A Recommended for approval of Shareholders

The total dividend payout for the year amounts to Rs.10,289 crore (including interim dividends of Rs.8,719 crore). The final dividend shall be paid after approval at the Annual General Meeting. The total payout ratio for the year was 60 % as compared to 57 % for previous year.

1.2. Transfer to Reserves

For FY 2021-22, appropriation of profit has been made as follows:

a) General Reserve: Rs.7,000.00 crore

b) Self-Insurance Reserve: Rs.291.14 crore

1.3. Government of India (GOI) Shareholding

The Government of India's shareholding in the Company remained unchanged at 51.34%.

2.1. Completion of Inter-Regional projects

Your Company added 7,200 MW of Inter-Regional power transfer capacity to the national grid through following projects:

a) Pole-III & IV of the Raigarh-Pugalur-Trichur HVDC Scheme:

During the year, ?800 kV Raigarh - Pugalur FIVDC link along with Bipole-ll (Pole-Ill & IV 1,500 MW each) and ? 320 kV, 2000 MW, Pugalur - Trichur Voltage Source Converter (VSC) based FIVDC System were commissioned (part of Raigarh- Pugalur- Trichur FIVDC Scheme). This has enhanced the inter-regional power transfer capacity of national grid by 3,000 MW.

Through this project, the state-of-the- art VSC Technology has been brought to India for the first time by POWERGRID.

The VSC technology significantly reduces the land requirement compared to the conventional FIVDC systems and is \ oarticularlv suitable for areas, where land is

scarce. It also facilitates development of smart grid and improves system resilience under various operating conditions. A unique feature of this project is the combination of overhead line and underground cable to address the restricted availability of transmission corridor in Kerala.

Major HVDC equipment like interface transformers and IGBT-based power convertors, AC equipment such as Gas Insulated Sub-station, switchgear, controls, and relay panels have been supplied by factories in India, aligned to the Government of India's Make in India program. A significant part of the design, engineering, testing, and commissioning for this VSC based Pugalur - Trichur project has been done in India, supporting the Prime Minister's vision of "Aatmanirbhar Bharat".

b) 765kV D/C Vindhyachal Pooling Station - Varanasi Transmission Line

During the year, POWERGRID's wholly owned subsidiary POWERGRID Varanasi Transmission System Limited (PVTSL) commissioned Vindhyachal Pooling Station - Varanasi 765kV D/C Transmission Line. This transmission line corridor provides a strong connectivity between Northern Region and Western Region and has enhanced the inter-regional power transfer capacity of national grid by 4,200 MW.

2.2. Tariff Based Competitive Bidding (TBCB)

During the year under review, your Company emerged successful in one Inter-State Transmission project associated with solar energy zones in Rajasthan and one Intra-State Transmission Project in Uttar Pradesh. Three project SPVs (Sikar-II Aligarh Transmission Limited, Fathegarh Bhadla Transco Limited and Sikar New Transmission Limited) were acquired by your Company in FY 2021-22.

As on 31st March, 2022, nine TBCB subsidiaries were fully operational and six out of seven elements of one subsidiary were operational. Cumulatively, the Company, at the end of FY 2021-22, owned 20 TBCB subsidiaries, the details of which are provided in the Management Discussion & Analysis Report (MD&A).

2.3. Monetization of Transmission Assets through POWERGRID Investment Infrastructure Trust (PGInvIT):

The Union Budget 2019-20 emphasized investment led growth and indicated that new and innovative financial instruments including Infrastructure Investment Trusts (lnvITs), have been launched as part of the brown field asset monetization strategy for augmenting infrastructure investment.

Your Company in accordance with the guidelines of Government of India, had monetized assets, which are mainly High Voltage Transmission lines and substations, through Infrastructure Investment Trust (InvIT) model. Your Company is the first PSU in the country to undertake asset recycling by monetizing its assets through the InvIT model and using the proceeds to fund the new and under-construction capital projects. Total amount raised through asset monetization during the year was Rs.8,370 crore.

2.4. Incorporation of POWERGRID Energy Services Limited

Your Company has setup a wholly owned subsidiary namely 'POWERGRID Energy Services Limited' with an objective to invest in and 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.

2.5. Incorporation of POWERGRID Teleservices Limited

The latest technological advancements in the telecom sector, increased thrust of the government on digitalization of the economy, enhanced data localization accelerated by prevailing geo-political environment are likely to provide growth opportunities. To harness the emerging opportunities in the sector, POWERGRID has formed a wholly owned subsidiary company POWERGRID Teleservices Limited which would provide greater focus to this segment. POWERGRID got International Long Distance (ILD) license to directly serve customers in the neighboring countries with reliable broadband connectivity.

POWERGRID's Board accorded approval for expansion into Data Center Business. A Pilot Data Center at an estimated cost of Rs.322 crore is approved to be established at Manesar. The Company is also planning to establish hyper scale data centers in the country. POWERGRID Telecom is also planning to setup the edge data centers to serve the businesses in Tier-1 cities of the country.

2.6. Other emerging opportunities

Your Company is exploring opportunities for installation of smart meters for state utilities under DBFOOT model and initiated procurement process for End-to-End Smart Metering Solution for one crore smart meters. Your Company also envisages Battery Energy Storage System (BESS) to be a significant element of future grid. Accordingly, your Company has appointed a consultant to study the business scope for it in the BESS segment and is looking to setup BESS system.

Your Company is also evaluating setting up solar generation capacity on the vacant land available with it and few locations with a total potential of 200 MWp have been identified. Of these, preparations are being made to build your Company's first 105MWp solar PV plant at Nagda, MP. The power generated would be either utilized for in-house requirements or sold through exchange/ PPAs.

3.1. Asset Management

As on 31st March 2022, your Company's total transmission assets I including those owned through its wholly owned subsidiaries consisted of 1,352 transmission lines aggregating to 1,72,437 ckm., 265 substations with an aggregate transformation capacity of 4,74,457 MVA.

Your Company is increasingly migrating towards digitization of asset management keeping in view the growing asset base. Centralized relay database management system has been introduced which will improve the efficiency of relay settings management and save manhours in operation and maintenance of assets.

Internal benchmarking on key performance indicators is used by

your Company to analyze operational performance, identify areas for improvement and achieve optimal operational performance.

In-house repair of GIS substation equipment by your Company's maintenance team at six substations has avoided prolonged system failures and saved significant costs. Refurbishment of defective GIS modules at a site was also carried out by your Company's team of maintenance specialists and provided significant cost savings. Five older air insulated substations (AIS) located in the North-Eastern region of your Company have been replaced with Gas Insulated Substations (GIS), improving system reliability.

Refurbishment of ?2x250MW HVDC Vindhyachal back-to-back and ?500kV, 1,500MW HVDC Rihand-Dadri Bipole were carried out for life extension. These projects have served the Indian power system for more than 25 years and refurbishing them, the first of its kind in India for HVDC systems, will extend their life by approximately 10 years benefiting the end

consumers with reliable and quality power supply. To evacuate power from solar energy zones in Rajasthan, testing of reverse power flow in Ballia-Bhiwadi HVDC link (Bhiwadi to Ballia) was carried out successfully.

Forma ny years, the Compa ny has participated in the International Transmission System Operation and Maintenance Study (ITOMS), a global Operations & Maintenance (O&M) benchmarking platform that includes 32 major power transmission utilities globally, where it has been consistently ranked amongst the most successful transmission companies.

