Power Grid Corporation of India Ltd Management Discussions.

MANAGEMENT DISCUSSION AND ANALYSIS

1. Economic Overview of Indian Power Sector

The global economy Including India gradually started recovering In the last year from the Impacts of COVID-19. Particularly the latter half of the year, witnessed increased vaccine coverage across the globe and a drop in the cases. However, the global economic prospects worsened since the start of 2022 due to geopolitical environment in Eurasia and the economic recovery got a severe setback. As a result, the global GDP growth rate is expected to slow down to 3.2% in 2022 as per IMF World Economic Outlook, July, 2022. While India is also expected to be impacted by the global turmoil, the GDP growth rate is estimated to be 7.4% in 2022.

India aspires to become a US$5 trillion economy in coming years and attain US$40 trillion by 2047, when India marks centenary year of Independence. Energy Sector is playing a pivotal role in progress of country, both in ease of living and ease of doing business. Electricity has been regarded as a strategic commodity and has multiplier effect on variables determining landscape of economy.

As electricity rapidly replaces other sources of energy, a robust power sector becomes more critical for the growth of the economy with thrust on sustainablity and energy security. Despite being the third largest electricity consumer in the world, per capita electricity consumption in India was 1,255 kWh (FY 2021-22), considerably low as compared to the world average of more than 3,200 kWh. The per capita consumption of our country is envisaged to increase to 1,616 kWh by 2025.

Though 80% of Indias energy requirements are currently met by coal, oil, natural gas and solid biomass, India has emerged as a leader in commitment to sustainability and has taken progressive actions under its Nationally Determined Contributions (NDCs). It has strengthened its position as a transforming nation with outstanding far-reaching agendas like increasing nonfossil fuel based installed electricity capacity of the country.

At COP26, Honble Prime Minister announced five nectar elements (Panchamrit) of Indias Climate action:

• Reach 500 GW Non-Fossil energy capacity by 2030.

• 50% of its electrical energy requirements to be met from renewable energy sources by 2030.

• Reduction of total projected carbon emission by one billion tonnes from now to 2030.

• Reduction of the carbon intensity of the economy by 45% by 2030, over 2005 levels.

• Achieving the target of net zero emission by 2070.

On 3rd August, 2022, Govt. of India has updated nationally deterrmined contribution (NDC) representing framework for India transition to cleaner energy for period 2021-30. As per the updated NDC, India now stands commited to reduce emission intensity of its GDP by 45% by 2030 from 2005 level and achive about 50% cummulative electric power installed capacity from non fossil energy resources by 2030.

As of April 2022, India is fourth largest in terms of renewable power generation capacity in the world with installed capacity of 111 GW (excluding Large Hydro Capacity) along with 61 GW renewable capacity under implementation phase and 20 GW at various phases of bidding. The non-fossil fuel based installed capacity of the country is 165 GW i.e. 41% of the total installed power generation capacity.

The overall growth In the power sector across various segments, during last 3 years, Is detailed as below:

Growth Growth
FY19-20 FY 20-21 FY 21-22 YoY (%) (FY17-FY22)
CAGR (%)
Generation
Total Installed Capacity (incl. RE) GW 370.11 382.15 399.49 4.54 3.89
Renewable Capacity GW 87.03 94.43 109.85 16.33 12.35
Total Generation (Incl. RE) BU 1,389.1 1,381.86 1,491.86 7.96 3.63
Generation from RE sources (BU) 138.32 147.25 170.91 16.07 11.16
Cross-Border Power Exchange (BU) 15.68 18.74 16.83 -10.19 3.60
Transmission
Transmission Lines (ckm) 4,25,071 4,41,821 4,56,716 3.37 3.66
Transformation Capacity (MVA) 9,67,893 10,25,468 11,04,450 7.7 6.82
Inter-Regional Power Transfer Capacity (MW) 1,02,050 1,05,050 1,12,250 6.85 4.88
Inter-Regional Power Transfer (BU) 197.21 214.77 228 6.16 7.52
Power Markets
Short Term Transactions (Nos.) 50,948 69,036 89,544 29.71 32.57
Short Term Transactions (Energy Transacted) BU 117.36 123.67 162.809 31.65 17.78
Power Supply Position
Peak Demand (GW) 183.8 190.2 203.01 6.74 5.10
Peak Demand-Met (GW) 182.53 189.4 200.54
Deficit (%) 0.7% 0.40% 1.20%
Energy Demand (BU) 1,291.01 1,275.53 1,379.81 8.18 3.38
Energy Met (BU) 1,284.44 1,270.66 1,374.02
Deficit (%) 0.5% 0.40% 0.40%

Indian power sector Is undergoing significant changes that have redefined the Industry outlook. Theres a consistent Increase In the Installed generation and transmission Infrastructure depicting bright future In the Power Sector.

Future Potential of Power Sector

• Renewable Energy sector in India Is emerging as a significant player. In the grid connected power generation capacity and Is gearing up to play a much bigger role in achieving energy security in the years ahead.

• Increasing investments in the form of ambitious projects across the value chain.

• As per the rolling plan (March22) prepared by Central Transmission Utility of India (CTUIL) upto 2026-27 for Inter-State Transmission System (ISTS) envisages an investment of about Rs.1,24,148 crore during FY 2023-27.

• Renewable energy zones (REZs) of aggregate capacity of 181.5 GW have been identified in 8 states including Andhra Pradesh, Karnataka, Telangana, Rajasthan, Maharashtra, Madhya Pradesh, Gujarat (5GW Offshore wind) & Tamil Nadu (5 GW Offshore wind). These RE capacities include the Solar-Wind hybrid projects along with energy storage systems.

• Government of India has decided to bid-out off-shore energy blocks as per following:

• Project capacity of 4.0 GW per year for a period of three years starting with FY 2022-23 for development off the coast of Tamil Nadu and Gujarat are for sale of power through open access/captive/bi-lateral third-party sale/merchant sale.

• Subsequently, project capacity of 5 GW will be bid out every year for a period of five years i.e. up till FY 2029-30.

• Electricity (Transmission System Planning, Development and Recovery of Inter-State Transmission Charges) Rules, 2021 paves the way for overhauling of transmission system planning, towards giving power sector utilities easier access to the electricity transmission network across the country. The rules underpin a system of transmission access which is termed as a General Network Access (GNA) in the inter-state transmission system. In a major change from the present system, transmission planning will be led by demand for electricity and network expansion will precede generation capacities. State power utilities will also be able to purchase electricity from any source connected to the network and optimize their power purchase costs.

• Government of India has launched National Hydrogen mission with an aim to decarbonize major sectors of the economy and making India a green hydrogen hub. The green hydrogen policy has been notified in February, 2022 and is also expected to promote renewable energy generation as RE will be the basic ingredient in making hydrogen and will help in international commitment of clean energy.

2. Transmission Sector

Transmission sector plays a critical role in the value chain of the power sector. It acts as a growth lever for power sector by enabling seamless integration of power generation and availability of reliable, secure and affordable power to all the consumers. Increase in generation capacity, integration of renewable energy and focus of government on providing electricity to rural areas, has led to an extensive expansion of the countrys transmission and distribution (T&D) system across the country. To meet the growing energy demand (peak demand of 207 GW met in April, 2022) through sustainable sources, India is going through energy transition at rapid pace with greater focus on development of new Renewable Energy (RE) resources. Out of 500 GW, about 225 GW RE (Solar & Wind) is expected to be integrated into the grid by 2026-27. With the faster adoption of E-mobility to reduce emission of greenhouse gases, the demand for electricity has gained even more importance.

3. Opportunities

As per the 19th EPS published by CEA, Indias power demand is expected to increase to about 299 GW by 2026-27, a growth of about 47% from the present demand of 203 GW in FY 2021-22. To meet this fast-growing demand, generation capacity is also being continuously added into the grid. Accordingly, the installed capacity of India is expected to be about 568 GW by 2026-27 thereby registering a growth of about 42% from the installed capacity of 399 GW at the end of FY 2021-22.

Large RE parks of GW capacities are being developed in the country in resource rich areas to meet the energy transition goals. This huge quantum of RE needs to be transferred reliably and securely to all the major load-centres of the country. The integration of large amount of RE with the grid comes with many challenges like low-capacity utilization factor (CUF), flexibility, intermittency etc. One of the solutions could be to implement energy storage systems. Hence, there is also a thrust on development and integration of energy storage devices in form of batteries, pumped hydro etc. in the National Grid, which can store the excess electricity during off-peak period and hence provide balancing power during low or no RE period and increase utilization of transmission system associated with RE projects.

Transmission:

I. Inter-State Transmission System

In order to integrate the envisaged generation capacity of 568 GW (predominantly RE), and to meet the projected demand of 299 GW, by 2026-27, following asset addition is expected to be added as per the rolling plan of ISTS by CTUIL.

Sl. No. Financial Year Ckm addition MVA addition Estimated cost (in T crore)
1 2022-23 10,009 49,365 27,673
2 2023-24 6,099 52,820 19,079
3 2024-25 9,355 84,695 29,904
4 2025-26 4,404 23,330 20,525
5 2026-27 2,028 6,630 26,967
Total 31,895 2,16,840 1,24,148

 

(Source: Rolling Plan 2026-27 for Inter-State Transmission System by CTUIL)

Further, the Inter-Regional (IR) transmission capacity is expected to grow from present level of 1,12,250 MW to about 1,18,740 MW in next 2-3 years.

II. Intra-State Transmission System

The growing power demand calls for matching Intra state transmission systems infrastructure. Some of the States have started the development of Intra state transmission system by awarding works through TBCB route. This has thrown opportunity to prominent players operating in the development of Intra-State transmission system.

Government of India has approved Green Energy Corridor (GEC) phase-II for Intra State transmission system. The scheme will facilitate grid integration and power evacuation of approximately 20 GW of Renewable Energy (RE) power projects in seven States namely, Gujarat, Himachal Pradesh, Karnataka, Kerala, Rajasthan, Tamil Nadu and Uttar Pradesh. The estimated cost of the project is around Rs.12,000 crore and is targeted to be set up by FY 2025-26 with establishment of transformation capacity of approx. 27,500 MVA and installation of approx. 10,750 ckm of transmission line in seven states.

Further, the ongoing initiatives of Government of India and demand growth projections have spurred the investment opportunities in Intra state space through joint venture with prospective States and other various modes like extending consultancy services on project management, engineering solutions etc.

in addition to the above, Government of India has recommended to States to transfer 33 kV systems from DISCOM to State Transmission Utilities (STUs) with an objective of better upkeep of 33 kV network through investment in technological advancement. This shall lead to improvement of performance of 33 kV network.

III. Cross-Border Inter-connections

Transmission of power is economical than transportation of fuel. it is important to establish electrical interconnections with neighboring countries which would be beneficial in meeting growing power demand, sharing of various types of energy resources, decreasing operational cost through better resource management, utilizing renewable energy resources, and deferring investment by optimizing spinning reserves.

