The Company had empanelled various hospitals nearby to its establishments including Corporate Centre for the healthcare of employees and their dependents.

Your Company successfully continues to address the issues related to workmen through the National and Regional Bipartite Committee (PNBC/PRBC), a joint consultative forum comprising management and workmen representatives. During the year, the Industrial Relations scenario in the Corporation has been cordial and no man days were lost. An effective work culture has been established in the organization through empowerment, transparency, decentralization, and practice of participative management.

Quality food is served to the employees in the ISO 22000:2005 conferred Cafeteria in the Corporate Office and Food Lounge of Multi Purpose hall of your Company. Healthy community living is spread through periodically conducted cultural programmes for celebrating various occasions like Diwali get-together, Holi Milan, New Year, Raising Day, etc. in all establishments of the Company.

The Company also conducted various sports competitions, for boosting the interest of employees in sports and games, at intra and inter- regional level for Kabaddi, Cricket, Volleyball, Badminton etc. Your Company also participates regularly in Inter-PSU Sports meet also. Your Company players in Cricket, Table Tennis, and Carom have stood meritorious and bagged awards in the Inter-PSU tournaments.

Citizen''s Charter

The Company formulated its Citizen''s Charter providing a visible front of its mission & objectives, commitments, terms of service and its obligation to various stakeholders. In the Citizen''s Charter information is available about Company''s schemes, policies, project plans ofthe Corporation and issues ofgeneral interest to stakeholders.

Implementation of Official Language

Your Company, being sensitive towards our heritage, social and cultural concerns, continues to prove its commitment for implementation of Rajbhasha Policy of Govt, of India.

Your Company is enforcing and puffing all efforts for usage of Hindi in all aspects of management in all levels ofthe corporation. Further, the Company is organizing various events such as workshops to impart training in translation, enhancing working knowledge through organizing computer trainings and Hindi classes, etc. for increased use of Official language. Events like Akhil Bhartiya Rajbhasha Sammelan, Kavi Sammelan (poetry sessions), Kavita Pratiyogita, Drama, Publication of Hindi Magazines/papers, competitions and meetings, etc. are regularly organized. To provide further inspiration, employees are nominated for external Hindi training programmes which are encouraging them to work in Hindi.

Various forums such as Parliamentary Committees on Official Language, Advisory Committee on Official Language and Town Official Language Implementation Committee (TOLIC) had applauded the efforts taken by your Company for implementing Rajbhasha besides receiving many accolades.

Corporate Image through Communication Management

In the current global competitive scenario, it is crucial that Companies carve out a unique niche for itself in terms of building strong relationship with its stakeholders and establishing brand identity for themselves through various innovative communications management initiatives.

In order to facilitate interaction with the stakeholders in respect of achievements, growth, recent developments on operational and financial front, regular press communique have been issued by your Company and face to face interaction of the management arranged with the analysts and stakeholders at the Quarterly Analyst Meet and Press Meet. This has enhanced brand exposure with existing and potential clients, investors and other stakeholders.

Your Company through its efficient communication management handled the most challenging communication crisis by disseminating prompt information amongst the press and journalists regarding restoration of the National Grid in July/ August, 2012. The management was regularly updating the press and the media by releasing hourly updation reports and interviews thereby maintaining a transparent communication with the public.

Your Company successfully participated in the India International Trade Fair (IITF) 2012 exhibition by creating a theme stall based on Smart Grid Technology and 1200 kV HVDC transmission line, focusing on its ongoing activities, core competencies and current assignments. The Company also participated in many business oriented exhibitions, technical, social seminars and workshops to reach out to its principal clients and the public.

With a view to integrate the employees'' outlook towards the Company''s mission, goals and strategies numerous internal communications tools are deployed such as monthly newsletters in digital form, wall magazines, lounge for regular event updates to apprise the developments, achievements & viewpoints of organisation. Besides this, we also provide a stage to our employees for direct interaction with management by organizing "Open House" session time to time where CMD and Directors interact with all the employees either directly or through video conferencing. These internal communications has been instrumental in boosting employee morale, enthusiasm and in turn giving a fillip to revenue per employee.

EXHIBITION AND CONFERENCE ON NEWTECHNOLOGIES - GRIDTECH 2013

Your Company with the support of Ministry of Power and in association with CBIP and IEEMA has organised its 4th International Exhibition and Conference GRIDTECH 2013 on new technologies in transmission, distribution, smart grid/city, load dispatch & communication. Being an excellent global networking opportunity for exhibitors, visitors and delegates, GRIDTECH 2013 provided an opportunity for all Companies to showcase their Transmission, Distribution, Smart Grid, Load Dispatch and Communication expertise and know-how and to identify business opportunities in the electricity market in India and abroad. Recognising the importance in development of Smart Grid/City for sustainable development, special considerations and showcasing were done for exhibiting real life working of Smart Grid/City covering various functionalities by the exhibitors including the demonstration of the functioning of Smart Home Energy Management System.

RENEWED COMMITMENT TO TRANSPARENCY & VIGILANCE FUNCTION

Your Company focuses more on Preventive and Pro-active Vigilance, apart from Detective, Predictive and Punitive Vigilance. Aiming at better transparency in working of the Organisation and to inculcate a sense of Ethics, Integrity and sound Corporate Governance several steps are being taken for improving the system and vigilance administration through various technologies such as Online Complaint Handling System, Vigilance Information Network System (VINS), Online Property Returns, e-bidding, e-payments, e-auction, e-procurement, e-billing, etc. in the Organisation as a whole. Various workshops on Preventive Vigilance, Ethics and the RTI Act are also conducted both at the Corporate Centre as well as in the Regions.

Your Company, as a part of Preventive Vigilance, inspections in the form of surprise and process online were conducted, apart from CTE type inspections. Based on the inspections conducted, adequate cost compensation was effected on points not conforming to technical specifications or conditions of Contract, etc. On the basis of surprise inspections conducted, some cases were also registered for investigation and necessary disciplinary proceedings were initiated in some cases. A number of complaints were also received both internally as well as from outside agencies. The Company has adopted zero tolerance towards corruption. The complaints received are therefore, taken up for verification, earnestly. On the basis of investigations conducted into these complaints, disciplinary action, wherever appropriate, was also initiated against some employees. The Vigilance Department continues its drive to spread awareness amongst employees by sending bulk SMS and e-mails regarding the provisions of the Conduct, Discipline and Appeal Rules. Continuous improvement in systems and procedures has always remained one of the hallmarks of your Company. The Company have, like in previous years, continued its focus on spheres of functioning, like, communication of assessment to the concerned bidders, incorporation of provision relating to conflict of interest, restriction relating to purchase of mementoes to visiting dignitaries, installation of surveillance cameras to increase security, storage of materials at construction sites, etc. Vendors'' meet were also organized during the year in various Regions to bolster more interaction with the stakeholders.

During Vigilance Awareness Week, your Company organized a number of programmes both at Corporate Centre and regions like essay, debate, quiz, slogan and painting competitions both for employees as well as for their family members. Panel discussions and lectures by eminent personalities and academicians were also organized. The Vigilance Commissioners, Shri R. Srikumar and Shri J.M. Garg, addressed the employees at Corporate Centre and at the Regions (through Video Conferencing) during this week. The in-house journal ofthe Vigilance Department, ''Candour'' was also inaugurated during this period and distributed widely amongst the employees.

ACCOLADES & AWARDS

Govt, of India and other prestigious organisations & institutes has bestowed your Company with various awards/ accolades in various categories.

Your Company has been selected for ''MoU excellence award'' for FY 2010-11 by Department of Public Enterprises (DPE), Ministry of Heavy Industries & Public Enterprises for being the top performer in the Energy Syndicate.

Your Company had been conferred with the "3rd Rajeev Gandhi Excellence Award 2011" under the ''Best Power Company of the Year'' Category by an NGO "Pehchan", to commemorate Late Prime Minister Shri Rajiv Gandhi''s birthday, in a function held on August 20, 2012 at New Delhi.

Your Company has also been conferred with the 4th DSIJ PSU Awards 2012 for "Fastest Growing Navratna in non-manufacturing category" by Dalai Street Investment Journal in a function held in New Delhi on March 23, 2013.

Further, your Company''s team had won the National Championship of National Competition for Business Management Simulations -2012 and represented India in Asian Championship.

MANAGEMENT DISCUSSION AND ANALYSIS

In addition to the issues in the Directors'' Reports, some issues have been brought out in Report on Management Discussion and Analysis placed at Annexure-I.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report as stipulated under Clause 55 ofthe Listing Agreement with the Stock Exchanges is given in Annexure-ll and forms part of the Annual Report.

PARTICULARS OF EMPLOYEES

The particulars of employees of the Corporation who were in receipt of remuneration in excess of the limit prescribed under Section 217 (2A) of the Companies Act, 1956 is given in Annexure-lll to this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As per requirements of disclosures under Section 217(1) (e) of Companies Act,1956 read with Rule 2 of the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 information relating to conversation of energy, technology absorption and foreign exchange earnings and outgo is given in Annexure-IV to this Report.

COMPTROLLER AND AUDITOR GENERAL''S COMMENTS

Company has achieved ''NIL'' comments on the accounts for the year ended March 31, 2013 by the Comptroller and Auditor General of India under Section 619(4) ofthe Companies Act, 1956. Copy is attached in Annexure-V to this Report.

CORPORATE GOVERNANCE

A Report on the Corporate Governance (Annexure-VI), forming part of this Report, together with the Certificate thereon is given in Annexure-VII to this report.

Your Company has got its Secretarial Compliance Audit conducted for the financial year ended March 31, 2013 from M/s Sanjay Grover & Associates, Practising Company Secretary. Their Report forms part of this Annual Report (Annexure-VIII).

STATUTORY AUDITORS OF THE COMPANY

The Statutory Auditors of your Company are appointed by the Comptroller & Auditors General of India. M/s S. K. Mehta & Co., M/s Chatterjee & Co., and M/s Sagar & Associates were appointed as Joint Statutory Auditors for the financial year 2012-13.

COST AUDITORS OF THE COMPANY

Your Company had appointed the Cost Auditors Shri Jugal Kishore Puri and M/s. K. G. Goyal and Associates for the Financial Year 2012-13. Further, M/s. K. G. Goyal and Associates and M/s. S. C. Mohanty & Associates have been appointed as Cost Auditors for the Financial Year 2013-14 under Section 233B of the Companies Act, 1956.

The due date for filing Cost Audit Reports for the financial year 2012-13 with the Cost Audit Branch, Ministry of Company Affairs is September 27, 2013 and the same will be filed with the Cost Audit Branch within the stipulated time.

POWERGRID''S BOARD

During the year under report, some changes took place in the Directorate. Shri Ravi P. Singh assumed the charge of Director (Personnel) with effect from (w.e.f) April 1, 2012 and Shri R. P. Sasmal, took over the charge of Director (Operations) with effect from August 1, 2012. Five non-official part time directors viz. Shri R. K. Gupta, Dr. K. Ramalingam, Shri R. Krishnamoorthy, Shri Ajay Kumar Mittal and Shri Mahesh Shah were appointed with effect from January 16, 2013.

Further, Shri Rakesh Jain, JS&FA, MoP, ceased to be Director on the Board of the Company w.e.f. July 08, 2013 (Afternoon). The Board wishes to place on record its deep appreciation and gratitude for the invaluable contribution and unstinted support to the Company extended by Shri Rakesh Jain during his tenure as Director ofthe Company.

In accordance with the provisions of Section 255 and 256 of the Companies Act, 1956 read with Article 31(iii) of the Articles of Association of the Company, Smt. Rita Sinha, Shri Santosh Saraf, Independent Directors shall retire by rotation at the Annual General Meeting of your Company and being eligible, offer themselves for re-appointment.

ACKNOWLEDGEMENTS

The Board of Directors, with deep sense of appreciation, acknowledges the guidance and co-operation received from Govt, of India, particularly Ministry of Power, Ministry of Finance, Ministry of Home Affairs, Ministry of External Affairs, Ministry ofStatisticsand Programme Implementation, Ministry of Environment & Forests, Central Electricity Regulatory Commission, Appellate Tribunal for Electricity, Central Electricity Authority, Planning Commission, Department of Public Enterprises, Regional Power Committees, and other concerned Govt, departments/ agencies at the Central and State level as well as from Securities and Exchange Board of India, National Stock Exchange of India Ltd., and BSE Ltd., Mumbai without whose active support, the achievements by the Corporation during the year under review would not have been possible.

Board''s special appreciation and thanks are due to our valued customers, various State power utilities and other clients, who have awarded various consultancy works and reposed faith in Company''s capability to handle them. The Board also appreciates the contribution of contractors, vendors and consultants for successful implementation of various projects by the Company.

The Directors take this opportunity to thank the Principal Director of Commercial Audit and Ex-Officio Member Audit Board-Ill for the co-operation during the year. Directors also acknowledge the valuable suggestions and guidance received from the statutory auditors during the audit of accounts of the Company for the year under review. The Board also conveys its sincere thanks to various national/ international financial institutions/ banks/ credit rating agencies for their timely assistance, continued trust and confidence reposed by themon POWERGRID.

We have achieved a great deal this year and none of it would have been possible without the skills and dedication of each member of POWERGRID family at all levels. I would like to thank the Executive team for its strong leadership, the various employee unions to ensure that the Company continues to achieve greater heights year after year and all our employees for their commitment and enthusiasm to achieve ouraim to be the world''s premier transmission network utility.

For and on behalf of the Board of Directors

Place: New Delhi (R. N. Nayak)

Date: 06.08.2013 Chairman & Managing Director

Mar 31, 2012

It gives me immense pleasure to present on behalf of the Board of Directors, the 23rd Annual Report on the performance of your Company during the financial year ending March 31, 2012 together with Audited Statement of Accounts, Auditors' Report and Review of the Accounts by the Comptroller and Auditor General of India for the review period.

Your Company has once again surpassed its performance targets set forth under Memorandum of Understanding (MoU) with Ministry of Power (MoP), Government of India. Based on overall performance, your Company is poised to achieve 'Excellent' rating for FY 2011-12 too.

Your Company, in a brief span of 20 years, has grown by leaps and bounds and has carved a niche for itself amongst the largest transmission utilities in the world. The Company has been contributing significantly towards development of power sector in India through continuous innovations in technical & managerial fields and by undertaking coordinated development of power transmission network along with effective and transparent operation of Regional Grids and National Grid.

In order to keep pace with changing business environment, your Company set its 'Vision' to be the "World Class, Integrated, Global Transmission Company with Dominant Leadership in Emerging Power Markets Ensuring Reliability, Safety and Economy" and aligned its mission and objectives as a vanguard of foresight.

Out of many challenges met by your Company, the performance of your Company has been specifically commended in (i) execution of last leg of Transmission System in Creek area of Gujarat for evacuation of power from the Country's first Ultra Mega Power Project (UMPP) at Mundra before stipulated time, and (ii) restoration of Kishenpur-Wagoora 400kV Double circuit (D/c) transmission line in snow bound area of Kashmir valley about 5000 ft. above sea level within 48 hours under extreme hostile weather conditions.

Your Company has heralded creditable accomplishments in all its areas of operations. The major achievements during the year are as under:

Rs. Investment of Rs. 17,814 Crore, an increase of about 48% over last year.

- Added about 10,600 circuit kilometre (ckm) of Extra High Voltage (EHV) transmission lines, 15 new EHV sub-stations and transformation capacity of more than 30,000 Mega Volt Ampere (MVA).

- Record commissioning of Assets worth Rs. 14,021 Crore.

- Investment approval accorded for 43 new transmission projects worth about Rs. 39,225 Crore.

- Transmission system availability attained - 99.94%, highest so far in the history of the Company.

- With the addition of Inter-Regional power transfer capacity of 5,600 MegaWatt (MW), total inter-regional capacity of National Grid enhanced to 28,000 MW.

FINANCIAL PERFORMANCE

(Figures in Rs. Crore, except per share data)

Description 2011-12 2010-11 Y-o-Y Growth

Income

Transmission Charges 9,544 7,903 20.76%

Consultancy 290 299 (3.0%)

Telecom 201 187 7.5%

Other Income 750 710 5.6%

Total Income 10,785 9,099 18.5%

Profit After Tax (PAT) 3,255 2,697 20.7%

Earnings per Share (Rs.) 7.03 6.19 13.6%

Book Value per Share (Rs.) 50.73 46.12 10.0%

Gross Fixed Assets 63,387 50,343 25.9%

Long term borrowings * 51,752 39,433 31.2%

Net Worth 23,488 21,351 10.0%

Debt Equity Ratio 69:31 65:35 -

Commissioning 14,021 7,313 91.7%

- including current maturities of long term borrowings.

OPERATIONAL EXCELLENCE

As on April 1, 2012, transmission assets of about 92,981 ckm of EHV transmission lines, 150 EHV sub-stations and transformation capacity of 124,525 MVA, spread over the length and breadth of the Country are under operation. Your Company continues to wheel about 50% of total power generated in the Country through its transmission network.

Your Company consistently maintains high availability of its transmission network by implementing technologically advanced operational techniques such as Hot Line Maintenance, Washing of Insulators hotline with the use of helicopters, Equipment Condition Monitoring techniques including Dynamic Testing of relays, Thermo-vision Scanning, Frequency Response Analysis (FRA) for transformers and reactors, large scale automation of sub-stations, etc.. Presently, 32 sub-stations of your Company are being operated remotely and many new sub-stations are being designed for remote operation. For further improvement in operational efficiency, a "National Transmission Asset Management Centre" is being established to facilitate centralised operation, monitoring & control of sub-stations remotely. This will help in optimal utilisation of manpower & other resources of a group of substations by creating "Maintenance Service Hub" facilities, and reduce the response time in case of faults & breakdowns.

Replacement of conventional insulators with polymer insulators at polluted stretches in NCR area has contributed significantly in achieving safe, secure & reliable operation of Grid during foggy weather conditions.

Average availability of transmission systems during the year 2011-12 was maintained at 99.94%, highest ever in the history of the Company. Number of trippings per line was also abated at 0.59.

To meet eventualities like earthquake, fire, cyclone, landslides, sabotage, etc., your Company has kept state-of-the-art Emergency Restoration Systems (ERS) at strategic locations for restoration of collapsed transmission line towers in shortest possible time. Further, to mitigate the above eventualities in case of substation, a mobile 400/220kV ERS substation is being procured, which will facilitate quick deployment & restoration of sub-station in only 1-2 weeks, which otherwise may take several months.

Some potent options are also being explored like use of robotic technology for condition monitoring of conductor, earthwire & hardwares besides aerial patrolling of transmission lines using helicopters.

PROJECT IMPLEMENTATION

Your Company puts its best efforts to implement transmission projects within stipulated time frame to derive maximum economic benefits. Further, your Company takes a variety of measures such as advanced and cost effective Integrated Project Management and Control System (IPMCS) for total project review and monitoring, Standardisation of Designs, Project Review Meetings (PRMs) at regular intervals through video conferencing, pre-emptive measures and advance actions on various project linked activities such as land acquisition, survey and soil investigations, tender activities, funding tie-up, etc. in parallel with project investment approval process.

All these dynamic facets led to excellent performance on project implementation front during FY 2011-12 and not a single MW power is bottled-up for want of our transmission. Transmission projects worth about Rs. 14,021 Crore were commissioned during the year, thereby adding about 10,600 ckm, 15 sub-stations and transformation capacity of more than 30,000 MVA in the transmission system. Major 400kV transmission lines commissioned during the year include Korba STPS-Raipur D/c, Wardha-Parli D/c(Quad), Baripada-Mendhasal D/c, Mundra-Bachau-Ranchorpura D/c (triple snowbird), Maithon RB-Ranchi D/c, Uri-II - Wagoora single circuit (S/c), Mauda-Wardha D/c(Quad) & Biharshariff-Sasaram D/c(Quad) lines. Major 765kV transmission lines commissioned during the year include Gaya-Balia, Balia-Lucknow, Seoni-Wardha, Bina-Indore, Sasaram-Fatehpur (Circuit-1), Gaya-Sasaram S/c lines.

Notably, timely commissioning of 400kV D/C Mundra-Ranchorpura in September'11 and 400kV D/C Mundra-Limbdi D/c (triple snowbird) lines in February'12 associated with the 1st UMPP Project of the Country enhanced the image of confidence in power sector. In spite of severe Right-of-Way (RoW) problems, readiness of these systems had been ensured by your Company on its commitment.

During the year, 43 new projects with an estimated cost of about Rs. 39225 Crore involving about 16900 Ckt km of transmission lines, 22 new sub-stations and transformation capacity of about 56000 MVA, HVDC terminal capacity of 3000 MW and 16200 km of OPGW fibre optic cable were approved and taken up for implementation.

FINANCIAL MANAGEMENT

Your Company has recorded an impressive financial performance during FY 2011-12, achieving a turnover of Rs. 10,785 Crore and Net Profit of Rs. 3,255 Crore as compared to Rs. 9,099 Crore and Rs. 2,697 Crore respectively during FY 2010-11. The gross asset base of the Company has been enhanced to Rs. 63,387 Crore from Rs. 50,343 Crore in 2010-11, an increase of about 25.9%.

Your Company, through its improved performance in Telecom and Consultancy businesses, also enhanced value for the shareholders.

Capital Investment and Fund Mobilization

The Company undertook capital investment of Rs. 17,814 Crore during the financial year 2011-12, which is about 48% higher than last year. Rs. 9,698 Crore were mobilised from domestic market through private placement of bonds with attractive coupon rates and proceeds of ongoing loans from multilateral funding agencies, viz. The World Bank (WB) and Asian Development Bank (ADB) were utilised, besides accrued internal resources.

During the year, your Company has also tied up a line of credit of Rs. 5000 Crore from State Bank of India, of which Rs. 1000 Crore has been drawn in FY 2011-12 and balance is to be drawn in the subsequent years for part financing of the capital expenditure of POWERGRID projects.

Domestic credit rating agencies namely, CRISIL, CARE and ICRA have assigned credit ratings of AAA/Stable (triple AAA with stable outlook), AAA and LAAA respectively for our bonds issue. These credit rating agencies have also assigned AAA (Highest Safety) and LAAA ratings for long-term borrowings.

In addition to above, process of mobilization of additional loans from The World Bank (WB) and ADB was also taken up during the year for implementation of various transmission projects during XII Plan. Towards this, two loan agreements with ADB for a loan amount totalling to USD 576 million with sovereign guarantee, and also for the first time, a Non-Sovereign loan of USD 250 million on commercial principle basis was signed in March, 2012.

Dividend Payout

For FY 2011-12, your Company has proposed a final dividend of Rs. 1.31 per share in addition to Rs. 0.80 per share of interim dividend paid in Feb. 2012. The final dividend shall be paid after your approval at the Annual General Meeting. Thus, total dividend pay out for the year amounts to Rs. 976.89 Crore (including an interim dividend of Rs. 370.39 Crore) as against Rs. 810.23 Crore paid during the previous year. The total dividend pay out including dividend tax accounts for 34.8% of Profit after Tax of the Company.

