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Power Grid Corporation of India Limited(A Government of India Enterprise)

CIN: L40101DL1989GOI038121

Regd. Office : B-9, Qutab Institutional Area, Katwaria Sarai, New Delhi- 110016.

Phone No.: 011-26560112, Fax: 011-26601081

Corp. Off.: “Saudamini”, Plot No. 2, Sector-29, Gurgaon-122001 (Haryana)

Phone No.: 0124-2571700-719, Fax: 0124-2571762

Website: www.powergridindia.com, Email ID: powergrid@powergrid.co.in

NOTICENOTICE is hereby given that the Twenty Seventh Annual General Meeting of the Members of Power Grid Corporation of India Limited will be held on Friday, the 16th September, 2016 at 11.00 a.m. at “Manekshaw Centre, Parade Road, Delhi Cantt., New Delhi - 110010” to transact the following business:

ORDINARY BUSINESS:

1. Toreceive,considerandadopt theAuditedFinancialStatements(includingconsolidatedfinancialstatements)of theCompany for thefinancialyearended31st March, 2016, the Report of the Board of Directors and Auditors thereon.

2. TonotethepaymentofinterimdividendanddeclarefinaldividendfortheFinancialYear2015-16.

3. ToappointaDirectorinplaceofDr.PradeepKumar(DIN:05125269),whoretiresbyrotationandbeingeligible,offershimselfforre-appointment.

4. To appoint a Director in place of Ms. Jyoti Arora (DIN: 00353071), who retires by rotation and being eligible, offers herself for re-appointment.

5. TofixtheremunerationoftheStatutoryAuditorsfortheFinancialYear2016-17.

SPECIAL BUSINESS:

6. To approve the appointment of Shri Jagdish Ishwarbhai Patel (DIN: 02291361) as an Independent Director.

Toconsiderandifthoughtfit,topasswithorwithoutmodification,thefollowingresolutionasanORDINARYRESOLUTION: RESOLVEDthatpursuanttotheprovisionsofSections149,150,152andanyotherapplicableprovisionsoftheCompaniesAct,2013and

theRulesmadethereunder(includinganystatutorymodification(s)orre-enactmentthereofforthetimebeinginforce)readwithScheduleIVtotheCompaniesAct,2013, theappointmentofShriJagdishIshwarbhaiPatel(DIN02291361)asanIndependentDirectorof theCompanywitheffectfrom17thNovember,2015forholdingofficeuptoandincluding16thNovember,2018,i.e.foratermnotexceeding3consecutive years, be and is hereby approved.”

7. Ratification of remuneration of the Cost Auditors for the Financial Year 2016-17.

Toconsiderandifthoughtfit,topasswithorwithoutmodification,thefollowingresolutionasanORDINARYRESOLUTION:

“RESOLVEDthatpursuanttoSection148oftheCompaniesAct,2013theremunerationofM/s.K.G.Goyal&Associates,CostAccountantsandM/s.R.M.Bansal&Co.,CostAccountantsasthejointCostAuditorsoftheCompany(forTransmissionandTelecombusiness)asapprovedbytheBoardfortheFinancialYear2016-17at`2,00,000/-(RupeesTwoLakhsonly)tobesharedequallybyboththefirms;Taxesasapplicabletobepaidextra,travellingandoutofpocketexpensestobereimbursedatactualsasperpolicyoftheCompanyandM/s.K.G.Goyal&Associates,theLeadCostAuditortobealsopaidfortheworkofconsolidationandfacilitationforfilingofconsolidatedcostauditreportfortheFinancialYear2016-17fortheCompanyasawhole,anadditionalfeeof`10,000/-(RupeesTenThousandonly)being10%ofitsCostAuditFee,beandisherebyratified.”

8. To raise funds in INR or any other acceptable foreign currency as permitted by Reserve Bank of India (RBI) up to ` 14,000 Crore, from domestic / External / Overseas sources through issue of secured / unsecured, non-convertible, non-cumulative, redeemable, taxable / tax-free Rupee Linked Bonds/Bonds under Private Placement during the Financial year 2017-18 in up to eight tranches/offers with/without Green Shoe Option and each tranche/offer shall be of up to ` 2,000 Crore of Bonds, exclusive of Green Shoe Option.

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Toconsiderandifthoughtfit,topasswithorwithoutmodification,thefollowingresolutionasaSPECIALRESOLUTION:

(i) “ResolvedthatpursuanttoSections23(1)(b),42and71ofCompaniesAct,2013readwithRule14(2)ofCompanies(ProspectusandAllotmentofSecurities)Rules,2014andotherapplicableprovisions,ifany,oftheCompaniesAct,2013asamended,ForeignExchangeManagementAct,1999asamended,SecuritiesandExchangeBoardofIndia,includingtheSecuritiesandExchangeBoardofIndia(IssueandListingofDebtSecurities)Regulations,2008,asamended,orprovisionsofanyotherapplicable law,whether in Indiaorabroadand the Memorandum and Articles of Association of the Company, approval be and is hereby granted to raise funds in INR or any other acceptableforeigncurrencyaspermittedbyReserveBankofIndia(RBI)upto 14,000Crore,fromdomestic/External/Overseassourcesthroughissueofsecured/unsecured,non-convertible,non-cumulative,redeemable,taxable/tax-freeRupeeLinkedBonds/BondsunderPrivatePlacementduringFinancialYear2017-18forfinancingofPOWERGRIDCapitalexpenditurerequirementandfurther,intheeventofrequirement,providingInterCorporateLoan(s)oncosttocostbasisandbacktobackservicing,towhollyownedprojectSPV’sacquiredbyPOWERGRIDunderTariffBasedCompetitiveBidding(TBCB)Projectsfromtimetotime,inuptoeighttranches/offerswith/withoutGreenShoeOptionandeachtranche/offershallbeofupto`2,000CroreofBonds,exclusiveofGreenShoeOption.”

(ii) “ResolvedfurtherthattheBoardofDirectors/CommitteeofDirectorsforBondsbeandisherebyauthorizedtofinalizedetailedtermsandconditionsofeachissue/trancheofBonds,IssueprogrammeofBonds,throughBook-buildingProcessorotherwise,etc.”

(iii) “Further resolved that theBoardofDirectors /CommitteeofDirectors forBonds / suchofficial(s)asmaybeauthorizedbyBoardofDirectors/CommitteeofDirectorsforBonds,beandareherebyauthorisedanditshallalwaysbedeemedtohavebeensoauthorisedtofinalize,executeanddeliver/filesuchofferletter,document(s),deed(s)andwriting(s),etc.asmayberequiredandalsotodoallsuchotheracts,deedsandthings,deposit/payfees,etc.tosuchAuthorityasmaybenecessaryforraisingfundsinINRoranyotheracceptableforeign currency as permitted by RBI up to `14,000CroreduringtheFinancialYear2017-18fromdomestic/external/OverseassourcesthroughPrivatePlacementofsecured/unsecured,non-convertible,non-cumulative,redeemable,taxable/tax-freeRupeeLinkedBonds/Bondsinuptoeighttranches/offerswith/withoutGreenShoeOptionandeachtranche/offershallbeofupto`2,000 Crore of Bonds, exclusiveof Green Shoe Option.”

By order of the Board of Directors

(Divya Tandon)Company Secretary

Regd. Office: B-9,QutabInstitutionalArea,KatwariaSarai,NewDelhi-110016.(CIN: L40101DL1989GOI038121)

Date: 08.08.2016

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NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.

Proxies,inordertobeeffectivemustbelodgedwiththeCompanynotlessthan48hoursbeforethecommencementoftheAnnualGeneralMeeting,i.e.latestby11.00a.m.onWednesday,14thSeptember,2016.Blankproxyformisenclosed.

Apersoncanactasaproxyonbehalfofmembersnotexceedingfiftyandholdingintheaggregatenotmorethantenpercentofthetotalshare capital of the Company carrying voting rights. A member holding more than ten percent of the total share capital of the Company carryingvotingrightsmayappointasinglepersonasproxyandsuchpersonshallnotactasaproxyforanyotherpersonorshareholder.

2. AsrequiredbyRegulation36oftheSEBI(ListingObligationsandDisclosureRequirements),2015,therelevantdetailsofDr.PradeepKumar(DIN:05125269)andMs.JyotiArora((DIN:00353071),Directorsretiringbyrotationandseekingre-appointmentunderaforesaidItemNo.3and4,inaccordancewithapplicableprovisionsoftheArticlesofAssociationoftheCompanyandthedetailsofthosedirectorswhoarebeingappointedinthisAnnualGeneralMeeting,areannexed.

3. NoneoftheDirectorsoftheCompanyisinanywayrelatedwitheachother.

4. AStatementpursuanttoSection102(1)oftheCompaniesAct,2013,relatingtotheSpecialBusinesstobetransactedattheMeetingisannexedhereto.

5. Membersarerequestedto:-

(i) notethatcopiesofAnnualReportwillnotbedistributedattheAnnualGeneralMeeting.

(ii) bringtheircopiesofAnnualReport,NoticeandAttendanceSlipdulycompletedandsignedatthemeeting.

(iii) deliverdulycompletedandsignedAttendanceSlipattheentranceofthemeetingvenueasentrytotheHallwillbestrictlyonthebasisoftheentryslipavailableatthecounteratthevenuetobeexchangedwiththeAttendanceSlip.PhotocopiesofAttendanceSlipwill not be entertained for issuing entry slip for attending Annual General Meeting.

(iv) quotetheirFolio/ClientID&DPIDNos.inallcorrespondence.

(v) note thatdue tostrict security reasonsmobilephones,briefcases,eatablesandotherbelongingswillnotbeallowed inside theAuditorium.

(vi) notethatnogifts/couponswillbedistributedattheAnnualGeneralMeeting.

6. CorporateMembersarerequestedtosendadulycertifiedcopyoftheBoardResolution/PowerofAttorneyauthorizingtheirrepresentativetoattendandvoteontheirbehalfattheAnnualGeneralMeeting.Alternatively,suchanauthoritydulycertifiedshouldbebroughtbytherepresentative attending on behalf of the corporate body, at the meeting.

7. TheRegisterofMembersandShareTransferBooksoftheCompanywillremainclosedfrom10th September, 2016 to 16th September, 2016 (bothdaysinclusive).Thefinaldividendonequityshares,asrecommendedbytheBoardofDirectors,subjecttotheprovisionsofSection126oftheCompaniesAct,2013,ifdeclaredattheAnnualGeneralMeeting,willbepaidon6th October, 2016 to those members, whose nameappearsintheRegisterofMembersonthe9th September, 2016.

8. TheBoardofdirectors,intheirmeetingheldon27thJanuary,2016,haddeclaredaninterimdividend@8%onthepaid-upequitysharecapital of the Company (i.e. `0.80pershare)whichwaspaidon16th February, 2016. Members who have not received or not encashed theirdividendwarrantmayapproachKarvyComputersharePrivateLimited,RegistrarandTransferAgentoftheCompany,forrevalidatingthewarrantorforobtainingduplicatewarrant.TheBoardhadfurtherrecommendedaFinalDividend@15.10%onthepaid-upequityshare capital of the Company (i.e. `1.51pershare)atitsmeetingheldon26th May, 2016. The dividend, if declared at the Annual General Meeting will be paid on 6th October, 2016 to those Members, whose names appear on the Register of Members of the Company as on 16th September,2016inrespectofphysicalshares.However,inrespectofsharesheldindematerializedform,thedividendwillbepayabletothosepersonswhosenamesappearasbeneficialownersasattheclosureofthebusinesshourson9th September, 2016 as per details to be furnished by the depositories.

9. PursuanttoSection205AreadwithSection205CoftheCompaniesAct,1956,thedividendamountswhichremainunpaid/unclaimedforaperiodofsevenyears,arerequiredtobetransferredtotheInvestorEducation&ProtectionFundoftheCentralGovernment.MembersareadvisedtoencashtheirDividendwarrantsimmediatelyonreceipt.Unclaimedfinaldividendof`71,75,610fortheFinancialYear2007-08 and unclaimed interim dividend of `61,06,252fortheFinancialYear2008-09havebeentransferredon18thNovember,2015and21st March,2016,respectively,totheInvestorEducationandProtectionFundoftheCentralGovernment(‘IEPF’),pursuanttotheprovisionsofSection205CoftheCompaniesAct,1956(orSection125oftheCompaniesAct,2013,oncenotified).

10. MembersareadvisedtosubmittheirElectronicClearingSystem(ECS)mandatetoenabletheCompanytomakeremittancebymeansofECS.ThoseholdingsharesinDematerializedformmaysendtheECSMandateintheenclosedFormdirectlytotheirDepositoryParticipants(DP).ThoseholdingsharesinPhysicalformmaysendtheECSMandateFormtoKarvyComputersharePrivateLimited,theRegistrar&ShareTransferAgentoftheCompany.ThosewhohavealreadyfurnishedtheECSMandateFormtotheCompany/DepositoryParticipant/Registrar&TransferAgentwithcompletedetailsneednotsenditagain.

TheshareholderswhoholdsharesinPhysicalformandwhodonotwishtooptforECSfacilitymaypleasemailtheirbankers’name,branchaddressandaccountnumbertoKarvyComputersharePrivateLimited,Registrar&ShareTransferAgentoftheCompanytoenablethemtoprint these details on the dividend warrants.

11. Membersholdingshares inmultiple folios inphysicalmodeare requested toapply for consolidationof shares to theCompanyor itsRegistrar&ShareTransferAgentalongwithrelevantShareCertificates.

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12. PursuanttoSection139(5)oftheCompaniesAct,2013theauditorsoftheGovernmentcompanyareappointedbytheComptroller&AuditorGeneralofIndia(C&AG)andintermsofSection142oftheCompaniesAct,2013,theremunerationhastobefixedbythecompanyin the Annual General Meeting or in such manner as the company in General Meeting may determine. The Members of the Company, in 26th AnnualGeneralMeetingheldon15thSeptember,2015,hadauthorizedtheBoardofDirectorstofixtheremunerationofStatutoryAuditorsfortheFinancialYear2015-16.Accordingly,theBoardofDirectorshadfixedauditfeeof 187.19Lakh(`89.31Lakhtowardsauditfee;and`97.88Lakhtowardsworkdoneinothercapacities)fortheStatutoryAuditorsfortheFinancialYear2015-16inadditiontoreimbursementofactualtravellingandout-of-pocketexpensesforvisittoaccountingunits.M/s.S.K.Mittal&Co.,M/s.R.G.N.Price&Co.,M/s.Kothari&Co.andM/s.Parakh&Co.havebeenappointedbytheC&AGasStatutoryAuditorsoftheCompanyforthefinancialyear2016-17.TheMembersmayauthorizetheBoardtofixanappropriateremunerationofStatutoryAuditorsasmaybedeemedfitbytheBoardfortheFinancialYear2016-17.

13. AllthedocumentsreferredtointheaccompanyingnoticeareopenforinspectionattheRegisteredOfficeoftheCompanyonallworkingdays(excludingSaturdaysandSundays),between11.00AMto1.00PMuptoThursday,the15th September, 2016.

14. MembersholdingsharesinphysicalformanddesirousofmakinganominationinrespectoftheirshareholdingintheCompany,aspermittedunderSection72of theCompaniesAct,2013,arerequestedtosubmit totheRegistrar&ShareTransferAgentsof theCompanytheprescribedForm(FormNo.SH-13)oftheCompanies(ShareCapitalandDebentures)Rules,2014.Incaseofsharesheldindematerializedform, the nomination has to be lodged with the respective Depository Participant.

15. AnnualListingfeefortheyear2016-17hasbeenpaidtotheStockExchangeswhereinsharesoftheCompanyarelisted.

16. Membersarerequestedtosendallcorrespondenceconcerningregistrationoftransfers,transmissions,sub-division,consolidationofsharesoranyothersharesrelatedmatterandbankaccounttoCompany’sRegistrars.