Presently, India is connected with its neighboring countries, Nepal, Bhutan, Bangladesh and Myanmar through various electrical interconnections with a cumulative power transfer capacity of about 4,233 MW. The cross-border power transfer by India with neighboring countries is through Inter-Governmental bilateral cooperation, which plans for cross border interconnection and system operation. The present cross-border transmission capacity of India with neighboring countries is summarized below:

"One Sun, One World, One Grid": Studies on techno-economic feasibility of interconnection of regional grid viz. SouthEast Asia, South Asia, Middle East (Gulf Cooperation Council), Africa & Europe for exchange of renewable power are being undertaken. Further, to facilitate Maldives energy transition programme, India and Maldives have proposed to establish transmission interconnection for renewable power transfer as part of One Sun, One World & One Grid initiative.

IV. Other emerging opportunities

a) Grid scale battery energy storage technologies

The intermittency associated with the RE technologies is a limitation, which needs to be addressed in the power system. Renewable energy supply round-the-clock (RTC) with the help of battery storage overcomes the intermittency associated with solar and wind, which generate energy only when there is enough sunshine and wind. Government of India has identified the requirement of approx. 27 GW/108 GWh energy storage including BESS by 2030.

Grid scale battery energy storage technologies have started gaining popularity globally due to reducing cost of installation. It is anticipated that battery energy storage technologies would become financially viable and complement RE as a prominent generation source in coming years.

b) Revamped Distribution Sector Scheme

It is a reform-based and results-linked scheme with an objective to improve quality and reliability of power supply to consumers through a financially sustainable and operationally efficient distribution Sector. This scheme aims to reduce the AT&C losses to pan-India level of 12-15% and ACS-ARR gap to zero by FY 2024-25. The Scheme has an outlay of Rs.3,03,758 crore over a period of five years from FY 2021-22 to FY 2025-26. This scheme shall create opportunities for capital investment/ partnering with the State utilities through various model like consulting services/ handholding to prospective states.

4. Companys Outlook

I. Transmission

Your Company Is primarily operating in Inter-State transmission sector and owns and operates approximately 85% of countrys network. As part of business strategy, the Company has expanded into development (acquired through TBCB mode) of Intra State network and has successfully commissioned/ maintaining transmission system in the state of Uttar Pradesh.

The Companys robust & large power transmission network (along-with its subsidiaries) along with other business segments, i.e. Telecom, Consultancy etc. are discussed in Directors Report.

Your Company continues to be a prominent player in transmission sector and has further aligned its business processes/ approaches to capitalize opportunities in Indian power transmission sector discussed above. Consequent to hiving off of statutory functions of Indias Central Transmission Utility (CTU), your Company continues to be a deemed Transmission Licensee under the Act and discharge functions incidental and connected therewith.

The Company Is expected to play a prominent role in opportunities under tariff based competitive bidding consequent to requirement of transmission system to achieve 50% cumulative electric power installed capacity from non-fossil fuel based energy resources by 2030.

Your Company Is exploring various opportunities available under Intra State segment and Is currently executing works in the state of Uttar Pradesh, Madhya Pradesh along-with participation in bidding opportunities being offered under Tariff Based Competitive Bidding.

II. Telecom

Digital infrastructure and services are increasingly emerging as key enablers and critical determinants of a countrys growth and well-being. With significant capabilities in both telecommunications and software, India stands poised to benefit from harnessing new digital technologies and platforms to unlock productivity, catalyzing economic growth, development, and ensuring access to next generation services for its citizens. Your company has set up a pan India fibre optic-based communication network to meet the communication requirement for safe and reliable operation of its transmission assets. The spare capacities available under telecom infrastructure Is being also utilized for providing telecom services to various customers (Telecom service providers, Government Department, State Governments, PSU, IT companies, Defense establishments).

The rapid and unprecedented growth of mobile phone, Internet, social media platforms, and the rapid expansion of digital payments, data consumption and generation across India indicate that the data economy and digital technologies and services have evolved into widespread instruments of access and empowerment for citizens. To harness emerging opportunities in the sector, your Company has formed a wholly owned telecom subsidiary company-POWERGRID TELESERVICES LIMITED. It has also received the Unified License for National Long Distance (NLD), International Long Distance (ILD) and Internet Service Category-A (ISP-A) Service from Department of Telecom. The telecom business of the company will be hived off into this company in the current fiscal year subject to necessary approvals.

The Company Is exploring new business opportunities within the telecom segment viz. setting up of Data Center, International Long Distance (ILD) Bandwidth Business to directly serve neighboring countries with reliable connectivity. Company Is establishing pilot Data Centre at Manesar, Gurugram. The Company has been continuously augmenting its all-India telecom network by enhancing new bandwidth capacity in existing routes, adding new routes and new locations to tap the opportunities. Your Company has also established 200 G based DWDM system and has established separate 100 G internet network with SD-WAN, DNS and D-DOS facility. Further, considering the security requirements of Government Department, the Company Is in process of establishing the Telecom network on Non-PRC country Telecom Equipment.

III. Consultancy Domestic

Driven by years of sectoral knowledge and large pool of experienced professionals, your Company Is regularly undertaking consultancy assignments on pan India basis. With strong in-house expertise in transmission, sub-transmission, distribution area, the Company Is exploring various avenues on acquiring business in field of transmission, distribution by playing key role as consultant for successfully implementing Government of India flagship program of Revamped Distribution Sector Scheme. With evolving sectoral landscape, your Company Is focusing to play pivotal role in assisting state utilities with cutting edge technology in areas of sub transmission & distribution. Consultancy services for development of associated transmission system for renewable generators Is also emerging as source of business.

The Sub-transmission system plays an important role as an interface between transmission and distribution system. Ministry of Power, Government of India has recommended to bring 33 kV systems from DISCOM to STUs and various technical measures for improvement of performance of 33 kV network including robust network planning, network re-configuration, re-conductoring, predictive maintenance, Modern technologies for improvement of reliability etc. Ministry of Power has also suggested STUs to form joint venture with your Company wherever necessary. Your Company is engaging with DISCOMs to explore opportunities for collaboration in this area.

International

Your Company has so far established footprints in 23 Countries spread across Asia, Africa, CIS countries, Asia-Pacific, Middle East and Europe by providing Consultancy services on Concept to commissioning of Transmission system viz. feasibility Study/Preparation of DPR, Project Management and Construction Supervision, Assistance in Procurement, Asset Management and Capacity Building to various clients which include state-owned power utilities, multilateral funding agencies like World Bank, ADB, KfW, IFC and Government of India. Your Company is exploring opportunities in Africa, Asia, Middle East and CIS countries.

In line with the Vision and as part of Government of Indias global outreach aspirations from its Maharatna CPSEs, your company is also exploring global opportunities for equity investment in power transmission projects. Company has signed Joint Development Agreement (JDA) with Africa50 to take up investment in Kenya under PPP mode through a Joint Venture with Africa50. Your company has also signed Share Holders Agreement with Nepal Electricity Authority for development of Indian portion of 400 kV New Butwal (Nepal) - Gorakhpur (India) transmission line in 50:50 JV.

The Companys performance and latest status of works under implementation has been discussed in the Directors Report.

IV. Foray into Solar Power Generation:

Your Company is looking for new business opportunities to enhance its operational presence in various new areas thus bringing more value to its shareholders. In view of the thrust on RE generation by Government of India, solar power generation is one such opportunity with immense potential for investment.

Your Company has un-utilized vacant land available at various locations which are suitable for establishment of Solar PV Power Plant. 5 locations at Nagda (Madhya Pradesh), Aurangabad (Maharashtra), Durgapur (W.B.), Bina (M.P.), Itarsi (M.P.) having potential of installed capacity of about 200 MWp have been identified. The work for first commercial 105 MWp Solar PV Plant is in progress at Nagda (M.P.).

V. Other Opportunities:

Your Company has large talent pool equipped with new age skills and experience to perform a leading role in entire supply value chain of power sector. The Company intends to partner with prospective states/utilities in the field of distribution businesses (upgradation of the distribution Infrastructure, Smart Metering under reform based and results linked scheme of Revamped Distribution Sector Scheme (RDSS). To fructify this, your Company has incorporated a wholly owned subsidiary, POWERGRID Energy Service Limited, with an objective to invest and/or act as Project Management consultant in new and emerging business areas viz. Energy Management, Transmission & Distribution business, Electric Vehicle charging infrastructure, Energy Storage, Smart Grid etc. in India and abroad.

Your company has initiated procurement process for End-to-End Metering Solution for 1 crore smart meters and discussions for development of SMART METERING infrastructure in state utilities are underway.

5. Major Constraints/Challenges/Threats faced in construction, operation & maintenance of Transmission systems and mitigation thereof:

I. Conserving Right-of-Way (RoW) through forests, agricultural land, urban areas, industrial establishments as well as other infrastructure, upgradation of transfer capacity of lines matching with power transfer requirement, securing land for substations are major areas of concern in development of transmission network in the country.

Challenges in Construction Mitigation actions
1. Managing scarcity of land for construction of Substation Apart from investing in new technologies like Gas Insulated Substations (GIS) and Hybrid sub-station, your Company, in order to minimize social impact, reduce resistance and ensure long term relation with land-owners in particular and community in general, has decided to secure land for its substation through mutual consent on Willing Buyer Willing Seller basis as far as possible. Securing land voluntarily instead of Involuntary acquisition by invoking provision of applicable act has resulted in smooth and resistance free acquisition of land for substations.
2. Overcoming Forest/ wildlife Clearances challenges POWERGRID Is utilizing Fortnightly Regional Coordination Meeting (FRCM) conducted by each Regional Integrated Regional Offices (IRO) of MoEFCC for resolution of its pending forest/wildlife cases as well as their approval by Regional Offices of MoEFCC expeditiously.
3. Timely expansion of Transmission system to meet the requirements The alternate procurement methodology to meet these short timeline requirement of Transmission projects were explored and following methodology for implementation of small bay work was proposed:
of Renewable Energy (RE) capacity addition • Bulk procurement of the 400 kV & 220 kV AIS Main equipment (i.e. CB, CT, CVT, LA, Isolator etc.) and 220 kV GIS Hybrid Bays.
4. Major outages of sub- station/generating plant due to natural calamities • Procurement of a mobile GIS station which consist of one no. 220 kV and one no. 132 kV bays (suitable for line/Transformer/Reactor application) mounted on trailer(s), which shall meet the contingency requirement for evacuation of power to match the schedule of generation plants.

