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Dear Shareholders, Ladies & Gentlemen,
I am delighted to present on behalf of the Board of Directors, the 26th Annual Report on the performance of your Company during the financial year ending March 31, 2015 together with Audited Financial Statement, Auditors' Report and Review of the Accounts by the Comptroller and Auditor General of India for the review period.
Financial year 2014–15 marked the completion of 25 glorious years of your Company. In this 'Silver Jubilee' year, it maintained its growth momentum and saw a number of splendid achievements on all fronts.
In the area of project execution, your Company recorded a capitalization of Rs.21,760 Crore, which is the highest ever in a single financial year of its history. The Company's meritorious performance and continuous thrust on commissioning of transmission assets has resulted in higher revenue & earnings, thereby added value for its stakeholders. The successful addition of transmission assets has facilitated seamless power transfer in the Country. A strong and highly integrated inter–State transmission system has enabled development of the vibrant power market and provided momentum to growth of the power sector.
Your Company commenced implementation of Green Energy Corridors across the Country, giving boost to renewable generation by facilitating its integration with the National Grid, displaying the Company's efforts towards realization of sustainable and inclusive growth. In the area of operational excellence, 'National Transmission Asset Management Centre (NTAMC)' and 'Enterprise Resource Planning (ERP)' have been operationalized. These state–of–the–art technological advances have enabled increased transparency & efficiency in asset management and facilitated remote visibility & operation of POWERGRID's transmission system established across the Country.
Your Company has been given 'Navratna' status by Govt. of India and it continued to display "Excellent" performance by exceeding most of the targets under the 'Memorandum of Understanding (MoU) signed with Ministry of Power (MoP), Government of India for FY 2014–15'. Based on its performance against the MoU targets, the Company is poised to be rated 'Excellent' for the year 2014–15, thereby maintaining the record of the getting 'Excellent' rating year after year over two decades since signing of its first MoU.
Major achievements by your Company on various fronts are mentioned below:
? Capital investment of Rs. 22,456 Crore
? Assets capitalization of about Rs. 21,760 Crore.
? Commissioned new transmission assets comprising about 8,830 circuit kilometre (ckm) of Extra High Voltage (EHV) transmission lines, 8 new sub–stations and 25,786 Mega Volt Ampere (MVA) transformation capacity.
? Investment approval accorded for 33 new transmission projects worth more than Rs. 25,500 Crore.
? Maintained transmission system availability at 99.87% with number of trippings per line limited at 0.53 for the year.
? During the year, a number of large projects were commissioned including important elements, viz. 765 kV D/C Wardha–Aurangabad lines 1 & 2, 765 kV D/C Raipur–Wardha & 765kV Champa–Raipur lines for evacuation of power from IPP Projects in Chhattisgarh, 765 kV D/C Nellore–Kurnool, 765kV D/C Kurnool–Thiruvalam for Southern Region Grid Strengthening, 765kV 2xS/C Angul–Jharsuguda 765kV D/C Jharsuguda– Dharamjaygarh and 765kV S/C Satna–Gwalior–II lines.
? During the year, inter–regional power transfer capacity of 4,200 MW has been added by the Company. The cumulative inter–regional power transfer capacity of the National Grid stood at about 46,450 MW at the end of March, 2015.
As on April 1, 2015, the transmission assets owned and operated by your Company stand 115,637 ckm. of Extra High Voltage (EHV) transmission lines and 192 nos. EHVAC & High Voltage Direct Current (HVDC) sub–stations with 231,709 MVA transformation capacity.
Managing such widely spread assets across the Country has been an extraordinary task involving meticulous planning and observing stringent procedures. 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 damage due to natural calamities or otherwise, Emergency Restoration System (ERS) is being used for restoration of damaged transmission towers in shortest possible time. Further, POWERGRID has taken initiative for development of mobile sub–station (truck mounted) for emergency restoration in case of eventuality.
In spite of the challenging conditions, during the FY 2014–15, your Company maintained availability of the transmission network at 99.87% which is comparable to international standards. The number of tripping per line (unplanned) stood at 0.53 for the year, indicating high reliability of POWERGRID transmission system. This performance could be maintained through training, deployment of advanced techniques including use of helicopters for live line aerial patrolling, hot line maintenance upto 765 kV voltage level, equipment conditioning monitoring including dynamic testing, thermo–vision scanning, frequency response analysis of the transformers and reactor's etc.
With rapid increase in asset base of your Company, urgent need was felt to provide expert handling to the equipment spread all across the Country. In view of this, National Transmission Asset Management Centre (NTAMC) has been established for remote operation and monitoring of the substations, which is manned by experts on 24X7 basis to provide expert handling to system & equipment. The project constitutes of three distinct areas such as SCADA (Supervisory Control and Data Acquisition System), for gathering of electrical data & control of the switchgear of sub–station, RAS (Remote Accessibility System) and VMS (Video Monitoring System) which can be remotely controlled from the NTAMC and which is used to keep a close watch on the substation switch yard & its premises.
At the end of FY 2014–15, 75 substations are being operated through remote operation including 44 substations without operating staff. MSH (Maintenance Service Hub) facility has been established where specialised group of experts of all areas like control & protection, switchyard equipment, transformer & reactor are available to carry out repair/overhauling of equipment as & when required.
International Benchmarking of POWERGRID O&M practices
In order to improve further, POWERGRID O&M practices are regularly being benchmarked internationally through "International Transmission Operation and Maintenance Study" (ITOMS) carried out by UMS, USA. In ITOMS studies/ benchmarking, about 28 large Power Transmission Utilities across the Globe participate and their performances are evaluated and benchmarked. POWERGRID carried out benchmarking of all its 9 Regions with each other and with other member Utilities of ITOMS to identify areas of improvement. As per ITOMS benchmarking, your Company has been maintaining high performance in its sub–stations & transmission lines operations.
