To,
Dear Members,
On behalf of the Board of Directors, I am delighted to present the 28th
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. '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 '24,429 crore against a target of ' 23,000 crore.
• "Excellent" MoU rating notified by Government of India for financial
year 2015-16.
• Investment approval accorded for transmission projects worth about '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 '25,716.54 crore (year-on-year increase of
24%) and Profit after Tax of '7,520.15 crore (year-on-year increase of 26%).
• Interim Dividend of '1.00 per share (face value ' 10/- each) has been
paid and in addition, Final Dividend of '3.35 per share for the Financial Year
2016-17 recommended, subject to approval of shareholders.
• Pole-I (1500 MW) of 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) - 'Establishment of Transmission System for 765kV Eastern Region Strengthening
Scheme (ERSS-XVIII)'.
• Telecom revenue rose to '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 '1,10,000
crore for XII Plan, the Company has made a capital expenditure of '1,12,664 crore. Also,
thrust was given to completion of projects and total capitalization achieved during XII
Plan is over '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:
| 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% |
| Description |
2016-17 |
2015-16# |
Y-o-Y Growth |
| Profit After Tax (PAT) |
7520.15 |
5948.50 |
26.42% |
| Earnings per Share (') |
14.37 |
11.37 |
26.39% |
| Book Value per Share (') |
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 '3.35 per share in
addition to '1.00 per share of interim dividend taking total dividend to '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 '2,275.74 crore (including an interim
dividend of ' 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 31st 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 'Annual Maintenance Plan' 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 'National Transmission Asset Management Centre' (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 "Best O&M Practices for EHV and UHV AC
& DC Transmission System Assets" 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 POWERGRID's 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,
POWERGRID's 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:-
• 800 kV Champa - Kurukshetra HVDC Bi-pole-l(Pole-I) link,
• Pole-II & III of 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 (2nd) 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 '26,581.46 crore and net profit of '7,520.15 crore.
Capital Investment and Fund Mobilization
Your Company made a capital investment (CAPEX) of ' 24,429 crore during the year
2016-17. For the CAPEX of FY 2016-17, ' 14,806 crore was mobilized through private
placement of bonds & term loan, '3,037 crore was mobilized through External Commercial
Borrowings (ECB)/Suppler credit and '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,
800kV Champa Pool - Kurukshetra HVDC Pole-I of Bipole-1 (1500MW), Angul-Srikakulum 765kV
D/c, Wardha - Nizamabad 765kV D/c and 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 ' 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.
• 'Make in India' 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 "National Vendor Development Programme cum Industrial Exhibition for Micro
& Small Enterprises for the benefit of MSME sector and thereby promote "Make in
India" 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 "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 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 Government's 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 ' 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 country's 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.
'POWERTEL' - 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 'POWERTEL'. The
existing National Long Distance (NLD) and Internet Service Provider - Category 'A'
(ISP-'A") 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 POWERGRID's 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. 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". 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 '17,000 crore on pan-India basis.
During FY 2016-17, the Company has achieved domestic consultancy revenue of ' 582.43
crore, which is 25% higher w.r.t. previous years revenue of ' 465.46 crore.
During 2016-17, 26 nos. Consultancy assignments have been acquired on domestic front,
having estimated Project cost of ' 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 ' 890 crore estimated project cost
under Central Railway, East Central Railway, South East Central Railway & South West
Railway) has been entrusted to POWERGRID in Nov'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 '
358 crore) for providing up-stream transmission connectivity for traction substations of
Railways.
POWERGRID is executing Govt. of India's 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 ' 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 ' 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 India's 220kV Srinagar - Drass - Kargil - Khalsti - Leh Line &
associated system is being implemented by POWERGID on consultancy basis at a sanctioned
cost of about '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
'World 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 Company's 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 2nd 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 ' 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 March'18. In UP, RE work of 4 districts at an estimated cost of around ' 500
crore is expected to be completed by Dec.'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 ' 80.46 lakh from ' 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 India's 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 'Innovative Training Practices' 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 Company's team has emerged winners in Table Tennis, National
Management Games and other sports meets and bagged a number of awards.