II. The Company Is continuously taking efforts maintain the high standards of availability and reliability of its transmission system through use of latest state-of-art maintenance practices. Maintenance activities are planned well in advance and an Annual Maintenance Plan Is prepared for every asset through live line or shutdown maintenance, as per technical feasibility which has minimized the tripping of lines especially. The software tool, Transformer Online Condition Monitoring System (TOCMS), Is operational at NTAMC and RTAMC. POWERGRID has invested in the latest available technological tools and techniques for better operational performance and in this direction following latest technologies have been adopted by your Company:

Challenges in Operations and Maintenance Mitigation actions
Increasing operational & maintenance efficiency Development of transmission line patrolling APP: Developed an in-house application software PG-DARPAN (POWERGRID DIGITAL APPLICATION FOR ROUTINE PATROLLING & ASSESSMENT OF NETWORK) for transmission line patrolling with real time data and customizable dashboard for monitoring by management.
Hotline maintenance and Emergency restoration system (ERS): Implemented hot line maintenance technique to carry out maintenance of critical elements in live condition to avoid outages. Your Company Is also using ERS for quick restoration of transmission lines in case of failures.
Reactor with Natural ester oil: Commissioned Worlds first 400kV Shunt Reactor with Natural Ester oil as insulating fluid.
Digital Substations: Initiated upgradation of conventional protection and control system at 400/220kV old Kanpur substation to IEC 61850 process bus based full digital system towards digitalization.
FACTS Devices (STATCOM/SVC/FSC/TCSCs): Installed state-of-the art Static Synchronous Compensators (STATCOMs) in the 400kV grid to improve the grid reliability and voltage stability limit at multiple locations. Implemented Thyristor Controller Reactor (500 MVAR) in Kurukshetra to improve the static as well as dynamic voltage profile of Kurukshetra HVDC station.
Refurbishment of HVDC: Conducted functionality tests of Reverse power flow for evacuation of POWER from solar energy zones in Ballia-Bhiwadi HVDC link (Rajasthan).

6. Risk Management Framework

In todays world, we operate in an environment that Is highly dynamic, uncertain, and complex. Such an environment requires an organization to develop an efficient process to proactively evaluate the nature of risks and undertake measures to manage and mitigate risks.

We believe risks are multi-dimensional and need to be addressed holistically, considering the dynamic environment. Thus, to manage the strategic, operational, governance and cyber security risks associated with POWERGRIDs business operations and growth objectives, your Company has established a comprehensive Enterprise Risk Management (ERM) framework for identification, assessment, monitoring and management of risks. These risks are monitored and controlled through various Key Performance Indicators (KPIs).

To periodically review and monitor the identified risks, process and practices. Your Company has a dedicated Board level Risk Management Committee comprising of two Independent Directors and three Executive Directors as members. The Committee meets at regular intervals and reviews KPIs & major business risks and provides corrective measures to improve business efficiency. The ERM approach has helped POWERGRID to not just identify and mitigate various internal and external risks but also capitalize on emerging opportunities associated with various risks.

During the reporting period, meetings of Risk Management Committee were held to monitor/review the risks. Senior General Manager (Corporate Planning) has been designated as Chief Risk Officer of the Company.

7. Internal Financial Control and Adequacy

POWERGRID has a comprehensive internal control mechanism in place to verify the Accounting and Financial Management System, adequacy of controls, material checks, financial propriety aspects and compliance implementation mechanism. The elaborated guidelines for preparation of Accounts are followed consistently for uniform compliance.

In line with the regulatory requirements, the Internal Auditors were appointed by the Board of Directors. Regular and exhaustive Internal Audit on half yearly basis is carried out by the experienced Cost/Chartered Accountant Firms in close co-ordination with Companys own Internal Audit department to ensure that all checks and balances are in place and all internal controls/systems are in order. The Corporate Internal Audit Department also carries out System Audit and Management Audit to reassure the effectiveness of internal control mechanism. The scope of the Internal Audit is derived from the Internal Audit Plan approved by the Audit Committee. The Audit Committee meets at regular intervals.

The significant/material audit findings are placed before the Audit Committee for review, discussion and subsequent action.

8. Integrated Management Policy

POWERGRID is committed to:

• establish and maintain an efficient and effective "National Grid" with due regard to time, cost, technology and value addition,

• sustainable development through conservation of natural resources and adopting environment friendly technology on principles of Avoidance, Minimization and Mitigation,

• ensure safe, occupational hazard free and healthy work environment,

• to the satisfaction of stakeholders in all areas of its activities and shall endeavor to improve continually its management systems and practices in conformity to legal and regulatory provisions.

9. Financial Discussion and Analysis

Total Income

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Revenue from Operations 39,928.09 37,665.65 6.01
Other Income 2,407.78 2,861.46 (15.85)
Total 42,335.87 40,527.11 4.46

Total income in FY 2021-22 was Rs.42,335.87 crore, which represented an increase of 4.46% over the total income of Rs.40,527.11 crore in FY 2020-21. In FY 2021-22, transmission and transmission-related activities constituted 91.16% of our total income, with the balance coming from consultancy, telecommunication business and other income.

Factors affecting your Companys results of operations

Tariff norms

The transmission charges of the transmission system or an element used for inter-State transmission of electricity and implemented under Regulated Tariff Mode are governed by tariff norms notified by the CERC pursuant to Central Government Tariff Policy and legislation. The transmission licensee shall make an application as prescribed in the Tariff Regulations, for determination of tariff based on capital expenditure incurred or projected to be incurred during the prevailing tariff block for the transmission system as the case may be.

Under Tariff Regulations applicable for Block 2019-24, your Company has been permitted to charge transmission charges for recovery of annual fixed cost ("AFC") consisting of tariff components such as Return on Equity, Interest on Outstanding Debt, Depreciation, Operation & Maintenance expenditure and Interest on Working Capital.

The Return on Equity (ROE) is computed on pre-tax basis by grossing up the base rate of return on equity of 15.5% at the effective tax rate of the respective financial year. Interest on Outstanding Debt is calculated considering repayment of loan for each year deemed to be equal to the allowed depreciation. Recovery of Operation & Maintenance (O&M) expenses for maintaining the transmission systems are based on specified norms for Transmission Line, Sub-stations and HVDC systems, etc. For interest on working capital, Rate of interest is considered on normative basis and is linked to one-year MCLR of SBI plus 350 bps as on 1st April of the tariff year.

Besides above rebate for timely payment of transmission charges as per Tariff Regulations and late payment surcharge (LPS) as per MoP Rules for delayed payments is also applicable. MoP, vide Gazette Notification dated 22.02.2021, notified the Electricity (Late Payment Surcharge) Rules, 2021. Subsequently, MoP on 03.06.2022 issued Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 superseding the Electricity (Late Payment Surcharge) Rules, 2021. The LPS shall be payable on outstanding dues after 45 days at the rates specified in the rules. "Base rate of LPS" is linked to one year MCLR of SBI as on 1st April of the financial year plus 500 bps. In addition, regulation of access for default in payment of dues has also been provided in the rules. For projects being implemented under TBCB route, the tariff is discovered through competitive bidding process wherein the successful bidder would be the one who has quoted the lowest levelized tariff for a period of 35 years.

Sharing of Inter-state transmission charges for RTM projects and TBCB projects is governed by CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, as notified from time to time in line with the National Tariff Policy and provisions of the Electricity Act, 2003. Presently, CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, 2020 are in vogue.

As per the Sharing Regulations, 2020, the Central Transmission Utility (CTU), has the responsibility of billing, collection and disbursement of transmission charges on behalf of all ISTS licensees in the country. Your company ceased to be the CTU w.e.f. 01st April 2021 and the Central Transmission Utility of India Limited (CTUIL), a wholly owned subsidiary of the Company has been notified to undertake and discharge all functions of CTU. Your Company continues to be a deemed Transmission Licensee under the Electricity Act, 2003.

Certain expenses and income, allowed under CERC Regulations are required to be reimbursed/passed on to beneficiaries in future, are to be accounted in the Statement of Profit and Loss as per the provisions of Ind AS 114 Regulatory Deferral Accounts Such expenses and income, to the extent recoverable/payable as part of tariff under CERC Regulations are treated as Regulatory Deferral Assets/Liabilities.

9.1 Revenue from Operations

(Rs. in crore)
Revenue from Operations FY 2021-22 FY 2020-21 % Change
Revenue from transmission business 38,594.41 36,456.92 5.86
Revenue from consultancy business- Project 753.34 501.28 50.28
Management & Supervision
Revenue from telecom business 580.34 707.45 (17.97)
Total 39,928.09 37,665.65 6.01

Your Company Is mainly engaged in the business of Transmission of Power. The revenue from transmission business is increased by 5.86% mainly due to commissioning of new transmission assets and interest on differential between provisional and final tariff.

Your Company also earns revenue from Consultancy (including project management and supervision services) and Telecommunication business. Consultancy income mainly consists of fee for the execution of transmission and communication system-related projects on a turnkey basis and technical consulting assignments for Indian state utilities, joint venture/ subsidiaries companies and utilities in other countries.

The revenue from consultancy business Is increased by 50.28% mainly due to increase revenue in NERPSIP project and other O&M consultancy. The revenue from our telecommunication business Is mainly on account of leasing band width of our fibre - optic lines. The revenue from telecom business Is decreased by 17.97% mainly due to additional discount provided to BSNL.

9.2 Other Income

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Other Income 2,407.78 2,861.46 (15.85)

The other income reduced mainly due to decrease in surcharge income from customers and interest on loan to subsidiaries. 10. Expenses

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Expenses 25,767.90 24,822.40 3.81

Expenses have been categorized as

(i) Employees Benefits Expense

(ii) Finance Costs

(iii) Depreciation and Amortization expense

(iv) Other expenses.

10.1 Employees Benefits Expenses

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Employees benefits expenses 2,234.76 2,110.74 5.88

Employees benefits expenses include salaries and wages, performance related pay, allowances & benefits, contributions to provident and other funds and staff welfare expenses. The increase Is due to annual increments, increase in dearness allowance and commissioning of new assets.

10.2 Finance Costs

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Finance costs 8,210.94 8,501.01 (3.41)

As compared to previous year, the decrease of 3.41% in finance cost was mainly on account of repayment of loans and reduction in interest rate as compared to previous year.

10.3 Depreciation and Amortization Expenses

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Depreciation and amortization expenses 12,550.58 11,711.68 7.16

As compared to previous year, the increase of 7.16% in depreciation and amortization expenses was mainly on account of capitalization of new transmission assets.

10.4 Other Expenses

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Other Expenses 2,771.62 2,498.97 10.91

As compared to previous year, other expenses increased on account of higher cost of repair and maintenance of buildings, plant and machinery, power charges, security expenses, vehicle hiring charges, travelling expenses, CSR expenses etc.