Being a sound customer centric organisation, your Company has been contributing in restoration of power in areas hit by natural calamities in the Country. This was evident when the State of Jammu & Kashmir (J&K) saw the devastating flood in its history of last 60 years, disrupting the electricity supply in most of the areas of the State. For quick restoration of power in the State, your Company took charge as Nodal Agency to assist J&K Power Department by taking immediate measures such as deployment of manpower, tools & tackles for restoration of flood affected distribution system, diversion of the material to J&K from far–flung States, deployment of Emergency Restoration System (ERS), quick procurement of Distribution Transformers, etc.
Yet again, when unseasonal torrential rainfall caused flood like situation in the State of J&K, landslides were reported at various places and tower collapse was reported in 132 kV Salal–Jammu transmission line. Immediate dispatch of ERS was arranged and erection carried out in a very short time.
Similarly in Andhra Pradesh in October, 2014, after cyclone 'HUDHUD', support was provided to restore power in the affected areas of three (3) districts, namely Vishakhapatnam, Srikakulam & Vijayanagaram. Wide–spread damage in these three districts had taken place on account of tripping of lines connecting to the area from Khammam, Vijayawada, Vemagiri, in AP and 400kV in feed from Jeypore ( Odisha). Approximately, 1000MW load had crashed due to failure of downstream sub–transmission & distribution network of AP Transco & Discoms in above three districts. Besides, towers collapse was reported in a number of 400KV & 220KV transmission lines in the area and number of bay equipment at 400kV Gazuwaka (POWERGRID), Simhadri (NTPC) & Kalpaka (APTRANSCO) were also damaged. A team comprising senior officials was sent to site immediately to restore the damaged system. Restoration of distribution system was also carried out.
Your Company's actions have been lauded by everyone including media and Government, which has further boosted the determination to be ready to face such calamities.
Your Company has been putting continuous thrust on commissioning of its transmission projects to extract maximum commercial benefits through its Integrated Project Management and Control System (IPMCS).
On project implementation front, your Company has commissioned about 8,830 ckm of EHV (Extra High Voltage) transmission lines and 25,786 MVA transformation capacity with 8 new sub–stations during the year, which includes a number of large projects, including important elements such as 765 kV D/C Wardha–Aurangabad lines 1 & 2, 765 kV D/C Raipur–Wardha & 765kV Champa–Raipur lines for evacuation of power from IPP Projects in Chhattisgarh, 765 kV D/C Nellore–Kurnool, 765kV D/C Kurnool–Thiruvalam for Southern Region Grid Strengthening, 765kV S/C Satna–Gwalior–II & 765kV 2xS/C Angul–Jharsuguda transmission lines. Also, through commissioning of 765kV D/C Jharsuguda– Dharamjaygarh line, 4,200 MW inter–regional power transfer capacity has been added by your Company.
Also, your company has provided active support in the completion of critical 765kV Raichur–Solapur circuit–2 transmission line, which was being implemented through Private Sector participation.
In the FY 2014–15, your Company continued to show exceptional performance in all its business areas, enhancing the value for the shareholders. Your Company has achieved turnover of Rs 17,780 Crore and Profit after Tax (PAT) of Rs 4,979 Crore as compared to Rs 15,721 Crore and Rs 4,497 Crore respectively during FY 2013–14 on standalone basis.
On consolidated basis, PAT crossed the Rs 5000 crore mark, registering at Rs 5046 crore in FY 2014–15. The turnover on consolidated basis increased to Rs 18233 crore from Rs 16146 crore in FY 2013–14.
Capital Investment and Fund Mobilization
In line with its increased target of Rs 1,10,000 Crore from Rs 1,00,000 crore capital expenditure target for the XII Plan, Capital investment (CAPEX) of Rs 22,456 Crore has been made during the year 2014–15 and cumulatively Rs 65,651 Crore CAPEX has been achieved. For the CAPEX of FY 201415, Rs 13,014 Crore were mobilised through private placement of bonds & term loan, Rs 3,070 Crore were mobilised through External Commercial Borrowings (ECB)/Suppler credit and balance Rs 6372 crore was met through internal resources generated & FPO proceeds.
For FY 2014–15, your Company has proposed a final dividend of Rs 1.31 per share in addition to Rs0.69 per share of interim dividend paid in March, 2015. 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 1,046 Crore (including an interim dividend of Rs 361 Crore).
Particulars of loans, Guarantees or investments.
Loans, Guarantees or investments under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual report.
Particulars of contracts or arrangements with related parties
Particulars of contracts or arrangements with related parties referred to in Section 188 (1) of the Companies Act, 2013, in the prescribed Form AOC–2, are given as Annexure Rs of the Directors' Report. Further, attention of the members is drawn on Note No. 2.47 of the Financial Statement which sets out related party disclosure.
Transfer to Reserves
Your company has proposed to transfer Rs 2400.00 crore to the general reserve and an amount Rs 1763.00 crore to other reserves.
Statement containing salient features of financial statements of subsidiaries, associate and Joint Ventures Companies
Statement containing salient features of financial statements of subsidiaries, associate and Joint Ventures Companies as required under Section 129 (3) of the Companies Act, 2013, in the prescribed Form AOC–1, is given as Annexure XI to the Director's Report.
Consolidated Financial Statement
As per the requirements of the Companies Act, 2013, the Audited Consolidated Financial Statement is provided in the Annual Report.
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.
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 entrusted the responsibility for billing, collection & disbursement of transmission charges bills on behalf of all Inter–State Transmission System (ISTS) Licensees. In this regard, bills on transmission charges are prepared, raised and uploaded on the website portal for Designated ISTS Customers (DICs), including the payment details by the customers.
Your Company is fulfilling the assigned responsibilities effectively and displayed excellent collection efficiency of 97%.