3.2. National Transmission Asset Management Centre (NTAMC), Manesar and Regional Transmission Asset Management Centres (RTAMCS)

To facilitate remote operation of your Company's transmission system and monitoring of various parameters on real time basis at Regional and National levels, NTAMC was set up at Manesar, near Gurugram, Haryana and RTAMCs were set up at various locations across the country. These state-of-the-art centers are manned round-the-clock by experts for effective monitoring and management of transmission assets.

During FY 2021-22, twenty-two additional Extra High Voltage (EHV) Substations were integrated with NTAMC for remote operation. By the end of FY 2021-22, a total of 264 Substations are being operated remotely from these asset management centers.

Remote management of Substations has proved to be immensely beneficial during FY 2021-22 to ensure uninterrupted supply of power despite COVID-19 pandemic.

3.3. Cyber Security

Cybersecurity initiatives are led by the Chief Information Security Officer (CISO) through the Information Security Department in the Company. Your Company's Corporate Office, all regional headquarters and 213 substations are certified as per the Information Security Management System ISO: 27001. Your Company conducts extensive training programs for employees and participated in programs and simulations organized by Computer Emergency Response Team (CERT-In) and National Critical Information Infrastructure Protection Center (NCIIPC).

In addition, the Company works closely with designated statutory bodies: CERT-In and the NCIIPC. Your Company follows the recommendations issued by these agencies from time to time and shares them with other utilities in the transmission sector. The Ministry of Power has assigned POWERGRID the responsibility of sectoral Computer Emergency Response Team (CERT) for the Transmission Sector. The Company is planning to set up a Cyber Security Operations Centre for threat analysis and monitoring in order to strengthen resilience in its operations.

3.4. Safety

Your Company has ISO 45001:2018 certified, Occupational Health and Safety Management System, which ensures a healthy work environment.

The Company is committed to maintaining a safe working environment and measures are taken to ensure that all applicable safety factors are considered in accordance with standards during the design, construction, operation and maintenance of the assets.

Your Company has a 3-tier setup i.e., Corporate, Region and Substation/Site levels to implement safety policy, rules, and guidelines. Safety cells work to promote all safety measures for accident prevention in activities involving transmission lines and substations under construction and O&M. Regular monitoring and evaluation of safety performance is carried out by all Regions. Designated Safety officers at the Corporate and regional level ensure the implementation of safety aspects at site.

Safety audits/ inspections, trainings, safety briefings, mock-drills were carried out for all contract workers and Company staff at various O&M and construction sites. Safety audits of 265 substations and safety inspection at 290 construction sites were carried out in FY 2021-22.

Safety trainings were organized on various safety aspects such as fire safety, stress & health management and first aid, etc. at various sites maintaining the Covid-19 precautions. During the year, 949 safety training sessions were organized for Company employees, and 4,865 safety training sessions were conducted for construction agency workers/staff. In addition to this, 908 mock-drills were organized at sites for preparedness to cope up with any untoward incident/ urgency/emergency.

Daily safety briefings/pep talks were held at all sites and safety instructions/accident precautions/committee recommendations were discussed in languages that workers understand to educate about the possible risks associated with work and how to reduce them. Safety day/weekly/fortnightly celebrations attended by employees, their family members, and contract workers help raise awareness about safety compliance at workplace and at home.

All the dangerous incidences were reviewed by Standing Safety Management committee and the POWERGRID Apex Safety Board in collaboration with all Heads of Regions and Board level representatives of construction agencies. The recommendations of Accident Enquiry committee was widely circulated to all sites for implementation.

4. Disaster Management

The Company has a "disaster and crisis management plan" to take immediate action during the pre and post-disaster period and to quickly restore damaged power infrastructure. It outlines the hierarchy of crisis/disaster management at different levels to manage crises and disasters effectively and efficiently, and the roles/responsibilities of different departments in disaster management.

The Company adequately prepared itself to meet any natural calamity, basis the inputs received from the Indian Meteorological Department (IMD). There was no major damage to your Company's transmission network during major cyclones, namely Tauktae, Yaas, Gulab and Jawad. The Company also supported the transmission and distribution utilities of the affected states by providing manpower and equipment to rapidly restore their damaged transmission and distribution networks.

5. Project Implementation

During FY 2021-22, your Company added 5,450 circuit km (ckm.) of Extra High Voltage (EHV) transmission lines, 43,564 Mega Volt Ampere (MVA) transformation capacity, 7 new substations (including through its subsidiaries).

Further, about 8,174 km of OPGW network was added during the year to support voice and data communication with Regional Load Dispatch Centres (RLDCs)/ State Load Despatch Centres (SLDCs) for effective grid management.

a) Inter-Regional Lines

- ?800 kV Raigarh - Pugalur HVDC link along with Bipole-ll (Pole-Ill & IV 1,500 f MW each)

- 765 kV D/C Vindhyachal Pooling Station - Varanasi Transmission Line associated with "Transmission System ^ New WR-NR 765 kV Inter-Regional Corridor"

b) Cross-Border Interconnection

- 400 kV D/C Alipurduar - Jigmeling cross border interconnection between India and Bhutan (India portion)

Solar Energy Zones in Rajasthan

- 400 kV D/C Bhadla-II PS - Bhadla (PG) line

- LILO of 765 kV D/C Ajmer - Bikaner line at Bhadla-II Pooling Station

- LILO of 765 kV D/C Fatehgarh (TBCB) - Bhadla (PG) line at Fatehgarh-II Pooling Station

5.2. Other Important Transmission Lines

- 400 kV D/C Pugalur HVDC Station - Thiruvalam line

- 400 kV D/C Pugalur HVDC Station -Edayarpalayam (TANTRANSCO) line

- 400 kV D/C Edayarpalayam (TANTRANSCO) - Udumalpet line

- 400 kV D/C Wardha - Aurangabad (Upgradable to 1200 kV S/C) Line

- 765 kV D/C Medinipur - Jeerat (New) line

- 400 kV D/C Jeerat (New) - Jeerat (WBSETCL) line

- 400 kV D/C Darbhanga - Sitamarhi (New) line

- 400 kV D/C Sitamarhi (New) - Motihari line

- LILO of both ckt of 400 kV D/C Kishanganj - Patna (Quad) line at Saharsa

- 765 kV D/C Ajmer (PG) - Phagi line

- 765 kV D/C Fatehgarh-II -Bhadla -II line

- 765 kV D/C Khetri- Jhatikara line

- 400 kV D/C Khetri - Sikar (PG) line

5.3. Intra-State Lines

- 400 kV D/C Jawaharpur - Firozabad line

As on 31st March 2022, the inter-regional power transfer capacity of the transmission assets belonging to the Company and its subsidiaries was 97,290 MW out of 1,12,250 MW inter-regional power transfer capacity of the national grid.

6. Capital Investment, Fund Mobilization & Investment Approval of New Projects

During FY 2021-22, your Company made a consolidated capital investment of Rs.9,426 crore on cash basis. To finance this investment, the Company mobilized Rs.8,106 crore from asset monetization, Rs.610 crore through bonds & term loans, Rs.567 crore from Internal accruals, Rs.133 crore through grants received from Power System Development Fund & from Central Financial Assistance (Ministry of New and Renewable Energy) and Rs.10 crore through External Commercial Borrowings (ECB)/ Suppliers' Credit.