Your Company is driven by its persistent zeal to build relationships and create wealth for its stakeholders through deploying cutting edge technology, adopting global best practices, optimum utilization of resources and sustainable development.

DIRECTORS' RESPONSIBILITY STATEMENT

As required u/s 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed;

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii) The Directors have taken proper and sufficient care for the maintenance of adequate records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The Directors have prepared the annual accounts on a going concern basis.

COMMERCIAL PERFORMANCE

Point of Connection (PoC) Charges tariff sharing mechanism through Central Electricity Regulatory Commission Regulations 2010, for Sharing of Transmission Charges and Losses has been implemented in the transmission sector w.e.f. July 1, 2011. POWERGRID as Central Transmission Utility (CTU) of the Country has been assigned the responsibility to carry out activities like raising of transmission charge bills on behalf of all the ISTS Licensees, collecting the amount and disbursing the same to them. In order to implement the Billing, Collection and Disbursement (BCD), a Portal has been developed by your Company during the year through which bills of transmission charges are prepared, raised and uploaded on the website for about 61 Designated ISTS Customers (DICs) including payment details by the customers.

Through petitions and follow up with Central Electricity Regulatory Commission (CERC), Regulatory Approvals have been secured by your Company for transmission projects worth total estimated cost of about Rs. 26,170 Crore during the year so as to take up these projects for investment approval and execution.

DEVELOPMENT OF NATIONAL GRID

In line with the Plan for enhancement of inter-regional power transfer capacity of the National Grid, RourkelaÃRaigarh 400kV D/c, SasaramÃFatehpur 765kV S/c & GayaÃBalia 765kV S/c inter-regional links with aggregate capacity of 5,600 MW have been commissioned. With this, the cumulative inter-regional power transfer capacity of National Grid has been enhanced to about 28,000 MW. Commissioning of these inter-regional links has strengthened the inter-regional grid capacity of Eastern Region with Western Region and Northern Region. This would go a long way in promoting economic energy exchange by facilitating transfer of power across the Country.

Four major regional power grids of the country, namely Northern, Eastern, North-Eastern & Western continued to operate at same frequency in synchronous mode as one of the largest synchronous grid in the world with total installed capacity of about 148,000 MW. Southern Regional grid, which is presently connected through various High Voltage Direct Current (HVDC) links with rest of the grid is planned to be connected synchronously by early 2014 through high capacity RaichurÃSholapur 765kV (2xS/c) lines.

To further strengthen the National Grid, various high capacity HVDC and EHV Alternating Current (EHVAC) inter-regional links with total capacity of 38,400 MW have been planned to take care of inter-regional power transfer requirement of various planned generation projects including Independent Power Producers (IPPs) scheduled for commissioning in XII Plan. The Inter-regional power transfer capacity of National Grid thus envisaged to be enhanced to about 66,400 MW by end of XII Plan.

GRID MANAGEMENT AND OPEN ACCESS

Grid Management function is continued to be looked after by Power System Operation Corporation Limited (POSOCO), a 100% subsidiary company of POWERGRID. Unified Load Despatch & Communication (ULDC) schemes have continued to bring quality and economy in operation of power system besides improving data availability, visibility and transparency.

With the ever expanding transmission network in the Country, complexities of grid operation are also escalating. Keeping this in mind, the facilities at all the five Regional Load Despatch Centers (RLDCs) and National Load Despatch Centre (NLDC) are being upgraded continuously through deployment of latest technology. Indian Power Grid had not experienced any major grid disturbance during the past nine years. However, the electricity grid experienced two major disturbances consecutively on 30th July & 31st July, 2012. While the first disturbance affected only Northern Region, the second one affected Northern, Eastern and North Eastern Regions. However, the essential loads were restored at the fastest pace within few hours of the incidents and power supply was restored progressively and normalised completely on the same day of the incident(s). Further, to avoid such recurrence in future, various actions have been/are being taken by your company.

Our strong transmission network and modernised RLDCs have facilitated about 58 Billion Units (BUs) of inter-regional energy transfer across the Country, as compared to previous year (about 56 BUs). Growth of inter-regional power exchange helped in meeting more demand in energy deficit regions besides achieving overall economy.

During FY 2011-12, 24,109 transactions involving about 67 BUs of energy were approved under short term open access (STOA) compared to 19,883 transactions and about 55 BUs of energy during 2010-11.

Your Company, as CTU is the nodal agency for grant of Long Term Access (LTA), Medium Term Open Access (MTOA) and Connectivity. LTA has been granted for about 82,000 MW to 133 nos. of IPP projects, MTOA has been granted for about 2400 MW to 33 nos. of applicants and connectivity has been granted to 67 nos. of eligible applicants for about 59,710 MW.

QUALITY MANAGEMENT

Your Company is continuously striving to provide cost effective & quality services to its valued customers thereby deriving high customer satisfaction. To achieve this, your Company is implementing appropriate quality measures at every stage from conceptualisation of project till commissioning and subsequently during operational phase. Quality improvement techniques are being adopted to identify the areas of improvement and develop action Plan for continuous quality improvement in all of its activities.

During the year, Integrated Management System of your Company was reviewed and based on evaluation of implementation of the latest systems and procedures, the revised certification was acclaimed. Your Company stands certified for Integrated Management System as per Publicly Available Specification, PAS 99:2006 integrating requirements of ISO 9001:2008 (Quality Management System), ISO 14001:2004 (Environment Management System) and OHSAS 18001:2007 (Occupational Health & Safety Management System). Establishments of your Company have been audited for its Social accountability systems & certification of entire Corporation for Social Accountability Standard, SA 8000:2008 is re-confirmed. Your Company is following standard manufacturing quality Plan both at national & international level during inspection at various manufacturing stages and adhered to standard O&M manuals for operation & maintenance of its transmission system.

For capacity building, specially considering vast geographical spread of our operations, vendor development has been taken-up on priority to meet project requirements in execution as well as in supply of 765kV transformers, reactors & other critical equipment.

With a target to move towards zero product inspection, around 50 manufacturing units spread all over the Country/overseas were taken-up for process audits at their works.

Quality audits at sites have also been taken up during the year. Appropriate corrective actions were also ensured based on Quality Audit feedback. Quality Audit on implementation of Field Quality Plans was also carried out for assurance of quality during transportation, storage, erection and commissioning activities during implementation of projects.

TECHNOLOGY DEVELOPMENT

Your Company has undertaken several technological advancements aimed at conserving RoW, minimizing impact on natural resources & human habitat and cost effectiveness in evacuation of power by upgrading & uprating of existing transmission lines, use of High Temperature endurance Conductors, Series Compensation including Thyristor Control, Flexible AC Transmission System (FACTS), use of Multi Circuits, Compact & Tall Towers, Gas Insulated Sub-stations (GIS), High Surge Impedance Loading (HSIL) Lines, Large Scale Automation of Sub-stations, unmanned Sub-stations etc..

Power transmission at higher voltage levels not only offer increased power transfer capability, it also helps in reduction of transmission losses and reduction of Right of Way requirement. Experienced with implementation and operation of ÃÂ±500kV HVDC & 765kV EHVAC transmission systems, your Company is now working on higher transmission voltages of 800kV HVDC & 1200kV Ultra High Voltage AC (UHVAC).

800kV multi-terminal HVDC System

Implementation of ÃÂ±800kV, 6000 MW multi-terminal HVDC system of around 2000 km from North Eastern Region (Biswanath Chariali in Assam and Alipurduar of West Bengal) to Northern Region (Agra in Uttar Pradesh) is under construction. It shall be amongst world's largest ÃÂ±800kV multi-terminal HVDC system.

1200kV UHVAC Transmission System

To meet the long-term bulk power transfer requirement an overlaying super grid with 1200kV UHVAC system has been envisaged. The 1200kV UHVAC technology, the highest voltage level in the world, is being developed by your Company in collaboration with 35 Indian manufacturers. This is one of the unique R&D projects in public-private partnership model.

The pilot 1200kV S/c line was successfully test charged and 1200 kV D/c line erected at 1200kV UHVAC National Test Station at Bina, Madhya Pradesh in February, 2012 by your Company. The 1200 kV UHVAC technology current under field testing.

This endeavour shall benefit Indian power sector to enter into new era of 1200kV level with 1200kV class equipment from the manufacturers within Country.

Other Initiatives

Technological initiatives such as Pollution & Lightning mapping of transmission system, Process bus technology & Superconducting (Zero Resistance) Technology are being taken up/ explored for their viability in Indian Power System to ensure more efficient, safe, secure & reliable operation of Grid.

SMART GRID TECHNOLOGY

Smart Grid is confluence of Information, Communications & Electrical/ Digital technologies. Smart Grid, apart from facilitating real time monitoring and control of power system will help in reduction of AT&C losses, peak load management/ demand response, integration of renewable energy, power quality management, outage management etc.. Smart Grid will act as a backbone infrastructure to enable new business models like smart city, electric vehicles, smart communities apart from more resilient and efficient energy system and tariff structures.

Your Company is taking leadership initiative for implementation of Smart Grid Technology in the Country and has already installed 8 Nos. of Phasor Measurement Units (PMUs) as part of Wide Area Measurement Systems (WAMS) as a pilot in Northern Region Grid.

Unified Real Time Dynamic State Measurement (URTDSM) project for installation of PMUs, Phasor Data Concentrators (PDCs) etc. has been formulated. First test lab for PMU and PDC testing in India is being established by your Company at Bhiwadi in Northern Region.

Secretariat of the prestigious "India Smart Grid Task Force (ISGTF)" forum, is being operated by your Company and providing technical support in evaluation of proposals. Model Request for Proposals (RfP) has been prepared for Smart Grid Pilot project in distribution sector. Further, your Company is also providing technical support for Ministry of Power in evaluation of proposals received from Utilities for establishing Pilot Project in Distribution Sector.

Your Company has formed specialised "Smart Grid" department to take up implementation of Smart Grid / Smart City Projects. Detailed Project Report (DPR) for a number of cities like Amritsar, Raipur (Satara), Puducherry, Agartala, and Panipat for pilot smart grid projects have been submitted under India Smart Grid Task Force. Further, project reports for implementation of Smart grid/ cities for Firozabad and Katra have been submitted and for Bidhuna, Shikohabad, Jammu (Gandhinagar Division), Baghat, Gulmarg, Pahalgam, Charar-i-Sharief, Chitradurga (Karnataka), District/cities of Tripura, Chhatisgarh, Haryana, Punjab, Bihar etc. are under preparation.

The pilot Smart grid/ Smart city project in Puducherry has been taken up for which an MOU has been signed with Electricity Dept., Govt. of Puducherry in March 2012. In all, 63 organizations have joined hands with your Company for implementation this pilot project.

Your Company has evolved a comprehensive scheme for Green Energy Corridor associated with renewable energy sources integration into the Grid. Also, it has identified other measures to facilitate smooth integration of large scale renewable generation capacity addition.

PERFORMANCE IN TELECOM

Your Company with its brand name 'POWERTEL' in Telecom business is the only utility in the Country having overhead optic fibre network using OPGW (Optical Ground Wire) on power transmission lines. POWERGRID has an all India Broad Band Telecom Network of about 25000 Kms.

It is a matter of pride that your Company is one of the few telecom players with a marked presence in remote areas of NER, J&K etc.. It has acquired National Long Distance (NLD) and Internet Service Provider (ISP-A) and Infrastructure Provider Category-I (IP-I) licences to provide a variety of services.

During the year, few more cities viz. Kottayam, Nadia, Puruliya, Jalpaigudi, Bhagalpur, Saifai & Kurukshetra have been added to our telecom network, taking the tally to 206 cities.

During the year, your Company added 11 new customers on its network, further increasing its already illustrious list of Customers, which include prime telecom companies, prestigious Government organizations, International Operators and various Government Offices. In addition, the Company is also planning to attract customers from entertainment and broadcasting industry.

Total Order Book of Telecom rose to Rs. 1,050 Crore from Rs. 650 Crore in previous year (i.e. up by 62%) despite a general slowdown experienced by Telecom industry due to intense price wars. Telecom Backbone system availability during the fiscal was maintained at 99.97%.

National Knowledge Network (NKN) project

Your Company is one of the implementing agencies for the prestigious National Knowledge Network (NKN) project through which Government plans to connect all knowledge centres across the Country such as IITs, IISc, etc. on high speed connectivity. Revenue realised under this project during FY 2011-12 is Rs. 45.02 Crore.

National Optical Fiber Network (NOFN) project

Your Company is a member of Advisory Body and Core Committee of National Optical Fiber Network (NOFN) project through which Government of India plans to connect 250,000 Gram Panchayats on Optical Fiber network at an estimated cost of Rs. 20,000 Crore with completion schedule of 24 months, utilising existing facilities of BSNL, POWERGRID and RAILTEL. POWERGRID share in the project is expected to be 20% involving 50,000 Gram Panchayats. A Pilot Project has been taken up in Vizag (AP).

Multi Protocol Lable Switching (MPLS)

Your Company has taken up implementation of MPLS through Virtual Private Network which will provide highly Secure & Reliable Network connectivity (any-to-any) on Internet Protocol (Routing). Apart from being cost effective, MPLS offers advantages like maximum Bandwidth Utilization, Scalable & Simpler Customer Connectivity (Radial Connectivity), easy Provisioning & Maintenance etc..

BUSINESS DEVELOPMENT & CONSULTANCY

Your Company has established itself as one of the leading consultants in the field of Power Transmission, Sub-transmission, Distribution, Load Despatch & Communication and Telecom sectors and is utilising this expertise to offer consultancy services world wide.

On the domestic front, during FY 2011-12, your Company has bagged 41 new assignments having project cost of Rs. 1002 Crore. Further, your Company has been appointed as Design cum Implementation Supervision Consultant for strengthening of Transmission & Distribution System of 6 States of NER having Project cost of around Rs. 8400 Crore.

In international arena, the Company is working in 11 countries viz. Nepal, Bhutan, Bangladesh, Afghanistan, Sri Lanka, Myanmar, UAE, Nigeria, Ethiopia, Kenya & Tajikistan.

During the year, your Company signed Memorandum of Understanding (MoU) with Kenya Electricity Transmission Co. Ltd. (KETRACO) and Ethiopian Electric Power Corporation (EEPCo) for providing assistance for development of Power Transmission network in their countries. In addition, a General Cooperation Agreement was signed with Gulf Cooperation Council Interconnection Authority (GCCIA) for providing technical services in areas of Operation and Maintenance of HVDC, Telecom, Grid Operations, Technical services, system planning and operation etc.. Further, an MoU was signed with International Finance Corporation (IFC), an extended arm of the World Bank, for extending co-operation between POWERGRID and IFC to identify and evaluate transmission projects for development and/or Own/Co-own transmission projects in Asian and African Continents by providing financial and technical services to Project's client.

SAARC Grid

POWERGRID has emerged as a strong player in South Asia and is playing an active role in formation of a strong SAARC grid for effective utilization of resources for mutual benefits. Presently, various electrical interconnections exist between India & Bhutan and India & Nepal and these are being further strengthened for substantial exchange of power across the borders. An asynchronous interconnection between India & Bangladesh is under implementation. Also, feasibility study for an under-sea interconnection between India and Sri Lanka is under finalization and 500MW Amritsar (India) - Lahore (Pakistan) HVDC link between India and Pakistan is under discussion.

STRATEGIC ALLIANCES

Your Company intends to enter into manufacturing of transmission line towers/ conductors/ equipment by forming Joint Venture Companies (JVCs) with the manufacturers of basic raw material. In this direction, your Company has signed MoUs with National Aluminium Company Limited (NALCO) and Rashtriya Ispat Nigam Limited (RINL) to explore the opportunity of manufacturing conductors and transmission line towers respectively, including research and development.

CONTRIBUTION IN DISTRIBUTION REFORMS

To enable end consumers to derive benefit of additions in generation & transmission, Govt. of India's Rajiv Gandhi Grameen Vidhyutikaran Yojana (RGGVY) Scheme aims at providing electricity in all villages & habitations and provides access to electricity to all rural below poverty line (BPL) households.

Under RGGVY, your Company has been assigned the job for execution of rural electrification works in 65 districts in the Country. Upto end of XI plan, your Company has created infrastructure for electrification of 64,803 villages out of which 32,318 were un- electrified villages and provided 33.57 lac Service Connections to BPL households.

During FY 2011-12, infrastructure for electrification in 9358 villages, including 1688 un-electrified villages, was created and Service connections were provided to about 6.783 Lakh BPL households.

By end of FY 2011-12 cumulatively 30,178 Villages have been charged including 11,229 during the year.

XI PLAN ACHIEVEMENTS

Your Company surpassed its planned capital investment of Rs. 55,000 Crore during XI Plan and made an investment of more than Rs. 55,300 Crore for development of inter-State transmission system.

Achievements in XI Plan provide ample testimony to the untiring efforts put in by your Company. To propel the growth of your Company to the next orbit, Govt. of India has accorded the prestigious Navratna Status in May 2008, thereby providing greater autonomy & powers.

Accelerated growth path of your Company during XI Plan can be seen from the following table, which shows a phenomenal built up of about 50% capacity of Company's present network in XI Plan only w.r.t. the capacity as built in last many years.

Parameter At the end of X At the end of XI Addition during XI Growth in XI Plan Plan Plan Plan

Transmission network (ckm) 59,461 92,981 33,520 56.37%

Sub-stations (nos.) 104 150 46 44.23%

Transformation Capacity (MVA) 59,415 124,525 65,110 109.59%

Inter-regional Capacity (MW) 14,100 28,000 13,900 98.58%

Gross Assets (Rs. Crore) 29,015 63,387 34,372 118.46%

During XI Plan, your Company has operationalised 765kV EHVAC level by charging Sipat-Seoni transmission line at its rated voltage in October, 2007. Additionally, during the plan, seven (7) number of 765 kV sub-station and above 3500 ckm. of 765 kV transmission lines have been added. Further, the highest voltage level in the world, 1200kV UHVAC Test Station has been test charged.

National Load Despatch Centre (NLDC), the apex body to ensure integrated operation of the national power system at national level, commissioned in Feb., 2009. Power System Operation Corporation Limited (POSOCO), a 100% subsidiary of your Company, set up to look after Grid Management function in line with GoI directive, started commercial operation from 1st October, 2010.

As part of prestigious international consultancy assignments, the construction of 220kV Transmission line from Pul-e-Khumri to Kabul in Afghanistan completed in Jan., 2009 and 400kV GIS substation in Dubai (UAE) successfully commissioned in 2010.

GoI has made Tariff Based Competitive Bidding (TBCB) mandatory for inter-State Transmission System from January 5, 2011. Leveraging its competitive edge, your Company has secured both the transmission projects invited under TBCB since then.

XII PLAN INVESTMENT PROGRAMME

Considering the generation capacity addition of 75,7851 MW envisaged during XII Plan, total fund requirement for transmission sector is estimated at about Rs. 180,000 Crore. In this, major portion of the investment i.e. about Rs. 100,000 Crore is planned by the Company during XII Plan for further development of inter-State transmission systems which includes development of High Capacity Power Transmission Corridors (HCPTCs) apart from inter-regional links for enhancement of National Grid capacity & various system strengthening schemes.

Your Company is placed in a comfortable position in terms of resource mobilisation owing to its excellent credit rating. Loan requirement is planned to be met through borrowings from multilateral funding agencies (The World Bank and Asian Development Bank), Supplier's credit, ECB loan and from domestic sources on the basis of requirement.

ERP & IT

Your Company has made remarkable strides in the area of Information Technology (IT) and systematically developed, through in-house efforts, software applications for most of the functional areas for deploying IT for efficient and effective discharge of its objectives. Laptops and datacards have been provided to employees to enable them to discharge their functions efficiently.

Main package of ERP Project has been awarded. The project includes deployment of Data Centre, Disaster Recovery Centre and augmentation of communication network.

Initiative towards implementation of Information Security Management System (ISMS) leading to ISO:27001 certification across the organization have been undertaken.

SUSTAINABLE DEVELOPMENT

Transmission projects are environmentally clean and involve neither any disposal of solid waste, effluents and hazardous substances in land, air and water nor large scale excavation which may result in soil erosion. Transmission line projects rather help in reducing environmental impacts of power projects, especially thermal power projects. Generation Projects could be located far away from inhabited areas to have minimum transportation of coal and for bulk power transfer, high capacity transmission lines are set-up to dispatch power to load centre located distance apart.

Your Company has proactively followed the Environmental and Social Policy & Procedures (ESPP) for the conservation of forests, flora & fauna, resettlement & rehabilitation. POWERGRID believes that its guiding principles of Reliability, Security and Economy have to match up to the rising expectations of a cleaner, safer, healthier environment for people, both affected and benefited by its activities. After adoption of ESPP, forest involvement on our transmission lines have been reduced to 1.35% from the level of 6% in 1998.

POWERGRID was the first Company in power sector to come out with 'Sustainability Report' and 2nd such report shall be coming out shortly, providing all stakeholders a clear picture of our contributions to sustainable development through its activities.

POWERGRID has undertaken Rain Water Harvesting systems in 6 Sub-stations with total expenditure of Rs. 25.75 lakhs as part of the Company's Sustainable Development initiative to contribute to the endurance of our ground water reserves.

Transfer of huge quantum of power across the regions poses massive challenges like RoW, clearing of forest, etc.. Therefore, your Company is focusing on more number of high capacity 800kV HVDC systems and 765kV D/c lines to minimise RoW and environmental problems. In addition, as mentioned your Company is developing 1200kV AC technology, highest AC voltage level in the world, as next higher AC voltage in the Country. The 1200kV AC voltage line would enable transfer of 7000-8000 MW power over single corridor which will help in utilizing the right-of-way in an optimal manner and minimizing of loss of forest, flora & fauna and scarce natural resource like land etc..

Besides, your Company has successfully demonstrated up-gradation of existing lower voltage lines to higher voltage operation to enhance the power transmission capacity within the same corridor without felling additional trees.

Optimization of RoW and its associated environmental and social impact in extra high voltage transmission line are far reaching and implementation of this voltage/ technology will go a long way in minimizing environmental and social impact of high voltage transmission line.

For overall sustainable development of the sector, your company's major thrust is on inclusive development of the sector. Towards this, your company besides undertaking capacity building program for various State power utilities, is in the process of forming Joint Venture Companies with State power utilities to take up intra-State transmission System & management contract for distribution circles etc.

As a step further a specalised dedicated Smart Grid, Distribution Management, Energy Efficiency and Carbon Emmission reduction Cells have been created to take up these activities not only for POWERGRID establishment but for other utilities as well. Certification of our employees as Energy Auditor is being taken up in big way. During the year, Energy audit was completed at 12 sub-stations and reports have been implemented.

CORPORATE SOCIAL RESPONSIBILITY

Your Company emphasises on the overall development of areas and communities around its establishments. It undertakes various community development schemes through provision of facilities like health, education, drinking water besides infrastructure like roads, community centres etc..