PERFORMANCE AGAINST COMPETITION
Your Company is able to do well in spite of stiff competition and displayed impressive performance under Tariff Based Competitive Bidding (TBCB). During the year FY 2014–15, your Company won three out of four projects put up for bidding under the TBCB route, namely Transmission System Strengthening associated with Vindhyachal–V, Transmission System associated with Gadarwara STPS (2X800 MW) of NTPC Part–A and Transmission System associated with Gadarwara STPS (2X800 MW) of NTPC Part–B. As on 31.3.2015, your Company has won total eight (8) projects through TBCB since its participation.
DEVELOPMENT OF NATIONAL GRID
A strong National Grid enables seamless power flow across the regions and optimum utilization of resources across the Country. Working in this direction, your Company successfully achieved 'One Nation–One Grid–One Frequency' in the year 2013–14. During the year under consideration, the Company commissioned 765kV D/c Jharsuguda–Dharamjaygarh transmission line, increasing the power transfer capacity between Eastern Region and Western Region by 4,200MW. As a result, the total inter–regional power transfer capacity of the National Grid stands at 46,450 MW as on March 31, 2015. Also to increase 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 about 72,250 MW.
GRID MANAGEMENT AND OPEN ACCESS
Power System Operation Corporation Limited (POSOCO), a fully owned subsidiary of your Company, has been managing the national grid successfully. POSOCO, through National Load Despatch Centre (NLDC) and Regional Load Despatch Centres (RLDCs) has been facilitating transfer of power through bilateral and multi–lateral transactions and is playing important role for creating vibrant electricity market in the Country. 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.
During FY 2014–15, to meet the demands in the Country, about 84.36 Billion Units (BUs) of inter–regional energy transfer was facilitated, across the nation using pan–India inter–regional transmission links.
Under Short Term Open Access (STOA), 12,106 nos. of bilateral transactions and 25,942 nos. of collective transaction were approved, allowing energy transfer of 52.55 BUs through bilateral transactions and 28.38 BUs through collective transactions, totaling up to 38,048 approved transactions and 80.93 BUs of approved energy in the FY 2014–15.
Further, 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. Out of 209 Connectivity applications for about 2,10,000 MW capacity received, Connectivity was granted to 90 numbers. of eligible applications of 77,600 MW capacity. As on March 31, 2015, the Company granted LTA to 201 applications of 152,000 MW capacity. Also based on the transmission margins availability, the MTOA was granted to 76 numbers. of applications of 5,100 MW capacity.
With the present state of economy & financial issues, the manufacturers are facing tough competition from indigenous as well as international manufacturers. To ensure quality while procuring goods at competitive prices, various quality assurance improvement measures have been initiated and implemented to get better quality products. Process/surveillance audits were carried out to create win–win partnership with suppliers and to get better quality products at low costs.
With vast geographical spread of work & large number of high capacity transmission lines and sub–stations with state–of–Art technology under implementation, capacity building is one of the major challenges. In this direction, your Company has established its 'POWERGRID Academy of Leadership' at Manesar for capacity building of its staff as well as for power sector–domestic & international. Further, to have self–reliance of indigenous development of High technology / critical products, your Company has mandated its international suppliers to set up manufacturing facilities in India in the field of 765kV Transformer/Reactors, 800kV HVDC equipment, GIS & major equipment, etc.
Your Company continues to do process audits in the manufacturing units of various vendors, sub–vendors & even further below in supply chain to achieve the target of zero product inspection. Activities like calibration of key testing instruments & their validation were undertaken on topmost priority so as to improve quality systems at the manufacturer's works. Quality audits at sites were also undertaken during the year for instant feedback and to take appropriate corrective action apart from web based feedback system.
In order to ensure quality of product with required technical specifications and to meet project completion target, a number of activities have been undertaken by your Company like defining proper processes for quality manufacturing, quick approval of quality plan of various items and smart inspection of materials. For on time issue of CIP (Customer Inspection Points) /MICC (Material Inspection Clearance Certificate), testing and manufacturing of various critical items, continuous follow up with manufacturers were undertaken.
Another milestone was achieved during the year when two of the Regional Offices of POWERGRID, i.e. Nagpur (Western Region–I) & Shillong (North–East Region) were awarded certification for their Energy Management Systems under ISO 50001.
Your Company developed and maintained systems and procedures aligned with integrated management system comprising ISO 9001: 2008 for Quality Management System, ISO 14001: 2004 for Environmental Management System and OHSAS 18001: 2007 for Occupational Health and Safety Management System. The certification has been maintained upon rigorous audits by BSI Management Systems.
Your company gives priority to research and development activities with potential for environmental, social and national interests by incorporating advanced technology solutions in the field of power system. In this direction, your company is setting up State–of–the–Art research and testing laboratories POWERGRID Advanced Research and Technology Centre at Manesar in the field of transmission, renewable integration, power system simulation, material science, advanced equipment diagnostics, smart grid, energy efficiency, control and automation, engineering design etc. This R&D centre shall cater to the research needs of POWERGRID and the country as a whole as well as capacity building of various stakeholders in this field.
The focus areas in development of transmission system across the country and trans–country as well are conserving the Right of Way (RoW), minimizing impact on natural resources, indigenization of technology and maintaining high network availability. To address these aspects, your company has developed new type of tower design including multi circuit type, digital substation through process bus architecture, air core reactor suitable for HVDC terminal etc.
Further, your Company as a part of its technology development process is carrying out a demonstration project on High Temperature Superconductor (HTS) cable system at 220kV voltage level. Being a technology in its development and demonstration stage worldwide, which is known for bulk power transmission with negligible losses on reduced right–of–way, the first–hand experience gained from this R&D project will boost your company's thrust towards adoption of cutting edge technologies for safe, secure and reliable operation of grid. The operational experience and maintenance know–how gained from the project will pave way for future deployment of this state–of–the art technology in Indian grid.
