The Board of Directors have the pleasure of presenting the ThirtiethAnnual Report on performance of the Company together with the Audited Financial Statementsfor the financial year ended 31st March 2019.
Keeping in line with the past trend Financial Year (FY) 18-19 hasproved to be yet another year of excellence and achievements.
In FY 2018-19 Transmission assets consisting of 8468 circuit km(ckm.) of Extra High Voltage (EHV) transmission lines 40119 Mega Volt Ampere (MVA)transformation capacity and 10 new substations have been added. This includes 3543 ckm.6000 MVA transformation capacity and 2 substations added during the year by the Company'swholly owned subsidiaries. At the end of 31st March 2019 the totaltransmission assets of POWERGRID and its subsidiaries stood at 158298 circuit km oftransmission lines 245 substations and 371912 MVA of transformation capacity.
The major milestones achieved during FY 2018-19 are as below:
Asset Capitalization of 727325 crore including 76633 crorethrough subsidiaries and Foreign Exchange Rate Variation (FERV) of 71456 crore.
Capital Investment of 725807 crore including 74008 crore insubsidiaries against the target of 7 25000 crore.
Transmission System Availability was 99.71% with number oftrippings per line contained at 0.46.
Total Income of 735618.07 crore and Profit After Tax (PAT) of79938.55 crore on standalone basis and total Income of 735661.32 crore and PAT of710033.52 crore on consolidated basis.
Interim Dividend of 75.83 per share (Face Value 710/- each) paidand in addition recommendation made for 72.50 per share as final dividend for the FY2018-19 subject to approval of shareholders.
Inter-regional power transfer capacity of 8400 MW added by theCompany during the year. The cumulative inter-regional power transfer capacity added bythe Company stood at 84090 MW at the end of 31st March 2019.
About 12950 km of Optical Ground Wire (OPGW) network added bythe Company and its subsidiaries to support voice and data communication with RegionalLoad Despatch Centres (RLDCs) / State Load Despatch Centres (SLDCs) for effective gridmanagement.
Telecom revenue rose to 7663.25 crore in the financial yearended on 31st March 2019.
Consultancy revenue in the financial year ended on 31stMarch 2019 was 7610.93 crore.
220 kV Srinagar Leh Transmission System commissioned therebyconnecting strategically important Ladakh region with the National Grid.
Total Income of subsidiaries crossed 71000 crore mark at 71056crore and Profit After Tax stood at 7193 crore.
POWERGRID acquired its first Intra-State Transmission Projectthrough Tariff Based Competitive Bidding (TBCB) for evacuation of power from 2x600 MWJawaharpur Thermal Power Plant and associated transmission system.
Four TBCB subsidiaries viz. POWERGRID Parli TransmissionLimited POWERGRID Warora Transmission Limited POWERGRID Jabalpur Transmission Limitedand POWERGRID NM Transmission Limited became fully operational.
1.0 FINANCIAL PERFORMANCE
The Company maintained its sound Financial Performance in FY 2018-19.The Financial Performance during FY 2018-19 as compared to the previous year 2017-18 onstandalone basis is summarized below:
(All Figures except per share data is in units as indicated)
|Description || |
|INR (Cr.) ||US $ (M) ||INR (Cr.) ||US $ (M) |
|Revenue || || || || || |
|Transmission Charges ||32844.94 ||4707.60 ||28495.82 ||4084.25 ||15.26% |
|Consultancy-Sale of Services ||610.93 ||87.56 ||662.18 ||94.91 ||-7.74% |
|Telecom ||663.25 ||95.06 ||606.59 ||86.94 ||9.34% |
|Other Income ||1498.95 ||214.84 ||1001.73 ||143.58 ||49.64 % |
|Total Income ||35618.07 ||5105.06 ||30766.32 ||4409.68 ||15.77 % |
|Profit After Tax (PAT) ||9938.55 ||1424.47 ||8244.65 ||1181.69 ||20.55 % |
|Earnings per Share ||Rs 19.00 ||US$ 0.27 ||Rs 15.76 ||US$ 0.23 ||20.56% |
|Book Value per Share (Rs ) ||Rs 112.81 ||US$ 1.62 ||Rs 104.01 ||US$ 1.49 ||8.46% |
|Gross Fixed Assets ||197792.69 ||28349.25 ||177100.25 ||25383.44 ||11.68% |
|Long Term Borrowings* ||141786.36 ||20321.97 ||130212.96 ||18663.17 ||8.89% |
|Net Worth ||59017.14 ||8458.81 ||54414.96 ||7799.19 ||8.46% |
|Debt Equity Ratio ||71:29 ||71:29 ||- || || |
|Return on Net Worth ||16.84% ||15.15% || |
| || |
* Including current maturities of Long Term Borrowings. Convenienceconversion at 1 US $ = 69.77 INR as on 31.03.2019.
1.1 DIVIDEND PAYOUT
For FY 2018-19 the Company has proposed a final dividend of Rs 2.50per share in addition to Rs 5.83 per share of interim dividend paid in February 2019taking total dividend for the financial year 2018-19 to Rs 8.33 per share. The totaldividend payout for the year amounts to Rs 4357.91 crore (including an interim dividendof Rs 3050.02 crore). The final dividend shall be paid after your approval at the AnnualGeneral Meeting.
1.2 TRANSFER TO RESERVES
For the FY 2018-19 appropriation of profit has been made as follows:
a. General Reserve: Rs 4250 crore
b. Bonds Redemption Reserve: Rs 2029.20 crore
c. Self Insurance Reserve: Rs 249.07 crore
2.0 MoU PERFORMANCE
The Company was rated 'Excellent' for financial year 2017-18 for itsperformance against MoU with Ministry of Power thereby continuing with the trend ofconsistently achieving 'Excellent' rating since signing of its first MoU for the year1993-94.
3.0 OPERATIONAL PERFORMANCE
3.1 Asset Management
As on 31st March 2019 the transmission assets owned andoperated by the Company (consolidated) consist of 1235 lines and 245 nos. EHV substationsincluding 15 nos. High Voltage Direct Current (HVDC) substations upto + 800 kV level 726nos. transformers 11 nos. STATCOMs 5 nos. Static Var Compensators (SVC) besides SeriesReactors and Thyristor Controlled Series Compensators (TCSC) /Fixed Series Compensators(FSC) at various places.
Reliable operation of such large and complex transmission network callsfor maintaining the assets in utmost condition and the Company achieves this by meticulousadvance planning as well as adopting best technological tools available for maintenanceand monitoring of the transmission system. Some such state-of-the-art techniques beingdeployed for management of assets across the Company include On-line Condition Monitoringfor Substation Equipment On-line Transient Monitoring System Aerial Patrolling GISMapping etc.
3.2 National Transmission Asset Management Centre Manesar (NTAMC) andRegional Transmission Asset Management Centers (RTAMCs)
NTAMC has been established for remote operation of the system andmonitoring of various parameters at National level and ten numbers Regional TransmissionAsset Management Centres (RTAMCs) for similar function at Regional level. During the year2018-2019 38 nos. of substations have been integrated in NTAMC for remote operations.With this a total of 210 sub stations are now integrated under NTAMC for remote operationfrom control centers. These are manned by experts on 24x7 basis to provide expert handlingof the system.
3.3 Operation & Maintenance Benchmarking in POWERGRID
To achieve optimum performance in all spheres of Operation &Maintenance (O&M) activities the Company undertakes external as well as internalbenchmarking. In the External Benchmarking process the Company is a part of'International Transmission Operation and Maintenance Study (ITOMS)' - a global O&Mbenchmarking platform presently comprising 32 leading global power transmission utilities.The results of the benchmarking study are discussed and the best maintenance practices areshared amongst the participating utilities. The Company has consistently improved itsperformance in both line and substation categories.
Internally the operational performance of regions are evaluated withthe objective to identify gaps in operational practices of various regions identify keyinitiatives and focus areas in an effort to bring at par the performance of regions. Abenchmarking system has also been developed for regional O&M performance on monthlybasis for critical parameters. The best practices of regions are shared on regular basis.
Measures/ initiatives taken by the Company to mitigate thechallenges/ concerns have been described in the Management Discussion and Analysis (MDA)Report.
3.4 Adoption of latest technology for better availability oftransmission lines
The Company has adopted various technological tools for ensuring betteravailability of transmission lines such as Aerial Patrolling of Transmission lines Appbased Patrolling etc. the details of which are described in the MDA.
3.5 Other key operational achievements during the year
3.5.1 Overhauling of six number HVDC convertor transformers at Pusaulisubstation was carried out on site. This has saved time and money required fortransportation of the transformers to the factory for overhauling.
3.5.2 Rigorous in-house protection audit of more than 80 substationswas undertaken.
3.5.3 There has been no major outage of any station during the year.
3.6 Cyber Security
The Company is committed to security of its infrastructure assets fromthe risks associated with cyber security and has an Information Security Policyimplementation of which is reviewed annually through third party audits for ISO:27001Certification. The cyber security preparedness of the Company's businesses and cybersecurity initiatives are being reviewed by Chief Information Security Officer (CISO)through the Information Security Department. The Corporate Office and the RegionalHeadquarters are certified for ISO:27001 Information Security Management System. Theadvisories and guidelines issued by the designated statutory bodies namely IndianComputer Emergency Response Team (CERT-In) and National Critical InformationInfrastructure Protection Centre (NCIIPC) are complied with. The Company also participatesin mock-drill programs organised by CERT-In. All concerned staff are sensitized in thearea of cyber security through specific awareness programs.