During FY 2021-22, investment approvals for transmission projects under regulated tariff mechanism (RTM) worth ~ Rs.5,050 crore have been accorded and Company acquired projects estimated at Rs.3,300 crore under the TBCB mechanism.

7. Commercial Performance

Sharing of Inter-state transmission charges 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 notified by Government of India 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, the Central Transmission Utility (CTU), had the responsibility of billing & collecting transmission charges on behalf of all ISTS licensees in the country including your Company and disbursing to them. Your Company ceased to be the CTU w.e.f. 01st April 2021 and Central Transmission Utility of India Limited (CTUIL), a wholly owned subsidiary of your Company has been notified as CTU by the Government of India. Your Company continues to be a deemed Transmission Licensee under the Electricity Act, 2003.

Your Company through regular follow up with its customers (DICs) and timely regulatory actions has achieved collection efficiency of 97.98% of billing in FY 2021-22.

8. Cross Border Interconnections

India, being centrally placed in South Asian region and sharing political boundaries with SAARC and BIMSTEC countries, has been playing a major role in establishment of cross-border interconnections with various neighbouring countries, namely Nepal, Bhutan, Bangladesh, Sri Lanka, and Myanmar, for optimal utilization of regional energy resources in South-Asian region.

The present cumulative power transfer capacity between India and neighbouring countries through cross-border interconnections is about 4,230 MW. In FY 2021-22, Alipurduar-Jigmeling line (India portion) 400kV D/C (Quad) line was commissioned. Additional links for interconnection with Nepal through the Gorakhpur (India) - New Butwal (Nepal) and Sitamarhi (India) - Dhalkebar (Nepal) 400kV D/C (Quad) transmission lines are under implementation.

9.1. Telecom Business a) POWERTEL

Your Company is providing a range of services under its Unified License as National Long Distance (NLD) and Internet Service Provider - Category'A'(ISP-'A') service authorizations. Your Company is providing nationwide services like point-to-point leased line bandwidth services, Internet Leased line, Tower co-location, MPLS based IP-VPN, SD-WAN, DDoS etc. in all parts of the country with its Pan India high-capacity optical ground wire (OPGW) network.

During FY 2021-22, the Company's telecom network coverage increased to 74,109km from 71,673km at the end of the previous year, with annual telecom backbone availability of 99.99%. The Company's telecom network spans across India and is in over 1200 locations covering all major cities and metros. During the year, your Company achieved revenue from operations of Rs.580.34 crore from telecom segment.

Your Company's Board accorded the approval for expansion of POWERGRID Telecom into Data Center Business and to establish the Pilot Data Center at Manesar. POWERGRID Telecom is also planning to setup the edge data centers to serve businesses in Tier-1 cities of the country.

Your Company has signed agreements with Damodar Valley Corporation, West Bengal State Electricity Transmission Company Limited, Bihar State Power Transmission Company Ltd. and Assam Electricity Grid Corporation Limited for leasing of their OPGW fibres, which provides it with access to additional 12,000 km of OPGW network. Through this, the Company will expand its telecom business in various new cities of West Bengal, Bihar, Assam & Jharkhand.

Further, during the year, your Company incorporated a wholly owned subsidiary 'POWERGRID Teleservices Limited' on 25th November, 2021 to undertake Telecommunications and Digital Technology Business. POWERGRID Teleservices Limited has obtained the Unified License with service authorization of National Long Distance (NLD), Internet Service Provider (ISP-A) & International Long Distance (ILD) from Department of Telecommunications (DoT) on 11th May, 2022.

b) BHARAT NET

Your Company is one of the implementing agencies for 'Bharat Net' Phase-I project envisaged to provide broadband connectivity to Gram Panchayats (GPs), thus making valuable contribution to the initiatives of the Government of India for Digital India.

The Company has completed the work on 473 blocks out of 511 Blocks and successfully handed over to M/s BBNL under Bharat Net Phase-I Project. Further, cumulatively 321 blocks asset capitalization has been completed out of 511 blocks. The scope of work is spread across 39 districts in 5 States viz., Andhra Pradesh, Telangana, Himachal Pradesh, Jharkhand & Odisha.

During FY 2021-22, the Company has handed over 55 blocks to M/s BBNL under Bharat Net Phase-I project and asset capitalization of 250 blocks has been completed during the year.

9.2. Consulting Services

Your Company, one among the largest power transmission I utilities in the world, has developed expertise in its ¹ core areas such as power transmission projects, sub- ; transmission system, distribution management, load dispatch & communications, in India and abroad. Leveraging its capacity and experience, consulting services have been provided to several customers globally. During the year. your Company achieved revenue from operations of Rs.753.34 crore from consultancy segment.

a) Domestic Market

On behalf of Government of India, your Company is implementing two important projects as consultancy assignments for strengthening of the Intra-State Transmission and Distribution Systems (33kV and above) namely 'NER Power System Improvement Project' (NERPSIP) in Manipur, Meghalaya, Mizoram, Tripura, Nagaland & Assam and 'Comprehensive Scheme' for strengthening of Transmission & Distribution in Arunachal Pradesh and Sikkim. Your Company is also providing services to the Indian Railways for electrification of un-electrified railways tracks in Central, East Central, South-Western & South-East-Central Railway zones.

During the year, your Company bagged 27 new consultancy assignments and is currently executing about 68 consultancy assignments in various fields including transmission & sub transmission, design & engineering, EV charging etc.

Your Company is implementing Rural Electrification Infrastructure works under Prime Minister's Development Package (PMDP) scheme in 6 districts in J&K UT and 2 districts in Ladakh UT. Intra-state transmission work of 2 projects are under progress in J&K UT under PMDP.

b) International Market

On the International front, as on 31st March, 2022 your Company has its footprint in 23 countries. During the FY 2021 -22, Company has received orders from two new countries viz. Guinea and Moldova. The Company is providing consultancy to various clients in Nepal, Uganda, Fiji, and Moldova.

The Company has signed Joint Development Agreement 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 with Nepal Electricity Authority.

10. Quality Management

Your Company has developed and maintained systems and procedures that are in accordance with the Publicly Available Specification, PAS 99:2012, while also incorporating the requirements of ISO 9001:2015 (Quality Management System), ISO 14001:2015 (Environmental Management System), and ISO 45001:2018. (Occupational Health & Safety Management System).

A third party audit of the Integrated Management Systems, was completed successfully. The systems were also audited for compliance with the SA: 8000 Social Accountability Standard, ISO:50001 Energy Management Systems, and ISO:27001 Information Security Management Systems.

Despite COVID-19 pandemic, more than 15,000 Inspection calls were attended during FY 2021-22. All the inspections, sub vendor assessments and other quality related activities were undertaken in a well-planned manner via hybrid mode of physical and virtual visits.

To encourage and develop MSME manufacturers for supply of innovative & quality products, MSME vendor development programs were conducted during the year at various locations across the country. Special focus was kept on Micro and Small Enterprises owned by SC/ ST and Women entrepreneurs. Promoting Atmanirbhar Bharat/Make in India, 34 new Micro/small vendors were approved during FY 2021-22 and existing vendors were encouraged to upgrade their equipment to higher voltage level. This shall improve available sources increasing vendor base, thus creating a more competitive environment.

11. Research and Development (R&D)

Your Company has been investing in R&D for new technologies and techniques, aimed at improving efficiency of its transmission assets to ensure high system availability and reliability.

A Centralized Circuit Breaker health indexing system was developed in-house, which has enabled transition towards predictive maintenance of circuit breakers, a critical element in system protection.