Your company is considering a pilot project on Fault Current Limiter. The search for a solution to address the issue of rising fault current levels in Indian grid and at the same time which doesn't affect the reliable operation of the grid leads your company to advanced fault current limiters. These Fault Current Limiters offer a promising solution to tackle the rising fault levels with its unique features in comparison to conventional methods for fault current limitation viz. bus splitting, series reactors etc.
Towards maintaining high network availability by maintaining proper insulation level of EHV transmission line, pollution measurements on pan India basis is being carried out to create base line pollution mapping data facilitating review of EHV lines insulation requirement which is first of its kind in the country.
SMART GRID TECHNOLOGY
Your company has pioneered for development of Smart Grid leading towards Smart City in the country for bringing efficiency encompassing entire power supply value chain.
Your company is implementing one of the world's largest Wide Area Measurement System(WAMS) through deployment of State–of–the–Art Phasor Measurement Units(PMU) as part of Smart transmission. It covers deployment of PMUs at all 400kV and above substations at State and Central level as well as generation switchyards of 220kV & above across the country as part of Unified Real Time Dynamic State Measurement(URTDSM) scheme. Real time measured system information using fibre optic communication network are to be integrated at State Load Despatch Centres(SLDC), Regional Load Despatch Centres (RLDC) and National Load Despatch Centre(NLDC) for improved visualization and enhanced situational awareness of system operators and planners. Analytics using above data are being developed in association with IIT, Bombay to enhance the efficiency & security of the overall grid management.
Towards smart distribution, after demonstration of various Smart Grid attributes at Puducherry in a comprehensive manner through open collaboration, your company is also extending services for implementation of Smart Grid projects in various states like Himachal Pradesh, Punjab, West Bengal, Tripura, Chhattisgarh, Rajasthan, Haryana, Karnataka and Puducherry. Your company has also submitted project report to Govt. of Haryana on development of smart grid leading towards smart city Gurgaon to provide 24x7 quality power including catering growing demand and make Gurgaon Diesel generator set free city.
Towards facilitating increasing penetration of renewables in the overall generation capacity portfolio, your company has pioneered in implementation of battery energy storage systems of about 1 MW capacity as pilot project in Puducherry to evaluate different battery and its control technologies for proof of concept, areas of application, policy advocacy etc. in Indian context for large scale deployment.
Quality of power is one of the major concerns now in India for performance improvement of process and maintaining health of electrical network equipment. Recognizing its importance, your company has taken initiative to measure various power quality parameters at different cities on pan India at all voltage level to create base line data repository for identification of mitigating measures and application of technological solutions. Already measurements at more than 150 cities/towns completed across the country.
Your company is indigenously developing/developed smart products like smart meter, data concentrator unit, home energy management system, micro grid controller, active power filter etc. for varied applications and applied for patent.
To bring awareness about Smart Grid technologies and its demonstration in a holistic manner, your company is establishing a Smart Grid Knowledge Center equipped with working model of various technologies at POWERGRID Advance Research and Technology Centre (PART) at Manesar. This shall facilitate dissemination of knowledge on smart grid technologies in a learning environment as well as capacity building of utility/consumer and other stakeholders.
Your company also operates Secretariat of the prestigious "India Smart Grid Task Force(ISGTF)" of Ministry of Power, Govt. of India for activities related to Smart Grid.
GRID INTEGRATION OF RENEWABLE ENERGY SOURCES
Integration of Renewable Energy(RE) sources into the grid is one of the top priority of Govt. of India towards energy security and environmental sustainability. In this direction, your company has evolved Green Energy Corridors comprising intra state and inter state transmission infrastructure to facilitate integration of envisaged renewable capacity addition of about 33 GW in 12th plan in RE resource rich states at an estimated cost of about ofthe 38,000 cr. Inter State Transmission System(ISTS) as part of Green Energy Corridors is being implemented by your company. Further, your company has also evolved transmission schemes for integration of proposed ultra mega solar power parks of about 22,000MW in various states as part of Green Energy Corridors–II. Govt. of India also assigned your company to develop Inter State transmission system for nine(9) solar parks of capacity about 10,000 MW in seven(7) states. Implementation of transmission scheme for one(1) solar park in Andhra Pradesh is under progress.
Energy conservation through energy efficiency measures plays an important role to address energy saving aspect towards sustainability. Your company initiated activities in identification of energy saving opportunities through carrying out energy audits of various industries including Integrated Steel Plant at Bokaro & Bhilai, SAIL, institutions and other commercial establishments. Your company has more than 70 Bureau of Energy Efficiency (BEE) certified Energy Auditors/Managers. So far through energy audits, energy saving potential equivalent to 4750 Mil with avoidable generation of about 900MW has been identified besides reduction in 002 emission. Towards demand side management, your company replaced 1337 old agricultural pumps with energy efficient pumps in Mandya district, Karnataka resulted into energy saving more than 35% with about 3MW load reduction.
Your company is also a BEE Grade–I Energy Service Company (ESCO) to implement energy efficiency solutions. In–house designed Waste heat recovery systems for steel re–rolling mills and implemented at various industries.
Your Company has released a study report"Negawatt Makes–a–Watt" i.e, Energy efficiency opportunities in India covering eighteen(18) energy intensive sectors in the country. Savings more than 20% in electrical energy, 12% in Coal and 7% in oil can be achieved per annum at an investment of ofthe 12 lakh crore over a period of 5 years.
'POWERTEL' – TELECOM SERVICES ON TRANSMISSION INFRASTUCTURE
Your Company is leveraging its Country wide transmission infrastructure with its diversified business portfolio of Telecom under the brand name 'POWERTEL'. During the FY 2014–15, total network coverage has been increased by 12% to 33,241 kms from the earlier reach of 29,641 kms. Number of Points of Presence (PoPs) locations have been increased to 352 from the earlier coverage of 317 PoPs and 44 new customers were added, resulting in increase in total customer base to 187 numbers and a growth of 25% over previous year.