The possible risks due to cyber-attacks are minimised by isolating gridconnected intelligent systems from external data networks. Digital signals controllingoperation of critical equipment are kept further confined and isolated by design toprevent any large scale cascade event.
4.0 PROJECT IMPLEMENTATION
4.1 Project Management
Efficient and timely implementation being the cornerstone ofinfrastructure projects the Company undertakes detailed planning of the projects throughvarious tools and processes such as Integrated Project Management and Control Systems(IPMCS) and Enterprise Resource Planning (ERP). Also the projects under implementationare regularly reviewed at various levels to pre-empt/ address any obstacles faced intimely implementation. Interactive meets with Industry partners are also a regular featurewith the objective of sharing industry best practices and resolution of issues. To furtherbolster business relationships the Company has been annually felicitating the vendors fortheir performance.
4.2 Physical Achievements
4.2.1 A number of important and critical pending projects which werestuck up due to Right-of-Way (RoW) issues in different States were completed throughCompany's persistent efforts and with the help of Hon'ble PM's institutional projectmonitoring platform - ProActive Governance & Timely Implementation (PRAGATI) andconstant support from Ministry of Power Minister of State for Power (Independent Charge)Central Electricity Authority (CEA) and the States' administration.
The list of projects completed by the Company during the year includesInter-Regional Schemes renewable energy integration linked projects for cross borderinterconnections etc.
765kV Double Circuit (D/C) Jharsuguda-Dharamjaygarh line(between Eastern and Western Regions); and
765kV D/C Banaskantha-Chittorgarh line & BanaskanthaSubstation (between Western and Northern Regions).
Renewable Energy Integration linked
765kV Single Circuit (S/C) Dharampuri-Madhugiri (Tumkur) line;
765kV D/C Bhuj Pool-Banaskantha line & Bhuj substation;
400kV D/C Kadapa-Hindupur-NP Kunta System & Kadappa GasInsulated Substation (GIS);
400kV D/C Banaskantha-Sankhari transmission line;
400kV D/C Mundra UMPP-Bhuj transmission line;
400kV D/C Tumkur (Pavagada)-Hiriyur transmission line;
400kV D/C Bhadla (POWERGRID) - Bhadla (RVPN) transmission linealong with 1X500 MVA ICT at 765/400/220kV Bhadla (POWERGRID) substation;
400/220kV Tirunelveli Pooling Station (GIS) 2x500 MVA ICTs; and
2x1500 MVA 765/400kV ICTs at Srikakulam alongwith bay extensionat Srikakulam.
Cross border interconnections
400kV D/C (Quad) Punatsangchu-Alipurduar transmission line(Indian Portion of Indo-Bhutan transmission line).
Other Major transmission lines and substations
765kV D/C Angul-Jharsuguda transmission line;
2nd Ckt. of 765kV D/C Orai-Aligarh transmission line& Orai ICT;
400kV D/C Silchar-Melriat transmission line;
400kV D/C Dharampuri-Somanhali transmission line;
400kV D/C Kota-Jaipur (South) transmission line;
400kV D/C Farakka-Baharampur transmission line;
LILO of both circuits of Bamnauli-Samaypur 400kV D/Ctransmission line at Tughlakabad along with GIS;
132kV S/C Tezu-Namsai transmission line (strung on D/C towers)& Namsai substation; and
STATCOMs at Lucknow Nalagarh Kishenganj Ranchi JeyporeGwalior Aurangabad & Solapur.
Projects implemented by subsidiaries acquired through TBCB
POWERGRID Parli Transmission Limited
765kV D/C Warora pooling station-Parli transmission line;
765kV D/C Parli (New)-Solapur transmission line;
765/400kV pooling station at Parli (2x1500MVA);and S 400 kV D/C(Quad) Parli (New)-Parli (PG) transmission line.
POWERGRID Warora Tranmission Limited
765kV D/C Gadarwara-Warora transmission line;
765/400kV pooling station at Warora (2x1500MVA);and
LILO of both circuits of 400kV D/C Wardha-Parli (PG) at poolingstation near Warora.
POWERGRID Jabalpur Transmission Limited
765kV D/C Vindhyachal-Jabalpur transmission line.
POWERGRID NM Transmission Limited
765kV S/C Salem-Madhugiri transmission line;
POWERGRID Southern Interconnector Transmission System Limited ^400kV D/C Srikakulam-Garividi transmission line; and
Rs 400kV D/C Cuddapah-Madhugiri transmission line.
5.0 CAPITAL INVESTMENT AND FUND MOBILIZATION
During the year the Company made a capital investment (CAPEX) of Rs25807 crore. Towards this Rs 11112 crore were mobilized through private placement ofbonds & term loans Rs 6808 crore were mobilized through External CommercialBorrowings (ECB)/ Suppliers' Credit Rs 7282 crore from Internal Resources and Rs 605crore in form of grants received from Power System Development Fund & from CentralFinancial Assistance (Ministry of New and Renewable Energy).
The Company signed following new loan agreements during FY 2018-19:
Unsecured Syndicated Term Loan facility of JPY 22 billion withSumitomo Mitsui Banking Corporation (SMBC) Aozora Asia Pacific Finance Ltd. and The Bankof Yokohama.
Term Loan facility of 200 million from 'KfW Frankfurt amMain ('KfW') Germany for financing high capacity transmission projects first such loanagreement signed by the Company under KfW's 'Promotional Loan Category'.
Term Loan of Rs 10000 crore from State Bank of India.
Investment approvals for transmission projects worth about Rs 3000crore have been accorded during the year.
6.0 COMMERCIAL PERFORMANCE
The Central Electricity Regulatory Commission (Sharing of Inter-StateTransmission Charges and Losses) Regulations 2010 which came into effect from01.07.2011 provides for computation of Point of Connection (PoC) charges and losses forsharing of transmission charges. The recovery of transmission charges for the servicesprovided by the Company for Designated Interstate Customers (DIC) is based on the SharingRegulations 2010 and subsequent amendments thereof. As per the CERC Sharing Regulationsthe Company as Central Transmission Utiliy raises bills for transmission charges on thebeneficiaries i.e. DICs on behalf of all ISTS Licensees in the country and collects &disburses the payments to the Licensees as per the provisions of the said regulations. TheCompany is fulfilling the assigned responsibilities effectively and achieved collectionefficiency of 94.6% for FY 2018-19.
CERC has notified Tariff Regulations 2019 vide notification dated 7thMarch 2019 for the tariff block 2019-24. The salient features of the Tariff Regulations2019 are highlighted in the MDA section.
7.0 SUBSIDIARIES ACQUIRED THROUGH TARIFF BASED COMPETITIVE BIDDING(TBCB)
The Company has 13 nos wholly owned subsidiaries acquired through TBCBand 7 of these are under commercial operation. The detailed information about Company'sTBCB subsidiaries and their performance has been described in MDA section.
8.0 STRENGTHENING OF NATIONAL GRID AND CROSS BODER INTERCONNECTIONS
8.1 Inter - Regional Power Transmission Capacity
Two inter-regional transmission lines have been commissioned during theyear viz. 765kV D/C Banaskantha-Chittorgarh transmission line 765kV D/CJharsuguda-Dharamjaygarh transmission line thereby increasing inter-regional powertransfer capacity by 8400 MW.
With this addition by the Company and further 4200 MW added by othertransmission licensees during the year cumulative interregional power transfer capacityof the National Grid stood at 99050 MW as on 31st March 2019.
8.2 Cross-Border Interconnections
Presently electrical interconnections with neighbouring countries-Nepal Bhutan Bangladesh and Myanmar exist with aggregate power transfer capacity of3150MW. The interconnections are being further strengthened for increased exchange ofpower. Some of the upcoming and planned interconnections are as under:
8.2.1 Interconnections with Nepal
Gorakhpur (India) - New Butwal (Nepal) 400 kV D/C (Quad)transmission line is under discussion.
Upgradation to rated voltage of 400kV D/C Muzaffarpur -Dhalkebar transmission line.
8.2.2 Interconnections with Bhutan
For evacuation of power from various upcoming hydro - electricpower projects (HEPs) in Bhutan Jigmeling (Bhutan) - Alipurduar (India) 400kV D/C (Quad)transmission line is under implementation.
8.2.3 Interconnections with Bangladesh
Baharampur (India) - Bheramara (Bangladesh) 400kV D/C 2ndtransmission line is under implementation.
Katihar (India) - Parbotipur (Bangladesh) - Bornagar (India)765kV D/C transmission line is under discussion.
Upgradation of Surajmaninagar - Comilla D/C line at 400kValongwith 500MW HVDC Back to Back at Comilla.