During FY 2011-12, CSR expenditure of Rs. 24.93 Crore [0.92% of Profit after tax (PAT) of the preceding year] was made on carrying out more than 400 CSR projects, including 166 in the area of Infrastructure, 82 in Health, 57 in Education, 33 in Environment and 40 in Livelihood. These projects were carried out in consultation with the local stakeholders in the vicinity of the establishments, and therefore, have played a pivotal role in identifying the most pressing needs, and subsequently, improving the socio-economic conditions of the marginalized sections. During this period, more than 1.55 lakh tree saplings were also planted. There is an ambitious plan of planting over one million trees in the coming years.

Your Company has also collaborated with number of specialized agencies to roll out its CSR initiatives. Some of the significant interventions were in the field of Capacity building training to youths in "Transmission Line Tower erection" which are being conducted in association with leading manufacturers. During this year, 213 unskilled workers have been trained through Capacity Building Programme and gainfully employed in the transmission industry. Livelihood training programmes were also imparted to unemployed rural youth in tailoring, cutting/ stitching, embroidery, automobile repairing, handloom weaving, food & fruit processing, repairing of household appliances, etc. to secure employment or be self employed. Your Company has adopted Government ITIs at Buxar&Marhoura in Bihar, Bargi-Jabalpur in M.P. and Bhadravati in Maharashtra for upgradation under Public Private Partnership mode of "Adopt an ITI" scheme of GOI. Total about 500 students have passed out from these institutions in various trade such as moulding, welding, plumbing, electrical, mechanical etc. Further your company is in the process of setting up of two (2) new ITIs each in the States of J & K and Odisha for enhancing the capacity building of the sector as well as employablity of the youth of our country.

Some of the other noteworthy CSR initiatives include reclamation of Reserve Forest in Assam wherein tree saplings were planted in 100 hectares of land, providing mid-day meals to primary students in Haryana, providing Maternal & Child Health care services to around 45,000 villagers in backward areas of Mewat, Jhajjar & Gurgaon and providing broadband connectivity to few remote village panchayats in Maharashtra, Odisha & Assam.

PEOPLE, OUR CORE STRENGTH

Attracting Talent, Nurturing & Development of Human Capital Our employees & their continuous development are the most valuable asset & investment of the Company. Your Company encourage innovation, meritocracy and the pursuit of excellence through continuous development. In this direction, your company is setting up a state-of-the-art HRD centre at Manesar named "POWERGRID Academy of Leadership" (PAL) at an estimated cost of over Rs. 55 crore for development of the employees of POWEGRID as well as that of State utilities.

During FY 2011-12, POWERGRID has inducted 394 personnel at various levels viz., Executives, Supervisors, Workmen through open advertisement on all India basis and campus selection from reputed engineering and management institutes for executives, and for non-executives through employment exchanges and local advertisement at regional level.

For overall competency enhancement of employees in synchronization with business needs, environment and individual development Plan, your Company has boosted up its training efforts and an average 6.15 training mandays per employee has been achieved.

A centre for training on maintenance of live high voltage lines of up to 400kV has been established at Hyderabad 400kV sub-station. The state-of-the-art facility has been recognised as Category-I training centre in power sector by Central Electricity Authority for imparting training in Hot Line Maintenance on the live power transmission lines.

MoUs have been signed with Foundation of Innovation and Technology Transfer of IIT, Delhi (FITT, IIT Delhi) for conducting certification programmes for operation & maintenance of transmission system and telecom.

Corporate Yellow Pages of your Company have been collated to cope with the competitive regime. In fact, with the arrival of Knowledge economy, your Company is rising up to manage the knowledge assets, share, use, re-use, capitalize them and remain ahead of the competition.

Project management is the value driver that helps the organization gets most out of its performance. In view of the organisational need, 46 executives got the Certification in Project Management from international bodies.

Employee Welfare

Keeping in pace with changing needs and welfare of employees, various policies and rules are being revised/ amended from time to time. Various hospitals adjacent to our establishments have been empanelled both at Corporate Centre as well as in other establishments for benefit of Employees and their dependents. The Cafeteria in the Corporate Office and Food Lounge of Multi Purpose hall of your Company is conferred with ISO 22000: 2005 where quality food is served to employees.

Cultural programmes are conducted periodically for promoting healthy community living and celebrating various occasions like Diwali get-together, Holi Milan, New Year, Raising Day, etc..

The Company has also been organizing Intra & Inter-Regional Sports Competitions for Kabaddi, Cricket, Volleyball, Chess, Badminton etc. and regularly participating in the Inter-PSU Sports Meet. POWERGRID players in Kabaddi, Table tennis and Lawn- Tennis have stood meritorious and bagged awards in the Inter-PSU tournaments. Your Company's team has emerged as National Champions in prestigious National Management Games-2012, organised by All India Management Association and qualified to represent India in Asian Management Games Challenge.

POWERGRID National & Regional Bipartite Committees provides a platform for addressing issues related to workmen. During the year, the Industrial Relations have been maintained cordial and no manday was lost.

Citizen's Charter

The Company formulated its Citizen's Charter providing a visible front of its mission & objectives, commitments, terms of service and its obligation to various stakeholders. In the Citizen's Charter information is available about Company's schemes, policies, project plans of the Corporation and issues of general interest to stakeholders.

Implementation of Official Language

Your Company has proven its commitment for implementation of Rajbhasha Policy of Govt. of India and is sensitive towards our heritage, social and cultural concerns.

All out efforts have been made to ensure use of Hindi in all aspects of management at all levels in the Corporation. For increased use of Official language, various activities were undertaken such as organizing workshops to impart training in translation, enhancing working knowledge through organizing computer trainings and Hindi classes, etc.. Akhil Bhartiya Rajbhasha Sammelan, Kavi Sammelan (poetry sessions), Kavita Pratiyogita, Drama, Publication of Hindi Magazines/ papers, competitions and meetings, etc. are regularly organized. To provide further inspiration to work in Hindi, employees are nominated for external Hindi training programmes. The efforts made in implementation of Rajbasha have been applauded in many forums and the Company has received many accolades.

Corporate Image through Communication Management

Building Communication Capital is as important as Human Capital to build relation between organisation and its stakeholders. Your Company has adopted a number of communication interventions to present itself as an infrastructure major contributing to nation building.

In order to facilitate dissemination of information and interaction with all stakeholders with regard to our achievements, growth, recent developments on operational and financial front besides updation of website, regular press communiquÃÂ© have been issued by your Company and face to face interaction of the management arranged with the analysts and stakeholders at the Quarterly Analyst Meet and Press Meet. This has enhanced brand exposure with existing and potential clients, investors and other stakeholders. Information and latest updates & announcements regarding the Company are posted on Company's website including Financial results, approval to projects granted by the Board etc..

Your Company successfully participated in the India International Trade Fair (IITF) 2011 exhibition by creating a theme stall based on 1200kV UHVAC transmission line. The Company also participated in other business oriented regional exhibitions in Jharkhand, Mumbai and other places to reach out to local clients and the common masses.

Internal communications play a key role in enabling employees across the Company in understanding and embracing the Company's mission, goals and strategies. Towards this objective, your Company has continuously deployed communication tools such as monthly newsletters, CMD's communique, house journals, wall magazines, lounge and regular media updates to apprise the employees of the developments, achievements & events, viewpoints of the management and also provide a platform to employees to participate and take pride in being associated with POWERGRID. "Open house" sessions are also regularly organised where CMD and Directors of your Company interact with all the employees, either directly or through video conferencing.

EXHIBITION AND CONFERENCE ON NEW TECHNOLOGIES - GRIDTECH 2011

With the support of Ministry of Power, Govt. of India, GRIDTECH 2011, an International exhibition and conference on new technologies in transmission & distribution and synergic areas like load despatch, telecommunications, application software etc. was organised. GRIDTECH 2011 provided a unique opportunity for the power utilities, manufacturers, research institutions, policy makers, academicians, consultants etc. to gain exposure to state-of-the-art products and technologies like 1200kV UHVAC, 800kV HVDC, FACTS, GIS, Superconductors, Smart Grid, substation automation, compact lines, power system protection system, modern distribution management, renewable energy sources, integrated communication system etc..

RENEWED COMMITMENT TO TRANSPARENCY & VIGILANCE FUNCTION

Several initiatives have been taken to strengthen internal systems to enhance efficiency and effectiveness of the Vigilance function. The Vigilance Department lays emphasis in the awareness process. In line with this, training has been imparted on ethics and vigilance matters through various preventive vigilance workshops. Apart from these, vigilance executives were also sent on training to various organizations like Central Bureau of Investigation (CBI) and the National Institute of Criminology and Forensic Science, besides participating in training programmes organized for capacity enrichment of the vigilance executives. The Vigilance Executives at the regions also undertook regular knowledge enhancement sessions while on tour or inspections, which gave a feedback on the practical issues being faced by personnel at the execution level. Besides these, Vigilance Audit of some of the Departments has also been conducted, which is aimed at examining the primary objectives of a Unit/ Department and impact assessment in terms of achievement of these primary objectives. It brings out the extent of risk, irregularities, mistakes & omissions under various provisions of the rules, and also examines whether there are any lacunae in the system/ rules and its application leading to the said defects. On assessment of these, remedial measures have been suggested.

As part of pro-active vigilance, process online inspections have also been conducted in which critical works are inspected at the initial stage of execution by the vigilance executive for shortcomings and for advising corrective measures at the initial time, if any. As a result of Vigilance audit, large number of system improvements were implemented which include standard Field Quality Plan, safety norms, Project Insurance Policy, maintaining proper storage, construction related records, Qualifying Requirements on procurement, HR Policies etc.. A large number of inspections have been conducted both by Vigilance executives as well as by the CTE's Organisation. Based on these inspections, adequate cost compensation was effected on the points for not conforming to technical specifications etc.. To facilitate report generation & compliance on inspection reports generated through the Vigilance Inspection System (VINS), a system has been devised for furnishing online replies on the internet. On the punitive side, a number of complaints were received and taken up for investigation. Necessary disciplinary action wherever appropriate was also initiated against some employees.

While e-payments, document tracking, uploading of contractual documents, web based complaint handling system has already been implemented in the Organisation from 2007 onwards, lately, e-procurement has been successfully implemented in the Organisation with the signing of Contract Agreement with two leading Application Service Providers (ASP), viz. M/s Telecommunications Consultants India Limited (TCIL) & M/s m junction services Limited (mjunction). Further, provision of e-Reverse auction has also been included in the agreements.

To spread awareness amongst employees and to prevent violation of the Conduct, Discipline & Appeal (CDA) Rules, bulk SMS on the CDA Rules are being sent to all the employees regularly. Vigilance Department also uploaded CDA Rules Quiz, the Public Interest Disclosure and Protection of Informers (PIDPI) Resolution of CVC, Case studies and closed inspection reports on the intranet website. During the Vigilance Awareness Week from 31st October to 4th November, 2011 the theme of the year "Participative Vigilance" as decided by Central Vigilance Commission was celebrated in befitting manner by administering the pledge to all employees as well as through several competitions and programmes which included painting and debate competitions for the employees, their children and outside schools children. Lectures by eminent personalities on topics related to corruption, ethics and values were organized at different installations of the Corporation. The in-house journal of the Vigilance Department Ã "Candour" was released during the valedictory function of the Vigilance Awareness Week by the Chief Guest, Shri Anil Kumar Sinha, IPS, Addl. Secretary, Central Vigilance Commission. He also gave away prizes to the prize winners on the occasion.

ACCOLADES & AWARDS

Your Company has been bestowed with numerous awards in various categories by Govt. of India and other prestigious organisations & institutes.

Six projects of POWERGRID bagged the prestigious National Awards for Meritorious Performance in Power Sector instituted by the Government of India for the year 2009-10 & 2010-11. POWERGRID received three Gold Shields and two Silver Shields for Transmission System Availability and one Silver Shield for Early Completion of Transmission Project.

In recognition of its continued efforts to provide secure & reliable transmission system, POWERGRID was conferred with 'Power Line Awards 2012' in the category "Best Performing Transmission Company".

'Environmental Excellence & Sustainable Development award-2011' by the Indian Chamber of Commerce and '4th India Power Awards 2011' under the 'Largest CPU in Transmission Sector' and 'Overall Utility Performance- Transmission' Categories were conferred on your Company for its outstanding performance.

In Telecom Business, as a testimony of the excellent work being done by your Company, it has been bestowed with "Excellence in Innovation in Tower Management" Award by INFOCOM CMAI National Telecom Awards 2011.

MANAGEMENT DISCUSSION AND ANALYSIS

In addition to the issues in the Directors reports, some issues have been brought out in report on Management Discussion and Analysis placed at Annexure-I.

PARTICULARS OF EMPLOYEES

The particulars of employees of the Corporation who were in receipt of remuneration in excess of the limit prescribed under Section 217 (2A) of the Companies Act, 1956 is given in Annexure-II to this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As per requirements of disclosures under Section 217(1) (e) of Companies Act,1956 read with Rule 2 of the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, information is given in Annexure-III to this Report.

COMPTROLLER AND AUDITOR GENERAL'S COMMENTS

Company has received 'NIL' comments on the accounts for the year ended 31st March, 2012 by the Comptroller and Auditor General of India under Section 619(4) of the Companies Act, 1956. Copy is attached in Annexure-IV to this report.

CORPORATE GOVERNANCE

A report on the Corporate Governance (Annexure V), forming part of this report, together with the Certificate thereon is given in Annexure-VI to this report.

Your Company has got its Secretarial Compliance Audit conducted for the financial year ended 31st March, 2012 from M/s Sanjay Grover & Associates, Practising Company Secretaries. Their Report forms part of this Report. (Annexure-VII)

STATUTORY AUDITORS OF THE COMPANY

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India. M/s S. K. Mehta & Co., M/s Chatterjee & Co., and M/s Sagar & Associates were appointed as Joint Statutory Auditors for the financial year 2011-12.

COST AUDITORS OF THE COMPANY

POWERGRID had appointed the Cost Auditors Sh. Jugal Kishore Puri, M/s. Chandra Wadhwa & Co, M/s. S. C. Mohanty & Associates and M/s. K. G. Goyal and Associates under Section 233B of the Companies Act, 1956 for the Financial Year 2011-12.

The due date for filing Cost Audit Reports for the financial year 2011-12 with the Cost Audit Branch, Ministry of Company Affairs is September 30, 2012 and the same will be filed with the Cost Audit Branch within the stipulated time.

POWERGRID'S BOARD

During the year, Shri R. N. Nayak who was our Director (Operations) took over the charge of Chairman & Managing Director with effect from 1st September, 2011.

Shri R. T. Agarwal assumed the charge of Director (Finance) with effect from July 29, 2011. Smt. Rita Acharya, Jt. Secy, MoP joined the Board of the company w.e.f. August 26, 2011 in place of Dr. M. Ravi Kanth Jt. Secy. (Trans.), MoP, who ceased to be Director on Board of the company w.e.f. August 16, 2011. Further, Shri Santosh Saraf and Smt. Rita Sinha joined the Board as non-official part time directors w.e.f. December 27, 2011.

Shri S. K. Chaturvedi demitted the office as Chairman & Managing Director on 31st August, 2011 upon attaining superannuation. Shri V. M. Kaul, Director (Personnel) superannuated on March 31, 2012 and ceased to be Director on the Board of POWERGRID. The tenure of - two non-official part-time Directors - Shri Ashok Khanna and Shri S.C. Tripathi came to an end on April 24, 2011; four non-official Part-time Directors - Dr. P. K. Shetty, Prof. A. S. Narag, Shri Anil K. Agarwal and Shri F. A. Vandrevala came to an end on July 9, 2011 and that of Mrs. Sarita Prasad, non-official part time Director came to an end on August 3, 2011 and they ceased to be Director.

The Board wishes to place on record its deep appreciation and gratitude for the invaluable contribution and unstinted support to the Company extended by these directors.

Shri Ravi P. Singh assumed the Charge of Director (Personnel) with effect from April 1, 2012. Shri R. P. Sasmal has been appointed as Director (Operations) with effect from August 1, 2012.

In accordance with the provisions of Section 255 and 256 of the Companies Act, 1956 read with Article 31 (iii) of the Articles of Association of the Company, Shri I. S. Jha, Director (Projects), Shri R. T. Agarwal, Director (Finance) and Smt. Rita Acharya, Director shall retire by rotation at the Annual General Meeting of your Company and being eligible, offer themselves for re-appointment.

ACKNOWLEDGEMENTS

The Board of Directors, with deep sense of appreciation, acknowledges the guidance and co-operation received from Govt. of India, particularly Ministry of Power, Ministry of Finance, Ministry of Home Affairs, Ministry of External Affairs, Ministry of Statistics and Programme Implementation, Ministry of Environment & Forests, Central Electricity Regulatory Commission, Appellate Tribunal for Electricity, Central Electricity Authority, Planning Commission, Department of Public Enterprises, Regional Power Committees, and other concerned Govt. departments/agencies at the Central and State level as well as from Securities and Exchange Board of India, National Stock Exchange of India Ltd., and Bombay Stock Exchange Ltd., Mumbai without whose active support, the achievements by the Corporation during the year under review would not have been possible.

Board's special appreciation and thanks are due to our valued customers, various State power utilities and other clients, who have awarded various consultancy works and reposed faith in Company's capability to handle them. The Board also appreciates the contribution of contractors, vendors and consultants for successful implementation of various projects by the Company.

The Directors take this opportunity to thank the Principal Director of Commercial Audit and Ex-Officio Member Audit Board-III for the cooperation during the year. Directors also acknowledge the valuable suggestions and guidance received from the statutory auditors during the audit of accounts of the Company for the year under review. The Board also conveys its sincere thanks to various national/international financial institutions/ banks/ credit rating agencies for their timely assistance, continued trust and confidence reposed by them on POWERGRID.

We have achieved a great deal this year and none of it would have been possible without the skills and dedication of each member of POWERGRID family at all levels. I would like to thank the Executive team for its strong leadership, the various employee unions to ensure that the company continues to achieve greater heights year after year and all our employees for their commitment and enthusiasm to achieve our aim to be the world's premier transmission network utility. ~

For and on behalf of the Board of Directors

Place: New Delhi (R. N. Nayak)

Date : 09.08.2012 Chairman & Managing Director

Mar 31, 2011

Dear shareholders,

Ladies & Gentlemen,

I am privileged to present, on behalf of the Board of Directors, the 22nd Annual Report on the business and operations of your Company for the financial year ended on 31st March 2011 togeth er with the Audited Statements of Accounts, Auditors' Report and Review of the Accounts by the Comptroller & Auditor general of India for the review period.

I am happy to share with you that your Company has excelled in all areas of its operations achieving significant milestones such as exceeding budget utilization target, meeting overall targets under Memorandum of Understanding (MoU) with Ministry of Power, government of India, timely commissioning of projects, etc. Based on the overall performance, your Company is poised to get "excellent" rating for FY 2010-11 as well, continuing the track record of achieving the highest rating since signing of its first MoU in FY 1993-94.

Your Company has been conferred with 'moU excellence award' for FY 2008-09 by Department of Public Enterprises, Ministry of Heavy Industries & Public Enterprises, govt. of India for being the top performer in the Energy Sector. The Company has also been bestowed with the 'scope award for excellence and outstanding Contribution to the Public sector management (2008- 09) - Large scale Pse Category'. Both the awards were presented to POWERGRID by our Hon'ble Prime Minister in a ceremony held on December 15, 2010.

Your Company has been ranked as 8th overall in the fastest-Growing asian Companies and 18th as fastest-Growing Global Companies in the "Platts top 250 Global energy Company rankings" for the year 2010. Your Company has also featured in the "forbes Global 2000" list.

Performance highlights of your Company during fY 2010-11 are briefly mentioned here to give an overview of accomplishments in all fronts:

- Made an investment of Rs. 12,005 Crore during the year, an increase of about 13% over the investment made in last year (Rs. 10,617 Crore).

- on the project implementation front, added about 6,760 ckm of transmission lines, 11 new sub-stations and transformation capacity of about 9,500 mVa.

- Assets worth Rs. 7,313 Crore are declared under commercial operation.

- Investment approval for 25 new transmission projects worth about Rs. 21,150 Crore was accorded by the Board. This includes the project of international importance, "Cross country grid Interconnection between India and Bangladesh".

- transmission system availability of 99.80% was achieved, highest so far in the history of the Company. There was no major grid disturbance in any part of the country during the year and grids were operated smoothly.

- Inter-Regional power transfer capacity addition of 1,600 mW was achieved during the year with the commissioning of Barh Ã Balia 400 kv Double circuit (Quad) line, enhancing inter-regional capacity of National grid to 22,400 Mw.

- Under consultancy business, a total of 45 new orders with estimated project cost of about Rs. 600 Crore received, and in this financial year, revenue of Rs. 299.35 Crore is earned from Consultancy business as compared to Rs. 269 Crore earned during previous year.

- Financial Performance

(Figures in Rs. Crore, except per share data)

Description 2010-11 2009-10 Y-o-Y Growth

Income

Transmission Charges 7,691 6,576 16.95%

Consultancy 299 269 11.15%

Telecom 187 158 18.35%

Short Term open Access Income 212 124 69.60%

other Income 711 376 89.10%

Total Income 9,100 7,504 21.27%

Profit After Tax (PAT) 2,697 2,041 32.14%

Earnings per Share (Rs.) 6.19 4.85 27.63%

Book value per Share (Rs.) 46.12 37.81 21.98%

gross Fixed Assets 50,352 43,202 16.55%

Debt 40,883 34,417 18.64%

Net worth 21,351 15,914 34.16%

Debt Equity Ratio 65:35 68:32

Capitalisation 7,313 3,610 102.58%

Operational Excellence

Your Company, with its strong in-house expertise in all specialised areas of power transmission business, has carved a niche for itself amongst the largest transmission utilities in the world. Today, your Company wheels about 50% of total power generated in the country through its transmission network. As on 31st March, 2011, your Company owns & operates a transmission network of 82,355 ckm of transmission lines, 135 nos. of EHv & HvDC substations and transformation capacity of about 93,050 mVa. During FY 2010-11, transmission system availability of 99.80% was achieved for our transmission network. Besides, number of trippings per line was also contained at 1.27 against MoU target of 2.5 under "Excellent" category. Maintaining such high availability was possible through deployment of state-of-the-art operation & Maintenance techniques at par with international standards. Your Company follows state-of-the-art preventive maintenance. Equipment health is assessed periodically using "Condition Assessment Techniques". Maintenance activities are planned well in-advance and an "Annual Maintenance Plan" is chalked out for every asset through live line or shut down as per technical feasibility. Your Company also employs state-of-the-art "Emergency Restoration System" for restoration of collapsed transmission lines, due to natural calamities or otherwise, in shortest possible time. Replacement of aged assets has also been taken up as per prevalent CERC tariff regulations.

o&M activities of your Company are ISo certified. Systems and procedures are in place and being upgraded periodically to keep abreast with the latest technology. Formats for documentation on schedule & procedures have been standardized for all assets. All substations and line offices can access these documents through Company's web-portal. Periodic reviews are also conducted at regional level as well as at Substations and Line offices to evaluate implementation of the systems and procedures. Presently, about 30 sub-stations of POWERGRID are operated remotely and many new sub-stations are being designed for remote operation. For further improvement in operational efficiency, "national transmission asset management Centre" is being established to control & operate most of the sub-stations remotely and establishment of "Maintenance Service Hub" facility has commenced, which caters to the maintenance need of a group of sub-stations rather than placing staff in each sub-station. This will not only help in optimal utilisation of manpower & resources but also reduce the response time in case of faults & breakdowns.

options are also being explored for use of Robots in transmission lines' inspection besides aerial patrolling of transmission lines using helicopters, to optimise manpower requirement/ time management for line patrolling and improve efficiency in maintaining them.