Telecom Backbone Availability for the year 2014–15 was 99.97% better than in the previous year. Total Revenue (including revenue from internal sources) from Telecom Business for FY 2014–15 was ofthe 300.95 Crore as against ofthe 288.21 Crore in the previous year.
Your Company has signed an agreement with Bharat Sanchar Nigam Limited (BSNL) to improve the telecommunication connectivity with the North–Eastern States including Sikkim. It envisages the provisioning of bandwidth on optical fibre media laid over existing high tension electric transmission network of your Company. After completion of the proposed connectivity, the reliability of the telecom services shall improve substantially in North–Eastern region including Sikkim. Your Company has successfully completed the prestigious NKN (National Knowledge Network) project assigned by Govt. of India, which connects all knowledge centres across the Country such as Indian Institutes of Technology (IITs), Indian Institute of Sciences (IISCs) etc., on a high speed connectivity.
National Optical Fibre Network (NOFN)
As a part of Government of India plan to connect 250,000 Gram Panchayats (GP) in the Country by utilizing existing fibres of PSUs (BSNL, Railtel and 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 States viz. Telangana, Himachal Pradesh, Jharkhand & Odisha by Bharat Broadband Network Ltd (BBNL). Survey work has been completed in all states. Awards have been placed progressively for supply of duct & accessories and trenching & laying work. 977 nos of Gram Panchayats have been connected with fibre till 31st March 2015.
BUSINESS DEVELOPMENT & CONSULTANCY
Your Company, one among the largest power transmission utility in the world, has developed the expertise in its core areas such as power transmission, sub–transmission, load dispatch and communications (LD&C) etc.
Leveraging its capacity and experience, Consulting services have been provided to a number of customers in India and worldwide. During FY 2014–15, forty (40) Consultancy assignments were secured. During the fiscal 2015, the Company achieved Consultancy Revenue of Rs. 381 Crore from Consulting services.
Keeping its commitment to assist State Utilities for an inclusive, healthy and sustainable growth, your Company undertook a number of assignments on behalf of Utilities and other clients covering areas of Transmission, Sub–transmission, Distribution, Load Dispatch & Telecommunication, Smart Grid application, Energy Efficiency, HR Management and Development etc. Major Assignments include Comprehensive Scheme for Strengthening of Transmission & Distribution System in Arunachal Pradesh & Sikkim (Estimated project cost of Rs. 4209 Crore), Strengthening of 400 kV & 220 kV Transmission System of Delhi Transco Ltd (Estimated project cost of Rs. 932 Crore) and Srinagar – Leh Transmission System (Estimated project Cost of Rs. 1788.41 Crore).
In order to expand consultancy market even farther, exploratory forays are being persistently charted out in Oil sector, Railways, Industrial Corridors, etc. which are likely to bear fruit in near future.
Some of the engagements in green–shoot areas like Smart Grid / Non–conventional Renewable Energy and Energy Efficiency initiated by the Company also have potential opportunities to contribute towards income from consulting services.
Your Company secured a total of 10 assignments with consulting fee of about Rs. 3,700 Lakhs during FY 2014–15, in international arena. Your Company has now international presence in a number of countries of Asia, Africa & Eurasia regions. Countries in which consulting services are being provided include in Afghanistan, Bangladesh, Bhutan, Congo, Ethiopia, Nigeria, Nepal, Kazakhstan, Kenya, Kyrgyz Republic, Myanmar, Senegal, Tajikistan, Tanzania, Uzbekistan etc.
During the FY 2014–15, your Company successfully completed the contract worth USD 64.01 million awarded by Myanmar Electric Power Enterprise (MEPE), within time schedule, for supply of Goods and related Services for 230kV Transmission System associated with Thahtay Chaung Hydro Power Project in Myanmar.
The proposed cross–country grid is being envisaged for harnessing SAARC nations' capacities and resources to address growing energy needs of the region. Presently, India has interconnections with Nepal, Bhutan and Bangladesh, which are being strengthened for mutual exchange of power. With these interconnections, while the county imports around 1,500 Megawatt (MW) of power from Bhutan, it exports around 500 MW power to Bangladesh and 150 MW power to Nepal.
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 countries Bhutan & India, is under implementation and expected to be ready by 2017. Also, for transfer of bulk power, interconnection between India and Nepal through 400 kV Dhalkebar (Nepal) – Muzaffarpur (India) D/c transmission line is under implementation. Further, to augment the power transfer capacity of India – Bangladesh asynchronous interconnection through 400kV (charged at 132kV) Surajyamaninagar (India) – Comilla (South) (Bangladesh) line, addition of another 500MW power terminal module at Bheramara is being firmed up, which will increase the power transfer capability between the two nations by 500MW. For interconnection between India and Sri Lanka through a ±400kV, 500/1000MW under–sea HVDC line, feasibility studies carried out and reports under review. Discussion for interconnection between India and Pakistan through Amritsar (India) – Lahore (Pakistan) line are being held at Government level.
CONTRIBUTION IN DISTRIBUTION REFORMS
Under DDUGJY (Deendayal Upadhyaya Gram Jyoti Yojana) scheme (including erstwhile RGGVY) for rural electricity infrastructure and household electrification, your Company has been executing infrastructure work for rural electrification in sixty–seven (67) districts of nine (9) States in the Country of a base cost of about Rs. 7,409 Crore.
Almost all of the X / XI plans schemes have been completed. Work in 4 districts in Uttar Pradesh (UP) assigned to POWERGRID under XI Plan Phase–II and XII Plan are under implementation.
During FY 2014–15, infrastructure was created for electrification in 581 nos. of partially electrified villages. Also, 2666 nos. of villages were energised. Cumulatively, till March, 2015, infrastructure has been created for electrification of 71,622 villages. Further, service connections were provided to about 35.9 lakh BPL households.
For rural electrification under DDUGJY, your Company has been engaged for execution of projects under the XII Plan in 15 districts of Odisha having sanction cost of about Rs. 1767 Crore and earning potential of Rs. 159 Crore.