17. Membersarerequestedtonotifyimmediatelyanychangeintheiraddress:

(i) totheirDepositoryParticipants(DP)inrespectofsharesheldindematerializedform,and

(ii) totheCompanyatitsRegisteredOfficeoritsRegistrar&ShareTransferAgent,KarvyComputersharePrivateLimitedinrespectoftheirphysicalshares,ifany,quotingtheirfolionumber.

18. Membersdesirousofgettingany informationonany itemsofbusinessof thismeetingare requested toaddress theirqueries to theCompanySecretaryatleasttendayspriortothedateofthemeeting,sothattheinformationrequiredcanbemadereadilyavailableatthemeeting.

19. MembersarerequiredtobringtheirAttendanceslipstotheAGM.DuplicateAttendanceslipsand/orcopiesoftheReportandAccountswill not be provided at the AGM venue.

20. IntermsofSection108oftheCompaniesAct,2013readwithRule20oftheCompanies(ManagementandAdministration)Rules,2014andincompliancewiththeprovisionsofRegulation44(3)oftheSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015,theCompanyisofferingremotee-votingfacilitytoalltheShareholdersoftheCompanyinrespectofitemstobetransactedatthisAnnualGeneralMeetingandinthisregard,theCompanyhasengagedtheservicesofKarvyComputersharePrivateLimited(KARVY)toprovidethefacilityofelectronicvoting(‘remotee-voting’).

21. (I) Instructions and other information relating to remote e-voting are as under:

A. Theremotee-votingfacilitywillbeavailableduringthefollowingvotingperiod:

Commencement of remote e-voting :From9.00a.m.(IST)on13th September, 2016.

End of remote e-voting :Upto5:00p.m.(IST)on15th September, 2016.

B. In case a Member receives an email from Karvy [for Members whose email IDs are registered with the Company/ DepositoryParticipant(s)]:

(i) LaunchinternetbrowserbytypingtheURL:https://evoting.karvy.com

(ii) Enterthelogincredentials(i.e.UserIDandpasswordmentionedatAttendanceSlip).YourFolioNo./DPID-ClientIDwillbeyourUserID.However,ifyouarealreadyregisteredwithKarvyfore-voting,youcanuseyourexistingUserIDandpasswordforcastingyourvote.

User-ID ForMembersholdingsharesinDematForm:-a)ForNSDL:8CharacterDPIDfollowedby8DigitsClientIDb)ForCDSL:16digitsbeneficiaryIDForMembersholdingsharesinPhysicalForm:-Event no. followed by Folio Number registered with the company.

Password YourUniquepasswordisprintedontheAttendanceSlip.

Captcha EntertheVerificationcodei.e.,pleaseenterthealphabetsandnumbersintheexactwayastheyaredisplayed for security reasons.

(iii) Afterenteringthesedetailsappropriately,clickon“LOGIN”.

(iv) YouwillnowreachpasswordchangeMenuwhereinyouarerequiredtomandatorilychangeyourpassword.Thenewpasswordshallcompriseminimum8characterswithatleastoneuppercase(A-Z),onelowercase(a-z),onenumeric(0-9)andaspecialcharacter(@,#,$,etc.).Thesystemwillpromptyoutochangeyourpasswordandupdateyourcontactdetailslikemobilenumber,emailID,

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etc.onfirstlogin.Youmayalsoenterasecretquestionandanswerofyourchoicetoretrieveyourpasswordincaseyouforgetit.Itisstronglyrecommendedthatyoudonotshareyourpasswordwithanyotherpersonandthatyoutakeutmostcaretokeepyourpasswordconfidential.

(v) Youneedtologinagainwiththenewcredentials.

(vi) Onsuccessfullogin,thesystemwillpromptyoutoselecttheE-VotingEventNumberforPowerGridCorporationofIndiaLimited.

(vii)Onthevotingpageenterthenumberofshares(whichrepresentsthenumberofvotes)asonthecut-offdateunder“FOR/AGAINST”oralternatively,youmaypartiallyenteranynumberin“FOR”andpartiallyin“AGAINST”butthetotalnumberin“FOR/AGAINST”takentogethershouldnotexceedyourtotalshareholdingasmentionedoverleaf.Youmayalsochoosetheoption“ABSTAIN”andthesharesheld will not be counted under either head.

(viii)Membersholdingmultiplefolios/demataccountsshallchoosethevotingprocessseparatelyforeachofthefolios/demataccounts.

(ix) VotinghastobedoneforeachitemoftheNoticeseparately.Incaseyoudonotdesiretocastyourvoteonanyspecificitemitwillbe treated as abstained.

(x) Youmaythencastyourvotebyselectinganappropriateoptionandclickon“Submit”.

(xi) Aconfirmationboxwillbedisplayed.Click“OK”toconfirmelse“CANCEL”tomodify.Onceyouconfirm,youwillnotbeallowedtomodifyyourvote.Duringthevotingperiod,MemberscanloginanynumberoftimestilltheyhavevotedontheResolution(s).

(xii)Corporate/InstitutionalMembers(i.e.otherthanIndividuals,HUF,NRI,etc.)arealsorequiredtosendscannedcertifiedtruecopy(PDFFormat)oftheBoardResolution/AuthorityLetter,etc.,togetherwithattestedspecimensignature(s)ofthedulyauthorizedrepresentative(s),totheScrutinizerate-mailID:pkmittal171@gmail.com.Theymayalsouploadthesameinthee-votingmoduleintheir login. The scanned image of the above mentioned documents should be in the naming format “Corporate Name_EVENT NO.”

C. (I) IncaseaMemberreceivesphysicalcopyoftheAnnualGeneralMeetingNoticebyPost[forMemberswhoseemailIDsarenotregisteredwiththeCompany/DepositoryParticipant(s)]:

(i) Use‘userID’and‘initialpassword’asprovidedatAttendanceSlip.

(ii) PleasefollowallstepsfromSr.No.(i)to(xii)asmentionedin(B)above,tocastyourvote.

(II) Theremotee-votingperiodcommenceson13thSeptember,2016(09.00AMIST)andendson15thSeptember,2016(05.00PM.IST).Theremotee-votingmoduleshallbedisabledbyM/sKarvyComputersharePrivatelimitedforvotingthereafterandthefacilitywillbeblockedforthwith.Duringremotee-votingperiod,shareholdersofthecompanyholdingshareseitherinphysicalformorindematerializedform,asonthecut-offdatei.e.9thSeptember,2016maycasttheirvoteelectronically.OncethevoteonaresolutioniscastbyaMember,theMembershallnotbeallowedtochangeitsubsequently.Further,theMemberswhohavecasttheirvoteelectronically shall not be allowed to vote again at the Meeting.

(III)AnyPersonwhohasacquiredsharesandbecomesMemberoftheCompanyafterthedispatchoftheNoticeoftheAGMbutbeforethecut-offdateof9thSeptember,2016,mayobtaintheiruserIDandpasswordforremotee-votingfromCompany’sRegistrar&TransferAgents,M/sKarvyComputersharePrivateLimited,KarvySeleniumTowerB,Plot31-32,GachibowliFinancialDistrict,Nanakramguda,Hyderabad–500032, PhoneNo: 04067161500,E-mail id: einward.ris@karvy.com,Toll FreeNo.: 18003454001andFax: 04023420814andcanalsorequestforthephysicalcopyoftheAnnualReport.

(IV) Memberswhohavecasttheirvotethroughremotee-votingfacilitypriortothemeetingmayalsoattendthemeetingbutshallnotbe entitled to cast their vote again. At the venue of the meeting, members who have not cast their vote through remote voting may cast their vote through ballot paper. The facility for voting by electronic voting system shall not be made available at the AGM of the Company.

(V) Personswhosenamesarerecordedintheregisterofmembersmaintainedbyregistrarasoncutoffdatei.e.9thSeptember,2016shallonlyavailthefacilityofremotee-votingorvotingthroughballotpaperatvenueofthemeeting.

(VI) Incaseofanyquery,membersarerequestedtocontact:

Name:ShriSVRaju/ShriA.MohanKumar

Designation:Asstt.GeneralManager/Dy.Manager

E-mailid:einward.ris@karvy.com

Address:M/sKarvyComputersharePrivateLimited,KarvySeleniumTowerB, Plot31-32,GachibowliFinancialDistrict,Nanakramguda,Hyderabad–500032.

Contactdetails:PhoneNo:04067161571

TollFreeNo18003454001andFax:04023420814

(VII)Incaseofanyquerypertainingtoe-voting,pleasevisitHelp&FAQ’ssectionavailableatKarvy’swebsitehttps://evoting.karvy.com.

(VIII)ThevotingrightsoftheMembersshallbeinproportiontothepaid-upvalueoftheirsharesintheequitycapitaloftheCompanyasonthecut-offdate(i.e.therecorddate),beingFriday, 9th September, 2016.

(IX) TheBoardofDirectorshasappointedShriPradeepK.Mittal,Advocate,M/s.PKMGLawChambers,asaScrutinizertoscrutinizethee-votingprocessinafairandtransparentmanner.

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(X) TheScrutinizershall,immediatelyaftertheconclusionofvotingattheAnnualGeneralMeeting,firstcountthevotescastatthemeeting,thereafter,unblockthevotescastthroughremotee-votinginthepresenceofatleasttwo(2)witnessesnotintheemploymentoftheCompanyandwillmake,notlaterthanthreedaysofconclusionofthemeeting,aconsolidatedScrutinizer’sReportofthevotescastinfavouroragainst,ifany,totheChairmanorapersonauthorizedbyhiminwritingwhoshallcountersignthesame.Chairmanorapersonauthorizedbyhiminwritingshalldeclaretheresultofthevotingforthwith.

(XI) TheResultsonresolutionsshallbedeclaredatoraftertheAnnualGeneralMeetingoftheCompanyandtheresolutionswillbedeemedtobepassedontheAnnualGeneralMeetingdatesubjecttoreceiptoftherequisitenumberofvotesinfavouroftheResolutions.

(XII)TheResultsdeclaredalongwiththeScrutinizer’sReport(s)willbeavailableonthewebsiteoftheCompany(www.powergridindia.com)andonKarvy’swebsite(https://evoting.karvy.com)immediatelyaftertheresultisdeclaredbytheChairmanandcommunicationofthesametoNationalStockExchangeofIndiaLimitedandBSELimited.

22. Important Communication to Members:-

AspertheprovisionsofSections101and136oftheCompaniesAct,2013readwiththeCompanies(ManagementandAdministration)Rules,2014andRegulation36oftheSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015,theserviceofnotice/documentsincludingAnnualReportcanbesentbye-mailtoitsmembers.Memberswhohavenotregisteredtheire-mailaddresses,sofar,arerequestedtoregistertheire-mailaddresses,inrespectofdematerializedshareswiththeDepositorythroughtheirconcernedDepositoryParticipants.MemberswhoholdsharesinphysicalformarerequestedtofilltheE-CommunicationMandateFormandhandoverthesamealong with Attendance Slip at the Registration Counter of venue of Annual General Meeting for registration of Email address for receiving notice/documentsincludingAnnualReport.

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Annexure to Notice

EXPLANATORY STATEMENTITEM NO. 6

Appointment of Shri Jagdish Ishwarbhai Patel (DIN: 02291361) as an Independent Director.

ShriJagdishIshwarbhaiPatel(DIN:02291361)wasappointedasanIndependentDirectorofthecompanywitheffectfrom17thNovember,2015byBoardResolutiondated5thAugust,2016.IntheopinionoftheCentralGovernmentintheMinistryofPowerShriPatelfulfilstheconditionsspecifiedintheCompaniesAct,2013andtheRulesmadethereunderandthatShriPatelisindependentoftheManagement.

The above appointment of Shri Jagdish Ishwarbhai Patel as an Independent Director on the Board of the Company, not being liable to retire by rotationintermsofSection152readwithSection149oftheCompaniesAct,2013,requiresapprovaloftheMembersintheGeneralMeeting.BriefresumeofShriJagdishIshwarbhaiPatelisannexed.

ShriJagdishIshwarbhaiPatelholdsNILsharesinPOWERGRID.

NoneoftheDirectorsandKeyManagerialPersonneloftheCompanyortheirrelativesareconcernedorinterestedintheresolutionexcepttotheextentthatheorsheisaDirectorand/orShareholderoftheCompany.

The Board of Directors of your Company recommends the passing of the resolution as set out at Item No. 6 as an Ordinary Resolution.

ITEM NO. 7

Ratification of remuneration of the Cost Auditors for the Financial Year 2016-17.

CostAuditfortransmissionbusinessofPOWERGRIDisbeingconductedsinceFinancialYear2005-06.ForTelecombusiness,CostAudithasbeenmadecompulsorysinceFinancialYear2011-12.AsperSection148(3)oftheCompaniesAct,2013,theappointmentofCostAuditorshallbe made by the Board of Directors on such remuneration as may be determined by the members.

Accordingly, itwasproposedbytheAuditCommitteeandapprovedbytheBoard(i) theappointmentofM/sK.G.Goyal&Associatesand M/sR.M.Bansal&Co.asjointCostAuditorsoftheCompanyfortheFY2016-17forafeeof`2,00,000/-plusapplicabletaxes.ThefeeshallbesharedequallybythetwojointCostAuditors.TheabovefeeisexclusiveofTravellingandOutofpocketexpenses,whichshallbereimbursedbyPOWERGRIDatactualonsubmissionofclaimalongwithdocumentaryproofsand(ii)theappointmentofM/s.K.G.Goyal&Associates,CostAccountants,astheLeadCostAuditorfortheworkofconsolidationandfacilitationforfilingofconsolidatedCostAuditReportoftheCompanyfortheFinancialYear2016-17atanadditionalfeeof`10,000/-(RupeesTenThousandonly),being10%ofitsCostAuditFee.

NoneoftheDirectorsandKeyManagerialPersonneloftheCompanyortheirrelativesareconcernedorinterestedintheresolutionexcepttotheextentthatheorsheisaDirectorand/orShareholderoftheCompany.

TheBoardofDirectorsofyourCompanyrecommendsthepassingoftheresolutionassetoutatItemNo.7asanOrdinaryResolution.

ITEM NO. 8

To raise funds in INR or any other acceptable foreign currency as permitted by Reserve Bank of India (RBI) up to ` 14,000 Crore, from domestic / External / Overseas sources through issue of secured / unsecured, non-convertible, non-cumulative, redeemable, taxable / tax-free Rupee Linked Bonds/Bonds under Private Placement during the Financial Year 2017-18 in up to eight tranches/offers with/without Green Shoe Option and each tranche/offer shall be of up to ` 2,000 Crore of Bonds, exclusive of Green Shoe Option.

1. POWERGRIDBoardofDirectors,intheir331stmeetingheldon05.08.2016,approvedraisingofsecured/unsecured,non-convertible,non-cumulative,redeemable,taxable/tax-freeRupeeLinkedBonds/Bondsunderprivateplacement/TermLoans/TermloanintheformofLineofCredit/ECB/FCB/Multilateralfunding/Supplierscreditupto`15,750Crore(Approx)inoneormoretranchesdependingupontherequirementoffundsduringtheFinancialYear2017-18forfinancingofPOWERGRIDCapitalexpenditurerequirementandfurtherintheeventofrequirementofinter-corporateloan(s)oncosttocostbasisandbacktobackservicing,towhollyownedProjectSpecialPurposeVehicle(s)acquiredbyPOWERGRIDunderTariffBasedCompetitiveBidding.