Project Implementation

Transmission projects are planned, implemented, monitored and controlled through Integrated Project Management and Control System, which has been developed matching with the organization structure, effective working, flow of information and feed back. Project implementation activities involves total project review and monitoring including Standardisation of Designs, Project Review Meetings at regular intervals through video conferencing, pre-emptive measures and advance actions on various project linked activities such as land acquisition, state-of-the-art survey techniques and soil investigations, tender activities, funding tie-up, etc. in parallel with project investment approval process.

During FY 2010-11, transmission projects worth Rs. 7,313 Crore were commissioned as compared to Rs. 3,610 Crore for the previous year. Your Company has commissioned about 6,760 ckm of transmission lines, 11 new sub-stations and transformation capacity of about 9,500 mVa. These additions to the Company's network have helped in improving power supply situation in various regional grids leading to improved system reliability and better grid stability to meet the total all time high peak demand of 111gw & 811BU of energy in 2010-11.

Presently, transmission projects of about Rs. 93,000 Crore are under various stages of implementation and are progressing well matching with commissioning schedule of generation projects in the country. This includes 25 new transmission projects approved by the Board of Directors in FY 2010-11 at an estimated cost of about Rs. 21,150 Crore comprising of about 8,000 ckm of transmission lines & 5200 Km of fibre optic network, 23 nos. sub-stations and transformation capacity of about 32,000 mVa. Major ongoing projects are, Transmission System associated with generation projects like Subansiri & Kameng HEPs (which includes 2000 km, ÃÂ±800 kv HvDC bipole link), DvC & Maithon Right Bank project, Sasan, Mundra & Krishnapatnam Ultra Mega Power Projects, Pallatana gBPP, Bongaigaon TPS, Transmission system for transfer of power from Bhutan to NR/wR, Interconnection between Indian & Bangladesh power grids, Development of High Capacity Transmission corridor for phase-I IPPs in the State of odisha, Transmission system for IPP generation Projects in the State of Sikkim & Chhattisgarh, etc. and System Strengthening schemes in Northern, Eastern, western & Southern Regions etc. Your Company has an impeccable track record of not bottling up of even a single mega Watt of power from central sector generation projects for want of inter-state transmission system. Accelerated growth path of your Company during XI plan can be demonstrated from the following table, which shows a phenomenal built up of about 30% capacity of Company's present network in last four years only w.r.t. the capacity as built in last many years.

Parameter as on as on addition during first the beginning of Xi Plan the end of FY 2010-11 four years of Xi Plan

Transmission network (ckm) 59,461 82,355 22,894

Sub-stations (Nos) 104 135 31

Transformation Capacity (MvA) 59,415 93,050 33,635

Financial Management

Your Company exhibited an impressive financial performance during FY 2010-11, earning a net profit of Rs. 2,697 Crore, thereby registering a highest ever rise of 32% as compared to previous year's profit of Rs. 2,041 Crore. Turnover of the Company stands at Rs. 9,100 Crore from Rs. 7,504 Crore during FY 2009-10, i.e. up by 21%. gross Asset Base has been enhanced to Rs. 50,352 Crore from Rs. 43,202 Crore in FY 2009-10.

Dividend Payout

In FY 2010-11, your Company registered Earnings per Share (EPS) of Rs. 6.19 as compared to Rs. 4.85 in previous fiscal. Your Board of Directors have recommended a final dividend of Rs. 1.25 per share for the year 2010-11, in addition to an interim dividend of Rs. 0.50 per share paid in February, 2011. The total

dividend paid for the year is Rs. 1.75 per share as against Rs. 1.50 per share paid last financial year. The final dividend shall be paid after your approval at the Annual general Meeting. The total dividend pay-out for the year amounts to Rs. 810.23 Crore representing 30% of profit after tax for the year. Your Directors believe that strategic diversification into synergic business would lead to increase in shareholders' value. Therefore, focussed attention is being given for expanding the telecom and consultancy businesses for further improvement in financial performance.

Capital investment and fund mobilisation

Your Company made an investment of Rs. 12,005 Crore during FY 2010-11 for implementation of various ongoing projects.

The requisite funds were mobilised from domestic market, proceeds of loans from multilateral funding agencies, namely, The world Bank and Asian Development Bank, besides internal resources of approx. Rs. 4,000 Crore (including FPo proceeds).

Directors' responsibility statement

As required u/s 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

- In the preparation of the Annual Accounts, the applicable accounting standards have been followed;

- The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

- The Directors have taken proper and sufficient care in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- The Directors have prepared the annual accounts on a going concern basis.

Xi Plan investment programme

For development of inter-State transmission system, an investment of about X 55,000 Crore has been planned by your Company during XI Plan which includes further development in National grid by adding inter-regional transmission systems, system strengthening schemes, transmission system to facilitate evacuation of power from generation projects under central sector and Ultra Mega Power Projects (UMPPs). Stepping towards realising the target, your Company has already made a capital investment of aboutRs. 37,445 Crore during the four (4) years' period of XI plan for implementation of various projects.

Your Company has an excellent credit rating with financial institutions, thereby, is placed in a comfortable position in terms of resource mobilisation. The Company, as such, does not envisage any problem in mobilizing the resources for meeting the planned investment during last year of XI plan period. Loan requirement is planned to be met through borrowings from multilateral funding agencies (The world Bank and Asian Development Bank), Supplier's credit and from domestic sources on the basis of requirement. Your Company being rated AAA by CRISIL, does not foresee any problem in mobilizing the required resources from domestic market at competitive rates.

Going Public

Company's Follow-on-Public offer (FPo) of divestment of 10% of govt. equity (420,884,123 shares) and issue of 10% fresh capital (420,884,123 shares) in November, 2010 received huge response both from domestic & foreign institutional investors; and was oversubscribed by almost 15 times. FPo subscription opened on 9th November 2010 and closed for QIBs on 11th November 2010 and on 12th November 2010 for others. The issue price was fixed at Rs. 90 per share and a discount of 5% was offered for retail investors and employees. Post-issue, holding of government of India is 69.42%, while the balance 30.58% is held by public. out of Rs. 3,721 Crore raised from fresh issue of shares under FPo, Rs. 1,600 Crore has been spent during the FY 2010-11 on capital expenditure of identified projects. The funds garnered through FPo shall help the Company for part financing of projects during XI and XII plan.

Commercial Performance

Your Company's performance on commercial front is highly satisfactory, especially in terms of realisation of transmission charges. During the year 2010-11, current realisation stood at about Rs. 7,192 Crore, the highest so far, against Rs. 6,570 Crore realised last year. Post-securitisation, outstanding dues (beyond 90 days of billing) stands at 'nil' as on March 31, 2011. The present LC coverage is about Rs. 567 Crore which is equivalent to 115% of average monthly billing.

During the year, a total of 222 petitions of transmission projects involving transmission charges of Rs. 2,957 Crore were filed with CERC for Tariff period 2009-14. It includes filing of advance petitions, for the assets whose DoCo are anticipated till June, 2011.

As per CERC Regulation on Sharing of Inter-State Transmission charges and losses, 2010, your Company, as CTU, has been mandated to perform Billing, Collection and Disbursement (BCD) on behalf of all the inter-State Transmission Service licensees. In view of this, new Transmission Service Agreement, Revenue Sharing Agreement & BCD procedures after incorporating comments from designated inter-State Customers and inter-State Transmission System licensees were drafted and submitted to CERC for approval. Several workshops have been conducted across all the regions with the State Transmission Utilities and DISCoMs for their institutional building for new billing, collection and disbursement mechanism.

Development of National Grid

Your Company is taking adequate measures for strengthening/ establishing the inter-State and inter-regional links for enhancing the capacity of National grid in a time bound manner so as to ensure optimal utilization of uneven distribution of energy resources. Inter-Regional capacity addition of 1,600 mW was achieved during the year with the commissioning of BarhÃBalia 400 kv Double circuit (Quad) line in June, 2010. By 31st march 2011, national Grid with inter-regional power transfer capacity of about 22,400 mW has been established, placing it among one of the largest synchronous grid in the world with installed generation capacity of about 1,17,000 Mw. Currently, substantial power is being exchanged across the regional grids and the capacity of this National grid is planned to be enhanced to about 28,000 Mw by the end of XI Plan with the expectation of generation capacity addition as programmed.

Grid Management

Development of National grid through reliable and stable operation of regional power grids has been a priority area for your Company. The Company is facilitating power evacuation from Central Sector generating Stations through its strong and robust transmission network and it is a matter of great pride that evacuation constraint has not been generally faced by any Central Sector generating Station during the year.

grid Management is carried out through a hierarchial control philosophy using Supervisory Control and Data Acquisition, SCADA. Considering the increased complexity of grid operation of such a large network of the country, the facilities at all the five Regional Load Despatch Centers and National Load Despatch Centre are being upgraded continuously through deployment of latest technology. Your Company's effective grid management measures & techniques are not only paying rich dividends but also restricted minimal grid disturbances besides improvement in vital grid parameters, improved data availability, visibility and transparency. This is very well demonstrated since indian Power Grids have not experienced any major grid disturbance during more than last eight years. Even minor grid disturbances in regional grids have come down significantly.

All these measures have also led to increase in inter-regional power exchanges on real-time basis and helped in meeting more demand of energy deficit regions, thereby improving overall economy of the country. During FY 2010-11, about 56,700 million Units (mUs) of inter-regional energy transfer was facilitated across the country as compared to about 52,000 MUs during FY 2009-10. The frequency remained within the prescribed IEgC band (49.5 Ã 50.2 Hz) for most of the period. on behalf of various State Power utilities and other players in the regional pool, POWERGRID, through its RLDCs, facilitated settlement of UI charges to the tune of Rs. 10,357 Crore in FY 2010-11.

Power system operation Corporation Limited (PosoCo), a 100% subsidiary of your Company which was set up to look after grid Management function in line with goI directive, has started commercial operation from 1st october, 2010. open access in inter-state transmission:

In order to promote development of competitive electricity market, Short Term open Access (SToA) in inter-State transmission was successfully implemented since 2004.

Under SToA, about 19,900 transactions were approved during the year involving more than 55,000 mUs of energy. Since introduction of SToA in May, 2004, cumulatively more than 73,600 bilateral transactions have taken place and about 218 Billion Units (BUs) have been exchanged. Around hundred captive power plants across the country have also availed the benefit of SToA.

Being the nodal agency for grant of Long Term Access (LTA) to private producers, your Company has undertaken development of high capacity transmission corridors for evacuation of large quantum of power from various IPP generation projects. LTA has been granted for about 90,000 Mw to 135 nos. of IPP projects. Development of transmission system for IPPs generation projects was a major concern especially due to non-finalisation of beneficiaries and firm commissioning schedule of generation projects by the generating companies. Taking the lead role, your Company organized various meetings with power generation developers, CEA, Ministry of Power and took up the case with CERC actively thereby achieving timely development of transmission systems for IPPs. Nine High Capacity Power Transmission Corridors have been finalized for meeting evacuation requirement of IPPs coming up in the State of Jharkhand, odisha, Chattisgarh, Madhya Pradesh, Andhra Pradesh and Tamil Nadu at an estimated cost of about Rs. 58,000 Crore, for which regulatory approval was accorded by CERC in May, 2010. Implementation of these corridors has been taken up by your Company in a phased manner matching with progress of generation projects. This shall go a long way in integrated development of transmission system in the country.

Quality Ã a WAY of Life

Your Company aims to provide quality services to its valued customers, and in order to do so, quality improvement measures/ techniques are being adopted at every stage right from conceptualisation of project till commissioning and subsequently during its operation. Besides, the areas requiring improvement are identified and immediately addressed. Your Company's Quality Management System (QMS) is built upon the philosophy of Prevention, i.e. Quality Assurance rather than Detection while final product inspection. This system covers Design, Engineering, Procurement, Construction, operation and Maintenance activities for AC & HvDC transmission systems, SCADA, EMS & Communication projects.

During the year, Quality management system of your Company was reviewed and based on evaluation of implementation of the latest systems and procedures, the revised certification was accorded. Your Company is certified with integrated management system as per Publicly available specification, Pas 99:2006 integrating requirement of ISo 9001:2008 (Quality), ISo 14001:2004 (Environment) and oHSAS 18001:2007 (occupational Health & Safety Management System). All the establishments of your Company were also audited for social accountability system, sa 8000:2008.

Technology Development

Conserving Right-of-way (Row), minimizing impact on natural resources, coordinated development of cost effective transmission corridor, flexibility in upgradation of transfer capacity of lines matching with power transfer requirement are major areas of concerns in development of transmission network in the country. In order to address these issues effectively and to ensure development of efficient, coordinated and economical inter-State transmission system, the Company has undertaken several technological innovations.

For efficient utilisation of precious Row, the Company is deploying state-of-the-art technologies such as high temperature low sag Conductors, series compensation including Thyristor Control, Multi Circuits, Compact & Tall Towers, High Surge Impedance Loading Lines, etc. For effective grid operation, high-tech o&M practices such as hotline maintenance, live line washing of insulators, use of emergency restoration system, large scale automation of sub-stations, etc. are being adopted. Your Company gives priority to research activities with potential for societal, environmental & national benefits by application of advance technologies and finding solutions to gear up for future challenges. After commissioning & operating 765 kv UHv AC & ÃÂ±500kv HvDC transmission system, POWERGRID is now working on next higher transmission voltages of 1200 kV UHVaC & ÃÂ±800kV HVDC systems to achieve efficient utilization of Row and increased power transfer capability for transfer of bulk power over long distances.

The 1200kV UHV aC technology is being developed by your Company for the first time in the world. This is one of the unique R&D projects in public-private partnership model. Development of 1200kv UHvAC technology has already been initiated by establishment of a Test Station (at Bina in the State of Madhya Pradesh), which is under progress as a collaborative effort with 34 indigenous equipment manufacturers who are partners in this development process. The objective of the project is development and establishment of 1200kv voltage level in the country with concerted co-ordination among technical experts for finalization of technical parameters, field testing, and trial operation etc. and extend support to equipment manufacturers for indigenous development of 1200kv system equipment. This endeavour shall not only benefit Indian Power sector but also Indian manufacturers who would emerge as world leader for 1200kv class equipment. with the introduction of Ultra High voltage in the transmission system, in addition to enhanced power transfer capability of the line, it will help in reduction of transmission losses and minimise Right of way requirement.

Implementation of /- 800 kV, 6000 mW HVDC Bi-pole of length around 2000 Km from North Eastern region (Biswanath Chariali in the State of Assam) to Northern Region (Agra in the State of Uttar Pradesh) is under construction. This shall facilitate high quantum of power transfer. once implemented, this shall be the longest /- 800kv HvDC line.

Your Company is taking leadership initiative for implementation of smart Grid technology in the country. In this direction, your Company has implemented Smart grid Pilot Project using wAMS in Northern Region grid, for the first time in India. "india smart Grid task force", being headed by Shri Sam Pitroda, Adviser to Hon'ble Prime Minister on Public Information Infrastructure & Innovations, is a nodal point for government's activities related to Smart grid. Secretariat of this prestigious forum is now being operated by your Company.

High Temperature Superconducting cable provides unique solution of large amount of power transmission at lower voltage. In order to study the preliminary feasibility of developing the use of superconducting technology in transmission, an experimental superconducting AC line parallel to existing transmission line of 220kv at gurgaon gas Insulated Substation (gIS) is being explored.

Lightning mapping of the system is very useful in optimizing lightning protection design and real time operation & maintenance of transmission lines. Pollution mapping helps in optimal insulation design and maintenance of transmission lines. Considering huge transmission expansion plan, POWERGRID has initiated pollution mapping of Northern Region in association with CPRI, Bangalore and lightning mapping in North-Eastern Region.

national High Power test Laboratory Pvt. Ltd. (nHPtL), a Joint venture Company of POWERGRID, NTPC, NHPC and DvC has been created in May, 2009 for establishment of a fully independent, professionally managed, international class, "on Line High Power short Circuit test facility" in India which shall provide a full range of short circuit test facilities for electrical equipment manufacturing industry and power utilities.

Green initiatives

Major reason for continuous degradation of earth's climate and environment may be attributed to emission of billions of tons of greenhouse and other potent gases in atmosphere due to mankind's heavy dependence on fossil fuel for many of its daily needs. As Indian population is increasing and economy is growing at large pace, demand for power will increase manifold. It is well established fact that growth brings with it the risk of environmental problems, and unless significant energy conservation measures and large scale use of eco-friendly measures are undertaken, necessitating huge investments to protect the environment. Transmission projects can play a significant role in harnessing clean/green power through innovative and challenging initiatives. Accordingly, POWERGRID, being a responsive organisation, is constructing ÃÂ±800kv HvDC high capacity transmission system for transfer of about 6,000 Mw of power from hydro projects in North-Eastern Region to far away beneficiaries in Northern & western Regions. The expected environmental benefits are:

- Will reduce CO2 emissions by replacing thermal generation at load centres of Northern & western Regions by transmitting about 6,000 Mw of clean/green hydro power generated in phases in the remote and under developed North-Eastern Region of the country with negligible environment impact.

- Otherwise, the Northern & Western Regions of the country, which are deficit in energy, would set up equivalent coal fired thermal power plants. It is envisaged that about 257 million tons of Co2 emission would be reduced during the 30 year lifecycle of the HvDC transmission system.

It is heartening to note that our sincere efforts towards environment protection has started bearing fruits in terms of the appreciation and awards POWERGRID had received during the last three years.

Business Development & Consultancy

Your Company has acquired in-house expertise at par with global standards in the field of Planning, Design, Engineering, Load Despatch and Communication, Telecommunication, Contracts, Finance and Project Management. Utilising this expertise, consultancy is being offered at national & international level.

The Company has emerged as a strong player in transmission sector in South Asia, Middle-east Asia & African countries and is providing consultancy services in United Arab Emirates (UAE), Nigeria and Bangladesh. Your Company has been keenly participating in projects funded by ADB, The world Bank, and other foreign organizations in various countries like vietnam, China, Kenya, Ethiopia, Uzbekistan, Afghanistan & Bangladesh.

Throughout the year, business development opportunities continued to receive focussed attention and thrust across the entire value chain of the power sector. During the year 2010-11, your Company has bagged 45 new assignments having project cost of about Rs. 600 Crore. Your Company has earned revenue of about Rs. 299.35 Crore during FY 2010-11 as consultancy fee from its various ongoing assignments against Rs. 269 Crore earned last year.

Further, your Company is playing an active role in preparing a roadmap for developing SAARC market for electricity on a regional basis to develop a cross country power-grid, harnessing each other's capacities and resources in order to address the growing energy need in the region. Presently, various interconnections exist between india & nepal and between india & Bhutan. For evacuation of power from various upcoming HEPs in Bhutan, Punatsangchhu-I HEP (in Bhutan) - Alipurduar (in India) 400 kv D/c line between Bhutan & India is under implementation and expected to be completed by 2015. Further, an asynchronous interconnection between india & Bangladesh through 500 Mw HvDC back-to-back terminal along with Bheramara (Bangladesh) - Baharampur (India) 400kv D/C line is under implementation and expected to be completed by 2013. In addition, an interconnection between india and sri Lanka through HvDC bipole link including submarine cable for sea portion is being finalised. Further, for bulk transfer of power, interconnection between India and Nepal through 400 kv Dhalkebar (in Nepal) - Muzaffarpur (in India) D/C transmission line is under finalisation.

Telecom Business

In order to shore up its revenue base, POWERGRID spotted the opportunity of convergence between transmission & telecom, and entered into telecom business to leverage its country wide transmission infrastructure. Your Company is currently managing about 25,000 km of telecom network connecting all metros, major cities & towns, which has been maintained at an availability of 99.98%.

It is our constant endeavour to provide a robust highway of telecommunication at affordable cost with ultra modern and eco- friendly implementation techniques. The Company is one of the few telecom players with marked presence in remote areas and has acquired Infrastructure Provider Category-I (IP-I), Internet Service Provider (ISP) Category 'A' and National Long Distance (NLD) licenses to provide a variety of services.

During 2010-11, telecom business earned revenue of about Rs. 187.20 Crore for the Company. Revenue realization to the tune of 99% of total sales was achieved during the year. The telecom business registered a Profit before Tax of Rs. 29.73 Crore for the financial year ended 31st March 2011; and order Book rose to about Rs. 650 Crore in FY 2010-11 from Rs. 410 Crore in previous year (i.e. up by 58%) despite a general slowdown experienced by Telecom industry due to intense price wars. Your Company is one of the implementing agencies for the prestigious national Knowledge network project at a project cost of Rs. 6,000 Crore. The project envisages a gigantic 3 layer Telecom network of all knowledge centres across the country such as IITs, IISc, etc. on high speed connectivity. In this, your Company has bagged a contract of Rs. 900 Crore to be realised over a period of 10 years, out of which advance of Rs. 384 Crore was received during FY 2010-11.

with the focus now shifting more towards rural connectivity, POWERGRID's role in telecom becomes even more significant as it has presence in rural & remote areas of the country by way of its Power Transmission network. Considering an ever increasing base of transmission towers across the country with a present base of about 1,50,000 towers including remote/ rural areas, a business model of leasing transmission towers for placing telecom antennas has been formulated to generate additional business. In the first phase, tower space has been leased out in 3 States of J&K, HP & Punjab for installation of Telecom Antennas and for other States, it is under process. Your Company has made synergic tie-ups with multiple service providers for spreading out of its Point of Presence to more than 2200 nodes on Pan-India basis. Company is also venturing into Multi-protocol Label Switching services as a value addition to its Dense wavelength Division Multiplexing / Synchronous Digital Hierarchy based Point to Point Telecom Network and has ventured into Data Center business for in-house requirement. This indeed is a major leap in achieving strategic network expansion by which your Company has strengthened its capabilities to reach and cater even remotely placed segments particularly small towns and villages.