XII PLAN PROGRAMME
The Capex plan of your Company has been increased to Rs.1,10,000 Crore from Rs. 1,00,000 Crore envisaged earlier for XII Plan mainly due to additional transmission infrastructure of various inter–State transmission systems including Green Energy Corridors projects.
Your Company has already made a capital expenditure of Rs. 65,651 Crore in the first three years of the plan period. Based on the ratings given by both domestic and international credit agencies, your Company do not foresee any difficulty for resource mobilisation. The funding for capital expenditure are 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.
ERP IMPLEMENTATION & IT
Project "RUPANTAR", the Enterprise Resource Planning (ERP) initiative of your Company has been implemented successfully in the year 2014–15.
Subsequent to completion of the User Acceptance Testing of the business solutions, pilot Go–live of ERP took place in August 2014. After the stabilization of the pilot region, roll out to balance regions was also taken up and completed during October 2014 to February 2015. Presently, majority of the key processes related to the business are running on ERP. Also, a Disaster Recovery Site is being established at Bangalore.
Your Company continues to provide latest IT solutions for betterment of its business process. Both Internet and Intranet have been provided in offices and site locations all over the Country for seamless connectivity and effective working environment. Recruitment process is being conducted for self and for few other companies through online application portal, which is designed, developed and maintained through in–house expertise. Further, various applications like online status of "Swachh Bharat Abhiyaan" (Clean India Mission) works, Inspection Management System, Vigilance Inspection System and Attendance Management System etc. are developed, run and maintained in–house for assisting the business operations.
The Company has also taken up a major technology upgradation of IT infrastructure such as implementation of cloud, security policy, Information Security Management System (ISMS), etc. Further, ISO:27001 Certification for ISMS is also being implemented initially at Corporate Centre.
Your Company has established video conferencing facilities at Corporate Centre, all regional Headquarters, all major Project Headquarters as well as at most of the substations. Video Conferencing is extensively used to carry out meetings, discussions and trainings within and outside POWERGRID network.
ENVIRONMENT AND SOCIAL MANAGEMENT
Your Company, since its inception is working to harmonise environment conservation with all aspects of its projects. Your Company's activities are non–polluting in nature and their environmental impacts are negligible. Your Company is committed to conservation of natural resources, reducing impact on nature and increasing the service value by use of efficient and safe technology practices.
Key initiatives taken by your Company towards sustainable development are technological initiatives for conservation of precious Right of Way (ROW), rain water harvesting system which is now an integral part of every new substation design, installation of LED bulbs, solar lights, fuel catalysts devices for DG sets etc. Your Company has substantially reduced the land requirement by utilizing new technology like Gas Insulated Substation (GIS) which requires less than one–third (1/3rd) of the land compared to conventional Air insulated Substation (AIS). In order to reduce Carbon footprint, waste paper are used to produce recycled paper for printing of our office stationery like letter heads, writing pads, visiting cards, envelopes etc. This has resulted in reduction in use/procurement of fresh paper.
For the FY 2014–15 your Company have obtained final forest clearance for 29 transmission lines involving 34 forest proposals involving diversion of about 1760 hectares and in–principle forest clearance for 22 transmission lines involving 32 forest proposals for diversion of about 1680 hectares. Some of the major lines for which such forest clearances are obtained include 765 kV Angul–Jharsuguda, 400 kV D/C Dehradun–Abdullapur, 132 kV S/C Tezu–Namsai, 765 kV D/C Dharamjaygarh–Jabalpur etc.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) is a commitment of your Company to its stakeholders to conduct business in an economically, socially and environmentally sustainable manner that is transparent and ethical. It primarily focuses on inclusive social–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, Livelihood Generation, Health, Education, Tree plantation, Environmental, Relief/Restoration during National Calamities etc.
During the FY 2014–15, your Company spent Rs. 47.42 Crore on various CSR activities, which was 75% higher than amount spent of CSR activities during FY 2013–14.
During the year under review, your Company has also participated in the "Swachh Bharat Abhiyaan" by constructing about 10,000 toilets in about 4,500 Government schools in several states of India. It has also undertaken Projects of imparting skill development trainings for industry employment/ self – employment to about 7500 youths departmentally and in association with National Skill Development Corporation (NSDC), National Handicapped Finance and Development Corporation (NHFDC), ITCOT etc. Your Company also distributed aids & appliances to People with Disabilities in association with ALIMCO and arranged "Health Check–up camps" at 30 locations.
Annual Report on corporate social responsibility (CSR) activities and spend of CSR Amount is given at Annexure XII of this Report.
PEOPLE, OUR CORE STRENGTH
Attracting Talent, Nurturing & Development of Human Capital
Employees are main resources for your Organization. During FY 2014–15, your Company inducted about 321 personnel at various levels viz. Executives, Supervisors & Workmen. Executives recruited through open advertisement on all India basis from reputed engineering and management institutes. Recruitment of non–executives was carried out through employment exchanges and local advertisement at regional level. As on March 31, 2015, the total number of employees of your Company stood at 9,033.
Your Company's Human Resource Development (HRD) interventions are directed towards learning new competencies and to reinforce good work practices & change workplace behaviour as per the organizational needs. 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. In order to align with growing competitive business environment, your Company imparted training/ hands on training on major equipment and their operation & maintenance, new Land Acquisition Act, Certified Project Management Programmes, latest survey techniques, networking skills and overhead power line design program, etc.
The yearly Action Plan HRD has been based on 'Organisational Need Analysis (ONA)' and 'Training Needs Assessment (TNA)'. Competency Analysis and Skill Gap Analysis have been carried out for various functions in your Company by keeping in view the existing/emerging business scenario. Skill development programmes in the areas of transmission line construction, tower erection & stringing for unemployed / underemployed youths have been conducted at various locations in the Country and more than 600 such youths were trained during FY 2014–15. For conducting such trainings, necessary infrastructure has been created in POWERGRID sub–stations. Cumulatively, about 1600 persons have been trained up to 31.03.2015 under this initiative for enhancing the availability of skilled manpower for construction jobs in the field of transmission.
