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Power Grid Corporation of India Directors Report, Power Grid Corp Reports by Directors
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Power Grid Corporation of India

BSE: 532898|NSE: POWERGRID|ISIN: INE752E01010|SECTOR: Power - Generation & Distribution
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Directors Report Year End : Mar '16    « Mar 15
Dear Shareholders,
 
 Ladies & Gentlemen,
 
 The Directors'' are pleased to present the 27th Annual Report on
 performance of your Company along with the audited financial statements
 during the financial year ending March 31, 2016.
 
 FY 2015-16 is yet another year of achievements for your Company. In the
 area of project commissioning, your Company recorded a capitalization
 of Rs.31,788 crore, which is the highest ever in a single financial
 year of its history. With commissioning of new transmission assets
 comprising 13,717 circuit kilometre (ckm) of Extra High Voltage (EHV)
 transmission lines, 15 new substations and 23,139 Mega Volt Ampere
 (MVA) transformation capacity, total transmission assets of your
 Company have increased to 129,354 ckm & 207 substations with
 transformation capacity of 254,848 MVA.
 
 Other major achievements of your Company during the year on various
 fronts are mentioned below:
 
 - Capital investment of Rs.22,584 crore.
 
 - Excellent MoU rating notified by Government of India for financial
 year 2014-15.
 
 - Investment approval accorded for 23 new transmission projects worth
 more than Rs.13,000 crore.
 
 - Maintained transmission system availability at 99.72% with number of
 tripping per line limited at 0.66 for the year.
 
 - Total Income from operations is about Rs.21,281 crore as compared to
 Rs.17,780 crore in FY 2014-15. This financial year your Company has
 recorded PAT of about Rs.6,027 crore as compared to Rs.4,979 crore in
 last fiscal.
 
 - Interim dividend of Rs.0.80 per share (face value Rs.10/- each) has
 been paid and recommendation of Rs.1.51 per share as final dividend for
 the FY 2015-16, subject to approval of shareholders.
 
 - World''s first & longest (~1750 km) ±800kV HVDC Multi terminal
 transmission line (Pole-I, 1500 MW) from Biswanath Chariali (Assam) to
 Agra (U.P) commissioned in November, 2015.
 
 - Inter-regional power transfer capacity of 13,200 MW added by the
 Company.
 
 - The first high capacity synchronous link between India and Nepal
 400kV Muzaffarpur (India) - Dhalkebar (Nepal) double circuit
 transmission line commissioned in February, 2016.
 
 - Grid interconnection between India and Bangladesh was strengthened
 through 400kV Surjyamaninagar (Tripura, India) - Comilla (Bangladesh)
 double circuit transmission line commissioned in March, 2016.
 
 - 400kV Khammam – Nagarjunasagar double circuit transmission line - the
 1st line commissioned by your Company under Tariff Based Competitive
 Bidding.
 
 - Telecom revenue rose to Rs.392 crore in the financial year ended on
 31st March 2016 as against Rs.275 crore in the previous year
 registering growth about 43%.
 
 - The 1200kV (the highest transmission voltage in the world) National
 Test Station Phase -II successfully charged.
 
 FINANCIAL PERFORMANCE
 
 Your Company''s financial performance during the year 2015-16 as
 compared to the previous year 2014-15 is summarized below:
 
                           (Figures in Rs. crore, except per share data)
 
 Description                       2015-16     2014-15     Y-o-Y Growth
 
 Revenue
 
 Transmission Charges               19,945      16,521         20.7%
 
 Consultancy-Sale of Services          465         381         22.0%
 
 Telecom                               392         275         42.5%
 
 Other Income                          479         603        (20.6%)
 
 Total Income                       21,281      17,780         19.7%
 
 Profit After Tax (PAT)              6,027       4,979         21.0%
 
 Earnings per Share (Rs.)            11.52        9.52         21.0%
 
 Book Value per Share (Rs.)          81.43       72.71         12.0%
 
 Gross Fixed Assets               1,50,052    1,18,264         26.9%
 
 Long Term Borrowings*            1,06,321      93,845         13.3%
 
 Net Worth                          42,598      38,037         12.0%
 
 Debt Equity Ratio                   71:29       71:29            -
 
 Return on Net Worth                 14.15%      13.09%           -
 
 Dividend Payout
 
 For FY 2015-16, your Company has proposed a final dividend of Rs.1.51
 per share in addition to Rs.0.80 per share of interim dividend paid in
 February, 2016 taking total dividend to Rs.2.31 per share. The final
 dividend shall be paid after your approval at the Annual General
 Meeting. Thus, the total dividend payout for the year amounts to
 Rs.1,209 crore (including an interim dividend of Rs.419 crore).
 
 OPERATIONAL EXCELLENCE
 
 Asset Management
 
 As on April 1, 2016, the transmission assets owned and operated by your
 Company stands at 129,354 ckm of Extra High Voltage (EHV) transmission
 lines and 207 nos. EHVAC & High Voltage Direct Current (HVDC)
 substations with about 254,848 MVA transformation capacity. During the
 FY 2015-16, your Company maintained availability of the transmission
 network at 99.72% which is comparable to international standards. The
 number of trippings per line (unplanned) was contained to 0.66 during
 the year, indicating high reliability of transmission system.
 
 To maintain such high standard, maintenance activities are planned well
 in advance and an Annual Maintenance Plan is chalked out for every
 asset through live line or shutdown maintenance, as per technical
 feasibility.
 
 In the event of tower collapse due to natural calamities or otherwise,
 Emergency Restoration System is being deployed to quickly restore
 collapsed towers. For the first time ever, Aerial Patrolling &
 Maintenance of transmission lines using helicopters and Unmanned Aerial
 Vehicles (UAVs/ Drones) have been taken up. State-of-the-Art Travelling
 Wave Fault Locator used for detection of transmission line faults
 accurately, is under procurement process. Equipment conditioning
 monitoring techniques such as dynamic testing of the relay, online
 monitoring, thermo- vision scanning, frequency response analysis of the
 transformers and reactors etc. are being used for determination of
 healthiness of the assets.
 
 State-of-the-Art ''National Transmission Asset Management Centre''
 (NTAMC) at Manesar, Haryana, was dedicated to the Nation on April 29,
 2015 and 104 substations have been connected for remote operation from
 NTAMC till March, 2016.
 
 DISASTER MANAGEMENT
 
 Your Company has been contributing in restoration of power in areas hit
 by natural calamities including neighbouring countries. Support was
 promptly extended in Tamil Nadu to restore EHV lines, which were
 damaged due to floods in Chennai in November-December, 2015.  POWERGRID
 contributed in restoration of 400kV & 230kV lines including evacuation
 lines from Kalpakkam Nuclear Power Plant & North Chennai TPS. To
 provide immediate communication facility, 20Mbps dedicated bandwidth
 was provisioned to Load Despatch Centre.
 
 Support was given to Manipur Govt. to restore its power supply after
 the earthquake in Manipur on 4th January, 2016. Restoration work was
 taken up immediately & local grid was restored within few hours.
 
 Your Company sent highly specialized engineers to Nepal to restore
 their electrical network after the devastating earthquake in April,
 2015. It worked closely with Nepal Electricity Authority to restore
 about 85% of power supply in the valley in the first 3-4 days itself
 after the earthquake.
 