2. The aforesaid amount of `15,750Crore includesaproposeddrawlofapproximately`1,750Crore frommultilateral funding/ExternalCommercialBorrowings(ECB)/SuppliersCreditasForeignCurrencyCommittedLoans(FCCL).POWERGRIDhasatermloanagreementwithStateBankofIndiaintheformofLineofCreditof`10,000Crorespreadoveraperiodoffiveyearsandhasundrawnbalanceof`2,215CroreasattheendofJune,2016.However,theactualdrawlfromSBIandFCCLcanbeascertainedonlyinduecourseoftimedependingupontherequirementoffundsduringF.Y.2017-18andanyshortfallindrawlfromSBIandFCCLwillbecompensatedthroughraisingofadditionaldebtfundfromdomestic/externalsourcesthroughissueofBondsonPrivatePlacementbasisinoneormoretranches.Accordingly,itisproposedtoraisefundsinINRoranyotheracceptableforeigncurrencyaspermittedbyRBIthroughissueofRupeeLinkedBonds/BondsonPrivatePlacementbasisinoneormoretranches/offersupto`14,000 crore (within the aforesaid limit of `15,750Crore)fromdomestic/externalsourcesunderSection179(3)(c)/179(3)(d)oftheCompaniesAct,2013,dependingupontherequirementoffundsduringtheFinancialYear2017-18.

3. TheproposedborrowingforFY2017-18willbewithintheoverallborrowinglimitsof`1,50,000crore.

4. PursuanttoSections23(1)(b)and42ofCompaniesAct,2013readwithRule14(2)ofCompanies(ProspectusandAllotmentofSecurities)Rules,2014Companies,forprivateplacementofSecuritiesarerequiredtoseekapprovalofShareholdersbywayofSpecialResolution.

5. POWERGRIDdomesticBondshavebeenratedathighestcreditrating(AAA)byvariousRatingAgenciesi.e.CRISIL,ICRA&CARE.TheratesofinterestareafunctionofmarketconditionsprevalentatthetimeofenteringthemarketforaparticularofferofBondsonthe

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privateplacement(includingoffertoQualifiedInstitutionalBuyer/s).Uptonow,borrowingthroughdomesticBondswasbeingdonebytheCompanyattheinterest(coupon)ratewhichwasmoreorlessequivalenttoprevailinginterestratesapplicabletoAAAratedcorporatebonds. In line with the past practice, the proposed domestic borrowing is also envisaged at the interest rates based on the more or less equivalenttoprevailingAAAratedcorporatebondsinterestrates.

6. NoneoftheDirectorsandKeyManagerialPersonneloftheCompanyortheirrelativesareconcernedorinterestedintheresolutionexcepttotheextentthatheorsheisaDirectorand/orShareholderoftheCompany.

7. TheBoardofDirectorsofyourCompanyrecommendsthepassingoftheresolutionassetoutatItemNo.8asaSpecialResolution.

AllthedocumentsreferredtointheaccompanyingNoticeandexplanatoryStatementareopenforinspectionbetween10.00a.m.to1.00p.m.onallworkingdaysattheCorporateOfficeoftheCompanyi.e.‘Saudamini’,PlotNo.2,Sector-29,Gurgaon-122001orattheRegisteredOfficei.e.B-9,QutabInstitutionalArea,KatwariaSarai,NewDelhi–110016uptoThursday,15th September, 2016.

By order of the Board of Directors

(Divya Tandon)

Company Secretary

Regd. Office: B-9,QutabInstitutionalArea,KatwariaSarai,NewDelhi-110016.(CIN: L40101DL1989GOI038121)

Date: 08.08.2016

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BRIEF RESUME OF THE DIRECTORS SEEKING RE-ELECTION Directors seeking re-election at the 27th AGM:

1.

Name Dr. Pradeep Kumar

DIN 05125269

Date of Birth and Age 1stJanuary,1961/55Years

Date of Appointment 10thSeptember,2013

Qualification B. Tech in Electronics, MBA, Master Diploma in Public Administration and Governance and Ph.D in the area of Integrated Freight Transport Planning.

Expertiseinspecificfunctionalarea Duringillustriouscareerof29yearsasIASofficer,hehasheldvariousadministrativepositionsintheareasofRevenue,Finance,Transport,Shipping,InlandWaterTransportation,WaterResources,Power&Renewable Energy, Irrigation, Food&Civil Supplies, Consumer Affairs, Environment&Forests.

Directorship held in other Companies (Part-time)

NTPC Limited

Membership / Chairmanship ofCommittees in other Companies

NTPC Limited:1.AuditCommittee–Member2.Stakeholders’RelationshipCommittee-Member

No. of Shares held NIL

2.

Name Smt. Jyoti Arora

DIN 00353071

Date of Birth and Age 15.10.1961/54Years

Date of Appointment 20th March, 2014

Qualification PostGraduate(Economics)

Expertiseinspecificfunctionalarea Ms. Jyoti Arora is an eminent energy professional in India, and is presently working as JointSecretary in theMinistry of Power, looking after policymaking in electricity sector concerningRegulatoryAffairs,TransmissionandRenewableGridIntegration.Herworkalsoincludesworkingclosely with the States for planning and implementing the 24x7 Power For All, the flagshipprogrammeofGovernmentofIndia.Inherover26yearsofexperienceintheIndianAdministrativeService, she has been closely associated at the grassroots level with the issues of energy access, itsdeliveryandappropriatetechnologyoptions.Shehasholisticexperience inthepowersectorofpolicymaking and also its implementation as shewasManagingDirector of electricity utilitiesdealing in Distribution, Transmission and Generation for more than a decade. As Chief of Bureau ofEnergyEfficiency(BEE) inIndiashewasclosely involved in implementationofCleanEnergyinitiatives.HasalsorepresentedthecountryinUNFCCClimateChangenegotiations.

Directorship held in other Companies (Part-time)

1. Power System Operation Corporation Limited2. PTC India Limited

Membership / Chairmanship ofCommittees in other Companies

NIL

No. of Shares held NIL

10

Directors being appointed at this Annual General MeetingName Shri Jagdish Ishwarbhai Patel

DIN 02291361

Date of Birth and Age 15thOctober,1964/51Years

Date of Appointment 17thNovember,2015

Qualification B.Sc.,ASTM-UT,MBA(Ind.)

ExpertiseinspecificfunctionalArea Mr. Jagdish I Patel has an illustrious career spanning over 35 years contribution in the areasof Energy Generation, Mining and Space sectors as engineering solution providers and strategic planneroverbusinessauxiliaryunits.HavingbeenaDirector(Tech.)atPushpakTrademechLimited,aswell as KIA InfrastructureDevelopment Limited and activemember of Gujarat Chamber ofCommerceandIndustry(GCCI),hehasservedasamemberofseveralinstitutionssuchasDistrictImplementation&IndustrialManagementCommitteeofITI,IndustrialManagementCommitteeofIGTRandhasalsoservedasPresidentaswellasTreasureratLUB-GujaratandalsomemberofStandingCommittee/TownPlanningCommittee/SolidWasteManagementCommitteeofAMC.

Directorship held in otherCompanies(Part-time)

1.PushpakTrademechLimited2.KIAInfrastructureDevelopmentLimited

Membership/ChairmanshipofCommittees in other Companies

NIL

No. of Shares held NIL

11

Power Grid Corporation of India Limited(AGovernmentofIndiaEnterprise)CIN:L40101DL1989GOI038121

Regd.Office:B-9,QutabInstitutionalArea,KatwariaSarai,NewDelhi-110016.PhoneNo.:011-26560112,Fax:011-26601081Corp.Off.:“Saudamini”,PlotNo.2,Sector-29,Gurgaon-122001(Haryana)PhoneNo.:0124-2571700-719,Fax:0124-2571762

Website:www.powergridindia.com,EmailID:powergrid@powergrid.co.in

PROXY FORM

I/We,beingthemember(s)of…………...sharesoftheabovenamedcompany,herebyappoint1.Nameofthemember(s): Address:E-mailId:Signature:……………...........,orfailinghim2.Nameofthemember(s): Address:E-mailId:Signature:……………...........,orfailinghim3..Nameofthemember(s): Address:E-mailId:Signature:……………...........,asmy/ourproxytoattendandvote(onapoll)forme/usandonmy/ourbehalfatthe27th Annual General Meeting of the company, to be held on Friday, the 16thSeptember,2016at11.00a.m.at“ManekshawCentre,ParadeRoad,DelhiCantt.,NewDelhi-110010”andatanyadjournmentthereof in respect of such resolutions as are indicated below:

Sl. No. Resolutions For AgainstOrdinary Business1. Toreceive,considerandadopttheAuditedFinancialStatements(includingconsolidatedfinancialstatements)

oftheCompanyforthefinancialyearended31st March, 2016, the Report of the Board of Directors and Auditors thereon.

2. TonotethepaymentofinterimdividendanddeclarefinaldividendfortheFinancialYear2015-16.

3. ToappointaDirector inplaceofDr.PradeepKumar(DIN:05125269),whoretiresby rotationandbeingeligible,offershimselfforre-appointment.

4. ToappointaDirectorinplaceofMs.JyotiArora(DIN:00353071),whoretiresbyrotationandbeingeligible,offersherselfforre-appointment.

5. TofixtheremunerationoftheStatutoryAuditorsfortheFinancialYear2016-17.Special Business6. ToapprovetheappointmentofShriJagdishIshwarbhaiPatel(DIN:02291361)asanIndependentDirector.7. RatificationofremunerationoftheCostAuditorsfortheFinancialYear2016-17.8. ToraisefundsinINRoranyotheracceptableforeigncurrencyaspermittedbyReserveBankofIndia(RBI)

up to `14,000Crore,fromdomestic/External/Overseassourcesthroughissueofsecured/unsecured,non-convertible,non-cumulative, redeemable, taxable/ tax-freeRupeeLinkedBonds/BondsunderPrivatePlacementduringtheFinancialyear2017-18inuptoeighttranches/offerswith/withoutGreenShoeOptionandeachtranche/offershallbeofupto`2,000CroreofBonds,exclusiveofGreenShoeOption.

Nameofthemember(s):

Registered address:

E-mailId:

Foliono/ClientId:

DP ID:

Signedthis…………..dayof………………..,2016.

Signature of shareholder

SignatureofProxyholder(s)

Note: 1. This form of proxy in order to be effective should be duly completed and deposited at the Registered

Office of the Company, not less than 48 hours before the commencement of the Meeting.2. Fortheresolutions,explanatorystatementsandNotes,pleaserefertotheNoticeof27th Annual General Meeting.

3. Pleasecompletealldetailsincludingdetailsofmember(s)intheaboveboxbeforesubmission.

AffixRevenueStamp

""

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Power Grid Corporation of India Limited(AGovernmentofIndiaEnterprise)CIN:L40101DL1989GOI038121

Regd.Office:B-9,QutabInstitutionalArea,KatwariaSarai,NewDelhi-110016.PhoneNo.:011-26560112,Fax:011-26601081Corp.Off.:“Saudamini”,PlotNo.2,Sector-29,Gurgaon-122001(Haryana)PhoneNo.:0124-2571700-719,Fax:0124-2571762

Website:www.powergridindia.com,EmailID:powergrid@powergrid.co.inECS MANDATE FORM

[APPLICABLE FOR SHARES HELD IN PHYSICAL FORM ONLY]ToKarvy Computershare Private LimitedUnit:PowerGridCorporationofIndiaLimited,KarvySeleniumTowerB,Plot31-32,Gachibowli Financial District, Nanakramguda,Hyderabad–500032.

NameoftheFirst/SoleShareholderFolio No.

PAN / Email information

Income Tax Permanent Account Number (PAN) (Please attach aphotocopyofPANCard)

Email ID

ECS Mandate Form (for shares held in Physical mode)

BankName

BranchName&Address

BankAccountType(tick) SB Current Others

BankAccountNumber

9DigitCodeNumberoftheBankandBranchappearingontheMICRChequeissuedbytheBank.(Please attach a photo copy of the Cheque)

Iherebydeclarethattheparticularsgivenabovearecorrectandcompleteandalsoexpressmyconcurrencetoreceiveinformationthroughe-mailtowardsdividendpaidbytheCompanyundertheECSmode.

Signature of the 1st Registered Holder/Sole Holder

Power Grid Corporation of India Limited(AGovernmentofIndiaEnterprise)CIN:L40101DL1989GOI038121

Regd.Office:B-9,QutabInstitutionalArea,KatwariaSarai,NewDelhi-110016.PhoneNo.:011-26560112,Fax:011-26601081Corp.Off.:“Saudamini”,PlotNo.2,Sector-29,Gurgaon-122001(Haryana)PhoneNo.:0124-2571700-719,Fax:0124-2571762

Website:www.powergridindia.com,EmailID:powergrid@powergrid.co.in

E-COMMUNICATION REGISTRATION FORM

FolioNo./DPID&ClientID : ……………………………………………………

Name of 1stRegisteredHolder : …………………………………………………..

NameofJointHolder(s) : …………………………………………………..…………………………………………………….

RegisteredAddress : ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

E-mailID(toberegistered) : ………………………………………………………………………………………………………

I/weshareholder(s)ofPowerGridCorporationofIndiaLimitedagreetoreceivecommunicationfromtheCompanyinelectronicmode.Pleaseregistermyabovee-mailinyourrecordsforsendingcommunicationthroughe-mail.

Signature:…………………………………………

(FirstHolder)

Date:……………………

Note: Shareholder(s) are requested to keep the Company informed as and when there is any change in the e-mail address.

" "

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15

16

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Contents

Notice ........................................................................................................................................................................................... 01

Reference Information .................................................................................................................................................................... 18

LettertoShareholders..................................................................................................................................................................... 19

Director’sProfile............................................................................................................................................................................. 21

ListofSeniorExecutives................................................................................................................................................................. 24

POWERGRIDS’SPerformance.......................................................................................................................................................... 25

FiveYears’sSummary..................................................................................................................................................................... 26

Director’sReport............................................................................................................................................................................ 28

AnnexureI-ManagementDiscussionsandAnalysis.......................................................................................................................... 41

AnnexureII-BusinessResponsibilityReport.................................................................................................................................... 61

AnnexureIII-ParticularsrequiredSection134(3)(m)oftheCompaniesAct,2013.............................................................................. 71

AnnexureIV-CommentsofC&AGu/s143(6)(B)oftheCompaniesAct,2013................................................................................... 74

AnnexureV-SecretariatAuditReport............................................................................................................................................. 76

AnnexureVI-FormNo.MGT9....................................................................................................................................................... 79

AnnexureVII-ReportonCorporateGovernance.............................................................................................................................. 100

AnnexureVIII-CertificateonCorporateGovernance.......................................................................................................................... 121

AnnexureIX-FormNo.AOC-2...................................................................................................................................................... 122

AnnexureX-FormNo.AOC-1.......................................................................................................................................................126

AnnexureXI-AnnualReportonCorporateSocialResponsibility.......................................................................................................... 129

Balance Sheet ................................................................................................................................................................................ 141

StatementofProfitandLoss............................................................................................................................................................ 142

CashFlowStatement...................................................................................................................................................................... 143

Notes.............................................................................................................................................................................................145

IndependentAuditor’sReport.......................................................................................................................................................... 188

AnnexureIndependentAuditor’sReport..........................................................................................................................................190

ConsolidatedFinancialStatements................................................................................................................................................... 194

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Reference InformationPOWER GRID CORPORATION OF INDIA LIMITED

CIN: L40101DL1989GOI038121

Registered OfficeB-9,QutabInstitutionalArea,KatwariaSarai,NewDelhi-110016PhoneNo.-011-26560112,Fax–011-26601081

Company Secretary & Compliance OfficerMs. Divya Tandon

Corporate Office“Saudamini”, Plot No. 2,Sector29,Gurgaon-122001(Haryana)PhoneNo.–0124-2571700-719,Fax–0124-2571762

Website: www.powergridindia.comE-mail ID: powergrid@powergrid.co.in

For the Financial year under review i.e. 2015-16Statutory Auditors

1. M/s. S. K. Mittal & Co., Chartered AccountantsMittalHouse,E-29,SouthExtensionPart-II,NewDelhi–110049.Email:skmittalca@yahoo.co.in

2. M/s. R. G. N. Price & Co., Chartered AccountantsSimpson Buildings,861, Anna Salai,Chennai-600002.Email:rangarajan@rgnprice.com

3. M/s. Kothari & Co., Chartered Accountants1E,Neelkanth,26-B,CamacStreet,Kolkata–700016.Email:manaswykothari@yahoo.co.in

