The Board of Directors have the pleasure of presenting the 29th Annual Report onperformance of Power Grid Corporation of India Limited (POWERGRID the Company) during thefinancial year ended March 31 2018 together with the Audited Financial Statements.
Continuing its long track record of sterling performance your Company once againperformed exceedingly well as is evident from the excellent results and achievements inall areas.
In FY 2017-18 Transmission assets consisting of 9072 circuit kilometre (ckm.) ofExtra High Voltage (EHV) transmission lines 41620 Mega Volt Ampere (MVA) transformationcapacity 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 trippingper line contained at 0.60.
Inter-Regional power transfer capacity of 11400 MW added by the Company. Withthis cumulative Inter-Regional power transfer
capacity of the National Grid stood at 86450 MW at the end of March 2018.
Total Income of *30766.32 crore and Profit After Tax (PAT) of *8238.96 crore.
Interim Dividend of * 2.45 per share (Face Value *10/- each) paid and inaddition recommendation made for *2.80 per share as final dividend for the FY 2017-18subject to approval of shareholders.
Highest ever over 12000 km of Optical Ground Wire (OPGW) installed. 57000 kmOPGW network commissioned up to 31.03.2018 to support requirement of reliable voice anddata communication with RLDCs to facilitate effective grid management.
Telecom revenue rose to *606.59 crore in the financial year ended on 31st March2018 from *497.36 crore in the previous year.
Consultancy revenue increased to *662.18 crore in the financial year ended on31st March 2018 from *582.43 crore in the previous year.
Won tow projects under TBCB route - ERSS XXI Transmission Limited and WR-NRPower Transmission Limited.
1. FINANCIAL PERFORMANCE
In FY 2017-18 the Company has shown a stellar financial performance. The FinancialPerformance during FY 2017-18 as compared to the previous year 2016-17 is summarizedbelow:
(All Figures except per share data is in units as indicated)
| || |
|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.
For FY 2017-18 your Company has proposed a Anal dividend of ^2.80 per share inaddition to ^2.45 per share of interim dividend paid in February'18 taking total dividendto ^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 afteryour 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 hasbeen 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 stoodat 148149 ckm. of Extra High Voltage (EHV) transmission lines and 234 nos. EHVAC &High Voltage Direct Current (HVDC) substations with 331163 MVA transformation capacity.During the FY 2017-18 the Company maintained availability of the transmission network at99.81% 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 complextransmission network to ensure reliable operation your Company plans maintenanceactivities for every asset well in advance. Your Company believes in 'preventivemaintenance' over 'breakdown maintenance' and is committed to adopt the best oftechnological 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 FrequencyResponse Analysis for Transformers & Reactors Dynamic Contact Resistance Measurementfor Circuit Breakers Third Harmonic Resistive Current measurement for Surge ArrestorsThermo-vision scanning of substation equipment etc. for detection of defects atincipient stage. In addition periodic oil parameter checks Dissolved Gas Analysis (DGA)of Transformers & Reactors and their bushings particle counts and inhibitor contenttest are very useful for diagnosis of problems and life enhancement of theTransformers/Reactors.
4.1.2 Use of process bus for digital substations
Your Company has introduced process bus architecture by connecting Circuit BreakersIsolators and Current Transformers/ Potential Transformers through Optical fibers Ethernetusing IEC 61850 protocol for avoiding complex protection control & measurementcables. 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 substationsto monitor switching and lightning surges. This will help in analysing condition of thesubstation 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 onreal 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 toachieve the next level of performance.
4.2.1 External Benchmarking
Since 2010 POWERGRID has been a part of International Transmission Operation andMaintenance Study (ITOMS) - a global O&M benchmarking platform where 32 leadingglobal power transmission utilities are benchmarked against each other in variouscategories related to Operation & Maintenance practices. The study is carried out inrespect of performance level achieved cost incurred in maintenance and key practicesassociated in maintenance of equipment and the results of each utility are discussed andbest maintenance practices are shared between different utilities. Since its participationin ITOMS POWERGRID has gradually improved its performance in both Line and substationcategories. In the last ITOMS cycle 2017 POWERGRID was rated in first quadrant forperformance in both the major categories of Maintenance of Transmission Lines andsubstations - which denotes achievement of high performance efficiency along with low costincurred on maintenance.
4.2.2 Internal Benchmarking
A comprehensive annual benchmarking system has been developed and started by POWERGRIDsince 2016-17 for evaluation of operational performance of various regions. Based on theresults the best practices of various regions are shared with other regions during AnnualO&M conference.
The purpose of Internal Benchmarking is to identify gaps in operational practices ofvarious regions identify key initiatives and focus areas and bring performance of all theRegions on same operational platform.
Since September 2017 a concise monthly benchmarking system has also been developed forbenchmarking 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 resourcesAerial patrolling of transmission lines is being carried out by your Company usinghelicopters to identify transmission line defects. Helicopters equipped with Gimbalmounted LIDAR (Light Detection and Ranging) Thermo-vision Camera Corona Camera Highresolution Video and Digital camera are being deployed to identify the defects and takingcorrective measures.
4.3.2 App based Patrolling
Your Company has adopted an android based application for patrolling of transmissionlines for live updation of data and effective monitoring of critical locations. Plan ofpatrolling for each cycle can be created and monitored effectively via this App. Actualpatrolling of each tower and defects rectification can be ensured through the app. It willprogressively replace offline reports preparation and documentation.
4.4 Cyber Security
Your Company understands criticality to ensure cyber security of the inter-statetransmission infrastructure. Information Security Policy and Procedures have been put inplace. Its Corporate Office has been certified for ISO: 27001 Information SecurityManagement System Standard. The Regional Headquarters are also in the process of beingcertified for ISO: 27001.
Compliance to Guidelines of The Indian Computer Emergency Response Team (CERT-in) andNational Critical Information Infrastructure Protection Centre (NCIIPC) have been ensured.
In view of possible risks due to Cyber-attacks all Grid connected intelligent controlequipment are kept isolated (air-gapped) from external data communication systems. Alsoin large part of networks digital signals controlling operation of critical equipment arekept further confined and isolated by design to prevent any large scale cascade event.
A senior executive has been designated as Chief Information Security Officer whoreviews Cyber Security preparedness.
4.5 Advance Infrastructure for Grid Management
In the process of continuous up gradation and keeping in line with latest technologicaldevelopment in Grid Management Company has been implementing Advance Infrastructureprojects.
4.5.1 Unified Real Time Dynamic State Measurement (URTDSM)
Under URTDSM 1314 nos. of Phasor Measurement Units (PMUs) have been installed covering316 nos. of substations out of which 1165 PMUs have already been integrated with RLDCsas 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 newfeatures like web based scheduling cyber security main & backup control centres. Thecommunication network has also been upgraded to meet the requirement of upgraded controlcentres. During the year 188 nos. OPGW links have been commissioned connecting 70additional substations.