11. Profit Before Tax & Regulatory Deferral Account Balances

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Profit before Tax & Regulatory Deferral Account 20,327.48 14,626.07 38.98
Balances

11.1 Exceptional Items

Your Company has monetized five of its Subsidiaries, namely POWERGRID Vizag Transmission Limited (PVTL), POWERGRID Kala Amb Transmission Limited (PKATL), POWERGRID Jabalpur Transmission Limited (PJTL), POWERGRID Warora Transmission Limited (PWTL) and POWERGRID Parli Transmission Limited (PPTL) through POWERGRID Infrastructure Investment Trust (PGInvIT/ Trust).

PGInvIT has been registered by SEBI under SEBI (Infrastructure Investment Trusts) Regulations, 2014 (InvIT Regulations) as an Infrastructure Investment Trust vide registration no. IN/InvIT/20-21/0016 dated 07th January, 2021. The Company is the Sponsor of PGInvIT and acts as the Project Manager to PGInvIT. IDBI Trusteeship Services Limited is the Trustee and POWERGRID Unchahar Transmission Limited (PUTL), a wholly owned subsidiary of the Company, has been appointed as Investment Manager to PGInvIT. The 74% shares in the above five SPVs have been transferred to PGInvIT in May, 2021 and balance 26% shares of PVTL has been transferred in March 2022. The balance 26% of remaining SPVs i.e. PKATL, PJTL, PWTL & PPTL will be transferred in line with Transmission Service Agreement (TSA) & the same has been classified as "Assets Classified as Held for Sale" as on 31.03.2022. In lieu of consideration of shareholding so transferred, 41,06,50,900 Units at the price of Rs.100 each were allotted by PGInvIT to the Company and Rs.330.78 crore towards transfer of 26% share of PVTL. Further, the Company received Rs.304.15 crore on relinquishment of right on additional revenue in PPTL, PWTL & PJTL. The Company retained 13,65,00,100 units being 15% of total units of PGInvIT outstanding on post issue basis pursuant to InvIT Regulations and remaining 27,41,50,800 units were sold by way of Offer for Sale (OFS) The Company received an amount of Rs.2736.02 crore (net of STT) against the OFS. The Profit on above transactions (net of related expenses) amounting to Rs.3759.51 crore has been disclosed under "Exceptional items"

In previous year, a consolidated one time rebate of Rs.1078.64 crore was given to DISCOMs and Power Departments of States/ Union Territories for passing on to end consumers on account of COVID-19 pandemic against the billing of April, 2020 and May, 2020.

11.2 Tax Expenses

Tax expenses consist of Current tax and Deferred tax.

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Current Tax 3,282.06 2,529.11 29.77
Deferred Tax (571.00) 560.03 na

Provision for deferred tax is made in respect of timing difference on account of higher depreciation charge available under income tax provisions. In the opinion of the management, it is probable that future economic benefits will flow to the Company in the form of availability of set off against future income tax liability by recognizing MAT credit. Future taxable profits will be adjusted against (a) tax holiday u/s 80-IA of Income Tax Act, 1961 for the projects commissioned upto 31st March, 2017 (b) initial depreciation on the assets to be commissioned in future and (c) regular income tax depreciation u/s 32 of Income Tax Act, 1961 and thereafter tax amount will be set off against MAT credit to the extent of Rs.3,288.36 crore (Previous year Rs.2,158.77 crore). Hence, the same has been recognized as Deferred Tax Assets during the year.

11.3 Net Movement in Regulatory Deferral Account Balances-Income/(Expenses) (Net of Tax)

Net movement in Regulatory Deferral Account Balances-Income/(Expenses) (net of tax) for FY 2021-22 stood at Rs.(522.66) crore as against Rs.398.85 crore in previous year.

12. Profit After Tax

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Profit After Tax 17,093.76 11,935.78 43.21

Your Company recorded a growth in profit of 43.21% as compared to the previous year is mainly due to commissioning of new transmission assets, monetisation through PGInvIT during the year and rebate provided to DICs in previous year.

13. Return on Net Worth

Particulars FY 2021-22 FY 2020-21 Change
Return on Net Worth 22.45 17.15 30.90

Return on Net worth has increased in FY 2021-22 as compared to previous year on account of growth in profit (including monetisation through PGInvIT during the year and rebate provided to DICs in previous year).

14. Financial Ratios

Particulars FY 2021-22 FY 2020-21
Debtors Turnover 4.39 4.19
Inventory Turnover 29.14 26.91
Interest Coverage Ratio 4.61 3.79
Current Ratio* 0.62 0.84
Debt Equity Ratio 63:37 67:33
Operating Profit Margin# 93% 95%
Net Profit Margin ** 43% 32%

Note: # Operating profit margin = Earnings before Interest, Depreciation, Tax & Exceptional items/Revenue from Operations

* Current ratio decreased by 26% due to increase in current maturities of Long term borrowings and Short-term borrowing.

** Net Profit Margin increased by 34% due to profit on sale of shares in subsidiaries/associates to PGInvIT.

15. Other Comprehensive Income (Net of Tax)

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
Other Comprehensive Income 290.93 25.36

The variation is mainly due to increase in valuation of investment in PTC India Limited Shares & units of PGInvIT and increase in provisions made for actuarial valuation.

16. Credit Ratings

Your Companys financial prudence is strongly reflected in the credit ratings accorded by domestic and international ratings agencies.

For details, refer.

Report on Corporate Governance.

17. Liquidity and Capital Resources

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Cash and cash equivalents 2,457.47 4,430.05 (44.53)

The Company depends on both internal and external sources of liquidity to provide working capital and to fund capital requirements. The decrease in cash and cash equivalents in comparison to previous year is mainly on account of reduction in designated account balances relating to consultancy clients/others.

18. Cash Flows

(Rs. in crore)

Year ended March 31

Particulars 2022 2021
Net cash from operating activities 24,640.20 27,613.73
Net cash from/(used in) investing activities 2,188.54 (7,802.99)
Net cash from/(used in) Financing activities (28,801.32) (20,185.83)
Cash and cash equivalents at the end of the year 2,457.47 4,430.05

18.1 Net Cash from Operating Activities

Net cash flows from operating activities are principally used to service long-term debt, for investments and for payment of dividend.

18.2 Net Cash from/(used in) Investing Activities

Net cash used in investing activities during FY 2021-22 was primarily reflected in expenditure on Property, Plant & Equipment and Capital Work-in-Progress (including advances for capital expenditure) of Rs.3,645.32 crore, Loans & Advances to Subsidiaries & Joint Ventures including repayments of Rs.1,228.83 crore, investment in Subsidiaries & Joint Ventures of Rs.1,122.13 crore and receipt of interest on deposits, bonds, loans to subsidiaries & JVs and investment in PGInvIT of Rs.1,239.26 crore, surcharge received of Rs.244.59 crore and dividend received Rs.664.38 crore.

18.3 Net Cash from/(used in) Financing Activities

During FY 2021-22, your Company raised Rs.2,584.70 crore of new long term borrowings. These borrowings included principally Rupee bonds/Loans and foreign currency borrowings. The Company repaid Rs.15,251.97 crore of long-term borrowings and paid interest and finance charges of Rs.8,813.95 crore. In the FY 2021-22, the Company paid dividend of Rs.10,811.96 crore comprising final dividend of Rs.2,092.64 crore for FY 2020-21 and interim dividends of Rs.8,719.32 crore for FY 2021-22.

19. Capital Expenditure

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Capital Expenditure (cash) 9,426 11,150 (15.46)

Your Companys capital expenditure is primarily used for the installation of new transmission capacity and the expansion of existing capacity. Our capital expenditure during FY 2021-22 and FY 2020-21, includes CAPEX for TBCB companies of Rs.4,501 crore and Rs.3,598 crore respectively.

20. Non-current Assets

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Non Current Assets 2,17,793.25 2,18,973.55 (0.54)

Non-current assets have been categorized as (i) Property, Plant & Equipment; (ii) Capital work in progress; (iii) Investment Property (iv) Intangible assets; (v) Intangible assets under development; (vi) Investments (vii) Loans; (viii) other non-current financial assets; (ix) other non-current assets and (x) Assets classified as held for sale.

20.1 Property, Plant and Equipment

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Property, Plant & Equipment 1,78,175.63 1,75,392.06 1.59

Property, Plant & Equipment (Net Block) has Increased by 1.590/o. It mainly consists of Land, Buildings, Transmission Lines, Substations, HVDC, ULDC Equipment, Furniture & Fixtures etc.

20.2 Capital work in progress

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Capital work-in-progress 7,344.46 17,896.67 (58.96)

Capital work-in-progress was decreased by 58.96% in FY 2021-22.The cost of materials consumed, erection charges and other expenses incurred for the implementation of projects are shown on the Balance Sheet as capital work-in-progress, pending capitalization of the completed project. The change in this amount is due to capitalization of several transmission projects and due to undertaking of new transmission projects.

20.3 Intangible assets

(f in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Intangible Assets 1,556.13 1,551.44 0.30

Intangible Assets consist of Electronic Data Processing Software, Right of Way-Afforestation Expenses, Telecom licenses and development of 1200 kV Transmission System.

20.4 Intangible assets under development

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Intangible assets under development 31.53 74.86 (57.88)

Right of way-afforestation expenses are shown on the balance sheet as Intangible assets under development. The change is on account of capitalization of expenditures on Transmission Projects during FY 2021-22 and undertaking of new transmission projects.

20.5 Investments

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Investments (Quoted) 1,926.43 93.30
Investments (Un-Quoted) 5,302.10 4,172.06
Total 7,228.53 4,265.36 69.47

Investments under Quoted category are investments made in PTC (India) Limited and Investment in Units of POWERGRID Infrastructure Investment Trust (PGInvIT) computed at Fair Value. Investments Under Unquoted category in FY 2021-22 consist of equity investment in joint venture and subsidiary companies mainly at cost. Major investments in Joint venture & subsidiaries as on 31st March, 2022 are:

Sl. Name of the Subsidiary/Joint Venture No. Amount invested as on 31.03.2022 (Rs. in crore)
Subsidiaries
1 POWERGRID NM Transmission Limited 488.95
2 POWERGRID Khetri Transmission System Limited 198.25
3 POWERGRID Medinipur Jeerat Transmission Limited 638.00
4 POWERGRID Mithilanchal Transmission Limited 233.20
5 POWERGRID Ajmer Phagi Transmission Limited 115.00
6 POWERGRID Himachal Transmission Limited 432.50
7 POWERGRID Fategarh Transmission Limited 141.00
8 POWERGRID Southern Interconnector Transmission System Limited 709.00
9. POWERGRID Varanasi Transmission System Limited 186.00
10. POWERGRID Bhuj Transmission Limited 180.00
11. POWERGRID Rampur Sambhal Transmission Limited 109.00
12. POWERGRID Meerut Simbhavali Transmission Limited 129.71
Joint Ventures
13. Powerlinks Transmission Limited 229.32
14. Teestavalley Power Transmission Limited 120.12
15. North East Transmission Company Limited 106.96
16. Bihar Grid Company Limited 322.54
17. Energy Efficiency Services Limited 463.61

20.6 Loans (Non-Current)

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Loans to Related Parties 13,880.84 10,163.97
Loans to Employees 388.94 310.12
Total 14,269.78 10,474.09 36.24

The increase in loans from previous year to FY 2021-22 was mainly due to increase in Unsecured Loans to Subsidiaries which are executing Projects acquired by the Company through Tariff Based Competitive Bidding (TBCB) route and loans to Joint venture companies.