 PROJECT IMPLEMENTATION
 
 Transmission projects implementation has been a challenging task as
 these projects run over hundreds of kilometres of length across tough
 terrains and involve varied socio-economic issues. To ensure that power
 evacuation and system strengthening projects are completed matching
 with the system requirement, detailed planning is done during
 implementation and progress is reviewed at various levels to take
 corrective actions.
 
 On project implementation front, your Company has commissioned about
 13,717 ckm of EHV (Extra High Voltage) transmission lines and 23,139
 MVA transformation capacity with 15 new substations, which resulted in
 record capitalization of Rs.31,788 crore in this year.
 
 During the year, a number of important transmission lines have been
 commissioned, viz. ±800 kV Biswanath Chariali - Agra HVDC Bi-pole,
 765kV Jabalpur - Dharamjaygarh I & II, 765kV Meerut-Moga, 765kV D/C
 Aurangabad- Solapur line, 400kV D/C Barh-II TPS-Gorakhpur line (Quad)
 &765kVGwalior- Jaipur I & II.
 
 Further, more than 10,000 km of OPGW have been installed and about
 26,000 km of OPGW installation is under progress.
 
 FINANCIAL MANAGEMENT
 
 In the FY 2015-16, your Company continued to show sustained performance
 in all its business areas, enhancing value for the shareholders. Your
 Company has achieved turnover of Rs. 21,281 crore and net profit of Rs.
 6,027 crore in FY 2015-16 as compared to Rs. 17,780 crore and Rs. 4,979
 crore respectively during FY 2014-15, registering a growth of 19.7% and
 21%, respectively.
 
 Capital Expenditure and Fund Mobilization
 
 Towards its Rs.1,10,000 crore capital expenditure target for the XII
 Plan (FY12-17), POWERGRID made a capital expenditure (CAPEX) of
 Rs.22,584 crore during the year 2015-16. For the CAPEX of FY 2015-16,
 Rs.12,743 crore were mobilised through private placement of bonds &
 term loan, Rs.2,980 crore were mobilised through External Commercial
 Borrowings (ECB)/Suppler credit and Rs.6,861 crore were utilized from
 Internal Resources.
 
 XII PLAN PROGRAMME
 
 Against CAPEX plan of Rs.1,10,000 crore for XII Plan, your Company has
 already made a capital expenditure of Rs.88,235 crore in the first four
 years of the Plan period.
 
 Based on the ratings assigned by both domestic and international credit
 rating agencies, your Company does not foresee any difficulty for
 resource mobilisation. The funding for capital expenditure has been
 planned to be met through loans from multilateral institutions such as
 The World Bank, Asian Development Bank, Supplier''s Credit, External
 Commercial Borrowings through bonds / notes, besides loans from
 domestic market and through private placement of bonds.
 
 During FY 2015-16, Govt. of India has entrusted some important
 challenging projects, including ISTS portion of Green Energy Corridors,
 to your Company which are required to be implemented under compressed
 time schedule. These projects are likely to be commissioned by the end
 of XII Plan/early XIII Plan.
 
 COMMERCIAL PERFORMANCE
 
 As per Central Electrical Regulatory Commission (Sharing of inter-State
 Transmission Charges and Losses) Regulations, 2010, your Company as the
 Central Transmission Utility (CTU) of the Country, has been assigned
 the responsibility for carrying out the activities such as raising of
 transmission charges bills on behalf of all inter-State Transmission
 System (ISTS) Licensees, collecting the amount and distributing the
 same to them. In this regard, transmission charges bills are prepared,
 raised and uploaded on the website for Designated ISTS Customers
 (DICs), including the payment details by the customers.
 
 Your Company is fulfilling the assigned responsibilities effectively
 and achieved collection efficiency of above 97% for FY 2015-16.
 
 PERFORMANCE UNDER TARIFF BASED COMPETITIVE BIDDING (TBCB)
 
 Your Company is performing well in the competitive environment under
 Tariff Based Competitive Bidding (TBCB). In FY 2015-16, your Company
 successfully bid for the project ''Strengthening of Transmission System
 beyond Vemagiri'' and aquired the SPV, ''Vemagiri II Transmission
 Limited'' from the BPC. The SPV has been renamed as POWERGRID Southern
 Interconnector Transmission System Limited. With this your Company has
 won total nine (9) projects through TBCB.
 
 400kVKhammam – Nagarjunasagar double circuit transmission line -the 1st
 line commissioned by your Company under Tariff Based Competitive
 Bidding during FY 2015-16.
 
 DEVELOPMENT OF NATIONAL GRID
 
 After successful achievement of ''One Nation-One Grid-One Frequency'', to
 further strengthen the National Grid, a number of inter-regional
 transmission lines have been commissioned and more lines are under
 construction. In FY 2015-16, 400kV D/c Barh-II-Gorakhpur, Extension of
 400kV D/c Biharshariff - Sasaram to Varanasi, 765kV 2nd S/c Ranchi
 -Dharamjaygarh, 765kV 2xS/c Gwalior-Jaipur, 765kV D/c Narendra –
 Kolhapur and one pole of ±800 kV Biswanath Chariali - Agra HVDC Bi-pole
 inter-regional transmission lines have been commissioned resulting in
 enhancement of inter-regional power transfer capacity of the National
 Grid by 13,200 MW. To further augment the inter-regional power transfer
 capacity of the National Grid, your Company is executing a number of
 projects, some of which include high capacity HVDC links. By the end of
 XII Five Year Plan, it is expected that the inter-regional power
 transfer capacity of the National Grid will be over 72,000 MW.
 
 The enhancement of transmission capacity due to above inter-regional
 links has augmented pan-India electricity market and during FY 2015-
 16, about 117 billion units (BUs) inter-regional energy transfer was
 facilitated across the nation, an increase of about 40% over previous
 year.
 
 GRID MANAGEMENT
 
 Power System Operation Corporation Limited (POSOCO), a fully owned
 subsidiary of your Company, has been managing the national grid through
 National Load Despatch Centre (NLDC) and five Regional Load Despatch
 Centres (RLDCs). POSOCO has been designated as the nodal agency for
 Renewable Energy Certificate (REC) Mechanism, Transmission Pricing,
 Short Term Open Access (STOA) in transmission, Deviation Settlement
 Mechanism, Power System Development Fund (PSDF) Management, etc. As per
 GoI directive, process has been initiated for its separation from
 POWERGRID.
 
 Under Short Term Open Access (STOA), 13,467 nos. of bilateral
 transactions and 30,967 nos. of collective transaction were approved,
 allowing energy transfer of 64 BUs through bilateral transactions and
 34 BUs through collective transactions, totaling to 44,404 approved
 transactions and 98 BUs of approved energy in the FY 2015-16.
 
 CONNECTIVITY, MEDIUM TERM OPEN ACCESS (MTOA) & LONG TERM ACCESS (LTA)
 
 Your Company, as Central Transmission Utility (CTU), is the nodal
 agency for processing & grant of Connectivity, Long Term Access (LTA)
 and Medium Term Open Access (MTOA) to various applicants. Relevant
 regulations, procedures, guidelines and related documents for
 Connectivity, MTOA and LTA applications and status thereof are
 available on Company''s website.
 
 As of March 31, 2016, the Company has granted Connectivity to 98 nos.
 of eligible applications for 81,860 MW and has granted LTOA/LTA to 192
 nos. of eligible applications for 94,200 MW. In addition, based on the
 transmission margins availability, the MTOA has also been granted to 92
 nos. of applications for 10,450 MW capacity.
 
