cesc ltd Management discussions

4 Under the Announced Pledges Scenario of the IEA, which is consistent with governments meeting their aspirational. targets, including their long-term net zero and energy access goals, on time and in full, total energy demand is estimated to stabilise close to its current levels at around 630 EJ in 2050. In contrast, electricity generation under this scenario will grow at a CAGR of 2.7% to 61,268 TWh in 2050, which is more than twice of current electricity generation and substantially higher than 49,845 TWh under the baseline Stated Policies Scenario.

As shown in Table 2, the peak demand for power in 202223 was 216 GW whereas the peak power supply was 207 GW. Hence, the demand-supply situation remained broadly balanced, with a nominal shortfall of 4.0% at the all-India level. Most of this deficit was in the Eastern region.

The demand-supply deficit at the regional level is due to unsatisfactory situations in few areas: UT of Jammu & Kashmir and Ladakh (5.4%) in the northern region; Maharashtra (6.8%) in the western region; Kerala (7%) and Andhra Pradesh (6.6%) in the southern region; Bihar (15.5%) and Jharkhand (14.9%) in the eastern region. Other than these, no state or union territory had a peak power deficit exceeding 4% in 2022-23.

With the worst of Covid behind us, the global economy was widely expected to continue to be on a strong growth path in 2022-23. But the severe dislocations in global food and energy markets due to the war in Ukraine as well as supply chain disruptions following fresh outbreaks in China derailed this fragile recovery. According to the IMF, world output growth declined considerably from 6.3% in 2021 to 34% in 2022.

India also registered a deceleration in growth, but the impact was lower. According to the Second Advance Estimates released by the National Statistical Office (NSO) in February 2023, Indias Gross Domestic Product (GDP) grew at 7.0% in 2022-23, compared to 9.1% in 2021-22. Agriculture growth remained stable at over 3%, whereas the services sector actually growth accelerated from 8.8% in 2021-22 to 9.4% in 2022-23. As such, the decline in growth was by and large limited to the industry component of GDP.

With Covid no longer posing a major threat, the bigger global challenge today is persistent inflation and systemic risks in the banking and financial sector in the developed world. Considering these, the IMF has moderated its growth projections for global output in 2023 to 2.8% in its latest estimates released in April 2022.

India has managed the situation well so far. The domestic economy showed remarkable stability in the face of headwinds from high global inflation and poor external

demand. Although there are risks of vulnerabilities in the global banking and financial sector transforming into a fullblown crisis, the outlook for India remains positive. In its recent Monetary Policy Report released on April 6, 2023, the RBI pegged Indias GDP growth in 2023-24 at 6.5%, which is only marginally below the 7.0% growth recorded in 2022-23. This will make India the fastest growing large economy in 2023-24.

2022-23 was the first full year when there were no major disruptions in economic activity after Covid-induced lockdowns started in March 2020. With a more complete return to normalcy, CESCs system demand grew at 8.7 % during the year, from 10,279 Million units (MU) in

2021- 22 to 11,175 MU in 2022-23. This coupled with an equally creditable 5% growth in the previous year meant that electricity demand in 2022-23 surpassed the pre- Covid demand of 11, 024 MU in 2019-20. Chart F provides quarterly data on system demand of CESC for 2021-22 and

2022- 23.

Focus during the year was on ensuring supply of electricity to its consumers remained unaffected, while maintaining high service levels and bringing down distribution losses. At the same time, efforts were undertaken to make the operations more agile and efficient through greater adoption of digital technologies, data and analytics based solutions. These initiatives are discussed in detail in the sections on Generation, Distribution and Customer Service.

CESC reported creditable results for 2022-23. Total income (including other income) of CESC as a standalone entity grew by 9% from 7,479 Crore in 2021-22 to Rs8,153 Crore in 2022-23, even as electricity tariffs remained unchanged during the year. Operating and other costs increased during the year, in part due to high fuel and power purchase costs. As a result, standalone profit before tax (PBT), after incorporating regulatory income, marginally rose to Rs1,060 Crore in 2022-23. Profit after tax (PAT) stood at Rs830 Crore in 2022-23, marginally higher than Rs816 Crore reported in the previous year. Further details are available in the section on Financial Results.

BUSINESS PERFORMANCE

CESCs businesses comprise the Koikata operations as well as other generation and distribution ventures:

• Kolkata Operations: Distribution of electricity, with own generation facilities, across its licensed area in Kolkata, Howrah, Hooghly, North and South 24 Parganas, West Bengal. Other than the 600 MW plant at Haldia, which is under its 100% subsidiary Haldia Energy Limited (HEL), the operations are directly under CESC Limited.

