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Power Grid Corporation of India Ltd.

BSE: 532898 Sector: Infrastructure
NSE: POWERGRID ISIN Code: INE752E01010
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VOLUME 65147
52-Week high 248.25
52-Week low 186.35
P/E 10.57
Mkt Cap.(Rs cr) 154,297
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 223.35
CLOSE 223.45
VOLUME 65147
52-Week high 248.25
52-Week low 186.35
P/E 10.57
Mkt Cap.(Rs cr) 154,297
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Power Grid Corporation of India Ltd. (POWERGRID) - Director Report

Company director report

Dear Shareholders

On behalf of the Board of Directors it gives me immense pleasure in presenting the 33rdAnnual Report on the performance of the Company together with the Audited FinancialStatements for the financial year ended 31st March 2022.

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

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

• On a standalone basis the Company's Total Income at Rs.42335.87 croreincreased by 4.46 % and Profit after Tax (PAT) at Rs.17093.76 crore increased by 43.21%as compared to previous year.

• Achieved system availability of 99.83%. The trippings per line decreased to0.33 lowest in last five years.

• Addition of 5450 circuit km (ckm.) of Extra High Voltage (EHV) transmissionlines 43564 Mega Volt Ampere (MVA) transformation capacity and 7 new Substations.

• Addition of 7200 MW Inter-Regional power transfer capacity to the nationalgrid.

• Assets of Rs.20695 crore were capitalized.

• Important transmission assets commissioned:

- ?800 kV Raigarh - Pugalur HVDC link along with Bipole-II (Pole-III & IV 1500 MWeach)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

- 765 kV D/C Khetri-Jhatikara line

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

- 400 kV D/C Jawaharpur - Firozabad line

• For ensuring effective communication of the existing as well as new substationswith

Regional Load Despatch Centres (RLDCs)/State Load Despatch Centers (SLDCs) 8174 km ofOptical Ground Wire (OPGW) network was added.

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

• Emerged successful in 2 TBCB projects- Inter State Transmission Projectassociated with transmission strengthening scheme for evacuation of power from solarenergy zones in Rajasthan (8.1 GW) under Phase-II and

- Intra State Transmission Project in the State of Uttar Pradesh for construction of400/ 220/ 132kV Substation at Mohanlalganj (Lucknow) four 400kV D/C Transmission linesand two 765kV S/C Transmission lines.

• Launched the Virtual Smart Grid Knowledge Centre (SGKC) a Digital-twin thatreplicates the facilities available at the SGKC in Manesar and can be accessed by anyoneat any time from any location to accelerate knowledge dissemination in the smart griddomain.

• Created a centralized circuit breaker health indexing system that allows for thetransition to predictive circuit breaker maintenance.

1. Financial Performance

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

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

FY 2021-22

FY 2020-21

Y-o-Y
Parameters Rs.(Crore) US $ (Million) Rs.(Crore) US $ (Million) Growth (%)
REVENUE
Transmission Charges 38594.41 5056.26 36456.92 4776.22 5.86%
Consultancy-Sale of Services 753.34 98.70 501.28 65.67 50.28%
Telecom 580.34 76.03 707.45 92.68 (17.97)%
Other Income 2407.78 315.44 2861.46 374.88 (15.85)%
TOTAL INCOME 42335.87 5546.43 40527.11 5309.45 4.46%
Profit After Tax (PAT) 17093.76 2239.45 11935.78 1563.71 43.21%
Earnings per Share (EPS) # Rs. 24.51 US $ 0.32 Rs. 17.11 US $ 0.22 43.25%
Book Value per Share # Rs. 109.17 US $ 1.43 Rs. 99.75 US $ 1.31 9.44%
Gross Fixed Assets 249953.70 32746.46 234284.32 30693.61 6.69%
Long term borrowing* 129365.27 16948.16 141251.48 18505.37 (8.41)%
Net Worth 76151.57 9976.62 69578.84 9115.53 9.45%
Debt Equity Ratio

63:37

67:33

Return on Net Worth (%)

22.45%

17.15%

# EPS and Book value have been adjusted for Bonus Issue

* Including current maturities of Long-Term Borrowings Convenience Conversion at US $1= Rs.76.33 as on 31.03.2022

1.1. Dividend Payout

The Company recommended/declared dividend as follows: -

FY 2021-22

FY 2020-21

Dividend (per share) In Rs. In % In Rs. In %
First Interim Dividend 7.00* 70.00 3.75# 37.50
Second Interim Dividend 5.50 55.00 3.00# 30.00
Final Dividend 2.25A 22.50 3.00 30.00
Total Dividend 14.75 147.50 9.75 97.50

* Including a Special Dividend of Rs.3.00 per share

# Adjusted for Bonus

A Recommended for approval of Shareholders

The total dividend payout for the year amounts to Rs.10289 crore (including interimdividends of Rs.8719 crore). The final dividend shall be paid after approval at theAnnual General Meeting. The total payout ratio for the year was 60 % as compared to 57 %for previous year.