Your Company is developing a substation Inspection Robot in collaboration with IIT Kanpur to facilitate automation of routine inspection of switchyard equipment as well as data driven decision process using Artificial Intelligence/Machine Learning techniques, thus improving operational efficiency.

Your Company is setting up a Centre of Excellence (CoE) in Cybersecurity in Transmission and Grid operation at IISc Bangalore. This collaborative effort facilitates continuous research, monitoring, development, and demonstration focused on cybersecurity aspects in association with academia and industry towards cyber resilient transmission system.

12. Adoption of Latest Technology and Digital Transformation

Your Company has been taking up several initiatives towards adoption of latest technology and digital transformation. These initiatives gained pace during the pandemic and ensured business continuity despite the COVID-19 pandemic.

Some of the new developments in this regard are as follows:

• PALMS V2.0 - It is an in-house Asset Health Indexing Software introduced in 2020 and for assessing real-time risk-based health indexing of POWERGRID transformers and reactors. This was upgraded during the year incorporating more advanced diagnostic methods based on various international standards and your Company's experience in interpreting test results.

• PGDARPAN - Your Company has developed in-house application software PGDARPAN (POWERGRID Digital Application for Routine Patrolling & Assessment of Network) for transmission line patrolling. The same has been used in your Company since August 2021. The PG DARPAN portal features a rich, highly customizable dashboard which enables ground patrolling of transmission lines and generation of reports, this helps the asset managers to monitor and take corrective action.

• Repeater- less solutions-To adopt green technologies in order to reduce carbon emissions, your Company is implementing repeater-less solution for long haul communication links, replacing traditional repeater shelters having DG & AC systems. The solution involves use of Erbium Doped Fibre Amplifiers (EDFA) along with Remote Optical Pump Amplifier (ROPA) units passive devices in additional fibres of the OPGW to boost the signal levels. This technology will eliminate the need for traditional repeaters in long distance AC links with lengths up to 350 km.

• Other Technology Tools-Your Company uses different technology tools to ensure better line availability such as aerial line patrol, temperature scanning, corona camera, high resolution video, digital camera, surveillance application-based transformers, reactors and line patrols and real-time data updates through online applications for efficient asset tracking.

13.1. Promotion of 'Make In India'

Your Company through continuous measures, has encouraged localization of various goods I to be sourced for development/ operations of transmission system. Foreign manufacturers have been nudged to set-up facilities in India and thus promoting the Make in India initiative of the Government of India. With the Company's efforts, new plants and facilities have been set-up in India over the past few years by a number of foreign manufacturers for equipment like GIS, transformers, reactors, STATCOM, OPGW, etc. paving way for a wider vendor base and emergence of a more efficient supply chain.

Your Company also promotes existing vendors to upgrade their equipment to higher voltage level & cover more items to increase vendor base.

Further, the Company has given much impetus towards procuring from local suppliers in its various procurement verticals in line with the extant Government of India's policy on the same. During FY 2021-22, procurement of about Rs.7250 crore was carried out through Domestic Competitive Bidding route, which is more than 90% of the total procurement done by the Company. Your Company is actively working for development of its vendor base in the domestic market by encouraging participation of local suppliers and promoting capacity building for existing vendors.

13.2. Promotion of Micro, Small and Medium Enterprises (MSME)

The Company has been complying with the guidelines issued by the Government from time to time for promotion of MSMEs. The Company is registered on (i) Receivable Exchange of India Limited (RXIL) (A NSE - SIDBI JV), (ii) Mynd Solutions Private Ltd (Mlxchange) and (iii) A TREDS Ltd. (Invoicemart) for Trade Receivable e-Discounting System (TReDS). Trade Receivables Discounting System (TReDS) is the platform for facilitating the financing of trade receivables from corporate and other buyers, including Government Departments and Public Sector Undertakings (PSUs), through multiple financiers. The Company is continuously pursuing with its MSMEs suppliers to get themselves on-boarded on TReDS Platforms. Suitable provisions have already been incorporated in the bidding documents of POWERGRID for procurement of various products and services rendered by Micro and Small Enterprises (MSEs) in line with the Public Procurement Policy of the Government of India. The Company has achieved the target of mandatory procurement of 25% out of total annual purchases of products and services rendered by Micro and Small Enterprises in line with Public Procurement Policy (Order 2012) read in conjunction with its amendment in November 2018.

In terms of the said policy, the total eligible value of annual procurement of goods produced and services rendered by MSEs (including MSEs owned by SC/ ST and Women entrepreneurs) during FY 2021-22 was Rs.2,238 crore. The total procurement by the Company from MSEs (including MSES owned by SC/ST and Women entrepreneurs) was Rs.1,143 crore (51.07%).

The Company has taken various steps to encourage MSE participation in the procurement process across India. During this year, to encourage and develop Micro and Small manufacturers for supply of innovative & quality products, 18 vendor development programs have been organized through virtual platforms, wherein presentations were made, and discussions were held with representatives of numerous MSE's of our country. Special focus was kept on MSE's owned by SC/ ST and women entrepreneurs and their response in these meetings/webinars was overwhelming. Several MSME's have been developed as sub-vendors and approved for supply of components for various equipment.

13.3. Procurement through Government e-Marketplace (GeM):

In line with Government of India mandate, procurement of goods & services in your Company is being done through GeM portal, which started in FY 2018-19 and in subsequent years, with persistent emphasis, this has continuously increased. During FY 2021-22, procurement of Rs.706 crore of goods & services was done through GeM portal which is almost double of that in FY 2020-21 ( Rs.352 crore).

14. Sustainable Growth

The principles of Environment, Social and Governance (ESG) are being embedded by your Company into business operations and the Company continues to attach importance to ESG ecosystem.

The Company is taking steps to align its sustainability related aspects with global requirements and is participating in assessment surveys carried out by MSCI, FTSE and S&P Global CSA annually, wherein your Company gets an opportunity to benchmark its various parameters pertaining to ESG under power transmission against domestic & international peers.

14.1. Environment and Social Management

Transmission projects are mostly environmentally benign due to absence of any chemical processes that may involve release of pollutants to environment or involving large scale excavation which may result in soil erosion. Also, due to inherent flexibility both in choosing most optimum line alignment as well as in finalizing the substation site, your Company avoids most of the associated social issues.

Your Company not only follows the applicable regulatory requirements but also practices Environmental and Social prudence in all its business activities to ensure that they become an inherent and integrated part of our project management process.

Your Company has taken many key initiatives like piloting the use of safer and greener natural Ester Oil in place of regular synthetic mineral oil in a 400 kV Reactor first time in the world, integration of Decision Support System (DSS) software developed by Forest Survey of India (FSI) for identification/ avoidance of environmental sensitive areas during the early stage of route alignment etc. Further, your Company has undertaken installation of digital water flow meter for monitoring groundwater extraction to optimize water consumption/uses and management of biodegradable waste through installation of composting machine in substation establishments. Besides, to reduce carbon footprint your company has taken initiative to replace diesel vehicles by electric vehicles & E-cart/Golf cart progressively in its office establishments/substations.

Transparency - Your Company, a pioneer in Sustainability Reporting in the Indian Power Sector released its 7th biennial Sustainability Report for FY 2019-21 in March 2022 based on internationally acclaimed and accepted "Global Reporting Initiative (GRI) Standards (Core)" duly validated by independent Accredited Assurance Provider. The report is available on the company's website https://www.powergrid.in/sustainability-report.