• Generation Projects: Thermal and renewables projects owned and operated by various subsidiaries of CESC (excluding HEL). At the end of 2022-23, cumulative generation capacity of these projects stood at over 650 MW.

• Distribution Ventures: Distribution licence for Greater Noida (Uttar Pradesh); three distribution franchisees (DFs) in Kota, Bharatpur and Bikaner in Rajasthan; and the DF in Malegaon, Maharashtra. These are operated by CESCs subsidiaries.

KOLKATA OPERATIONS

Generation

CESC operates a 750 MW generating station at Budge Budge (BBGS) and a 135 MW generating station at Garden Reach (Southern). In addition, Haldia Energy Limited (HEL), a 100% subsidiary of the Company, operates a 600 MW generating station at Haldia. HEL has a long-term power purchase agreement (PPA) for selling its power to CESC. During the year, total generation from these plants was 10,185 Million units (MU), out of which 9,550 MU or 93.8% of the total generation in 2022-23 came from Budge Budge and Haldia.

Table 3: Performance of Key Generating Stations

Table 3 presents data on performance of the two key generating stations — Budge Budge (BBGS) and Haldia (HEL). Both stations are ISO 9001, ISO 14001, ISO 45001 and ISO 50001 certified in respect of Quality Management Systems, Environment Management Systems, Occupational Health and Safety Management Systems and Energy Management Systems. BBGS and HEL have consistently excelled in operating efficiencies, energy conservation, quality systems and processes. Budge Budge bagged the 1st runner-up prize at the 6th edition of CII National Energy Efficiency

n AA

CESC has been at the forefront of using best-in-class technology and digital interventions to effect improvements in several key areas such as operations, maintenance, safety and asset management. New initiatives undertaken in 2022-23 include use of Virtual Reality along with bio feedback mechanism to train and assess personnel suitable for working at height, application of 3D laser scanning technology in development of drawings for reverse engineering, Artificial Intelligence (AI) and Machine Learning (ML) based models for prediction of benchmark station efficiency as well as Auxiliary Power Consumption , with respect to station PLF. Budge Budge plant received the Gold award in Smart Technology Electricity Generation category at the national competition organised by India Smart Grid Forum (ISGF) in 2023. CESC is also alive to the digital and cyber security threats. Budge Budge, Southern and Haldia plants are ISO 27001 certified for Information Security Management Systems.

CESC has set stringent environmental standards, and both Budge Budge and Haldia plants continue to achieve 100% utilisation of ash in an environment friendly manner. CESC has also come out with a novel technology for producing different grades of concrete by partial substitution of natural sand with bottom ash. This technology was awarded a patent by Government of India in 2022-23 and has generated widespread interest in the construction fraternity. The PWD Division of Chandrapur, Government of Maharashtra, completed construction of 500 metre M-40 grade concrete road using bottom ash from the 2 x 300 MW thermal power plant of Dhariwal Infrastructure Limited (DIL), a 100% subsidiary of CESC Limited. The technology was also implemented for protection of 20 metres of shoreline from river erosion at the cooling water intake area of Haldia plant using concrete blocks of M-20 grade.

Over the years, CESC has excelled in environment and sustainability. Ambient air quality and stack emission are monitored continuously. Both Budge Budge and Haldia plants continuously optimise their water usage by reducing consumption, reusing and recycling wherever possible. Budge Budge is also a zero liquid discharge (ZLD) plant. During the year, Haldia established a spice garden and a rose garden while Budge Budge set up a spice garden and a butterfly park inside the plant. In 2022-23, around 5,000 and 1,150 saplings were planted at Haldia and Budge Budge respectively, taking total tree plantation at both plants to well over one lakh each. HEL has the distinction of having over 30% of its plant area under green cover.

Studies on Carbon dioxide (CO2) sequestration by existing plantation inside Budge Budge and Haldia plants were completed. A study on carbon dioxide (CO2) sequestration potential of Azolla (an aquatic fern) is also in progress at Haldia. Work has also started for creating Urban Forest using the Miyawaki method at the Garden Reach (Southern), Budge Budge and Haldia plants. During the year, the Gate complex building at Budge Budge was converted to an IGBC Platinum rated green building. Two Electric cars have also been introduced at the Haldia plant during the year.

During the year, BBGS won the Energy & Environment Foundations Global Water Conservation Awards 2022 and was recognised as Global Water Conservation Company of the Year 2022 for outstanding achievements in Water Management. It also won the Gold award at the Apex India Green Leaf Award for Water stewardship in the Thermal sector. HEL won the Sustain Awards 2022 organised by the Indo-German Chamber of Commerce for Excellence in Water Management as well as the 16th CII National Water Award 2022.