1.2. Transfer to Reserves

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

a) General Reserve: Rs.7000.00 crore

b) Self-Insurance Reserve: Rs.291.14 crore

1.3. Government of India (GOI) Shareholding

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

2. Significant Developments

2.1. Completion of Inter-Regional projects

Your Company added 7200 MW of Inter-Regional power transfer capacity to thenational grid through following projects:

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

During the year ?800 kV Raigarh - Pugalur FIVDC link along with Bipole-ll (Pole-Ill& IV 1500 MW each) and ? 320 kV 2000 MW Pugalur - Trichur Voltage Source Converter(VSC) based FIVDC System were commissioned (part of Raigarh- Pugalur- Trichur FIVDCScheme). This has enhanced the inter-regional power transfer capacity of national grid by3000 MW.

Through this project the state-of-the- art VSC Technology has been brought to Indiafor the first time by POWERGRID.

The VSC technology significantly reduces the land requirement compared to theconventional FIVDC systems and is \ oarticularlv suitable for areas where land is

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

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

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

During the year POWERGRID's wholly owned subsidiary POWERGRID Varanasi TransmissionSystem Limited (PVTSL) commissioned Vindhyachal Pooling Station - Varanasi 765kV D/CTransmission Line. This transmission line corridor provides a strong connectivity betweenNorthern Region and Western Region and has enhanced the inter-regional power transfercapacity of national grid by 4200 MW.

2.2. Tariff Based Competitive Bidding (TBCB)

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

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

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

The Union Budget 2019-20 emphasized investment led growth and indicated that new andinnovative financial instruments including Infrastructure Investment Trusts (lnvITs) havebeen launched as part of the brown field asset monetization strategy for augmentinginfrastructure investment.

Your Company in accordance with the guidelines of Government of India had monetizedassets which are mainly High Voltage Transmission lines and substations throughInfrastructure Investment Trust (InvIT) model. Your Company is the first PSU in thecountry to undertake asset recycling by monetizing its assets through the InvIT model andusing the proceeds to fund the new and under-construction capital projects. Total amountraised through asset monetization during the year was Rs.8370 crore.

2.4. Incorporation of POWERGRID Energy Services Limited

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

2.5. Incorporation of POWERGRID Teleservices Limited

The latest technological advancements in the telecom sector increased thrust of thegovernment on digitalization of the economy enhanced data localization accelerated byprevailing geo-political environment are likely to provide growth opportunities. Toharness the emerging opportunities in the sector POWERGRID has formed a wholly ownedsubsidiary company POWERGRID Teleservices Limited which would provide greater focus tothis segment. POWERGRID got International Long Distance (ILD) license to directly servecustomers in the neighboring countries with reliable broadband connectivity.

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

2.6. Other emerging opportunities

Your Company is exploring opportunities for installation of smart meters for stateutilities under DBFOOT model and initiated procurement process for End-to-End SmartMetering Solution for one crore smart meters. Your Company also envisages Battery EnergyStorage System (BESS) to be a significant element of future grid. Accordingly yourCompany has appointed a consultant to study the business scope for it in the BESS segmentand is looking to setup BESS system.

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

3. Operational Performance

3.1. Asset Management

As on 31st March 2022 your Company's total transmission assets I including those ownedthrough its wholly owned subsidiaries consisted of 1352 transmission lines aggregating to172437 ckm. 265 substations with an aggregate transformation capacity of 474457 MVA.

Your Company is increasingly migrating towards digitization of asset management keepingin view the growing asset base. Centralized relay database management system has beenintroduced which will improve the efficiency of relay settings management and savemanhours in operation and maintenance of assets.

Internal benchmarking on key performance indicators is used by

your Company to analyze operational performance identify areas for improvement andachieve optimal operational performance.

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

Refurbishment of ?2x250MW HVDC Vindhyachal back-to-back and ?500kV 1500MW HVDCRihand-Dadri Bipole were carried out for life extension. These projects have served theIndian power system for more than 25 years and refurbishing them the first of its kind inIndia for HVDC systems will extend their life by approximately 10 years benefiting theend

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

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

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

To facilitate remote operation of your Company's transmission system and monitoring ofvarious parameters on real time basis at Regional and National levels NTAMC was set up atManesar near Gurugram Haryana and RTAMCs were set up at various locations across thecountry. These state-of-the-art centers are manned round-the-clock by experts foreffective monitoring and management of transmission assets.

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

Remote management of Substations has proved to be immensely beneficial during FY2021-22 to ensure uninterrupted supply of power despite COVID-19 pandemic.

3.3. Cyber Security

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

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

3.4. Safety

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

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

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

Safety audits/ inspections trainings safety briefings mock-drills were carried outfor all contract workers and Company staff at various O&M and construction sites.Safety audits of 265 substations and safety inspection at 290 construction sites werecarried out in FY 2021-22.