4. M/s. Parakh & Co., Chartered AccountantsA-101,PratikApartment,RamachandraNagar3,NearCadburySignal,ThaneWest,Mumbai–400604.Email : sharmapsd@yahoo.com

Cost Auditors

1. M/s. K. G. Goyal and Associates, Cost Accountants,8,ChitraguptaNagar–IJyoti Nagar Railway Crossing,Jaipur–302005.Email:rajeshgoyaljaipur@yahoo.co.in

2. M/s. R. M. Bansal & Co., Cost Accountants,A-201,TwinTowers,Lakhanpur,Kanpur–208024.Email : cmarmbansal11@gmail.com

Registrar & Share Transfer Agent:Equity Shares:KarvyComputersharePrivateLimitedKarvySeleniumTowerB,PlotNo.31&32,Gachibowli,FinancialDistrict,Nanakramguda,Serillingampally,Hyderabad-500032 Tele:+9140-67162222,Fax:+914023420814 TollfreeNo.18003454001Email:einward.ris@karvy.comWebsite:www.karvycomputershare.comBonds:MCS Share Transfer Agent Limited,F-65,OkhlaIndustrialArea,Phase-I,NewDelhi-110020.Ph:011-41406149-52Telefax.:011-41709881E-mail:admin@mcsregistrars.com

BankersIndianOverseasBankBankofBarodaStateBankofPatialaCanaraBankStateBankofIndiaPunjabNationalBankUnionBankofIndiaStateBankofHyderabadHDFCBankLtdICICIBankLtdIDBIBankAndhraBankCorporationBankAxisBankLtdKotakMahindraBankDenaBankStateBankofMysore

Shares Listed at:NationalStockExchangeofIndiaLimitedBSE LimitedDepositories:National Securities Depository LimitedCentralDepositoryServices(India)Limited

Debenture TrusteesFor Bond Series VIII to XV IssueIndianOverseasBank10, Parliament Street,Jeevan Deep Building, New Delhi 110 001Tel:011-23341421,23742559Fax:011-23348928Email:Iob0762@iob.in

For Bond Series XVI to LII IssueIDBI Trusteeship Services Ltd.Asian Building, Ground Floor,17,R.KamaniMarg,BallardEstate,Mumbai-400001Ph:022-40807000Fax:022-66311776Email : itsl@idbitrustee.com

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LETTER TO SHAREHOLDERS

Dear Shareholders,

ItgivesmegreatpleasuretosharewithyoutheperformanceofyourCompanyduringtheFinancialYear(FY)2015-16.YourCompanycontinuedtodeliveranotheryearofconsistentgrowthonvariousfrontsdespite the challenging environment.

Friends,Fiscal2016wasanotherremarkableyearforPOWERGRID.Iamgladtosharewithyouthatyour Company has capitalized transmission projectsworth `31,788Crore during the year 2015-16,whichisthehighestevercapitalizationinasinglefinancialyearofitshistory.AnumberofimportantprojectswerecommissionedduringtheyearincludingPole-I(1500MW)ofoneoftheWorld’sfirstandlongest±800kVHVDCMultiTerminaltransmissionlinefromBiswanathChariali(Assam)toAgra(U.P.)withroutelengthofabout1750km,765kVJabalpur-DharamjaygarhI&IItransmissionlines,765kVMeerut-Mogatransmissionline,400kVD/CBarhIITPS-Gorakhpur(Quad)transmissionlineand765kVGwalior–JaipurI&IItransmissionlines.Further,the1200kV(thehighesttransmissionvoltageintheworld)NationalTestStationPhase-IIwassuccessfullycharged.

YourCompanyhasachievedanothermilestone throughestablishmentof thefirsthighcapacitysynchronous linkbetweenIndiaandNepalwiththecommissioningof400kVMuzaffarpur(India)-Dhalkebar(Nepal)doublecircuittransmissionline.Inaddition,Gridinter-connectionbetweenIndiaandBangladeshwasstrengthened throughcommissioningof400kVSurjyamaninagar (India) -Comilla (Bangladesh)doublecircuit transmission line.

InFiscal2016,yourCompanydisplayedanimpressivefinancialperformance.YourCompanyregisteredaTurnoverof`21,281CroreandProfitafterTax(PAT)of`6,027CroreinFiscal2016,registeringagrowthof19.7%and21.04%respectively,tothecorrespondingTurnoverandPATinFiscal2015.YourCompany’sGrossFixedAssetsasonMarch31,2016standsat`1,50,052Croreasagainst`1,18,264Croreinthelastfiscal.

Ontheoperationalfront,yourCompanycontinuedtomaintainthetransmissionsystemavailabilityabove99%.TheavailabilityfortheFiscal2016was99.72%withnumberoftrippingsperlinelimitedat0.66.AsonMarch31,2016,yourCompanyowns&operatesatransmissionnetworkofabout1,29,354ckmofInter-statetransmissionlines,207nos.ofEHVAC&HVDCsub-stationswithtransmissioncapacityofabout2,54,848MVA.

During theFiscal2016,yourCompanycontinued tomakesignificantprogress inall itsbusinessareas includingTelecomandConsultancy,enhancing value for the shareholders. A number of Consultancy assignments have been secured during the year. Also, on the Telecom front, totalnetworkcoveragehasbeenincreasedby10%toabout36,500kmandNumberofPointsofPresence(PoPs)locationshavebeenincreasedto595fromtheearliercoverageof352PoPs,andthecustomersbasehasincreasedby45%from187inFiscal2015to270inFiscal2016.

UnderDDUGJY(DeendayalUpadhyayaGramJyotiYojana)scheme(erstwhileRGGVY),infrastructurewascreatedfor2960nos.ofelectrified/un-electrifiedvillagesinFiscal2016.Cumulatively,tillMarch,2016,infrastructurehasbeencreatedforelectrificationof74,500villagesandserviceconnectionwereprovidedtoabout36.7lakhBPLhouseholds.

Friends,ElectricityisaveryessentialconstituentofinfrastructureaffectingeconomicgrowthandwelfareoftheCountry.UndertheTwelfthFiveYearPlan(FY12-17)whichhaslaidspecialemphasisondevelopmentoftheinfrastructuresectorincludingenergy,yourCompanyhasalreadymadeaCapitalExpenditureof`88,235croreagainsttheCapitalExpenditureplanof`1,10,000 Crore.

TowardsintegrationofRenewableEnergyResourceswithGrid,yourCompanyisplayinganimportantroleincludingundertakingthedevelopmentofGreenEnergyCorridorsaswellastransmissionschemesfor7200MWUltraMegaSolarParksinvariousstates.YourCompanyisalsotakingupthechallenging&flagshipresponsibilityofsettingupofamaidenRenewableEnergyManagementCenters(REMC)insevenrenewablerichstates.Thiswouldenable forecastingof renewableresourcesandefficientmanagementofdistributed& intermittent renewablegenerationensuringefficientutilizationofresources.

YourCompanycontinuestotakevarious initiatives fordevelopmentofSmartGrid inIndiaand isconstantlyenhancing itsabilities throughin-houseresearchanddemonstrationprojects inthisdirection.YourCompanyisextendingconsultingservicesforvariousprojectscoveringdistributioninfrastructure,advancedmeteringinfrastructure,electricvehiclechargingstations,powerqualitymanagement,netmetering,etc.AspartofGoI’sendeavourtowardsSmartCityDevelopment,yourCompanyisalsocloselyassociatedwithimplementationofSmartGridatVaranasi and Gurgaon.

Further,yourCompanyhastakenvariousinitiativesrealizingitsobligationsandcommitmenttowardsSustainableDevelopmentsuchasspecialdesignedtowerstoconservethepreciousRightofWay(RoW),installationofLEDbulbs&SolarStreetLightsinsubstationcontrolrooms,fuelcatalystdevicesforDGsets,rainwaterharvesting,installationofsolarphotovoltaicinofficebuildingstomeettheinternalenergyrequirements/CO2 reduction, etc.

AsapartofCorporateSocialResponsibility, yourCompany ismakingcontribution to societyat largewithmajor focuson inclusive social-economicgrowthfordevelopmentofmarginalized&under-privilegedsectionsofthesocietyresidingarounditsareasofoperation.Various

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communitydevelopmentactivitieshavebeencarriedoutduringtheyearinareasofRuralDevelopment,SkillDevelopment&CapacityBuilding,Health,Education,Environment,etc.Underthe“SwachhBharatAbhiyaan”ofGoI,yourCompanyhasconstructedabout9,500toiletsinabout4,250GovernmentschoolsinseveralstatesoftheCountry.

UnderTariffBasedCompetitiveBidding(TBCB),yourCompanyhasbaggedonemoreprojectduringtheyear.Withthis,yourCompanyhassecured9projectsasonMarch31,2016.IamhappytosharewithyouthatthefirstTransmissionLineunderTBCBprojectsofyourCompanyviz.400kVD/CKhammam–NagarjunasagarhasbeensuccessfullychargedduringFY2015-16.

YourCompanywasrecognizedforexcellencealongmanydimensionsandhasreceivedseveralprestigiousawardsanddistinctions.Someofthesignificant&recentawardsinclude-the“CBIPAwardforBestTransmissionUtility”byCentralBoardofIrrigationandPower(CBIP),“Dun&BradstreetPSUAward2015”underthePowerTransmission&Distributionsectorcategory,“Dun&BradstreetInfraAward2015”underPowerTransmissioncategory,“MostValuableCompany”and“BestPerformingCompany”awardfromIndiaTodayinNavratna(PSU)category,and‘RajbhashaNavratna’awardfortheyear2015-16by‘BhartiyaBhashaEvamSanskrutiKendra’.Further,yourCompanyhasbeenfelicitatedat‘TheEconomicTimesPowerFocus3rdAnnualSummit’forcommendableinitiativesandexcellentcontributionsinPowerSector.

Friends,IamproudtosharewithyouthatyourCompanyhasbeenrecognisedasoneofthe“India’sBestCompaniestoWorkfor2016”by‘TheGreatPlacetoWorkInstitute’,inpartnershipwith‘TheEconomicTimes’.YourCompanywasrankedno.3amongalistof49companiesselectedunderthecategoryof“Asia’sBestAnalystDays”intheInstitutionalInvestorSurveyofAsia.Further,yourCompanycontinuedtobe‘’FastestGrowingElectricUtilityinAsia’’forthesecondsuccessiveyearandwastheonlyIndianPSUinthe“PlattsTop50FastestGrowingEnergyCompaniesintheWorld”,2015.

OnbehalfoftheCompany,Ithankshareholdersfortheircontinuedconfidenceandsupport.IwouldalsoliketotakethisopportunitytothanktheemployeeswhosecommitmentandhardworkhashelpedindeliveringanothersuccessfulyearfortheCompany.

Withbestwishes,

Yourssincerely,

(I.S.Jha) Chairman&ManagingDirector

Place: New Delhi Date : 08.08.2016

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Shri I. S. Jha Chairman and Managing Director

Shri I. S. Jha (57 years), (DIN: 00015615) is Chairman&Managing Director of our Company.Priortohispresentassignment,hesuccessfullyservedasDirector(Projects)oftheCompanyfromSeptember,2009andwasresponsibleforplanning,engineering,projectmanagement,monitoringandimplementationofalltransmissionanddistributionprojects.AnElectricalEngineerfromNIT,Jamshedpur, he is awell known Power SystemProfessional havingmore than 35 years of richandvariedworkexperience.Hebeganhisprofessionalcareerin1981asanExecutiveTraineeinNTPC.HehasbeenassociatedwithPOWERGRIDsince its inception in1991andhasbeenpartof departments such as Engineering, Distribution Management System (DMS), and CorporateMonitoringGroup.HehasworkedasExecutiveDirectorofNorthEasternRegion,EngineeringandCorporateMonitoringGroupoftheCompany.WhileworkingatvariousprojectsandCorporateOfficeofNTPCandPOWERGRID,hewasinvolvedinconceptualization,planning,design,engineering,monitoringandimplementationofprojectsofNationalimportance.

Apart from these, he has been a leadMember in Planning, Engineering and Execution of APDRP and RGGVY schemes inPOWERGRID.He ismemberofGoverningBodyofCPRI,BangaloreandEmpoweredCommitteeofGovernmentofIndiaforpromoting competition in Power Transmission Sector. He is also associatedwith professional bodies such as Institution ofEngineers-India,PowerEngineeringSocietyofIEEE-USA,andInternationalCouncilonLargeElectricSystems(CIGRE)–France.Hehaspublished/presentednumerousarticles,technicalpapersinthefieldofpowersysteminvariousinternationalandNationalJournal/Conferences.HehasbeenappointedCMDofthecompanyinNovember,2015.

Shri R. T. Agarwal Director(Finance)

ShriR.T.Agarwal(59years),(DIN:01937329)isDirector(Finance)ofourCompany.Priortotakingup thisassignment,hewasworkingasExecutiveDirector (Finance).Acharteredaccountantbyprofession,ShriAgarwalhasmorethan35yearsofexperienceinmultifariousFinance&Accountsfunctions like finalization of Accounts, coordinationwith Auditors, Taxation, Treasury Functions,Internal Audit, Budgeting, Pay Roll, Concurrence, MIS & Commercial aspects etc. both at theCorporateCentreandatRegionalHeadquartersofPOWERGRID.HehasplayedapivotalroleinthetwosuccessfulFollow-onPublicOffersofPOWERGRID.BeforejoiningPOWERGRIDin1991,hehadworkedinpowermajorNTPCLtd.projectsitesforaround10years.HewasappointedasaDirectoronourBoardinJuly,2011andsuperannuateson31st August, 2016.

Shri R. P. Sasmal Director(Operations)

Shri R. P. Sasmal (58 years), (DIN: 02319702), is Director (Operations) of our Company. Priorto takingupthisassignment,hewasExecutiveDirector (OperationServices) in thecompany.Agraduate Engineer from Sambalpur University, Odisha, Shri Sasmal hasmore than 34 years ofexperienceinpowersector.ShriSasmalhashandledmulti-disciplinaryfunctionssuchasplanning,monitoringandimplementationofHVDCprojects,EHVtransmissionsystemsandLoadDespatchandCommunicationSystems.Hewasinstrumentalinintroducingthe±800kVmulti-terminalHVDCtransmissionsystemwhichisfirstofitskindintheworld.Underhisguidance,thefirstunmannedoperationof400kVsub-stationatBhiwadiwasimplementedasapilotproject.Hehasbeenbestowedupon with “Distinguished Member of CIGRE, 2012” and has published various technical papers on transmissionsystemsespeciallyonHVDCinvariousnationalandinternationalprofessionalforums/societieslikeIEEEandCIGRE.HeiscurrentlythenationalrepresentativeforIndiaatCIGREforHVDCandPowerElectronics.BeforejoiningPOWERGRIDin1993,hehadworkedinNTPCLtd.foraround13years.HewasappointedasaDirectoronourBoard in August, 2012.

DIRECTOR’S PROFILE

22

Smt Jyoti Arora Government Nominee

Ms. JyotiArora isaneminentenergyprofessional in India,and ispresentlyworkingas JointSecretary in theMinistryofPower, lookingafterpolicymaking inelectricitysectorconcerningRegulatoryAffairs,TransmissionandRenewableGridIntegration.Herworkalsoincludesworkingclosely with the States for planning and implementing the 24x7 Power For All, the flagshipprogramme of Government of India.

Inherover26yearsofexperience intheIndianAdministrativeService,shehasbeencloselyassociated at the grassroots level with the issues of energy access, its delivery and appropriate technologyoptions.Shehasholisticexperienceinthepowersectorofpolicymakingandalsoits implementation as she was Managing Director of electricity utilities dealing in Distribution,

TransmissionandGenerationformorethanadecade.AschiefofBureauofEnergyEfficiency(BEE)inIndiashewascloselyinvolvedinimplementationofCleanEnergyinitiatives.HasalsorepresentedthecountryinUNFCCClimateChangenegotiations.

SheisapostgraduateinEconomicsandwasselectedfortheHubertHumphreyFellowshipintheyear2003.