CESCs distribution infrastructure serves its 3.5 Million customers in Kolkata, Howrah, Hooghly, North and South 24 Parganas in the state of West Bengal. The demand for power is quite variable in its licensed area, with the Company having registered a peak demand more than 2,300 MW and a lean demand lower than 400 MW in recent years.

During periods of high demand, CESC also imports power to complement its own generation (including from HEL). Conversely, it exports surplus power, when possible. Banking of power is also done with other licensees to facilitate availability of power during periods of high demand. In 2022-23, there was marked improvement in demand. The peak power demand increased to 2,339 MW, compared to 2,012 MW in the previous year. Total energy requirement grew at 8.7% from 10,279 MU in 2021-22 to 11,175 MU in 2022-23. About 83 % of this requirement was met by CESCs own generation, including HEL.

CESC undertakes continuous upgradation of its distribution infrastructure to maintain the quality and reliability of supply as well as to reduce downtime, overloads and sustainable reduction in losses. Management of distribution losses despite challenges of burgeoning Low-Tension demand and higher length of evacuation from sources of generation, continues to demonstrate its ability of control within the normative targets. This was made possible with technological interventions to create a pilfer proof network such as use of theft-proof pillar boxes, co-axial cables and leveraging smart meter based automated remote surveillance cum theft prevention systems.

Over the years, CESC has achieved high degree of automation through its investments in technology and equipment, resulting in faster restoration in case of supply interruptions. Deployment of remote asset

health monitoring technologies have enabled the Company to move from preventive maintenance to predictive condition-based maintenance. More recently it has embraced innovative digital technologies like selfhealing for automatic restoration of load. Some initiatives introduced in 2022-23 include: pilot trials of IoT based remote monitoring and control system for LT side of distribution transformers, feeding power to water logged and theft prone areas, installation of Class-A power quality meters at 33 kV consumer premises and CESC substations for 24x7 remote monitoring of power quality.

Given the proliferation of technology-based solutions across the Companys operations and explosion of data generated in the process, another area which received considerable attention was cybersecurity. To achieve this, OT and IT systems have been physically segregated with restricted point of convergence and proper security measures for mutual data exchange. The organisation has a comprehensive Cyber Crisis Management Plan (CCMP), including identification of critical information infrastructure as well as compliance with ISO 27001. Training programmes and mock drills were also conducted to improve awareness on cybersecurity among the employees.

CESC is at the forefront of deploying advanced technology and innovations to provide better services to its customers. The Company is also executing special projects to upgrade its distribution network and enhance its long-term capacity. Some of the key initiatives were:

• As a part of a longer-term plan to augment CESCs capacity to import power, import points are being upgraded to 220kV. During the year, synchronisation of CESCs system was upgraded from 132kV to 220kV, which will facilitate drawing of more power from external sources. Space consolidation is another focus area.

• Smart Meters with RF Mesh and 4G cellular technology have been implemented for remote billing, smart and proactive outage management systems. It has also been utilised for pinpointing thefts in certain loss- prone pockets by implementing micro energy audit. Around 11,750 smart meters were installed in 202223.

• Field Force Automation in meter replacement activity was implemented in 2022-23, thereby improving turnaround time and making the process paperless. This mobile application is ably supported by a wholly digitised back-end system with unique features like automatic scheduling and allotment of jobs based on geographical distribution and historical data.

• A pilot project for peer-to-peer (P2P) power transfer using blockchain platform was implemented during the year with about 1,000 meters, along with assessment of different trading models with consumers and prosumers. This would facilitate penetration of RE power and help in demand control.

• Given back-to-back cyclones over the last few of years, importance of grid resiliency under extreme weather events can hardly be overstated. CESC has undertaken an in-depth study for improving its distribution network resiliency in association with IIT, Kharagpur.

• A micro-grid with 100 kWp floating solar PV plant and 218 kWh BESS inside one of the substations was commissioned in 2022-23. The micro-grid provides uninterrupted power supply for local loads inside the station.

• Electric Vehicle Charging Station (EVCS) will put a major thrust on electricity distribution system in near future. CESC has undertaken a pilot project on EV Charging Optimised for assessment of impact of EV load in its system.

• Several establishments of the Company comprising of three substations and one office building were converted to certified green buildings during the year.

CESC is serving a base of over 3.5 million Customers consistently providing reliable services by harvesting and distilling analytics amidst bedlam of changing consumer expectations and also climatic changes, by maintaining high levels of service delivery as an overarching objective.