9.0 CONNECTIVITY LONG TERM ACCESS (LTA) & MEDIUM TERM OPEN ACCESS(MTOA)
POWERGRID as CTU being the nodal agency for processing & grant ofConnectivity Long Term Access (LTA) and Medium Term Open Access (MTOA) has grantedConnectivity to 449 nos of eligible applications for a quantum of about 186597 MW andhas granted LTOA/LTA to 237 nos applications for a quantum of about 105122 MW so far. Inaddition based on the transmission capacity margins availability the MTOA has also beengranted to 138 nos of applications for a total quantum of about 14517 MW by 31stMarch 2019.
10.0 QUALITY MANAGEMENT
Quality Management System has been implemented in the Company adoptingbest practices to ensure quality of goods procured as well as quality of physical works inthe field. To accomplish this apart from procuring goods at competitive prices andrevision of technical specifications lot of efforts have been put on quality assuranceand various measures have been taken as mentioned below:
Developed and maintained systems and procedures aligned withintegrated management system comprising ISO 9001: 2015 for Quality Management System ISO14001:2015 for Environmental Management System and OHSAS 18001:2007 for OccupationalHealth and Safety Management System. BSI Group India has maintained the certificationafter rigorous audits. Systems were also audited for maintenance of Social AccountabilityStandard SA: 8000 Energy Management Systems as per ISO: 50001 and Information SecurityManagement Systems as per ISO:27001.
With a target to move towards zero product inspection as perPOWERGRID quality policy inspections at some of the manufacturing units of towersconductor cables transformer oil etc. were reduced after thorough process audits as perstandardized guidelines. Man-days saved were used for process audits at othermanufacturing units for system improvements.
Special program was conducted wherein QCI-MSE meet for ZED i.e.Zero Defect Zero Effect was organized. Program was a huge success and was appreciated byall Medium and Small Enterprises (MSE) and Quality Council of India (QCI) team.
To ensure availability of spares for ease of maintenanceefforts have been made over the years towards indigenisation due to which most of 765kVClass Transformers/ Reactors/other equipment and even some of GIS equipment are presentlybeing supplied from India itself. New plants and facilities have been set-up in India by anumber of foreign manufacturers for equipment like GIS equipment upto 765kV OpticalGround Wires (OPGW) 765kV reactors STATCOM etc. thus contributing to 'Make In India'program.
The Company promoted a number of existing vendors to upgradetheir equipment to higher voltage level & cover more items to increase vendor basethus creating more competitive environment.
11.0 INFORMATION TECHNOLOGY AND ENTERPRISE RESOURCE PLANNING
11.1 As part of continued efforts towards paper-less officetransparency and digitalization of communication the e-office system has been implementedand made operational. Online web-streaming facility has commenced for training programs.This facilitates live participation across the country and also helps in archiving oftraining sessions in document repository for future references.
11.2 The ERP System implementation has been successfully completed inall regions in phases. The additional functionalities have also become operational in theintegrated ERP system as discussed herein below.
11.2.1 As part of digital initiative POWERGRID Online Payment Utility(POPU) application Portal has been developed for receiving all types of payments toPOWERGRID. This has resulted in 100% digitalization of payment receipts by POWERGRID.
11.2.2 All payments being made by POWERGRID have been totallycentralized with ERP system. This facilitated better management of working capital andcash-flow needs at optimal levels in a cost-effective manner.
11.2.3 Company's establishments throughout the country have beenfacilitated with biometric attendance system which has been integrated with ERP system
12.0 TECHNOLOGY DEVELOPMENT
During the year POWERGRID Advanced Research & Technology Centre(PARTeC) commenced its full-fledged operation. The facility is equipped withstate-of-the-art laboratories consisting of power system analysis and real time simulationfacility protection automation and control facility Wide Area Measurement System (WAMS)facility Equipment Diagnostics facility Calibration and Diagnostics facility MaterialScience facility and Smart Grid facility. Various studies on power system substationautomation system Phasor Measurement Units (PMUs) material analysis equipment diagnosisand calibration are being conducted to cater to the in-house requirement of organization.The facilities are also being used as a training facility for imparting hands-on trainingprograms on substation automation system smart grid etc. to engineers of the Company aswell as of various utilities.
Software system for fault detection of Transformer based on the dataacquired from online Dissolved Gas Analysis sensors installed on various transformers hasbeen developed in-house. This is being operated at NTAMC and all RTAMCs of the Company.With the use of this system the Company envisages to take timely action for preventingfailures of transformers/ reactors.
A mobile capacitor bank at 33kV level to meet the needs ofdistribution companies for utilization at low voltage system conditions has beendeveloped and successfully field tested in Haryana Vidyut Prasharan Nigam Limited (HVPNL)system. Its effect on distribution system has been studied with respect to the HVPNLsystem and the results obtained are affirmative.
13.0 SMART GRID AND E-VEHICLE CHARGING
13.1 Smart Grid Knowledge Centre
The Company has established Smart Grid Knowledge Center in associationwith Ministry of Power Govt. of India at PARTeC Manesar. The Centre is equipped withvarious working models and functionalities pertaining to Smart Grid and aims to bringawareness on the applications of Smart Grid technologies and its demonstration in aholistic manner. The Centre is providing learning environment and capacity building on allmajor smart grid attributes viz. Advanced Metering Infrastructure SCADA OutageManagement System Renewable Integration Microgrid Smart Home EV with RenewableCharging Infrastructure and Cyber Security etc. to the stakeholders.
13.2 Smart Transmission
Towards Smart Transmission the Company is implementing WAMS basedUnified Real Time Dynamic State Measurement (URTDSM) project. This involves placement ofPMUs at all 400kV and above substations generation switchyards of 220kV and above HVDCterminals and Phasor Data Concentrator (PDC) at SLDCs RLDCs & NLDC control centresalong with OPGW based backbone communication infrastructure.
During the year 154 nos PMUs (for 44 stations) and 12 nos PDCs atSLDCs and RLDCs were added by the Company to enable synchronous measurement of real timegrid parameters across the widely spread grid with low latency in data transfer to controlcentres which would be very effective in reliable secure and economical grid operation.With this cumulative PMUs and PDCs commissioned by the Company as on 31stMarch 2019 stood at 1319 nos. (for 329 stations) and 29 nos (for all RLDCs and 24 SLDCs)respectively.
13.3 EV Charging Infrastructure
The Company is promoting electric vehicles in the country by installingEV chargers & using electric vehicles for office purpose. It has established its firste-taxi charging station at Hyderabad Metro.
14.0 INTEGRATION OF RENEWABLE ENERGY (RE)
Large scale renewable penetration in the grid leads to challengestowards evacuation and its integration. The Company has been working towardsimplementation of Green Energy Corridors (GEC) - Inter-State Transmission System (ISTS) at765kV and 400kV level in renewable resource rich states in the country.
The Company has also evolved a comprehensive transmission plan for gridintegration of various Renewable Energy Zones (66.5 GW) in the country.
15.0 Renewable Energy Management Centres
To enable forecasting of renewable resources and efficient managementof intermittent renewable generation the Company on behalf of Govt. of India isestablishing Renewable Energy Management Centres (REMCs) at 11 (eleven) locations invarious SLDCs/ RLDCs/ NLDC.
16.0 ENERGY EFFICIENCY
Realising the significance of energy saving aspect of sustainabledevelopment the Company is aggressively pursuing business opportunities in energy savingby way of conducting energy audits of various Govt. as well as private agencies e.g.industries institutions commercial establishments State Transmission Utilities etc. TheCompany is a BEE Grade-I Energy Service Company (ESCO) for undertaking energy efficiencyprojects and has a large pool of certified energy auditors/energy managers who are wellqualified to offer energy efficiency solutions.
During the year the Company secured a no. of consultancy assignmentsin the energy audit business as below:
Energy auditing of Power Transmission Corporation of UttarakhandLimited (PTCUL) substations along with assessment of transmission losses.
Preparation of 14 nos. Investment Grade Energy audit report forvarious cities under 'Atal Mission for Rejuvenation and Urban Transformation (AMRUT)'Scheme of Govt. of India.
Energy audit of transmission network of BSES Rajdhani PowerLimited (BRPL) through Delhi Electricity Regulatory Commission (DERC).
Futher the Company has signed an MoU with Uttar Pradesh PowerCorporation Limited for replacement of agricultural pumps which shall pave the way forESCO projects in Uttar Pradesh. The Company is also exploring possibility of cooperationwith IIT Roorkee to work in the mutually agreed areas such as space cooling lightingpower quality and waste to energy. The Company is also empaneled now with EnergyManagement Centre Kerala as an energy auditing agency and is exploring avenues forworking together in the areas of mutual interest in Energy Management.
17.0 TELECOM BUSINESS- 'POWERTEL'
Leveraging its country-wide transmission infrastructure the Companyunder the brand name 'POWERTEL' is providing a range of services under its Unified Licenseas National Long Distance (NLD) and Internet Service Provider - Category 'A' (ISP-'A)Service authorizations.
The Company has undertaken expansion of the network using 200G DWDMsystem to double the existing capacity (12 Tbps) in next two years. The Company is alsopartnering with last mile connectivity providers and State Electricity Boards for Right ofWay (RoW) fiber leasing etc. to increase its network reach its presence and potentialbusiness opportunities. As a result the network coverage has increased to more than60900 km by the end of FY 2018-19 from about 47700 km in the previous year.