In addition, during FY 2014–15, training has been imparted to employees/ participants from Haryana Vidyut Prasaran Nigam Ltd.(HVPNL), Bhakra Beas Management Board(BBMB), Powergrid Company of Bangladesh Ltd. (PGCB), Kenya Electricity Transmission Company Limited (KETRACO), Ceylon Electricity Board, Nepal Electricity Authority, Bhutan Power Corporation, Tanzania Electric Supply Company Limited and US Energy Association, under consulting services basis.
Your Company undertakes requisite changes in various policies from time to time in line with the needs and welfare of employees. It has empanelled various hospitals nearby to its establishments including Corporate Centre for the healthcare of employees and their dependents. The 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.
An effective work culture has been established in the Company through empowerment, transparency, decentralization and practice of participative management. Industrial relations scenario in the Company has been cordial and no man–days were lost in FY 2014–15. Healthy community living is spread through periodically conducted cultural programmes for celebrating various occasions like Diwali get–together, Holi Milan, New Year, Raising Day, etc. in all establishments of the Company. Quality food is served to the employees in the ISO 22000:2005 conferred Cafeteria, Office and Food Lounge of Multi–Purpose hall.
Your Company also conducts various sport competitions for boosting the interest of employees in sports and games at intra and inter–regional level for Kabaddi, Cricket, Volleyball, and Badminton etc. Your Company also participates regularly in Inter–PSU Sports meet and its players stood meritorious in Table Tennis, Cricket, Carom, Badminton & Kabaddi tournaments and bagged a number of awards.
On the occasion of Silver Jubilee Celebrations a Mini–Marathon was organised at Corporate Centre, Gurgaon in which employees including CMD & Directors participated with their family members enthusiastically.
Prevention of Sexual Harassment at Workplace
As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (VAcf) and Rules made thereunder, your Company has constituted Internal Complaints Committees (ICC).
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, being sensitive towards our heritage, social and cultural concerns, continues to prove its commitment for implementation of Official Language Policy of Govt, of India.
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), Kavita Pratiyogita, 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 writing and reading. To provide further inspiration, employees are nominated for external Hindi training programs which further educate & encourage the employees to work in Hindi.
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 through Communication Management
Communication Management is an important and powerful weapon for building a strong corporate brand identity to strengthen and modify its relationship with the internal and external stakeholders. Keeping in mind the need for sustained, timely and bona fide communication interventions, your Company has adopted various communication strategies to highlight itself as a major power transmission infrastructure giant contributing significantly towards development of national economy.
Your Company has been issuing various press communique to highlight growth, achievements, and developments with a view to maintain regular interaction with the public. Your Company organizes 'Quarterly Press & Analysts' Meet' to facilitate face to face interaction with the journalists, analysts and stakeholders which is aimed at winning the trust of the masses through imparting information in a transparent way.
To showcase its technologies and strengths, your Company participated in the 'India International Trade Fair (IITF) 2014' and 'Vibrant Gujarat' targeted towards the common masses and focused clients. Your Company also participated in other business oriented exhibitions in Mumbai, Delhi and the Country of Tanzania to reach out to the target audience for pitching the business.
Communication is not effective unless and until it reaches out to the employees who are the pillar of any organization. To achieve this, your Company deploys various internal communication tools such as monthly newsletters, house journals, wall magazines, lounge and regular media updates. Beside this, Company regularly organizes open house for face to face interaction between management and employees. Company has prepared a corporate movie to showcase its journey on the occasion of Silver Jubilee year. A motivated theme song was also prepared for the employees. All these communication tools have helped individual in gaining an understanding about the organization's culture & function and making them a brand ambassador of the Company.
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.
RENEWED COMMITMENT TO TRANSPARENCY & VIGILANCE FUNCTION
Vigilance Department of your Company performs Preventive, Pro–active as well as Punitive Vigilance. However, the emphasis has been shifted from "Punitive Vigilance" to "Preventive and Pro–active Vigilance". Your Company has taken a number of initiatives to inculcate good governance within the organization. Some of these initiatives are given hereunder:
Process (Online) Inspection
Using this technique, inspections are planned in such a manner that critical pre–award and post–award activities are inspected during execution of works. Process (On–line) Inspection is done in order to check whether there are any shortcomings or not, thereby providing an opportunity for rectification of the defects before the work is completed. Since the focus is more on prevention, critical observations made during such inspections help the management in preventing similar irregularities during the later stages of execution of the projects.
Web Based Vigilance Information Network System (VINS)
With a view to leverage Technology in our work, Vigilance Information Network System (VINS) has been devised by your Company in collaboration with the IT Department, which has significantly cut down time, efforts and cost of working resulting into higher efficiency.
Workshop on Ethics & Values
Every year, two (2) workshops on Ethics & Values are conducted by the Regional Vigilance Department as well as Corporate Centre. These are aimed at encouraging value based ethical decision by the employees. Further, Preventive Vigilance Workshops are also conducted by Vigilance Department for non–vigilance executives. With a view to create awareness among the employees, RTI workshops are organized by Corporate as well as Regional Vigilance Department.
Vigilance Awareness Week 2014
Vigilance Awareness Week was observed in POWERGRID from October 27, 2014 to November 1, 2014. In keeping with the theme 'Combating Corruption– Technology as an Enabler', various competitions were organized for the employees as well as for their family members, talk on ethics & values and on anti–corruption topics were delivered by eminent personalities. The week concluded with the release of in–house journal of the Vigilance Department 'Candour' by Shri Pratyush Sinha, former Central Vigilance Commissioner.
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.