CESC is practicing the culture of Customer Obsession, by now instilling service behaviours into processes, workflows and interactions, and by creating systems that genuinely care about Customers. Hence, CESC is prioritizing investments in digital reengineering and robotic process automation and creating listening radars through voice of customer management systems to enhance Customer value proposition, to deliver desired shareholder value.

Some of the key highlights of such initiatives in 2022-23 are:

• New Connections: CESC provided over 1,06,101 new connections in 2022-23. The average time taken to provide a new connection was 1-2 days. Moreover,

fo where premises have an existing connection, supply

typically starts within 24 hours of compliance and payment.

CM

• Billing and Payment: CESC has a wide variety of user- friendly online payment options such as debit/credit

o; card, net banking, mobile wallets, ECS, NEFT/RTGS,

Bharat QR and UPI. During the year, it introduced: Dial and Pay Services (first time ever in Indian Utility < entailing payment of electricity bills through just a call) which can be used even by feature phone users and is not dependent on internet access, apps or e-wallets; Bangla Sahayata Kendra centres where customers can walk-in to pay their dues and additional BQR payment channel from alternate banking partner.

• Customer Contact: The Companys centralised 24x7 call interaction centre acts as the primary touch point for all complaints and queries. The Key Account Management (KAM) programme for personalised support to large consumers was revamped during last year for better support, including an increase in its coverage. CESCs voice bot Aastha was upgraded to process complaints regarding distribution transformer outage as well as notifying customers. In a first-of- a-kind service, the Company introduced a Video Call Centre (VID-U) for its customers to interact with agents on video call. In 2022-23, over 85% customer interactions were serviced by our digital channels including IVR, voice bot, web chat bot and WhatsApp bot & unique vernacular Voice Bot, most of all equipped with AI/ML & NLL/NLP capabilities that have further enriched Customer Service delivery.

• Supply Interruptions: Over the years CESC has taken different steps to ensure reliable power supply and quicker restoration times. The 24x7 Control Room, manned by engineers, is further equipped with radio- linked and GPS-enabled mobile service vans which are placed at strategic locations to enable faster supply restoration. Proactive outage information is sent to Consumers. In 2022-23, CESC introduced body worn camera with audio and video communication capabilities for capturing video footage of fault repair process and utilising AI/ML/analytics to provide actionable guidance to ensure job quality.

• Complaint Management: Significant improvements have been made in this regard through implementation of better processes and technology. During the year, CESC introduced corrective and preventive action (CAPA), a well-known quality framework, for proactive mitigation of consumer-related issues. Besides, process optimisation and RPA (robotic process automation) have led to consistent reduction of up to 8% in supply complaints and over 35% in commercial complaints. Implementation of process automation is currently in progress for complaint handling at regional offices, repeat complaints as well as email complaint management system.

• Promotion of Sustainability: Under its campaign #LiveFreeBreatheFree, CESC endeavoured creating awareness about sustainable practices. In 2022-23, CESC has actively promoted green initiatives like Electric Cooking and Electric Vehicles across its Social Media platforms and also on the website. The E-Auto launch by CESC as a part of upgradation of captive fleet, was given live coverage on Facebook. CESCs sustainability initiatives were showcased at big events like the International Kolkata Book Fair 2023 and Kreta Suraksha Mela.

Box 1: CESCs Digital Presence — Key Developments

• Website Relaunch: CESC Website was completely revamped and relaunched in 2022-23. Apart from having a fresh look and improved speed, the website has a multi-fold design framework and a mobile-first approach. The website features intelligent search bar, dedicated Customer Zone and enhanced security. The website traffic has seen considerable increase of over 200%, as we launched Search engine optimization (SEO), first time ever at CESC.

• Social Media: The Company is present in popular social media platforms such as Facebook, Twitter, Instagram, LinkedIn, YouTube and WhatsApp. These platforms are becoming increasingly popular for two-way customer interactions. In 2022-23, social media activity was strengthened through professional content as well as maintaining quality and timeliness of responses to customer queries and complaints. Social media engagements increased considerably during the year, with an average response time of 7 minutes. CESC is currently the third most liked Indian utility brand on Facebook. The rating of CESC Limited Facebook page, basis FB follower reviews, is now 4.3.