Safety trainings were organized on various safety aspects such as fire safety stress& health management and first aid etc. at various sites maintaining the Covid-19precautions. During the year 949 safety training sessions were organized for Companyemployees and 4865 safety training sessions were conducted for construction agencyworkers/staff. In addition to this 908 mock-drills were organized at sites forpreparedness to cope up with any untoward incident/ urgency/emergency.

Daily safety briefings/pep talks were held at all sites and safetyinstructions/accident precautions/committee recommendations were discussed in languagesthat workers understand to educate about the possible risks associated with work and howto reduce them. Safety day/weekly/fortnightly celebrations attended by employees theirfamily members and contract workers help raise awareness about safety compliance atworkplace and at home.

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

4. Disaster Management

The Company has a "disaster and crisis management plan" to take immediateaction during the pre and post-disaster period and to quickly restore damaged powerinfrastructure. It outlines the hierarchy of crisis/disaster management at differentlevels to manage crises and disasters effectively and efficiently and theroles/responsibilities of different departments in disaster management.

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

5. Project Implementation

During FY 2021-22 your Company added 5450 circuit km (ckm.) of Extra High Voltage(EHV) transmission lines 43564 Mega Volt Ampere (MVA) transformation capacity 7 newsubstations (including through its subsidiaries).

Further about 8174 km of OPGW network was added during the year to support voice anddata communication with Regional Load Dispatch Centres (RLDCs)/ State Load DespatchCentres (SLDCs) for effective grid management.

5.1. Major Transmission Assets Commissioned

a) Inter-Regional Lines

- ?800 kV Raigarh - Pugalur HVDC link along with Bipole-ll (Pole-Ill & IV 1500 fMW each)

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

b) Cross-Border Interconnection

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

c) Transmission System Associated with \

Solar Energy Zones in Rajasthan

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

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

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

5.2. Other Important Transmission Lines

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

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

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

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

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

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

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

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

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

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

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

- 765 kV D/C Khetri- Jhatikara line

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

5.3. Intra-State Lines

- 400 kV D/C Jawaharpur - Firozabad line

As on 31st March 2022 the inter-regional power transfer capacity of the transmissionassets belonging to the Company and its subsidiaries was 97290 MW out of 112250 MWinter-regional power transfer capacity of the national grid.

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

During FY 2021-22 your Company made a consolidated capital investment of Rs.9426crore on cash basis. To finance this investment the Company mobilized Rs.8106 crore fromasset monetization Rs.610 crore through bonds & term loans Rs.567 crore fromInternal accruals Rs.133 crore through grants received from Power System Development Fund& from Central Financial Assistance (Ministry of New and Renewable Energy) and Rs.10crore through External Commercial Borrowings (ECB)/ Suppliers' Credit.

During FY 2021-22 investment approvals for transmission projects under regulatedtariff mechanism (RTM) worth ~ Rs.5050 crore have been accorded and Company acquiredprojects estimated at Rs.3300 crore under the TBCB mechanism.

7. Commercial Performance

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

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

8. Cross Border Interconnections

India being centrally placed in South Asian region and sharing political boundarieswith SAARC and BIMSTEC countries has been playing a major role in establishment ofcross-border interconnections with various neighbouring countries namely Nepal BhutanBangladesh Sri Lanka and Myanmar for optimal utilization of regional energy resourcesin South-Asian region.

The present cumulative power transfer capacity between India and neighbouring countriesthrough cross-border interconnections is about 4230 MW. In FY 2021-22Alipurduar-Jigmeling line (India portion) 400kV D/C (Quad) line was commissioned.Additional links for interconnection with Nepal through the Gorakhpur (India) - New Butwal(Nepal) and Sitamarhi (India) - Dhalkebar (Nepal) 400kV D/C (Quad) transmission lines areunder implementation.

9. Other Businesses

9.1. Telecom Business a) POWERTEL

Your Company is providing a range of services under its Unified License as NationalLong Distance (NLD) and Internet Service Provider - Category'A'(ISP-'A') serviceauthorizations. Your Company is providing nationwide services like point-to-point leasedline bandwidth services Internet Leased line Tower co-location MPLS based IP-VPNSD-WAN DDoS etc. in all parts of the country with its Pan India high-capacity opticalground wire (OPGW) network.

During FY 2021-22 the Company's telecom network coverage increased to 74109km from71673km at the end of the previous year with annual telecom backbone availability of99.99%. The Company's telecom network spans across India and is in over 1200 locationscovering all major cities and metros. During the year your Company achieved revenue fromoperations of Rs.580.34 crore from telecom segment.