 QUALITY MANAGEMENT
 
 The Quality Management System in your Company is built around the
 philosophy of prevention rather than detection. To ensure quality,
 while procuring goods at competitive prices, a lot of effort has been
 put on quality assurance and various quality improvement measures have
 been initiated and implemented to get better quality products.
 
 During FY 2015-16, Southern Region-II Headquarter building at Bangalore
 and National Transmission Asset Management Centre (NTAMC) at Manesar
 were certified for Energy Management Systems as per ISO 50001
 requirements. Your Company is also certified for Information Security
 Management Systems as per requirements of ISO 27001.
 
 Your Company has developed and maintained systems and procedures
 aligned with Integrated Management System comprising ISO 9001 for
 Quality Management System, ISO 14001 for Environmental Management
 System and OHSAS 18001 for Occupational Health and Safety Management
 System. The certification has been maintained after rigorous audits by
 BSI Management Systems.
 
 In order to facilitate inspection of huge capital work, your Company
 has undertaken various proactive measures like smart inspections (in
 process and before acceptance), continuous follow up with
 manufacturers, improve quality systems at manufacturers'' works etc.
 
 With target to move towards zero product inspection as per your
 Company''s quality policy, inspections at some of the manufacturing
 units of towers, conductor, cables, transformer oil etc. were reduced
 after thorough process audits at their works as per standardized
 guidelines.
 
 Continuous follow up with manufacturers for timely manufacturing, smart
 inspection, testing of various critical items & subsequent issuance of
 dispatch clearances in time resulted in achieving record asset
 capitalization in this fiscal year. Special awareness programs were
 also organized for transmission line EPC contractors & their CEOs to
 discuss and sensitize the importance of quality in transmission system.
 
 Special campaign was launched for the cause of Make in India.
 Presently, most of 765kV class transformers/ reactors/other equipment
 and even some of Gas Insulated Substation (GIS) are being supplied from
 Indian works. This has been facilitated by stipulating conditions in
 various contract agreements for establishment of new factories or
 expansion of existing factories, transfer of technology, recruitment of
 employees, skill development and also development of the ancillaries. A
 number of sub-vendors have been developed and approved in India for
 supply of components for various equipment to facilitate employment
 generation in the Country.
 
 TECHNOLOGY DEVELOPMENT
 
 Your Company adopts and encourages the Research & Development (R&D)
 activities in pursuit of technological excellence in power
 transmission.  Notable among them are the prestigious 1200kV National
 Test Station project at Bina, Madhya Pradesh and the Process-bus
 architecture in substation automation system.
 
 1200kV National Test Station
 
 Your Company has successfully test charged Phase-II of the prestigious
 1200kV National Test Station in the month of March 2016. With this, all
 the 1200kV equipment in the test station have been successfully charged
 at 1200kV voltage level. For this project of national importance, your
 Company has collaborated with Indian equipment manufacturers for
 getting the 1200kV equipment developed, which have been presently
 installed at the test station in Bina for long term field operation and
 performance monitoring.
 
 Process-bus Architecture
 
 The pilot initiative of your Company on IEC 61850 protocol based
 Process- bus Architecture, successfully commissioned at the 400kV
 Bhiwadi substation, was a significant step taken in the direction to
 completely digitized substations. Further in the FY 2015-16, your
 Company has also taken up and successfully completed a pilot project to
 optimize the control & protection cable used in transformer at 400/220
 kV Neemrana substation. After implementation of new scheme at this
 substation, significant reduction in the number of cores between
 transformer marshalling box and protection panel was achieved. The
 scheme is expected to ease the maintenance and trouble-shooting in
 future and also reduce restoration time in case of any eventuality.
 Gaining experience from these projects, your Company is planning for
 taking-up another pilot project for retrofitting ageing substations
 having conventional protection and control schemes with advanced
 automation systems.
 
 POWERGRID Advanced Research and Technology Centre
 
 Your Company is establishing world class laboratories and test
 facilities at Manesar, Gurgaon for carrying out research and
 development in power transmission area. This R&D centre shall cater to
 the research needs of POWERGRID and of the Country to a large extent
 with state-of-the-art facilities for power system analysis, advanced
 equipment diagnostics, smart grid, energy efficiency, control and
 automation, material science, engineering design etc.
 
 SMART GRID & ENERGY EFFICIENCY
 
 Your Company continues its journey of delivering value to its
 stakeholders through applications of intelligent technologies towards
 Smart Grid.  Your Company is continuously enhancing its abilities
 through in-house research & demonstration projects in the field of
 Smart Grid & Energy Efficiency. It has been continually adding advanced
 attributes to the utility projects to bolster the success story in the
 above fields. Smart Grid vertical is expanding its customer base and
 new projects are getting added, making Smart Grid a promising business
 area in future.
 
 Your Company has garnered valuable experience in implementation of
 Smart Grid technology in last fewyears and presently providing
 consultancy for ten (10) projects covering distribution infrastructure,
 advanced metering infrastructure, intelligent outage management,
 electric vehicle charging stations, power quality management,
 distributed generation, net metering etc. Your Company is closely
 associated with implementation of Smart Grid at Varanasi & Gurgaon as
 part of Government''s endeavour towards Smart City development.
 
 Towards smart transmission, your Company is implementing Phasor
 Measurement Unit (PMU) based Unified Real Time Dynamic State
 Measurement (URTDSM) project, integrating all State and Central grids
 for Wide Area Measurements (WAMS). In addition, analytics using PMU
 data are being developed in association with IIT Bombay. Synchronized
 measurements integrated with high end analytics will facilitate
 improved monitoring, visualization and enhanced situational awareness
 of the grid events on real time towards grid reliability improvement.
 
 Integration of Renewables
 
 Your Company is playing a key role for integration of renewable energy
 resources into the grid. Green Energy corridor are under implementation
 by your Company which will serve dual purpose to facilitate
 interconnection of large scale renewable, into the National Grid as
 well as enlarging the balancing area to address renewable volatility.
 In addition, transmission schemes for 7200 MW Ultra Mega Solar Power
 Parks are also under implementation in various states as part of Green
 Energy Corridors-II. Apart from Green Energy Corridor implementation
 and grid-integration of Ultra Mega Solar Parks, it has been
 establishing the first grid interactive energy storage pilot projects
 with different battery technologies.  The research findings of these
 energy storage projects would be crucial in delineating the roadmap for
 large scale deployment to address intermittency, variability and
 uncertainty of renewable power and to ensure grid stability.
 
 Your Company is taking up the challenging and flagship responsibility
 of establishment of maiden Renewable Energy Management Centres (REMC)
 in 7 renewable rich states including Regional Load Dispatch Centres at
 SR, WR, NR as well as at National Load Dispatch Centre. This would
 enable forecasting of renewable resources and efficient management of
 distributed and intermittent renewable generation ensuring efficient
 utilization of resources.
 
 Energy Efficiency
 
 Your Company has taken lead role in identification of energy efficiency
 opportunities by carrying out energy audits of various industries,
 institutions and other commercial establishment. Waste heat recovery
 systems for steel re-rolling mills designed & developed by your Company
 have been installed successfully in steel industry. Energy Audits were
 carried out in six installations during the year. Energy audits
 undertaken and efficiency measures suggested by your Company shall
 enable prevention of CO2 emissions to the tune of about 1197 tonne and
 deferred capacity addition of more than of 300 MW during the Financial
 Year 2015-16.
 