• Brand Campaigns: The Company has built several successful campaigns around the core organisational values of the Group. Some key campaigns carried out in 2022-23 include: showcasing online services (#SmartChoicesWithCESC), promoting sustainability (#LiveFreeBreatheFree), establishing connect between Kolkata and CESC (#LightsCameraKolkata), highlighting efforts of our workmen (#HeroesofCESC), showcasing technological advancements (#TechItForward), CSR initiatives (#Humaneness), safety tips (#CustomerFirst), employee testimonials (#LeadingWithLIght) and Customer testimonials (#PoweredByCESC). It also launched its official digital mascot Alo Di, who is used to promote digital services, share safety tips and conduct important events on Facebook.

Safety and Health

CESC is committed to maintaining high standards of industrial safety across its operations, and has a safety vision and policy, including a policy on use of personal protective equipment. Over the years, it has redefined its daily work management practices to create a culture of safety within the organisation. All three generating stations — BBGS, Haldia and Southern — are ISO 45001 certified for occupational health and safety management systems. Southern Generating Stations received the Gold award at the 4th ICC National Occupational Health & Safety Awards 2022.

The central Safety Cell has been instrumental in implementing safe work procedures as well as monitoring unsafe situations in line with its safety standards. The Safety Cell has also been providing training to all its workers. Besides, officers have undergone safety-related training by institutions of national and international repute. Job site audits, safety communication meetings, safety

workshops, hand holding exercises at sites and companywide observation of Safety Day are other activities that have contributed to increased awareness and reduction of incidents.

CESC has a structured communication system for coverage of its safety-related initiatives, which includes its bi-annual safety magazine Surakshabarta (available in Bengali and Hindi) and a web-based monthly newsletter Safety Spotlight. Besides, safety mailers are regularly sent to its consumers and seminars are organised to educate customers on electrical and fire safety. The Company also arranged for movement of decorated safety tableaus across its operating areas for building safety awareness among its consumers and general public.

CESC has a strong focus on health and well-being of its employees. It operates 27 well-equipped dispensaries across the organisation with doctors and pharmacists. Best-in-class medical facilities are also available to the employees through tie-ups with major super-speciality hospitals, nursing homes and diagnostic clinics. It also conducts regular health check-up for all employees as a part of its occupational health initiative.

GENERATION PROJECTS

Apart from plants catering to Kolkata operations, CESC has built independent generation capacities to benefit from the opportunities in the sector and build capabilities in the renewable energy space. This includes two thermal power

projects with a capacity of 600 MW and 40 MW, as well as a solar power project with a capacity of 18 MW DC.

Chandrapur, Maharashtra: This is a 2x300 MW thermal power project implemented by Dhariwal Infrastructure Limited (DIL), a 100% subsidiary of CESC Limited. For power evacuation, Unit I was earlier connected to the state grid (STU), and Unit II to the central grid (CTU). DIL had applied to CERC for closed operation of CTU and STU and Honble CERC accorded approval of the scheme with proper guidance pertaining to the issue. The scheme was finally implemented on May 4, 2023, midnight . This has enhanced the flexibility and reliable operation of DIL. DIL has Fuel Supply Agreements (FSAs) with South Eastern Coalfields Limited and Western Coalfields Limited.

For Unit-II, DIL has long-term Power Purchase Agreements (PPAs) for supply of 100 MW power to Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) and 170 MW power to the Noida Power Company Limited (NPCL). For Unit-I, DIL has a PPA with Central Railway in Maharashtra for supply of 210 MW for a period of 3 years. In 2022-23, the overall PLF for DIL was 80.5%.

DIL is certified in respect of Quality Management Systems (ISO 9001), Environmental Management Systems (ISO 14001), Occupational Health & Safety Management Systems (ISO 45001), Energy Management Systems (ISO 50001) and Information Security Management Systems (ISO 27001).

DIL has excelled in meeting high environmental standards in its operations through continuous innovations and efforts. It has achieved 100% ash utilisation and has an outstanding record on health and safety. Being a zero liquid discharge (ZLD) plant, various initiatives for utilisation of waste water in different processes have been implemented, resulting in water consumption levels well below the national standards. It has also taken several measures to protect and enhance biodiversity. In 2022-23, it became one of the first IPPs to blend agro-waste biofuel with coal. As mentioned earlier, using the Companys patented technology, the PWD Division of Chandrapur, Government of Maharashtra, completed construction of a : 500 metre M-40 grade concrete road using bottom ash

from DIL for partial substitution of natural sand.

Under its CSR initiatives, DIL conducts awareness programs related to health, sanitation, agriculture and education in the nearby villages. It has also taken up women empowerment programs through development of self-help groups.