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

Your Company has signed agreements with Damodar Valley Corporation West Bengal StateElectricity Transmission Company Limited Bihar State Power Transmission Company Ltd. andAssam Electricity Grid Corporation Limited for leasing of their OPGW fibres whichprovides it with access to additional 12000 km of OPGW network. Through this the Companywill expand its telecom business in various new cities of West Bengal Bihar Assam &Jharkhand.

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

b) BHARAT NET

Your Company is one of the implementing agencies for 'Bharat Net' Phase-I projectenvisaged to provide broadband connectivity to Gram Panchayats (GPs) thus making valuablecontribution to the initiatives of the Government of India for Digital India.

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

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

9.2. Consulting Services

Your Company one among the largest power transmission I utilities in the world hasdeveloped expertise in its 1 core areas such as power transmission projectssub- ; transmission system distribution management load dispatch & communicationsin India and abroad. Leveraging its capacity and experience consulting services have beenprovided to several customers globally. During the year. your Company achieved revenuefrom operations of Rs.753.34 crore from consultancy segment.

a) Domestic Market

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

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

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

b) International Market

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

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

10. Quality Management

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

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

Despite COVID-19 pandemic more than 15000 Inspection calls were attended during FY2021-22. All the inspections sub vendor assessments and other quality related activitieswere undertaken in a well-planned manner via hybrid mode of physical and virtual visits.

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

11. Research and Development (R&D)

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

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

Your Company is developing a substation Inspection Robot in collaboration with IITKanpur to facilitate automation of routine inspection of switchyard equipment as well asdata driven decision process using Artificial Intelligence/Machine Learning techniquesthus improving operational efficiency.

Your Company is setting up a Centre of Excellence (CoE) in Cybersecurity inTransmission and Grid operation at IISc Bangalore. This collaborative effort facilitatescontinuous research monitoring development and demonstration focused on cybersecurityaspects in association with academia and industry towards cyber resilient transmissionsystem.

12. Adoption of Latest Technology and Digital Transformation

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

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

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

PGDARPAN - Your Company has developed in-house application softwarePGDARPAN (POWERGRID Digital Application for Routine Patrolling & Assessment ofNetwork) for transmission line patrolling. The same has been used in your Company sinceAugust 2021. The PG DARPAN portal features a rich highly customizable dashboard whichenables ground patrolling of transmission lines and generation of reports this helps theasset managers to monitor and take corrective action.

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

Other Technology Tools-Your Company uses different technology tools toensure better line availability such as aerial line patrol temperature scanning coronacamera high resolution video digital camera surveillance application-basedtransformers reactors and line patrols and real-time data updates through onlineapplications for efficient asset tracking.

13. Participation in GoI Initiatives

13.1. Promotion of 'Make In India'

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

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

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

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

The Company has been complying with the guidelines issued by the Government from timeto time for promotion of MSMEs. The Company is registered on (i) Receivable Exchange ofIndia Limited (RXIL) (A NSE - SIDBI JV) (ii) Mynd Solutions Private Ltd (Mlxchange) and(iii) A TREDS Ltd. (Invoicemart) for Trade Receivable e-Discounting System (TReDS). TradeReceivables Discounting System (TReDS) is the platform for facilitating the financing oftrade receivables from corporate and other buyers including Government Departments andPublic Sector Undertakings (PSUs) through multiple financiers. The Company iscontinuously pursuing with its MSMEs suppliers to get themselves on-boarded on TReDSPlatforms. Suitable provisions have already been incorporated in the bidding documents ofPOWERGRID for procurement of various products and services rendered by Micro and SmallEnterprises (MSEs) in line with the Public Procurement Policy of the Government of India.The Company has achieved the target of mandatory procurement of 25% out of total annualpurchases of products and services rendered by Micro and Small Enterprises in line withPublic Procurement Policy (Order 2012) read in conjunction with its amendment in November2018.

In terms of the said policy the total eligible value of annual procurement of goodsproduced and services rendered by MSEs (including MSEs owned by SC/ ST and Womenentrepreneurs) during FY 2021-22 was Rs.2238 crore. The total procurement by the Companyfrom MSEs (including MSES owned by SC/ST and Women entrepreneurs) was Rs.1143 crore(51.07%).

The Company has taken various steps to encourage MSE participation in the procurementprocess across India. During this year to encourage and develop Micro and Smallmanufacturers for supply of innovative & quality products 18 vendor developmentprograms have been organized through virtual platforms wherein presentations were madeand discussions were held with representatives of numerous MSE's of our country. Specialfocus was kept on MSE's owned by SC/ ST and women entrepreneurs and their response inthese meetings/webinars was overwhelming. Several MSME's have been developed assub-vendors and approved for supply of components for various equipment.

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

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

14. Sustainable Growth

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

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

14.1. Environment and Social Management

Transmission projects are mostly environmentally benign due to absence of any chemicalprocesses that may involve release of pollutants to environment or involving large scaleexcavation which may result in soil erosion. Also due to inherent flexibility both inchoosing most optimum line alignment as well as in finalizing the substation site yourCompany avoids most of the associated social issues.