5. PROJECT IMPLEMENTATION
5.1 Project Management
In order to extract the maximum commercial benefits by implementing the transmissionprojects within the timelines detailed planning is done to handle complex geographical aswell 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 differentlevels of the management have helped to identify any hindrances well in advance to enabletimely corrective actions.
Also to continuously improve the performance interactive meets with Industry partnersare organised regularly to share best practices and to resolve common issues throughfeedback and consultative process. Apart from business interactions to encourageperformance through positive reinforcement your Company also felicitated varioussuppliers/contractors for their performance under different categories. Investmentapprovals for transmission projects worth about ' 4000 crore have been accorded duringthe year.
5.2 Physical Achievements
On physical achievements front your Company has been successful on a number of countswhether it is completing long overdue projects matching completion of AssociatedTransmission System (ATS) for generation linked projects execution of large HVDC projectsor inter regional links.
5.2.1 During the year some of the long stalled/held up transmission projects werecompleted through Company's persistent efforts and support from State GovernmentsMinistry 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 & 400/220kV substation at Yelahanka;
400kV D/C Sasaram-Daltonganj transmission line 400/220kV substation atDaltonganj;
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 & 132/33kVRoing 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 ParksKishanganga & Kameng HEPs.
5.2.3 Important Inter-Regional schemes completed include:
Pole IV of 800 KV Biswanath - Chariyali / Alipurduar - Agra HVDCmulti-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. Forthis ^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 andsuccessfully arranged borrowing from domestic as well external sources at competitiverates. The major source of borrowing is from private placement of domestic bonds. Forfinancing of CAPEX your Company had also tapped other sources which include commercialBank loans loans from bilateral and multilateral funding agencies.
During the year your Company set up its first Medium Term Note (MTN) Program of USD 1bn to offer debt securities for mobilization of funds from international market in one ormore tranches.
7. COMMERCIAL PERFORMANCE
The Company primarily provides transmission service to various Designated Inter-StateTransmission System Customers (DICs) comprising mainly the State Utilities owned byrespective State Governments private utilities Independent Power Producers (IPPs) / BulkCustomers (like Railways) etc. The transmission charges payable by the DICs aredetermined as per the Central Electricity Regulatory Commission (Terms &Conditions ofTariff) Regulations 2014.
With effect from 01.07.2011 the recovery of transmission charges are based on thePoint of Connection mechanism for sharing of Transmission charges as per the CentralElectricity Regulatory Commission (Sharing of Inter-state Transmission Charges &Losses) Regulations 2010 and subsequent amendments thereof. As per the mechanismPOWERGRID as Central Transmission Utility (CTU) raises bills for transmission charges onthe beneficiaries - Designated ISTS Customers (DICs) on behalf of all the Inter-StateTransmission System (ISTS) Licensees in the Country and collects & disburses thepayments 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 andensures prompt payment from its customers in majority of the cases. During FY 2017-18your Company achieved a revenue realization efficiency of 98.92%.
Your Company has been effectively discharging all the activities/ coordination relatedto its responsibilities as CTU for Billing Collection and Disbursement functions underthe Central Electricity Regulatory Commission (Sharing of inter-State Transmission chargesand Losses) Regulations 2010.
7.2 Payment Security Mechanism
The Sharing Regulations provide a time period of 60 days for the DICs to make paymentagainst the bills raised on them. In order to ensure better realization leading toimproved cash flow and reduction of trade receivables the Company with the consent ofother ISTS Licensees in the Country has evolved a Graded Rebate Policy wherein a gradedrebate is provided for payments made within 60 days which is being availed by manyutilities.
The Company enjoys a robust payment security mechanism in the form of Letter of Creditand regulatory provisions to undertake curtailment of Short term Open Access (STOA) ofdefaulting DICs to recover the transmission charges.
Besides the above regulatory mechanisms the dues of State Utilities are also securedby a Tri-Partite Agreement (TPA) signed amongst the Gol RBI and the concerned StateGovernment during 2003 as a part of securitization of dues of State Utilities towards thePower CPSUs in the Country that included POWERGRID also. The TPA provides that if there isany default in payment of current dues for more than 90 days by any State Utility to theCPSU the outstanding dues can be deducted by Gol from the State allocation fundsmaintained with RBI and paid to the CPSU. The TPA was valid till October 2016 which isbeing presently extended for another 10 years. Majority of the States have executed theagreements for extension of the TPAs (25 out of 29 states and 2 out of 4 Union territoriessigned the TPA) and the matter is being pursued with the remaining States/ UnionTerritories.
8. TARIFF BASED COMPETITIVE BIDDING PROJECTS
Your Company is performing well in the competitive environment under Tariff BasedCompetitive Bidding (TBCB). The details in this regard have been presented in Report onManagement Discussion and Analysis.
9. NATIONAL GRID AND CROSS-BORDER INTERCONNECTION
9.1 In order to ensure seamless power flow across different Regions and for optimumutilization of resources spread across the Country a strong National Grid is required. Inpursuit 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 - AgraHVDC multi-terminal Transmission System were completed. With these Inter-Regional powertransfer capacity of the National Grid is increased by 11400 MW and cumulativeInter-Regional power transfer capacity of the National Grid stands at 86450 MW. Withcommissioning of new Inter-Regional lines in the future this capacity is likely to beenhanced to about 118000 MW by the end of 2021-22.
9.2 Cross-Border Interconnections
The electrical interconnections with neighbouring countries Nepal Bhutan andBangladesh are being further strengthened for increased exchange of power. Some oftheupcoming 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 onconsultancy basis.
9.2.2 Inter Connections with Bhutan
For evacuation of power from various upcoming hydro power projects (HEPs) inBhutan Punatsangchu-I HEP (Bhutan) - Alipurduar (India) and Jigmeling - Alipurduar 400kVD/C (Quad) lines - under implementation.
9.2.3 Interconnections with Bangladesh
Baharampur (India) - Bheramara (Bangladesh) 400kV D/C 2nd line - underimplementation
Katihar (India)-Parbotipur (Bangladesh)-Bornagar (India) 765 kV D/C line (to beinitially 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 LongTerm Access (LTA) and Medium Term Open Access (MTOA) to various applicants. Relevantregulations procedures guidelines and related documents for Connectivity MTOA and LTAapplications and status thereof are available online on Company's website.
Out of total Connectivity & LTOA/LTA granted as on March 31 2018 131 numbers ofConnectivity for 91406 MW and 209 nos. of LTOA/ LTA for 98642 MW are in place. Inaddition based on the transmission capacity margins availability the MTOA has also beengranted to 133 nos. of applications for a quantum of 14368 MW cumulative capacity out ofwhich 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 qualityproducts as below:
11.1 Implemented Quality Index Number (QIN) system for grading of EHV transformer andreactor suppliers. This has resulted in motivation for good suppliers and also sets abenchmark for other vendors. Systems are also developed for undertaking intelligentinspections of additional new items by way of reducing the requirement of inspections incase of qualified & excellent vendors. The time thus saved is utilized to exert morefocus on process inspection at other vendors to upgrade and develop them towardsexcellence.