 Your Company is also a BEE Grade-I Energy Service Company (ESCO) for
 undertaking energy efficiency projects in various industries.
 
 Indian power industry is in the age of revolutionary transformations
 and extensive advancements. Equipped with 90 energy auditors, your
 Company is well prepared to stand as a star performer and key enabler
 in the challenging environment, by offering Energy Efficiency
 solutions.
 
 POWERTEL'' - TELECOM SERVICES ON TRANSMISSION INFRASTUCTURE
 
 Your Company has been creating value to its shareholders by leveraging
 its country wide transmission infrastructure under the brand name
 ''POWERTEL''. It has established itself as an important player in
 providing telecom bandwidth and other communication services. Major
 achievements during the FY 2015-16 are as under:
 
 Parameter                      FY 2014-15     FY 2015-16      % Change
 
 Total network Coverage          33,241 km      36,563 km         10%
 
 Number of points present (PoPs)    352            595            70%
 
 Customers                          187            270            45%
 
 Telecom Backbone Availability for the FY 2015-16 was 100% as against
 99.97% in the previous year.
 
 National Knowledge Network (NKN)
 
 Under NKN project devised by Govt. of India which connects knowledge
 centres such as Indian Institutes of Technology (IITs), Indian
 Institute of Science (IISc) etc. across the Country, on a high speed
 connectivity, 33 links of 10 Gbps each, 105 links of 1Gbps/100 Mbps and
 440 links 100 Mpbs/1Gbps have been provisioned.
 
 National Optical Fibre Network (NOFN)
 
 As a part of digital India initiative of the Govt., to connect 250,000
 Gram Panchayats (GP) in the Country by utilizing existing fibres of
 BSNL, Railtel & POWERGRID and laying incremental fibre to connect to
 Gram Panchayats wherever necessary, your Company has been allotted work
 for development & maintenance of NOFN network in the States of
 Telangana, Himachal Pradesh, Jharkhand & Odisha by Bharat Broadband
 Network Limited (BBNL), covering about 36,000 GPs upto the FY 2015-16,
 4120 GPs have been connected through incremental fiber out of which
 Acceptance Testing for 1940 GPs have been completed. Further, 917 GPs
 have been connected End to End.
 
 Connectivity to Enterprise segment customers is provided on POWERGRID''s
 MPLS Cloud. POWERGRID provides both Layer-2 and Layer-3 Virtual Private
 Networks (VPNs) with port capacities ranging from 2Mbps to 10Gbps.
 POWERGRID also provides reliable Internet Connectivity solutions over
 its Internet cloud of different capacities ranging from 2Mbps to 1Gbps.
 POWERGRID is peered with global content providers for providing IP
 Transit services to ISPs. The IP Transit service reduces cost and
 enhances service quality of hosted content for ISPs and in turn enables
 them to offer better internet services at lower price to their users.
 POWERGRID''s extensive backbone telecom network with its local access
 partners has eliminated the location disadvantage of small towns
 towards accessibility and affordability of high speed internet. It has
 the potential to bridge the so called digital divide and be a change
 agent towards realizing the vision of Digital India. Towards this,
 MPLS VPN / Internet deals have been signed with a number of important
 domestic customers.
 
 BUSINESS DEVELOPMENT & CONSULTING SERVICES
 
 Your Company has developed the expertise in core areas of power
 transmission, sub-transmission, load dispatch and communications etc.
 Leveraging its capacity and experience, Consulting Services have been
 provided to a number of clients in India and worldwide. On
 international front, 2 nos. 220/20 kV substations at Doshi (1 X 16 MVA)
 and Charikar (2 X 16 MVA) along with the LILO of one circuit of the 220
 kV D/C Pul-e-Khumri to Kabul Transmission line at each substation have
 been completed and handed over to Afghanistan authorities for
 operations.
 
 A Tripartite MoU has been signed among Railways, Dedicated Freight
 Corridor Corporation of India Ltd (DFCCIL) & POWERGRID in November,
 2015 to facilitate necessary co-operation to explore the scope for
 dedicated transmission system for power supply to Railways for their
 traction substations.
 
 During FY 2015-16, your Company has achieved consultancy revenue of Rs.
 465 crore, which is 22% higher w.r.t. previous year Revenue of Rs. 381
 crore.
 
 POWERGRID has been assigned the work of providing consulting services
 for implementation of NER Power System Improvement Project funded by
 World Bank and for implementation of Comprehensive Scheme for
 Strengthening of Transmission & Distribution in Arunachal Pradesh and
 Sikkim. The Company is also implementing transmission project in J&K to
 provide grid connectivity and reliable power supply to the
 strategically important Ladakh region. In addition, other important
 consulting assignments include Strengthening of transmission network in
 Delhi and execution of transmission system for evacuation of power from
 Lalitpur power plant of Uttar Pradesh.
 
 It is a matter of pride that as Lead-Member of the Consortium,
 POWERGRID has successfully completed Management Contract of Ethiopian
 Electric Power Service Corporation. The scope of this Contract covered
 improving the quality and performance of the Electric Power service in
 Ethiopia (Generation, Transmission and Distribution), to ensure the
 establishment of an international recognized customer focused, market
 oriented, world class new Electric Power Service provider with the
 state-of-the art Electric Power Utility and infrastructure.
 
 INTERNATIONAL CO-OPERATION
 
 The existing interconnections with neighbouring countries, Nepal,
 Bhutan and Bangladesh, are being further strengthened for mutual
 exchange of power. Some of the recently commissioned interconnections
 including communication links through OPGW are as under-
 
 Transmission Interconnection between India and Nepal
 
 - 400 kV D/C Muzaffarpur (India) - Dhalkebar (Nepal) – February, 2016
 Transmission Interconnection between India and Bangladesh
 
 - 400kV D/C Surjyamaninagar (India) – Comilla (Bangladesh) – March,
 2016
 
 Further, for evacuation of power from various upcoming hydroelectric
 power projects(HEPs) in Bhutan, Punatsangchu-I HEP (Bhutan) –
 Alipurduar (India) 400kV Double Circuit (D/C) line between Bhutan &
 India, is under implementation and expected to be ready by 2017.
 
 CONTRIBUTION IN DISTRIBUTION REFORMS
 
 Rural Electrification
 
 Under Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) scheme for rural
 electricity infrastructure and household electrification, your Company
 has been executing infrastructure work for rural electrification in
 seventy (70) districts of nine (9) States in the Country at a cost of
 aboutRs. 9,000 crore.
 
 Almost all of the X/ XI Plan schemes have been completed. Work in Uttar
 Pradesh and Odisha assigned to POWERGRID under XI Plan Phase-II/ XII
 Plan are under implementation.
 
 During FY 2015-16, infrastructure was created for electrification in
 2960 nos. of partially electrified / unelectrified villages. Service
 connections were provided to about 83,500 BPL households. Cumulatively,
 till March, 2016, infrastructure has been created for electrification
 of about 74,500 villages. Further, service connections were provided to
 about 36.7 lakh BPL households.
 
 Integrated Power Development Scheme (IPDS)
 
 The implementation of IPDS work in Old Kashi area of Varanasi Town was
 assigned by Purvanchal Vidyut Vitaran Nigam Limited (PuVVNL) in
 September, 2015 and has been taken up for implementation and work has
 been progressing as per schedule.
 