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

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

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

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

14.2. Corporate Social Responsibility (CSR)

As India's largest Electric Power Transmission Utility your Company undertakes severalCSR initiatives aimed at social and economic development of areas and communities. Throughthese initiatives we impact the lives of millions of people by promoting inclusive growthand addressing the basic needs of under privileged and weaker sections of society. Due toyour Company's nature of business in remote areas of India our CSR activities generallybenefit the rural population and marginalized communities.

During FY 2021-22your Company has spent Rs.271.14 crore exceeding the CSR budget ofRs.257.07 crore. Further 152 new CSR projects of Rs.420.83 crore were sanctioned duringFY 2021-22.

During the year the Company also contributed Rs.75 crore to PM CARES Fund towardsCOVID-19 pandemic.

Your Company undertakes CSR activities in areas of healthcare drinking water &sanitation education skill development rural development and infrastructure like roadscommunity centers etc. These projects are conceived in consultation with the stakeholdersprimarily in the vicinity of its area of operations. Major CSR projects undertaken andsanctioned by your Company during the year are as follows:

Major CSR Projects undertaken during FY 2021-22:

• Assistance in COVID-19 vaccination programme through procurement of cold chainequipment for the states of Punjab Mizoram Sikkim and UT of Ladakh.

• Financial assistance for construction of Nuclear Medicine Theranostics facilityfor patients undergoing Radioisotope Treatment at TMC/ACTREC for cancer patients at TATAmemorial hospital Mumbai.

• Financial support for Tata Memorial Centre (TMC) for developing ModularOperation Theatres at women and child hospital ACTREC campus TMC Navi Mumbai.

• Financial assistance for Installation and Operationalization of 480 Smartclassrooms in 240 Government Schools in 12 Districts of Haryana.

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

• Financial assistance to National Foundation for Communal Harmony for educationof 1632 violence affected students from Assam Manipur and Chhattisgarh.

• Financial Assistance for procurement of 10 Neonatal Ventilators and 10 ABGMachines for District Hospitals at Mewat Faridabad and Gurugram.

• Setting up of ITI Shergarh Jodhpur.

• Supply & installation of 3250 solar LED street lights in Himachal Pradesh.

• Construction of Schedule Castes Senior Girls Hostel (50 Seater) at Tehsil Saraiin Singrauli district.

Important CSR projects sanctioned during FY 2021-22:

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

• Establishment of POWERGRID Gyan Kendra (PGK) by renovation and upgradation ofShaskiya Barmendra Jila Pustaklaya Nagod District Satna Madhya Pradesh.

• Establishment of 100 bedded Paediatric Intensive Care Unit (PICU) at GSVMMedical College Kanpur.

• Supply of Medical equipment to Swami Ramanand Theerth Rural Government MedicalCollege (SRTRGMC) Ambajogai Beed district Maharashtra.

• Providing Medical Equipment and Instruments to the various Government healthfacilities in the State of Sikkim.

• Financial Assistance for Construction of 100 Bedded District Hospital atSerchhip District in Mizoram etc.

A complete list of all CSR Projects undertaken and sanctioned by the Company during FY2021-22 are provided in Annexure-X of this Report.

15. Governance

15.1. Right to Information

To promote transparency and accountability an appropriate mechanism has been set upacross your Company in line with 'Right to Information Act 2005' The Company hasnominated Public Information officers and Appellate Authorities at Corporate RegionalHead Quarters and other offices to provide required information to the citizens under theprovisions of Act.

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

In FY 2021-22 around 1065 RTI applications were received in the Company and processedtimely as per the RTI Act 2005. Training programs/awareness sessions for the Company'sCPIOs/PIOs/Appellate Authorities were organized for sensitization about their role inimplementation of the RTI Act.

15.2. Commitment to Transparency and Ethical practices

Your Company advocates the principles of Transparency Probity and Ethics in itsmanagement functioning. Vigilance Department of your Company performs PreventivePro-active as well as Punitive Vigilance and ensures that best ethical practices arefollowed.

a) Emphasis on Preventive Vigilance

To strengthen the organizational process and to minimize malpractices in varioussystems & activities of the organization emphasis is laid on preventive vigilance. Itfocuses on the right types of systems or re-engineering processes for acting againstpotential threats.