In recognition of its sturdy and reliable Telecom Infrastructure and its Telecom services, your Company has been conferred with "emerging telecom infrastructure Provider award" by INFoCoM CMAI National Telecom Awards, 2010. ContriBUtion in DistriBUtion reforms

To derive benefit of additions in generation & transmission by end consumers, govt. of India has launched Accelerated Power Development & Reforms Programme (APDRP) and Rajiv gandhi grameen vidyutikaran Yojana (RggvY), which are aimed at bringing qualitative improvement in subÃtransmission and distribution sector and expected to achieve reduction of AT&C losses. Your Company is playing a significant role in carrying forward the distribution reforms through undertaking APDRP works on behalf of govt. of India in various parts of the country. Most of these schemes have been commissioned/ are nearing completion. Under RggvY, your Company has been assigned the job for execution of rural electrification works in 68 districts in the country covering about 72,800 villages. During the year, POWERGRID created infrastructure for electrification in 4710 un-electrified villages against a target of 3500 villages, achievement of about 135%. Service connections were provided to about 10.60 Lakh BPL households against a target of 7 Lakh, achievement of over 150%. Cumulatively, till March, 2011, infrastructure has been created for electrification of 55,445 villages. Further, service connection to about 26.79 Lakh BPL households has also been released under RGGVY.

E-Governance

In line with international practices, your Company has taken up an initiative to deploy Enterprise wide IT System, which will facilitate operation of different business processes in an integrated manner and to achieve optimal use of resources. This includes, rolling-out of Enterprise Resource Planning (ERP) system across the organization along with establishment of state-of-the-art Data Centre, Communication Network and Disaster Recovery Site which shall be completed progressively in next two to three years. In addition, the Company has also taken various steps to improve upon IT security envisaging potential increase in IT dependence in day to day operations. Your Company has been assigned the task for establishing "CERT-Transmission", a forum of all State transmission utilities of the country, to address IT security and required timely response at the time of crisis.

Sustainable Development

As we all know, electricity has become a necessity in our day to day life and it plays the pivotal role in economic development of the country. while, it's use in one hand has sharply benefited the quality of life, on the other hand it's generation has raised several social, environmental, economical and political issues, which need to be understood in its right perspective and addressed accordingly. Though transmission projects are non polluting, your Company has developed a detailed corporate strategy document "environmental and social Policy and Procedures (esPP)" in 1998 and upgraded it from time to time through wide consultations with social bodies, local communities, govt. agencies, etc. in line with International best practices. The policy outlines the Company's approach and commitment to deal with environmental and social issues, relating to transmission projects, and lays out management procedures and protocols to address the same. The policy is applauded by the multilateral funding agencies like The world Bank & ADB and the Company applies the same for all projects across the country. Your Company is the first Power Company in India, which has come out with the Sustainability Report in March, 2010 and is giving shape to sustainability reporting process so as to establish a procedure for information disclosure and communication to stakeholders. Sustainability reporting benefits the Company in the long run by establishing a system of measuring, monitoring and reporting environmental and social performance.

The pioneering technologies like 1200kv UHv AC & ÃÂ±800kv HvDC being undertaken by your Company will enable transfer of large quantum of power over single corridor upon implementation and further minimise the environmental and social impact.

Corporate Social Responsibility

Your Company has earmarked one percent (1%) of Profit After Tax (PAT) for the preceding year as non lapsable budget for CSR activities. During FY 2010-11, a major portion of CSR budget was spent on different thrust areas like education, health, infrastructure development, games & sports etc. Being of long lasting value, these facilities have played a pivotal role in improving the standard and quality of life of local people around our establishments. The efforts made by your Company have been applauded and earned the goodwill of the local inhabitants.

Your Company sponsored ten students, who were meritorious but under privileged for taking coaching for preparation of IIT-JEE entrance exam-2011 in "Utkarsh Super-30, Delhi Centre", as a part of Corporate Social Responsibility. It is heartening to know that six out of ten students got into IITs and rest four students qualified for other reputed engineering institutes. Public Distribution Shops in the villages of Rajavur, Senganadipudur & Karupusamypudur were constructed and handed over to the Block Development officer, Udumalpet which benefitted nearly 900 local villagers. Further, 15 desktop computer systems were handed over to the Principal of the Deaf Enabled Foundation in Hyderabad. 118 nos. of solar street lamps were handed over to District Administration of Raichur for the benefit of Umalipannur, Duganur, Kataknur and Malkapur villages of Raichur district and a 250 kvA Dg was provided to District Hospital of Leh.

People, our Prime movers Development of Human Capital

Your Company strongly believes that human capital is the most vital asset of the organization and accordingly, its policies are focused on development of human resource through skill upgradation, career enhancement, job enrichment & job rotation.

Your Company has developed in-house online Training Need Assessment (TNA) System through which individual TNA of 8,300 employees were captured. The findings of TNA were corroborated & discussed with Focus group at Regional and Corporate level for identification and alignment with organizational requirements before finalisation of Learner's Planner for 2011-12.

For overall competency enhancement of employees in synchronization with business needs, environment and individual development plan, 49,831 mandays of training was imparted to the employees during FY 2010-11. In addition, induction training was provided to 143 Executive Trainees, 316 Supervisor Trainees and 340 workmen Trainees during the year. Training has also been imparted to the employees of State power utilities and other utilities within the country and overseas.

MoUs have been signed with MDI, gurgaon, Jamia Millia Islamia, New Delhi, Amity International Business School & Birla Institute of Management Technology, Noida, which will enable organizations to leverage each others capability and resources in area of pedagogy, training, research and innovation in systems, process etc. Further, your Company has tie-up with Foundation of Innovation and Technology Transfer of IIT, Delhi for conducting certification programmes for operation & maintenance of transmission system and telecom.

Considering the growing needs of the organization, a number of initiatives have been taken up with high priority accorded for Training & Development.

During the year, POWERGRID has inducted 979 personnel at various levels viz., Executives, Supervisors, workmen in different areas through open Advertisement on All India basis and Campus Selection from reputed Engineering and Management Institutes for executives, and for non-executives through Employment Exchange and local advertisement at regional level.

For mutual benefit in the area of Power Transmission Line Construction, your Company has initiated capacity building programmes and overall skill development in the country with the help of Transmission Line (TL) construction contractors under Public Private Partnership mode. A Memorandum of Understanding was signed with some of the TL Construction Contractors for training of unemployed youth in the field of TL construction jobs. Short term training courses were also offered in Power Transmission Line Tower Erection and Power Transmission Line Stringing works. Accreditation to these courses are being accorded by Directorate general of Employment and Training (DgET), Ministry of Labour & Employment under Modular Employable Skills of Skill Development Initiative Scheme and these courses have been included in the list of Modular Employable Skills courses approved by National Council for vocational Training (NCvT). Candidates, after successfully passing the examination conducted by Assessing Bodies appointed by DgET, shall be provided certificate by NCvT, govt. of India.

For augmenting the Capacity Building initiatives, "transmission Line management institute" has been established at Misa along with extension Centre at Salakati in Assam.

Knowledge Map and Knowledge Matrices of your company have been prepared along with its business verticals. This has helped the organization to identify the present knowledge assets in relation to corporate strategy and identify sources for bridging the knowledge gap. This has enabled your Company to figure out where knowledge, expertise and experiences reside in our people, documents, processes, systems and systemic routines. It is the first document of its type in Indian Power Industry.

Your Company has been bestowed with numerous awards in various categories. The major HR related awards bagged this year are "training excellence Gold award" by greentech Foundation for its hallmark performance in area of Training and Development, "Best Hr strategy in Line with Business award" and "award for excellence in training" by Asia's Best Employer Brand Awards 2010 at Singapore; "amity Hr excellence award" for Best Environment friendly and Employees Safety practices; "award for talent management" under 5th Employer Branding Awards 2010-11 by Employer Branding Institute and "organization with innovative Hr Practices" under global HR Excellence Awards 2010-11; "Hr excellence award for PsU sector for innovative Hr Practices" under Talent Leadership and HR Awards (for excellence in Human Resource Development) presented by Star News; "india shining star Csr award" in the Power Sector instituted by wockhardt Foundation, Mumbai.

Employee welfare

During the year, the Industrial Relations scenario in the Corporation has been cordial and no man days were lost. An effective work culture has been established in the organization through empowerment, transparency, decentralization, and practice of participative management.

The Company also holds open sessions, chaired by the CMD and all the functional Directors, for eliciting views/suggestions of the employees concerning the overall development & growth prospects of the organization.

Your Company believes in participation of all the employees down upto workmen level for meeting the objectives of the company. In your Company, POWERGRID National Bipartite Committee (PNBC), a joint consultative forum comprising of management and workmen representatives exists, which provides a platform for addressing issues related to the workmen cadre at the national level including the signing of three long term wage agreements. The forum is associated with the decision making process in policy formulation concerning larger issues of workmen category. The forum has also been instrumental in communicating the company's vision, business plans, core values and important business developments. Besides, regional level issues pertaining to workmen are dealt through regional forum of PNBC called PRBC (POWERGRID Regional Bipartite Committee). Your company was amongst the first few companies to implement wage revision (w.e.f. 1st January, 2007) for workmen & supervisors, this year.

Citizen's Charter

Your Company has formulated its Citizen's Charter providing a visible front of its objectives, mission, commitments, terms of service and its obligation to various stakeholders. Information about its schemes, policies, project plans of the Corporation and issues of general interest to stakeholders is available in the offices. This information is also available on Company's web site.

Implementation of official Language

Your Company is committed to ensure the implementation of Rajbhasha policy and has made all efforts to ensure use of Hindi as laid out in the Rajbhasha Annual Plan of the government of India. To promote the use of official language, various activities like "Annuvad Abhayaas Karyakram", training for use of computer in Hindi applications are organized to enhance the working knowledge. In addition, lectures on various topics by eminent Hindi scholars are arranged on regular basis to change the mindset of the employees.

Your Company maintains one of the best libraries in public sector wherein books, popular/ literary magazines and newspapers in Hindi are available. Every year, "Akhil Bhartiya Rajbhasha Sammelan", "Kavi Sammelan", "Drama", and competitions in Hindi writing etc. are also organized.

Attractive incentive schemes for employees have also been instituted for official working in Hindi and to contribute articles/ write ups for in-house magazines.

The effort made by your Company has been applauded in many forums. As a result of the excellent work being done by your Company in the field of Rajbhasha implementation, the Company has been conferred with "NTPC Rajbhasha shield for the year 2009-10" and "Rajabhasha Shiromani" shield. The Company's in-house magazine "grid Darpan" has bagged "Rajbhasha grih Patrika Samman" during the year.

Corporate Image Through Communication Management

This year, your Company launched the desired publicity campaign wherein the key strengths and expertise of the Company was presented to potential investors. Print and electronic media, Tv & radio commercials, outdoor hoardings and investor road shows were held for publicity campaign. This has equally contributed to the mega success of the Follow-on-Public offer of the Company.

Your Company launched advertisement campaigns in leading business magazines to pitch the consultancy business to SEBs, IPPs and other potential clients. Your Company also participated in a number of Exhibitions and Conferences including the "world Energy Congress" held in Montreal, Canada so as to maximize brand exposure and to explore business opportunities. Your Company successfully organised the gRIDTECH 2011 exhibition and international conference in which about 120 exhibitors showcased their state-of-the-art products in the field of transmission, distribution and grid management. Internal communications play a key role in enabling employees across the company to understand and embrace the Company's mission, goals and strategies. Monthly newsletters, house journals, wall magazines are published & widely circulated to apprise the employees of the developments, achievements & events, viewpoints of management and also give a platform to employees to participate and take pride of their Company. The media centre link of your Company's website was also revamped as Communication Lounge with new features such as media coverage, PR kit, industrial photography, query form etc.

Your company maintained cordial relations with the media so as to effectively deliver key messages to target audiences. In order to ensure that the Company's perspective on any given issue is reflected in the media, regular press releases were issued and press conferences were conducted along with interviews of top management were regularly published in leading publications/ journals & electronic media.

Vigilance - Transparency

governed by the principles of good Corporate governance, the Company strives to be accountable to the nation by being as transparent as possible about its operations; and the year gone by was another such year for Company's renewed commitment to transparency. During the year, a large number of systems improvements were undertaken by the Company to plug loopholes in the system and emphasis was laid on the awareness process in the Company.

Training was imparted to employees on 'Ethics and vigilance Matters' through various preventive vigilance workshops, in which 440 non-vigilance executives were imparted training. vigilance executives were also sent on training to various organizations like CBI and the National Institute of Criminology and Forensic Science, besides participating in training programmes organized at Corporate Centre. In addition, vigilance executives were also sent on foreign training at RIPA International, London.

Your Company also conducts process online inspections in which critical works are inspected at the initial stage of execution by the vigilance executives for shortcomings, if any. A large number of inspections have been conducted both by vigilance executives as well as by the Chief Technical Examiner's organisation (CTE). on the basis of these inspections, adequate cost compensation was affected for not conforming to technical specifications, wherever applicable. Besides this, a considerable number of CTE paras were also settled during the year.

The vigilance Awareness Period was organized from 25th october to 1st November, 2010 as per the directives of the Central vigilance Commission. The pledge was administered to all employees across the Country. During the week, various competitions were organized for the employees and their family members. Billboard and banners were put up at public places in order to generate publicity against corruption. Street plays and road shows were also organized. During this period, debate competitions on topics related to vigilance were also organized at various schools. The week concluded with the release of the in-house journal 'Candour' at the valedictory functions wherein prizes were also distributed.

To spread awareness amongst employees and to prevent violation of the Contract Rules, bulk SMS service was inaugurated during the occasion of the vigilance Awareness Period and sent to all employees in order to educate them on vigilance matters. Bulk SMS on the Conduct, Discipline & Appeal (CDA) Rules are being sent to all the employees every month.

Management Discussion And Analysis

In addition to the issues in the Directors' Report, some issues have been brought out in report on Management Discussion and Analysis placed at annexure-i to this Report.

Particulars of Employees

The particulars of employees of the Corporation who were in receipt of remuneration in excess of the limit prescribed under Section 217 (2A) of the Companies Act, 1956 is given in annexure-ii to this Report.

Conservation of Energy, Technology Absorption And Foreign Exchange Earnings And Outgo

As per requirements of disclosures under Section 217(1) (e) of Companies Act,1956 read with Rule 2 of the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, is given in annexure-iii to this Report.

Comptroller And Auditor General's Comments

Comments on the Accounts for the year ended 31st March, 2011 by the Comptroller and Auditor general of India under Section 619(4) of the Companies Act, 1956 are given in annexure-iV to this report.

Corporate Governance

A Report on the Corporate governance annexure-V, forming part of this Report, together with the Certificate thereon is given in annexure-Vi to this Report.

Your Company has got its Secretarial Compliance Audit conducted for the financial year ended 31st March, 2011 from M/s. Sanjay grover & Associates, Practising Company Secretary. Their Report forms part of this Annual Report. (annexure-Vii)

Statutory Auditors of the Company

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor general of India. M/s A.R. & Co., M/s Umamaheswara Rao & Co., M/s S R I Associates were appointed as Joint Statutory Auditors for the financial year 2010-11.

Cost Auditors of the Company

POWERGRID had appointed the following Cost Auditors under Section 233B of the Companies Act, 1956 for the Financial Year 2010-11:

Sh. Jugal Kishore Puri, Cost Accountant - NR-I, NR-II & SR-II

M/s. Chandra wadhwa & Co, Cost Accountants - wR-I, wR-II & SR-I

M/s. Mani & Co., Cost Accountants - ER-I, ER-II & NER

The due date for filing Cost Audit Reports for the financial year 2010-11 with the Cost Audit Branch, Ministry of Corporate Affairs is September 30, 2011 and the same will be filed with the Cost Audit Branch within the stipulated time.

Powergrid's Board

During the year, the tenure of four non-official Part-time Directors - Dr. P. K. Shetty, Dr. A. S. Narag, Shri Anil K. Agarwal and Shri F. A. vandrevala came to an end, who were appointed for a period of three years with effect from July 10, 2007 to July 9, 2010 and accordingly, they ceased to be Directors of POWERGRID. However, they were reappointed by goI vide order dated october 19, 2010 w.e.f. July 10, 2010 for a period of one year. The tenure of two non-official Part-time Directors Shri Ashok Khanna and Shri S.CTripathi came to an end on April 24, 2011 and they ceased to be Directors. The Board wishes to place on record its deep appreciation for the valuable services rendered by Shri Ashok Khanna and Shri S.CTripathi, during their association with POWERGRID. Shri J. Sridharan, Director (Finance) superannuated on April 30, 2011 and ceased to be Director on the Board of POWERGRID. The Board also wishes to place on record its deep appreciation and gratitude for the invaluable contribution and unstinted support to the Company given by Shri J. Sridharan during his tenure as Director (Finance).

Further, the tenure of four non-official Part-time Directors - Dr. P. K. Shetty, Dr. A. S. Narag, Shri Anil K. Agarwal and Shri F. A. vandrevala came to an end on July 9, 2011 and they ceased to be Directors. The tenure of Mrs. Sarita Prasad, non official part time Director came to an end on August 3, 2011. The Board wishes to place on record its deep appreciation for the valuable services rendered by Dr. P. K. Shetty; Dr. A. S. Narag; Shri Anil K. Agarwal; Shri F. A. vandrevala; Shri Ashok Khanna; Shri S. C. Tripathi; and Mrs. Sarita Prasad.

Shri R. T. Agarwal taken the charge of Director (Finance) with effect from July 29, 2011.

In accordance with the provisions of Section 255 and 256 of the Companies Act, 1956 read with Article 31(c) (iii) of the Articles of Association of the Company, Shri v. M. Kaul, Director and Shri Rakesh Jain, Director shall retire by rotation at the Annual general Meeting of your Company and being eligible, offer themselves for re-appointment.

Acknowledgements

The Board of Directors, with deep sense of appreciation, acknowledges the guidance and co-operation received from govt. of India, particularly Ministry of Power, Ministry of Finance, Ministry of Home Affairs, Ministry of External Affairs, Ministry of Statistics and Programme Implementation, Ministry of Environment & Forests, Central Electricity Regulatory Commission, Appellate Tribunal for Electricity, Central Electricity Authority, Planning Commission, Department of Public Enterprises, Regional Power Committees, and other con cerned govt. departments/agencies at the Central and State level as well as the Securities and Exchange Board of India, National Stock Exchange of India Ltd., and Bombay Stock Exchange Ltd., without whose active support, the achievements by the Corporation during the year under review would not have been possible.

Board's special appreciation and thanks are due to our valued customers, various State power utilities and other clients, who have awarded various consultancy works and reposed faith in Company's capability to handle them. The Board also appreciates the contribution of contractors, vendors and consultants for successful implementation of various projects by the Company. The Directors take this opportunity to thank the Principal Director of Commercial Audit and Ex-officio Member Audit Board- III for the cooperation during the year. Directors also acknowledge the valuable suggestions and guidance received from the Statutory Auditors during the Audit of Accounts of the Company for the year under review. The Board also conveys its sincere thanks to various national/international financial institutions/ banks/ credit rating agencies for their timely assist ance, continued trust and confidence reposed by them on POWERGRID.

we have achieved a great deal this year and none of it would have been possible without the skills and dedication of each member of POWERGRID family at all levels. I would like to thank the Executive team for its strong leadership and all our employees for their commitment and enthusiasm to achieve our aim to be the world's premier transmission network utility.

For and on behalf of the Board of Directors

Place: New Delhi (s. K. Chaturvedi)

Date: 04.08.2011 Chairman & Managing Director

Mar 31, 2010

It is my pleasure to present, on behalf of the Board of Directors, the 21st Annual Report on the performance of your Company during the financial year that ended on March 31, 2010 along with audited Statement of Accounts, Auditors Report, comments on the Accounts by the Comptroller and Auditor General of India for the reporting period.

POWERGRID has been contributing significantly towards development of Indian power sector by undertaking coordinated development of power transmission network through continuous innovations in technical & managerial fields along with effective and transparent operation of regional grids. Your company has once again displayed commendable performance during the year in all areas of its operations and established new benchmarks.

Highlights of achievements of your Company during FY 2009-10 are briefly mentioned here to give an overview of success achieved in all fronts:

Your company made an investment of -10,617 Crore during the year for implementation of various transmission projects, an increase of about 30% over the investment made in last year (- 8,167 Crore). The requisite funds were mobilised from domestic market, proceeds of loan form multilateral funding agencies namely, The World Bank (WB) and Asian Development Bank (ADB), besides internal resources. As on 31st March, 2010, your company owns and operates a transmission network of about 75,290 ckt kms of inter-State transmission lines, 124 nos. of EHV & HVDC substations with transformation capacity of about 83,100 MVA. Transmission Projects worth - 3,610 Crore were Commissioned during the year. Under RGGVY, POWERGRID created infrastructure for electrification in 3402 un-electrified villages against a target of 3100 villages, achievement of 110%. Service connections to about 6.87 Lakh BPL households were provided against a target of 6 Lakh, achievement of about 115%. Transmission system availability of 99.77% was achieved, highest so far in the history of the Company. There was no major grid disturbance in any part of the country during the year and regional grids were operated smoothly.

220/110/20 kV Chimtala Substation, in Kabul, Afghanistan along with the Pul-e-Khumri - Kabul 220 kV Double circuit transmission line completed by POWERGRID last year under the consultancy assignment, was inaugurated by His Excellency Mr. Hamid Karzai, the President of Islamic Republic of Afghanistan in May, 2009. With the commissioning of Chimtala Substation and associated transmission system in Afghanistan, power flow to Kabul has commenced from neighboring country Uzbekistan. It was one of the largest infrastructure projects ever undertaken in Afghanistan and through this system, for the first time in decades, Kabuls four million people can enjoy the benefits of a stable source of electricity. Certificates of appreciation were given by Honble Minister of Energy and Water, Afghanistan in recognition of the difficulties and challenges involved in the project implementation and contributions made by POWERGRID.

On the MoU front, based on overall performance, Company has posted "Excellent" for FY 2009-10, continuing the track record of achieving "Excellent" rating since signing of its first MoU for 1993-94.

Your Company has featured in the list of top 250 global energy companies compiled by Platts, a leading provider of energy and commodities information and named in the 20 fastest-growing Asian companies.

Your Company has been conferred with three Gold Shields and one Silver Shield in the National Awards for Meritorious Performance in Power Sector for the year 2008-09. In this, Western Region-I Transmission System and North-Eastern Region Transmission System were awarded Gold Shields for Transmission System Availability, while the 220 kV Double Circuit Transmission Line from Pul-e-Khumri to Kabul in Afghanistan was bestowed with Gold Shield as a Special Award for early completion of project. Eastern Region-I Transmission System bagged the Silver Shield for Transmission System Availability. It is a matter of pride that your Company has been receiving these awards continuously for the last five years.

In addition, during FY 2009-10, POWERGRID has been conferred with "Certificate of Merit Award" for its contribution towards Human Resource Development (HRD) by International Federation of Training and Development Organization Limited, Geneva, Switzerland. POWERGRID has also received "INFOCOM CMAI National Telecom Award 2009" for "Utilities Providing Best Telecom Infrastructure" and prestigious 2nd India Power Award 2009 under Overall Utility Performance Category, by Council of Power Utilities & KW Conference.