Asansol, West Bengal: This is a 40 MW atmospheric fluidised bed combustion (AFBC) power plant using washery rejects and inferior coal from the adjacent captive coal mine in Sarisatolli. The unit has been operational since July 2009. The power plant is owned by Crescent Power Limited, a CESC subsidiary, which operates in the merchant power market. In 2022-23, the plant generated 334 Million units (MU) of power with a PLF of over 95%. It won the Indian Social Impact Award 2022-23 for its CSR activities in the area of women empowerment and the Apex India Green Leaf Award (Platinum) 2022 for Environment Excellence.

Ramnathapuram, Tamil Nadu: This solar power project, commissioned in January 2016, has been undertaken through Crescent Power Limited, a subsidiary of CESC. It has a capacity of 18 MW DC. Power generated in the project is being sold to the Tamil Nadu Generation and Distribution Corporation Limited under a long term energy purchase agreement. During 2022-23, it generated 27.6 MU of electricity.

CESC has been active in the private distribution space outside Kolkata since 1993 through the Noida Power Company Limited, its subsidiary that distributes power in Greater Noida, Uttar Pradesh. More recently, state distribution companies (DISCOMs) started using the distribution franchisee (DF) route to partially privatise operations. CESC won bids for three DFs in Rajasthan and Malegaon in Maharashtra. Kota and Bharatpur became operational in 2016-17, Bikaner became operational in 2017-18 and Malegaon commenced operations in 2020-21.

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Greater Noida, Uttar Pradesh: Noida Power Company Limited (NPCL), a subsidiary company of CESC, started its operations in 1993-94 after it was granted distribution license by the Government of Uttar Pradesh. The license area covers 335 square kilometres comprising a mix of industrial establishments as well as 118 fully electrified villages. Currently, around 8% of its 1,35,214 customers comprise business establishments.

NPCL has implemented state-of-the-art technology and processes to deliver safe and reliable electricity along with highly customer-centric services, setting industry benchmarks in the process. It has a fully integrated GIS and a 100% SCADA compliant network. It has also piloted self-healing technology for smart grids and deployment of drones for network surveillance.

In 2022-23, NPCLs peak load was 592 MW as compared to 522 MW in the previous year. Sales also grew at 23% from 2,338 MUs in 2021-22 to 2,870 MU during the year. As a mature and efficient distribution business, its distribution losses continue to be low. In 2022-23, its losses came down further to 7.63%, from 7.95% in the previous year. Following prudent practices and proactive engagement with its customers, NPCL was able to maintain collections at close to 100% in 2022-23. The Companys digital collection ratio stood at 87%.

NPCL achieved 7th Rank in the 10th and 11th Annual Integrated Rating & Rankings of Power Distribution Utilities conducted by PFC Limited under the framework of Ministry of Power, Government of India. NPCL also achieved “A" rating in Consumer Service Rating of Discoms for 2021-22 conducted by REC Limited and was one of the top performer amongst Discoms across the nation. Apart from these, NPCL received 39 prestigious awards and recognitions in 2022-23. Some of the key ones are: Efficient Operations Award in ICC 10th Innovation with Impact Awards for DISCOMs; Top Performer Award in Energy Conservation and Management in Energy Conservation Award 2022 organised by UPNEDA; 4 Gold Awards in QCFIs Chapter Convention and Excellence Award in QCFIs National Convention on Quality Concepts; 2 Platinum Awards in ISGF Innovation Awards; 2 Platinum and 1 Gold Award in CII Quality Circle Competition; and

Digital Warrior - Utilities Award, by IT Magazine Dataquest. It also received multiple awards at CII-3M Competition, QCFI Kaizen Conclave, CII Kaizen Competition, CII Challengers Trophy.

Kota, Rajasthan: Kota Electricity Distribution Limited (KEDL), a wholly owned subsidiary of CESC, took over operations in Kota on September 1, 2016 after signing of Distribution Franchisee Agreement with the Jaipur Vidyut Vitran Nigam Limited (JVVNL).

The local economy of Kota is heavily dependent on education sector, especially test preparation. After a mass exodus and severe downsizing of these businesses due to Covid-19, things returned to normalcy during the year. Around 11,977 new customers were added, and sale of electricity increased by 49% from 960 MU in 2021-22 to 1432 MU in 2022-23.

KEDL continued with its efforts to strengthen the network and curb losses in 2022-23. This included revisiting of old network to review health of network assets, replacing cables with open joints and damaged insulation with armoured cables. In addition, network surveillance activity has been aggressively pursued in the areas with high pilferage. With these efforts, distribution losses came down considerably from 19.2% in 2021-22 to 14.83% in 2022-23.

This year KEDL achieved the collection efficiency of more than 100%, while at billing front, the non-actual reading percent reduced to 2.18% in 2022-23 from 5.62% in 202122, raising our actual reading based billing to 97.8% for 2022-23.