The 3rd 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.
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 updated Citizens' Charter is available on
POWERGRID website.
IMPLEMENTATION OF OFFICIAL LANGUAGE (RAJBHASHA)
In pursuance of Govt. of India's Rajbhasha Policy to promote Indian languages and
Rajbhasha 'Hindi', 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, POWERGRID's efforts were applauded during various inspections and
discussions done by Hon'ble 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 '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.
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 31st
October to 5th November, 2016. The weeklong activity started with the
administration of pledge to all employees by CMD, CVO and all Directors. The
organization's 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, 'Candour' on
the occasion.
During the Vigilance Awareness Week, 2016, vendors' 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 POWERGRID's ESPP under its policy of "Country
Safeguard System" (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 3rd biennial Sustainability Report in September, 2015.
This report also attained the highest possible rating of "A+" 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 4th 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 couldn't 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 ? 3,410 Crore. The total
procurement form MSEs (including MSES owned by SC/ST entrepreneurs) was ? 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 ? 1000 Crore.
For enhancement of procurement from MSEs, annual procurement plan along with other
relevant details related to procurement from MSEs are uploaded on POWERGRID's 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 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 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 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.
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 GENERAL'S COMMENTS
Company has received 'NIL' 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.
COMPANY'S BOARD
Your Company's 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 1st September, 2016. Shri R. T. Agarwal demitted the office of
Director (Finance) on 31st 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 8th
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. 16th 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 6th April,
2017.
Smt. Jyoti Arora and Dr. Pradeep Kumar on being relieved from the Ministry of Power on
5th July, 2017 (A/N) and 31st 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 3rd 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
POWERGRID's 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 'Independent
Director' 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 5th 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 05th 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 DIRECTORS' 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 Directors' 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 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 5th 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.
SUBSIDIARIES AND JOINT VENTURES
During the year, shares of Power System Operation Corporation Limited (POSOCO) were
transferred to Government of India on 2nd January, 2017. As on 31st
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 '147.27 crore and sanctioned 171 nos. of CSR
Projects costing about 180 crore to be executed in next 2-3 years.
During the year, your Company completed the construction of the 'POWERGRID Vishram
Sadan' at J.P. Apex Trauma Centre, AIIMS, New Delhi.
Also, your Company has participated in the 'Swachh Bharat Abhiyaan'. POWERGRID
employees and their family members, in more than 150 locations across the country,
voluntarily undertook 'Shram Daan', and contributed more than 60,000 manhours towards this
end. Further, POWERGRID has contributed an amount of '30 crore to the "Swachh Bharat
Kosh" 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 '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) 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, Boy's 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 Boards' 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 Company's 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 Company's operations in future.
DIRECTORS' 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;
(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.
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 'Best Performing Transmission Utility 2016'.
'Clean Energy Award'- 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.
'Gold Trophy for Top Exporter in the Medium category' of the year 2013-14 by
Engineering Exports Promotion Council (EEPC) under the aegis of Ministry of Commerce.
'Best Risk Management Practise' Award at the 3rd 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.
'Industry Excellence Awards 2017' in the category of 'Energy & Power' on the
occasion of BRICS International Conclave for MSMEs & start-ups organised by 'Stepup
360'& BRICS International Forum" and supported by MSME-DI New Delhi.
'North American Synchrophasor Initiative (NASPI) Award' for Outstanding Utility during
2016-17.
"Delhi Management Association Award 2016" for "Improving Rural
Livelihoods and Protecting Environment through Farmer-centric Integrated Watershed
Management" under CSR
"SCOPE Award 2016" for "Innovative Stakeholders Engagement" 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 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.
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 Company's 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 world's
premier transmission utility.
|
For and on behalf of the Board of Directors |
|
(I. S. Jha) |
|
Chairman & Managing Director |
| Place: New Delhi |
|
| Date: 9th August, 2017 |
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