She was appointed as a Director on our Board in March, 2014.

Dr. Pradeep Kumar Government Nominee

Dr.PradeepKumar(55years),(DIN:05125269),anIndianAdministrativeServiceOfficerofKeralaCadre, is B. Tech in Electronics, MBA, Master Diploma in Public Administration and Governance and Ph.DintheareaofIntegratedFreightTransportPlanning.Duringhisillustriouscareerof29yearsasIASofficer,hehasheldvariousadministrativepositionsintheareasofRevenue,Finance,Transport,Shipping, InlandWaterTransportation,WaterResources,Power&RenewableEnergy, Irrigation,Food&CivilSupplies,ConsumerAffairs,Environment&Forests.HewasappointedasaDirectoronourBoardinSeptember,2013.

Shri Ravi. P. Singh Director(Personnel)

ShriRaviP.Singh(56years),(DIN:05240974),isDirector(Personnel)ofourCompany.HedidhisMechanicalEngineeringfromNIT,AllahabadinFirstClasswithHonoursandPostGraduateDiplomainHRfromAIMA,NewDelhi.HehaspreviouslyheldthepositionsofExecutiveDirector(EasternRegion-II) and Executive Director (Human Resource Management & Corporate Communication)inPOWERGRID.Shri Singhhasover 34 years ofwork experience in thepower sector handlingvarious multi-disciplinary functions like HR, Telecom, Contracts, Materials, Planning, MonitoringandTransmissionSystemConstruction/O&M.PriortojoiningPOWERGRIDin1991,ShriSinghhasworkedfor10yearsinNTPC.HewasappointedasaDirectoronourBoardinApril,2012.

23

Mr. Jagdish I. Patel Independent Director

Mr.JagdishIPatel(51years)[DIN:02291361]isaB.Sc.,ASTM-UT,MBA(Ind.)hasanillustriouscareer spanningover35years in theareasofEnergyGeneration,MiningandSpace sectorsasengineering solution providers and strategic planner over business auxiliary units. Having beenDirector(Tech.)atPushpakTrademechLimited,aswellasKIAInfrastructureDevelopmentLimitedandactivememberofGujaratChamberofCommerceand Industry (GCCI),hehasservedasamemberofseveralinstitutionssuchasDistrictImplementation&IndustrialManagementCommitteeof ITI, Industrial Management Committee of IGTR and has also served as President as well as TreasureratLUB-Gujarat.HeisalsomemberofStandingCommittee/TownPlanningCommittee/SolidWasteManagementCommitteeofAMC.HewasappointedasanIndependentDirectoronourBoardinNovember,2015.

Shri V.K. Saksena ChiefVigilanceOfficer

ShriV.K.Saksena(57years),MA,LLB,istheChiefVigilanceOfficerofPOWERGRID.Hebelongstothe1984batchofIndianRevenueService(IncomeTax)andhasover32yearsofexperienceintaxlawenforcementandhasalsoworkedondeputationassignments.IntheIncomeTaxDepartment,Govt. of India, he has served in various capacities including administrative, appellate and has also handledjudicialandvigilanceassignments.HehasalsoworkedintheTaxPolicyandLegislationDivisionintheCentralBoardofDirectTaxes,MinistryofFinance.HehasattendedaUNDPtrainingprogrammeonTechniquesofTaxAuditandCollectioninLosAngeles,USA.HewasappointedasChiefVigilanceOfficerofPOWERGRIDinJuly,2016.

24

S.N Name (S/Sh) E.No Desg Level Dept Region Location1 Ashwani Jain 00095 COO E9 Telecom CC New Delhi2 PankajKumar 00105 ED E9 ERP Cell CC Gurgaon3 Y.K.Sehgal 00122 ED E9 Commercial&RegulatoryCell CC Gurgaon4 Seema Gupta 00127 COO E9 CTUPlanning&CostEngineering CC Gurgaon5 M.KrishnaKumar 00129 ED E9 Technology Development CC Gurgaon6 Dr. Subir Sen 00158 ED E9 SmartGrid;EnergyEfficiencyCell CC Gurgaon7 B. Mishra 00189 ED E9 CorporatePlanning;IT CC Gurgaon8 MeenakshiDavar 00384 ED E9 HR CC Gurgaon9 Anil Mehra 00464 COO E9 International Business CC Gurgaon10 D.K.Valecha 10027 ED E9 Engineering-(TL,S/s,Civil) CC Gurgaon11 P.N.Dixit 10046 ED E9 Asset Management CC Gurgaon12 RanjanKr.Srivastava 10073 ED E9 F&A CC Gurgaon13 S.K.Mishra 10091 ED E9 QA&I;CMDCoordinationCell CC Gurgaon14 S Sen 10871 COO E9 NTAMC CC Manesar15 Oommen Chandy 10872 ED E9 Engineering-HVDC CC Gurgaon16 A.K.Arora 10907 ED E9 Asset Management CC Gurgaon17 S.K.Sharma 16257 ED E9 CMG CC Gurgaon18 T. C. Sarmah 20026 COO E9 BDD CC Gurgaon19 Sunil Agrawal 20497 ED E9 LD&C CC Gurgaon20 D.C.Joshi 40045 ED E9 Contracts Services CC Gurgaon21 S. Vaithilingam 40050 ED E9 F&A CC Gurgaon22 R.N. Singh 40054 ED E9 TBCB Cell CC Gurgaon23 B.P. Gantayet 40080 ED E9 DMS CC Gurgaon24 Atul Trivedi 40707 ED E9 ESMD,CSR&LAC CC Gurgaon25 PankajKumar 00369 GM(I/C) E8 Materials CC Gurgaon

Regions/Projects1 PrabhakarSingh 20003 ED E9 HeadofRegion NR-I New Delhi2 Anil Jain 10060 ED E9 HeadofRegion NR-II Jammu3 A.K.Sinha 40062 ED E9 HeadofRegion NR-III Lucknow4 DevendraKumar 10765 ED E9 HeadofRegion ER-I Patna5 Bharat Bhushan 20006 ED E9 HeadofRegion ER-II Kolkata6 A. Chaudhary 40017 ED E9 HeadofRegion NER Shillong7 V.Sekhar 20107 ED E9 HeadofRegion SR-I Secunderabad8 R.K.Singh 11044 ED E9 HeadofRegion SR-II Bangalore9 S.K.Gupta 10034 ED E9 HeadofRegion WR-I Nagpur10 D.K.Singh 40065 ED E9 HeadofRegion WR-II Baroda11 BhojPaul 10947 ED E9 NorthEastern-Northern/WesternIC-IProj. CC Gurgaon12 R.K.Chauhan 10951 ED E9 Western/NorthernICProj. NR-II Kurukshetra13 S. Gupta 11045 GM(I/C) E8 OdishaProj. ER-II Bhubaneswar

POSOCO1 S.K.Soonee 45003 CEO E9 I/cPOSOCO POSOCO-HQ New Delhi2 K.V.S.Baba 00126 ED E9 HeadofNLDC NLDC New Delhi3 P.K.Agarwal 10963 GM E8 HeadofRLDC NRLDC New Delhi4 U.K.Verma 16373 GM E8 HeadofRLDC ERLDC Kolkata5 T.S. Singh 50022 GM E8 HeadofRLDC NERLDC Shillong6 V.K.Srivastava 30041 GM E8 HeadofRLDC SRLDC Bangalore7 PMukhopadhyay 45007 GM E8 HeadofRLDC WRLDC Mumbai

On Deputation to other organisation(s)1 J.P. Singh 00195 ED E9 OnDep-TPTL Gurgaon2 SanjeevSingh 10040 ED E9 OnDep-DelhiTranscoLtd. New Delhi3 KanikRam 20008 ED E9 OnDep-BiharGridCo.Ltd. Patna

List of Senior Executives as on 29-July-2016

25

POWERGRID’S PERFORMANCE

26

FIVE YEARS’ SUMMARYOPERATING RESULTS

2015-16 2014-15 2013-14 2012-13 2011-12

(A) EARNED FROM:

Transmission Charges 19877.08 16450.86 14250.05 12162.66 9544.19

Consultancy Revenue

Sales of Services 465.46 380.60 332.48 228.96 289.95

Sales of Products - - 294.07 86.44 -

Telecom Revenue 392.25 274.89 276.14 231.39 201.19

Other Operative Revenue 67.43 70.88 77.54 48.40 128.94

Other Income 478.96 602.81 491.13 570.89 620.74

Total Earnings 21281.18 17780.04 15721.41 13328.74 10785.01

(B) PAID & PROVIDED FOR :

Purchasesofstock-in-trade - - 219.40 63.50 -

EmployeesRemuneration&Benefits 980.54 1023.65 941.68 886.40 842.97

TransmissionExpenses 644.29 605.15 456.24 367.65 328.38

AdministrationExpenses 888.59 705.80 629.54 494.56 476.21

OtherExpenses(IncludingPriorPeriodAdj.) (64.25) 47.38 25.25 -18.12 19.96

DefferedRevenueExpenditure - - - - 1.79

Provisions 7.50 43.95 22.35 2.75 2.30

Total Expenditure(Excluding Depreciation & Interest)

2456.67 2425.93 2294.46 1796.74 1671.61

ProfitbeforeDepreciation&Interest 18824.51 15354.11 13426.95 11532.00 9113.40

Depreciation 6182.76 5085.41 3995.68 3351.92 2572.54

Interest&FinanceCharges 5022.97 3979.32 3167.52 2535.22 1943.26

NetProfitafterInterest&DepreciationbutbeforeTax

7618.78 6289.38 6263.75 5644.86 4597.60

RegulatoryIncome/(Expense) (0.05) - - - -

Provisionfortax(MAT) 1574.79 1280.99 1274.13 1052.08 888.51

NetProfitafterMAT&FBT 6043.94 5008.39 4989.62 4592.78 3709.09

DeferredTax 17.22 29.22 492.20 358.28 454.14

ProfitafterDeferredTax 6026.72 4979.17 4497.42 4234.50 3254.95

Dividend 1208.50 1046.32 1349.76 1273.18 976.89

(`incrore)

27

FINANCIAL POSITION

2015-16 2014-15 2013-14 2012-13 2011-12

(A) WHAT THE COMPANY OWNED:Gross Fixed Assets 150051.92 118264.26 96503.66 80600.05 63387.34Less:Depreciation 34894.02 28578.05 23349.59 19199.41 15725.04NetFixedAssets 115157.90 89686.21 73154.07 61400.64 47662.30CapitalWorkinProgress 33950.69 39882.19 31851.41 19114.92 15573.50Construction Stores 9859.27 13041.96 17625.30 15708.62 12610.04 AdvancesforCapitalExpenditure 3020.20 3367.44 3853.61 5328.98 5091.23Long term Investments 771.28 740.99 814.33 964.24 1101.19OtherNon-currentLoans&Advances 5687.78 3651.99 3221.35 2517.07 1840.20 CurrentAssets,Loans&Advances 9981.80 7930.10 9069.00 6099.09 6329.89TOTAL (A) 178428.92 158300.88 139589.07 111133.56 90208.35(B) WHAT THE COMPANY OWED:Long Term Loans: -FromBanks&FinancialInstitutions 12031.00 7600.22 5101.94 1705.31 1323.51-ForeignCurrencyLoans 29266.81 26713.66 24721.62 21031.17 14352.17-DomesticBonds 58941.94 55061.96 46966.66 40339.79 33443.51TotalLong-termLoans 100239.75 89375.84 76790.22 63076.27 49119.19Current maturities of Long Term Loans 6081.66 4468.71 3679.63 3111.60 2632.72WorkingCapitalLoan(short-term) 2000.00 1200.00 2700.00 2000.00 1650.00CurrentLiabilities&Provisions 17171.91 16195.81 13137.50 9596.90 7088.29DeferredTaxLiability(Net) 2489.37 2472.15 2442.96 1959.16 1600.88 DeferredRevenue-AdvanceagainstDepreciation 1795.57 1938.57 2018.07 2094.96 2143.78DeferredRevenue-DFCFI/EAccount 3819.12 2751.22 2404.32 1505.61 493.17Grants in Aid 109.16 73.12 95.07 117.03 139.32Long-termProvisions 650.45 580.23 524.37 442.63 421.49OtherLong-termLiabilities 1337.96 1078.64 1337.30 989.93 1431.73TOTAL (B) 135694.95 120134.29 105129.44 84894.09 66720.57(C) NET WORTH OF THE COMPANY REPRESENTED BY :Share Capital 5231.59 5231.59 5231.59 4629.73 4629.73Reserves and Surplus 37366.85 32805.48 29181.30 21583.68 18858.05TOTAL (C) 42598.44 38037.07 34412.89 26213.41 23487.78(D) COMMITTED RESERVESCSR Activities Reserve 135.53 129.52 46.74 26.06 -TOTAL (D) 135.53 129.52 46.74 26.06 -TOTAL (B+C+D) 178428.92 158300.88 139589.07 111133.56 90208.35CAPITAL EMPLOYED 99886.13 75751.79 62705.94 52791.23 42621.18 (NetFixedAssets+NetCurrentAssets)(E) RATIOSNetProfittoCapitalEmployed(%) 6.03 6.57 7.17 8.02 7.64NetProfittoNetWorth(%) 14.15 13.09 13.07 16.15 13.86NetWorthperRupeeofPaid-upCapital(`) 8.14 7.27 6.58 5.66 5.07Debt/EquityRatio(#) 71:29 71:29 70:30 72:28 69:31Current Ratio 0.40:1 0.36:1 0.46:1 0.41:1 0.56:1EarningperShare(DilutedEPS)(`) 11.52 9.52 9.36 9.15 7.03BookValuepershare(`) 81.43 72.71 65.78 56.62 50.73Dividend Per Share (`) 2.31 2.00 2.58 2.75CapitalExpenditure 22584 22456 23158 20037 17814(F) OTHER IMPORTANT INFORMATIONLengthofTransmissionLines(ckm) 129354 115637 106804 100200 92981No. of Substations 207 192 184 167 150Transformation Capacity (MVA) 254848 231709 205923 164763 124525No.ofEmployees($) 8606 8575 8694 8909 9221TransmissionNetworkavailability(%) 99.72% 99.78% 99.92% 99.90% 99.94%(#)ForcalculationofDebt-EquityRatio,LoanliabilityalsoincludeCurrentMaturitiesofLongTermLoans.($)ExcludingemployeespostedinPOSOCOonsecondmentbasis.

(`incrore)

28

POWER GRID CORPORATION OF INDIA LIMITED

Directors’ Report

To,

Dear Shareholders,

Ladies & Gentlemen,

YourDirectors’arepleasedtopresentthe27thAnnualReportonperformanceofyourCompanyalongwiththeauditedfinancialstatementsduringthefinancialyearendingMarch31,2016.

FY2015-16isyetanotheryearofachievementsforyourCompany.Intheareaofprojectcommissioning,yourCompanyrecordedacapitalizationof `31,788 crore,whichisthehighesteverinasinglefinancialyearofitshistory.Withcommissioningofnewtransmissionassetscomprising13,717 circuit kilometre (ckm)ofExtraHighVoltage(EHV)transmissionlines,15 new substations and 23,139 Mega Volt Ampere (MVA) transformation capacity, total transmission assets of your Company have increased to 129,354 ckm & 207 substations with transformation capacity of 254,848 MVA.

OthermajorachievementsofyourCompanyduringtheyearonvariousfrontsarementionedbelow:

Capital investment of `22,584 crore.

“Excellent”MoUratingnotifiedbyGovernmentofIndiaforfinancialyear2014-15.

Investment approval accorded for 23newtransmissionprojectsworthmorethan`13,000 crore.

Maintained transmission system availability at 99.72% with number of tripping per line limited at 0.66 for the year.

Total Income from operations is about `21,281 crore as compared to `17,780croreinFY2014-15.ThisfinancialyearyourCompanyhasrecorded PAT of about `6,027 crore as compared to `4,979croreinlastfiscal.

