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Services > Company Profile > Director's Reports
Power Grid Corporation of India Ltd Power Generation And Supply
BSE Code
532898
ISIN Demat
INE752E01010
Book Value
104.0122792
NSE Symbol
POWERGRID
Div & Yield %
2.79
Market Cap (Rs Cr.)
98380.05
P/E
11.67
EPS
16.11
Face Value
10

To,

Dear Shareholders,

The Board of Directors have the pleasure of presenting the 29th 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 ofthe major achievements ofthe Company during FY 2017-18 are:

• Asset Capitalization of * 27928 crore (incl. TBCB projects).

• Capital Investment of * 25791 crore against target of * 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 *30,766.32 crore and Profit After Tax (PAT) of *8,238.96 crore.

• Interim Dividend of * 2.45 per share (Face Value *10/- each) paid and in addition recommendation made for *2.80 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 *606.59 crore in the financial year ended on 31st March 2018 from *497.36 crore in the previous year.

• Consultancy revenue increased to *662.18 crore in the financial year ended on 31st March 2018 from *582.43 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 (Rs crore) US $ (million)
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 *15.75 US$ 0.24 *14.37 US$ 0.22 9.60%
Book Value per Share *104.01 US$ 1.6 *95.20 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 15.1 .4% 15.1 .0%

* Including current maturities of long term borrowings.

2. DIVIDEND

For FY 2017-18, your Company has proposed a Anal dividend of ^2.80 per share in addition to ^2.45 per share of interim dividend paid in February'18, taking total dividend to ^5.25 per share. The total dividend payout for the year amounts to ^2746.58 crore (including an interim dividend of ^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 31st 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 analysing 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 organised 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 ' 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 ofthe 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 800 KV Biswanath - Chariyali / Alipurduar - Agra HVDC multi-terminal Transmission System.

• 2nd Pole of 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 ^25791 crore. For this, ^13760 crore were mobilized through private placement of bonds & term loans, ^4947 crore were mobilized through External Commercial Borrowings (ECB)/Supplier Credit, ^6698 crore from Internal Resources and ^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 of Tariff) 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, 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 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 neighbouring countries, Nepal, Bhutan and Bangladesh, are being further strengthened for increased exchange of power. Some ofthe 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 ' 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 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.

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 neighbouring 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 fleld 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 flbre 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 renewables, 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 renewables.

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 ofthe 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 renewables 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.

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 ^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 ^426 crore and ^489 crore respectively.

Your Company is providing consultancy services to Indian Railways for electrification of 761 rkm with estimated project cost of ^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 ^ 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 ^ 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 ^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 organisation wide training and development programmes and other systems & process development interventions based on Organisation 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 ^ 87.05 lakhs, 15.65 ckm and 34.99 MVA from ^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 behavioural 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 thereunder, 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 sensitising 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 communique 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 Facebook, 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 organisations 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 5th 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 fulfilment 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 ofthe 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 ^157.99 crore and sanctioned 145 nos. of CSR Projects costing ^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

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 ofthe accounting records and the timely preparation of reliable financial disclosures.

36. STATUTORYAUDITORSOFTHECOMPANY

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) ofthe Companies Act, 2013. Copy ofthe same is attached in Annexure-IV to this Report.

38. SECRETARIAL AUDITOR

Kumar Naresh Sinha & Associates, Practising 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 ofthe 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 18th 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 Ailed 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 31st 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 19th 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 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

3. Your Company could not Ale 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 All under e-Aling 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 Aled 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'S BOARD

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-ofAcial part time Director (Independent Director) w.e.f. 12th September, 2017.

Shri R. P. Sasmal, Director (Operations) and Shri Prabhakar Singh, Director (Projects) demitted the ofAce on 28th February, 2018 and 30th 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 signiAcant contribution and support to the Company.

Ms. Seema Gupta assumed the charge of Director (Operations) with effect from 1st March, 2018. The Ministry of Power vide OfAce 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 OfAce 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 himselffor re-appointment.

42. NUMBER OF MEETINGS OF THE BOARD

Board of Directors met 12 times during the Anancial 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 CertiAcate 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 speciAed 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 5th 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 incharge of the Company, or, as the case may be. Similar exemption was requested from SEBI under the SEBI LODR.

Further, MCA, vide notification dated 05th 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 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.

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 31st 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 29th 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) ofthe 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 2nd highest placed PSU

• Best Risk Management Framework & Systems Award in 'Power' and 'PSU' categories at the 4th 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 recognising 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 25th 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

Place: New Delhi (I. S. Jha)
Date: 6th August, 2018 Chairman & Managing Director
DIN 00015615

   

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