Your Company has been rated 'Excellent' for its performance as per MoU 2013–14 signed with the Ministry of Power and based on its performance poised to get 'Excellent rating' for MoU 2014–15 as well.
Your Company has been conferred with the prestigious "ICSI National Award for Excellence in Corporate Governance" for 2014 by Institute of Company Secretaries of India (ICSI) in recognition of the highest levels of transparency and governance practices adopted by the Company.
Your Company proved its mettle on global front by positioning itself in the "Forbes List of Global 2000 Largest and Most Powerful Public Companies", and also "fastest growing electric utility in the world" as per M/s Platts (a division of McGraw–Hill Companies).
"The Economic Times" at its Power Focus 2nd Annual Summit awarded your Company for its remarkable contribution in the Power Sector.
Your Company has been conferred with "CBIP Award" for the best performing Transmission Utility and your CMD has been felicitated with the "Power Persona of The Year Award" by CBIP in recognition of his contribution for accelerated development of power sector.
Your CMD has also been bestowed the prestigious "IEF Meritorious Energy Service Award"
Director (Finance) of your Company, Shri R. T. Agarwal, has been felicitated with the "CA–CFO–Power Sector Award" by the Institute of Chartered Accountants of India in recognition of exceptional performance as CA–CFO in Power Sector for the Year 2014.
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 Clause 55 of the Listing Agreement with the Stock Exchanges is given in Annexure–II.
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, is given in Annexure–III to this Report.
The qualification in Statutory Auditors' report and managements reply thereto is given at Annexure – IV to this Report.
COMPTROLLER AND AUDITOR GENERAL'S COMMENTS
Company has received 'NIL' comments on the standalone accounts for the year ended March 31, 2015 by the Comptroller and Auditor General of India under Section 143(5) of the Companies Act, 2013. C&AG comments on the consolidated accounts and management's reply thereto are attached as Annexure–V to this Report.
The Performance Audit has been conducted by C&AG to assess the effectiveness of 'Planning & Implementation of transmission projects by POWERGRID during XI Plan (2007–2015) and Grid Management by POSOCO.' The Performance Audit report was placed before the Committee on Public Undertakings in August, 2015. The points forwarded by the Committee in the said report have been duly replied by the management.
Composition of the Board
Your Company's composition of Board of Directors underwent some changes during the year 2014–15. Shri Santosh Saraf and Smt. Rita Sinha, non–official part time directors ceased to be Directors on the Board of the Company w.e.f. December 27, 2014. The Board wishes to place on record its deep appreciation and gratitude for the significant contribution and support to the Company extended by them during their tenure as Directors of the Company.
As on 31st March, 2015, the Board comprised Twelve Directors out of which five were whole–time Directors including the Chairman & Managing Director, two Government nominees and five Independent Directors.
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, Shri Ravi P. Singh, Director (Personnel) and Shri R.P. Sasmal, Director (Operations) 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 regarding holding the position of 'Independent Director' and necessary declaration from each Independent Director under Section 149 (7) has been 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 has reviewed the work assigned to them under Schedule IV of the Companies Act, 2013, including performance evaluation of Directors and the Board.
Further, the appointment, tenure and remuneration of Directors is 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.
M/s Chandrasekaran & Associates, Practising Company Secretary has conducted Secretarial Audit of the Company for the financial year ended March 31, 2015 from. The Report forms part of this Annual Report at Annexure–VI.
The Secretarial Auditor in his report has made the following observations:
"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 observations:
1. The Company has complied with the provisions of Section 149 of the Companies Act 2013 and clause 49 of Listing Agreement except with respect to the requirement of appointment of minimum number of Independent Directors since 27.12.2014.
2. 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 are 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. The matter has already been taken up with administrative ministry for filling two existing vacancies of Independent Directors on the Board of POWERGRID.
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 fill under e–filing in MCA–21.
Extract of Annual Return
In accordance with Section 134 (3) (a) of the Companies Act, 2013, the extract of the annual return in the prescribed format in MGT–9 is given as Annexure VII of this Report.
Committees of the Board
The Company has Audit Committee, CSR Committee and other Committees in place. The composition and scope of the Committees are provided in the Report on Corporate Governance.
A report on the Corporate Governance (Annexure–VIII), forming part of this report, together with the Certificate thereon is given in Annexure–IX 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 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. Mehta & Co., M/s Chatterjee & Co., and M/s Sagar & Associates were appointed as Joint Statutory Auditors for the financial year 2014–15.
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) 2014–15 under Section 148 of the Companies Act, 2013.
The Cost Audit Reports for the FY 2014–15 will be filed with the Cost Audit Branch, Ministry of Company Affairs before due date i.e. September 27, 2015.
The Board of Directors, with deep sense of appreciation, acknowledges 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, Central Electricity Regulatory Commission, Appellate Tribunal for Electricity, Central Electricity Authority, 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 Bombay Stock Exchange Ltd., Mumbai without whose active support, the achievements of the Corporation during the year under review would not have been possible.
Board's special appreciation and thanks are to our valued customers, State Governments and State power utilities and other clients, who have awarded various works on consulting services basis and reposed faith in Company's capability to handle them. The Board also appreciates all its the contribution of Contractors, Vendors and Consultants for successful implementation of cvarious projects by the Company.
The Directors take this opportunity to thank the Principal Director of Commercial Audit and Ex–Officio Member Audit Board–Ill for the cooperation during the year. The 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 records its appreciation to national/ international financial institutions/ multilateral Financial Institutions (The World Bank & Asian Development Bank)/ Banks/ national (ICRA & CRISIL) & international (Standard & Poor and Fitch) 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 of the dedicated efforts and valuable services rendered by the members of the POWERGRID family, in the Company's achievements during the year 2014–15. 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 to achieve the aim to be the world's premier transmission utility.
For and on behalf of the Board of Directors
(R. N. Nayak)
Chairman & Managing Director
Place: New Delhi