Interim dividend of `0.80 per share (face value `10/-each)hasbeenpaidandrecommendationof`1.51pershareasfinaldividendfortheFY2015-16,subjecttoapprovalofshareholders.

World’sfirst&longest(~1750km)±800kVHVDCMultiterminaltransmissionline(Pole–I,1500MW)fromBiswanathChariali(Assam)toAgra(U.P)commissionedinNovember,2015.

Inter-regionalpowertransfercapacityof13,200MWaddedbytheCompany.

ThefirsthighcapacitysynchronouslinkbetweenIndiaandNepal400kVMuzaffarpur(India)-Dhalkebar(Nepal)doublecircuittransmissionline commissioned in February, 2016.

Grid interconnection between India and Bangladesh was strengthened through 400kV Surjyamaninagar (Tripura, India) - Comilla(Bangladesh)doublecircuittransmissionlinecommissionedinMarch,2016.

400kVKhammam–Nagarjunasagardouble circuit transmission line - the1st line commissioned by your Company under Tariff Based Competitive Bidding.

Telecom revenue rose to `392croreinthefinancialyearendedon31st March 2016 as against `275 crore in the previous year registering growth about 43%.

The1200kV(thehighesttransmissionvoltageintheworld)NationalTestStationPhase-IIsuccessfullycharged.

FINANCIAL PERFORMANCE

YourCompany’sfinancialperformanceduringtheyear2015-16ascomparedtothepreviousyear2014-15issummarizedbelow:

Description 2015-16 2014-15 Y-o-Y Growth

Revenue

Transmission Charges 19,945 16,521 20.7%

Consultancy-SaleofServices 465 381 22.0%

Telecom 392 275 42.5%

Other Income 479 603 (20.6%)

Total Income 21,281 17,780 19.7%

(Figures in `crore,exceptpersharedata)

29

Dividend Payout

ForFY2015-16,yourCompanyhasproposedafinaldividendof`1.51pershare in addition to `0.80 per share of interim dividend paid in February, 2016 takingtotaldividendto`2.31pershare.Thefinaldividendshallbepaidafteryour approval at the Annual General Meeting. Thus, the total dividend payout for the year amounts to `1,209crore(includinganinterimdividendof`419crore).

OPERATIONAL EXCELLENCE

Asset Management

As on April 1, 2016, the transmission assets owned and operated by your Company stands at 129,354 ckm of Extra High Voltage

(EHV) transmission lines and 207 nos. EHVAC & High Voltage Direct Current (HVDC) substations with about 254,848 MVA transformation capacity.DuringtheFY2015-16,yourCompanymaintainedavailabilityof the transmissionnetworkat99.72%which iscomparabletointernationalstandards.Thenumberoftrippingsperline(unplanned)wascontainedto0.66duringtheyear, indicatinghighreliability of transmission system.

Tomaintainsuchhighstandard,maintenanceactivitiesareplannedwellinadvanceandan“AnnualMaintenancePlan”ischalkedoutforeveryasset through live line or shutdown maintenance, as per technical feasibility.

In theeventof tower collapsedue tonatural calamitiesorotherwise,EmergencyRestorationSystem isbeingdeployed toquickly restorecollapsedtowers.Forthefirsttimeever,AerialPatrolling&MaintenanceoftransmissionlinesusinghelicoptersandUnmannedAerialVehicles(UAVs/Drones)havebeentakenup.State-of-the-ArtTravellingWaveFaultLocatorusedfordetectionoftransmissionlinefaultsaccurately,isunderprocurementprocess.Equipmentconditioningmonitoringtechniquessuchasdynamictestingoftherelay,onlinemonitoring,thermo-visionscanning,frequencyresponseanalysisofthetransformersandreactorsetc.arebeingusedfordeterminationofhealthinessoftheassets.

State-of-the-Art ‘National Transmission Asset Management Centre’ (NTAMC)atManesar,Haryana,wasdedicatedtotheNationonApril29,2015and104substationshavebeenconnectedforremoteoperationfromNTAMC till March, 2016.

Description 2015-16 2014-15 Y-o-Y Growth

Profit After Tax (PAT) 6,027 4,979 21.0%

Earnings per Share (`) 11.52 9.52 21.0%

Book Value per Share (`) 81.43 72.71 12.0%

Gross Fixed Assets 1,50,052 1,18,264 26.9%

Long Term Borrowings* 1,06,321 93,845 13.3%

Net Worth 42,598 38,037 12.0%

Debt Equity Ratio 71:29 71:29 _

Return on Net Worth 14.15% 13.09% _

*-includingCurrentMaturitiesofLongTermBorrowings

30

DISASTER MANAGEMENT

Your Company has been contributing in restoration of power in areas hit by natural calamities including neighbouring countries. Supportwaspromptlyextended inTamilNadu to restoreEHV lines,whichweredamageddue tofloods inChennai inNovember-December,2015.POWERGRIDcontributedinrestorationof400kV&230kVlinesincludingevacuationlinesfromKalpakkamNuclearPowerPlant&NorthChennaiTPS. To provide immediate communication facility, 20Mbps dedicated bandwidth was provisioned to Load Despatch Centre.

SupportwasgiventoManipurGovt.torestoreitspowersupplyaftertheearthquakeinManipuron4thJanuary,2016.Restorationworkwastakenupimmediately&localgridwasrestoredwithinfewhours.

YourCompanysenthighlyspecializedengineerstoNepaltorestoretheirelectricalnetworkafterthedevastatingearthquakeinApril,2015.ItworkedcloselywithNepalElectricityAuthoritytorestoreabout85%ofpowersupplyinthevalleyinthefirst3-4daysitselfaftertheearthquake.

PROJECT IMPLEMENTATION

Transmissionprojectsimplementationhasbeenachallengingtaskastheseprojectsrunoverhundredsofkilometresoflengthacrosstoughterrainsandinvolvevariedsocio-economicissues.Toensurethatpowerevacuationandsystemstrengtheningprojectsarecompletedmatchingwiththesystemrequirement,detailedplanningisdoneduringimplementationandprogress isreviewedatvariouslevelstotakecorrectiveactions.

Onproject implementation front,yourCompanyhascommissionedabout13,717 ckmofEHV(ExtraHighVoltage) transmission linesand23,139 MVA transformation capacity with 15newsubstations,whichresultedinrecordcapitalizationof`31,788 crore in this year.

Duringtheyear,anumberof importanttransmission lineshavebeencommissioned,viz.±800kVBiswanathChariali -AgraHVDCBi-pole, 765kVJabalpur-DharamjaygarhI&II,765kVMeerut-Moga,765kVD/CAurangabad-Solapur line,400kVD/CBarh-IITPS-Gorakhpur line(Quad)&765kVGwalior-JaipurI&II.

Further,morethan10,000kmofOPGWhavebeeninstalledandabout26,000kmofOPGWinstallationisunderprogress.

FINANCIAL MANAGEMENT

IntheFY2015-16,yourCompanycontinuedtoshowsustainedperformanceinallitsbusinessareas,enhancingvaluefortheshareholders.YourCompany has achieved turnover of `21,281croreandnetprofitof`6,027croreinFY2015-16ascomparedto`17,780croreand`4,979crorerespectivelyduringFY2014-15,registeringagrowthof19.7%and21%,respectively.

Capital Expenditure and Fund Mobilization

Towards its `1,10,000 crore capital expenditure target for the XII Plan (FY12-17), POWERGRID made a capital expenditure (CAPEX) of `22,584croreduringtheyear2015-16.FortheCAPEXofFY2015-16,`12,743croreweremobilisedthroughprivateplacementofbonds&termloan, `2,980croreweremobilisedthroughExternalCommercialBorrowings(ECB)/Supplercreditand`6,861crorewereutilizedfromInternalResources.

XII PLAN PROGRAMME

Against CAPEX plan of `1,10,000croreforXIIPlan,yourCompanyhasalreadymadeacapitalexpenditureof`88,235croreinthefirstfouryears of the Plan period.

Basedontheratingsassignedbybothdomesticand internationalcredit ratingagencies,yourCompanydoesnot foreseeanydifficulty forresourcemobilisation.ThefundingforcapitalexpenditurehasbeenplannedtobemetthroughloansfrommultilateralinstitutionssuchasTheWorldBank,AsianDevelopmentBank,Supplier’sCredit,ExternalCommercialBorrowingsthroughbonds/notes,besidesloansfromdomesticmarketandthroughprivateplacementofbonds.

DuringFY2015-16,Govt.ofIndiahasentrustedsomeimportantchallengingprojects,includingISTSportionofGreenEnergyCorridors,toyourCompanywhicharerequiredtobeimplementedundercompressedtimeschedule.TheseprojectsarelikelytobecommissionedbytheendofXIIPlan/earlyXIIIPlan.

COMMERCIAL PERFORMANCE

AsperCentralElectricalRegulatoryCommission(Sharingofinter-StateTransmissionChargesandLosses)Regulations,2010,yourCompanyastheCentralTransmissionUtility(CTU)oftheCountry,hasbeenassignedtheresponsibilityforcarryingouttheactivitiessuchasraisingoftransmissionchargesbillsonbehalfofallinter-StateTransmissionSystem(ISTS)Licensees,collectingtheamountanddistributingthesametothem.Inthisregard,transmissionchargesbillsareprepared,raisedanduploadedonthewebsiteforDesignatedISTSCustomers(DICs),including the payment details by the customers.

YourCompanyisfulfillingtheassignedresponsibilitieseffectivelyandachievedcollectionefficiencyofabove97%forFY2015-16.

PERFORMANCE UNDER TARIFF BASED COMPETITIVE BIDDING (TBCB)

YourCompanyisperformingwellinthecompetitiveenvironmentunderTariffBasedCompetitiveBidding(TBCB).InFY2015-16,yourCompany

31

successfullybidfortheproject‘StrengtheningofTransmissionSystembeyondVemagiri’andaquiredtheSPV,‘VemagiriIITransmissionLimited’fromtheBPC.TheSPVhasbeenrenamedasPOWERGRIDSouthernInterconnectorTransmissionSystemLimited.WiththisyourCompanyhaswontotalnine(9)projectsthroughTBCB.

400kVKhammam–Nagarjunasagardoublecircuittransmissionline-the1st line commissioned by your Company under Tariff Based Competitive BiddingduringFY2015-16.

DEVELOPMENT OF NATIONAL GRID

After successfulachievementof ‘OneNation–OneGrid-OneFrequency’, to further strengthen theNationalGrid,anumberof inter-regionaltransmissionlineshavebeencommissionedandmorelinesareunderconstruction.InFY2015-16,400kVD/cBarh-II-Gorakhpur,Extensionof400kVD/cBiharshariff-SasaramtoVaranasi,765kV2ndS/cRanchi–Dharamjaygarh,765kV2xS/cGwalior-Jaipur,765kVD/cNarendra–Kolhapurandonepoleof±800kVBiswanathChariali-AgraHVDCBi-poleinter-regionaltransmissionlineshavebeencommissionedresultinginenhancementofinter-regionalpowertransfercapacityoftheNationalGridby13,200MW.Tofurtheraugmenttheinter-regionalpowertransfercapacityoftheNationalGrid,yourCompanyisexecutinganumberofprojects,someofwhichincludehighcapacityHVDClinks.BytheendofXIIFiveYearPlan,itisexpectedthattheinter-regionalpowertransfercapacityoftheNationalGridwillbeover72,000MW.

Theenhancementoftransmissioncapacityduetoaboveinter-regionallinkshasaugmentedpan-IndiaelectricitymarketandduringFY2015-16,about117billionunits(BUs)inter-regionalenergytransferwasfacilitatedacrossthenation,anincreaseofabout40%overpreviousyear.

GRID MANAGEMENT

PowerSystemOperationCorporation Limited (POSOCO), a fully owned subsidiaryof yourCompany,hasbeenmanaging thenational gridthroughNationalLoadDespatchCentre(NLDC)andfiveRegionalLoadDespatchCentres(RLDCs).POSOCOhasbeendesignatedasthenodalagencyforRenewableEnergyCertificate(REC)Mechanism,TransmissionPricing,ShortTermOpenAccess(STOA)intransmission,DeviationSettlementMechanism,PowerSystemDevelopmentFund(PSDF)Management,etc.AsperGoIdirective,processhasbeen initiated for itsseparationfromPOWERGRID.

UnderShortTermOpenAccess(STOA),13,467nos.ofbilateraltransactionsand30,967nos.ofcollectivetransactionwereapproved,allowingenergytransferof64BUsthroughbilateraltransactionsand34BUsthroughcollectivetransactions,totalingto44,404approvedtransactionsand98BUsofapprovedenergyintheFY2015-16.

CONNECTIVITY, MEDIUM TERM OPEN ACCESS (MTOA) & LONG TERM ACCESS (LTA)

YourCompany,asCentralTransmissionUtility(CTU),isthenodalagencyforprocessing&grantofConnectivity,LongTermAccess(LTA)andMediumTermOpenAccess(MTOA)tovariousapplicants.Relevantregulations,procedures,guidelinesandrelateddocumentsforConnectivity,MTOAandLTAapplicationsandstatusthereofareavailableonCompany’swebsite.

AsofMarch31,2016,theCompanyhasgrantedConnectivityto98nos.ofeligibleapplicationsfor81,860MWandhasgrantedLTOA/LTAto192nos.ofeligibleapplicationsfor94,200MW.Inaddition,basedonthetransmissionmarginsavailability,theMTOAhasalsobeengrantedto92nos.ofapplicationsfor10,450MWcapacity.

QUALITY MANAGEMENT

TheQualityManagementSysteminyourCompanyisbuiltaroundthephilosophyofpreventionratherthandetection.Toensurequality,whileprocuringgoodsatcompetitiveprices,alotofefforthasbeenputonqualityassuranceandvariousqualityimprovementmeasureshavebeeninitiatedandimplementedtogetbetterqualityproducts.

DuringFY2015-16,SouthernRegion-IIHeadquarterbuildingatBangaloreandNationalTransmissionAssetManagementCentre(NTAMC)atManesarwerecertifiedforEnergyManagementSystemsasperISO50001requirements.YourCompanyisalsocertifiedforInformationSecurityManagementSystemsasperrequirementsofISO27001.

YourCompanyhasdevelopedandmaintained systemsandproceduresalignedwith IntegratedManagementSystemcomprising ISO9001forQualityManagementSystem,ISO14001forEnvironmentalManagementSystemandOHSAS18001forOccupationalHealthandSafetyManagementSystem.ThecertificationhasbeenmaintainedafterrigorousauditsbyBSIManagementSystems.

Inordertofacilitateinspectionofhugecapitalwork,yourCompanyhasundertakenvariousproactivemeasureslikesmartinspections(inprocessandbeforeacceptance),continuousfollowupwithmanufacturers,improvequalitysystemsatmanufacturers’worksetc.

WithtargettomovetowardszeroproductinspectionasperyourCompany’squalitypolicy,inspectionsatsomeofthemanufacturingunitsoftowers,conductor,cables,transformeroiletc.werereducedafterthoroughprocessauditsattheirworksasperstandardizedguidelines.

Continuousfollowupwithmanufacturersfortimelymanufacturing,smartinspection,testingofvariouscriticalitems&subsequentissuanceofdispatchclearancesintimeresultedinachievingrecordassetcapitalizationinthisfiscalyear.SpecialawarenessprogramswerealsoorganizedfortransmissionlineEPCcontractors&theirCEOstodiscussandsensitizetheimportanceofqualityintransmissionsystem.

Specialcampaignwaslaunchedforthecauseof“MakeinIndia”.Presently,mostof765kVclasstransformers/reactors/otherequipmentandevensomeofGasInsulatedSubstation(GIS)arebeingsuppliedfromIndianworks.Thishasbeenfacilitatedbystipulatingconditionsinvarious

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contractagreementsforestablishmentofnewfactoriesorexpansionofexistingfactories,transferoftechnology,recruitmentofemployees,skilldevelopmentandalsodevelopmentoftheancillaries.Anumberofsub-vendorshavebeendevelopedandapprovedinIndiaforsupplyofcomponentsforvariousequipmenttofacilitateemploymentgenerationintheCountry.