FINANCIAL RESULTS

Rs. Crore

2009-10 2008-09

Turnover * 7504 6139

Gross Margin 6247 5037 Less: Depreciation 1980 1094

Prior period Adjustment 96 70

Deferred Revenue Expenses written off 2 2

PBIT 4170 3871

PBT 2626 2229

PAT 2041 1691

APPROPRIATIONS

Transfer to Bonds Redemption Reserve 630 491

Interim Dividend 210 210

Proposed final Dividend 421 295

Tax on Interim Dividend 36 36

Provision for Dividend Tax on proposed final dividend 70 50

Transfer to General Reserve 800 700

Transfer to Self Insurance Reserve 38 35

Transfer to LDC Reserve 16 -

Transfer to CSR Activities Reserve 8 -

* Excluding Foreign Exchange Rate Variation.

OPERATIONAL EXCELLENCE

Over a decade and half of excellent business operations, your Company has developed strong in-house expertise in all specialised areas of power transmission business and has carved a niche for itself amongst the largest transmission utilities in the world. As on 31st March, 2010, your company owns and operates a transmission network of about 75,290 ckt kms of inter-State transmission lines, 124 nos. of EHV & HVDC substations with transformation capacity of about 83,100 MVA and about 50% of total power generated in the country is wheeled over it. For the year, availability of 99.77% was achieved for the transmission system, highest ever in the history of the company, and number of tripping per line was contained at 2.07 against MoU target (Excellent) of 2.60.

To enhance the efficiency of its operations, State-of-the-art O&M measures like Hotline Maintenance, Emergency Restoration System and the cleaning of insulators through helicopters was adopted. Equipment health is being assessed periodically using "Condition Assessment Techniques" with sophisticated tools. All shut down and non shut down maintenance activities are planned in advance and an "Annual Maintenance Plan" is worked out for each and every asset. There are well defined levels for approval of test results depending on their importance and criticality. As a result, your company has been able to display its capability in consistently maintaining the high transmission system availability, comparable with the best international standards. In addition, State-of-the-art "Emergency Restoration System" were also deployed for restoration of collapsed transmission lines in minimum possible time. Further, appropriate initiatives have been taken up to replace ageing transmission assets as per prevalent CERC tariff regulations.

O&M activities of your company are ISO certified and systems and procedures are being modified periodically to keep abreast with the latest technology. Documents of maintenance schedule, procedures and formats have been standardized for all assets. All substations and line offices can access these documents through Companys website portal. Periodical reviews are conducted at Substations and Line offices to evaluate implementation of the systems and procedures.

As on date about 16 sub-stations are operated remotely. Keeping in view the successful experience of remote operation and international trend of unmanned sub-stations, actions are being initiated to establish "National Transmission Management Centre" to control & operate most of the sub-stations remotely and "maintenance hub" to cater to the maintenance requirements of nearby group of sub-stations rather than placing staff in each sub-station for optimal utilisation of manpower & also to reduce the response time in case of fault.

Transformer On-Line Condition Monitoring system (TOLCM) was installed at Mandola & Rihand substations to assess the condition of transformers. This system measures bushing Capacitance & Tan delta, DGA, moisture, OLTC monitoring, loading profile, oil temperature, winding temperature and residual life assessment and is helpful in taking advance action in case of any abnormality to avoid catastrophic failures.

Your company has also entered into a contract with M/s UMS Group, USA in March 2010 for the International Benchmarking of its O&M practices through International Transmission Operations & Maintenance Study (ITOMS) based on cost, productivity, service levels, equipment maintenance, Asset Management, safety etc. This exercise will pinpoint areas requiring improvements with respect to similar utilities in the world and will help in identifying opportunities for improvement and discovering best practices in Operations, Maintenance and Technology.

A conference on International Best Practices in O&M of EHV Transmission System was organized by POWERGRID on 5th and 6th March, 2010 at Gurgaon. International experts from various renowned utilities and institutions such as Doble- USA; Hydro-Quebec, Canada; BC Hydro, Canada; TEPCO, Japan; NGC, UK; Furnas, Brazil; ASU, USA had participated in the conference and delivered lectures on the best practices being followed in their system. The conference was also attended by executives from all the Regions and Corporate Centre. The conference provided a platform for the employees to learn various emerging techniques in the field of O&M in EHV Transmission System and also to interact with various experts from different utilities across the globe. Further, your company is exploring options to carry out aerial patrolling of transmission lines through helicopter on trial basis and on its successful completion, it is planned to be deployed country wide to optimise manpower & for better efficiency in maintaining the transmission lines.

QUALITY MANAGEMENT

Your Company, in all its endeavours, is committed to provide cost effective & quality services to its valued customers thereby deriving high customer satisfaction. To achieve this, quality improvement measures/ techniques are being adopted at every stage from conceptualisation of project till commissioning and subsequently during operation phase to identify the areas of improvement and develop action plans for achieving the desired level of quality in all of its activities.

During the year, Quality Management System (QMS) of your Company was reviewed and based on evaluation of implementation of the latest systems and procedures the revised certification with validity upto June, 2013 was obtained. Today, your company stands certified with Integrated Management System (IMS) as per Publicly Available Specification, PAS 99:2006 integrating requirement of ISO 9001:2008 (Quality), ISO 14001:2004 (Environment) and OHSAS 18001:2007 (Occupational Health & Safety Management System). POWERGRID also stands audited for Social Accountability System, SA 8000:2008 for all its establishments. With the accreditation of ISO 9001:2000 for all Regional Load Dispatch Centres (RLDCs) during the last year, QMS certification for all establishments of POWERGRID has been completed.

GRID MANAGEMENT AND OPEN ACCESS

Optimum utilization of generation resources requires development of a strong transmission network and its implementation has been taken up by your Company in a phased manner. Planned rapid expansion of regional grids and their integration to form National Grid poses great challenges in Grid Operation & Management. Toward this, various inter-regional links have been implemented matching with generation capacity addition programme and growing power demand in the country. Central Sector Generating Stations have not faced any generation evacuation problem on account of transmission constraints during the year, as the strong and robust transmission network set up by your Company is there to take care of evacuation related issues.

Reliable and stable operation of regional power grids has always been a matter of high priority for your company. The facilities at all the five Regional Load Despatch Centers (RLDCs) and National Load Despatch Centre (NLDC) are being upgraded continuously considering the increased complexity of grid operation in the country. Our initiatives towards effective grid management are paying rich dividends leading to minimal grid disturbances along with improvement in ^ vital grid parameters such as voltage and frequency. Indian Power Grids have not experienced any major grid disturbance during the last seven years. Even minor grid disturbances in regional grids have come down significantly. Further, grid frequency was maintained in the prescribed band as per IEGC, i.e. 49.2 Hz to 50.3 Hz for large percentage of time in all the five regions during the year.

Development of various inter-regional transmission links, strong transmission network and modernised Regional Load Despatch Centers (RLDCs) have also facilitated manifold growth in inter-regional power exchanges on real-time basis. During FY 2009-10, about 52,000 MUs of inter-regional energy transfer was facilitated across the country as compared to about 46,000 MUs during FY 2008-09. The increased inter-regional power exchanges have helped in meeting more demand in energy deficit regions besides achieving overall economy.

On behalf of various State Power utilities and other players in the regional pool, your company, through RLDCs, facilitated settlement of UI charges to the tune of Rs. 12,290 Crore in FY 2009-10 (as compared to Rs. 14,000 Crore in FY 2008-09).

Further, in line with GoI directive, your Company has established M/s Power System Operation Corporation Limited (POSOCO), a 100% subsidiary of POWERGRID, in March, 2009 to look after Grid Management function. However, pending determination and transfer of assets, Grid management function continued to be operated by your Company.

Inter-State power exchange in an Open Access environment:

Non-discriminatory Open Access is the key for development of a successful Competitive Electricity Market. Short-Term Open Access is applicable for utilization of surplus capacity available on the inter-State transmission System by virtue of inherent design margins, margins available due to variations in the power flows and margins available due to in-built spare transmission capacity created to cater to the future load growth or generation addition.

Short-Term Open Access in inter-State transmission has been successfully implemented and facilitated for development of a vibrant short-term electricity market. Around hundred captive power plants across the country have also exploited the benefit of short-term open access. Under open access, more than 18,244 transactions were approved during the year involving about 39,500 MUs of energy. Thus, the Company facilitated flow of power across the country effectively utilising the available transmission capacities, thus bringing much needed open access to reality. Since introduction of Short-term open access in inter-State transmission in May, 2004, more than 40,000 bilateral transactions has taken place and more than 152,500 MUs have been exchanged.

Open access environment encourages exchange of power as per the market conditions. For this purpose, two Power Exchanges have been established in the country, which facilitates collective transactions discovered through a transparent, anonymous double sided based bidding mechanism. In a short-span of less than 2 years, around 10,000 MUs have been exchanged through power exchanges. In this financial year itself, around 7,000 MUs have been exchanged.

PROJECT IMPLEMENTATION

Your Company gives utmost priority for implementation of its projects with economy and within stipulated time frame to be eligible for additional return on equity of 0.5% as per the prevailing CERC tariff norms and to derive maximum economic benefits. Your companys advanced and cost effective Integrated Project Management and Control System (IPMCS) for total project review and monitoring has been contributing significantly. Project implementation activities involves total project review and monitoring including Standardisation of Designs, Project Review Meetings (PRMs) at regular intervals through video conferencing, pre-emptive measures and advance actions on various project linked activities such as land acquisition, survey and soil investigations, tender activities, funding tie-up, etc. in parallel with project investment approval process.

During FY 2009-10, transmission projects worth about Rs. 3,610 Crore were commissioned. These additions to the Companys network have helped in improving power supply situation in various regional grids, facilitating enhanced inter-regional power transfer and improved reliability of the system. Further, Board of Directors of your company have accorded investment approval for 14 new transmission projects with an estimated cost of about Rs. 13,450 Crore comprising of 6,500 ckm of transmission lines, 20 no. sub-stations and transformation capacity of about 27,825 MVA. Major projects includes Transmission System associated with generation Projects like Pallatana GBPP (726 MW), Bongaigaon TPS (750 MW), Mauda (2x500), Kalpakkam PFBR (500 MW), Nabinagar TPS (1000 MW), Simhadri-II (2x500MW), VindhyachalÃIV (1000MW), RihandÃIII (1000MW), System Strengthening in Northern Region for Sasan & Mundra Ultra Mega Power Projects, 765 KV System for Central Part of Northern Grid (Part-II&III), Northern Regional Transmission Strengthening Scheme, etc.. Implementation activities of these projects have already commenced.

At the end of March, 2010, transmission projects at a cost of over Rs. 81,000 Crore involving about 42,000 ckm of transmission lines, 58 new substations and transformation capacity of 88,675 MVA are under various stages of implementation.

Your Company has also been entrusted by Govt. of India to develop associated transmission systems for evacuation of power from four Ultra Mega Power Projects (UMPPs) viz. Mundra, Sasan, Krishnapatnam and Tilaiyya UMPP. Necessary actions are being taken by the Company for implementation of these projects matching with the generation projects. In this, Associated Transmission Systems for Mundra and Sasan UMPPs have been approved and implementation has commenced while transmission system for Krishnapatnam UMPP is under investment approval & that for Tillaiyya UMPP is under finalisation.

FINANCIAL MANAGEMENT

The year 2009-10 has been another year of impressive financial performance for your Company, with a Turnover of Rs. 7504 Crore and Net Profit of Rs. 2041 Crore as compared to Rs. 6,139 Crore and Rs. 1,691 Crore respectively during FY 2008-09, an increase of 22.2% and 20.7% respectively. The Gross Asset Base of the Company has been enhanced to Rs. 43,202 Crore in 2009-10 from Rs. 40,319 Crore in 2008-09.

Dividend Payout

In addition to interim dividend of Rs. 0.50 per share paid in January, 2010, your Directors have recommended a final dividend of Rs. 1.0 per share for the year 2009-10. The total dividend payout for the year is Rs. 1.50 per share as against Rs. 1.20 per share paid last financial year. The final dividend shall be paid after your approval at the Annual General Meeting. The total dividend pay-out for the year amounts to Rs. 631.34 Crore representing 30.93% of the profits after tax for the year. Earning per share has also increased to Rs. 4.85 as against Rs. 4.02 last year.

To remain a financially progressive organisation and enhance value for our shareholders in emerging market conditions, company is taking all possible steps to further improve its financial performance by expanding the consultancy activities in synergic businesses such as consultancy assignments at National and International level in transmission, distribution, telecom etc.. Your Directors believe that strategic diversification into synergic business would lead to increase in shareholders value.

Directors Responsibility Statement

As required u/s 217 (AA) of the Companies Act, 1956, your Directors confirm that:

- In the preparation of the Annual Accounts, the applicable accounting standards have been followed;

- The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

- The Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

- The Directors have prepared the annual accounts on a going concern basis.

XI Plan Investment programme

Government of Indias mission of Power for All by 2012 envisages sufficient, reliable & quality power to all at optimum cost, and, inter-alia achieving GDP growth rate of 8-9%. The gigantic task can only be accomplished with matching investments in the power sector. For development of inter-State transmission system, an investment of about - 55,000 Crore is planned by the Company during XI Plan for further developing National Grid including inter-regional transmission systems, system strengthening schemes, transmission system for evacuation of power from generation projects under central sector and Ultra Mega Power Projects (UMPPs). In fact, during first 3 years of XI plan, investment of - 25,440 Crore (46% of planned investment) has already been made. For the FY 2010-11, an outlay of - 12,900 Crore has been kept. Balance expenditure of about - 16,700 Crore is envisaged to be made in FY 2011-12 based on the generation capacity addition.

Your Company is placed in a comfortable position in terms of resource mobilisation, as it enjoys an excellent credit rating with financial institutions at national and international level. Our ongoing transmission projects, which are at various stages of implementation, are progressing as per schedule. Your company does not envisage any problem in mobilizing the resources for meeting the planned investment during XI plan period. Loan requirement shall be met through borrowings from multilateral funding agencies (such as The World Bank and Asian Development Bank)/ suppliers credit and balance from domestic sources on yearly basis as per requirement. Presently, about 80% of fund requirement has already been tied-up/ identified and balance shall be mobilized as per requirement. Being a AAA rated, your Company is not foreseeing any problem in mobilizing the resources from domestic market at competitive rates. Equity requirement of about - 16,500 Crore shall be met through internal resources, sale of bonds, follow-on public issue etc. as per requirement/ approval from Govt. of India.

COMMERCIAL PERFORMANCE

Your companys performance has been highly satisfactory on commercial front, in terms of realisation of transmission charges. Current realisation of about - 6570 Crore stood at about 100% of billed amount during the year 2009-10 against - 5,877 Crore realised last year. POWERGRID is continuously realising 100% of its current dues for the last six years. Post-securitisation, outstanding dues (beyond 90 days of billing) stands at nil as on March 31, 2010. The present LC coverage of about - 503 Crore is equivalent to more than 100% of average monthly billing.

DEVELOPMENT OF NATIONAL GRID

Your company is playing an important role in development of National Grid for optimum utilisation of generation resources and for meeting power demand in various parts of the country. As on March 31, 2010, National Power Grid with an inter-regional power transmission capacity of about 20,800 MW has been established which includes one of the largest synchronous grid in the world with installed generation capacity of over 1,15,000 MW. Four major regional power system grids, namely Northern, Eastern, North-Eastern & Western are presently operating at same frequency in synchronous mode. Southern Region is connected to this grid through various HVDC links. Substantial amount of power is being exchanged across the country. In fact, establishment of National Grid is also facilitating transfer of short term surplus power from any place to any other place in the country from generation under State and Private sector as well.

Capacity of National Grid is planned to be enhanced to more than 32,000 MW by end of XI Plan or early XII plan as per materialization of planned generation capacity addition.

HVDC Back to back Station at Sasaram is operating as per system requirements and revenue is being realised as per CERC norms. Considering the future transmission system development in the regions, Standing Committee of Regional Transmission Planning of CEA and Regional power Committees in Southern region, Western Region and Northern Region and constituents of all the three Regions have agreed to shift HVDC equipment at Sasaram to Kolhapur and also to pay transmission charges thereof.

TECHNOLOGY UP-GRADATION, RESEARCH & DEVELOPMENT

In every stage of transmission system development there are challenges, be it Planning, Construction, Operation or Maintenance, Conserving Right-of-Way (RoW), minimizing impact on natural resources and cost effectiveness in evacuation of power, coordinated development of cost effective Transmission corridor, flexibility in upgradation of transfer capacity of lines matching with power transfer requirement are major areas of concerns in development of transmission network in the country. In order to address these issues effectively, your Company has undertaken several technological innovations aimed at conserving Right-of-Way (RoW), minimizing impact on natural resources & human habitat and cost effectiveness in evacuation of power from the future generation projects.

Technology upgradation is a continuous process. Liberalisation & globalisation have led to greater competition from both domestic as well as international companies. This has reinforced the need for technology upgradation to attain international levels of competitiveness and to be able to offer contemporary levels of technology. In order to meet these objectives, the development effort is being pursued by entering into collaboration with reputed foreign manufacturers, forming joint ventures, in-house R&D efforts and through interaction with various research organisations.

For optimum utilisation of precious right of way and effective Grid Operation & Management, Company is deploying state-of-the-art technologies such as High Temperature Conductors, Series Compensation including Thyristor Control, Multi Circuits, Compact & Tall Towers etc. in transmission systems. Having established the 765kV EHV AC & ÃÂ±500kV HVDC technologies, as a next step to meet expected accelerated growth, initiatives have been taken up to introduce next higher transmission voltages in HVDC and AC, High Surge Impedance Loading (HSIL) Lines, Large Scale Automation of Sub-stations, Use of Helicopter in construction & maintenance, etc. to ensure development of efficient, coordinated and economical inter-State transmission system for bulk transfer of power.

Towards introduction of next voltage level in HVDC, implementation of ÃÂ±800kV, 6000 MW HVDC Bi-pole line from North Eastern Region to Northern Region have commenced. This link shall pass through chicken neck area of North- Eastern Region and shall be transmitting power over a distance of more than 2000 Kms. With regard to AC, establishment of a 1200kV Ultra High Voltage AC Test Station at Bina in Western Region is under process as a collaborative effort with manufacturers, who would be able to field test their indigenously developed 1200kV equipment on long term basis. Presently, designs and proto type testing of 1200kV DA type tower has been successfully completed and the same for other types of towers and most of the sub-station equipment are under progress. Tower foundations & erection works are under progress. These technological initiatives are pioneering efforts even globally.

In India, creation of facilities for short-circuit testing of transformers was long felt. In this direction, National High Power Test Laboratory (Pvt.) Ltd. (NHPTL), a Joint Venture Company of NTPC, NHPC, POWERGRID and DVC has been created in May, 2009 for establishment of a fully independent, stand alone, state-of-the-art, professionally managed, international class, On Line High Power Short Circuit Test Facility in India. This shall provide a full range of short-circuit test facilities for the electrical equipment manufacturing industry and power utilities in conformance to Indian and International Standards. NHPTL is proposed to be established at Bina sub-station of your company in Western Region in four stages. Stage-I & II are proposed to be taken up simultaneously which will facilitate testing of large power transformers (up to 400 kV & 765 kV voltage levels) for short-circuit withstand capabilities. Estimated cost of this facility is envisaged to be about - 340 Crore and the facility is expected to be commissioned by June, 2012.

The latest in the transmission business is the use of Smart Grid technology which envisages providing choices to each and every customer for deciding the timing and amount of power consumption based upon the price of the power at a particular moment of time. Your Company is taking leadership initiative for implementation of Smart Grid Technology in the country for effective transmission & distribution of power. Two pilot projects for transmission system of Northern & Western Region Power System have already been undertaken which involves deployment of Synchro Phasor based WAMS (Wide Area Measurement System) Technology. Your companys initiative would prompt other utilities for similar action and we are ready to provide necessary help to all these organizations.

A two day international workshop on Smart Grid was organized by your company in January, 2010 for all the Power Utilities of the country at the Gurgaon Office in which technological and strategically important issues involved in implementation of the smart grid were discussed. The workshop was inaugurated by Honble Union Minister of Power, Shri Sushilkumar Shinde. Senior officials of Ministry of Power, Central Electricity Authority, State Power utilities and Industry experts from India, and abroad, etc. have participated in the workshop.

PERFORMANCE IN TELECOM

Your Company is one of the few telecom players with marked presence in remote areas and has acquired Infrastructure Provider Category-I (IP-I), Internet Service Provider (ISP) Category A and National Long Distance (NLD) licenses to provide a variety of services. Our major customers include prestigious Government organizations such as ERNET, STPI, NIC and various Government Ministries along with other prime telecom companies. It is our constant endeavour to provide a robust highway of telecommunication at affordable cost with ultra modern and eco-friendly implementation techniques. In the coming years, Company is also planning to attract customers from entertainment and broadcasting industry.

At the end of FY 2009-10, your Company has established around 20,600 Kms of telecom network connecting all metros, major cities & towns. Availability of the Telecom Network has been consistently maintained at 99.9% during 2009- 10.

Despite a general slowdown experienced by Telecom industry wherein intense price war is resulting into declining average revenue per user, your Company has achieved a growth and earned revenue of about Rs. 158 Crore in telecom business during FY 2009-10, compared to Rs. 150 Crore in FY 2008-09.

POWERGRID is a consortium member for implementing the prestigious telecom infrastructure project of national importance, namely National Knowledge Network (NKN) project, which envisages a gigantic 3 layer Telecom network of all knowledge centres across the country such as IITs, IISc, etc. on high speed connectivity at an estimated total project cost of about Rs. 6,000 Crore. Based on the work likely to be allocated to your company, our investment in the NKN project is expected to be of the order of about Rs. 560 Core. A revenue of about Rs. 1000 Crore over a period of 10 years is envisaged by your company from this project.

Your Company has lined up major expansion plans for its telecom network, which include further diversification into value added services such as MPLS-VPN, NLD Switched Voice, Data Centres and the Tower Infra business. With the focus now shifting from urban to rural connectivity, your Companys role in telecom becomes even more significant as it has presence in rural & remote areas of the country by way of its Power Transmission network which can be leveraged to provide telecom services in such areas by co-locating Wireless Antennas on Power Towers.

During the year, we have added some new customers (viz. HSBC Bank, Videocon, Sistema Shyam Teleservices Limited, Loop Telecom, Unitech Wireless Limited (Uninor), etc. from the Private Sector and National Disaster Management Authority (NDMA), India International Centre, Prasar Bharti from Govt. Sector, etc.) to our already impressive list of customers.

BUSINESS DEVELOPMENT & CONSULTANCY

Backed by its strong in-house expertise in various facets of Transmission, Sub-transmission, Distribution and Telecom sectors, POWERGRID is executing various consultancy assignments in the areas of Planning, Engineering, Load Despatch & Communication, Telecommunication, Contracting, Financial and Project Management at national & international level.

In the international arena, your Company has emerged as a strong player in transmission sector in South Asia and is providing consultancy services in United Arab Emirates (UAE), Nigeria and Bangladesh in the field of transmission, grid management and telecom which would help these countries in smooth operation of the links. Further, a high capacity cross border transmission corridor for bulk transfer of power between India and Nepal is being implemented by two separate Joint Venture companies for Indian portion & Nepal portion wherein POWERGRID, SJVNL, Nepal Electricity Authority and IL&FS are the stakeholders and the project is expected to be completed by 2012 at an estimated cost of Rs. 205 Crore. This high capacity transmission line will initially help Nepal in meeting part of its deficit by importing power from India and subsequently for export of power to India. In addition, interconnection between India and Bangladesh has been finalized, and, besides taking up activities for implementation of India portion of the line, your Company is also providing consultancy to Power Grid Company of Bangladesh (PGCB) for construction of Bangladesh portion of the interconnection as well as capacity building of PGCBs manpower.