 ERP IMPLEMENTATION
 
 Project RUPANTAR, the Enterprise Resource Planning (ERP) initiative
 of your Company has been implemented successfully and the processes and
 systems have been stabilised in all the regions of your Company.
 Presently, majority of the key processes related to the business are
 running on ERP. E-tendering for the domestic bids has also been taken
 up in ERP system on pilot basis. In order to provide stability and
 reliability to ERP system, a Disaster Recovery Centre has been
 established at Bengaluru.
 
 HUMAN RESOURCE, OUR STRENGTH
 
 Talent Acquisition & Development
 
 Your Company places human resource as key to its growth. During the
 year 2015-16, income per employee and profit per employee have been
 increased to Rs.247 lacs and Rs.70 lacs from Rs.208 lacs & Rs. 58 lacs
 respectively in previous year. Also, during the year circuit kilometre
 per employee and MVA per employee have been increased to 15 ckm & 29.7
 MVA from 13.5 ckm & 27.1 MVA respectively in previous year.
 
 In order to keep pace with the latest technology, employees are
 provided training in the areas of specific skills/functions to upgrade
 and update them towards the changing business environment and to
 effectively take on the challenges ahead.
 
 Your Company''s Human Resource Development (HRD) Action Plan for the
 year 2015-16 was based on the premise of the outcome of two pronged
 strategy namely Organisational Need Analysis (ONA) and Training Needs
 Assessment (TNA).The Company has been able to link the Individual
 Development Plans (IDP) of employees as per the business requirement
 which helps the organization to keep updating the competencies of
 employees to meet current and future requirements.
 
 POWERGRID Academy of Leadership (PAL), at Manesar has been envisioned
 to culminate in a State-of-the-Art, world class Institution. PAL has
 become fully functional and the various HRD interventions are conducted
 in addition to imparting training to Executive Trainees (ET).
 
 Under the Flagship of PAL two weeks'' Power Sector Global Outreach
 Programme at UK and France had been successfully conducted for PSUs in
 power sector. Apart from these, the Company has provided consultancy
 towards capacity building to Ethiopian Electric Power Corporation
 (EEPCo)and to various state utilities including North Eastern Region.
 
 Employee Welfare
 
 During the year, the Industrial Relations scenario in the Company has
 been cordial and no man-days were lost. An effective work culture has
 been established in the Company through empowerment, transparency,
 decentralization and practice of participative management.
 
 Keeping in view of changing needs and welfare of employees, your
 Company undertakes essential changes in various policies from time to
 time.  Issues related to workmen are successfully addressed through the
 National and Regional Bipartite Committee (PNBC/PRBC), a joint
 consultative forum comprising management and workmen representatives.
 Your Company has empanelled various hospitals nearby to our
 establishments for the healthcare of employees and their dependents.
 Quality food is served to the employees in the ISO 22000:2005 conferred
 Cafeteria, in
 
 Corporate Office and Food Lounge of Multi-Purpose hall in Gurgaon.
 
 Cultural programmes are conducted periodically for promoting healthy
 community living and celebrating various occasions like Diwali
 get-together, Holi Milan, New Year, Raising Day, etc. in establishments
 of the Company.
 
 Your Company also conducts various sports competitions for boosting the
 interest of employees in sports and games at intra and inter-regional
 level for Kabaddi, Cricket, Volleyball, Caroms, Chess and Badminton
 etc. and also participates regularly in Inter-PSU Sports meet. Your
 Company team has stood as first runner up in prestigious 24 th National
 Competition for Business Management Simulation Games organised by All
 India Management Association and represented India in Asia Management
 Games as well as in Global Management Challenge.
 
 Prevention of Sexual Harassment at Workplace
 
 As per the requirement of the Sexual Harassment of Women at Workplace
 (Prevention, Prohibition & Redressal) Act, 2013 and Rules made
 thereunder, your Company has constituted Internal Complaints
 Committees.
 
 CITIZEN''S CHARTER
 
 Citizen''s Charter has been formulated for the Company providing a
 visible front of its vision, mission, objectives, commitments, terms of
 service and its obligation to various stakeholders. In this,
 information is available about Company''s schemes, policies, project
 plans of the corporation and issues of general interest to
 stakeholders.
 
 IMPLEMENTATION OF OFFICIAL LANGUAGE
 
 Your Company continues to prove its commitment for implementation of
 Official Language Policy of Govt. of India. Series of initiatives were
 undertaken for promotion and propagation of Rajbhasha.
 
 Your Company has been encouraging and putting all efforts for promotion
 of usage of ''Hindi'' in all aspects of management in all levels of the
 Corporation.
 
 Further, the Company has organized various events such as workshops to
 impart training in translation, enhancing working knowledge through
 organizing computer trainings and Hindi classes, etc. for increased use
 of Official language. Events like Akhil Bhartiya Rajbhasha Sammelan,
 Kavi Sammelans (Poetry Sessions), Hindi Plays and various competitions
 for employees & their families are organized. Publication of Hindi
 magazines and circulation of Hindi newspaper to all departments is also
 being done to encourage Hindi reading and writing. To provide further
 inspiration, employees are nominated for external Hindi training
 programs which further educate & encourage the employees to work in
 Hindi.
 
 Besides this, a unique Hindi Library has also been established for the
 employees, where around 14,500 books, 53 Hindi Magazines on various
 topics & 16 Hindi Newspapers are available for the readers. List of
 Hindi Books are also available on the website.
 
 Various forums such as Parliamentary Committees on Official Language,
 Advisory Committee on Official Language and Town Official Language
 Implementation Committee (TOLIC) have applauded the efforts made by
 your Company for implementation of Rajbhasha & receiving many
 accolades.
 
 CORPORATE IMAGE ENHANCEMENT
 
 POWERGRID has been continuously investing on building a strong brand
 identity to overcome the emerging challenges in power sector.  Your
 Company''s transparent work culture is regularly brought forth in face
 to face interactions of the management with the analysts and
 representative of press and media at Press and Analysts Meet.
 
 In order to facilitate an interaction with the masses with regard to
 the achievements, growth, recent developments on operational and
 financial front numerous press communiqué have been issued by your
 Company. Your Company has been executing its projects and operations in
 extremely challenging situations from time to time. Landmark
 achievement have been highlighted through a proper media management
 strategy ensuring precise and timely dissemination of information which
 helped the Company in earning widespread appreciation and applaud from
 media persons, common masses, stakeholders and investors all over the
 country.
 
 POWERGRID has taken a giant leap forward by pledging 55,000 man-hours
 in year 2016 towards fulfilling its commitment towards the national
 agenda of Swachh Bharat. The Company has not only taken this oath but
 it has launched various media campaigns for the involving the common
 masses in this initiative and for spreading the awareness about this
 noble initiative.
 
 Internal communications play a key role in enabling employees across
 the Company in understanding and embracing the Company''s mission, goals
 and strategies. Towards this objective, your Company has continuously
 deployed communication tools such as e-transmit, wall magazines, lounge
 and regular media updates to apprise the employees of the developments,
 achievements & events, viewpoints of management and also to provide a
 platform to employees to participate and take pride in being associated
 with POWERGRID. The internal communication has been instrumental in
 boosting employee morale, enthusiasm.
 
 With the view to effectively deliver the Corporation''s key messages
 through relevant media to target audiences, your Company has
 strengthened its relations with all media by infusing communication
 equities for corporate branding purpose. The new mechanisms of
 communication management have also been well appreciated by the leading
 national media houses.
 