20.7 Other non-current financial assets

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Other non-current financial assets 4,144.46 4,313.62 (3.92)

Other non-current financial asset mainly consists of Recoverable from GOI fully serviced Bonds and Lease Receivables. Company has issued Government of India fully serviced bonds amounting to Rs.3,487.50 crore during FY 2018-19 for raising of Extra Budgetary Resources (EBR) for GOI scheme of Power System Development fund in terms of letter no. 7/1/2018-OM dated 21st January, 2019 of Ministry of Power, Government of India for meeting accrued liabilities for creation of Capital Assets. The repayment of principal and the interest payment on such bonds shall be met by GOI.

20.8 Other non-current assets

(f in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Other non-current assets 4,797.73 4,744.56 1.12

Other non-current assets mainly comprise of advances for Capital Expenditure, deferred foreign currency Fluctuation Asset, advance recoverable in kind or for value to be received.

21. Current Assets

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Current Assets 20,111.35 24,692.38 (18.55)

Current Assets have been categorized as (i) Inventories; (ii) Trade receivables; (iii) Cash & Cash Equivalents; (iv) Bank Balances other than cash and cash equivalents; (v) Loans; (vi) Other current financial assets; (vii) Other current assets and (viii) Assets classified as held for sale.

21.1 Inventories

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
inventories 1,352.60 1,362.82 (0.75)

inventories are valued at lower of the cost, determined on weighted average basis, and net realizable value. Our inventories consist of components, spares & other spare parts, loose tools, consumable stores and other items.

21.2 Trade Receivables

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Trade Receivables 9,106.82 8,470.20 7.52

Trade Receivables consist mainly of receivables relating to transmission services, consultancy services and telecom services. Due to different payment security mechanisms available to the company, the company has no material impaired receivables.

21.3 Cash & Cash Equivalents

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Cash and Cash Equivalents 2,457.47 4,430.05 (44.53)

Cash & Cash Equivalents decreased by 44.53% in FY 2021-22 as compared to previous year mainly on account of reduction in term deposits (with maturity less than 3 months) held in respect of consultancy clients and others.

21.4 Bank Balances other than cash & cash equivalents

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Bank balances other than cash & cash 513.57 843.49 (39.11)
equivalents

Bank Balances other than cash & cash equivalents decreased by 39.11% during FY 2021-22 as compared to previous year mainly on account of lower term deposits in banks held on behalf of consultancy clients and others.

21.5 Loans

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Loans 328.27 5,428.83 (93.95)

The decrease in Loans from previous year to FY 2021-22 was mainly on account of reduction in current maturities of Loans to Subsidiaries Companies.

21.6 Other current financial assets.

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Other current financial assets 6,125.77 3,031.53 102.07

As compared to previous year, other current financial assets increased by 102.07% during FY 2021-22 as compared to previous year mainly on account of increase in Contract Assets.

21.7 Other Current Assets

Particulars FY 2021-22 FY 2020-21 % Change
Other current assets 210.99 173.28 21.76

As compared to previous year, the other current assets have increased by 21.76% in FY 2021-22.

21.8 Assets Classified as Held for Sale

The investments of Rs.260.86 crore (current & non-current) in the four subsidiaries have been classified as "Assets classified as held for sale" as on 31.03.2022. For details refer to "Exceptional items" explained above.

22. Indebtedness

We rely on both Rupee and foreign currency denominated borrowings. A significant part of our external funding has been through long-term foreign currency loans from multilateral agencies such as the World Bank and the Asian Development Bank, with our performance under such loans guaranteed by GOI. Following table sets forth, by currency, our outstanding debt and its maturity profile (currency conversions are as of 31st March, 2022):

(Rs. in crore)
Particulars 2022-23 2023-24 2024-25 2025-26 Beyond 2026-27 Total
Domestic Bonds (1) 6,090.23 5,391.48 7,851.35 6,776.10 37,291.08 63,400.24
Domestic Loans (2) 2,004.00 2,754.00 3,254.00 3,254.00 12,950.06 24,216.06
Foreign Loans
US$ 6,235.96 2,475.78 2,377.65 2,255.22 20,486.94 33,831.55
EUR 615.72 615.72 612.85 610.60 2,777.18 5,232.07
SEK 208.54 208.54 208.54 208.54 412.26 1,246.42
JPY 11.42 11.42 11.42 11.42 1,393.25 1,438.93
TOTAL (3) 7,071.64 3,311.46 3,210.46 3,085.78 25,069.63 41,748.97
GRAND TOTAL (1+2+3) 15,165.87 11,456.94 14,315.81 13,115.88 75,310.77 1,29,365.27

22.1 Long-term borrowings

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Long-term borrowings 1,14,199.40 1,29,080.07 (11.53)

Long-term borrowings include amounts raised from our private placement of bonds, term loans from banks and financial institutions. Due to the repayment of loans during last year our borrowings have decreased by 11.53% in comparison of previous year.

22.2 Secured Loans

Our secured loans (excluding current maturities of long term loans) as at 31st March, 2022 and 2021 were Rs.82,429.61 crore and Rs.91,689.02 crore respectively. Most of these loans have been secured by floating charges on the moveable and immovable properties of the Company. The following table presents the secured debt as at 31st March, 2022:

Amount (Rs. in crore) % of total secured debt
Bonds denominated in Rupees 45,461.16 55.15
Term Loans and Other Loans From Banks and Financial institutions:
Denominated in Foreign Currency 29,147.42 35.36
Denominated in Rupees 7,821.03 9.49
Total 82,429.61 100

22.3 Unsecured Loans

Our unsecured loans (excluding current maturities) as at 31st March, 2022 and 2021 were Rs.31,769.79 crore and Rs.37,391.05 crore respectively, which consist of domestic bonds, foreign currency bonds, loans from foreign financial institutions/ Banks such as the Natixis (Formerly Credit National) in France, Japan international Cooperation Agency (Formerly Japan Bank for international Co-operation) in Japan, Skandinaviska Enskilda Banken AB (publ.) in Sweden and AB Svensk Exportkredit, Sweden.

The following table presents our unsecured debt as at 31st March, 2022

Amount (Rs. in crore) % of total secured debt
Bonds denominated in Foreign Currency & Domestic Bonds 11,848.86 37.30
Term Loans, From Banks and Foreign Currency Loans:
Denominated in Foreign Currency 5,529.90 17.40
Denominated in Rupees 14,391.03 45.30
Total 31,769.79 100

23. Advance Against Depreciation (AAD)

Advance against depreciation (AAD) was a component of tariff that was permitted to be charged under CERC regulations for the Block 2004-09, to cover shortfall in respect of depreciation in a year on assets, for repayment of debts. AAD was done away with in the tariff block 2009-2014 and depreciation rate were reworked. Due to change in these tariff norms and the depreciation rates w.e.f. 1st April, 2009, the outstanding AAD has been taken to transmission income after 12 years from the date of commercial operation to the extent the depreciation charged in respect of transmission system is more than the depreciation recovery under tariff. As on 31st March, 2022, AAD has decreased by 15.08% from Rs.1,010.75 crore during FY 2020-21 to Rs.858.29 crore in FY 2021-22.

24. Current liabilities

Particulars FY 2021-22 FY 2020-21 % Change
Current liabilities 32,279.37 29,523.30 9.34

Current liabilities includes (i) Borrowings; (ii) Trade payables; (iii) Other Current Financial Liabilities; (iv) Other Current liabilities; (v)Provisions; (vi) Current Tax Liabilities (Net) and (vii) lease liabilities.

24.1 Borrowings (Current)

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Borrowings 20,465.87 13,971.41 46.48

The Borrowings was increased due to increase in current maturities of Long Term Borrowings and increase in short term borrowings from banks.

24.2 Trade payables

Particulars FY 2021-22 FY 2020-21 % Change
Trade payables 266.14 186.30 42.86

Trade payables at 31st March, 2022 were 42.86% higher as compared to 31st March, 2021. 24.3 Other Current Financial Liabilities

(f in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Other current financial liabilities 7,408.90 10,228.58 (27.57)

Other current financial liabilities mainly include dues for capital expenditure, Interest accrued but not due on borrowings, deposits/retention money from contractors and others etc. Other current financial liabilities at 31st March, 2022 were 27.57% lower as compared to 31st March, 2021.

24.4 Other Current liabilities

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Other current liabilities 3,203.41 3,871.69 (17.26)

Other current liabilities at 31st March, 2022 were 17.26% lower as compared to 31st March, 2021 mainly on account of advances from customers.

24.5 Provisions

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21 % Change
Provisions for Employee Benefits and others 932.31 835.88 11.54

As compared to previous year, the provisions for Employee Benefits and others increased by 11.54%.

25. BUSINESS AND FINANCIAL REVIEW OF JOINT VENTURE COMPANIES AND SUBSIDIARIES FOR FY 2021-22 25.1 JOINT VENTURE (JV) COMPANIES:

A. Powerlinks Transmission Limited (POWERLINKS):

POWERGRID and Tata Power Company Limited are the Joint Venture Partners in this Joint Venture Company and hold 49% and 51% equity respectively. POWERLINKS was incorporated to undertake the implementation of Transmission Lines associated with Tala HEP, East-North interconnector and Northern Region Transmission System from Siliguri in West Bengal via Bihar to Uttar Pradesh and was the first public - private partnership in Power Transmission. POWERLINKS progressively commissioned the project by August, 2006. POWERGRID received Rs.36.69 crore as dividend during FY 2021-22 from this JV.

As on 31st March 2022, POWERLINKS has a paid-up capital of Rs.468.00 crore and POWERGRIDs share in its paid-up capital is Rs.229.32 crore.

Financial Highlights of this JV:

( Rs. in crore
Particulars FY 2021-22 FY 2020-21
POWERGRIDs investment in Equity 229.32 229.32
Gross Income 144.15 127.32
Profit after Tax 91.39 102.01
Earnings per Share* ( Rs.) 1.95 2.18

*Face value per Share is Rs.10 each.

B. Torrent Power Grid Limited (TPL):

POWERGRID and Torrent Power Limited are the Joint Venture Partners in this Joint Venture Company and hold 26% and 74% equity respectively. The Company was incorporated to undertake the implementation of transmission system associated with 1100 MW Gas Based project (Sugen) Generation Station of Torrent Power Ltd. at Akhakhol in Surat District of Gujarat.