TECHNOLOGY DEVELOPMENT

YourCompanyadoptsandencouragestheResearch&Development(R&D)activitiesinpursuitoftechnologicalexcellenceinpowertransmission.Notableamongthemaretheprestigious1200kVNationalTestStationprojectatBina,MadhyaPradeshandtheProcess-busarchitectureinsubstation automation system.

1200kV National Test Station

YourCompanyhassuccessfullytestchargedPhase-IIoftheprestigious1200kVNationalTestStationinthemonthofMarch2016.Withthis,allthe1200kVequipmentintheteststationhavebeensuccessfullychargedat1200kVvoltagelevel.Forthisprojectofnationalimportance,yourCompanyhascollaboratedwithIndianequipmentmanufacturersforgettingthe1200kVequipmentdeveloped,whichhavebeenpresentlyinstalledattheteststationinBinaforlongtermfieldoperationandperformancemonitoring.

Process-bus Architecture

ThepilotinitiativeofyourCompanyonIEC61850protocolbasedProcess-busArchitecture,successfullycommissionedatthe400kVBhiwadisubstation,wasasignificantsteptakeninthedirectiontocompletelydigitizedsubstations.FurtherintheFY2015-16,yourCompanyhasalsotakenupandsuccessfullycompletedapilotprojecttooptimizethecontrol&protectioncableusedintransformerat400/220kVNeemranasubstation.Afterimplementationofnewschemeatthissubstation,significantreductioninthenumberofcoresbetweentransformermarshallingboxandprotectionpanelwasachieved.Thescheme isexpected toease themaintenanceand trouble-shooting in futureandalso reducerestorationtimeincaseofanyeventuality.Gainingexperiencefromtheseprojects,yourCompanyisplanningfortaking-upanotherpilotprojectforretrofittingageingsubstationshavingconventionalprotectionandcontrolschemeswithadvancedautomationsystems.

POWERGRID Advanced Research and Technology Centre

YourCompanyisestablishingworldclasslaboratoriesandtestfacilitiesatManesar,Gurgaonforcarryingoutresearchanddevelopmentinpowertransmissionarea.ThisR&DcentreshallcatertotheresearchneedsofPOWERGRIDandoftheCountrytoalargeextentwithstate-of-the-artfacilitiesforpowersystemanalysis,advancedequipmentdiagnostics,smartgrid,energyefficiency,controlandautomation,materialscience,engineering design etc.

SMART GRID & ENERGY EFFICIENCY

YourCompanycontinuesitsjourneyofdeliveringvaluetoitsstakeholdersthroughapplicationsofintelligenttechnologiestowardsSmartGrid.YourCompanyiscontinuouslyenhancingitsabilitiesthroughin-houseresearch&demonstrationprojectsinthefieldofSmartGrid&EnergyEfficiency.Ithasbeencontinuallyaddingadvancedattributestotheutilityprojectstobolsterthesuccessstoryintheabovefields.SmartGridverticalisexpandingitscustomerbaseandnewprojectsaregettingadded,makingSmartGridapromisingbusinessareainfuture.

YourCompanyhasgarneredvaluableexperienceinimplementationofSmartGridtechnologyinlastfewyearsandpresentlyprovidingconsultancyfor ten (10)projects coveringdistribution infrastructure, advancedmetering infrastructure, intelligentoutagemanagement, electric vehiclechargingstations,powerqualitymanagement,distributedgeneration,netmeteringetc.YourCompanyiscloselyassociatedwithimplementationofSmartGridatVaranasi&GurgaonaspartofGovernment’sendeavourtowardsSmartCitydevelopment.

Towards smart transmission, your Company is implementing Phasor Measurement Unit (PMU) based Unified Real Time Dynamic StateMeasurement(URTDSM)project,integratingallStateandCentralgridsforWideAreaMeasurements(WAMS).Inaddition,analyticsusingPMUdataarebeingdevelopedinassociationwithIITBombay.Synchronizedmeasurementsintegratedwithhighendanalyticswillfacilitateimprovedmonitoring,visualizationandenhancedsituationalawarenessofthegrideventsonrealtimetowardsgridreliabilityimprovement.

Integration of Renewables

YourCompanyisplayingakeyroleforintegrationofrenewableenergyresourcesintothegrid.GreenEnergycorridorareunderimplementationby your Company which will serve dual purpose to facilitate interconnection of large scale renewable, into the National Grid as well as enlarging thebalancingareatoaddressrenewablevolatility.Inaddition,transmissionschemesfor7200MWUltraMegaSolarPowerParksarealsounderimplementationinvariousstatesaspartofGreenEnergyCorridors-II.ApartfromGreenEnergyCorridorimplementationandgrid-integrationofUltraMegaSolarParks,ithasbeenestablishingthefirstgridinteractiveenergystoragepilotprojectswithdifferentbatterytechnologies.The researchfindingsof theseenergystorageprojectswouldbecrucial indelineating the roadmap for largescaledeployment toaddressintermittency, variability and uncertainty of renewable power and to ensure grid stability.

YourCompany is takingup thechallengingandflagship responsibilityofestablishmentofmaidenRenewableEnergyManagementCentres(REMC)in7renewablerichstatesincludingRegionalLoadDispatchCentresatSR,WR,NRaswellasatNationalLoadDispatchCentre.Thiswouldenable forecastingof renewable resources andefficientmanagementof distributedand intermittent renewablegenerationensuringefficientutilizationofresources.

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Energy Efficiency

Your Company has taken lead role in identification of energy efficiency opportunities by carrying out energy audits of various industries,institutionsandothercommercialestablishment.Wasteheatrecoverysystemsforsteelre-rollingmillsdesigned&developedbyyourCompanyhavebeeninstalledsuccessfullyinsteelindustry.EnergyAuditswerecarriedoutinsixinstallationsduringtheyear.EnergyauditsundertakenandefficiencymeasuressuggestedbyyourCompanyshallenablepreventionofCO2emissionstothetuneofabout1197tonneanddeferredcapacityadditionofmorethanof300MWduringtheFinancialYear2015-16.

YourCompanyisalsoaBEEGrade-IEnergyServiceCompany(ESCO)forundertakingenergyefficiencyprojectsinvariousindustries.

Indianpower industry is in theageof revolutionary transformationsandextensiveadvancements.Equippedwith90energyauditors,yourCompanyiswellpreparedtostandasastarperformerandkeyenablerinthechallengingenvironment,byofferingEnergyEfficiencysolutions.

‘POWERTEL’ - TELECOM SERVICES ON TRANSMISSION INFRASTUCTURE

YourCompanyhasbeencreatingvaluetoitsshareholdersbyleveragingitscountrywidetransmissioninfrastructureunderthebrandname‘POWERTEL’. It has established itself as an important player in providing telecom bandwidth and other communication services. MajorachievementsduringtheFY2015-16areasunder:

TelecomBackboneAvailabilityfortheFY2015-16was100%asagainst99.97%inthepreviousyear.

National Knowledge Network (NKN)

UnderNKNprojectdevisedbyGovt.ofIndiawhichconnectsknowledgecentressuchasIndianInstitutesofTechnology(IITs),IndianInstituteofScience(IISc)etc.acrosstheCountry,onahighspeedconnectivity,33linksof10Gbpseach,105linksof1Gbps/100Mbpsand440links100Mpbs/1Gbpshavebeenprovisioned.

National Optical Fibre Network (NOFN)

AsapartofdigitalIndiainitiativeoftheGovt.,toconnect250,000GramPanchayats(GP)intheCountrybyutilizingexistingfibresofBSNL,Railtel&POWERGRIDandlayingincrementalfibretoconnecttoGramPanchayatswherevernecessary,yourCompanyhasbeenallottedworkfordevelopment&maintenanceofNOFNnetworkintheStatesofTelangana,HimachalPradesh,Jharkhand&OdishabyBharatBroadbandNetworkLimited(BBNL),coveringabout36,000GPsuptotheFY2015-16,4120GPshavebeenconnectedthroughincrementalfiberoutofwhichAcceptanceTestingfor1940GPshavebeencompleted.Further,917GPshavebeenconnectedEndtoEnd.

ConnectivitytoEnterprisesegmentcustomersisprovidedonPOWERGRID’sMPLSCloud.POWERGRIDprovidesbothLayer-2andLayer-3VirtualPrivateNetworks(VPNs)withportcapacitiesrangingfrom2Mbpsto10Gbps.POWERGRIDalsoprovidesreliableInternetConnectivitysolutionsoveritsInternetcloudofdifferentcapacitiesrangingfrom2Mbpsto1Gbps.POWERGRIDispeeredwithglobalcontentprovidersforprovidingIPTransitservicestoISPs.TheIPTransitservicereducescostandenhancesservicequalityofhostedcontentforISPsandinturnenablesthemtoofferbetterinternetservicesatlowerpricetotheirusers.POWERGRID’sextensivebackbonetelecomnetworkwithitslocalaccesspartnershas eliminated the location disadvantage of small towns towards accessibility and affordability of high speed internet. It has the potential to bridgethesocalleddigitaldivideandbeachangeagenttowardsrealizingthevisionof“DigitalIndia”.Towardsthis,MPLSVPN/Internetdealshave been signed with a number of important domestic customers.

BUSINESS DEVELOPMENT & CONSULTING SERVICES

YourCompanyhasdeveloped theexpertise incoreareasofpower transmission, sub-transmission, loaddispatchandcommunicationsetc.Leveragingitscapacityandexperience,ConsultingServiceshavebeenprovidedtoanumberofclientsinIndiaandworldwide.Oninternationalfront,2nos.220/20kVsubstationsatDoshi(1X16MVA)andCharikar(2X16MVA)alongwiththeLILOofonecircuitofthe220kVD/C Pul-e-KhumritoKabulTransmissionlineateachsubstationhavebeencompletedandhandedovertoAfghanistanauthoritiesforoperations.

ATripartiteMoUhasbeensignedamongRailways,DedicatedFreightCorridorCorporationofIndiaLtd(DFCCIL)&POWERGRIDinNovember,2015tofacilitatenecessaryco-operationtoexplorethescopefordedicatedtransmissionsystemforpowersupplytoRailwaysfortheirtractionsubstations.

DuringFY2015-16,yourCompanyhasachievedconsultancyrevenueof`465crore,whichis22%higherw.r.t.previousyearRevenueof`381crore.

POWERGRIDhasbeenassignedtheworkofprovidingconsultingservicesfor implementationof“NERPowerSystemImprovementProject”fundedbyWorldBankandforimplementationofComprehensiveSchemeforStrengtheningofTransmission&DistributioninArunachalPradeshand Sikkim. The Company is also implementing transmission project in J&K to provide grid connectivity and reliable power supply to thestrategicallyimportantLadakhregion.Inaddition,otherimportantconsultingassignmentsincludeStrengtheningoftransmissionnetworkinDelhiandexecutionoftransmissionsystemforevacuationofpowerfromLalitpurpowerplantofUttarPradesh.

Parameter FY 2014-15 FY 2015-16 % Change

TotalnetworkCoverage 33,241km 36,563km 10%

Numberofpointspresent(PoPs) 352 595 70%

Customers 187 270 45%

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ItisamatterofpridethatasLead-MemberoftheConsortium,POWERGRIDhassuccessfullycompletedManagementContractofEthiopianElectricPowerServiceCorporation.ThescopeofthisContractcoveredimprovingthequalityandperformanceoftheElectricPowerserviceinEthiopia(Generation,TransmissionandDistribution),toensuretheestablishmentofaninternationalrecognizedcustomerfocused,marketoriented,worldclassnewElectricPowerServiceproviderwiththestate-of-theartElectricPowerUtilityandinfrastructure.

INTERNATIONAL CO-OPERATION

Theexistinginterconnectionswithneighbouringcountries,Nepal,BhutanandBangladesh,arebeingfurtherstrengthenedformutualexchangeofpower.SomeoftherecentlycommissionedinterconnectionsincludingcommunicationlinksthroughOPGWareasunder-

Transmission Interconnection between India and Nepal

400kVD/CMuzaffarpur(India)-Dhalkebar(Nepal)–February,2016

Transmission Interconnection between India and Bangladesh

400kVD/CSurjyamaninagar(India)–Comilla(Bangladesh)–March,2016

Further,forevacuationofpowerfromvariousupcominghydroelectricpowerprojects(HEPs)inBhutan,Punatsangchu-IHEP(Bhutan)–Alipurduar(India)400kVDoubleCircuit(D/C)linebetweenBhutan&India,isunderimplementationandexpectedtobereadyby2017.

CONTRIBUTION IN DISTRIBUTION REFORMS

Rural Electrification

Under Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) scheme for rural electricity infrastructure and household electrification, yourCompanyhasbeenexecutinginfrastructureworkforruralelectrificationinseventy(70)districtsofnine(9)StatesintheCountryatacostofabout `9,000crore.

AlmostalloftheX/XIPlanschemeshavebeencompleted.WorkinUttarPradeshandOdishaassignedtoPOWERGRIDunderXIPlanPhase-II/XII Plan are under implementation.

DuringFY2015-16,infrastructurewascreatedforelectrificationin2960nos.ofpartiallyelectrified/unelectrifiedvillages.Serviceconnectionswereprovidedtoabout83,500BPLhouseholds.Cumulatively,tillMarch,2016,infrastructurehasbeencreatedforelectrificationofabout74,500villages.Further,serviceconnectionswereprovidedtoabout36.7lakhBPLhouseholds.

Integrated Power Development Scheme (IPDS)

TheimplementationofIPDSworkinOldKashiareaofVaranasiTownwasassignedbyPurvanchalVidyutVitaranNigamLimited(PuVVNL)inSeptember,2015andhasbeentakenupforimplementationandworkhasbeenprogressingasperschedule.

ERP IMPLEMENTATION

Project“RUPANTAR”,theEnterpriseResourcePlanning(ERP)initiativeofyourCompanyhasbeenimplementedsuccessfullyandtheprocessesandsystemshavebeenstabilisedinalltheregionsofyourCompany.Presently,majorityofthekeyprocessesrelatedtothebusinessarerunningonERP.E-tenderingforthedomesticbidshasalsobeentakenupinERPsystemonpilotbasis.InordertoprovidestabilityandreliabilitytoERPsystem, a Disaster Recovery Centre has been established at Bengaluru.

HUMAN RESOURCE, OUR STRENGTH

Talent Acquisition & Development

YourCompanyplaceshumanresourceaskeytoitsgrowth.Duringtheyear2015-16,incomeperemployeeandprofitperemployeehavebeenincreased to 247lacsand 70lacsfrom 208lacs& 58lacsrespectivelyinpreviousyear.Also,duringtheyearcircuitkilometreperemployeeandMVAperemployeehavebeenincreasedto15ckm&29.7MVAfrom13.5ckm&27.1MVArespectivelyinpreviousyear.

Inordertokeeppacewiththelatesttechnology,employeesareprovidedtrainingintheareasofspecificskills/functionstoupgradeandupdatethemtowardsthechangingbusinessenvironmentandtoeffectivelytakeonthechallengesahead.

YourCompany’sHumanResourceDevelopment(HRD)ActionPlan for theyear2015-16wasbasedonthepremiseof theoutcomeof twopronged strategy namely Organisational Need Analysis (ONA) and Training Needs Assessment (TNA).The Company has been able to linkthe IndividualDevelopmentPlans (IDP)ofemployeesasper thebusiness requirementwhichhelps theorganization tokeepupdating thecompetenciesofemployeestomeetcurrentandfuturerequirements.

POWERGRIDAcademyofLeadership(PAL),atManesarhasbeenenvisionedtoculminateinaState-of-the-Art,worldclassInstitution.PALhasbecomefullyfunctionalandthevariousHRDinterventionsareconductedinadditiontoimpartingtrainingtoExecutiveTrainees(ET).