Alignment with SDG's - Your Company, in partnership with Global Reporting Initiative (GRI) South Asia, has taken several initiatives towards fulfillment of India's commitment to United Nation's Sustainable Development Goals (SDGs) Agenda, 2030 and has already aligned its activities with 13 SDGs out of total 17.

14.2. Corporate Social Responsibility (CSR)

As India's largest Electric Power Transmission Utility, your Company undertakes several CSR initiatives aimed at social and economic development of areas and communities. Through these initiatives, we impact the lives of millions of people by promoting inclusive growth and addressing the basic needs of under privileged and weaker sections of society. Due to your Company's nature of business in remote areas of India, our CSR activities generally benefit the rural population and marginalized communities.

During FY 2021-22,your Company has spent Rs.271.14 crore exceeding the CSR budget of Rs.257.07 crore. Further, 152 new CSR projects of Rs.420.83 crore were sanctioned during FY 2021-22.

During the year, the Company also contributed Rs.75 crore to PM CARES Fund towards COVID-19 pandemic.

Your Company undertakes CSR activities in areas of healthcare, drinking water & sanitation, education, skill development, rural development and infrastructure like roads, community centers etc. These projects are conceived in consultation with the stakeholders, primarily in the vicinity of its area of operations. Major CSR projects undertaken and sanctioned by your Company during the year are as follows:

Major CSR Projects undertaken during FY 2021-22:

• Assistance in COVID-19 vaccination programme through procurement of cold chain equipment for the states of Punjab, Mizoram, Sikkim and UT of Ladakh.

• Financial assistance for construction of Nuclear Medicine Theranostics facility for patients undergoing Radioisotope Treatment at TMC/ACTREC for cancer patients at TATA memorial hospital, Mumbai.

• Financial support for Tata Memorial Centre (TMC) for developing Modular Operation Theatres at women and child hospital, ACTREC campus, TMC, Navi Mumbai.

• Financial assistance for Installation and Operationalization of 480 Smart classrooms in 240 Government Schools in 12 Districts of Haryana.

• Installation of 2x50 NM3/Hr Capacity oxygen generation plant in Gurugram.

• Financial assistance to National Foundation for Communal Harmony for education of 1632 violence affected students from Assam, Manipur and Chhattisgarh.

• Financial Assistance for procurement of 10 Neonatal Ventilators and 10 ABG Machines for District Hospitals at Mewat, Faridabad and Gurugram.

• Setting up of ITI, Shergarh, Jodhpur.

• Supply & installation of 3,250 solar LED street lights in Himachal Pradesh.

• Construction of Schedule Castes Senior Girls Hostel (50 Seater) at Tehsil Sarai in Singrauli district.

Important CSR projects sanctioned during FY 2021-22:

• Funding "POWERGRID Endowment Scholarship" Merit-Cum-Means (MCM) Scholarship Programme for B.Tech students of Indian Institute of Technology, Madras (IITM).

• Establishment of POWERGRID Gyan Kendra (PGK) by renovation and upgradation of Shaskiya Barmendra Jila Pustaklaya, Nagod, District Satna Madhya Pradesh.

• Establishment of 100 bedded Paediatric Intensive Care Unit (PICU) at GSVM Medical College, Kanpur.

• Supply of Medical equipment to Swami Ramanand Theerth Rural Government Medical College (SRTRGMC), Ambajogai, Beed district, Maharashtra.

• Providing Medical Equipment and Instruments to the various Government health facilities in the State of Sikkim.

• Financial Assistance for Construction of 100 Bedded District Hospital at Serchhip District in Mizoram, etc.

A complete list of all CSR Projects undertaken and sanctioned by the Company during FY 2021-22 are provided in Annexure-X of this Report.

15.1. Right to Information

To promote transparency and accountability, an appropriate mechanism has been set up across your Company in line with 'Right to Information Act, 2005' The Company has nominated Public Information officers and Appellate Authorities at Corporate, Regional Head Quarters and other offices to provide required information to the citizens under the provisions of Act.

The Company has also developed its own web based online RTI portal, which facilitates timely reply of RTI/Appeal to applicant by real time monitoring of all RTIs/ Appeals. The portal also facilitates auto generation of various RTI reports for internal and external stakeholders.

In FY 2021-22, around 1,065 RTI applications were received in the Company and processed timely as per the RTI Act, 2005. Training programs/awareness sessions for the Company's CPIOs/PIOs/Appellate Authorities were organized for sensitization about their role in implementation of the RTI Act.

15.2. Commitment to Transparency and Ethical practices

Your Company advocates the principles of Transparency, Probity and Ethics in its management functioning. Vigilance Department of your Company performs Preventive, Pro-active as well as Punitive Vigilance and ensures that best ethical practices are followed.

a) Emphasis on Preventive Vigilance

To strengthen the organizational process and to minimize malpractices in various systems & activities of the organization, emphasis is laid on preventive vigilance. It focuses on the right types of systems or re-engineering processes for acting against potential threats.

During FY 2021-22, 89 surprise inspections, 20 process-on-line inspections and 12 Chief Technical Examiner (CTE) Type inspections were conducted. Pursuant to Vigilance inspections and observations/ recommendations, several system improvements have been implemented.

b) Preventive Vigilance workshops as part of capacity building

During FY 2021-22, various Preventive Vigilance workshops, webinars were conducted for non-vigilance personnel at the Corporate centre as well as at various regions of the Company. These workshops inter-alia cover contracts management, provisions of Conduct Discipline and Appeal (CDA) Rules, compliances of rules and policies, common irregularities, deliberation of case studies based on real cases, quality aspects as well as Ethics Management which enables the employees to identify and deal with ethical dilemma.

c) Vigilance Awareness

In pursuance of the directions of the Central Vigilance Commission, Vigilance Awareness Week was observed in your Company from 26th October to 1^st November 2021 in line with the theme for this year "Independent India @ 75: SelfReliance with Integrity; "tORS hqjr @ 75: L VLrHMwj.", with full vigor, following all Covid related Government guidelines.

Your Company employees and their family members celebrated the Vigilance Awareness week with great enthusiasm. 696 activities including various competitions viz. essay, quiz, slogan, and painting competition for kids were organized by your Company for its employees and their family members wherein approximately 10,000 individuals participated. Walkathon was organized in around 285 establishments wherein employees along with their families participated. Nukkad Natak and Awareness Gram Sabhas were also organized during the week. The message of Vigilance Awareness Week 2021 was propagated through FM Channel, print and electronic media in national as well as regional languages. Stakeholders were also involved through vendor meets, which were conducted at Corporate Centre and all regions.

Integrity Pledge was conducted across all establishments of the Company, and it was extended to all the stakeholders. Around 20,000 employees and citizens took the Integrity Pledge.

Vigilance department journal; CANDOUR was released during the closing ceremony of Vigilance Awareness Week at the Corporate Centre, Gurugram. In line with the Commission's guidelines, the magazine was released in digital form (e-CANDOUR) for employees and public.

15.3. Citizen's Charter

A Citizen's Charter has been formulated for the Company providing a visible front of its Vision, Mission and Objectives. The Citizens' Charter consisting of Company profile, commitments, expectations from citizens, Integrated Management Policy, services offered, values and standards of services, access to information and grievance redressal is available on the Company's website.