As on 31st March, 2022, TPL has paid-up capital of Rs.90 crore. POWERGRIDs share in the paid-up capital is Rs.23.40 crore. The project was progressively commissioned in March, 2011. POWERGRID has received Rs.5.15 crore as dividend during FY 2021-22 from this JV.

Financial Highlights of this JV:

(Rs. in crore)
Particulars FY2021-22 FY 2020-21
POWERGRIDs investment in Equity 23.40 23.40
Gross Income 40.84 44.24
Profit after Tax 18.46 19.31
Earnings per Share* ( Rs.) 2.05 2.15

*Face value per Share is Rs.10/- each.

C. North East Transmission Company Limited (NETC):

POWERGRID entered into a Joint Venture Agreement with ONGC Tripura Power Project Company Ltd. (OTPC), Government of Tripura, Manipur, Mizoram, Assam Electricity Grid Corporation Ltd., Meghalaya and Nagaland for establishment of Transmission Line of 400 kV D/C Palatana- Silchar- Bongaigoan Transmission Project associated with 726.6 MW Palatana Gas based Power Project in the state of Tripura.

As on 31st March 2022, NETC has paid-up share capital of Rs.411.40 crore. POWERGRIDs share in the paid-up capital is Rs.106.96 crore.The project was progressively commissioned in February, 2015. POWERGRID has received Rs.13.90 crore dividend during FY 2021-22 from this JV.

Financial Highlights of this JV:

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
POWERGRIDs investment in Equity 106.96 106.96
Gross Income 320.76 323.96
Profit after Tax 69.59 75.24
Earnings per Share* ( Rs.) 1.69 1.83

*Face value per Share is Rs.10/- each.

D. Parbati Koldam Transmission Company Limited (PKTCL)

POWERGRID and India Grid Trust (IGT) are the Joint Venture Partners in this Joint Venture Company and hold 26% and 74% equity respectively. PKTCL was incorporated to undertake the implementation of transmission lines associated with Parbati-ll (800 MW) HEP and Koldam (800 MW) HEP.

As on 31st March, 2022, PKTCL has paid-up capital of Rs.272.84 crore. POWERGRIDs share in the paid-up capital is Rs.70.94 crore.The Project commissioned progressively in November, 2015. POWERGRID has received Rs.9.93 crore dividend during FY 2021-22 from this JV.

Financial Highlights of this JV:

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
POWERGRIDs investment in Equity 70.94 70.94
Gross Income 114.31 176.12
Profit after Tax 13.51 60.97
Earnings per Share* ( Rs.) 0.50 2.23

*Face value per Share is Rs.10/- each.

E. Teestavalley Power Transmission Limited (TPTL)

POWERGRID and Teesta Urja Ltd. are the Joint Venture Partners in this Joint Venture Company and hold 30.92% and 69.08% equity respectively. TPTL was incorporated to undertake the implementation of transmission lines associated with 1,200 MW Teesta-lll Hydro Electric Power Project to Kishanganj sub-station.

As on 31st March, 2022, TPTL has Paid-Up Capital of Rs.388.45 crore. POWERGRIDs share in the paid-up capital was Rs.120.12 Crore. The Project commissioned progressively in February, 2019.

Financial Highlights of this JV:

(Rs. in crore)
Particulars FY2021-22 FY 2020-21
POWERGRIDs investment in Equity 120.12 120.12
Gross Income 241.11 300.26
Profit after Tax 16.14 46.05
Earnings per Share* (Rs.) 0.42 1.19

*Face value per Share is Rs.10/- each.

F. National High Power Test Laboratory Private Limited (NHPTL)

NHPTL is a joint venture Company of NTPC, NHPC, POWERGRID, DVC and CPRI with equal equity participation of 20% each. The main aim of the NHPTL is to establish an online high power short circuit test facility in the country. This Facility

Is being established for the first time in the country at Bina (M.P.) to provide a full range of short circuit testing for the electrical equipment in conformance to Indian and International Standards.

As on 31st March, 2022, NHPTL has paid up share capital of Rs.152 crore. POWERGRIDs share in the paid-up capital was Rs.30.40 crore.

High Voltage Transformer (HVTR) Section of Laboratory under Phase-I put under commercial operation with effect from 1st July, 2017. The HVTR lab is capable of Short Circuit (SC) testing of power transformers for all possible ratings with voltage class starting from 132 kV to 765 kV. Medium Voltage Transformer (MVTR) Section is under implementation. The project has no operating profit yet.

G. Bihar Grid Company Limited (BGCL)

POWERGRID entered into a Shareholders Agreement on 29th December, 2012 with Bihar State Power (Holding) Company Limited {BSP(H)CL} for implementation of Intra-State Transmission System in the State of Bihar on 50:50 equity participation basis.

As on 31st March, 2022, BGCL has the Paid-up Share Capital of Rs.645.07 crore. POWERGRIDs share in the paid-up capital was Rs.322.54 Crore.

The Company is implementing Transmission System Strengthening Schemes in Bihar under Phase-IV, Part-I worth Rs.2,024 crore. The major components of Part-I Projects are under commercial operation. Further, works Phase-IV, Part-II worth Rs.1,688 crore and Supplementary works worth Rs.111 crore are under final stage of implementation.

Financial Highlights of this JV:

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
POWERGRIDs Investment in Equity 322.54 290.30
Gross Income 518.54 502.08
Profit after Tax 143.96 201.67
Earnings per Share* ( Rs.) 2.37 3.47

*Face value per Share is Rs.10/- each.

H. RINL POWERGRID TLT Private Limited (RPTPL)

POWERGRID and RashtriyaIspat Nigam Ltd. (RINL) formed a joint venture Company, RPTPL, on 50:50 equity participation basis, for setting up a Transmission Line Tower (TLT) manufacturing plant at Visakhapatnam with a view to exploit the emerging opportunity in transmission line tower manufacturing business. As on 31st March, 2022, the JV Company has paid up share capital of Rs.8.00 crore. However, keeping in view the business scenario of tower manufacturing, the Board of Directors of POWERGRID accorded In-principle approval for closure of the Company. RINL is seeking approval of Ministry of Steel for Closure of RPTPL.

I. Cross Border Power Transmission Company Limited (CPTCL)

POWERGRID entered into Shareholders Agreement on 9th July, 2012 with IL&FS Energy Development Company Limited (IEDCL), SJVN Limited (SJVN) and Nepal Electricity Authority (NEA) of Nepal and Incorporated a JV Company i.e. Cross Border Power Transmission Company Limited, Incorporated in India for implementation of Indian portion viz. Muzaffarpur - Sursand section (India Portion) of 400 kV D/C Muzaffarpur - Dhalkebar Indo-Nepal Cross Border transmission line.

The Shareholding of POWERGRID, SJVN, IEDCL and NEA in the said JV Company is 26%, 26%, 38% and 10% respectively. As on 31st March, 2022, CPTCL has paid-up capital of Rs.48.50 crore. At present, POWERGRID equity is Rs.12.61 crore.

POWERGRID has received Rs.1.39 crore dividend during FY 2021-22 from this JV. The Board of Directors of CPTCL has recommended final dividend of 25% for FY 2021-22, which would be declared in the forthcoming AGM of CPTCL.

J. Power Transmission Company Nepal Limited (PTCN)

POWERGRID entered into a "Joint Venture cum Share Purchase Agreement" on 5th April, 2014 with Nepal Electricity Authority (NEA), Hydroelectricity Investment & Development Company Ltd. (HIDCL) of Nepal and IL&FS Energy Development Company Ltd (IEDCL) and Incorporated a JV Company in Nepal i.e. Power Transmission Company Nepal

Limited (PTCN) for implementation of Dhalkebar - Bhittamod 400 kV Transmission Line (Nepal Portion of 400 kV D/C Dhalkebar - Muzaffarpur Indo-Nepal Cross Border transmission line). The Dhalkebar - Muzaffarpur Indo-Nepal Cross Border Transmission line is being used for Transmission of power between India & Nepal.

The Shareholding of NEA, POWERGRID, HIDCL and IEDCL in the said JV Company is 50%, 26%, 14% and 10% respectively.

As on 31st March, 2022, PTCN has Authorized, issued & paid-up share capital of NPR 45 crore. At present, POWERGRID equity is NPR 11.70 crore including 1,30,000 Bonus shares of NPR 100/- each. The line is under commercial operation w.e.f. 19th February, 2016. POWERGRID has received Rs.1.32 crore dividend during FY 2021-22 from this JV.

K. Energy Efficiency Services Limited (EESL)

POWERGRID entered into a Joint Venture Agreement with NTPC Ltd., Power Finance Corporation Ltd., and REC Ltd. The JV Company viz. EESL is to promote measures of Energy efficiency, Energy Conservation and Climate Change and is carrying out business related to energy audit of Government buildings, consultancy assignments etc. in India and globally.

As on 31st March, 2022, EESL has Paid-up Share Capital of Rs.1,390 crore. POWERGRID has invested Rs.407.49 crore during FY 2021-22 in EESL, thereby increasing its shareholding from 5.71% to 33.33%. POWERGRIDs share in the paid-up capital was Rs.463.61 crore (33.33%) as on 31st March, 2022. EESL has been considered as joint venture w.e.f. 1st September, 2021 being the joint control been reinstated vide Agreement dated 1st September, 2021.

25.2 SUBSIDIARY COMPANIES:

A. POWERGRID NM TRANSMISSION LIMITED (PNMTL)

PNMTL was acquired by POWERGRID on 29th March, 2012 under Tariff Based Competitive Bidding for establishing Transmission System associated with IPPs of Nagapattinam/Cuddalore Area (Package A) from PFC Consulting Ltd. (the Bid Process Co-ordinator). The Transmission System comprising 765 kV D/C and 765 kV S/C traverses the states of Tamil Nadu and Karnataka. PNMTL was granted transmission license by CERC in June, 2013. As on 31st March, 2022, PNMTL has an Authorized and Paid-up Share Capital of Rs.496.25 crore and Rs.488.95 crore respectively. The project elements have been progressively commissioned and the entire project has been commissioned on 26th January, 2019.

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
Gross Income 119.02 124.95
Profit after Tax 7.50 (37.05)

B. POWERGRID UNCHAHAR TRANSMISSION LIMITED (PUTL)

PUTL was acquired by POWERGRID on 24th March, 2014 under Tariff Based Competitive bidding from REC Transmission Projects Company Limited (the Bid Process Co-ordinator) for establishment of Transmission System for ATS of Unchahar TPS. The transmission system comprising 400 kV D/C traverses the state of Uttar Pradesh. The Company was granted transmission license by CERC in July, 2014. The Project has been commissioned on 23rd September 2016.

Power Grid Corporation of India Limited (holding Company) has appointed PUTL as the Investment Manager of POWERGRID Infrastructure Investment Trust, in accordance with the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014, as amended (the "InvIT Regulations"). Accordingly, PUTL has amended its Main Objects Clause of the Memorandum of Association to enable to undertake investment management activities in relation to the Trust.