11.2 Your Company has been audited for revised and latest version of ISO 9001 & ISO14001. Your Company has been granted revised certifications for Quality Management &Environment Management Systems successfully. It is also certified for IntegratedManagement Systems as per PAS 99:2012 integrating the requirement of ISO 9001:2015 ISO14001:2015 and OHSAS 18001:2004.
11.3 Theme based discussions on various equipment have been arranged to discuss oncontinual improvements in line with ISO 9001:2015 requirement.
11.4 Encouraged a number of existing vendors to upgrade their equipment to highervoltage level & cover more items to increase vendor base thus creating morecompetitive environment.
11.5 "Make in India" campaign has been given a great push. Some overseasmanufacturers have established their units in India for manufacturing of STATCOM SVC765kV Gas Insulated substations RIP bushings and 765kV transformers/reactors. To fosterefforts 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 withthe objective to establish a State-of-the-Art on-line High Power Short Circuit TestFacility in India. This laboratory will be extremely beneficial for Indian power sectorand 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 inthe Management Discussion and Analysis.
12. PROMOTION OF MICRO AND SMALL ENTERPRISES (MSES)
Your Company supports and encourages procurement from MSEs. It has taken variousinitiatives in line with Govt. of India Public Procurement Policy (PPP) for Micro andSmall Enterprises (MSEs). The annual procurement plan related to Goods and Services forwhich MSEs may participate directly in bidding has been made available on website. TheCompany is continuously making efforts to increase its MSE vendor data base.
13. ENTERPRISE RESOURCE PLANNING
Project "RUPANTAR" the Enterprise Resource Planning (ERP) initiative of theCompany has been implemented successfully and the processes and systems have beenstabilized in all the regions of the Company. Presently majority of the key processesrelated to the business are running on ERP. E-tendering for the domestic bids has alsobeen 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 theyear. Necessary changes in ERP system to comply with GST requirements have beenincorporated.
14. TECHNOLOGY DEVELOPMENT
Your Company has been at the forefront to adopt the latest advancements in the bulkpower transmission so as to result in technological excellence and improvement ofefficiency. In this direction Company has established an Advanced Research and TechnologyCentre at Manesar (Haryana) with state-of-the-art laboratories for power system analysisadvanced diagnostics digital substation material science engineering design etc. Thiscentre aims to help in knowledge assimilation enhancement and dissemination as well asadoption of innovative technologies in power sector.
The prestigious 1200kV National Test Station utilization of Geographic InformationSystem Tools application of Process Bus Technology in substation Automation System andIn-house software tools for Real time Monitoring of Transformers and Reactors are amongthe 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 atits 1200kV National Test Station established at Bina Madhya Pradesh in collaborationwith Indian equipment manufacturers for getting the 1200kV equipment developed in Indiafor future.
14.2 Geographic Information System Tools
Your Company is utilizing Geographic Information System Tool like 'Bhuvan' for mappingits transmission assets route alignment during planning of new transmission lines and fordisaster management studies.
14.3 Process Bus Technology
The Company is implementing the process bus technology in new substations andrenovation of aged substations based on the experience gained from pilot implementations.Besides reduction of footprint by replacing large amount of copper cables with minimalflbre optic cables it is expected to ease the maintenance and trouble-shooting in futureand 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 atMalerkotla substation and in a Greenfield project at 220/66kV GIS substation atChandigarh.
14.4 Software Tools for monitoring of Transformers and Reactors
Your Company is developing in-house software tools for centralized real time monitoringof transformer and reactors by integrating the sensors installed in these equipment acrossthe Country. Online monitoring of transformers/reactors is aimed at detecting early stagesof 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 bushingsfor 800kV Transformers and Reactors to minimize catastrophic failures.
15. TOWARDS SMART GRID DEVELOPMENT
Your Company is continuously focusing towards improving reliability security andefficiency of the grid through applications of intelligent smart grid technologies. YourCompany is delivering smart grid solutions to the utilities and vertically expanding theclient base making Smart Grid a promising business area.
Your Company offers wide range of smart grid solutions covering distributioninfrastructure advanced metering infrastructure intelligent outage management electricvehicle charging stations power quality management net metering renewable energymanagement center battery energy storage system roof top solar integration etc.Currently your company is extending consultancy services to eight (8) utilities forimplementation 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 toaddress challenges in increasing penetration of renewables E-mobility etc. your companyhas taken a pioneering step in establishing a pilot project for Grid connected BatteryEnergy Storage System. It consists of two different types of battery technologies(Advanced Lead Acid & Lithium Ion Phosphate) with Battery Management Systemintegration with network at Puducherry. The pilot system has demonstrated the capabilitiesfor frequency regulation and energy time shift applications. The findings of the energystorage project would also be helpful in deployment of large scale energy storage systemto address intermittency variability of renewables.
15.2 Smart Transmission
Your Company has undertaken full scale implementation of real time smart transmissionprojects applying State-of-the-Art Wide Area Measurement System (WAMS) using advancesynchrophasor technology in the grid. This Unified Real Time Dynamic State Measurement(URTDSM) project involves placement of Phasor Measurement Units (PMUs) at all 400 kV andabove substations generation switchyards of 220 kV and above HVDC terminals and PhasorData Concentrator (PDC) at SLDC RLDC & NLDC control centres along with backbonecommunication infrastructure which has enhanced the efficiency ofthe overall gridmanagement.
15.3 Smart Grid Knowledge Centre
To bring awareness on application of Smart Grid technologies and its demonstration in aholistic manner your Company has established Smart Grid Knowledge Center at Manesarequipped with various working models and functionalities. These working models shallprovide learning environment and capacity building on different smart grid attributes tovarious stakeholders.
15.4 EV Charging Infrastructure
As a step towards e-mobility the Company is undertaking a pilot project ofestablishing 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 intothe Grid. High Capacity Green Energy Corridors are under implementation which will servedual purpose to facilitate interconnection of large scale renewables into the NationalGrid as well as enlarging the balancing area to address renewable volatility. In additiontransmission schemes for 7200 MW Ultra Mega Solar Power Parks worth ^ 4300 crore are alsounder 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 establishmentof Renewable Energy Management Centers (REMC) at 11 (eleven) locations in various REresource rich states viz. Tamil Nadu Andhra Pradesh Karnataka Maharashtra GujaratMadhya Pradesh Rajasthan and regional load dispatch centers at SR WR NR as well as atNational Load Dispatch Centre. This would enable forecasting of renewable resources andefficient management of variable renewable generation ensuring grid stability &security. Upon implementation of REMCs by your Company these will be handed over torespective owners i.e. State LDCs/POSOCO (Load Dispatch Centers/Power System OperationsCorporation 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 establishingEnergy Management Centre (EMC) for monitoring control & forecasting of renewableresources at South Andaman.