16. People: Our Core Strength

Your Company has achieved excellent financial and operational results every year due to continuous alignment of HR practices with business objectives along with commitment of its strong motivated and competent workforce towards achieving Company goals. Your Company lays emphasis on organization culture that promotes continuous learning, creativity, sharing and development. Its Human Resource process and systems are designed to acquire, nurture, and empower professionals in line with core values of the Company in an equitable, collaborative, healthy and safe environment.

As on 31^st March 2022, the employee strength of your Company stood at 8,536 (exclusive of the employees on contract) of which women employees constituted 7.87%.

16.1. Human Resource Development

Your Company firmly believes that great businesses are built with great people and great teams. To this end, through well-articulated talent management and learning & development interventions, your Company has always endeavored to create a high trust, high performance work culture that brings out the best in people, enables and empowers them for continuous learning and be future ready to create best-in-class organizational capabilities for unmatched market competitiveness.

To scale up learning and development in Power Sector, your Company has been operating the state-of-art POWERGRID Academy of Leadership (PAL) at Manesar, which imparts a wide range of training and development opportunities for its employees and other stakeholders in India and abroad.

During this year, your Company organized more than 300 training and development programs through virtual mode through PAL, other Employee Development Centers in the regions and associated premier educational institutes in India and abroad. The range of trainings imparted include induction program to new recruits as well as hands-on, managerial, behavioral and leadership training for its employees and also training programs for other utilities.

Some of the key Learning & Development interventions undertaken by the Company during the year includes the following:

• Using a web-based Competency based Training Needs Assessment (CTNA), the Company has devised the Human Resource Development Action Plan for the financial year 2021-22 based on which the competencies of the employees are being upgraded to make them future ready.

• To promote social learning, capture and share both tacit and explicit knowledge in the Company, the portal for Mentoring and Coaching program named "SANDARSHIKA" has been rolled out successfully.

• Five employees were sponsored for a 15-month PGDM program by NTPC School of Business.

• In the field of e-Learning the Company has undertaken following interventions:

- Developed 72 eLearning modules related to different business verticals and 9 Refresher courses related to Company information. 6,500+ employees have benefited from these courses.

- Hosted 7 modules related to Power transmission for GOI's ambitious "Mission Karmayogi" Programme.

- 1,500 employees have been sponsored for Harvard Manage Mentor Program to enhance Leadership competencies.

- Tie-up with Ministry of IT & Electronics, GOI and IT Industry body NASSCOM for their FutureSkills PRIME portal. This portal provides access to all employees of your Company to e-courses in emerging technologies and professional skills.

In the matter of stakeholder development, the Company has undertaken following interventions:

• 1,100+ apprentices have been engaged in different trades as per the Apprentice Act.

• 350+ contract staff have been imparted training under Recognition of Prior Learning (RPL) certification.

• MoU has been signed among National Skill Development Corporation (NSDC), National Skill Development Fund (NSDF), Power Sector Skill Council (PSSC) and POWERGRID for Skill development training of 6000 unemployed youth in power Sector. Presently 2200+ trainees are undergoing training across 20 locations in India. ^•

• Under the Northern Eastern Regional Power System Improvement (CBIS-NERPSIP) Project, the Company is undertaking Capacity Building and Institutional Strengthening program for State Power Utilities in 6 (six) states of NER (viz: Assam, Meghalaya, Mizoram, Manipur, Nagaland, Tripura) and Capacity Building under Comprehensive Scheme (Arunachal Pradesh & Sikkim - 2 states)

• The Company has extended customized Training Programs for clients including NRPC, KIIFB, NPTI, POSOCO, HVPNL, DTL, REC, PFC, HPPTCL, NPMU, CSPTCL, MEA and Overseas Clients including KETRACO & PGCB.

16.2. Employee Welfare

In our continual effort to meet and exceed the ever-changing a expectations of our employees, your Company regularly updates its welfare policies in line with industry trends. During the year, in view of the second wave of COVID-19 pandemic = that wreaked havoc around the nation, your Company ^ introduced various initiatives for families of deceased employees to help them maintain a respectable standard of living.These rehabilitation initiatives included:

• Providing accommodation security to the family, increased

• insurance coverage of employees, securing various

• employee advances, providing a more comprehensive E medical coverage to dependents of deceased employees, etc.

• Introduced the 'SAKSHAM' scheme to provide monetary assistance for education of wards of deceased employees and provide skill development opportunities and financial aid to spouse of deceased employees to build an earning potential within the family.

• Your Company arranged several vaccination camps for regular and contractual employees, their families, Isolation facilities were setup at various locations for affected employees and dependents. Various other facilities viz. home collection of samples for COVID-19 testing, medical consultation through tele- medicine, etc. were also arranged to help employees and their families during these unprecedented circumstances.

• Many webinars/ talks were also held by experts for employees on medical care, physical and mental wellbeing and lifestyle management during the pandemic.

• Your Company introduced the Equal Opportunity Policy this year to demonstrate our commitment towards promoting diversity and inclusion in the workforce. The Policy aims to create a harmonious workplace for all employees irrespective of their gender, nativity, community, religious beliefs, or physical and mental ability and enable them to achieve their full potential.

• Your Company also rationalized its medical rules to promote health and well-being requirement of our employees and their families.

• For the first time, your Company organized its Annual Cultural meet for all employees and their family members in virtual mode owing to COVID-19 pandemic situation where employees and their family members show-cased traditions/cultures of different geographies of country.

• Your Company's employees actively participated in Fit India Freedom Run 2.0 and other events organized across establishments of Company in commemoration of Azadi ka Amrit Mahotsav.

16.3. Grievance Redressal

Grievance redressal is always taken up with priority and your Company promptly redresses the grievances of its employees within the broad parameters of guidelines enumerated by Government of India and policy framework. Employees can lodge their grievances by way of an online portal. The Company has designated nodal officers at corporate & regional offices for systematic & prompt redressal of the grievances within stipulated time frames.

16.4. Ensuring Social Justice

Your Company has constituted a separate reservation cell to look after and safeguard the legal provisions for SC/ST/ OBC & PwD categories of employees.

The reservation cell assists the Liaison Officer who looks after the welfare & safeguard of SC/ ST/ OBC & PwD employees. Liaison Officer also ensures that there is no discrimination based on caste, religion & disabilities amongst the employees. To ensure effective discharge of duties across all establishments of your Company, separate liaison officer for each region has been nominated. The Company implements all directives and guidelines regarding reservation policy issued by Government of India. Annual inspection is also conducted to ensure implementation of directives issued by Government of India. Periodic meetings are also held with representatives of the association of SC/ ST & OBC to resolve issues, if any.

17. Prevention of Sexual Harassment at workplace

As per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made there under, the Company has Internal Complaint Committees (ICC), in place, to redress complaints received regarding sexual harassment. Your Company has been conducting training/workshop programs for both male and female employees sensitizing them on issues and the law/ Act relating to sexual harassment. Workshops on women empowerment, development and gender sensitization are also organized. Three complaints of sexual harassment were received during FY 2021-22 and all complaints has been disposed off in stipulated time as per the Guidelines.

18. Implementation of Official Language (Rajbhasha)

In pursuance of Government of India's Rajbhasha policy to promote Indian languages and Rajbhasha "Hindi", your Company has made all round efforts to integrate and promote use of Hindi in its works at all levels. Your Company has proved its commitment to ensure the implementation of Rajbhasha policy and to achieve the goal as laid out in the Rajbhasha annual target given by Department of Official Language.