As on 31st March, 2022, PUTL has an Authorized Share Capital of Rs.14 crore and Paid-up Share Capital of Rs.12.96 crore. PUTL has paid first interim dividend of Rs.4.54 crore in August, 2021, Second interim dividend of Rs.4.54 crore in October, 2021 and Third interim dividend of Rs.4.27 crore in January, 2022 for FY 2021-22.

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
Gross Income 30.53 21.79
Profit after Tax 16.76 4.94

C. POWERGRID SOUTHERN INTERCONNECTOR TRANSMISSION SYSTEM LIMITED (PSITSL)

PSITSL was acquired by POWERGRID on 4th December, 2015 under Tariff based Competitive bidding from REC Transmission Projects Company Limited (the Bid Process Co-ordinator) for "Strengthening of Transmission System Beyond Vemagiri" Project on build, own, operate and maintain (BOOM) basis. The transmission project comprising of 765 kV & 400 kV D/C transmission lines is to traverse the states of Andhra Pradesh, Telangana & Karnataka and include establishment of one 765/400 kV Substation as well as 400 kV bay extension at two existing sub-stations in the state of Andhra Pradesh. The Company was granted transmission license by CERC in March, 2016.

As on 31st March, 2022, PSITSL has an Authorized Share Capital of Rs.731 Crore and Paid-up Share Capital of Rs.709.004 Crore. PSITSL, comprising elements viz. Vemagiri-II - Chilakaluripeta 765 kV D/C line, Chilakaluripeta - Cuddapah 765 kV D/C line, Chilakaluripeta - Narsaraopeta (Sattenapalli) 400 kV (quad) D/C line, Cuddapah - Madhugiri 400 kV (quad) D/C line, Srikaukulam Pooling Station - Garividi 400 kV (Quad) D/C line and 765/400 kV substation at Chilakaluripeta on Build, Own, Operate and Maintain (BOOM) basis, has been successfully commissioned progressively on 17th January, 2020.

PSITSL has paid first interim dividend of Rs.26.94 crore in October, 2021, Second interim dividend of Rs.28.36 crore in December, 2021, Third interim dividend of Rs.53.88 crore in January, 2022 and Fourth interim dividend of Rs.9.93 crore in March, 2022 for FY 2021 -22. Further, the final dividend of FY 2020-21 amounting to Rs.28.36 crore has been paid during FY 2021-22.

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
Gross Income 492.59 470.82
Profit after Tax (37.51) 108.68

PSITSL had filed a petition with CERC for increase in Transmission charges on account of Force Majure and change in law events. CERC has allowed partial increase in transmission Charges on account of Change in Law events. PSITSL has filed an appeal with Appellate Tribunal for Electricity (APTEL) challenging the above CERC order. APTEL has granted interim protection against coercive/precipitative actions by LTTCs till the next date of hearing of 24.08.2022. The matter is sub- judice. However, a provision for the amount of Rs.234.55 crore towards LD was made in FY 2021-22 leading to a reduction in the profit for the year.

D. POWERGRID MEDINIPUR JEERAT TRANSMISSION LIMITED (PMJTL)

PMJTL was acquired by POWERGRID on 28th March, 2017 under Tariff based competitive bidding from PFC Consulting Limited (the Bid Process Co-ordinator) for Transmission System associated with "765kV Strengthening in Eastern Region (ERSS-XVIII)" The Transmission System includes establishment of 765kV and 400kV Transmission lines which is to traverse the states of West Bengal and Jharkhand including establishment of two new 765/400kV Substations in West Bengal. The Company was granted transmission license by CERC in June, 2017.

As on 31st March, 2022, PMJTL has an Authorized Share Capital of Rs.682.00 crore and Paid-up Share Capital of Rs.638.00 crore. Seven out of eight elements of the Project elements were progressively commissioned on 09th February, 2021 and 29th September, 2021.

PMJTL has paid total interim dividend of Rs.187.02 crore for FY 2021-22. Further, final dividend of FY 2020-21 amounting to Rs.18.00 crore has been paid during FY 2021-22.

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
Gross Income 448.61 45.72
Profit after Tax 191.62 19.15

E. POWERGRID MITHILANCHAL TRANSMISSION LIMITED (PMTL)

PMTL formerly known as ERSS XXI Transmission Limited, was acquired by POWERGRID on 12th January, 2018 under Tariff based competitive bidding from REC Transmission Projects Company Limited (the Bid Process Coordinator) for Transmission System associated with "Establish Transmission System for Eastern Region Strengthening Scheme- XXI (ERSS-XXI)" The Transmission System includes establishment of 400 kV Transmission lines in the state of Bihar including establishment of three new 400/220/132 kV Substations in Bihar. The Company was granted transmission license by CERC in April, 2018.

As on 31st March, 2022, PMTL has an Authorized and Paid-up Share Capital of Rs.245.50 crore and Rs.233.20 crore.

The Project has been progressively commissioned on 11th March, 2021, 13th April, 2021, 23rd April, 2021 and 17th October, 2021.

PMTL has paid first interim dividend of Rs.17.72 crore in March, 2022 and Second interim dividend of Rs.9.79 crore in May, 2022 for FY 2021-22.

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
Gross Income 143.92 2.35
Profit after Tax 38.09 0.95

F. POWERGRID VARANASI TRANSMISSION SYSTEM LIMITED (PVTSL)

PVTSL formerly known as WR-NR Power Transmission Limited was acquired by POWERGRID on 27th March, 2018 under Tariff Based Competitive Bidding from REC Transmission Projects Company Limited (the Bid Process Co-ordinator) for establishing Transmission System for new Western Region- Northern Region 765 kV Inter Regional Corridor. The Transmission System includes establishment of a 765 kV D/C Transmission Line from Vindhyachal pooling station to Varanasi and traverses the states of Madhya Pradesh and Uttar Pradesh. The Company was granted transmission license by CERC in August, 2018. The project was commissioned in August, 2021.

As on 31st March 2022, PVTSL has Authorized and Paid-up Share Capital of Rs.198.90 crore and Rs.186.00 crore. PVTSL has paid first interim dividend of Rs.11.16 crore in March, 2022 and Second interim dividend of Rs.7.44 crore in May, 2022 for FY 2021-22.

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
Gross Income 79.69 0.02
Profit after Tax 20.16 0.01

G. POWERGRID JAWAHARPUR FIROZABAD TRANSMISSION LIMITED (PJFTL)

PJFTL formerly known as Jawaharpur Firozabad Transmission Limited was acquired by POWERGRID on 21st December, 2018 under Tariff based competitive bidding from REC Transmission Projects Company Limited (the Bid Process Coordinator) for establishing Transmission System for Evacuation of Power from 2 X 660 MV Jawaharpur Thermal Power Project and Construction of 400 kV Substation at Firozabad along with associated Transmission Lines and is an Intra State Transmission Project of Uttar Pradesh. The Company was granted transmission license by UPERC on 5th July, 2019.

The project elements have been progressively commissioned and the entire project has been commissioned on 02nd July, 2021.

As on 31st March 2022, PJFTL has an Authorized and Paid-up Share Capital of Rs.93.70 crore and Rs.89.60 crore respectively. PJFTL has paid first interim dividend of Rs.6.17 crore in October, 2021 for FY 2021-22.

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
Gross Income 51.90 3.57
Profit after Tax 17.12 1.04

H. POWERGRID KHETRI TRANSMISSION SYSTEM LIMITED (PKTSL)

PKTSL formerly Khetri Transco Limited was acquired by POWERGRID on 29th August, 2019 under Tariff based competitive bidding from REC Transmission Project Company Limited (the Bid Process Coordinator) to establish Transmission system associated with LTA application from Rajasthan SEZ (Part -C) on Build, Own, Operate and maintain (BOOM) basis. The Company was granted transmission license by CERC on 19th December, 2019.

As on 31st March, 2022, PKTSL has an Authorized and Paid-up Share Capital of Rs.209.00 Crore and Rs.198.25 Crore, respectively. The project is successfully commissioned on 4th October, 2021.

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
Gross Income 52.67 -
Profit after Tax 5.96 (0.04)

I. POWERGRID BHIND GUNA TRANSMISSION LIMITED (PBGTL)

PBGTL formerly Bhind Guna Transmission Limited was acquired by POWERGRID on 11th September, 2019 under Tariff based competitive bidding from REC Transmission Project Company Limited (the Bid Process Coordinator) to establish transmission system for Intra-State Transmission Work associated with construction of 400 kV Substation near Guna (Distt.-Guna) & Intra-State Transmission Work associated with construction of 220 kV S/s near Bhind (Distt.-Bhind, Madhya Pradesh) on Build, Own, Operate and maintain (BOOM) basis. The Company was granted transmission license in January 2021 by MPERC.

As on 31st March, 2022, PBGTL has an Authorized and Paid-up Share Capital of Rs.107.00 crore and Rs.90.15 crore respectively. The project is under implementation.

J. POWERGRID AJMER PHAGI TRANSMISSION LIMITED (PAPTL)

PAPTL was acquired by POWERGRID on 3rd October, 2019 under Tariff based competitive bidding from REC Transmission Projects Company Limited (the Bid Process Coordinator) to establish transmission system for Construction of Ajmer (PG)- Phagi 765 kV D/C line along with associated bays for Rajasthan SEZ. The Company was granted transmission license by CERC on 4th March, 2020.

As on 31st March, 2022, PAPTL has an Authorized and Paid-up Share Capital of Rs.125 crore and Rs.115 crore respectively. The project was commissioned on 6th May, 2021.

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
Gross Income 47.95 -
Profit after Tax 0.91 (0.01)

K. POWERGRID FATEHGARH TRANSMISSION LIMITED (PFTL)

PFTL was acquired by POWERGRID on 14th October, 2019 under Tariff based competitive bidding from PFC Consulting Limited (the Bid Process Coordinator) to establish transmission system for Ultra Mega Solar Park in Fatehgarh, Distt. Jaisalmer Rajasthan. The Company was granted transmission license by CERC on 4th March, 2020.

As on 31st March, 2022, PFTL has an Authorized and Paid-up Share Capital of Rs.141.00 crore.The project has been put under commercial operation on 1st September 2021.

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
Gross Income 36.71 -
Profit after Tax 2.26 -

L. POWERGRID BHUJ TRANSMISSION LIMITED (PBTL)

PBTL was acquired by POWERGRID 16th October, 2019 under Tariff based competitive bidding from PFC Consulting Limited (the Bid Process Coordinator) to establish transmission system for providing connectivity to RE projects at Bhuj- II (2000MW) in Gujarat. The transmission system includes establishment of new 2 x 1500 MVA (765/400 kV), 4 x 500 MVA (400/220 kV) Bhuj - II PS and reconfiguration of Bhuj PS - Lakadia PS 765 kV D/c line so as to establish Bhuj - II - Lakadia 765 kV D/c line as well as Bhuj - Bhuj II 765 kV D/c line. The Company was granted transmission license by CERC on 3rd March, 2020.