The Company has been displaying excellent performance in the areas ofproviding telecom bandwidth Mutliprotocol Label Switching (MPLS) based Virtual PrivateNetwork (VPN) internet and other communication services to Telecom Service ProvidersGovernment departments and enterprise customers. The Telecom Backbone Availability for theFY 2018-19 was 99.98%.The Company has a strong portfolio of diverse customers due to itsexcellent availability and reliability. A number of customers from various segments havereposed their trust in the reliability of Telecom Services rendered by the Company bycontinuing to place the orders on it on long term basis. This has resulted into continuousgrowth of revenue from Telecom business in spite of consistently falling tariffs.
17.1 Bharat Net
In line with the vision of the Government to connect 250000 GramPanchayats (GP) under 'Bharat Net' towards digital India the Company under its scope islaying optical fibre cables to connect to Gram Panchayats wherever required. As per therevised scope of work under Phase-I 39 districts spread across 5 States viz. AndhraPradesh Telangana Himachal Pradesh Jharkhand & Odisha covering 10436 GPs havebeen allotted to the Company by Bharat Broadband Network Limited (BBNL). Out of these9793 GPs have been connected on fibre by the end of FY 2018-19.
In Phase-II of project the Company has been assigned the work ofdevelopment of network in 2 states i.e. Uttarakhand (5706 GPs) and Himachal Pradesh(2994 GPs). Survey work and tendering activities of contracts for implementation ofprojects are under progress.
17.2 Enterprise and Internet Service Provider (ISPs) Business
Connectivity to Enterprise Segment Customers is provided on Company'sMPLS Cloud. The Company provides both Layer-2 and Layer-3 VPNs with port capacity rangingfrom 2 Mbps to 10 Gbps.
Company is peered with global content providers for providing IPTransit services to ISPs. The IP Transit service reduces cost and enhances service qualityof hosted content for ISPs and in turn facilitates them to offer better internet servicesto their users in a cost effective manner.
17.3 Telecom Tower Business
With a view to increase the Company's telecom services portfolio and toprovide a green and clean solution to bridge the urban- rural telecom divide in thecountry it has been exploring the use of its transmission towers as telecom towers andalso to provide power to the associated telecom equipment viz. mobile antennae MWantennae electronic equipment etc. placed on the tower. The Company had undertaken apilot in this regard in 2017 which has been in successful operation since then.Subsequently the Company had approached the regulator CERC for its approval forutilization of transmission assets for telecom tower business. CERC has recently allowedPOWERGRID to go ahead to provide transmission line towers for Telecom application withsuitable revenue sharing with the beneficiaries. Company's extensive transmission towernetwork will provide backbone telecom network and will eliminate the location disadvantageof small distant towns towards accessibility and affordability of high speed internet.
17.4 POWERGRID is endowed with attributes essential for Data Centrebusiness viz. reliable power telecom connectivity and secure space. Accordingly theCompany is working on a business strategy for Data Centre business opportunity.
18.0 BUSINESS DEVELOPMENT & CONSULTING SERVICES
Utilising its expertise in project management as well as technicalcapabilities established over the years in the core areas of power transmissionsub-transmission distribution management load dispatch and communications Smart Gridetc. the Company is providing its services as consultant/ training partner to variousagencies within as well as outside the Country.
18.1 Domestic Market
During the year the Company successfully commissioned the prestigiousand challenging 220kV Srinagar- Alusteng-Drass-Kargil-Leh Transmission Project. Theproject was implemented by the Company on behalf of Govt. of India as Project ManagementConsultant. With its commissioning the strategically important Ladakh region of Jammu& Kashmir has now been electrically connected to the ISTS (Northern) Grid. The projectwas dedicated to the Nation by Hon'ble Prime Minister on February 3 2019.
Besides on behalf of Govt. of India the Company is also implementingas a Consultant important projects in difficult geographic terrains of Sikkim and NER.Under the NER Power System Improvement Project (NERPSIP) funded by The World Bank &Govt. of India transmission schemes in 6 States of NER are being implemented. During theyear 23 elements were commissioned including transformation capacity addition of 312 MVA.Further the Company is acting as Consultant to Govt. of India for its 'ComprehensiveScheme for Strengthening of Transmission & Distribution in Arunachal Pradesh &Sikkim' project.
The Company received about 50 new consultancy assignments in domesticmarket during FY 2018-19. The major consultancy assignments during the year 2018-19include:
Implementation of Smart Grid Projects in 19 Towns of Jammu &Kashmir under Prime Minister Development Package (PMDP).
Construction of substation bays at POWERGRID substations (ISTSGrid) for injection of power from various renewable (Wind & Solar) developers.
Diversion works of various transmission lines of POWERGRIDinfringing the corridor of 'Purvanchal Expressway' being constructed by Uttar PradeshExpressways Industrial Development Authority (UPEIDA)
Diversion works of various transmission lines of POWERGRID forNational Highways Authority of India (NHAI).
Diversion of 25 transmission lines in Gujarat & Maharashtrafor upcoming high speed rail Corridor from Ahmedabad to Mumbai (Bullet Train Project).
The Company has entered into a Memorandum of understanding (MoU) withNeyveli Lignite Corporation (NLC) for development of Neyveli Township of NLC as miniSmartcity having all attributes of Smartcity.
18.2 International Market
On the International front also the Company has been providingconsultancy to various clients. During the year the Company successfully completed thefollowing Consultancy assignments:
Prestigious 'CASA 1000 Project' planned for export of surpluspower to Afghanistan & Pakistan from hydroelectric projects of Kyrgyzstan &Tajikistan.
Second Block of 1x500MW HVDC back to back station at Bheramara(Bangladesh) to facilitate enhancement of interconnection capacity between India andBangladesh.
Power Grid Company of Bangladesh (PGCB) placed another order forproviding consultancy services for establishment of 500MW HVDC Back-to Back stationinterconnecting Surajmaninagar (India) and Comilla North (Bangladesh).
During the year the Company secured ten nos of consultancyassignments which include 'Project Management Consultancy Services for TransmissionSystem associated with Arun-3 HEP in Nepal' consultancy services for Design &Construction of 400kV D/C Transmission line associated with Punatsangchu-I and IIHydroelectric projects study tour to India for delegates of Southern African power Pooletc.
The Company has signed a Memorandum of Cooperation with Korea ElectricPower Corporation (KEPCO) for a period of two years to promote bilateral cooperationexplore the business opportunities and develop business in power sector. Areas ofcooperation shall cover transmission lines & substations construction O&M powersystem reliability and efficiency enhancement Smart Grid including AMI EV chargingmicro grid etc.
19.0 CONTRIBUTION IN GOVT. OF INDIA SCHEMES FOR DISTRIBUTION REFORMS
The Company has been making valuable contribution in Govt. of India'sschemes related to distribution reforms in the Country.
The Company has achieved its assigned targets of releasing serviceconnections in the States of Odisha Uttar Pradesh Jammu and Kashmir by December 2018under the Govt. of India mission of connecting each and every household.
19.1 Rural Electrification (RE) works under Deen Dayal Upadhyaya GramJyoti Yojana (DDUGJY)
Under GoI's DDUGJY/ Prime Minister's Development Package (PMDP) forrural electricity infrastructure and household electrification the Company has so farimplemented infrastructure work for rural electrification in ninety five (95) districts ofTen (10) States in the country at a cost of about Rs 10802 crore. Till date totalinfrastructure has been created for electrification of 87838 nos. villages (includingpartially electrified & un-electrified villages) and service connections have beenprovided to about 49.49 lakhs BPL households.
Further RE works under DDUGJY/PMDP schemes in 8 districts of J&Kare also in progress where the scope includes 4 nos 33kV substations in Jammu 5 Nos 33kVsubstations in Kashmir and 2 nos 66kV & 2 nos 33kV substations in Leh & Kargilareas.
Progress of RE works in FY 2018-19 is as below:
19.1.1 RE Works in Odisha
Village infrastructure was completed in 4249 villages and 498197service connections were provided. Augmentation work of 64 nos 33kV substations out oftotal 89 substations completed.
19.1.2 RE Works in J&K
Village infrastructure was completed in 190 villages and 6040 serviceconnections were provided. Work in 2 substations of 33kV in Jammu and 1 substation inKashmir is in progress.
19.1.3 RE Works in Uttar Pradesh
Village Infrastructure was completed in 345 villages and 17380 serviceconnections were provided. Augmentation work of 5 nos 33kV substations was completed and 2new 33kV substations have also been charged.
20.0 CONSERVATION OF LAND AND ENVIRONMENTAL CONCERNS
Transmission projects are considered by and large environmentallybenign due to the fact that they don't involve disposal of any pollutants/ waste invarious environmental matrices i.e. air water or soil. Nevertheless the Company beinga responsible corporate entity addresses any residual environmental or social impactsassociated with its business following the cardinal principles of Avoidance Minimizationand
Mitigation as outlined in its Environmental and Social Policy &Procedure (ESPP). In doing so it leverages the role of technology by not only adoptingthe existing modern technological tools and technologies developed in different parts ofthe world but also emphasizes on in-house technology development meeting the nationalrequirement.