 GRIDTECH 2015 - INTERNATIONAL EXHIBITION AND CONFERENCE
 
 POWERGRID with the support of Ministry of Power, Govt. of India and in
 association with CBIP & IEEMA organized 5th International Exhibition
 and Conference – GRIDTECH 2015 during April 8-10, 2015 at New Delhi,
 which was inaugurated by Hon''ble Union Minister of State (I/C) for
 Power, Coal, New & Renewable Energy, Shri Piyush Goyal. More than
 seventy five technical papers focussing on State-of-the-Art
 technologies, emerging trends, renewable energy, smart grid etc. were
 presented in the two parallel conferences. Also, more than 40
 International and 70 National manufacturers showcased various new
 technology products. Theme pavilion set up by POWERGRID and the Student
 Pavilion attracted attention of many and received special mention from
 dignitaries as well as visitors.
 
 RIGHT TO INFORMATION
 
 In order to promote transparency and accountability, an appropriate
 mechanism has been set up across your Company in line with ''Right to
 Information Act, 2005''. Your Company has nominated CPIO/ Appellate
 Authorities at its Corporate Office and Regional offices across the
 Country to provide required information to the citizens under the
 provisions of Act.
 
 COMMITMENT TO TRANSPARENCY & VIGILANCE FUNCTION
 
 Your Company advocates the principles of Good Governance, Transparency,
 Probity and Ethics in its management functioning. The Vigilance
 Department works in tandem with the management so that these attributes
 are inculcated in the day to day functioning of the Organization.
 
 Emphasis on Preventive aspects
 
 The Company lays primary emphasis on preventive vigilance. It,
 therefore, focuses on whether the systems are in place, whether the
 right type of systems exist or need to be reengineered. Various
 in-house methods such as Process (Online) Inspection, Surprise
 Inspections, CTE Type Inspections are conducted to check the spectrum
 of the ongoing activities including physical works and scrutiny of iles
 by a team of dedicated professionals. During the inspections, loopholes
 /lapses, if observed, are brought to the notice of the management for
 rectification. During the year 2015-16, 55 Surprise and 66 Process
 Online Inspections/CTE Type Inspections were conducted and adequate
 cost compensation has also been effected, wherever necessary.
 
 System Improvements as a Continuous Process
 
 Presently, your Company is undergoing a dynamic phase of growth as
 several projects/works are being executed. Therefore, robust system and
 procedures are being put in place to keep up with the work
 requirements. One such endeavor has been updating of the Works &
 Procurement Policy and Procedure Manual of the Corporation. Besides
 this, important System Improvement suggestions (40 nos.) made by the
 Vigilance Department have been implemented during this period,
 pertaining to different areas of operation such as construction
 activities, recruitment procedure, photography of the hidden works etc.
 Since systems improvement is a continuous process a Steering Committee
 comprising senior level officers has also been formed to monitor their
 compliance.
 
 Preventive Vigilance/ RTI Workshops: As a pro-active measure, employees
 of the Company are imparted training on Company''s CDA rules and various
 preventive measures for smooth project execution. 21 Preventive
 Vigilance Workshops and 06 RTI workshops were conducted at Corporate
 Centre and Regions for 613 and 235 employees, respectively during the
 year 2015-16.
 
 Workshop on Ethics & Values: This year, 03 workshops on Ethics & Values
 were conducted by the Regional Vigilance Department as well as
 Corporate Centre for around 70 employees. Workshops were conducted for
 various levels of executives to encourage value based ethical decision
 making.
 
 SMS Based Alert System: With a view to acquaint all the employees about
 the CDA Rules as well as other vigilance activities, bulk SMS have been
 sent to all employees regularly.
 
 Vigilance Awareness Week 2015: Vigilance Awareness Week was celebrated
 in your company from 26th Oct to 30th Oct 2015. During the period,
 various activities such as Essay Competitions, Quiz Competitions,
 debates etc. were organized in line with the theme of the Vigilance
 Awareness Week this year i.e. Preventive Vigilance- a tool of Good
 Governance.
 
 As a measure of Participative Vigilance, various Inter college and
 Inter school Debate competitions and Panel Discussions were organized
 in which 116 Team of Schools and Colleges had participated and these
 events were attended by 5386 of students. Roadshows for spreading
 awareness about Preventive Vigilance were also organized by 8 Schools
 for 2100 participants. During this week, Vigilance in-house magazine
 Candour was published and the same was inaugurated by Sh Balwinder
 Singh, former Special Director (CBI). Dr Arun Kumar, retd. Professor of
 JNU, New Delhi was the Chief Guest at the Valedictory Session.
 
 Further, a film on POWERGRID Vigilance was telecast on DD National on
 29.10.2015 between 8.00 AM to 8.30 AM in the programme Aaj Savera and
 was also shown during various events organized at Corporate Centre.
 
 ENVIRONMENT AND SOCIAL MANAGEMENT
 
 POWERGRID, being a responsible corporate entity, always endeavours to
 protect and conserve environment in areas of its activities from
 inception to operation stage. It developed a comprehensive
 Environmental and Social Policy & Procedures (ESPP) in 1998 and has
 upgraded the same twice in line with the international best practices,
 to pre-empt possible environmental and social issues. The ESPP has been
 accepted by The World Bank under its Use of Country System (UCS) policy
 and greatly appreciated by different multilateral agencies.
 
 POWERGRID, a pioneer in the field of Sustainability Reporting in the
 Indian Power Sector published its 3 rd biennial Sustainability Report
 in September, 2015. Following the principle of continous improvement,
 this report has brought more transparency in the form of better and
 detailed disclosures, incorporating the voices of internal and external
 stakeholders. The report assumes special significance, as number of
 disclosures of performance indicators have been increased from 39 to
 96. With this it has also attained the highest possible rating of A .
 The report is externally assured by accredited assurance provider M/s
 Intertek India Private Limited based on Global Reporting Initiative
 (GRI-G3) guidelines including Electric Utilities Sector Supplement
 (EUSS) and International Standards like Accountability, UK Standard AA
 1000 APS (2008) and AA1000SES(2011).
 
 Apart from above, your Company has taken various initiatives to fulfil
 its commitment towards the goal of sustainable development and to
 address the negative externalities associated with its business
 processes. Key initiatives in this regard are:
 
 - Special designed towers to conserve the precious Right of Way (RoW),
 enhancing the carrying capacity of existing lines through various
 technological interventions,
 
 - Rain water harvesting made an integral part of substation design,
 
 - Installation of LED bulbs & solar street lighting in substation, 
 
 - Fuel catalysts devices for DG sets etc
 
 Further, a 50kWp Solar PV System has been installed at our Gurgaon
 Office Complex to meet part of its total energy requirement and will
 also result in CO2 reduction. POWERGRID is fully conscious of the need
 to conserve natural resources and avoids forest, ecological sensitive
 areas like Wildlife Sanctuaries/National Parks/Biosphere Reserves and
 Coastal Regulation Zone areas as far as possible through optimization
 of route alignment. POWERGRID completely avoided the Great Indian
 Bustard Sanctuary and Achanakmar - Amarkantak Biosphere Reserve by
 increasing the line lengths for construction of 765 kV S/C Indore-Dahod
 line & 765 D/C Dharmajaygarh-Jabalpur line respectively. Following the
 principle of avoidance, involvement of forest land has been reduced
 progressively from 6% in 1998 to 2.8% in 2015. However, in some cases
 where involvement of forest area becomes unavoidable, Forest Clearance
 as mandated under Forest (Conservation) Act, 1980 is obtained following
 norms/regulations associated with the act including payment of
 applicable NPV and cost of Compensatory Afforestation (CA). In FY
 2015-16, a total 30 nos. of forest clearances were obtained involving
 diversion of about 1000 Ha of Forest areas.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 Your Company believes in Corporate Social Responsibility (CSR) as a
 commitment to its stakeholders to conduct business in an economically,
 socially and environmentally sustainable manner that is transparent and
 ethical. Stakeholders include persons directly impacted by the
 activities of your Company, local communities, environment and society
 at large. It primarily focuses on inclusive socio-economic growth for
 development of marginalized and under-privileged sections of the
 society residing around its areas of operation. With this approach,
 your Company carries out various CSR activities with thrust on Rural
 Development/Infrastructural Development, Skill Development, Health,
 Education, Environment, etc.
 