Your Company has been keenly participating in tenders floated by ADB, The World Bank, and other foreign organizations and has also collaborated with internationally reputed companies like KEMA, Netherlands and is submitting Expressions of Interest and Prequalification documents to clients in various countries like Vietnam, China, Kenya, Ethiopia, Uzbekistan, Afghanistan & Bangladesh for participating in International Competitive Bidding.

During the year 2009-10, business development opportunities continued to receive focussed attention and thrust across the entire value chain of the power sector. Your Company has realised revenue of about Rs. 269 Crore during FY 2009-10 as consultancy fee from its various ongoing assignments as compared to Rs. 216 Crore realised last year. Further, during the year, 24 nos. repeat orders have been received from customers who placed orders for consultancy jobs in the previous financial year. This is the highest so far achieved and shows high level of customer satisfaction.

CONTRIBUTION IN DISTRIBUTION REFORMS

A well planned generation system, integrated transmission system & reliable distribution system penetrated through remotely located villages & habitations is the need of the hour. You can proudly claim that your Company is playing a significant role in carrying forward the distribution reforms through Govt. of Indias sponsored Accelerated Power Development & Reforms Programme (APDRP) and Rajeev Gandhi Grameen Vidyutikaran Yojna (RGGVY) schemes in various parts of the Country. These schemes are aimed at bringing qualitative improvement in distribution sector and expected to achieve reduction of AT&C losses.

With its strong managerial and technical expertise, your Company is assisting Govt. of India under APDRP for improvement of distribution system in various States. Most of these schemes have been commissioned/ are nearing completion. Under RGGVY, your Company has been assigned the job for execution of rural electrification works in 68 districts in the country covering around 74,000 villages at an estimated cost of about - 6,400 Crore. For the year 2009-10, infrastructure has been created for electrification in 3402 un-electrified villages against a target of 3100 villages, achievement of 110%. Service connections to about 6.87 Lakh BPL households were provided against a target of 6 Lakh, achievement of about 115%. Cumulatively, till March, 2010, your Company has established infrastructure for electrification of 37,923 villages. Further, service connection to about 16.20 Lakh BPL households has also been released under RGGVY.

E-GOVERNANCE:

Your Company is committed to fulfilment of the expectations of stakeholders through continual enhancement of Effectiveness, Efficiency and Transparency in its functions. In order to meet the above objective potential of Information technology as an enabler in its pursuit to achieve operational excellence is being leveraged.

Considering the present business needs and the fast pace of growth the Company has been experiencing in the last 5 years and which is only expected to grow exponentially, your Company is taking steps to integrate various parts of the systems, like financial and physical monitoring and control internally through the use of Enterprise Resource Planning (ERP).

First workshop cum meeting of Crisis Management Group for "Countering Cyber attacks and Cyber terrorism" was also organised by your Company in association with Indian Computer Emergency Response Team (CERT-In), Department of Information Technology, Ministry of Communications & Information Technology in February, 2010 at Gurgaon.

Major IT endeavours during the year include the following:

- IT Infrastructure consolidation and strengthening

- Facility Management System initiatives for maintaining IT infrastructure Nationwide

- Formulated the Knowledge Management Policy & started IT enabled initiatives

- Initiated implementation of Crisis Management Plan for Countering Cyber attacks and Cyber Terrorism and the draft Crisis Management Plan prepared as per CERT-In guidelines

- Proto testing of Enterprise Project Management (EPM) application for transmission projects

- Strategic Planning for EHV infrastructure Asset Management

- Developed e-Performance Management System

- Initiated activities for E-procurement.

ENVIRONMENTAL AND SOCIAL SAFEGUARDS MANAGEMENT

Increasing threat of climate change and environmental degradation due to increasing pollution and growth is a major area of concern today. You must be proud to know that your company, with a goal of achieving sustainable development of the power sector in the country has taken proactive measures for improvements in the areas of Environment Management. POWERGRIDs contribution towards environmental degradation is almost negligible. Transmission projects ^^ are non-polluting in nature and environmentally clean and dont generate solid waste.

Your Company is the first PSU to develop Environmental and Social Policy and Procedures (ESPP) in 1998 and upgraded it from time to time through wide consultations with social bodies, local communities, Govt. agencies, etc. in line with changes and International best practices to pre-empt all possible Environment & Social issues related to land acquisition & RoW clearances through proper & timely management. The ESPP outlines Companys approach and commitment to deal with environmental and social issues, relating to its transmission projects and lays its management procedures and protocol to mitigate the same. During last 12 years, ESPP implementation has drawn many appreciations/ awards from various stakeholders.

When we take loan from multilateral funding agencies, compliance to their environment policy, besides statutory requirement of the country, have to be ensured and their prior approval is required before commencing the work. However, considering the environment policy of your Company, which not only takes care of sustainability requirement but has been finalized keeping the international standards, The World Bank has selected POWERGRIDs ESPP as the 1st candidate for Use of Country Systems (UCS) in India, in which prior approval is not required. This facilitates expeditious compliance of funding agency requirement and timely implementation of transmission projects.

Your company took keen interest towards development of first Sustainability Report in power sector, for measuring, disclosing and being accountable to internal and external stakeholders for organizational performance towards sustainable development.

The results achieved by your company towards conservation of RoW are praiseworthy. With the development of innovative tower designs, the RoW requirement has been reduced from 85 m to 64 m for 765 kV and from 52 m to 46 m for 400 kV D/c AC line. You would be glad to know that more than a lakh sq. meters of precious RoW was saved by constructing 765 kV lines by your company till March, 2010. Apart from this, installation of Pole type structures for 400 kV in urban areas such as Dadri-Ballabhgarh transmission line has not only reduced the RoW, but were more aesthetic compared to conventional lattice type structures.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) has always been an integral part of your Companys vision and the cornerstone of Core Values of Good Corporate Citizenship. Your Company is committed towards taking responsibility for its impact, though very minimal in nature, on society and being accountable to the inhabitants of Mother Nature. As part of Corporate Social Responsibility, your Company is making key contributions to society through its core business activities, its social investment and philanthropy programmes and its engagement in public policy to ensure Socio-Economic development of weaker sections of Society and for overall conservation of Environment and improvement of Ecological balance.

Companys Corporate Social Responsibility Policy addresses the issue of Community Development (including employment, conservation and environment, etc.) in the vicinity of its offices/ sub-stations where the Resettlement and Rehabilitation (R&R) activities under ESPP have been completed and closed. The policy provides for spending 0.75% of previous years net profit on identified CSR activities.

The CSR Budget for the year 2009-10 was Rs. 12.67 Crore in different thrust areas like Education, Health, Infrastructural Development, Environment & Ecology, Sports, Arts & Cultural heritage, etc. spread across different Regions, which is non-lapsable and the unspent amount is to be carried forward to succeeding year. During the year, an amount of Rs. 4.29 crore was spent on CSR activities and the balance amount has been earmarked for expenditure during next year. A major portion of CSR initiatives was in the development of physical infrastructure in nearby villages like constructing class room, library, computer room for schools, primary health centre, drinking & sanitation facility, check dam, drainage, roads, bus shelter, community centre, street lights, cultural interpretation centre & auditorium etc. These facilities were created with the objective of these being of long lasting value and have multiplier effect on improving the standard and quality of life of the villagers.

CSR initiatives undertaken in different villages around our establishments have contributed tremendously and earned the goodwill of the local inhabitants. The work done by the Company has been appreciated by one and all. This has also played a pivotal role in improving the quality of life of local people by enabling them to use the physical infrastructure established by the company and bringing the marginalized people into the mainstream of development.

EMPLOYEES, OUR ASSESTS FOR SUCCESS

Human Resource Development

Company pursues the philosophy that human value is the most vital asset of the organization and accordingly, its policy is focused on Human Resource Development (HRD) through sustained efforts towards skill upgradation, career enhancement and job rotation. HRD strategy is evolved with a view to make employees competent for planning, monitoring and timely execution of construction projects, enable them to perform operation & maintenance effectively and upgrade/innovate technologically, provide better career growth, etc.

Training needs are identified with two pronged approach. Firstly, a structured questionnaire indicating the key result areas of various key functions is circulated among employees offline and online to seek the training needs of individuals. Secondly, a committee consisting of Heads of Departments representing various Regions examines the individual needs in terms of competencies and the gaps thereof. After a detailed discussion with key functionaries of various Departments, individual training needs are determined after verification of the same with their Annual Appraisal Reports. Comprehensive Annual HRD Action Planner is evolved based on the above process.

Your Company has been the front runner to implement the revised pay scales as well as perks, which are best in the PSUs. In order to cope up with the increased workload and challenges, this year about 1,200 employees have been recruited. Due to good reputation of your Company and also because of good pay packages, encouraging response has been received from candidates of IIMs during campus recruitments. Besides, a number of executive trainees from NITs and IITs have also been recruited through campus recruitments.

Your Companys Human Resources function took a number of initiatives during the year in response to intensifying competition for trained manpower. During the year, to nurture and develop the existing manpower, a series of long- duration training & development interventions Ã both functional and developmental Ã were carried out with focus on building leadership capabilities, strategic orientation and skills to suit new businesses.

Around 6560 employees have undergone classroom, in-house and external training programs, in all functional areas including programs on Sub-station Automation, Latest Survey Techniques, Developing Marketing Skills for Telecom Business, Advanced Features in IT, Networking Administration and Security, Power System Analysis, etc.. Your Company has also taken up training of employees of State Electricity Boards and other power utilities within the country and overseas.

Your Company has collaborations and strategic alliances with prominent management institutes such as IIM, IIT, IPE, MDI, XLRI, ECSI, NPTI etc. as a testimony of successful partnership between utility and academic institutions for achieving operational and professional excellence. At the same time, the hand-on training programmes being conducted at manufacturers premises such as CGL, BHEL, ABB, AREVA etc. are the excellent examples of fruitful collaboration between the utility and the industry.

All newly recruited employees are made to undergo an induction program. 259 Executive Trainees have been put through a one year induction training program during the year, which included class-room training, industry visits and on the job training. Employees promoted across categories are subjected to programs to enhance their skills. As a step towards integrated development of employees, employees are encouraged to take up membership of professional bodies through reimbursement of the professional fees.

Emerging business order of power sector fuelled by reform program calls for greater optimization of human resource, building requisite human resource skills and competencies, motivating people for superior performance, inculcating quality and customer delight oriented practices, involving line managers as partners of HR and bringing a scientific system approach to HR function, especially building the business human resource linkage at micro and macro levels. Your Company has continuously and consistently endeavored to excel on these parameters. Some of the interventions adopted to measure the effectiveness of HRM function besides those linked with business includes HR Function Effectiveness Audit, Culture Audit, System Audit, Manpower Audit & Review, etc..

Impact of all these HR function effectiveness measurement exercises along with HR interventions can be seen through different indicators, like there has been no employee unrest, strike or lock out in the Company and there has been no grievances in last many years and attrition rate is consistently low.

Employee welfare

An effective work culture has been established in the organization through empowerment, transparency, decentralization, practice of participative management etc.

Your Company is the first company in Indian Power Sector to get the entire establishments certified under Social Accountability 8000:2008. The cafeteria in the Corporate Office and Food Lounge of Multi Purpose Hall of your company is conferred with ISO 22000:2005 where quality food is being served to employees. Your Company has also been certified under OHSAS 18001:1999 for providing a healthy working environment for employees by ensuring norms for occupational health and safety in the workplace.

For taking care of welfare and improvement in quality of life of employees and their family members, various welfare measures have been provided in the guidelines to enable overall development of the individual as a contended & conscious citizen.

Cultural programmes are conducted periodically for promoting healthy community living and entertainment on various occasions like Diwali, Holi Milan, New year, Raising day, etc. Apart from the social gatherings on National festivals, to promote awareness amongst employees and their families about benefits of classical and traditional art forms like dance, drama, music, etc., various cultural events are organized round the year on regular basis wherein various renowned artists perform live.

The company has been regularly participating in the Annual Inter-PSU Sports meets and this year too Your Company participated in Inter-PSU Sports Tournament and won awards in Chess, Carrom & Table Tennis tournaments.

Citizens charter

Your Company has formulated its Citizens Charters providing a visible front of its objectives, mission, commitments, terms of service and its obligation to various stakeholders. Information about its schemes, policies, project plans of the Corporation and issues of general interest to stakeholders is available in the offices. This information is also available on Companys web site and is updated time-to-time. This provides information on schemes, plans and practices to users outside the organisation as well as information about accessing the services.

Implementation of official language

In order to give our Rajbhasha "Hindi" its due, your Company has renewed its commitment to ensure implementation of Rajbhasha policy of Govt. of India and is sensitive towards Countrys heritage, social and cultural concerns. Several steps have been taken to promote usage of Indian languages and Rajbhasha "Hindi" in all its official work. Various activities like workshops for training, meetings, poetry session, culture activities, publication of Hindi magazines/papers and lectures from eminent personalities are regularly organized. Hindi library of your Company is one of the best libraries in Public Sector Units wherein all records of Hindi books & magazines are kept online for easy access through internet. Employees are encouraged to work in Rajbhasha to the extent possible. For outstanding and noteworthy contributions in Hindi, number of incentives and reward schemes are in force. Efforts made in promoting the implementation of Rajbhasha have been applauded in many forums.

During the year, 217 Rajbhasha workshops were organised in which training to work in Hindi was imparted to about 2670 employees. 18 offices of your Company have been notified under Gazette of Govt. of India to work in Hindi during the year, thus taking the tally of notified offices to 134 overall. This year, about 450 employees were rewarded as per the guidelines, during a campaign organised for encouraging employees to type in Hindi, which is a new initiative in this direction.

Renewed commitment to transparency

In keeping with the tradition of bringing the internationally acclaimed best practices for raising integrity levels in procurement of works and services, the Integrity Pact for packages above Rs. 100 Crore was implemented on 24th December, 2009 by signing of a Memorandum of Understanding by CMD, POWERGRID and Chairman, Transparency International, India in the presence of Central Vigilance Commissioner, important vendors and other distinguished guests. Two Independent External Monitors (IEMs), Shri Arvind Pande, IAS (Retd.), Former Chairman, SAIL and Shri R.S.S.L.N. Bhaskarudu, Former Chairman, PESB have been appointed as IEMs on the approval of the Central Vigilance Commission. Earlier Integrity Pact has been implemented in the organization without IEMs for packages less than Rs. 100 Crore.

Special emphasis has been laid on the preventive aspect of vigilance. As part of this initiative, process online inspections have been devised to inspect ongoing critical works at the time of execution by the vigilance executive for shortcomings, if any. During this period, a large number of inspections have been conducted both by Vigilance Executives as well as the CTEs Organisation which also includes process online inspections conducted during this period in the regions. On the basis of these inspections, adequate cost compensation is affected for not conforming to technical specifications. Besides this, 93 CTE paras were also settled during the year.

Training is also imparted on ethics and vigilance matters through various preventive vigilance workshops organized at the Regions in which faculty from Engineering and QA&I departments are also invited to share ground realities at the site as well as the codal provisions. 197 non-vigilance executives were imparted training in these workshops. Vigilance executives are also sent on training to various organizations like CBI and National Institute of Criminology and Forensic Science, besides participating in training programmes organized at Corporate Centre. The Vigilance executives were also part of the faculty in training programmes organized at NPTI for executive trainees.

On the punitive side, a number of complaints were received and taken up for investigation. Necessary disciplinary action was also initiated against some employees. A large number of system improvements were also undertaken to further improve the system.

The Vigilance Awareness week was organized in the organization from 3rd to 7th of November, 2009 as per the directives of the Central Vigilance Commission. The pledge was administered to all the employees of the organization across the Country. During the week, various competitions were also organized for the employees and their family members. An inter-regional competition on implementation of e-governance was organized during the week in order to encourage the Regions to make maximum efforts in implementing the directives of the CVC in leveraging technology for better governance. Apart from this, an advertisement was also brought out in the Times of India and Hindustan highlighting the steps taken by your Company to enhance transparency through implementation of leveraging technology as per the advice of CVC. During the Vigilance Awareness Week, debate competitions on topics related to vigilance were also organized at various schools. The week concluded with the release of the in-house journal Candour by Secretary, Ministry of Labour and Employment.

MANAGEMENT DISCUSSION AND ANALYSIS

In addition to the issues in the Directors Report, some issues have been brought out in report on Management Discussion and Analysis placed at Annexure-I to this Report.

PARTICULARS OF EMPLOYEES

The particulars of employees of the Corporation who were in receipt of remuneration in excess of the limit prescribed under Section 217 (2A) of the Companies Act, 1956 is given in Annexure-II to this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As per requirements of disclosures under Section 217(1) (e) of Companies Act,1956 read with Rule 2 of the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 information relating to conversation of energy, technology absorption and foreign exchange earnings and outgo, is given in Annexure-III to this Report.

COMPTROLLER AND AUDITOR GENERALS COMMENTS

Comments on the accounts for the year ended 31st March, 2010 by the Comptroller and Auditor General of India under Section 619(4) of the Companies Act, 1956 are given in Annexure-IV to this Report.

CORPORATE GOVERNANCE

A report on the Corporate Governance, forming part of this Report, is given in Annexure-V. The Certificate on Corporate Governance obtained from the joint Statutory Auditors is given in Annexure-VI to this Report.

BOARD OF DIRECTORS

During the year, Shri Rakesh Jain, Joint Secretary & Financial Advisor, Ministry of Power, assumed the charge as Director w.e.f. 9th June, 2009. Shri Sudhir Kumar, MoP joined the Board of the company w.e.f. 22nd May, 2009 in place of Shri I.C.P. Keshari, who ceased to be on Board of the Company w.e.f. 22nd May, 2009. Shri Sudhir Kumar, MoP ceased to be Director of the company w.e.f. 11th December, 2009 and Dr. M. Ravi Kanth joined in his place. The Board wishes to place on record its deep appreciation for the valuable services rendered by Shri I.C.P. Keshari and Shri Sudhir Kumar, during their association with the Company. During the year, Shri R.N. Nayak assumed charge as Director (Operations) on 16th May, 2009, and Shri I.S.Jha assumed charge as Director (Projects) on 1st September, 2009.

The tenure of four non-official Part-time Directors on the Board of your Company - Dr. P. K. Shetty; Prof. A. S. Narag; Shri Anil K. Agarwal; Shri F. A. Vandrevala appointed for a period of three years with effect from the date of appointment - 10.07.2007 completed on 09.07.2010 and they ceased to be Directors of POWERGRID. The Board wishes to place on record deep appreciation for their invaluable contribution and support during their association with the Company.

In accordance with the provisions of Section 255 and 256 of the Companies Act, 1956 read with Article 31 (iii) of the Articles of Association of the Company the Directors Ã Shri Ashok Khanna and Smt. Sarita Prasad shall retire by rotation at the Annual General Meeting of your Company and being eligible, offer themselves for re-appointment.

ACKNOWLEDGEMENT

The Board of Directors acknowledge with deep sense of appreciation for the guidance and cooperation received from the Govt. of India, Ministry of Power, Ministry of Finance, Ministry of Environment & Forests, Ministry of Statistics and Programme Implementation, Ministry of Home Affairs, Central Electricity Regulatory Commission, Appellate Tribunal for Electricity, Central Electricity Authority, Planning Commission, Department of Public Enterprises, Regional Power Committees, other con cerned Govt. departments/ agencies at the Central and State level as well as from Securities and Exchange Board of India, National Stock Exchange of India Ltd., Delhi and Bombay Stock Exchange Ltd., Mumbai without whose active support it was hard for us to imagine the accomplishments your Company has achieved during the year.

Your Directors take this opportunity to thank our valued customers, various State power utilities as also to valued consultancy clients, for providing us with various consultancy works and reposing faith in our capability to handle them. The Board also conveys its gratitude to the shareholders, various International and Indian Banks/ Multilateral Agencies/ Financial Institutions/ Credit rating agencies for the faith they have shown in POWERGRID. Special thanks is reserved for C&AG and the Statutory Auditors for their constructive suggestions throughout the year.

The Board also wishes to place on record its appreciation for the untiring efforts and contributions made by the employees at all levels and the various employee unions to ensure that the company continues to achieve greater heights year after year.

For and on behalf of the Board of Directors

Place: New Delhi (S. K. Chaturvedi)

Date: 11.08.2010 Chairman & Managing Director

Mar 31, 2003

I am privileged to present on behalf of the Board of Directors, the 14th Annual Report of Power Grid Corporation of India Limited (POWERGRID), together with the Audited Statements of Accounts for the financial year 2002-03. It has been another eventful year for your company, which can be appreciated from the score sheet presented below.

Project Implementation

POWERGRID continued to implement its projects with economy and within stipulated time frame to derive maximum economic benefits. Its advanced and cost effective Integrated Project Management and Control System (IPMCS) for total project review and perpetual monitoring, has contributed significantly. I am happy to report that during the financial year 2002-2003, POWERGRID commissioned projects worth Rs. 5,300 crore, highest so far in any one year in the POWERGRIDs history. These projects were completed at a cost lesser by Rs. 850 crore than the Govt. of India approved cost. Major transmission projects that were commissioned are, 500 MW Sasaram HVDC back-to-back, +/- 500 kV/2000 MW Talcher-Kolar HVDC Bi-pole, 400 kV D/C Kolhapur-Mapusa, 400 kV S/C Jamshedpur-Rourkela, 400 kV D/C Raipur-Rourkela, and 400 kV D/C Vijayawada-Nellore-Chennai transmission system. The company established eleven (11) new 400/220 kV EHV AC sub-stations and HVDC stations in the year, besides extension of many existing sub-stations.

Operations and Maintenance

During the year, about 6,000 Ckt. Kms. of transmission lines were added enhancing its network size to 46,245 Ckt. Kms., consisting of 563 Ckt. Kms. of 800 kV, 4,368 Ckt. Kms. of HVDC, 31,952 Ckt. Kms. of 400 kV, 7,277 Ckt. Kms. of 220 kV, 2,048 Ckt. Kms. of 132 kV & 37 Ckt. Kms. of 66 kV transmission lines. This extensive transmission network along with 79 substations with transformation capacity of 44,736 MVA was maintained at an average systems availability of 99.39 % exceeding the target level of 98.25% set for the year.

Financial Management

The company registered a Turnover of Rs 2532.74 crore and earned a Net profit (After tax) of Rs. 642.59 crore thereby recording a Net profit margin of 25.37%. The companys Gross asset base and paid-up capital at the end of the financial year 2002-03 stood at Rs. 18,943. crore and Rs. 3,074 crore respectively as against Rs. 13,777 crore and Rs. 3,068 crore at the end of last financial year. The Debt to Equity ratio at the end of the financial year was 61.39 with scope for further leveraging of the capital.