In a country like India which caters to 18% of the world populationwhile having 2.4% of world's land mass conflicts related to land resources are notuncommon due to presence of different competing user groups. The Company as a firmbeliever in addressing the pressing social needs of the society has always beenforthcoming in up gradation and adoption of new and better technologies such as GasInsulated Switchyard (GIS) which requires lesser area compared to the traditional AirInsulated Switchyard (AIS). Additionally it has taken a policy decision to secure landfor its substations through direct purchase on willing buyer-willing seller basis onmarket/negotiated rate to avoid public resistance and court intervention faced during landacquisition. Land for Jeerat Chandauti Saharsa & Sitamarhi substations were securedthrough this method during the year.
Another area where it is able to make significant contribution inreducing land requirement is Right of Way (RoW) through innovative tower designs such asspecial compact tower pole type tower and Multi-circuit towers. These technologicalinterventions not only reduced the requirement of precious land resources and social risksto projects but also helped in preservation of environment by minimizing forest andvegetation involvement. Further construction of High Capacity Power TransmissionCorridors (HCPTCs) for transmitting power at higher voltage levels (765kV HVAC 800kVHVDC) not only reduced transmission losses but also ensured transmission of more power perunit of RoW (MW/meter of RoW).
In the area of environmental preservation also adoption of new andmodern technologies has helped the Company by putting it firmly on the path of SustainableDevelopment. In addition to technologies indicated above adoption of tools like Remotesensing and GPS has resulted in the selection of most optimum route for the transmissionlines thus avoiding/ minimizing environmentally sensitive areas such as ForestProtected Areas important wetlands important Bird and Biodiversity Areas elephantcorridors etc.
Another key initiative to reduce environment footprint includes upgradation of existing lines by reconductoring them with advanced conductors to enhance thecarrying capacity of such lines. This has helped in saving lot of forest and tree coverwhich might have been affected if new lines were to be constructed for such enhancedtransmission of power. Recognizing the importance of solar power in combating Climatechange and in-line with GOI's commitment towards Paris Agreement the Company is in theprocess of installing 5 MWp Rooftop Solar PV Systems in its premises covering more than50 locations. This initiative will result in saving of 7-8 million units (MUs) of Gridconnected energy per annum thereby reducing atmospheric emission of 35916 mT of CO2per year. Another significant innovation done by the Company is the use of inductive powerin earth wire for powering of telecom antennas. This inductive power which otherwise goeswaste will eliminate the use of DG sets (a constant source of pollution and Green HouseGas emission) for powering of telecom Base Transceiver Station (BTS) units. The technologyhas been successfully tested at pilot scale and regulatory approval of the CERC has alsobeen received. Other initiatives in this direction are making Rain Water Harvesting anintegral part of substation design installation of LED bulbs & solar street lightingin substation fuel catalysts devices for Diesel Generator (DG) sets etc. which furtherstrengthened the Company's agenda of sustainable development.
1.0 CORPORATE SOCIAL RESPONSIBILITY
The Company discharges its Corporate Social Responsibility (CSR) bycommitting itself to contribute to the society through initiatives that have positiveimpact on society at large especially the community in the neighbourhood of itsoperations. The main objective of CSR initiatives is improvement in the quality of life ofmarginalized and under-privileged sections of the society residing around its areas ofoperation. With this approach the Company carries out various CSR activities with thruston Rural Development Infrastructural Development Skill Development Health EducationEnvironment etc.
During FY 2018-19 the Company spent Rs 195.52 crore and sanctionedmore than 200 CSR projects of value of approx. Rs 360 crore that will be executed overthe next 2-3 years. Focus area of the Company's CSR activities during FY 2018-19 wereeducation and health initiatives in line with Govt. of India targets besidesinfrastructure development in rural areas like construction of community centres internalroads culverts as well as projects like installation of solar street lights drinkingwater facility etc. The company provided ambulances conducted health check-up camps andprovided infrastructural support to government hospitals/ Community Health Centre/PrimaryHealth Centre etc. and organized livelihood generating skill development programmes foryouths through various government agencies.
To help economically weak patients and their attendants creation ofpatient support infrastructure at prominent health centres like AIIMS State Govt.Medical Colleges and Hospitals etc. has been given special focus over the last fewyears. In this direction the Company has constructed 300 bedded 'POWERGRID Vishram Sadan'at J.P. Apex Trauma Centre AIIMS New Delhi which was dedicated to the nation by theHon'ble PM on 29th June 2018. Seven more 'POWERGRID Vishram Sadans' are being establishedin the Govt. hospitals at Lucknow Patna Guwahati Ranchi Bengaluru Darbhanga andVadodara where outpatients from distant locations approach for specialised medicaltreatment.
During the year Company participated in 'Swachh Bharat Abhiyan' as apart of Swachhta initiative. Besides construction of toilet blocks in Government schoolsconstruction of individual households' toilets for development of primitive tribal groupswas also taken up across the Country. 'Swachhta Pakhwada' was also observed in all unitsof the Company across the Country.
The Company has its owned and operated Skill Development Centres ineight of its Substations in Assam Manipur & West Bengal which impart training onTransmission Line Tower Erection. Besides the Company has also tied up with Indo-GermanInstitute for Advanced Technology (IGIAT) Vizag and Indo German Tool Room (IDTR) Indorefor imparting high-end skill training to youths on a residential basis in their campus.About 1100 youths were trained during FY 2018-19 and most of them are gainfully employed
Details of the CSR policy are available on Company's website at http://10.100.18.171/sites/default/files/CSR_Policy_2015_0.pdf .The Annual Report on our CSR activities is enclosed as Annexure XI of the Directors'Report.
22.0 CITIZEN'S CHARTER
Citizen's Charter has been formulated for the Company providing avisible front of its Vision Mission and Objectives. The Citizens' Charter consisting ofCompany profile commitments expectations from citizens Integrated Management Policyservices offered values and standards of services access to information and grievanceredressal is available on its website.
23.0 OUR PEOPLE - OUR STRENGTH
The Company being a service organisation has always recognised Peopleas its core strength and it firmly believes that employee growth and organizational growthmove in sync and this can be delivered largely through a well-articulated learning anddevelopment system within the organization together with a culture of mutual respect andtrust.
As on March 31 2019 the employee strength of the Company stood at9255 as against 8900 on March 31 2018 which is exclusive of the employees on Contract.
23.1 Human Resource Development
Committed to the cause of continuous learning and development of itspeople the Company has established 'POWERGRID Academy of Leadership (PAL)' astate-of-the-art world class institute at its 00Manesar complex near Gurgaon. Thefacility provides a wide range Profit after Tax per Employee ( in Lakhs) of trainingincluding induction hands-on managerial and behavioural programs to its employees. Theseprograms in the electricity sector 100.53 cover areas such as sector overviewtransmission technology & system management hotline maintenance Smart Grid &Distribution so.
Management behavioural/ leadership development programs etc.
(A During the year the Company conducted 825 training and developmentprograms at its PAL facility its Employee Development Centres in regions and also atpremium educational institutes and centres Z 40 of learning in India and abroad. Furtherthe Company's web based competency based training management system has been upgraded 20with updated competency directory. An android-based mobile app 'PAL Manesar' has beendeveloped to make it easy for employees to access many web based applications from theirhandheld devices. 2014-15 2015-10 2010-17 2017-10 2015-10 In FY 2018-19 the companycarried out a current state assessment of its HR processes and practices against theglobally acclaimed People Circuit kms per Employee Capability Maturity Model (PCMM)framework. The company was one of the few organisations in Public Sector assessed to be atMaturity
level 3. The existing HR Processes and practices in the company arebeing further strengthened and upgraded in line with PCMM. Through PCMM implementationthe company aims to streamline and align its policies and practices to global bestpractices. PCMM's emphasis on commitment measurement and improvement will lead to astronger I a foundation for continual business excellence through workforce and processcapability improvement.
The Company is also leveraging its people capabilities and the physical2014-15 2015-16 2016-17 2017-18 2018-19 infrastructure at PAL to provide customisedfunctional and behavioural programs on consultancy basis to external (domestic andinternational) stakeholders also. Training programs carried out through Ministry ofExternal Affairs (MEA) for South African Power Pool comprising a number of South Africannations and Capacity Building & Institutional Strengthening (CBIS) programs for NorthEastern States were some important training assignments taken up during the year.
23.2 Employee Welfare
The Company is continuously updating its welfare policies in line withindustry trend and to meet the changing needs for its employees. Issues are successfullyaddressed through the National and Regional Bipartite Committee (PNBC/PRBC) a jointconsultative forum comprising management and workmen representatives elected throughsecret ballot. Wage Revision of Executives Supervisors and Workmen effective from 1stJanuary 2017 has been implemented during the year.
23.3 Grievance Redressal
Grievance redressal is always taken-up on priority in the Company. Bothemployee grievance and public grievance are given utmost importance and efforts are madeto resolve them promptly. A dedicated team monitors and ensures grievances are redressedtimely and impartially under strict & unbiased framework after thoroughly analysingthe facts and data. The same is reviewed regularly by the senior management. The employeegrievance is accorded top priority and the Company has a 3-tier structure for expeditiousresolution of grievance within the broad framework of policy guidelines.