 During the year, your Company participated in the Swachh Bharat
 Abhiyaan by constructing about 9500 toilets in about 4,250 Government
 schools in several states of India.
 
 Projects like, ''Construction of 10 storeyed, 325 bedded Dharmashala at
 AIIMS Trauma Centre, New Delhi'', ''Improving Rural Livelihoods through
 Farmer-centric Integrated Watershed Management'' on 10,000 hectares of
 land in Kurnool (Andhra Pradesh) & Kudgi (Karnataka) through ICRISAT
 (The International Crops Research Institute for the Semi-Arid Tropics)
 are also under implementation.
 
 ACCOLADES & AWARDS
 
 The excellent performance of your Company has been recognised and
 appreciated by the Govt. of India and other prestigious organisations &
 institutions in form of various awards/ accolades in various categories
 from time to time.
 
 During the year, your Company has received following important
 awards/accolades
 
 Gold Shield in the National Awards for Meritorious Performance in
 Power Sector for the Year 2013-14
 
 Rajiv Gandhi National Quality Award by BIS under Large Scale Service
 Utilities category.
 
 CBIP Award for Best Transmission Utility by Central Board of
 Irrigation and Power (CBIP)
 
 Dun & Bradstreet PSU Award 2015 under the Power Transmission &
 Distribution sector category & Dun & Bradstreet Infra Award 2015
 under Power Transmission category.
 
 Most Valuable Company and Best Performing Company award from India
 Today in Navratna (PSU) category.
 
 Felicitated at The Economic Times Power Focus 3rd Annual Summit for
 commendable initiatives and excellent contribution in in Power Sector.
 
 India Pride Award 2014-15 in the category of Excellence in Energy and
 Power by Dainik Bhaskar.
 
 POWERGRID Regional Headquarters Building at Bengaluru awarded Green
 Building under Green Rating for Integrated Habitat Assessment (GRIHA).
 
 Rajbhasha Navratna Award 2015-16 by Indian Language & Cultural
 Centre.
 
 Most Innovative use of Training & Development as an HR Initiative for
 Organization Development Award by World HRD Congress
 
 Training Excellence in HR-Silver Award for outstanding achievements
 in Training at the 5th Annual Greentech HR Award 2015.
 
 Training Excellence Award and Knowledge Management Leadership Award
 by World HRD Congress.
 
 Fastest Growing Electric Utility in Asia for second successive year
 and only Indian PSU in the Platts Top 50 Fastest Growing Energy
 Companies 2015 in the World.
 
 Ranked no. 3 among a list of 49 companies selected under the category
 of Asia''s Best Analyst Days in the Institutional Investor Survey of
 Asia.
 
 MANAGEMENT DISCUSSION AND ANALYSIS
 
 In addition to the issues in the Directors'' Report, some issues have
 been brought out in report on Management Discussion and Analysis placed
 At Annexure-I.
 
 BUSINESS RESPONSIBILITY REPORT
 
 The Business Responsibility Report as stipulated under Regulation 34
 (2) of the SEBI (Listing Obligations and Disclosure Requirements)
 Regulations, 2015 is given in Annexure-II and forms part of the Annual
 Report.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 As per requirements of disclosures under Section 134(3) (m) of
 Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules,
 2014 information relating to conversation of energy, technology
 absorption and foreign exchange earnings and outgo, information is
 given in Annexure-III to this Report.
 
 COMPTROLLER AND AUDITOR GENERAL''S COMMENTS
 
 Company has received ''NIL'' comments on the accounts for the year ended
 March 31, 2016 by the Comptroller and Auditor General of India under
 under Section 143(5) of the Companies Act, 2013. Copy of the same is
 attached in Annexure - IV to this report.
 
 CORPORATE GOVERNANCE
 
 A report on the Corporate Governance (Annexure-VII), forming part of
 this report, together with the Certificate thereon is given in
 Annexure- VIII to this report.
 
 Your Company has got its Secretarial Compliance Audit conducted for the
 financial year ended March 31, 2016 from M/s Chandrasekaran &
 Associates, Practising Company Secretary. Their Report forms part of
 this Annual Report (Annexure-V).
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 As required u/s 134 (3) (c) & 134 (5) of the Companies Act, 2013, your
 Directors confirm that:
 
 (a) in the preparation of the annual accounts, the applicable
 accounting standards had been followed along with proper explanation
 relating to material departures;
 
 (b) the directors had selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company at the end of the financial year and of the profit of
 the Company for that period;
 
 (c) the directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities;
 
 (d) the directors had prepared the annual accounts on a going concern
 basis; and
 
 (e) the directors, had laid down internal financial controls to be
 followed by the Company and that such internal financial controls are
 adequate and were operating effectively.
 
 (f) the directors had devised proper systems to ensure compliance with
 the provisions of all applicable laws and that such systems were
 adequate and operating effectively.
 
 COMPANY''S BOARD
 
 Your Company''s composition of Board of Directors underwent some changes
 during the year 2015-16. During the year, Shri I. S. Jha, Director
 (Projects) took over the additional charge of Chairman & Managing
 Director with effect from 1st October, 2015 and regular charge of
 Chairman & Managing Director with effect from 10th November, 2015. Shri
 R. N. Nayak demitted the office of Chairman & Managing Director on 30th
 September, 2015 upon attaining the age of superannuation. The Board
 placed on record its appreciation and gratitude to Shri R. N. Nayak for
 the invaluable contribution, unstinted support and advice in the
 decision making process & affairs of the Company, provided by him to
 the Company during his tenure as CMD of POWERGRID.
 
 Shri Jagdish Ishwarbhai Patel has been appointed as non-official part
 time director (Independent Director) w.e.f. 17th November, 2015.
 
 Shri R. K. Gupta, Shri A. K. Mittal, Shri R. Krishnamoorthy, Dr. K.
 Ramalingam and Shri Mahesh Shah non-official part time directors
 (Independent Directors) ceased to be Directors on the Board of the
 Company w.e.f. January 16, 2016. The Board wishes to place on record
 its deep appreciation and gratitude for the significant contribution
 and support to the Company extended by Independent Directors of the
 company.
 
 In accordance with the provisions of Section 160 of the Companies Act,
 2013 read with Article 31 (iii) of the Articles of Association of the
 Company, Dr. Pradeep Kumar and Ms. Jyoti Arora, Directors shall retire
 by rotation at the Annual General Meeting of your Company and being
 eligible, offer themselves for re-appointment.
 
 NUMBER OF MEETINGS OF THE BOARD
 
 The details of number of Board / Committee meetings held during the
 year are provided in the Report on Corporate Governance, which forms
 part of this report.
 