Statutory Auditors, in their Audit Report have qualified the provision of depreciation on fixed asset at the rates specified in the tariff notification issued by CERC instead of rates notified Under the Electricity (Supply) Act, 1948 resulting in understatement of depreciation and overstatement of profit for the year by Rs. 461 crore.

The above Auditors comment is due to the reason that the rates of depreciation notified the Govt. of India u/s 25A of the Electricity (Supply) Act,1948 have not so far been amended to correspond

to the CERC rates. The charse of depreciation considered in the Profit & Loss A/C is at the rates notified by CERC for recovery of depreciation included in the transmission charges and maintaining the earlier principle, there is no overstatement of profits.

The significant changes in the accounting policies are given below:

I. ULDC Assets have been commissioned during the financial year in Northern and Southern Regions. POWERGRID has also constructed ULDC assets for SEBs, Tariff of which is being recovered as Levelised Tariff. These transactions are considered as finance lease in terms of AS-19 issued by ICAI. The following new accounting policy in respect of treatment of lease rentals from investment in State Sector ULDC assets in the books of POWERGRID has been made:

a) State Sector ULDC assets leased to the SEBs are considered as Finance Lease. Net investment in the leased assets is accounted as lease receivables under Loans and Advances.

b) Finance income on leased assets is recognised based on a pattern reflecting a constant periodic rate of return on the net investment.

c) Exchange Rate Variation (ERV) on foreign currency loans relating to leased assets is adjusted to the amount of lease receivables and is amortised over the remaining tenor of lease. ERV recovery (as per CERC norms) from the constituents is recognized net of such amortised amounts.

II. Surcharge which was hitherto being accounted for on receipt basis is now accounted for on receipt/certainty of receipt. This change in policy has resulted in increase in other income and profit by Rs.192.29 crore.

As per the terms of the tripartite agreement signed by State Govts. (on behalf of SEBs), Ministry of Finance and RBI, all surcharge and interest payable by the SEBs on the overdues of CPSUs shall be written off to the extent of 60%. Out of Surcharge of Rs. 192.29 crore accounted for during the year, Rs. 188.78 crore pertains to period covered by tripartite agreement and is net of the waived amount of Rs. 221.85 crore. However, the waived amount was never accounted for as income in any of the earlier years as per the accounting policy of the Corporation.

Dividend

Interim dividend to the tune of Rs.50 crore has been paid in March, 2003 and the Directors have recommended a further dividend of Rs.50 crore for the financial year 2002- 03 in addition to the interim dividend.

Transfer of Profit to Reserves

Appropriation of profit towards General Reserve amounting to Rs.500 crore and Rs.115.25 crore towards Redemption Reserve has been proposed.

Directors Responsibility Statement

- In the preparation of the Annual Accounts, the applicable accounting standards have been followed.

- The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period.

- The Directors had taken proper and sufficient care in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities,

- The Directors had prepared the annual accounts on a going concern basis.

Capital Investment and Fund Mobilisation

The company undertook a capital investment of Rs. 2,561 crore during the financial year 2002-03 and the required funds were tied up from internal resources, bonds/term loan from the domestic sources, grant from Government of India and ECB/Suppliers Credit. A suppliers Credit from Skandinaviska Enskilda Banken, Sweden amounting to SEK 345 million was tied up during the financial year for financing the 1x500 MW Back to Back HVDC project at Vizag associated with East-South Interconnector-lll project. Rs. 810 crore was mobilised at competitive rates from the domestic capital market by issue of bonds directly on private placement basis as well as through long term loans. In order to tap the lower interest rates prevalent in the international as well as domestic markets, Foreign loans amounting to approximately GBP 33 million and domestic loans amounting to Rs.250 crore were refinanced during the financial year 2002-03 resulting in net savings of about Rs.37 crore in the interest outgo during the residual life of the loans.

Following up on the refinancing initiative, Govt loans amounting to Rs. 699 crore have been refinanced in July, 2003 by raising bonds directly from the domestic capital market on private placement basis at competitive interest rate resulting in savings of Rs. 235 crore in the interest outgo during the residual life of the loans.

Commercial Effectiveness

The outstanding dues of CPSUs in power sector were securitised in line with Alhuwalia Committee Report by signing the Tripartite Agreement. This should facilitate liquidation of past dues and timely payment of the current dues. In pursuance of the above, a total amount of Rs. 2029.77 crore (including a Surcharge of Rs. 161.37 crore) have been reconciled with all the States for issuance of bonds by RBI under securitisation scheme to settle all the old outstanding dues up to 30.09.2001. Twenty Seven States have signed the Tri-partite agreement against which Rs. 1833.96 crore (including a Surcharge of Rs. 115.38 crore) stands covered for issuance of bonds. Remaining two States shall be signing the Agreement shortly. Out of the twenty seven states, who have signed the agreement, twenty

six States have already signed notification and authorised RBI to issue the bonds. In 1 st phase, the bonds related to 17 States amounting to Rs 1274.38 crore have been received on 1st September, 2003 and Bonds from the other nine States are also being received shortly.

Based on the all round performance during F.Y 2002- 03, POWERGRID Is once again poised to achieve the highest rating i.e. "Excellent" under the MoU signed with Ministry of Power.

National Grid

In line with the plan to establish an integrated National Power Grid in the country by the year 2012 with inter- regional power transfer capacity of 30,000 MW various inter-regional transmission schemes were undertaken.

The first phase of National Grid has been accomplished with commissioning of Sasaram HVDC B/B Project in Sept, 2002, 3 months ahead of schedule and at a cost lesser by Rs. 75 crore from the Government approved cost. Capacity addition for the second phase of National Grid has also commenced in F.y. 2002-03, with commissioning of 2000 MW Talcher-Kolar HVDC bipole link in September, 2002 and 400 kV D/C Raipur- Rourkela link in Mar03, enhancing inter-regional transfer capacity to 8000 MW from almost non-existent level five years ago. The implementation of 2000 MW, 1400 kms. long Talcher- Kolar HVDC project has the distinction of being the longest HVDC bipole link in Asia. This project was not only commissioned 9 months ahead of schedule but also at a cost, which is Rs. 700 crore less than the Govt. approved cost of Rs. 3,865 crore. Completion of Raipur-Rourkela 400 kV D/C AC interconnection between Eastern and Western Region has led to creation of a synchronised regional grid covering North-Eastern /Eastern/Western Regions with a total installed capacity of more than 50,000 MW stretching from Arunachal Pradesh in North Eastern Region to Goa in Western Region, traversing a distance of more- than 2500 Kms.

As a result of the above endeavours, during the year 2002-03, POWERGRID facilitated inter- regional power transfer of 13,000 MU valued at Rs. 2000 crore, about 40% higher compared to that achieved during FY 2001 -02. This power would have remained bottled up without the facilities created by POWERGRID. The power transfer has taken place mostly from power surplus Eastern Region to other power deficit regions. This has helped exporting region by way of reduced charges and importing region by mitigating the power shortage. Thus enhancement of inter-regional power transfer added huge economic value.

Encouraging Grid Discipline

Close on the heels of commissioning of Northern Region and Southern Region ULDC schemes, POWERGRID has test-charged the North-Eastern Region ULDC scheme during F.Y 2002-03. These complex projects involving the state-of-the-art technology have resulted in real time monitoring and control of the grid to enhance its reliability, stability, and security. Further, POWERGRID, in its efforts to ensure delivery of quality power and to encourage healthy grid behaviour, facilitated implementation of Availability Based Tariff (ABT) in all the regions viz. Western Region w.e.f. 1.7.2002, Northern Region w.e.f. 1.12.2002, Southern Region w.e.f. 1.1.2003 and Eastern Region w.e.f. 1.4.2003. ABT has a built in commercial mechanism, to reward proper grid behavior Commissioning of ULDC and implementation of ABT has significantly improved the vital grid parameter like grid frequency, which was hovering between 48 Hz and 52 Hz most of the time in the previous years, is now generally within the specified band of 49.0 Hz to 50.5 Hz. The voltage profile has also improved. Such improvement has not only increased life expectancy of the equipment

involved in power generation/Transmission/distribution but also of electricity driven equipments/ appliances at consumers end. Implementation of ABT has also facilitated reduction in cost of delivered power through merit order dispatch.

New Initiatives

Projects

In line with the companys ambitious expansion plan, new projects, worth about Rs. 3700 crore, have been taken up for implementation in year 2002-03, which include, System strengthening in ER & NR, Series Compensation on Raipur-Rourkela Line, Transmission System associated with Chamera-ll Hydro-Electric Project (HEP), Tala-Siliguri Transmission System, Transmission System associated with Dulhasti HEP, Series Compensation on Nagarjuna Sagar-Cuddapah & Gooty-Neelamangala 400 kV line, Transmission System associated with Extension of Tarapur Atomic Power Plant, Transmission System associated with Rihand-ll Super Thermal Power Project and Telecom Diversification projects.

In Pursuit of Latest Technology

Keeping pace with the advancement of technology in the sector elsewhere in the world, POWERGRID has attached prime importance to Technology upgradation. It is working in collaboration with research institutions, academic institutions and manufacturers, and is thus enhancing its in-house capabilities for design and engineering of state-of-the-art transmission systems. It has accorded major thrust in technologies like Flexible AC Transmission System (FACTS), High Temperature Endurance Conductors, Compact Towers, alternate type of tower structures like Guyed Structures, Pole Structures etc. In the field of operation and maintenance, POWERGRID is employing upto date technologies like Hot Line maintenance, Hot line washing, Tuning of Power System Stabilizer (PSS), Removal of closing resistors in the Circuit Breakers, Equipment Condition Monitoring and Residual life Assessment etc to improve the reliability, availability and security of transmission system.

Strategic Alliance

Facilitating infusion of Private capital

JV Route

POWERGRID, in its attempts to encourage private participation in the transmission sector has joined hands with private player, Tata Power for implementation of major transmission lines associated with Tala HEP in Bhutan, costing about Rs. 1,100 crore. The project with route length of around 1200 Kms. covers high capacity transmission lines from Siliguri (West Bengal) to Mandola (Uttar Pradesh) near Delhi constituting a major inter-regional component under second plan of National Grid. Kicking off the Joint venture, Tata Power has already picked up the 51 % stake in the Shell Company viz. Tala - Delhi Transmission Limited. This shall be for the first time in the history of Indian Power System that power transmission line shall be built with private participation. Further, such a JV shall pave the way for more such JVs thereby supplementing POWERGRIDs resources and efforts and facilitate MOPs initiative for private sector participation.

IPTC route

In addition to JV route, POWERGRID had also identified 400 KV D/C Bina-Nagda- Dehgam Transmission line with an estimated cost of about Rs. 450 crore as the pilot project for implementation by an Independent Power Transmission Company, which shall be privately wholly owned. Evaluation of the proposals submitted by the bidder (only one bidder) is underway. This process is being carried out under regulatory supervision.

Consultancy Business

There was a quantum jump this year in booking consultancy assignments and revenue realisation besides assisting SEBs. POWERGRID has secured 27 new consultancy assignments with a consultancy fee component of more than Rs. 155 crore, which shall accrue over a period of three years. The corresponding project cost is more than Rs. 1,200 crore.

Some of the major assignments include turnkey execution of 400KV D/C Vishnuprayag - Muzaffarnagar Transmission system with an estimated project cost of Rs. 323 crore on behalf of UPPCL, turnkey execution of various sub-transmission improvement projects in the State of Bihar, IT consultancy project for Delhi Transco.

POWERGRID could also make international foray by booking first international consultancy order from M/s Bhutan Telecom for turnkey execution of Optical Fibre Ground Wire and associated terminal equipments on the existing lines in Bhutan and technical consultancy for execution of National Load Despatch Centre in Bhutan.

Capitalisms on New Business opportunities

Convergence with Telecom

To strengthen its position in the competitive telecom business, POWERGRID commissioned Delhi-Lucknow-Mumbai telecom link (2,600 Kms.) in a record time of 9 months. The Delhi-Lucknow-Mumbai telecom link was inaugurated by Honble Prime Minister at Lucknow through Video Conferencing with Honble Chief Minister of Delhi on Delhi side and Honble Govenor of Maharashtra on Mumbai end. Agreements were signed with leading telecom players like VSNL, Data Access, Daksh, Convergys, Bharti Telenet, Spectranet, Wipro Spectramind etc for using POWERGRIDs telecom network. With few links, the company generated revenue of about Rs. 8.3 crore from its telecom operation during F.Y 2002-03.

A major boost to POWERGRIDs Telecom venture has been received with the GOI approval for the implementation of POWERGRIDs nationwide telecom network of about 14000 Kms. at an estimated cost of Rs. 934 crore. This network shall be operational by the year 2004 and shall interconnect about 60 cities including all the State capitals.

Contributing to Distribution Reforms under APDRP

Under Accelerated Power Development & Reforms Program (APDRP) of Ministry of Power, POWERGRID has been assigned the role of Advisor-cum-Consultant (AcC) to lend its managerial and technical expertise for developing 105 Distribution Circles. This includes 37 Circles, where POWERGRID has a direct role and in the remaining Circles which are being developed by NPC, WAPCOS, ERDA and SEBs, the company is acting as the co-ordinator. At the end of the first phase of the APDRP Program, projects worth Rs. 16,000 crore have been approved, which includes the projects worth Rs. 5587 crore, where POWERGRID is associated.

In addition, POWERGRID has also undertaken implementation of projects under APDRP on turnkey and bilateral basis in the States like Goa & Bihar. Major projects taken up for implementation are Renovation and Modernisation of Distribution systems in the circles

of PESU (East), Patna and Muzaffarpur in Bihar and North Goa, implementation of Rural Electrification Schemes in about 2600 villages in the districts of Vaishali and Muzaffarpur in Bihar.

Leveraging Human Capital to achieve excellence

POWERGRID believes that its human resource consisting of about 7000 employees is the most important asset and accordingly, its policies are focused on development of human potential through skill upgradation, career enhancement and job rotation to achieve organisational objectives. An effective work culture has been established in the organisation through empowerment, transparency, decentralisation and innovative practice of participative management through Open House interaction. POWERGRIDs growing productivity through an average annual growth of about 44% in the asset base of the company is witnessed with a manpower growth of only about 2.4% per annum.

Human Resource Development (HRD) is considered as a strategic function in POWERGRID. During the year, the company has designed and executed business aligned management development, technical training and competency enhancement programmes on its own and also in collaboration with reputed management development institutes such as IIMs, XLRI, ASCI, MDI and technical training institutes that include NTs, NPTI, Hotline Training Center. The company imparted training to 1602 employees during financial year 2002-03, surpassing the MoU target of 1,500.

Providing significant improvement in the quality of work environment, POWERGRID established a state-of-the-art Corporate Office building named "Saudamini" in Gurgaon near Delhi with modern features like Automated Controls, Rain Water Harvesting and Outdoor Lighting using Solar Energy etc. Further, to maintain nutritional standards, a dining facility has been created which is common for all the levels of employees including the Board Members. Thus, it is also facilitating in building up a sense of brotherhood and belongingness.

Implementation of Rajbhasha

In pursuance of Govt. of Indias policy to promote extensive use of Rajbhasha in the corporation, POWERGRID has notified in the gazette for using Hindi in all its official works. During the year, the Parliamentary Committee on Rajbhasha visited various establishments of the corporation and found implementation of Rajbhasha to be highly satisfactory. The efforts made by POWERGRID in promoting the implementation of Rajbhasha have been applauded in many forums, which is reflected in POWERGRID bagging the Rajbhasha Shield of Ministry of Power. About 400 employees have been imparted training in subjects

related to Rajbhasha and a large number of employees have been imparted training in Hindi software.

E-Governance

POWERGRID is systematically developing competency to deploy Information Technology for efficient and effective discharge of its functions. Some of the salient achievements are Web based Enterprise wide Information Portal as a step towards E-Governance, State-of-the-Art Multi Locational Video Conferencing System, Inspection Management System on internet based B2B platform and Enterprise wide Converged IT and Communication System. The Video Conferencing is utilised extensively for various meetings and follow up actions leading to substantial monetary savings and curtailing travelling time of senior executives.

Management of Environmental and Social Issues

Creating Sustainable Corporate Values

POWERGRID, being in the infrastructure sector, is in enviable position to directly contribute to the society. Power, today drives all the economic activities in the society. POWERGRID, as the provider of inter-state transmission facilities and as operator of the countrywide electrical grids, has a pivotal role in countrys power sector.

The sustainability of corporate values is proven by the fact that they are in consonance with the values cherished by the society. The objectives of the company are in alignment with the requirements of its stakeholders. End results of such value system are witnessed in all-round performance of the company, which has surpassed the targets. The company continues to make conscious efforts not only for sustaining such value-system but also inculcating desirable values.

Concern for Environment

Impact of POWERGRIDs business on environmental degradation is almost negligible, however, it believes that conservation and management of the environment has to remain the integral and essential part of economic development. Following the well established principles of environmental management, POWERGRID has evolved its own Environmental and Social Policy & Procedures (ESPP) in consultation with a wide section of people to take ample care of environmental and social issues arising out of its activities. This ESPP document, which has been inducted for application in all of its projects, helps to address all environmental and social issues at appropriate time and in appropriate manner.

POWERGRID has been successfully implementing the ESPP through in-house designing of Rehabilitation Action Plan (RAP) and Environment Assessment Management Plan (EAMP). All projects were implemented according to these plans. These plans are executed at site and monitored

not only at the highest level of the hierarchy but also by multilateral funding agencies like WB & ADB.

Emergency Restoration

POWERGRID, in conscious endeavours to discharge its broader social responsibilities, has taken many steps which include faster restoration of transmission system belonging to State utilities which are damaged during Natural calamities like flood, earthquake, cyclones, etc

Citizens charter

POWERGRID formulated its Citizens Charter providing a visible front of its objectives, mission, commitments, terms of service and its obligation to the stakeholders. This is also intended to provide all information on schemes, plans and practices to users outside the organisation as well as information about accessing the services.

Social justice

The Corporation has faithfully implemented the Govt. directives to take care of the interests of Scheduled Castes, Scheduled Tribes and other Backward Classes. For monitoring the same, POWERGRID has nominated Liaison Officers in the Corporate Centre and Regional Establishments. Appropriate funds have been earmarked for the welfare of the SC/ST community and a number of welfare schemes have been implemented in the SC/ST populated villages near its establishments.

Remaining Vigilant

In its continuous efforts towards bringing about total transparency in management, POWERGRID has gone ahead to promote the culture of zero tolerance. As a part of this effort, POWERGRID has tried to ensure speedy disposal of disciplinary cases by appointing Inquiry Officers from the panel approved by the CVC and by conducting regular and surprise inspections at regular intervals. The Organization received about 42 complaints during the year, out of which 21 complaints were taken up for investigation. Investigations were completed in 19 cases. On the preventive side, 69 inspections were conducted. The CTEs organisation also conducted 5 intensive examinations of the major works of POWERGRID.

In order to create an environment conducive to vigilance activities, significant achievement was made by involving senior management in preventive anti-corruption work. As a part of this effort, a workshop was organised in the Corporate Center in collaboration with IIM, Kolkata on "Ethics and business values", in which about 30 executives from the middle management level participated. Besides this, workshops were organised in the Regions on ethics and vigilance, for about 125 non-vigilance Executives.

As a part of its social responsibility, POWERGRID also organised one-act play competition, thematic lectures by eminent personalities, debates, essay and slogan competition on the occasion of the Vigilance Awareness Week.

Particulars of Employees:

The particulars of employees of the Corporation who were in receipt of remuneration in excess of the limit prescribed under Section 217 (2A) of the Companies Act, 1956 is given in Annexure-I to this Report.

Conservation of energy, technology absorption and foreign exchange earnings and outgo:

As regards the requirements of the disclosures under Section 217(1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, information is is given in Annexure-ll to this Report.

Comptroller and Auditor Generals comments:

Review of the accounts for the year ended 31st March, 2003 by the Comptroller and Auditor General of India under Section 619 (4) of the Companies Act, 1956 along with Directors comments on the points raised by the C&AG given in Annexure-lll to this report.

Corporate Governance

As per clause 49 of the Listing Agreement, a report on the Corporate Governance, forming part of this report, together with the Auditors Certificate regarding the compliance of the Corporate Governance are given in Annexure-IV to this report.

POWERGRIDs Board

During the year, a number of changes took place in the constitution of the Board of Directors. Shri U.C.Misra assumed the charge as Director (Personnel) POWERGRID w.e.f. 1.8.2002 in place of Shri A.I.Bunet who superannuated on 31.07.2002. The Board gratefully acknowledges the invaluable contribution and guidance received from him during his tenure with POWERGRID. Shri A.K.Kutty, JS, MOP and Shri M.Sahoo, JS&FA, MOP joined the Board of POWERGRID w.e.f. 22.7.2002 vice Shri P.I.Suvrathan and Shri R.Ramanujam respectively. Shri V.V.R.K.Rao Member, (G.O.), CEA ceased to be a Director on attaining the age of superannuation w.e.f. 30.06.2002. Shri Shashi Shekhar, JS, MOP joined the Board of POWERGRID w.e.f. 17.6.2003 in place of Shri A.K.Kutty, JS, MOP who ceased to be a Director of POWERGRID Board. The Board of Directors also place on record its deep appreciation for the contribution and guidance received from S/Shri V.V.R.K.Rao, R.Ramanujam, P.I.Suvrathan and A.K.Kutty. Appointment of non-official part- time Directors whose place fell vacant on 26.7.2001 is awaited.

Acknowledgements

The Directors place on record their grateful thanks for the guidance and cooperation extended all through by Ministry of Power, Central Electricity Authority, Ministry of Home Affairs, Central Electricity Regulatory Commission, Dept. of Economic Affairs, Ministry of Finance, Planning Commission and other concerned Govt. departments/agencies at the Central and State level without whose active support, the achievements by the Corporation during the year under review would not have been possible. Moreover, the Board extends its sincere thanks to the customers of the corporation, the State Electricity Boards/ Corporations for their endeavour to pay the transmission charges in spite of their financial hardships.

The Directors take this opportunity to thank the Principal Director of Commercial Audit and Ex-Officio Member Audit Board-Ill for the cooperation during the year. Your Directors also acknowledge the valuable suggestions and guidance received from the statutory auditors viz. M/s. Hingorani M & Co., M/s. Venugopal & Chenoy and M/s D.R Sen & Co. during the audit of accounts of the company for the year under review.

Your Directors further wish to place on record their sincere thanks to the various national/ international Financial Institutions/Banks/Credit Rating Agencies for the continued trust and confidence reposed by them by rendering the continuous timely assistance and patronage for successful implementation of the various projects by the company.

Last but not the least, the Board of Directors place on record the valuable contribution and appreciation for the support and the cooperation extended by each member of the POWERGRID family in the affairs of the company.

For and on behalf of the Board POWER GRID CORP OF INDIA LTD.

(R.P. SINGH) Chairman & Managing Director

Date : 29.09.2003. Place: New Delhi.

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