During FY 2021-22 89 surprise inspections 20 process-on-line inspections and 12 ChiefTechnical Examiner (CTE) Type inspections were conducted. Pursuant to Vigilanceinspections and observations/ recommendations several system improvements have beenimplemented.

b) Preventive Vigilance workshops as part of capacity building

During FY 2021-22 various Preventive Vigilance workshops webinars were conducted fornon-vigilance personnel at the Corporate centre as well as at various regions of theCompany. These workshops inter-alia cover contracts management provisions of ConductDiscipline and Appeal (CDA) Rules compliances of rules and policies commonirregularities deliberation of case studies based on real cases quality aspects as wellas Ethics Management which enables the employees to identify and deal with ethicaldilemma.

c) Vigilance Awareness

In pursuance of the directions of the Central Vigilance Commission Vigilance AwarenessWeek was observed in your Company from 26th October to 1st November 2021 inline with the theme for this year "Independent India @ 75: SelfReliance withIntegrity; "tORS hqjr @ 75: L VLrHMwj." with full vigor following all Covidrelated Government guidelines.

Your Company employees and their family members celebrated the Vigilance Awareness weekwith great enthusiasm. 696 activities including various competitions viz. essay quizslogan and painting competition for kids were organized by your Company for its employeesand their family members wherein approximately 10000 individuals participated. Walkathonwas organized in around 285 establishments wherein employees along with their familiesparticipated. Nukkad Natak and Awareness Gram Sabhas were also organized during the week.The message of Vigilance Awareness Week 2021 was propagated through FM Channel print andelectronic media in national as well as regional languages. Stakeholders were alsoinvolved through vendor meets which were conducted at Corporate Centre and all regions.

Integrity Pledge was conducted across all establishments of the Company and it wasextended to all the stakeholders. Around 20000 employees and citizens took the IntegrityPledge.

Vigilance department journal; CANDOUR was released during the closing ceremony ofVigilance Awareness Week at the Corporate Centre Gurugram. In line with the Commission'sguidelines the magazine was released in digital form (e-CANDOUR) for employees andpublic.

15.3. Citizen's Charter

A Citizen's Charter has been formulated for the Company providing a visible front ofits Vision Mission and Objectives. The Citizens' Charter consisting of Company profilecommitments expectations from citizens Integrated Management Policy services offeredvalues and standards of services access to information and grievance redressal isavailable on the Company's website.

16. People: Our Core Strength

Your Company has achieved excellent financial and operational results every year due tocontinuous alignment of HR practices with business objectives along with commitment of itsstrong motivated and competent workforce towards achieving Company goals. Your Companylays emphasis on organization culture that promotes continuous learning creativitysharing and development. Its Human Resource process and systems are designed to acquirenurture and empower professionals in line with core values of the Company in anequitable collaborative healthy and safe environment.

As on 31st March 2022 the employee strength of your Company stood at 8536(exclusive of the employees on contract) of which women employees constituted 7.87%.

16.1. Human Resource Development

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

To scale up learning and development in Power Sector your Company has been operatingthe state-of-art POWERGRID Academy of Leadership (PAL) at Manesar which imparts a widerange of training and development opportunities for its employees and other stakeholdersin India and abroad.

During this year your Company organized more than 300 training and developmentprograms through virtual mode through PAL other Employee Development Centers in theregions and associated premier educational institutes in India and abroad. The range oftrainings imparted include induction program to new recruits as well as hands-onmanagerial behavioral and leadership training for its employees and also trainingprograms for other utilities.

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

• Using a web-based Competency based Training Needs Assessment (CTNA) the Companyhas devised the Human Resource Development Action Plan for the financial year 2021-22based on which the competencies of the employees are being upgraded to make them futureready.

• To promote social learning capture and share both tacit and explicit knowledgein the Company the portal for Mentoring and Coaching program named"SANDARSHIKA" has been rolled out successfully.

• Five employees were sponsored for a 15-month PGDM program by NTPC School ofBusiness.

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

- Developed 72 eLearning modules related to different business verticals and 9Refresher courses related to Company information. 6500+ employees have benefited fromthese courses.

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

- 1500 employees have been sponsored for Harvard Manage Mentor Program to enhanceLeadership competencies.

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

In the matter of stakeholder development the Company has undertaken followinginterventions:

• 1100+ apprentices have been engaged in different trades as per the ApprenticeAct.

• 350+ contract staff have been imparted training under Recognition of PriorLearning (RPL) certification.

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

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

• The Company has extended customized Training Programs for clients includingNRPC KIIFB NPTI POSOCO HVPNL DTL REC PFC HPPTCL NPMU CSPTCL MEA and OverseasClients including KETRACO & PGCB.

16.2. Employee Welfare

In our continual effort to meet and exceed the ever-changing a expectations ofour employees your Company regularly updates its welfare policies in line with industrytrends. During the year in view of the second wave of COVID-19 pandemic = that wreakedhavoc around the nation your Company ^ introduced various initiatives for families ofdeceased employees to help them maintain a respectable standard of living.Theserehabilitation initiatives included:

• Providing accommodation security to the family increased

• insurance coverage of employees securing various

• employee advances providing a more comprehensive E medical coverage todependents of deceased employees etc.

• Introduced the 'SAKSHAM' scheme to provide monetary assistance for education ofwards of deceased employees and provide skill development opportunities and financial aidto spouse of deceased employees to build an earning potential within the family.