17. ENERGY EFFICIENCY
Your Company is a BEE Grade-I Energy Service Company (ESCO) for undertaking energyefficiency projects. Being in energy sector and having large pool of certified energyauditors/energy managers spread across the length and breadth of the Country the Companycan understand the nuances of energy saving much better as a result of which in a shorttime span your Company has set a benchmark for itself as an Energy Efficiency solutionprovider among industries and other commercial establishments. In order to take thisahead the Company is in discussion with various governments agencies such as DistributionCompanies (DISCOMs) municipalities and industries to implement projects similar to ESCOmodel such as replacement of agricultural and municipal pumps etc. leading to reductionin energy consumption for sustainable development and defer capacity addition.
As per 'Alliance for an Energy Efficient Economy (AEEE)' a report titled 'TransformingEnergy Services Sector in India: Towards Building a Billion Dollar ESCO market' - August2017 India has a market size of around '93000 crore to ' 120000 crore across fourverticals - Commercial Buildings Industries Agriculture and Municipalities . This marketis having potential opportunity for your Company to execute the energy efficiency projectsin diverse fields. The Company's project implementation capabilities and pan-Indiapresence provides a competitive advantage over others for taking up such project.
Your Company has carried out energy audits of various heavy and medium industriesinstitutions commercial establishment municipalities and other water management systemsof canals & irrigation departments and is also carrying out third party consultancyfor base-lining work which is a basic need for implementation of Energy Efficiencysolutions / ESCO projects.
18. TELECOM BUSINESS-'POWERTEL'
Your Company is leveraging its Country wide transmission infrastructure for itsdiversified telecom business under the brand name 'POWERTEL'. The Company provides a rangeof services under its Unified License with National Long Distance (NLD) and InternetService Provider - Category 'A' (ISP-'A") Service authorizations.
The Company has been displaying excellent performance in the areas of providing telecombandwidth MPLS based Virtual Private Network (VPN) internet and other communicationservices to Telecom Service Providers Government departments and enterprise customers.The network which includes more than 650 Points of Presence (PoP) has increased to47735 km as at the end of FY 2017-18 from 41988 km in the previous year registering agrowth 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) andup to 10 Gbps on MPLS/ VPN ports. The new orders received by Company include bulkbandwidth orders from BSNL 5 years' MPLS VPN deal with EESL and 3 years' MPLS VPN orderfrom 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 250000 Gram Panchayats(GP) in the Country by utilizing existing fibres your Company is laying optical fibrecables to connect to Gram Panchayats wherever necessary. In the revised scope underphase-I the Company has been allotted work for development of network in 39 districtsspread across States of Andhra Pradesh Telangana Himachal Pradesh Jharkhand &Odisha by Bharat Broadband Network Limited (BBNL) covering about 10440 GPs. Your Companyhas exceeded its Phase-I target of laying OFC to 7196 GPs corresponding to overall 1 lakhGPs by connecting 7635 GPs.
In Phase-II of project Company has been allocated 2 states i.e. Uttarakhand (5706GPs) and Himachal Pradesh (2994 GPs). Survey work and tendering activities of contractsfor implementation of projects are under progress.
18.2 Modernisation of Railways Signalling System
Report for Joint Venture Company with RailTel Corporation for establishment of HighSpeed Mobile Communication Corridor (HSMCC) for Indian Railways to improve its signallinghas been submitted to Railway Board.
18.3. Telecom Tower Business
Company has approached CERC for usage of transmission towers for installation of BaseTransceiver 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-ProtocolLabel Switch (MPLS) Cloud. Company provides both Layer-2 and Layer-3 VPNs with portcapacity ranging from 2Mbps to lOGbps.
Company is peered with global content providers for providing IP Transit services toISPs. The IP Transit service reduces cost and enhances service quality of hosted contentfor ISPs and in turn enables them to offer better internet services at lower price totheir users.
Company's extensive backbone telecom network with its local access partners haseliminated the location disadvantage of small towns towards accessibility andaffordability of high speed internet. It has the potential to bridge the so called digitaldivide 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 transmissionsub-transmission load dispatch and communications (LD&C) and related to area ofSmart Grid distribution management etc. The project management and technicalcapabilities 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 markethaving estimated Project cost of ^1528 crore (excluding TBCB projects). Some of the majorassignments bagged in the year are Strengthening of Sub-transmission works and RuralElectrification 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 electrificationof 761 rkm with estimated project cost of ^890 crore under Central East Central SouthEast Central & South West Railway zones. Proving its excellent execution skills yourCompany has completed the electrification of Mansi-Saharsa-Dauram Madhepura Section aheadof stringent target completion date matching with rolling out of the Electric Locomotivefrom the newly constructed facility of Indian Railways at Madhepura. The works on otherthree sections under different Railways zones are in full swing with active co-operationfrom Indian Railways. It is expected that successful execution of these electrificationworks by the Company shall pave the way for getting more such consultancy businesses fromIndian railways shall further add to existing consultancy order basket.
Company is executing transmission works in difficult geographic terrain areas forimplementation of NER Power System Improvement Project funded by The World Bank & Golin 6 States of NER and Comprehensive Scheme for Strengthening of Transmission &Distribution in Arunachal Pradesh & Sikkim. The Company is also implementingtransmission project in J&K to provide grid connectivity and reliable power supply tothe strategically important Ladakh region. Under this work Company has successfullycommissioned part of 220 kV D/c Srinagar-Alusteng Line i.e. 220/66 kV Leh and Khalsti GISS/s alongwith Leh-Khalsti Line. In addition other important consulting assignment underimplementation includes strengthening of transmission network in Delhi.
19.2 International Business
On the International front your Company has been providing consultancy to variousclients 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 Consultancyassignments with multilateral funding on competitive bidding basis.
In 2017-18 your Company has signed eight (08) nos. of consultancy agreement for newprojects / extension and augmentation of on-going projects.
Under the Indian Technology and Economic Co-operation (ITEC) scheme of MEA Golparticipants from different African countries were trained. With this platform Company islikely to forge long term relations and acquaintances with decision makers and otherexecutives from International Utilities. Apart from getting regular business for POWERGRIDAcademy of Leadership (PAL) this opportunity will also showcase Company's capacitybuilding prowess in international markets to secure further business in Consultancy /EPCcontracts.
20. Contribution in Govt of India Schemes
20.1 Rural Electrification (RE):
Under Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) Scheme for rural electricityinfrastructure and household electrification Company has been executing infrastructurework for rural electrification.
Presently RE work in Uttar Pradesh (UP) and Odisha assigned to the Company are underimplementation. In Odisha RE work in 15 districts at an estimated cost of around ^ 2200crore involving electrification of about 14300 villages and providing serviceconnections to about 2.9 lakh BPL households is under progress and expected to becompleted by Dec'18. In UP RE work of 4 districts at an estimated cost of around ^ 550crore is expected to be completed by Dec'18.
During FY 2017-18 infrastructure was created for electrification in 4279 nos. ofpartially electrified / un-electrified villages. Service connections were provided toabout 111600 BPL households.