23.4 Ensuring Social Justice
The Company has constituted a separate cell to look after and safeguardthe statutory provisions for SC/ ST/ OBC & Persons with Disabilities (PwD) categoriesof employees. The reservation cell assists the Liaison Officer who looks after the welfare& safeguard of SC/ ST/ OBC & PWD employees. Liaison Officer also ensures thatthere is no discrimination on the basis of caste religion & disabilities amongst theemployees. To ensure effective discharge of duties by Liaison Officer across allestablishments of the company separate Liaison Officer for each region has beennominated. The Company implements all directives and guidelines with regard to reservationpolicy issued by Government of India. Annual inspection is also conducted to ensureimplementation of directives issued by Gol. Periodic meeting is also held withrepresentative of the association of SC/ ST and OBC to resolve issues if any.
The company is also committed to gender diversity and considering thatwomen constitute 7.42% of its total workforce the Company continuously strives to makethe workplace safe and better for its women with its policy interventions and learningand development initiatives. The HRD Deptt of the Company also designs specificwomen-centric programs with focus on empowerment and mentorship for women and specialprograms are also conducted on the International Women's Day.
23.5 Sports and Cultural Activities
The Company organizes Intra & Inter-regional Sports Competitionsfor Cricket Badminton Volleyball Athletics Kabaddi Football Chess Carrom TableTennis Bridge etc. and participates in the Inter-CPSU Sports meets organised under theaegis of Power Sports Control Board. POWERGRID team has emerged winners in Table TennisCricket Chess (women) and runners up in Volleyball Badminton (women) Kabaddi andAthletics. One of our employees Shri J. Mukherjee stood first in National Championship inPara Table Tennis and represented Indian team at the International Paralympic Championship2019 held in Amman Jordan and won the Silver medal for the country.
Cultural programs are regularly conducted at various establishments ofthe Company for promoting healthy community living; and festivals are celebratedcollectively by organizing milan samarohs and other activities etc.
24.0 PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
As per the requirement of the Sexual Harassment of Women at Workplace(Prevention Prohibitions and Redressal) Act 2013 and Rules made thereunder InternalComplaint Committees (ICC) are in place to redress complaints received regarding sexualharassment. The Company has been conducting training/ workshop both for male and femaleemployees sensitising them about the issues and laws relating to Sexual Harassment.
During the year 05 such training programmes were conducted across theorganization. There was no complaint of sexual harassment during the year.
25.0 IMPLEMENTATION OF OFFICIAL LANGUAGE (RAJBHASHA)
The Company is sensitive towards its responsibilities heritage socialand cultural values. In pursuance of Govt. of India's Rajbhasha Policy to promote Indianlanguages and Rajbhasha "Hindi" the Company has made all round efforts tointegrate and promote use of Hindi in its official works at all levels.
To ensure the increased use of Official language various activitiessuch as Annuvad Abhayaas Karyakram workshops trainings motivational programs areorganized in the Company. Computer trainings are imparted to enhance the working knowledgein Hindi on computers. Hindi classes are also being organized for non-Hindi speakingemployees through Hindi Teaching Scheme. Lectures on heritage social and culturalconcerns are also being delivered by eminent scholars on regular basis to motivate theemployees towards increased working in Hindi.
Various activities are undertaken to publicize the Rajbhasha e.g.Akhil Bhartiya Rajbhasha Sammelans Technical conferences in Hindi Kavi Sammelans (Poetrysessions) Plays publication of monthly articles in Hindi via emails etc. Also variousHindi competitions are being conducted in the organization throughout the year withspecial emphasis during Hindi Pakhwada Swachchta Pakhwada Vigilance Awareness WeekQaumi Ekta Saptaah Pt. Deen Dayal Upadhyay Janmshati Diwas etc. along with departmentalmeetings as well as Official Language Implementation Committee (OLIC) meetings. TheCompany's Hindi library is considered as one of the best Hindi libraries among PublicSector Undertakings. More than 14500 books 53 Hindi Magazines on various topics and 16Hindi daily newspapers are available for the employees.
Attractive incentive schemes for employees working in Hindi have beenimplemented as per the government guidelines. Also various award and reward schemes havebeen introduced to encourage employees to actively participate in promotion of Hindi bygiving articles/ write-ups for in-house magazines reading library books etc.
For creating awareness among the employees and to motivate them tomaximise use of Hindi in official works and for publicity of official language All IndiaOfficial Language Conference Cum Technical Seminars were organised at eight places duringthe year by the Company. During the daylong events employees from different regions ofthe Company along with various member offices of Town Official Language ImplementationCommittee participated where different sessions on official language as well as ontechnical topics e.g. health information technology etc. and multi-topic quiz were held.
The efforts made by the Company were recognised in several fora duringthe year 2018-19. Various awards were conferred by different Town Official LanguageImplementation Committee (TOLICs) under the aegis of Ministry of Home Affairs Govt. ofIndia regarding best
Implementation of Official Language. Besides Company's efforts werealso appreciated during various inspections and discussions of the Hon'ble Committee ofParliament on Official Language and by Hindi Advisory Committee meetings on differentoccasions.
26.0 STAKEHOLDER ENGAGEMENT & CORPORATE IMAGE
The Company has been persistently working towards building a long termsustainable relationship with its stakeholders and it has always believed that reliableand timely communication is the hallmark of stakeholder engagement.
For internal stakeholders communication streams such as e-magazineslike Communique and Cue; display magazine LOUNGE and quarterly magazines published byregional offices regularly apprise the employees about the developments achievementsevents and also the viewpoints of management.
Regular interactions between management analysts and otherstakeholders have been instrumental in bringing transparent work culture in theorganization. Evocative films and documentaries made on specific projects (Srinagar LehTransmission System and IPDS works in Varanasi) captured and highlighted the hard work andproject management skills of the workforce of the Company.
The Company also regularly participates in various domestic andinternational exhibitions and during the year 2018-19 it participated in such conferencesincluding those in Myanmar Nigeria Russia and Abu Dhabi where it displayed itscompetencies and capabilities.
27.0 RIGHT TO INFORMATION
In compliance to 'Right to Information Act 2005' an appropriatemechanism is in place across the Company for promoting transparency and accountabilitywherein the Company has nominated Central Public Information Officer / AppellateAuthorities at its Corporate Office and Regional offices across the country to providerequired information under the provisions of Act.
Further for effective processing monitoring and management of RTIsand Appeals a web-based online RTI Portal has been developed in POWERGRID. The RTI portalis envisaged to facilitate timely reply of RTI/ Appeal to the applicant by real timemonitoring of RTIs / Appeals. Also the portal facilitates in generation of various RTIreports knowledge sharing with regard to replies latest RTI circulars and guidelinesetc.
In FY 2018-19 total 1501 nos. of RTI applications were received inthe Company and processed as per the Act. RTI Awareness Programs/ Workshops were organizedin different regions to apprise the employees with latest updates on the RTI Act 2005 andCentral Information Commission (CIC) decisions.
28.0 COMMITMENT TO TRANSPARENCY & VIGILANCE FUNCTION
Recognizing the importance of good governance the Company advocatesthe principles of Transparency Probity and Ethics in its management functioning. TheVigilance Department of the Company functions as an integral part of the management. Thedepartment ensures that best ethical practices are followed in the organization.
Emphasis on Preventive Vigilance
Although the Vigilance Department performs preventive proactive aswell as punitive functions to strengthen the organizational process and to minimize themalpractices in various systems and activities of the organization the emphasis is onpreventive and proactive vigilance. While preventive vigilance focuses on whether theright type of systems exist or need to be re-engineered proactive vigilance aims at theidentification of opportunities and in taking pro-active action against potential threats.
During FY19 47 surprise inspections and 59 Chief Technical Examiner(CTE) Type inspections/ process-on-line inspections were conducted. Pursuant to Vigilanceinspections and observations/recommendations many system improvements in variousfunctions of the organisations have been implemented.
Preventive Vigilance Workshops as part of Capacity Building
As part of Capacity Building Workshops on Preventive Vigilance wereconducted at the Corporate Centre as well as at various Regions of the Company. During theyear 23 Preventive Workshops were conducted for 690 non-vigilance personnel. ThePreventive Vigilance Workshops contain module of Ethics Management which enables theemployees to identify and deal with ethical dilemma.
In pursuance of the directions of Central Vigilance Commission theVigilance Awareness Week 2018 was observed by POWERGRID in all its offices across theCountry from 29.10.2018 to 03.11.2018 in line with the theme for this year "EradicateCorruption- Build a New India".
Vigilance Awareness Week was celebrated with great enthusiasm andfervour across all offices in India and abroad along with the management its employeesand their family members.
The Week commenced with the Integrity Pledge in Corporate Office andacross all offices of the Company and was extended to all the stakeholders. To sensitizethe next-gen to the ethical values a number of activities were organized in more than 350schools and colleges involving more than 40000 students.
Walkathons were conducted in around 200 establishments wherein theemployees along with their families participated holding placards on integrity honestyetc. Nukkad Natak with the theme of integrity and transparency were organized in prominentplaces involving more than 20000 people. 'Awareness Gram Sabhas' were conducted touchingmore than 15000 villagers for dissemination of awareness in Gram Panchayats to sensitisecitizens on the ill- effects of corruption. CANDOUR the official journal of POWERGRIDVigilance department was released during the Vigilance Awareness Week. In line with GoGreen Initiative of the Company the journal was released in digital form (e-CANDOUR).