Moreover, few of the long pending disputes of KEDL have been amicably resolved with Jaipur DISCOM which shall have a long term positive impact on our revenues.

Bharatpur, Rajasthan: Bharatpur Electricity Services

Limited (BESL), a wholly owned subsidiary of CESC, took over the operations in Bharatpur on December 1, 2016 after the signing of Distribution Franchisee Agreement with JVVNL.

Since its inception, BESLs focus is on minimising loss levels, bringing improvements in metering, billing and revenue collection as well as providing reliable power supply to its consumers. During the year, the Company also undertook various initiatives for network improvement including use of underground cables in dense areas to enhance quality of power supply and safety of the public at large. BESL added 3,573 consumers in the 2022-23. Electricity sales grew by about 11% from 255 MU in 2021-22 to 284 MU

This year BESL could achieve the actual reading based billing accuracy of 98.7% by restricting the non-actual reading to 1.30% which was 1.85% in 2021-22. Also, the collection efficiency stood at 100.5% for 2022-23.

Moreover, few of the long pending disputes have been amicably resolved with Jaipur DISCOM which shall have a long term positive impact on our revenues at Bharatpur DF.

Bikaner, Rajasthan: Bikaner Electricity Supply Limited (BKESL), a wholly owned subsidiary of CESC, took over the operations in Bikaner in May 2017 after the signing of Distribution Franchisee Agreement with Jodhpur Vidyut Vitran Nigam Limited (JdVVNL).

BKESL has made considerable investments in deploying advanced technologies and upgrading the network to make it safe and robust. Its focus on loss control activities have shown significant results. Besides, setting up of quick response teams to support vigilance have enhanced operating efficiencies. During the year, 8855 new consumers were added. It is worthwhile to mention here that even with significant addition of solar connected consumers in different tariff categories, BKESL registered an increase of 10.5% in sales from 671 MU in 2021-22 to 745 MU in 2022-23. Distribution losses were contained at 13.21% in 2022-23, compared to 13.9% in the previous year.

The collection efficiency for the year 2022-23 stood at 100.3% which was 99.40% in the last year and the reduction in non-actual reading from 2.06% in 2021-22 to 1.93% in 2022-23 resulted in enhanced actual reading based billing.

Malegaon, Maharashtra: Malegaon Power Supply Limited (MPSL), a wholly owned subsidiary of CESC, took over the operations in Malegaon on March 1, 2020 after signing a Distribution Franchisee Agreement with Maharashtra State Electricity Distribution Company Limited (MSEDCL). The distribution area covers the Malegaon Corporation Area spread across 57.6 square kilometres with around 1.23 lakh consumers, Approximately, 75% of the demand comes from the power loom sector.

>The power looms sector was severely impacted during Covid. The situation started to improve in 2022-23. The Company added 4,067 new connections and exchanged another 11,846 meters. It also stepped-up vigilance activities, while at the same time taking significant efforts to improve billing efficiency. This resulted in considerable improvement in performance. MPSL registered a 5% increase in sales from 740 MU in 2021-22 to 782 MU in 2022-23. T&D losses, which were above 50% at the time of takeover, came down to 39% in 2022-23. The focus on reducing distribution losses will continue through greater vigilance, increasing coverage of metering as well as improvement in meter reading efficiency.

CESC strives to institutionalise best-in-class HR practices to create an environment that ensures growth, development and well-being of its employees. Accordingly, all HR strategies are formulated keeping employees at the core and supporting them to contribute to organisational growth. Processes are in place by way of engagement surveys and perception studies to receive feedback from employees and align the organisation with changing business needs.

It seeks to establish itself as an Employer of Choice through its well-structured recruitment processes and engagement with premier engineering and management institutes. With the gradual return to normalcy post Covid, both Unmesh, its summer internship programme, and Anneswan, its annual induction process, happened physically in 2022-23.

Developing a culture of knowledge and innovation is an important organisational goal. This process is structured under the overall guidance of an Apex Panel of Mentors comprising members of its top leadership team and driven by a Knowledge and Innovation Management Council comprising senior experts from various functions. Knowledge Carnival, the conclave which witnesses confluence of innovative ideas and sharing of knowledge, was held physically for the first time since the onset of the pandemic. Eclectic - the in-house technical journal was released in September 2022 and March 2023.

