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Power Grid Corporation of India
BSE: 532898|NSE: POWERGRID|ISIN: INE752E01010|SECTOR: Power - Generation/Distribution
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« Mar 12
Chairman's Speech (Power Grid Corporation of India) Year : Mar '13
Dear Shareholders,
 
 It gives me immense pleasure to share with you the progress made by
 your company during the year 2012-13.
 
 Friends, the Indian economy grew at a lower rate than expected in the
 financial year ended March 31, 2013. As per the information released by
 the Central Statistics Office, Ministry of Statistics and Programme
 Implementation, the growth rate of Gross Domestic Product (GDP) is @ 5%
 for the fiscal 2012-13. Despite the challenging economic environment,
 your Company continued to deliver excellent results. In these
 tumultuous times, your Company has performed exceptionally well due to
 its strong fundamentals with not only focus on profit but also on the
 Sectoral development in distribution and sub-transmission areas with
 innovations.
 
 Indian power sector has witnessed manifold growth in the past. However,
 many challenges are still ahead to deliver quality and reliable power
 at the doorstep of consumers. To achieve high projected GDP growth rate
 for India, importance of power sector cannot be overlooked.  Electric
 power being a critical input to all economic activities be it
 agriculture, industry, commerce and household, the rapid and inclusive
 growth is only possible on the access of sustained power supply with
 reliability & quality.
 
 Your Company has earned the reputation as one of the largest and best
 managed transmission utilities in the world with its remarkable growth
 in the last two decades and carries about half of the country''s total
 energy generated.
 
 I am happy to share with you that fiscal 2013 was another year of
 significant progress. Your Company has put on a remarkable performance
 on various fronts. On the financial front, the turnover of the Company
 stands at Rs.13329 Crore in Fiscal 2013 and Profit after Tax increased
 to Rs.4235 Crore, which are 23.6% and 30.1% higher respectively,
 compared to the previous Fiscal 2012. Our Gross Fixed Assets as on 31st
 March, 2013 stands at Rs.80600 Crore as against Rs.63387 Crore in the
 last fiscal.
 
 On the operational front, as on 31st March, 2013, your Company owns and
 operates a transmission network of about 1,00,200 ckt kms of
 inter-state transmission lines, 167 nos. of EHV & HVDC substations with
 transformation capacity of about 1,64,763 MVA and wheels about 50% of
 total power generated in the country. Inter-regional power transfer
 capacity of National Grid has been enhanced by 2,000 MW in the year and
 cumulative capacity stood at about 29,750 MW by end of March, 2013.
 Further, with the commissioning of 765kV S/C Sasaram - Fatehpur line
 —II in the month of May 2013, the inter-regional power transfer
 capacity has been increased to 31,850 MW.
 
 I am delighted to share with you that the 1200kV Ultra High Voltage
 (UHV) AC National Test Station at Bina, Madhya Pradesh was test charged
 during the year and was dedicated to the Nation by Hon''ble Union
 Minister of State (l/C) for Power. The field tests are currently under
 progress.
 
 Under RGGVY, during FY 2012-13, infrastructure was created for
 electrification in 3,852 villages out of which 146 were un-electrified
 villages. Service connections were provided to about 1.82 Lakh BPL
 households. Cumulatively, till March, 2013, infrastructure has been
 created for electrification of 68,654 villages out of which 32,463 were
 un-electrified villages and service connection to about 35.37 Lakh BPL
 households were provided.
 
 Your Company continues to deliver improved performance in all its
 business areas including Telecom and Consultancy business, enhancing
 the value for the shareholders.
 
 Friends, today, there is growing realization that business is a crucial
 member of society. Business and society are deeply interdependent.
 Business can sustain only if the society is satisfied with its overall
 contribution to societal well-being. Your Company as a responsible
 corporate entity realises its obligations and commits itself to
 Sustainable Development. Your Company has proactively formulated and
 followed the Environmental and Social Policy & Procedures (ESPP) for
 the conservation of forests, flora & fauna, resettlement &
 rehabilitation. Various initiatives have been taken by your Company for
 reducing carbon footprint, which includes creating Rain Water
 Harvesting facility in its establishments/ substations, use of energy
 efficient Light Emiffing Diode (LED) bulbs and Solar lights in new
 substations and seffing up of a waste paper recycling plant at Gurgaon
 sub-station. In addition, new buildings are being constructed as per
 Green Building norms.
 
 As a part of Corporate Social Responsibility (CSR), your Company is
 making contribution to the society at large with emphasis on socio-
 economic development of areas/ communities primarily in and around its
 areas of operations and has carried out various community development
 activities such as Skill Development & Capacity Building, Livelihood
 generation, healthcare, education, etc. During the FY 2012-13, the
 Company made an expenditure of Rs.21.75 Crore [0.67% of Profit After
 Tax (PAT) of the preceding year] for carrying out about 440 CSR
 projects including 19 in education sector, 152 in the area of
 infrastructure for community development, 140 in healthcare and 131 for
 livelihood. About 1.09 lakh tree saplings were also planted by your
 Company in different parts of the Country.
 