29.0 DISASTER MANAGEMENT
The Company has always been at forefront when it comes to contributionin restoration of the power system as well as providing manpower and relief material inany area hit by natural calamity. In August 2018 when devastating floods caused majordamages in the State of Kerala and the distribution system of Kerala was affected theCompany provided assistance in restoration of system by setting up on - Site testingfacility and repair workshops for distribution transformer at Kochi Trichur andPathanamthitta. Restoration of 110 kV Neriamangalam- Kuthungal line was done by directlyconnecting to substation through stringing across the river. Replacement of medicalequipment in Govt. Hospital at Pampa- Sabarimala along with restoration of the Hospitalwas also carried out. In addition to this support was also extended by supplying commonrelief material in flood - affected districts.
The employees of the Company also supported in the rebuilding effortsthrough contribution to Chief Minister's Relief Fund and supporting the cleaning upactivities.
30.0 PROMOTION OF MICRO SMALL AND MEDIUM ENTERPRISES (MSMEs)
In line with Govt. of India directives for promotion of MSMEs theCompany has been complying with the guidelines. The Company has been registered on TradeReceivable e-Discounting System (TReDS) platforms of Receivable Exchange of India Limited(RXIL). Trade Receivables Discounting System (TReDS) is the scheme for facilitating thefinancing of trade receivables of MSMEs from corporate and other buyers includingGovernment Departments and Public Sector Undertakings (PSUs) through multiple financiers.The Company is continuously pursuing with its MSME suppliers to get themselves on-boardedon TReDS Platforms for which detailed guidelines have been provided in 'Tender' sectionof the Company's official website www.powergridindia.com .Suitable provisions have already been incorporated in the Bidding Documents of the companyfor procurements of various products produced and services rendered by Micro and SmallEnterprises in line with amendment to the Public Procurement Policy (Order 2012) inNovember 2018. The company has achieved the target of mandatory procurement of 25% out oftotal annual purchases of products and services rendered by Micro and Small Enterprises inline with Public Procurement Policy (Order 2012) read in conjunction with its amendment inNovember 2018. Total eligible value of annual procurement of goods produced and servicesrendered by MSEs (including MSEs owned by SC/ST and women entrepreneurs) for financialyear 2019-20 is projected to be in the range of Rs 1000 crore.
Further to encourage and develop Micro and Small manufacturers forsupply of innovative & quality products MSE vendor development programs wereconducted during the year at various locations across the Country wherein presentationswere made and discussions were held with numerous small manufacturers of our Country. Anumber of Micro Small & Medium Enterprises have been developed as sub-vendors andapproved for supply of components for various equipment.
31.0 MANAGEMENT DISCUSSION AND ANALYSIS
In addition to the issues stated in the Directors' Report some issueshave been brought out in report on Management Discussion and Analysis placed at Annexure-Iand forms part of the Financial Report.
32.0 BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report as stipulated under Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 isgiven in Annexure-II and forms part of the Annual Report.
33.0 CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
Pursuant to Section 134(3) (m) of Companies Act 2013 read with Rule 8of The Companies (Accounts) Rules 2014 information relating to 'Conversation of energytechnology absorption and foreign exchange earnings and outgo' is given in Annexure-IIIto this Report.
34.0 RISK MANAGEMENT POLICY
Information on Risk Management Framework is covered in the ManagementDiscussion and Analysis Report attached as Annexure-I of this Report.
35.0 INTERNAL FINANCIAL CONTROLS AND ADEQUACY
The Board has adopted policies and procedures for ensuring the orderlyand efficient conduct of its businesses including adherence to the Company's policiesthe safeguarding of its assets the prevention and detection of frauds error reportingmechanism the accuracy and completeness of the accounting records and the timelypreparation of reliable financial disclosures.
36.0 STATUTORY AUDITORS OF THE COMPANY
The Statutory Auditors of The 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 Auditorsfor the financial year 2018-19.
The Statutory Auditors have given an unqualified report. The report isself-explanatory and does not require any further comments by the Board.
37.0 COMPTROLLER AND AUDITOR GENERAL'S COMMENTS
Company has received 'NIL comments on the accounts for the year endedMarch 31 2019 by the Comptroller and Auditor General of India under Section 143(6) of theCompanies Act 2013. Copy of the same is attached as Annexure - IV to this Report.
38.0 SECRETARIAL AUDITOR
Kumar Naresh Sinha & Associates Practising Company Secretary hasconducted Secretarial Audit of the Company for the financial year ended March 31 2018.The Report forms part of this Annual Report (Annexure-V).
The Secretarial Auditor have reported that during the period underreview the Company has generally complied with the provisions of the Act RulesRegulations Guidelines Standards etc. mentioned above subject to the observation that:
"Provisions of Regulation 17(1) of Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 and Para3.1.4 of DPE Guidelines on Corporate Governance with regard to Composition of the Board ofDirectors have not been complied with during the financial year under review."
The explanation on the observation of Secretarial Auditors is asunder:
Your Company being a Government Company within the meaning of Section2(45) of Companies Act2013 the power to appoint Directors on the Board vests with theGovt. of India. Against the requirement of seven Independent Directors on your Company'sBoard during the year five Independent Directors were on the Board. Thus the Company hasnot been able to comply with provisions of Regulation 17(1) of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 and DPE Guidelines on Corporate Governancewith regard to Composition of the Board of Directors during the financial year underreview. The matter is being pursued with the Administrative Ministry for filling up ofexisting vacancies of Independent Directors.
39.0 COST AUDITORS OF THE COMPANY
The Company appointed M/s R. M. Bansal & Co. Cost Accountants andM/s Chandra Wadhwa & Co. Cost Accountants as Cost Auditors for the Financial Year2018-19 under Section 148 of the Companies Act 2013.
The Cost Audit Reports for the FY 2018-19 will be filed with the CostAudit Branch Ministry of Company Affairs before due date.
40.0 EXTRACT OF ANNUAL RETURN
In accordance with Section 134 (3) (a) of the Companies Act 2013 anextract of the Annual Return in the prescribed format in MGT-9 is given as Annexure VIof this Report.
41.0 COMPANY'S BOARD
The composition of Board of Directors underwent some changes during theyear 2018-19.
Shri I.S. Jha demitted the office of Chairman & Managing Directoron 21st January 2019 consequent on his appointment as Member Central ElectricityRegulatory Commission. The Board on its behalf & all the employees of the Companyplaced on record their deep sense of appreciation and gratitude for his valuablecontribution and commitment to take the Company to new heights.
The Ministry of Power vide Office Order dt. 21.01.2019 entrusted theadditional charge of post of Chairman & Managing Director (CMD) to Shri Ravi P. SinghDirector (Personnel) for period of three months. The Ministry of Power vide Office Orderdt. 13.06.2019 has further extended tenure of Shri Ravi P. Singh as CMD for a period ofsix months w.e.f. 21.04.2019 or till the appointment of a regular incumbent or untilfurther orders whichever is the earliest.
Shri Prabhakar Singh Director (Projects) also demitted the office on30th June 2018 upon attaining the age of superannuation. The Board acknowledges thecontribution of Shri Prabhakar Singh in various roles he handled during his tenure. Mrs.Seema Gupta Director(Operations) was given the additional charge of the post of Director(Projects) vide Office Order of MoP dt. 09.07.2018 for a period of three months. Shri R.K. Chauhan assumed the charge of Director (Projects) with effect from 23rd August 2018.
Ms. Bharati Joint Secretary MoP ceased to be Govt. Nominee Directoron 13.02.2019. Shri Vivek Kumar Dewangan JS & FA MoP who was on the Board of theCompany since 26.04.2018 ceased to be Govt. Nominee Director on 07.06.2019. The Boardplaces on record its appreciation for the valuable contribution guidance & supportgiven by Ms. Bharati and Shri Dewangan.
Shri Ghanshyam Prasad Chief Engineer Ministry of Power was appointedas Govt. Nominee Director on 01.03.2019.
Shri Sunil Kumar Sharma and Mrs. A. R. Mahalakshmi were appointed asIndependent Directors w.e.f. 23.07.2018 and 26.07.2018 respectively vide Ministry ofPower Office Order dt. 17.07.2018.
Shri J. I. Patel Independent Director appointed w.e.f. 17.11.2015 fora period of three years vide GOI Order dated 17.11.2015. Shri Patel was reappointed forfurther period of one year from the completion of his earlier tenure.
Shri M. N. Venkatesan appointed as an Independent Director w.e.f.11.07.2019 for a period of three years vide GOI Order dated 11.07.2019 Shri AnuragAgarwal AS&FA Ministry of Power appointed as a Govt. Nominee Director on the Boardof POWERGRID w.e.f. 27.06.2019 ceased to be Director on 12.07.2019.
In accordance with the provisions of the Companies Act and the Articlesof Association of the Company the resolutions w.r.t. reappointment of Shri Ravi P. Singh(DIN: 05240974) as Director liable to retire by rotation; appointment of Shri Rajeev KumarChauhan (DIN: 02018931) as Director; reappointment of Shri Jagdish Ishwarbhai Patel (DIN:02291361) & appointment of Shri M. N. Venkatesan (DIN: 02126022) as IndependentDirectors have been included in the Notice of Annual General Meeting.