Your Company is also implementing RE works in 8 districts of J&K in underDDUGJY/PMDP with sanctioned cost of ^489 crore involving electrification of 1737 villagesand 26884 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 remainingun-electrified households in the Country Government of India has launched Sahaj Bijli HarGhar Yojana (SAUBHAGYA) with the target to provide connections to all un-electrifiedhouseholds by Decemebr 2018. Your Company is implementing SAUBHAGYA Scheme in Odisha in15 districts with scope of 4.44 lakhs non-BPL connections and in UP with 11000 nos.non-BPL connections.
20.3 Integrated Power Development Scheme (IPDS)
Your Company has completed the arduous task of underground cabling under IPDS work inOld Kashi area of Varanasi Town assigned by Purvanchal Vidyut Vitaran Nigam Limited(PuVVNL) which involved conversion of overhead distribution network to underground andconnecting to exiting consumers. Under this total 1510 km HT and LT Power cabling workhas been completed and 50000 consumers have been connected to the new underground system.
This has resulted in improvements in the form of substantial reduction of AT&Closses in the area reduction in consumer complaint augmentation in power transformationcapacity increase in revenue collection due to increase in number of metered consumersavailability of quality power to the consumers enhanced safety and aesthetics of thearea.
21. CITIZEN'S CHARTER
Citizen's Charter has been formulated for the Company providing a visible front of itsvision mission objectives Company profile commitments expectations from citizensIntegrated Management Policy services offered values and standards of services accessto information and grievance redressal. The Citizens' Charter is available on theCompany's website.
22. PEOPLE: OUR CORE STRENGTH
22.1 Talent Acquisition & Development
Your Company being a service organization relies heavily on the strengths of itsemployees who are the key to deliver excellent results year after year. Thus HRprocesses are designed to attract best talents from the premier institutes and developthem to deliver high quality output. Through its learning initiatives your Company isable to respond to challenges and is able to adapt to an ever changing businessenvironment competition and to changing global markets. The continuous learning ensuresupdated people with customer centric attitude for better business outcome.
Your Company's practices are continuously aligned with technological development andcompetitive environment. Your Company aims to prepare for future challenges; making theorganization future ready. Your Company has been pioneer in several smart learning anddevelopment initiatives and its practices like 'Online HRD Management Systems' have beenrecognized all across the industry.
In the year 2017-18 your Company has conducted organisation wide training anddevelopment programmes and other systems & process development interventions based onOrganisation Need Assessment (ONA) & Competency Based Training Needs Assessment(CBTNA). Apart from this your Company has conducted various programs for employees atpremier institute like IIMs IITs NITs and ICAI etc.
Company's sustained efforts as above have resulted in higher productivity and outputwhich is proved by the fact that in 2017-18 profit per employee circuit kilometer peremployee 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 toprovide 24x7 affordable and reliable power to everyone. In line with this the Company hasto adopt the latest technologies and accordingly train manpower of its stakeholders also.To this end Company is providing training for policy procedures & systemup-gradation to other power utilities.
POWERGRID Academy of Leadership (PAL) a state-of-the-art world class Instituteestablished at Manesar has been providing a wide range of training which includesinduction hands-on managerial and behavioural programs to its employees and for variousother power utilities at national and international levels.
Appreciating the notable people friendly practices Company has been recognized as oneof the "India's Best Companies to Work" for two consecutive year 2017 and 2016by'The Great Place to Work Institute'.
22.2 Employee Welfare
The Company is continuously updating its welfare policies in line with industry trendand to meet the changing needs for its employees. Issues are successfully addressedthrough the National and Regional Bipartite Committee (PNBC/PRBC) a joint consultativeforum comprising management and workmen representatives elected through secret ballot.
At all establishments cultural Programs are regularly conducted for promoting healthycommunity living. Various festivals are celebrated collectively by organizing MilanSamaroh cultural activities etc.
The Company also organizes Intra & Inter-Regional Sports Competitions for KabaddiCricket Volleyball Chess and Badminton etc. and participates in the Inter-PSU Sportsmeets as well. Your Company team has emerged winners in Table Tennis National ManagementGames 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 withDisability' (PwD) in table tennis conducted by Ministry of Youth Affairs and Sports. Healso represented Indian team in International Paralympic games held in Jordan and won thebronze medal for the Country.
Company has a comprehensive medical treatment policy that covers both in-patient andout-patient procedures for its employees as well as their families. Employees also havethe facility to undergo preventive health check-ups to ensure that any medical conditiondoes not go unchecked. Company has empanelled the best hospitals in the cities/townssurrounding its numerous establishments to ensure that employees get the best ofhealthcare facilities. Further Company has also tied up with visiting medical consultantsat its major establishments on a regular basis to provide initial consultation toemployees at their place of work.
22.3 Ensuring Social Justice
POWERGRID has constituted a separate reservation cell to look after and safeguard thelegal 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 nodiscrimination on the basis of caste religion & disabilities amongst the employees.To ensure effective discharge of duties by liaison officer across all establishments ofPOWERGRID separate liaison officer for each region has been nominated. The Companyfollows all directives & guidelines with regard to reservation Policy issued byGovernment of India.
22.4 Grievance Redressal
In POWERGRID grievance redressal is always taken-up on priority. Be it employeegrievance or public grievance both are given utmost importance and resolved promptly. Adedicated team monitors and ensures grievances are redressed without any delay. Each andevery grievance is resolved impartially under strict & unbiased framework afterthoroughly analysing the facts and data. The same is reviewed by the Top Managementregularly. The employee grievance is accorded Top Priority and the Company has 3-Tierstructure for expeditious resolution of grievance within the broad framework of policyguidelines.
23. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
As per the requirement of the Sexual Harassment of Women at Workplace (PreventionProhibitions and Redressal) Act 2013 and Rules made thereunder Internal ComplaintCommittees (ICC) are in place to redress complaints received regarding sexual harassment.POWERGRID has been conducting training / workshop both for male and female employeessensitising them about the issues and law relating to Sexual Harassment. During the yearPOWERGRID conducted 06 such training programmes across the organization. During the yearno 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. Variousactivities such as Translation Practice Programme Workshops Trainings etc. are organizedat every unit of your Company to ensure the extended use of Rajbhasha. Computer trainingsare being imparted to enhance the working knowledge in Hindi on computers. Hindi classesare also being organized for non-Hindi speaking employees through Hindi Teaching Scheme asper Govt. norms. Lectures on wide spectrum of topics such as heritage social and culturalconcerns are also being delivered by eminent scholars on regular basis to change themindset of the employees towards increased working in Hindi. Following Govt. of India'sRajbhasha Policy regarding promotion of all Indian languages and Rajbhasha"Hindi" your Company has made comprehensive efforts to enhance and boost use ofHindi in its official work across the levels.