Learning and Development is a key element of its HR strategy. CESC has a robust process for conducting training and other learning interventions in line with an annual training plan. During the year, focus was given on skill development, operational safety and new age technologies like AI, ML, network security and data science. During 2022-23, the Company carried out 566 training programmes totalling around 10,136 man-days. These programmes were a mix of physical classroom-based and web-based sessions. Additionally, around 862 man- days were recorded from external training programmes.

Asia Institute of Power Management — the ISO 9001-2015 certified training and consulting wing of CESC — has established itself in training of power professionals all over India and abroad. In 2022-23, AIPM conducted seventeen physical trainings with executives from WBPDCL, WBSEDCL, ERPC, NTPC, Punjab State Power Corporation Limited and Bhutan Power Corporation with the support of USAID. In 2022-23, AIPM offered training to 231 senior executives on upgrading distribution network, improving efficiency in thermal generation and HR management. AIPM also conducted training on smart grid activities and integrating renewable sources of power.

CESC lays considerable emphasis on employee well-being and engagement. A comprehensive Employee Engagement Survey conducted during the year recorded around 6% increase in the overall employee satisfaction, while also providing insights on key organisational traits that influence the workforce productivity. Based on these, several initiatives were taken to focus on the quality of lives of our employees. Programmes like Ankur Samman to recognise the meritorious children of our employees and Avishkar to encourage talent among our employees and their family continue to be important platforms to support and engage employees. CESC also has structured Reward & Recognition programmes to acknowledge employee contribution. These include on-the-spot recognition as well as quarterly and annual public recognition forums. It also provides a family health insurance scheme for the benefit of its employees and their family members.

As on March 31, 2023, CESC had 6,469 employees on its payroll. Unions representing the employees continued to play a positive role in partnering with management to drive excellence in operations. CESC enjoyed industrial harmony in its operations during the year with no major incidents of service interruption due to industrial relations issues.

Quality has been an integral part of CESC ever since it started its operations. The ethos of customer centricity and operational excellence are developed through continuous upgradation of its quality practices that has established CESC as one of the most efficient power utilities in the country.

During the year, the emphasis was on reinforcing the quality culture through greater adoption of technology as well as quality practices and methodologies such as Kaizen and Workplace Organisation practices through 5S.

Significant progress was made on promoting project management discipline in its quality improvement journey through adoption of the DMAIC discipline for improvement projects for fresh groups. This as a structured methodology for problem identification and implementation of solution to ensure sustainable improvement and to meet need and expectations of the beneficiaries. CESC observed its 25th Quality Day in physical format in 2022-23, which witnessed full participation from employees at all levels.

CESC continues to strengthen the IT infrastructure and application landscape with infusion of digital interventions that allows it to innovate and provide its growing customer base best-in-class services as a power utility. This forms an integral part of the organisations ability to build a competitive edge and deliver on its strategic and performance objectives.

During the year, CESC has expanded the multi-channel capabilities to our consumers beyond WhatsAppBot and ChatBot and launched a multi-lingual Digital Voice Assistant called Aastha which is integrated with the CRM and outage systems and capable of carrying out interactions in Indian English, Hindi and Bengali. For this, it received a recognition at the ISGF (India Smart Grid Forum) Innovation Awards in March 2023. Improvements have been made to strengthen the Ease of Doing Business by

exploring and deploying purposeful process automation in areas of new connections and other business processes. A discussion on IT-enabled digital solutions and initiatives to improve operational efficiencies in the areas of outage management, billing and payments are already covered in the section on Customer Service. IT interventions for ESG initiatives in 2022-23 can be found in the Business Responsibility and Sustainability Report which form a part of this Annual Report.

The IT infrastructure includes CESCNET, its captive optical fibre data network, which connects the Companys service establishments across the license area as well as data centre (DC) and a disaster recovery (DR) sites for its IT application and systems. In 2022-23, the Company commissioned a new data centre to augment its IT servicing capabilities. A latest end-point backup solution was also introduced to reduce the risk of data loss in case of emergencies. It has also finalised Business Continuity Plan (BCP) architecture towards enhancement of the disaster and recovery posture of its systems and applications.

Cyber security infrastructure and solutions have been an important focus area. A state-of-the-art 24x7 Security Operations Centre (SOC) was commissioned during the year for early detection of cyber threats and attacks. An Endpoint Detection and Response (EDR) solution with latest global threat intelligence was also implemented to improve the security threat detection and resolution. CESC has adopted Dev-Sec-Ops framework in software development life cycle management. In 2022-23, ISO 27001 certification (Information Security Management Systems) was completed for both of its generating plants, alongwith plants of its subsidiaries HEL and DIL. Assesment has been completed for the distribution wing and the certificate is awaited.

CESC recognises the importance of environmental, social