42.0 NUMBER OF MEETINGS OF THE BOARD
Board of Directors met 13 times during the financial year 2018-19.Details regarding dates and attendance of the Board meetings are provided in the Report onCorporate Governance which forms part of this Report.
43.0 COMMITTEES OF THE BOARD
The Company has Audit Committee CSR Committee Nomination andRemuneration Committee Stakeholders' Relationship Committee and some other Committeesfor operational convenience of the Company. The composition and scope of the aforesaidCommittees are provided in the Report on Corporate Governance.
Report on the Corporate Governance (Annexure-VII) together with theCertificate thereon (Annexure-VIII) are attached to this Report.
44.0 DECLARATION BY INDEPENDENT DIRECTORS
During the year all the Independent Directors have met therequirements specified under Section 149 (6) of the Companies Act 2013 for holding theposition of 'Independent Director' and necessary declaration from each IndependentDirector under Section 149 (7) was received.
45.0 PERFORMANCE EVALUATION OF DIRECTORS
The Ministry of Corporate Affairs (MCA) vide Notification dated 5thJune 2015 has exempted Government Companies from the provisions of Section 178 (2) of theCompanies Act 2013 (the Act) which provides for manner of evaluation of performance ofBoard its Committees and Directors by Nomination and Remuneration Committee. Therequirement of mentioning a statement on the manner of formal evaluation of performance ofdirectors in Boards' Report as per section 134(3) (p) of the Act has also been done awaywith for Government Companies where the directors are evaluated by the Ministry orDepartment of the Central Government which is administratively in charge of the companyas per its own evaluation methodology. Further MCA vide its notification dated 05th July2017 has made an amendment in the Schedule IV of the Act whereby it has exemptedGovernment Companies from complying with the requirement of performance evaluation by theIndependent Directors of non-independent directors and Chairman and performance evaluationof the Independent Directors by the Board if the concerned departments or ministries havespecified these requirements.
The Department of Public Enterprises (DPE) has laid down a mechanismfor performance appraisal of all Functional Directors. DPE has also initiated evaluationof Independent Directors.
The Company enters into Memorandum of Understanding (MoU) with Ministryof Power (MoP) every year wherein Company is evaluated on various financial andnon-financial parameters. The performance of the Company & Board of Directors isevaluated by the Department of Public Enterprises in terms of MoU entered into with MoP.
In terms of Regulation 25 of SEBI LODR 2015 the performance of theBoard as a whole and non-independent directors including Chairman & Managing Directorwere evaluated by the Independent Directors in a separate Meeting held by them on 14thMarch 2019..
46.0 POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company has framed a policy on the remuneration of the DirectorsKMPs and employees as required under the provisions of Section 178 of the Act. The saidpolicy is available on our website at https://www.powergridindia.com/sites/default/files/Investor_Relation/ Reports_Filings/Code_of_Conduct_Policies/04_Remuneration%20Policy.pdf
47.0 PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Loans Guarantees or investments under Section 186 of the CompaniesAct 2013 form part of the Notes to Financial Statements (Note No. 58) provided in thisAnnual Report.
48.0 PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Particulars of contracts or arrangements with related parties referredto in Section 188 (1) of the Companies Act 2013 in the prescribed Form AOC-2 are givenas Annexure IX of the Directors' Report. Further attention of the members is drawn onNote No. 58 of the Financial Statement which sets out related party disclosures.
49.0 SUBSIDIARIES AND JOINT VENTURES
As on 31st March 2018 The Company has 13 subsidiaries and 13 JointVentures Companies.
A statement containing salient features of the financial statements ofour Subsidiaries and Joint Ventures are covered in the Management Discussion and Analysisand also annexed in the prescribed format AOC-1 as Annexure X.
50.0 DIVIDEND DISTRIBUTION POLICY
As per regulation 43A of the SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 (the Listing Regulations) the top 500 listed companiesshall formulate a dividend distribution policy. Accordingly the policy was adopted to setout the parameters and circumstance that will be taken into account by the Board indetermining the distribution of dividend to its shareholders and/or retained profitsearned by the Company. The policy is also available on the Company's website https://www.powergridindia.com/sites/default/files/ Dividend%20Distribution%20Policy.pdf
51.0 SIGNIFICANT MATERIAL ORDERS
There are no significant and material orders passed by the Regulatorsor Courts or tribunal impacting the going concern status and Company's operations infuture.
52.0 DIRECTORS' RESPONSIBILITY STATEMENT
As required u/s 134(3)(c) & 134(5) of the Companies Act 2013 TheDirectors confirm that:
(a) i n the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures;
(b) the Directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;
(c) the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(d) the Directors had prepared the annual accounts on a going concernbasis;
(e) the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively;
(f) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
53.0 ACCOLADES & AWARDS
During FY 2018-19 the Company has been conferred following importantawards/ accolades:
Fastest Growing Electric Utility in Asia- for the fifthsuccessive year since 2014 based on Platts Top 250 Global Energy Company Rankings.Globally the Company was positioned as the 3rd Fastest Growing Electric Utility;
FBIP Award 2019 for Best Performing Power Transmission Utilityfor its outstanding contribution to the power transmission sector in the country;
CBIP Special Jury Award for Innovation Excellence in PowerTransmission;
Flatinum Prize (1st prize) in Power Sector Categoryat the 6th FICCI Quality Systems Excellence Award;
One of the Top 25 Most Innovative Companies in India at the 5thCII Industrial Innovation Awards 2018 - only power sector CPSE in the list;
Good Corporate Citizen Award category at PHD Annual Awards forExcellence 2018;
Owards for Overall Best Overall Navratna Best Navratna inServices and Electricity: Power Transmission categories at Dun & Bradstreet PSU Awards2018;
0018 EEI Asia-Oceania Index Award at EEI (Edison ElectricInstitute) Global Electrification Forum for Highest Total Shareholder Returns in GoldLarge Capitalization category;
OML Munjal Award for Business Excellence through Leadership andDevelopment for 2018 in PSU Services category;
Ohird Prize in Public Sector Enterprises category at theNational Competition for Innovative Training Practices (2017-18) by Indian Society forTraining & Development;
0 ndia Concord Summit (ICS) 2018 PSU Award for Best HR Practicesby a PSU-Navratna;
FT2GOOD rating at the second edition of ET2GOOD 4GOOD Ratingsconferral ceremony for All-Round Excellence in CSR for 2016-17 & 2017-18;
Gold Certificate for Best CSR Practice at the Haryana CSR Summit2018 by Govt. of Haryana;
0 old Medal for Corporate Social Responsibility presented by theHon'ble Governor of Telangana & Andhra Pradesh and President of the Indian Red CrossSociety;
Best CEO Award to CMD POWERGRID in PSU category at BusinessToday Best CEO Awards
Felicitation of CMD POWERGRID at the PSE Excellence Awards 2018by Indian Chamber of Commerce;
0 rs. Seema Gupta Director (Operations) awarded BestContribution Award at the ITOMS International Conference at Kuala Lampur Malaysia;
Winner in the Power category at Dun & Bradstreet CorporateAwards 2018 and in Power Transmission category at Dun & Bradstreet Infra Awards 2018;
Strategic Performance and Consistent Growth Award at the 6thPSU Awards by Governance Now.
The Board of Directors would like to express their deep sense ofappreciation for the guidance and co-operation received from Government of Indiaparticularly Ministry of Power Ministry of Finance Ministry of Home Affairs Ministry ofExternal Affairs Ministry of Statistics and Programme Implementation Ministry ofEnvironment Forests & Climate Change Ministry of Railways Ministry of CorporateAffairs Central Electricity Regulatory Commission Appellate Tribunal for ElectricityCentral Electricity Authority NITI Aayog Department of Public Enterprises RegionalPower Committees Office of the Comptroller and Auditor general of India and otherconcerned Govt. departments/ agencies/statutory authorities at the Central and State levelwithout whose active support the achievements of the Corporation during the year underreview would not have been possible.
The Board also conveys its gratitude to your Company's valuedcustomers State Governments and State power utilities and other clients who have awardedvarious consulting works and reposed faith in Company's capability to handle them. TheBoard also appreciates the contribution of Contractors Vendors and Consultants for thesupport and co-operation your Company has been receiving towards successful implementationof various projects by the Company.
The Directors also acknowledge the valuable suggestions and guidancereceived from the Statutory Auditors during the audit of accounts of the Company for theyear under review.
The Board also conveys its sincere thanks to National and Internationalfinancial institutions multilateral Financial Institutions domestic & internationalCredit rating agencies for their assistance continued trust and confidence reposed in theCompany.
On behalf of Board of Directors I would also like to thank theExecutive team for their strong leadership the employee unions for their support and ouremployees at all levels for their commitment and dedicated efforts which have enabled theCompany to continue to be the World's premier transmission utility.
| ||For and on behalf of the Board of Directors |
|Place: New Delhi ||(Ravi P.Singh) Director (Personnel) & CMD |
|Date: 19th July 2019 ||DIN:05240974 |