Various activities are undertaken to promote Hindi. Every year a number of events areorganised prominent among them are Akhil Bhartiya Rajbhasha Sammelans Kavi Sammelans(poetry sessions) plays publication of monthly articles in Hindi via emails sendingwishes/ information via Hindi SMS on different occasions such as Hindi Diwas DiwaliHoli Eid and X-mas etc. Also various Hindi competitions throughout the year areconducted especially during Hindi Pakhwada Swachchta Pakhwada Vigilance Awareness WeekQaumi Ekta Saptaah Pt. Deen Dayal Upadhyay Janm Diwas etc. In addition departmentalreview meetings to implement official language as well as Town Official LanguageImplementation Committee (TOLICs) meetings are also conducted. Attractive incentiveschemes for employees working in Hindi have been implemented as per the governmentguidelines.
Your Company has established one of the best Hindi libraries among Public Sectors whereover 14500 books and 53 Hindi Magazines on various topics & 16 Hindi daily newspapersare available for the employees.
The efforts made by your Company in implementation of official language wereappreciated in several fora during the year 2017-18. Various awards have been conferred bydifferent TOLICs under the aegis of Ministry of Home Affairs Govt. of India regardingbest Implementation of Official Language. Besides POWERGRID's efforts were also applaudedduring various inspections and discussions done by 'Parliamentary Committee on OfficialLanguage' and by 'Hindi Advisory Committee'.
25. CORPORATE IMAGE ENHANCEMENT
Company has been persistently working towards communicating with the masses anddisseminating authentic information in time to its stakeholders endorsing the positiveperception about the Company.
The positive perception helps it to implement its projects timely. The various face toface interactions of the management with the analysts and stakeholders during thequarterly Analysts and Press Meets have been instrumental in bringing forth thetransparent work culture of the organization the work ethics and principles it hasnurtured and adopted through the years. In order to facilitate communication with themasses with regard to achievements growth & recent developments on operational andfinancial fronts of the Company numerous press communique have been issued and widespreadcoverage has been ensured.
Company has been executing its projects and operations in extremely challengingconditions. From time to time landmark accomplishments have been highlighted through aproper media management strategy ensuring precise and timely dissemination of informationwhich has helped the Company earn widespread appreciation and applause from both fromwithin the country as well as across the globe.
The Company participated in various national exhibitions as well as internationalexhibitions held in Russia Bangladesh etc. It also took part in industrial fairs whereits efforts and the pace with which the Company has adopted state of the art technologiesfor meeting the global challenges have been lauded by one and all. The Company alsosponsored a number of sports cultural and other programs for maximizing its reach to thegeneral public and creating brand awareness for the Company.
The Company is also utilizing the digital media platforms like Facebook Twitter andYouTube for reaching out to the social media savvy generation and connecting with theyouth of the Country. The digital media posts provide prompt feedbacks and areinstantaneous in their reach.
26. RIGHT TO INFORMATION
In order to promote transparency and accountability an appropriate mechanism has beenset up across the Company in line with 'Right to Information Act 2005' Company hasnominated CPIO/ Appellate Authorities at its Corporate Office and Regional offices acrossthe 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 andprocessed as per the Act. RTI Awareness Programs/ Workshops were organized on regularbasis to apprise Employees with latest updates on the RTI Act 2005 and CentralInformation Commission (CIC) decisions.
27. COMMITMENT TO TRANSPARENCY & VIGILANCE FUNCTION
Recognizing the importance of good governance your Company advocates the principles ofTransparency Probity and Ethics in its management functioning. The Vigilance Departmentof your Company functions as an integral part of the management. The department ensuresthat 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 tostrengthen the organizational process and to minimize the malpractices in the varioussystems and activities of the organization the main emphasis is laid on preventive andproactive vigilance. While preventive vigilance focuses on whether the right type ofsystems exist or need to be re-engineered proactive vigilance aims at the identificationof opportunities and in taking pro-active action against potential threats. During theperiod 42 Surprise inspections and 55 Chief Technical Examiner (CTE) Typeinspections/Process-on-line inspections were conducted. Pursuant to Vigilance inspectionsand observations/recommendations many system improvements in various functions of theorganisations 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 theCorporate Centre as well as at various Regions of the Company. During the period 28Preventive workshops were conducted for 757 non-vigilance executives. The PreventiveVigilance Workshops contain module of Ethics Management which enable the employees toidentify and deal with ethical problems developing their moral intuitions which areimplicit in everyday choices and actions.
27.3 Vigilance Awareness
In pursuance of the directions of Central Vigilance Commission the Vigilance AwarenessWeek 2017 was observed by POWERGRID in all its offices across the Country from 30.10.2017to 04.11.2017 in line with the theme for this year "My Vision - Corruption freeIndia".
Vigilance Awareness Week was celebrated with great enthusiasm and fervor across alloffices in India and abroad (Bhutan & Nepal) along with the management all itsemployees 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'bleVice President of India & Chief Vigilance Commissioner (CVC) were also read out bySenior Officers to the gathering.
In line with the directive of CVC and in order to ingrain ethical values in youngchildren in school/college 37 Integrity Clubs have been formed by the Company. The newconcept of CVC regarding formation of Integrity Club has been highly appreciated by theschool authorities. Various activities related to enhancing ethical and moral values shallbe sponsored through these clubs in future. Outreach activities were conducted whichincluded Nukkad Natak at Public Places. Gram Sabhas were also conducted at various placesnear the sites where the Company is located. Journal of Vigilance department (CANDOUR) wasreleased during the closing ceremony of Vigilance Awareness Week. In line with Go GreenInitiative 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 notlimited to financial profitability but includes wider and much desired societal welfare.Your Company as part of its corporate philosophy is committed at all levels tointernalize the negative externalities associated with its business processes includingenvironmental impacts social concerns and safety issues. In this regard the Company hasintegrated environmental and social management procedures into its corporate operations in1998 by enunciating Environmental and Social Policy & Procedures (ESPP). Theacceptance of ESPP provisions by leading multilateral agencies like The World Bank in 2009and 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'scommitment and implementation record for E & S safeguard management. The Company hasnow attained the unique distinction of becoming the first organization in the world whosesafeguard policy (ESPP) has been accepted by two major multilateral agencies viz. TheWorld Bank&ADB.
Your Company the leader in Sustainability Reporting in the Indian power sectorreleased its 5th biennial Sustainability Report in January 2018 based on internationallyacclaimed/accepted GRI-G4 Guidelines. The report is externally assured by M/s IntertekIndia Private Limited following International Standards like Accountability UK Standards'AA1000:2008 APS' and 'AA1000:2011 SES'. This report apart from showcasing Company'sachievements gives all stakeholders a clear picture of contributions to sustainabledevelopment through its activities.