 DECLARATION BY INDEPENDENT DIRECTORS
 
 All the Independent Directors have met the requirements specified under
 Section 149 (6) of the Companies Act, 2013 for holding the position of
 ''Independent Director'' and necessary declaration from each Independent
 Director under Section 149 (7) was received.
 
 PERFORMANCE EVALUATION OF DIRECTORS
 
 The requirement of performance evaluation of directors under Section
 178(2) of the Companies Act, 2013 has been done away with for
 Government Companies vide Ministry of Corporate Affairs'' Notification
 dt. 5th June, 2015. The Independent Directors in their separate meeting
 have reviewed the work assigned to them under Schedule IV of the
 Companies Act, 2013.
 
 Further, the appointment, tenure and remuneration of Directors are
 decided by the President of India. Remuneration paid to Chairman &
 Managing Director and Functional Directors are as per terms and
 conditions determined by the Department of Public Enterprises, Govt. of
 India. Independent Directors are paid only sitting fee per Board /
 Committee meeting attended. POWERGRID enters into Memorandum of
 Understanding (MoU) with Ministry of Power every year wherein Company
 is evaluated on various financial and non-financial parameters.
 
 SECRETARIAL AUDITOR
 
 M/s Chandrasekaran & Associates, Practising Company Secretaries have
 conducted Secretarial Audit of the Company for the financial year ended
 31st March, 2016. Their Report forms part of this Annual Report
 (Annexure-V). The Secretarial Auditor observed as under:
 
 During the period under review the Company has generally complied with
 the provisions of the Act, Rules, Regulations, Guidelines, Standards,
 etc. mentioned above subject to the following observation:
 
 1.  The Company has not complied with provision of Section 149 of the
 Companies Act, 2013 read with Regulation 17 of SEBI (Listing
 Obligations Disclosure Requirements) Regulations, 2015 in respect to
 the appointment of requisite number of Independent Directors.
 
 2.  The Company has not complied with provision of Section 177 of the
 Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligations
 Disclosure Requirements) Regulations, 2015 with respect to constitution
 of Audit Committee.
 
 3.  The Company has not complied with provision of Section 178 of the
 Companies Act, 2013 and Regulation 19 of SEBI (Listing Obligations
 Disclosure Requirements) Regulations, 2015 with respect to constitution
 of Nomination and Remuneration Committee.
 
 4.  The Company has not filed certain e-forms relating to creation of
 charges with the office of the Registrar of Companies where the
 Permanent Account Number (PAN) of the lenders are not available, which
 is mandatory.
 
 Further, the explanation given by the Board on the observation given by
 the Secretarial Auditor is as under:
 
 1.  POWERGRID, being a Govt. Company within the meaning of Section 2
 (45) of the Companies Act, 2013, the power to appoint Directors vests
 with the President of India. As on 31st March, 2016, the Company had
 only one Independent Director and thus the Company has not been able to
 comply with provisions of 149, 177 & 178 of the Companies Act, 2013 as
 observed by the Secretarial Auditor. The matter has already been taken
 up with Administrative Ministry for illing six existing vacancies of
 Independent Directors on the Board of the Company.
 
 2.  POWERGRID could not file certain e-forms relating to charges in
 MCA21, wherein the Lenders are Multilateral Agencies-World Bank, ADB
 and IFC for non availability of PAN of these Agencies. PAN is a
 mandatory ill under e-filing in MCA-21.
 
 EXTRACT OF ANNUAL RETURN
 
 In accordance with Section 134 (3) (a) of the Companies Act, 2013 an
 extract of the annual return in the prescribed format in MGT-9 is given
 as Annexure VI of this Report.
 
 COMMITTEES OF THE BOARD
 
 POWERGRID''s has Audit Committee, Stakeholders Relationship Committee
 and other Committees. The composition and scope of the Committees are
 provided in the Report on Corporate Governance.
 
 A report on the Corporate Governance (Annexure-VII), forming part of
 this report, together with the Certificate thereon is given in
 Annexure- VIII to this Report.
 
 RISK MANAGEMENT POLICY
 
 A Statement indicating development and implementation of a Risk
 Management policy of the Company including major elements of risk and
 mitigation thereof are given in the Management Discussion and Analysis
 Report at Annexure-I of this Report.
 
 STATUTORY AUDITORS OF THE COMPANY
 
 The Statutory Auditors of your Company are appointed by the Comptroller
 & Auditors General of India. M/s S. K. Mittal & Co., M/s R. G. N. Price
 & Co., M/s Kothari & Co. and M/s Parakh & Co. were appointed as Joint
 Statutory Auditors for the financial year 2015-16.
 
 COST AUDITORS OF THE COMPANY
 
 Your Company appointed M/s. K. G. Goyal & Associates, Cost Accountants
 and M/s. R. M. Bansal & Co., Cost Accountants as Cost Auditors for the
 Financial Year (FY) 2015-16 under Section 148 of the Companies Act,
 2013.
 
 The Cost Audit Report for the FY 2015-16 will be filed with the Cost
 Audit Branch, Ministry of Company Affairs before due date i.e.
 September 27, 2016.
 
 ACKNOWLEDGEMENTS
 
 Our Board of Directors would like to express their deep sense of
 appreciation for the guidance and co-operation received from Govt. of
 India, particularly Ministry of Power, Ministry of Finance, Ministry of
 Home Affairs, Ministry of External Affairs, Ministry of Statistics and
 Programme Implementation, Ministry of Environment & Forests, Ministry
 of Corporate Affairs, Central Electricity Regulatory Commission,
 Appellate Tribunal for Electricity, Central Electricity Authority, NITI
 Aayog, Department of Public Enterprises, Regional Power Committees, and
 other concerned Govt. departments/agencies at the Central and State
 level as well as from Securities and Exchange Board of India, National
 Stock Exchange of India Ltd., and BSE Ltd., Mumbai without whose active
 support, the achievements of the Corporation during the year under
 review would not have been possible.
 
 Special thanks to our valued customers, State Governments and State
 Power Utilities and other clients, who have awarded various consulting
 works and reposed faith in Company''s capability to handle them. The
 Board also appreciates the contribution of Contractors, Vendors and
 Consultants for successful implementation of various projects by the
 Company.
 
 Our Directors also acknowledge the valuable suggestions and guidance
 received from the statutory auditors during the audit of accounts of
 the Company for the year under review. The Board also conveys its
 sincere thanks to national/ international financial institutions/
 multilateral Financial Institutions (The World Bank & Asian Development
 Bank)/ Banks/ National (CARE, ICRA & CRISIL) & International (Standard
 & Poor''s and Fitch Ratings) credit rating agencies for their
 assistance, continued trust and confidence reposed by them on
 POWERGRID.
 
 On behalf of Board of Directors, I would like to place on record our
 deep appreciation for the dedicated efforts and valuable services
 rendered by the members of the POWERGRID family in the Company''s
 achievements during the Financial Year 2015-16. I would also like to
 thank the executive team for their strong leadership, the employee
 unions for their support and all our employees for their commitment and
 enthusiasm to achieve our aim to be the world''s premier transmission
 utility.
 
                           For and on behalf of the Board of Directors
 
                                                              (I.S.Jha)
 
                                          Chairman & Managing Director
 
 Place: New Delhi 
 
 Date: 08.08.2016
Source : Dion Global Solutions Limited
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