Dear Shareholders,
 
 It gives me immense pleasure to communicate with you on the occasion of
 the Twenty Second Annual general Meeting, scheduled on 19th September,
 2011. Friends, during the year the Indian economy has posted a further
 recovery improving the Country''s gross Domestic Product (gDP) to 8.5
 per cent in 2010-11 from 8 per cent during last fiscal. To ensure the
 envisaged gDP growth, Power Sector needs to grow at a rate higher than
 that of gDP.  Therefore, continued focus on investments on Power sector
 is essential.
 
 You are aware that the Follow-on-Public offer (FPo) of divestment of
 10% of govt. equity (420,884,123 shares) and issue of 10% fresh capital
 (420,884,123 shares) in November, 2010 of your Company received huge
 response from both domestic & Foreign Institutional Investors. The
 Issue was oversubscribed nearly 15 times. Post FPo, the holding of
 government of India is 69.42%.
 
 I am happy to inform that your company has achieved an impressive
 performance in fiscal 2010-11 on various fronts. on the financial
 front, your Company''s gross Turnover recorded Rs.9099.80 crore, an
 increase of 21.27% compared to the previous Fiscal 2009-10. Similarly,
 Profit after Tax during the year increased to Rs.2696.89 Crore from Rs.
 2040.94 Crore in Fiscal 2009-10, registering a growth of 32.14%. our
 gross Fixed Assets as on 31st March, 2011 are valued at Rs. 50,351.78
 Crore as against Rs. 43,202.28 crore in last fiscal. In fact your
 Company''s gross Fixed Asset have grown about 74% during last five
 years. Further, Board of Directors of your company accorded investment
 approval for 25 new transmission projects at a total estimated cost of
 about Rs. 21,150 Crore during financial year 2010-11.
 
 on the operational front, as on 31st March, 2011, your company owns and
 operates a transmission network of about 82,355 ckt kms of inter-State
 transmission lines, 135 nos. of EHv & HvDC substations with
 transformation capacity of about 93,050 MvA and wheels about 50% of
 total power generated in the Country. Transmission system availability
 of 99.80%, best ever so far, was achieved in the history of the Company
 and projects worth about Rs.7,313 Crore were commissioned during the
 year.
 
 Under RggvY, during this fiscal, your Company created infrastructure
 for electrification of 4710 un-electrified villages against a target of
 3500 villages, an achievement of 135%. Service connections to about
 10.60 Lakh BPL households were also provided as against a target of 7
 Lakh, an achievement of about 150%.
 
 The Inter–regional transmission capacity of your Company has been
 enhanced to 23,800 Mw with the commissioning of Rourkela-Raigarh 400kv
 D/c transmission line in July 2011.
 
 The business development opportunities continued to receive focussed
 attention both in the domestic and international market. During
 2010-11, your Company earned revenue of Rs.299.35 Crore towards
 consultancy fee from its various ongoing assignments as compared to Rs.
 269.17 Crore in last fiscal. The telecom segment also registered a
 revenue of Rs.187.20 crore as compared to Rs.157.72 Crore in last fiscal.
 
 on the subsidiary company set up by your Company for Independent system
 operation viz. Power System operation Corporation Ltd (PoSoCo),
 POWERGRID has transferred the movable assets and liabilities to PoSoCo
 w.e.f. 1st october, 2010. PoSoCo is now fully functional and has
 started billing the constituents for fees and charges from 1st october,
 2010 in terms of CERC Regulations on Fees and Charges of Regional Load
 Despatch Centre.
 
 Friends, POWERGRID, the Central Transmission Utility (CTU) of the
 Country is playing a pivotal role in Inter-State Transmission network
 planning and development both at regional and national level as well as
 its implementation. A number of inter-state grid strengthening schemes
 as well as inter-regional strengthening scheme have been identified by
 CTU for implementation. As CTU, your Company is also mandated to
 provide Short / Medium-term open Access (SToA/ MToA) and Long-term
 Access(LTA).
 
 As you are aware, Non-discriminatory open Access is the key for
 development of a successful Competitive Electricity Market. Short-Term
 open Access in inter-State transmission has been successfully
 implemented. During the year, more than 19,900 transactions were
 approved under open access, involving about 55,000 MUs of energy.
 
 Towards sustainable development, as CTU, your Company has focused for
 integration of emerging technologies like 1200kv UHvAC, ±800kv HvDC,
 FACTS, Smart grid etc. into transmission sector development, which are
 first of its kind in the Country.
 
 As part of Corporate Social Responsibility (CSR), your Company is
 making contributions to the society at large, wherein activities for
 Socio-Economic development of weaker sections have been taken up. 1% of
 PAT of the company of the preceding year is now earmarked as non
 lapsable budget for CSR activities. During FY 2010-11, Rs. 15.58 crore
 was spent on the development of infrastructure in nearby villages like
 constructing class room, library, computer room for schools, primary
 health centre, drinking & sanitation facility, check dam, drainage,
 roads, community centre, etc. These facilities were created with the
 objective of long lasting value and have multiplier effect on improving
 the standard and quality of life of people.
 
 Your Company has been ranked as 8th Fastest-growing Asian Companies and
 18th Fastest-growing global Companies in the Platts Top 250 global
 Energy Company rankings for the year 2010. Company has also featured in
 the Forbes global 2000 list.
 
 A major development in the transmission sector is that tariff based
 competitive bidding has been effective for transmission projects w.e.f.
 06th January, 2011. Competitive bidding, however, is not applicable for
 transmission projects requiring upgradation/strengthening of existing
 transmission lines and associated sub-stations and also not for
 projects for which Bulk Power Transmission Agreement/Transmission
 Service Agreement (BPTA/TSA) have been signed upto 05.01.2011. I wish
 to share with you that POWERGRID had already signed BPTAs for nine nos.
 of High Capacity Power Transmission Corridors which have a tentative
 cost estimate of about ^58000 crore, to be executed progressively
 through XII Plan and for a no. of other projects.
 
 Exemptions have also been extended by Ministry of Power in July, 2011
 from competitive bidding route for first two experimental works for
 1200 kv UHvAC line; works to cater an urgent situation or any
 requirement in compressed time schedule by CTU/State transmission
 Utility (STU), as decided by Central govt. on a case to case basis; for
 intra-state transmission projects by STUs for further 2 years beyond
 6th Jan, 2011.
 
 Lastly, I wish to share with you that I shall be demitting the office
 on 31st August, 2011 upon attaining superannuation. Shri R. N. Nayak,
 Director (operations) of your Company at present, shall be taking over
 charge as Chairman and Managing Director from 1st September, 2011 in
 terms of govt. order, to take the Company forward.
 
 I am confident that with the support of dedicated and committed
 workforce and continued support of esteemed shareholders, POWERGRID
 will continue to excel and discharge its responsibilities, enhancing
 value to stakeholders.
 
 with best wishes,
 
                                                    Yours sincerely,
 
 
                                                  (S. K. Chaturvedi)
 
                                       Chairman & Managing Director
 
 Place: New Delhi
 
 Date: 10.08.2011