The Company is fully conscious of the need to conserve natural resources and avoidecological sensitive area eco-sensitive zones forest sanctuaries national parkstiger/biosphere reserves and Coastal Regulations Zone (CRZ) areas as far as possiblethrough optimization of route alignment. Following the basic principle of avoidance &minimization which is one of the guiding principles of our ESPP involvement of forestland has been reduced progressively from 6% in 1998 to 2.26% last year. Other key measurestaken by the Company towards sustainable development are technological initiatives likedesign and installation of innovative towers for conservation of Right of Way (RoW) andreduce tree felling rain water harvesting system installation of LED bulbs solarlights fuel catalysts devices for DG sets etc. Further in order to achieve the IntendedNationally Determined Contributions (INDCs) target of the Country the Company is playinga key role in integration of renewable energy resources by establishing high capacity'Green Energy Corridors' dedicated to renewable energy including solar parks across theCountry. Such initiatives not only reduce the dependency on thermal generation but alsoprovide boost to renewable generation by providing reliable grid connectivity.
In line with Govt of India's commitment to United Nation's Sustainable DevelopmentGoals (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 17SDGs the Company's activities are already aligned in 11 goals. Towards commitment tocontinual improvement the Company has collaborated with Wildlife Institute of India (WII)for a comprehensive study titled "Assessment of Impacts of power lines on Avifaunain the Arid planes of Western Gujarat'. The outcome of the study will help transmissionand distribution utilities in formulating and implementing better safeguard measures forAvifauna protection which in turn is in line with SDG 15 ofthe UN.
Towards sustainability and green initiative your company is installing Rooftop SolarPV 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 itselfto contribute to the society through initiatives that have positive impact on society atlarge especially the community in the neighborhood of its operations. The main objectiveof CSR initiatives are the improvement in the quality of life of marginalized andunder-privileged sections of the society residing around its areas of operation. With thisapproach the Company carries out various CSR activities with thrust on RuralDevelopment/Infrastructural Development Skill Development Health EducationEnvironment etc.
During the FY 2017-18 your Company spent ^157.99 crore and sanctioned 145 nos. of CSRProjects costing ^237.60 crore to be executed in 2-3 years. Focus areas ofyour Company'sCSR activities during FY 2017-18 were projects involving infrastructure development inrural areas like Installation of solar street lights drinking water facility waterfiltration plant construction of community centres internal roads culvertsconstruction of class rooms toilets supply of desk & benches in village schoolsproviding ambulances conducting health checkup camps infrastructure support ingovernment hospitals/Community Health Centre/Primary Health Centre etc.
To help economically weak patients undergoing treatment in AIIMS New Delhi and theirattendants your Company has constructed 'POWERGRID Vishram Sadan' at J.P. Apex TraumaCentre AIIMS New Delhi which has become functional. One more 'POWERGRID Vishram Sadan'is being constructed at King George Medical University Lucknow and another two VishramSadans have been sanctioned during 2017-18 for Indira Gandhi Institute of MedicalScience 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 theCountry voluntarily undertook Shram Daan. Besides upkeep of 25 wards of Varanasi Citycomprehensive improvement for Iconic places - Baidyanath Dham for its overall improvementand plan including cleaning of entire premises have been taken up. As part of Swachhtainitiative besides construction of toilet blocks in Government Schools more than 30000twin-bin dustbins are in various stages of installation across the Country. Truck mountedsweeping machine with vacuum cleaner have also been provided to Municipal CorporationFaridabad.
During the year Company has successfully completed training of 5000 youths in 33location across the Country through a first of its kind of collaboration with the NationalSkill Development Fund (NSDF) and National Skill Development Corporation India (NSDC) forimparting skill development training to youths. Further to impart high end training toyouths the Company besides its owned and operated Skill Development Centre impartingtraining 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 toyouths on a residential basis in their campus. About 1000 youths were trained during FY2017-18 and most of them were gainfully employed.
The Company is implementing the project of'Improving Rural Livelihoods throughFarmer-centric Integrated Watershed Management'on 10000 hectares of land in Kurnool(Andhra Pradesh) & Kudgi (Karnataka) through ICRISAT (The International Crops ResearchInstitute for the Semi-Arid Tropics). The various initiatives under this project hasresulted in improvement of Crop productivity by 10-40% and water storage capacity of about95000 cu. mtrs. resulting in conservation of about 145000 cu. mtrs. of water.
1359 students of Assam Manipur and Chhattisgarh who have been renderedorphan/destitute due to various forms of societal violence were provided scholarshipsthrough 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'sReport.
30. BHARAT-22 Exchange Traded Fund (ETF)
Under BHARAT-22 Exchange Traded Fund (ETF) launched by the Government of India theGovernment of India had sold 51520439 no. of equity shares of POWERGRID i.e. 0.98% inNovember 2017 and 29937858 no. of equity shares of POWERGRID i.e. 0.57% have beendivested 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 outin Report on Management Discussion and Analysis placed at Annexure-I forming part of thisReport.
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 inAnnexure-II and forms part of the Annual Report.
33. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
As per requirements of disclosures under Section 134(3) (m) of Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 information relating to conversationof energy technology absorption and foreign exchange earnings and outgo information isgiven in Annexure-III to this Report.
34. RISK MANAGEMENT POLICY
Information on Risk Management Framework is covered in the Management Discussion andAnalysis 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 efficientconduct of its businesses including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds error reporting mechanism theaccuracy and completeness ofthe accounting records and the timely preparation of reliablefinancial disclosures.
The Statutory Auditors of your Company are appointed by the Comptroller & AuditorsGeneral 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 thefinancial year 2017-18.
The Statutory Auditors have given an unqualified report. The report is self-explanatoryand 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 2018by the Comptroller and Auditor General of India under Section 143(5) ofthe Companies Act2013. Copy ofthe same is attached in Annexure-IV to this Report.
38. SECRETARIAL AUDITOR
Kumar Naresh Sinha & Associates Practising Company Secretaries have conductedSecretarial Audit of the Company for the financial year ended March 31 2018. The Reportforms part of this Annual Report (Annexure-V).
The Secretarial Auditors have reported that during the period under review the Companyhas generally complied with the provisions of the Act Rules Regulations GuidelinesStandards etc. mentioned above subject to the following observations:
1. The Company has not complied with the provisions of Section 149 ofthe Companies Act2013 read with Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 in respect of the appointment of requisite number of IndependentDirectors on the Board.
2. The Company has not complied with the provisions of Section 178 of the CompaniesAct 2013 and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements)Regulation2015 with respect to constitution of Nomination and Remuneration Committee upto 18th September 2017.
3. The Company has not filed certain e-forms relating to creation of charges with theoffice of the Registrar of Companies where the Permanent Account Number (PAN) of theLenders 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 theCompanies Act 2013 (the Act) the power to appoint Directors vests with the President ofIndia. Against the requirement of seven Independent Directors on your Company's Boardduring the year only three posts have been Ailed up - Shri Jagdish Ishwarbhai Patel on17.11.2015 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 theAct and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 as observed by the Secretarial Auditor. The matter has already beentaken up with Administrative Ministry for Ailing up of four existing vacancies ofIndependent Director on the Board of your Company.