• Your Company arranged several vaccination camps for regular and contractualemployees their families Isolation facilities were setup at various locations foraffected employees and dependents. Various other facilities viz. home collection ofsamples for COVID-19 testing medical consultation through tele- medicine etc. were alsoarranged to help employees and their families during these unprecedented circumstances.

• Many webinars/ talks were also held by experts for employees on medical carephysical and mental wellbeing and lifestyle management during the pandemic.

• Your Company introduced the Equal Opportunity Policy this year to demonstrateour commitment towards promoting diversity and inclusion in the workforce. The Policy aimsto create a harmonious workplace for all employees irrespective of their gender nativitycommunity religious beliefs or physical and mental ability and enable them to achievetheir full potential.

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

• For the first time your Company organized its Annual Cultural meet for allemployees and their family members in virtual mode owing to COVID-19 pandemic situationwhere employees and their family members show-cased traditions/cultures of differentgeographies of country.

• Your Company's employees actively participated in Fit India Freedom Run 2.0 andother events organized across establishments of Company in commemoration of Azadi ka AmritMahotsav.

16.3. Grievance Redressal

Grievance redressal is always taken up with priority and your Company promptlyredresses the grievances of its employees within the broad parameters of guidelinesenumerated by Government of India and policy framework. Employees can lodge theirgrievances by way of an online portal. The Company has designated nodal officers atcorporate & regional offices for systematic & prompt redressal of the grievanceswithin stipulated time frames.

16.4. Ensuring Social Justice

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

The reservation cell assists the Liaison Officer who looks after the welfare &safeguard of SC/ ST/ OBC & PwD employees. Liaison Officer also ensures that there isno discrimination based on caste religion & disabilities amongst the employees. Toensure effective discharge of duties across all establishments of your Company separateliaison officer for each region has been nominated. The Company implements all directivesand guidelines regarding reservation policy issued by Government of India. Annualinspection is also conducted to ensure implementation of directives issued by Governmentof India. Periodic meetings are also held with representatives of the association of SC/ST & OBC to resolve issues if any.

17. Prevention of Sexual Harassment at workplace

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

18. Implementation of Official Language (Rajbhasha)

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

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

Various activities are undertaken to publicize Hindi every year Akhil BhartiyaRajbhasha Sammelans and technical conferences in Hindi Kavi Sammelans (Poetry sessions).Plays publication of House Magazines publication of monthly articles in Hindi via emailsare most prominent among these. Most

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

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

The effort made by your Company has been applauded in several forums during the FY2021-22. Your Company received the first prize for excellent implementation of officiallanguage for the year 2019-20 by Ministry of Power during the year. The Company alsoreceived awards from "Town Official Language Implementation Committee (TOLIC)Rajbhasha Vibhag Ministry of Home Affairs Government of India and other agenciesregarding Implementation of Official Language. The offices of the regional headquartersincluding Vadodara Bangalore Kolkata and Nagpur along with other offices like SiliguriItarsi Nellore Madurai Durgapur Roorkee Mandola Dadri etc. have been honored.Besides your Company's efforts were also applauded during various inspections anddiscussions done by Hon'ble Committee of Parliament on Official Language on differentoccasions.

19. Stakeholder Engagement

Your Company focuses on engaging with all its stakeholders and building cordialrelationships with them.

This helps us in not only understanding their needs and expectations but also helps usin recognizing opportunities and mitigating risks to our operations. We have a frameworkfor engaging with our stakeholders which also includes categories of Stakeholder alongwith the respective modes of engagement.

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

20. Management Discussion and Analysis

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

21. Business Responsibility Report

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

22. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo

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

23. Auditors

23.1. Statutory Auditors of the Company

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

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

23.2. Comptroller and Auditor General's Comments

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

23.3. Secretarial Audit

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

The observations of Secretarial Auditor are as under:

1. The Company did not have requisite number of Independent Directors as required underRegulation 17 of SEBI (LODR) Regulations 2015 and Para 3.1.4 of DPE Guidelines onCorporate Governance and the Company had a Woman Independent Director till 25thJuly 2021.

2. The composition of Audit committee was not in line with Regulation 18(1)(b) of SEBI(LODR) Regulations 2015 from 23rd July 2021 to 14th December2021; and

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

Regarding above it was explained that yours is a Government Company the power toappoint Independent Directors vests with the Government of India and the Company has takenup the matter for appointment of requisite number of Independent Directors with Governmentof India.

23.4. Cost Auditors & Cost Records

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

Your Company is maintaining Cost Accounting Records as prescribed under the Companies(Cost Record and Audit) Rules 2014 specified by the Central Government under section148(1) of the Companies Act 2013.