To ensure the increased use of Official language, various activities such as Annuvad Abhayaas Karyakram, Workshops, Trainings, motivational programmes have been organized. Computer trainings are being imparted to enhance the working knowledge in Hindi while using computers. Hindi classes are also being organized for non- Hindi speaking employees through Hindi Teaching Scheme.

Various activities are undertaken to publicize Hindi every year, Akhil Bhartiya Rajbhasha Sammelans and technical conferences in Hindi, Kavi Sammelans (Poetry sessions). Plays, publication of House Magazines, publication of monthly articles in Hindi via emails are most prominent among these. Most

of these programmes were organized by video conferencing in the financial year 2021-22. Also, various competitions throughout the year with special emphasis during Hindi Pakhwada, Vigilance Awareness Week, Swachchhta Pakhwada etc. along with departmental meetings as well as Official Language Implementation Committee (OLIC) meetings are also being conducted. Your Company has established one of the best Hindi libraries among Public Sector where popular/literary Magazines and newspapers have been made available for the employees.

Attractive incentive schemes for employees working in Hindi have been implemented as per the Government guidelines. In addition, various reward schemes have been introduced to encourage employees to actively participate in promotion of Hindi, by giving articles/write-ups for in-house magazines, reading library books etc.

The effort made by your Company has been applauded in several forums during the FY 2021-22. Your Company received the first prize for excellent implementation of official language for the year 2019-20 by Ministry of Power, during the year. The Company also received awards from "Town Official Language Implementation Committee (TOLIC), Rajbhasha Vibhag, Ministry of Home Affairs, Government of India and other agencies regarding Implementation of Official Language. The offices of the regional headquarters including Vadodara, Bangalore, Kolkata, and Nagpur along with other offices like Siliguri, Itarsi, Nellore, Madurai, Durgapur, Roorkee, Mandola, Dadri etc. have been honored. Besides, your Company's efforts were also applauded during various inspections and discussions done by Hon'ble Committee of Parliament on Official Language on different occasions.

19. Stakeholder Engagement

Your Company focuses on engaging with all its stakeholders and building cordial relationships with them.

This helps us in not only understanding their needs and expectations, but also helps us in recognizing opportunities and mitigating risks to our operations. We have a framework for engaging with our stakeholders which also includes categories of Stakeholder along with the respective modes of engagement.

For details, you may refer to the 'Value Creation' section of this Report.

20. Management Discussion and Analysis

The Management Discussion and Analysis Report, as stipulated under Regulation 34(2) of the SEBI (LODR) Regulations, 2015 and pursuant to Clause 7.5 of DPE Guidelines on Corporate Governance, forming part of the Directors' Report, is placed at Annexure-I of this Report.

21. Business Responsibility Report

The Business Responsibility Report, as stipulated under Regulation 34 (2) of the SEBI (LODR) Regulations, 2015, is given in Annexure-II and forms part of this Report.

22. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Pursuant to Section 134(3) (m) of Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, information relating to 'Conservation of energy, technology absorption and foreign exchange earnings and outgo', is given in Annexure-III to this Report.

23.1. Statutory Auditors of the Company

The Statutory Auditors of the Company are appointed by the Comptroller & Auditors General of India. M/s. T R Chadha & Co LLP, M/s. Umamaheswara Rao & Co., M/s. B M Chatrath & Co LLP and M/s. P S D & Associates were appointed as Joint Statutory Auditors for FY 2021-22.

The Statutory Auditors have given an unqualified report. The report is self-explanatory and does not require any further comments by the Board.

23.2. Comptroller and Auditor General's Comments

The Company has received 'Nil' comments on the Financial Statements (Standalone and Consolidated) for the Year ended 31^st March, 2022 from the Comptroller and Auditor General of India (C&AG) under Section 143(6) of the Companies Act, 2013. The comments are placed at Annexure-IV.

23.3. Secretarial Audit

M/s Kumar Naresh Sinha & Associates, Practicing Company Secretary conducted Secretarial Audit of the Company for the financial year ended 31^st March, 2022. The Secretarial Audit Report is placed at Annexure-V.

The observations of Secretarial Auditor are as under:

1. The Company did not have requisite number of Independent Directors as required under Regulation 17 of SEBI (LODR) Regulations, 2015 and Para 3.1.4 of DPE Guidelines on Corporate Governance and the Company had a Woman Independent Director till 25^th July, 2021.

2. The composition of Audit committee was not in line with Regulation 18(1)(b) of SEBI (LODR) Regulations, 2015 from 23^rd July, 2021 to 14^th December, 2021; and

3. The Composition of Nomination and Remuneration Committee was not in line with Regulation 19(1)(c) of SEBI (LODR) Regulations, 2015 from 26^th July, 2021 to 14^th December, 2021.

Regarding above, it was explained that yours is a Government Company, the power to appoint Independent Directors vests with the Government of India and the Company has taken up the matter for appointment of requisite number of Independent Directors with Government of India.

23.4. Cost Auditors & Cost Records

The Company appointed M/s Dhananjay V. Joshi & Associates and M/s Bandyopadhyaya Bhaumik & Co., Cost Accountants as Cost Auditors for the FY 2021-22 under Section 148 of the Companies Act, 2013.

Your Company is maintaining Cost Accounting Records as prescribed under the Companies (Cost Record and Audit) Rules, 2014, specified by the Central Government under section 148(1) of the Companies Act, 2013.

24.1. Company's Board

During FY 2021-22, Shri Ghanshyam Prasad, Jt. Secretary, Ministry of Power, Government of India has been appointed on the Board of Company as Part-time Government Nominee Director w.e.f. 21^st December 2021. Shri Onkarappa KN, Shri Chetan Bansilal Kankariya have been appointed as Independent Directors w.e.f. 17^th November, 2021 and Shri Ram NareshTiwari.asan Independent Director w.e.f. 18^th November, 2021.

Shri Dilip Nigam, Scientist 'G', Ministry of New and Renewable Energy (MNRE), Government of India completed his tenure as a Government Nominee Director on 30^th April, 2022 and appointed again as Government Nominee Director w.e.f. 6^th June, 2022.

Shri Raghuraj Madhav Rajendran has been appointed as a Government Nominee Director w.e.f. 5^th August, 2022.

Shri Sunil Kumar Sharma and Smt. A.R. Mahalakshmi, Independent Directors have completed their respective tenure of 03 years on 22^nd July, 2021 and 25^th July, 2021, respectively.

Shri Mritunjay Kumar Narayan, Joint Secretary, Ministry of Power, Govt. of India demitted the post of Government Nominee Director w.e.f. 6^th December, 2021.

Smt. Seema Gupta completed her tenure as Director (Operations), on attaining the age of superannuation w.e.f. 31^st May, 2022.

Shri M.N. Venkatesan, Independent Director completed his tenure of 03 years on 10^th July, 2022.

Shri Ghanshyam Prasad, Jt. Secretary, Ministry of Power, Govt. of India demitted the post of Government Nominee Director w.e.f. 14^th July, 2022.

Shri M. Taj Mukarrum completed his tenure as Director (Finance), on attaining the age of superannuation w.e.f. 31^st July, 2022.

The Board places on record its appreciation and gratitude to Shri M. Taj Mukarrum, Smt. Seema Gupta, Shri Mritunjay Kumar Narayan, Shri Sunil Kumar Sharma, Smt. A.R. Mahalakshmi, Shri M.N. Venkatesan and Shri Ghanshyam Prasad for their contribution and support to the Company.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, reappointment of Shri Abhay Choudhary (DIN: 07388432) and Dr. Vinod Kumar Singh (DIN: 08679313), as Directors liable to retire by rotation, have been included in the Notice of Annual General Meeting.