2. The Board had only two non-executive directors (Independent Directors) till 31stAugust 2017. With the appointment of one more non-executive director on the BoardNomination and Remuneration Committee was reconstituted by the Board in its meeting heldon 19th September 2017 and thereafter the constitution of Committee was in accordancewith 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 theLenders are Multilateral Agencies - The World Bank ADB and IFC for non-availability ofPAN 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 ChandraWadhwa & Co. Cost Accountants as Cost Auditors for the Financial Year 2017-18 underSection 148 of the Companies Act 2013.
The Cost Audit Reports for the FY 2017-18 will be Aled with the Cost Audit BranchMinistry 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 theannual 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 year2017-18. 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 PrasadAdditional Secretary MoP was appointed as Govt. Nominee Director on 14.08.2017 in placeof Ms. Jyoti Arora and she ceased to be director on 30.08.2017. Ms. Bharati JointSecretary 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 attainingthe age of superannuation. The Board places on record the appreciation and gratitude toShri R. P. Sasmal and Shri Prabhakar Singh for their signiAcant contribution and supportto the Company.
Ms. Seema Gupta assumed the charge of Director (Operations) with effect from 1st March2018. The Ministry of Power vide OfAce Order dt. 09.07.2018 has entrusted the additionalCharge 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 IndependentDirectors w.e.f. 23.07.2018 and 26.07.2018 respectively vide Ministry of Power OfAceOrder dt. 17.07.2018.
In accordance with the provisions of Section 160 of the Companies Act 2013 read withArticle 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 Companyand 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 regardingdates and attendance of the Board meetings are provided in the Report on CorporateGovernance which forms part of this Report.
43. COMMITTEES OF THE BOARD
Your Company has Audit Committee CSR Committee and other Committees. The compositionand scope of the Committees are provided in the Report on Corporate Governance.
The Report on the Corporate Governance (Annexure-VII) forming part of this Reporttogether 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 underSection 149 (6) of the Companies Act 2013 for holding the position of 'IndependentDirector' 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 everyDirector by the Nomination & Remuneration Committee. However Ministry of CorporateAffairs (MCA) vide General Circular dated 5th June 2015 has exempted Government Companiesfrom the aforesaid provisions where Directors are evaluated by the Ministry or Departmentof the Central Government which is administratively incharge of the Company or as thecase 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 ofthe Companies Act 2013 'Code for Independent Directors' as per which the performanceevaluation of the Board by the Independent Directors has been exempted for governmentcompanies.
The appointment tenure and remuneration of Directors are decided by the President ofIndia. Remuneration paid to Chairman & Managing Director and Functional Directors areas 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 allFunctional 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 ofPublic Enterprises.
46. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
Your Company has framed a policy on the remuneration of the Directors Key ManagerialPersonnel (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 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 everylisted company is required to disclose the ratio of the remuneration of each Director tothe median employee's remuneration and details of employees receiving remunerationexceeding limits as prescribed from time to time in the Directors' Report.
However as per notification dated 5th June 2015 issued by the Ministry of CorporateAffairs Government Companies are exempted from complying with provisions of Section 197of the Companies Act 2013. Therefore such particulars have not been included as part ofDirectors' Report.
48. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Loans Guarantees or investments under Section 186 of the Companies Act 2013 form partof 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 Section188 (1) of the Companies Act 2013 in the prescribed Form AOC-2 are given as Annexure IXof the Directors' Report. Further attention of the members is drawn on Note No. 59 of theFinancial 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 Subsidiariesand Joint Ventures are covered in the Report on Management Discussion and Analysis andalso 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 formulatea dividend distribution policy. Accordingly the policy was adopted to set out theparameters and circumstance that will be taken into account by the Board in determiningthe distribution of dividend to its shareholders and/or retained profits earned by theCompany. The policy was approved by the Board in its meeting held on 29th May 2017. Thepolicy 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 ortribunal 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 Directorsconfirm that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 theCompany and that such internal financial controls are adequate and were operatingeffectively;
(f) the Directors had devised proper systems to ensure compliance with the provisionsof 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 perPlatts Top 250 Global Energy Company Rankings (2017 2016 2015 & 2014).
India's Best Companies to Work for 2017 as per The Great Place to WorkInstitute'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 &CNBCTV18.
CBIP Award 2018 for Best Performing Power Transmission Utility by Central Boardof Irrigation and Power recognising the Company's contribution for emerging as the enablerfor a vibrant Electricity Market in the country by consistently implementing transmissionsystems setting new benchmarks in Performance and technological advancements.
SCOPE Award for Excellence and Outstanding Contribution to the Public SectorManagement - Individual Leadership Category-I (Maharatna/ Navratna CPSE) 2016-17 to CMDPOWERGRID
Best CEO Award for Power and PSU (except BFSI) categories to CMD POWERGRID atthe Business Today Best CEO Awards
Dun & Bradstreet (D&B) Corporate Award 2017 for best performing Companyin 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 CorporateGovernance.
Golden Peacock Award 2017 for Corporate Social Responsibility in Power Sectorby the Institute of Directors.
Best Issuer on Electronic Debt Bidding Platform-PSU awarded by National StockExchange of India Limited (NSE).
India Pride Award by Dainik Bhaskar group towards Company's contribution towardsNational Growth in Energy & Power Sector
Accreditation to POWERGRID SR-II Regional Headquarter Building with Four StarRating Shield under 'GRIHA' (Green Rating for Integrated Habitat Assessment) aninitiative by New & Renewable Energy Govt of India.
Your Board of Directors would like to express their deep sense of appreciation for theguidance and co-operation received from Government of India particularly Ministry ofPower Ministry of Finance Ministry of Home Affairs Ministry of External AffairsMinistry of Statistics and Programme Implementation Ministry of Environment &Forests Ministry of Corporate Affairs Central Electricity Regulatory CommissionAppellate Tribunal for Electricity Central Electricity Authority NITI Aayog Departmentof Public Enterprises Regional Power Committees Office of the Comptroller and AuditorGeneral of India and other concerned Govt departments/agencies at the Central and Statelevel without whose active support the achievements of the Corporation during the yearunder review would not have been possible.
56. Special thanks to our valued customers State Governments and State power utilitiesand other clients who have awarded various consulting works and reposed faith inCompany's capability to handle them. The Board also appreciates the contribution ofContractors Vendors and Consultants for successful implementation of various projects bythe Company.
Your Directors also acknowledge the valuable suggestions and guidance received from thestatutory auditors during the audit of accounts of the Company for the year under review.The Board also conveys its sincere thanks to national international financialinstitutions multilateral Financial Institutions domestic & international Creditrating agencies for their assistance continued trust and confidence reposed in yourCompany.
On behalf of Board of Directors I would like to place on record our deep appreciationof the dedicated efforts and valuable services rendered by the members of your CompanyFamily in the Company's achievements during the year 2017-18. I would also like to thankthe Executive team for their strong leadership the employee unions for their support andall our employees for their commitment and enthusiasm to achieve our aim to be the world'spremier 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 |