 Integration of Renewable Energy Resources with grid is the top priority
 worldwide for energy security and also for carbon emission reduction.
 Government of India is taking various initiatives in the area of
 renewable energy capacity addition and about 42 GW of generation is
 envisaged in XII Plan. Your Company has taken a lead initiative and
 developed a comprehensive master plan for integration of renewable
 energy generation coming up country-wide in XII plan into the grid
 through Green Energy Corridors. The plan covers both intra-state &
 inter- state transmission systems along with issues for grid
 interconnection of intermittent and variable renewable generation and
 its mitigation measures. The report on Green Energy Corridors was
 released in September, 2012 jointly by Ministry of Power and Ministry
 of Non- conventional & Renewable Energy.
 
 Your Company continues to take pioneering steps in bringing Smart Grid
 Technology in all facets of power supply value chain in the country.
 First Smart Grid Control Center in the country has been established at
 Puducherry by your Company through open collaboration with more than 70
 organizations & academic institutions. Under this, important Smart Grid
 attribute i.e. Advanced Metering Infrastructure (AMI) has been
 implemented and other functionalities like Outage Management System,
 Demand Response, Microgrid etc. are being taken up in a progressive
 manner. In addition, efficient street light management system has been
 implemented at Puducherry which has resulted in reduction of energy
 consumption for street lighting by about 15%. Further, development of
 Smart Home Energy Management System is being carried out in association
 with IIT, Kharagpur to facilitate consumers in energy management
 process through remote operation.  Towards implementation of Smart Grid
 Technology in transmission, the Company has executed Wide Area
 Measurement System (WAMS) pilot project in all the five (5) regions
 across the country. Under this initiative, presently about 52 Phasor
 Measurement Units (PMUs) are in operation, facilitating dynamic real
 time measurements and better visualization of power system which are
 useful in monitoring safety & security of the grid along with enhanced
 situational awareness and swiftness in taking control/corrective
 actions. Various distribution utilities/cities have also expressed
 their interest in Smart Grid implementation for which Detailed Project
 Report has been prepared by your Company and handed over to them for
 implementation.
 
 Your Company continues to explore new opportunities for raising long
 tenure debt from both domestic and international market, for meeting
 its capex-programme in XII Plan. In addition to debt funding from
 multilateral funding agencies like the World Bank and ADB, your Company
 has availed loan from International Finance Corporation (IFC) and
 Infrastructure Crisis Facility Debt Pool Limited Liability Partnership
 (ICF Debt Pool LLP) for an amount of US0 million for funding various
 transmission projects, during the year.
 
 I am happy to share that your Company made its maiden foray into
 foreign currency Bond market during the year which received an
 overwhelming response from the investing community and was
 over-subscribed nearly 19 times. Your Company has raised US0 million
 through issuance of 10 year Foreign Currency Bonds (FCB) at an
 attractive coupon rate of 3.875% p.a. and the Bonds are listed in
 Singapore Stock Exchange.
 
 For the first time, your Company was rated by International credit
 rating agencies, Standard & Poor''s Rating Services (S&P) and Fitch
 Ratings.  Both the agencies rated your Company at BBB - (outlook
 negative) consistent with India''s Sovereign rating. Consequent upon
 revision of Sovereign rating to ''Stable'' from ''Negative'' recently by
 ''Fitch Ratings'', the rating of your Company now stands as BBB- (outlook
 Stable).
 
 For inclusive growth in Power Sector, the development of
 sub-transmission system in the State(s) is also important. As a partner
 to development, your Company has joined hands with the State
 Transmission Utilities of Bihar and Odisha and has formed Joint Venture
 Companies (JVCs) namely Bihar Grid Company Limited with Bihar State
 Power (Holding) Company Limited and Kalinga Bidyut Prasaran Nigam
 Private Limited with Odisha Power Transmission Corporation Limited, on
 50:50 equity participation basis for development of Intra- State
 Transmission System in the States of Bihar & Odisha, respectively.
 
 Your Company is proud to receive continuous industry recognition. The
 list of awards and accolades constantly grows. Your Company has been
 selected for ''MoU excellence award'' for FY 2010-11 by Department of
 Public Enterprises (DPE), Ministry of Heavy Industries & Public
 Enterprises for being the top performer in the Energy Syndicate. Your
 Company has also been conferred other prestigious awards during the
 year which included the 4th DSIJ PSU Awards 2012 for Fastest Growing
 Navratna in non-manufacturing category by Dalai Street Investment
 Journal; and 3rd Rajeev Gandhi Excellence Award 2011 under the ''Best
 Power Company of the Year'' Category by an NGO Pehchan. Recently, your
 Company has been conferred the ''Special Jury Award for Lasting Impact
 on Indian Economy'' in the Governance Now PSU Awards, 2013.
 
 On behalf of the Company, I thank each shareholder for their continued
 support & trust placed in the Company. I would also like to record my
 appreciation to all employees, for their contribution towards the
 performance of the Company. I am confident that with the dedicated &
 committed employees and valuable support & guidance of our esteemed
 shareholders, the Company will continue to fulfill its responsibilities
 and ensure enhancing value to its stakeholders.
 
 With best wishes,
 
                                                     Yours sincerely,
 
                                                          (R N Nayak)
 
                                        Chairman & Managing Director
 
 Place: New Delhi
 
 Date: 06.08.2013
Source : Dion Global Solutions Limited
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