24.2. Number of Meetings of the Board

Board of Directors met 17 times during FY 2021-22. Details regarding dates and attendance at the Board meetings are provided in the Report on Corporate Governance, which forms part of this report.

24.3. Committees of the Board

The Company has constituted Audit Committee, CSR Committee, Nomination and Remuneration Committee, Stakeholders' Relationship Committee, Risk Management Committee and other Committees for operational convenience. The composition and scope of the aforesaid Committees are provided in the Report on Corporate Governance, which forms part of this report.

Report on the Corporate Governance is enclosed at Annexure-VI, and the certificate thereon, issued by Practicing Company Secretary pursuant to Schedule V Para E of SEBI (LODR) Regulations, 2015 is attached at Annexure-VII to this Report.

24.4. Declaration by Independent Directors

During the financial year, all the Independent Directors have met the requirements specified under Section 149 (6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (LODR) Regulations, 2015 for holding the position of 'Independent Director' and necessary declaration from each Independent Director under Section 149 (7) of the Companies Act, 2013 and Regulation 25(8) of SEBI (LODR) Regulations, 2015 has been received.

Pursuant to Regulation 34(3) and Schedule V Para C Clause (10)(i) of SEBI (LODR) Regulations, 2015, M/s Naresh Kumar Sinha & Associates, Company Secretaries have issued Certificate of Non- Disqualification of Directors, who were on the Board of Directors during FY 2021-22.

24.5. Performance Evaluation of Directors

This has been provided in the 'Report on Corporate Governance' section of this Report and you may refer it for details.

24.6. Policy on Director's Appointment and Remuneration

The Company has framed a policy on the remuneration of the Directors, KMPs and employees. The said policy is available on our website at https://www.powergrid.in/sites/default/files/Investor Relation/Reports Filings/Code of Conduct Policies/04 Remuneration%20Policy.pdf

25.1. Risk Management Policy

Information on Risk Management Framework is covered in the Management Discussion and Analysis placed at Annexure-I of this Report.

25.2. Internal Financial Controls and Adequacy

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its businesses, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds, error reporting mechanism, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

25.3. Annual Return of the Company

In accordance with Section 92(3) read with Section 134 (3) (a) of the Companies Act, 2013, Annual Return of the Company is available on the website of the Company and can be accessed at https://www.powergrid.in/sites/default/ files/Draft MGT 7 21 22.pdf

25.4. Loans, Guarantees or Investments

Loans, Guarantees or investments under Section 186 of the Companies Act, 2013 form part of the notes to financial statements attached to this Report.

25.5. Contracts or Arrangements with Related Parties

Contracts or arrangements with related parties referred to in Section 188 (1) of the Companies Act, 2013, in the prescribed Form AOC-2, are given as Annexure-VIII of this Report. Further, attention of the members is drawn on Note No. 55 of the Financial Statement which sets out related party disclosure.

25.6. Subsidiaries and Joint Ventures

As on 31^st March 2022 the Company has 24 subsidiaries and 11 Joint Ventures Companies.

A statement containing salient features of the financials of our Subsidiaries and Joint Ventures are covered in the Management discussion and Analysis and annexed in the prescribed format AOC-1 as Annexure-IX of this Report.

25.7. Dividend Distribution Policy

The policy was adopted to set out the parameters and circumstance that will be considered by the Board in determining the distribution of dividend to its shareholders and/or retained profits earned by the Company. According to the policy, Dividend for every financial year shall be decided by the Board considering various statutory requirements and Govt. guidelines, financial performance of the Company and other internal and external factors enumerated in the policy. The policy is also available on the Company's website at https://www.powergrid.in/sites/default/files/ Dividend%20Distribution%20Policy.pdf

25.8. Significant Material Orders

There are no significant and material orders passed by the Regulators or Courts or tribunal impacting the going concern status and Company's operations in future.

26. Annual Report on Corporate Social Responsibility

In terms of provisions of Section 135 of the Companies Act, 2013, read with amended Companies (CSR Policy) Rules, 2014, the Annual Report on CSR activities in the format prescribed under the said rules is annexed to this Report at Annexure-X.

27. Particulars of Employees

Your Company being a Government Company, the provisions of Section 197(12) of the Companies Act, 2013 and relevant Rules issued thereunder, are not applicable as per the notification dated 5^th June, 2015 issued by the Ministry of Corporate Affairs.

The terms and conditions of the appointment of Functional Directors are subject to the applicable guidelines issued by the Department of Public Enterprises (DPE), Government of India from time to time.

28. Insolvency and Bankruptcy Code, 2016

No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the financial year is not applicable.

29. Reporting of Frauds by Auditors

During the year under review, none of the Auditors have reported to the Audit Committee or the Board, under Section 143(12) of the Companies Act, 2013 for any instances of fraud committed against the Company by its officers or employees.

30. Fixed deposits

We have not accepted any fixed deposits, including from the public and as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

31. Secretarial Standards of ICSI

The Company has followed the requirements prescribed under Secretarial Standard on Meetings of Board of Directors (SS-1) and General Meetings (SS-2) read with MCA circulars granting exemptions in view of the Covid-19 pandemic.

32. Material Changes & Commitments

There have been no material changes & commitments affecting the financial position of the Company, which have occurred between the end of the financial year and date of this report.

33. Directors' Responsibility Statement

As required u/s 134(3) (c) & 134(5) of the Companies Act, 2013, the Directors confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the situation of the Company at the end of the financial year and of the profit of the Company for that period.

c. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. the Directors had prepared the annual accounts on a going concern basis.

e. the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

f. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

34. Acknowledgements

The Board of Directors would like to express their deep sense of appreciation for the guidance and co-operation received from Government of India, particularly Ministry of Power, Ministry of Finance, Ministry of Home Affairs, Ministry of External Affairs, Ministry of Statistics and Programme Implementation, Ministry of Environment & Forests, Ministry of Corporate Affairs, Central Electricity Regulatory Commission, Appellate Tribunal for Electricity, Central Electricity Authority, NITI Aayog, Department of Public Enterprises, Regional Power Committees, Office of the Comptroller and Auditor General of India, and other concerned Government departments/agencies at the Central and State level without whose active support, the achievements of the Company during the year under review would not have been possible.

Special thanks to our valued customers, State Governments and State power utilities and other clients, who have awarded various consulting works and reposed faith in Company's capability to handle them. The Board also appreciates the contribution of contractors, vendors and consultants for successful implementation of various projects by your Company.

The Directors also acknowledge the valuable suggestions and guidance received from the Statutory Auditors during the audit of accounts of the Company for the year under review. The Board also conveys its sincere thanks to national and international financial institutions, multilateral financial institutions, domestic & international credit rating agencies for their assistance, continued trust and confidence reposed in the Company.

On behalf of Board of Directors, I would like to place on record our deep appreciation of the dedicated efforts and valuable services rendered by the employees contributing to the performance of the Company during the year 2021-22. The commitment displayed by the employees at all levels, particularly during the ongoing pandemic situation, is exemplary and praise-worthy. I would also like to thank the Executive team for their strong leadership, the employee unions for their support and all our employees for their commitment, enthusiasm, and dedication.