As on 31st March, 2022, PBTL has an Authorized and Paid-up Share Capital of Rs.180.00 crore. The project is under implementation.

M. POWERGRID RAMPUR SAMBHAL TRANSMISSION LIMITED (PRSTL)

PRSTL was acquired by POWERGRID on 12th December, 2019 under Tariff based competitive bidding from REC Transmission Projects Company Limited (the Bid Process Coordinator) to establish transmission System for construction of 765/400/220 kV GIS Substation at Rampur and 400/220/132 kV GIS Substation at Sambhal with associatedTransmission Lines and is an Intra State Transmission Project of Uttar Pradesh. The Company was granted transmission license by UPERC in September, 2020.

As on 31st March, 2022, PRSTL has an Authorized and Paid-up Share Capital of Rs.166 crore and Rs.109 crore respectively. The project is under implementation.

N. POWERGRID MEERUT SIMBHAVALI TRANSMISSION LIMITED (PMSTL)

PMSTL was acquired by POWERGRID on 19th December, 2019 under Tariff based competitive bidding from PFC Consulting Limited (the Bid Process Coordinator) to establish transmission system for Construction of 765/400/220 kV GIS Substation, Meerut with associated lines and 400/220/132 kV GIS Substation, Simbhaoli with associated Transmission lines and is an Intra State Transmission Project of Uttar Pradesh. The Company was granted transmission license by UPERC in September 2020.

As on 31st March, 2022, PMSTL has an Authorized and Paid-up Share Capital of Rs.208.00 Crore and Rs.129.71 Crore respectively. The project is under implementation.

O. POWERGRID RAMGARH TRANSMISSION LIMITED (PRTL)

PRTL formerly Ramgarh New Transmission Limited was acquired by POWERGRID on 9th March, 2021 under Tariff based competitive bidding from REC Power Distribution Company Limited (the Bid Process Coordinator) to establish Transmission System for Transmission System Strengthening Scheme for Evacuation of Power from Solar Energy Zones in Rajasthan (8.1 GW) under Phase-II Part-A on Build, Own, Operate and Maintain (BOOM) basis. The Company was granted transmission license by CERC on 31st May, 2021.

As on 31st March, 2022, Company has an Authorized and Paid-up Share Capital of Rs.20 Crore and Rs.1.10 crore, respectively. The project is under implementation.

P. POWERGRID BIKANER TRANSMISSION SYSTEM LIMITED (PBTSL)

PBTSL formerly Bikaner-II Bhiwadi Transco Limited was acquired by POWERGRID on 25th March , 2021 under Tariff based competitive bidding from PFC Consulting Limited (the Bid Process Coordinator) to establish Transmission System for "Transmission System Strengthening Scheme for Evacuation of Power from Solar Energy Zones in Rajasthan (8.1 GW) under Phase-II Part-F" on Build, Own, Operate and maintain (BOOM) basis. The Company was granted transmission license by CERC on 15th July, 2021.

As on 31st March, 2022, Company has an Authorized and Paid-up Share Capital of Rs.70.00 Crore and Rs.22.21 Crore respectively. The project is under implementation.

Q. POWERGRID SIKAR TRANSMISSION LIMITED (PSTL)

PSTL formerly Sikar New Transmission Limited was acquired by POWERGRID on 4th June, 2021 under Tariff based competitive bidding from REC Power Distribution Company Limited (the Bid Process Coordinator) to establish Transmission System for "Transmission system strengthening scheme for evacuation of power from solar energy zones in Rajasthan (8.1 GW) under Phase II - Part C" on Build, Own, Operate and Maintain (BOOM) basis. The Company was granted transmission license by CERC on 27th May, 2022.

As on 31st March, 2022, Company has an Authorized and Paid-up Share Capital of Rs.80 crore and Rs.47.35 crore respectively. The project is under implementation.

R. POWERGRID BHADLA TRANSMISSION LIMITED (PBDTL)

PBTL formerly Fatehgarh Bhadla Transco Limited was acquired by POWERGRID on 4 June, 2021 under Tariff based competitive bidding from REC Power Distribution Company Limited (the Bid Process Coordinator) to establish Transmission System for "Transmission system strengthening for evacuation of power from solar energy zones in Rajasthan (8.1 GW) under phase II - Part B" on Build, Own, Operate and Maintain (BOOM) basis. The Company has filed petition with CERC for grant of transmission license.

As on 31st March, 2022, Company has an Authorized and Paid-up Share Capital of Rs.40 crore and Rs.20.31 crore respectively. The project is under implementation.

S. POWERGRID VEMAGIRI TRANSMISSION LIMITED (PVTL)

POWERGRID Vemagiri Transmission Limited was acquired by POWERGRID on 18th April, 2012 under Tariff Based Competitive bidding for establishing Transmission system associated with IPPs of Vemagiri Area (Package A) from REC Transmission Projects Company Limited (the Bid Process Co-ordinator). The transmission system comprising 765kV D/C lines was to traverse the state of Andhra Pradesh and Telangana.

As on 31st March, 2022, POWERGRID Vemagiri Transmission Limited has an Authorized Share Capital and Paid-up Share Capital of Rs.0.05 Crore each.

CERC vide Order dated 06th April, 2015 stated that Vemagiri-Khammam-Hyderabad 765 kV D/C lines under the project is neither required as an evacuation line nor as a system strengthening line, no useful purpose will be served by adopting the transmission charges and granting license to the petitioner for the said transmission line and has withdrawn the regulatory approval for the Transmission project.

T. POWERGRID HIMACHAL TRANSMISSION LIMITED (PHTL)

POWERGRID has acquired 74% stake on 25th March, 2021 held by Jaiprakash Power ventures Ltd. (JPVL) in JPL (Jaypee POWERGRID Limited) and hence JPL has become a wholly owned subsidiary of POWERGRID. Consequent upon acquisition name of the Company has been changed from Jaypee POWERGRID Limited to POWERGRID HIMACHAL transmission limited.

PHTL is engaged in operation and maintenance of (i) 400 Kv D/C Karcham Wang to Abdullapur Transmission Line with 219.80 KM (ii) LILO of 400 Kv D/C Baspa-Jhakri Line with 4.0 KM.

As on 31st March, 2022, the Authorized and Paid-up Share Capital of PHTL is Rs.300 crore. The project has been commissioned on 1st April, 2012. PHTL has paid total dividend of Rs.84 crore during FY 2021-22.

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
Gross Income 136.43 152.81
Profit after Tax 51.28 30.00

U. POWERGRID ALIGARH SIKAR TRANSMISSION LIMITED (PASTL)

PASTL formerly known as Sikar-II Aligarh Transmission Limited was acquired by POWERGRID on 8th June, 2021 under Tariff based competitive bidding from PFC Consulting Limited (the Bid Process Coordinator) to establish transmission system for Transmission system strengthening scheme for evacuation of power from solar energy zones in Rajasthan (8.1 GW) under Phase II - Part D and The Transmission system comprises establishment of a 765 kVD/C transmission line from Sikar to Aligarh and associated Substation extension works in the State of Rajasthan and Uttar Pradesh.

As on 31st March, 2022, Company has an Authorized and Paid-up Share Capital of Rs.70 crore and Rs.62.35 crore respectively. The project is under implementation. The Company was granted transmission license on 28th May, 2022 by CERC.

V. CENTRAL TRANSMISSION UTILITY OF INDIA LIMITED (CTUIL)

Pursuant to mandate of Government of India, POWERGRID incorporated Central Transmission Utility of India Limited, as its wholly-owned Subsidiary on 28th December, 2020. This Subsidiary has been mandated to be acquired by Government of India. As on 31st March, 2022, the Authorised and paid Up Share Capital of CTUIL is Rs.1 crore and Rs.0.05 crore respectively.

(Rs. in crore)
Particulars FY 2021-22 For the period from 28th December, 2020 to 31st March, 2021
Gross Income 53.71 -
Profit after Tax 40.03 (0.03)

W. POWERGRID TELESERVICES LIMITED (POWERTEL)

Pursuant to approval of the Board of Directors of POWERGRID, a Company was incorporated, as a wholly owned Subsidiary, namely POWERTEL on 25th November, 2021. This Subsidiary has been incorporated to undertake Telecommunications and Digital Technology Business of POWERGRID. The agreement for Unified License for NLD, ISP-A & ILD service authorizations was signed on 11th May, 2022 and the application for IP-1 Registration has already been submitted to DoT. Further, appointment of new Legal counsel for drafting Business Transfer Agreement (BTA) and other Business transfer activities is under process. Based on the approval received from CERC for incorporation of POWERTEL, POWERGRID will proceed to file the petition in CERC for permission of transfer of Telecom Business from POWERGRID to POWERTEL once the BTA is finalized by Legal Counsel. Upon receipt of approval from CERC, Telecom Business will be transferred from POWERGRID to POWERTEL.

As on 31st March, 2022, the Authorised and Paid Up Share Capital of POWERTEL is Rs.50 crore and Rs.9 crore respectively.

X. POWERGRID ENERGY SERVICES LIMITED (PESL)

Pursuant to approval of the Board of Directors of POWERGRID, a Company was incorporated, as a wholly-owned Subsidiary, namely POWERGRID Energy Services Limited on 14th March, 2022. This Subsidiary has been incorporated to undertake the Energy Management projects in India and Abroad. As on 31st March, 2022, the Authorised and Subscribed Share Capital of PESL is Rs.10 crore and Rs.0.05 crore respectively.

26. Consolidated financial statement

The consolidated financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) 110- Consolidated Financial Statements and Indian Accounting Standards (Ind AS) 28 - Investments in Associates and Joint Ventures On consolidated basis, the Total Income of the Company, during FY 2021-22, stood at Rs.42,697.90 crore as against Rs.40,823.53 crore during FY 2020-21, registering an increase of about 4.59%. Total Expenses for the year ended 31st March, 2022 stood at Rs.25,957.32 crore as against Rs.24,820.56 crore for the year ended 31st March, 2021. Profit after Tax during FY 2021-22 increased by 39.78% vis-a-vis FY 2020-21. A brief summary of the results on a consolidated basis is given below:

(Rs. in crore)
Particulars FY 2021-22 FY 2020-21
Total Income 42,697.90 40,823.53
Profit before Tax & Regulatory Deferral Account Balances 20,139.38 15,139.03
Profit after Tax 16,824.07 12,036.46
Net Cash from operating activities 26,123.52 29,402.68

27. Material developments in Human Resources/Industrial Relations

Please refer to Human Resource section of Directors Report for details.

For and on behalf of the Board of Directors
(K. Sreekant)
Chairman & Managing Director
DIN:06615674
Date: 5th August, 2022
Place: Gurugram