24. Board & Committees

24.1. Company's Board

During FY 2021-22 Shri Ghanshyam Prasad Jt. Secretary Ministry of Power Governmentof India has been appointed on the Board of Company as Part-time Government NomineeDirector w.e.f. 21st December 2021. Shri Onkarappa KN Shri Chetan BansilalKankariya have been appointed as Independent Directors w.e.f. 17th November2021 and Shri Ram NareshTiwari.asan Independent Director w.e.f. 18th November2021.

Shri Dilip Nigam Scientist 'G' Ministry of New and Renewable Energy (MNRE)Government of India completed his tenure as a Government Nominee Director on 30thApril 2022 and appointed again as Government Nominee Director w.e.f. 6th June2022.

Shri Raghuraj Madhav Rajendran has been appointed as a Government Nominee Directorw.e.f. 5th August 2022.

Shri Sunil Kumar Sharma and Smt. A.R. Mahalakshmi Independent Directors have completedtheir respective tenure of 03 years on 22nd July 2021 and 25thJuly 2021 respectively.

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

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

Shri M.N. Venkatesan Independent Director completed his tenure of 03 years on 10thJuly 2022.

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

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

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

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

24.2. Number of Meetings of the Board

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

24.3. Committees of the Board

The Company has constituted Audit Committee CSR Committee Nomination and RemunerationCommittee Stakeholders' Relationship Committee Risk Management Committee and otherCommittees for operational convenience. The composition and scope of the aforesaidCommittees are provided in the Report on Corporate Governance which forms part of thisreport.

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

24.4. Declaration by Independent Directors

During the financial year all the Independent Directors have met the requirementsspecified under Section 149 (6) of the Companies Act 2013 and Regulation 16(1)(b) of SEBI(LODR) Regulations 2015 for holding the position of 'Independent Director' and necessarydeclaration from each Independent Director under Section 149 (7) of the Companies Act2013 and Regulation 25(8) of SEBI (LODR) Regulations 2015 has been received.

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

24.5. Performance Evaluation of Directors

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

24.6. Policy on Director's Appointment and Remuneration

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

25. Compliances

25.1. Risk Management Policy

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

25.2. Internal Financial Controls and Adequacy

The Board has adopted policies and procedures for ensuring the orderly and 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 of the accounting records and the timely preparation of reliablefinancial disclosures.

25.3. Annual Return of the Company

In accordance with Section 92(3) read with Section 134 (3) (a) of the Companies Act2013 Annual Return of the Company is available on the website of the Company and can beaccessed at https://www.powergrid.in/sites/default/ files/Draft MGT 7 21 22.pdf

25.4. Loans Guarantees or Investments

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

25.5. Contracts or Arrangements with Related Parties

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

25.6. Subsidiaries and Joint Ventures

As on 31st March 2022 the Company has 24 subsidiaries and 11 Joint VenturesCompanies.

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

25.7. Dividend Distribution Policy

The policy was adopted to set out the parameters and circumstance that will beconsidered by the Board in determining the distribution of dividend to its shareholdersand/or retained profits earned by the Company. According to the policy Dividend for everyfinancial year shall be decided by the Board considering various statutory requirementsand Govt. guidelines financial performance of the Company and other internal and externalfactors enumerated in the policy. The policy is also available on the Company's website athttps://www.powergrid.in/sites/default/files/ Dividend%20Distribution%20Policy.pdf

25.8. Significant Material Orders

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

26. Annual Report on Corporate Social Responsibility

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

27. Particulars of Employees

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

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

28. Insolvency and Bankruptcy Code 2016

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

29. Reporting of Frauds by Auditors

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

30. Fixed deposits

We have not accepted any fixed deposits including from the public and as such noamount of principal or interest was outstanding as of the Balance Sheet date.

31. Secretarial Standards of ICSI

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

32. Material Changes & Commitments

There have been no material changes & commitments affecting the financial positionof the Company which have occurred between the end of the financial year and date of thisreport.

33. Directors' Responsibility Statement

As required u/s 134(3) (c) & 134(5) of the Companies Act 2013 the 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 to give a true and fairview of the situation of the Company at the end of the financial year and of the profit ofthe 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 provisions ofall applicable laws and that such systems were adequate and operating effectively.

34. Acknowledgements

The Board of Directors would like to express their deep sense of appreciation for 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 Government departments/agencies at the Central andState level without whose active support the achievements of the Company during the yearunder review would not have been possible.

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

The 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 and international financialinstitutions multilateral financial institutions domestic & international creditrating agencies for their assistance continued trust and confidence reposed in theCompany.

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 employees contributing tothe performance of the Company during the year 2021-22. The commitment displayed by theemployees at all levels particularly during the ongoing pandemic situation is exemplaryand praise-worthy. I would also like to thank the Executive team for their strongleadership the employee unions for their support and all our employees for theircommitment enthusiasm and dedication.

For and on behalf of the Board of Directors
(K. Sreekant)
Chairman & Managing Director
DIN: 06615674
Date: 5th August 2022
Place: Gurugram

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