UndertheFlagshipofPALtwoweeks’PowerSectorGlobalOutreachProgrammeatUKandFrancehadbeensuccessfullyconductedforPSUsin power sector. Apart from these, the Company has provided consultancy towards capacity building to Ethiopian Electric Power Corporation (EEPCo)andtovariousstateutilitiesincludingNorthEasternRegion.

Employee Welfare

Duringtheyear,theIndustrialRelationsscenariointheCompanyhasbeencordialandnoman-dayswerelost.AneffectiveworkculturehasbeenestablishedintheCompanythroughempowerment,transparency,decentralizationandpracticeofparticipativemanagement.

Keepinginviewofchangingneedsandwelfareofemployees,yourCompanyundertakesessentialchangesinvariouspoliciesfromtimetotime.IssuesrelatedtoworkmenaresuccessfullyaddressedthroughtheNationalandRegionalBipartiteCommittee(PNBC/PRBC),ajointconsultativeforumcomprisingmanagementandworkmenrepresentatives.YourCompanyhasempanelledvarioushospitalsnearbytoourestablishmentsforthehealthcareofemployeesandtheirdependents.QualityfoodisservedtotheemployeesintheISO22000:2005conferredCafeteria,in

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CorporateOfficeandFoodLoungeofMulti-PurposehallinGurgaon.

Cultural programmes are conducted periodically for promoting healthy communitylivingandcelebratingvariousoccasionslikeDiwaliget-together,HoliMilan,NewYear,RaisingDay,etc.inestablishmentsoftheCompany.

YourCompanyalso conducts various sports competitions forboosting theinterestofemployeesinsportsandgamesatintraandinter-regionallevelfor Kabaddi, Cricket, Volleyball, Caroms, Chess and Badminton etc. andalso participates regularly in Inter-PSU Sportsmeet. Your Company teamhas stood as first runner up in prestigious 24th National Competition for Business Management Simulation Games organised by All India Management Association and represented India in Asia Management Games as well as in Global Management Challenge.

Prevention of Sexual Harassment at Workplace

AspertherequirementoftheSexualHarassmentofWomenatWorkplace(Prevention,Prohibition&Redressal)Act,2013andRulesmadethereunder,your Company has constituted Internal Complaints Committees.

CITIZEN’S CHARTER

Citizen’sCharterhasbeenformulated for theCompanyprovidingavisiblefrontof itsvision,mission,objectives,commitments, termsofserviceanditsobligationtovariousstakeholders.Inthis,informationisavailableaboutCompany’sschemes,policies,projectplansofthecorporationandissuesofgeneralinteresttostakeholders.

IMPLEMENTATION OF OFFICIAL LANGUAGE

Your Company continues to prove its commitment for implementation ofOfficialLanguagePolicyofGovt.ofIndia.SeriesofinitiativeswereundertakenforpromotionandpropagationofRajbhasha.

YourCompanyhasbeenencouragingandputtingalleffortsforpromotionofusageof‘Hindi’inallaspectsofmanagementinalllevelsoftheCorporation.Further,theCompanyhasorganizedvariouseventssuchasworkshopstoimparttrainingintranslation,enhancingworkingknowledgethroughorganizingcomputertrainingsandHindiclasses,etc.forincreaseduseofOfficiallanguage.EventslikeAkhilBhartiyaRajbhashaSammelan,KaviSammelans(PoetrySessions),HindiPlaysandvariouscompetitionsforemployees&theirfamiliesareorganized.PublicationofHindimagazinesandcirculationofHindinewspapertoalldepartmentsisalsobeingdonetoencourageHindireadingandwriting.Toprovidefurtherinspiration,employeesarenominatedforexternalHinditrainingprogramswhichfurthereducate&encouragetheemployeestoworkinHindi.

Besidesthis,auniqueHindiLibraryhasalsobeenestablishedfortheemployees,wherearound14,500books,53HindiMagazinesonvarioustopics&16HindiNewspapersareavailableforthereaders.ListofHindiBooksarealsoavailableonthewebsite.

VariousforumssuchasParliamentaryCommitteesonOfficialLanguage,AdvisoryCommitteeonOfficialLanguageandTownOfficialLanguageImplementationCommittee(TOLIC)haveapplaudedtheeffortsmadebyyourCompanyforimplementationofRajbhasha&receivingmanyaccolades.

CORPORATE IMAGE ENHANCEMENT

POWERGRID has been continuously investing on building a strong brand identity to overcome the emerging challenges in power sector.YourCompany’s transparentwork culture is regularly brought forth in face to face interactionsof themanagementwith the analysts andrepresentative of press and media at Press and Analysts Meet.

Inordertofacilitateaninteractionwiththemasseswithregardtotheachievements,growth,recentdevelopmentsonoperationalandfinancialfront numerouspress communiquéhavebeen issuedby yourCompany. YourCompanyhasbeenexecuting its projects andoperations inextremelychallengingsituationsfromtimetotime.Landmarkachievementhavebeenhighlightedthroughapropermediamanagementstrategyensuring precise and timely dissemination of information which helped the Company in earning widespread appreciation and applaud from media persons,commonmasses,stakeholdersandinvestorsalloverthecountry.

POWERGRIDhastakenagiantleapforwardbypledging55,000man-hoursinyear2016towardsfulfillingitscommitmenttowardsthenationalagendaof“SwachhBharat”.TheCompanyhasnotonlytakenthisoathbut ithas launchedvariousmediacampaignsforthe involvingthecommon masses in this initiative and for spreading the awareness about this noble initiative.

InternalcommunicationsplayakeyroleinenablingemployeesacrosstheCompanyinunderstandingandembracingtheCompany’smission,goalsandstrategies.Towardsthisobjective,yourCompanyhascontinuouslydeployedcommunicationtoolssuchase-transmit,wallmagazines,loungeandregularmediaupdatestoapprisetheemployeesofthedevelopments,achievements&events,viewpointsofmanagementandalsotoprovideaplatformtoemployeestoparticipateandtakeprideinbeingassociatedwithPOWERGRID.Theinternalcommunicationhasbeeninstrumental in boosting employee morale, enthusiasm.

WiththeviewtoeffectivelydelivertheCorporation’skeymessagesthroughrelevantmediatotargetaudiences,yourCompanyhasstrengthened

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its relations with all media by infusing communication equities for corporate branding purpose. The newmechanisms of communicationmanagement have also been well appreciated by the leading national media houses.

GRIDTECH 2015 - INTERNATIONAL EXHIBITION AND CONFERENCE

POWERGRIDwiththesupportofMinistryofPower,Govt.ofIndiaandinassociationwithCBIP&IEEMAorganized“5thInternationalExhibitionandConference–GRIDTECH2015”duringApril8-10,2015atNewDelhi,whichwasinauguratedbyHon’bleUnionMinisterofState(I/C)forPower,Coal,New&RenewableEnergy,ShriPiyushGoyal.MorethanseventyfivetechnicalpapersfocussingonState-of-the-Arttechnologies,emergingtrends,renewableenergy,smartgridetc.werepresentedinthetwoparallelconferences.Also,morethan40Internationaland70Nationalmanufacturersshowcasedvariousnewtechnologyproducts.ThemepavilionsetupbyPOWERGRIDandtheStudentPavilionattractedattention of many and received special mention from dignitaries as well as visitors.

RIGHT TO INFORMATION

In order to promote transparency and accountability, an appropriate mechanism has been set up across your Company in line with ‘Right to InformationAct,2005’.YourCompanyhasnominatedCPIO/AppellateAuthoritiesatitsCorporateOfficeandRegionalofficesacrosstheCountrytoproviderequiredinformationtothecitizensundertheprovisionsofAct.

COMMITMENT TO TRANSPARENCY & VIGILANCE FUNCTION

YourCompanyadvocatestheprinciplesofGoodGovernance,Transparency,ProbityandEthicsinitsmanagementfunctioning.TheVigilanceDepartmentworksintandemwiththemanagementsothattheseattributesareinculcatedinthedaytodayfunctioningoftheOrganization.

Emphasis on Preventive aspects

The Company lays primary emphasis on preventive vigilance. It, therefore, focuses on whether the systems are in place, whether the right type ofsystemsexistorneedtobereengineered.Variousin-housemethodssuchasProcess(Online)Inspection,SurpriseInspections,CTETypeInspectionsareconductedtocheckthespectrumoftheongoingactivitiesincludingphysicalworksandscrutinyoffilesbyateamofdedicatedprofessionals.Duringtheinspections,loopholes/lapses,ifobserved,arebroughttothenoticeofthemanagementforrectification.Duringtheyear2015-16,55Surpriseand66ProcessOnlineInspections/CTETypeInspectionswereconductedandadequatecostcompensationhasalsobeen effected, wherever necessary.

System Improvements as a Continuous Process

Presently,yourCompanyisundergoingadynamicphaseofgrowthasseveralprojects/worksarebeingexecuted.Therefore,robustsystemandproceduresarebeingputinplacetokeepupwiththeworkrequirements.OnesuchendeavorhasbeenupdatingoftheWorks&ProcurementPolicyandProcedureManualoftheCorporation.Besidesthis, importantSystemImprovementsuggestions(40nos.)madebytheVigilanceDepartment have been implemented during this period, pertaining to different areas of operation such as construction activities, recruitment procedure,photographyofthehiddenworksetc.SincesystemsimprovementisacontinuousprocessaSteeringCommitteecomprisingseniorlevelofficershasalsobeenformedtomonitortheircompliance.

Preventive Vigilance/ RTI Workshops: Asapro-activemeasure,employeesoftheCompanyareimpartedtrainingonCompany’sCDArulesandvariouspreventivemeasuresforsmoothprojectexecution.21PreventiveVigilanceWorkshopsand06RTIworkshopswereconductedatCorporateCentreandRegionsfor613and235employees,respectivelyduringtheyear2015-16.

Workshop on Ethics & Values: Thisyear,03workshopsonEthics&ValueswereconductedbytheRegionalVigilanceDepartmentaswellasCorporateCentreforaround70employees.Workshopswereconductedforvariouslevelsofexecutivestoencouragevaluebasedethicaldecisionmaking.

SMS Based Alert System:WithaviewtoacquaintalltheemployeesabouttheCDARulesaswellasothervigilanceactivities,bulkSMShavebeen sent to all employees regularly.

Vigilance Awareness Week 2015:VigilanceAwarenessWeekwascelebratedinyourcompanyfrom26thOctto30thOct2015.Duringtheperiod,variousactivitiessuchasEssayCompetitions,QuizCompetitions,debatesetc.wereorganizedinlinewiththethemeoftheVigilanceAwarenessWeekthisyeari.e.“PreventiveVigilance-atoolofGoodGovernance”.

AsameasureofParticipativeVigilance,variousIntercollegeandInterschoolDebatecompetitionsandPanelDiscussionswereorganizedinwhich116TeamofSchoolsandCollegeshadparticipatedandtheseeventswereattendedby5386ofstudents.RoadshowsforspreadingawarenessaboutPreventiveVigilancewerealsoorganizedby8Schoolsfor2100participants.Duringthisweek,Vigilancein-housemagazine“Candour”waspublishedandthesamewasinauguratedbyShBalwinderSingh,formerSpecialDirector(CBI).DrArunKumar,retd.ProfessorofJNU,NewDelhiwastheChiefGuestattheValedictorySession.

Further,afilmonPOWERGRIDVigilancewastelecastonDDNationalon29.10.2015between8.00AMto8.30AMintheprogramme“AajSavera”andwasalsoshownduringvariouseventsorganizedatCorporateCentre.

ENVIRONMENT AND SOCIAL MANAGEMENT

POWERGRID, being a responsible corporate entity, always endeavours to protect and conserve environment in areas of its activities frominceptiontooperationstage.ItdevelopedacomprehensiveEnvironmentalandSocialPolicy&Procedures(ESPP)in1998andhasupgradedthesametwiceinlinewiththeinternationalbestpractices,topre-emptpossibleenvironmentalandsocialissues.TheESPPhasbeenacceptedbyTheWorldBankunderitsUseofCountrySystem(UCS)policyandgreatlyappreciatedbydifferentmultilateralagencies.

POWERGRID,apioneer in thefieldofSustainabilityReporting in theIndianPowerSectorpublished its3rd biennial Sustainability Report in September,2015.Followingtheprincipleofcontinousimprovement,thisreporthasbroughtmoretransparencyintheformofbetteranddetaileddisclosures,incorporatingthevoicesofinternalandexternalstakeholders.Thereportassumesspecialsignificance,asnumberofdisclosures

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ofperformanceindicatorshavebeenincreasedfrom39to96.WiththisithasalsoattainedthehighestpossibleratingofA+.ThereportisexternallyassuredbyaccreditedassuranceproviderM/sIntertekIndiaPrivateLimitedbasedonGlobalReportingInitiative(GRI-G3)guidelinesincludingElectricUtilitiesSectorSupplement(EUSS)andInternationalStandards likeAccountability,UKStandardAA1000APS(2008)andAA1000SES(2011).

Apart fromabove,yourCompanyhastakenvarious initiativesto fulfil itscommitmenttowardsthegoalofsustainabledevelopmentandtoaddressthenegativeexternalitiesassociatedwithitsbusinessprocesses.Keyinitiativesinthisregardare:

SpecialdesignedtowerstoconservethepreciousRightofWay(RoW),enhancingthecarryingcapacityofexistinglinesthroughvarioustechnological interventions,

Rain water harvesting made an integral part of substation design,

InstallationofLEDbulbs&solarstreetlightinginsubstation,

Fuel catalysts devices for DG sets etc

Further,a50kWpSolarPVSystemhasbeen installedatourGurgaonOfficeComplextomeetpartof its totalenergyrequirementandwillalso result in CO2reduction.POWERGRIDisfullyconsciousoftheneedtoconservenaturalresourcesandavoidsforest,ecologicalsensitiveareaslikeWildlifeSanctuaries/NationalParks/BiosphereReservesandCoastalRegulationZoneareasasfaraspossiblethroughoptimizationofroutealignment.POWERGRIDcompletelyavoidedtheGreatIndianBustardSanctuaryandAchanakmar-AmarkantakBiosphereReservebyincreasingthelinelengthsforconstructionof765kVS/CIndore-Dahodline&765D/CDharmajaygarh-Jabalpurlinerespectively.Followingtheprincipleofavoidance,involvementofforestlandhasbeenreducedprogressivelyfrom6%in1998to2.8%in2015.However,insomecaseswhereinvolvementofforestareabecomesunavoidable,ForestClearanceasmandatedunderForest(Conservation)Act,1980isobtainedfollowingnorms/regulationsassociatedwiththeactincludingpaymentofapplicableNPVandcostofCompensatoryAfforestation(CA).InFY2015-16,atotal30nos.offorestclearanceswereobtainedinvolvingdiversionofabout1000HaofForestareas.

CORPORATE SOCIAL RESPONSIBILITY

YourCompanybelievesinCorporateSocialResponsibility(CSR)asacommitmenttoitsstakeholderstoconductbusinessinaneconomically,sociallyandenvironmentallysustainablemannerthatistransparentandethical.StakeholdersincludepersonsdirectlyimpactedbytheactivitiesofyourCompany,localcommunities,environmentandsocietyatlarge.Itprimarilyfocusesoninclusivesocio-economicgrowthfordevelopmentofmarginalizedandunder-privilegedsectionsofthesocietyresidingarounditsareasofoperation.Withthisapproach,yourCompanycarriesoutvariousCSRactivitieswiththrustonRuralDevelopment/InfrastructuralDevelopment,SkillDevelopment,Health,Education,Environment,etc.

Duringtheyear,yourCompanyparticipatedinthe“SwachhBharatAbhiyaan”byconstructingabout9500toiletsinabout4,250Governmentschools in several states of India.

Projectslike,‘Constructionof10storeyed,325beddedDharmashalaatAIIMSTraumaCentre,NewDelhi’,‘ImprovingRuralLivelihoodsthroughFarmer-centric IntegratedWatershedManagement’ on 10,000 hectares of land in Kurnool (Andhra Pradesh)& Kudgi (Karnataka) throughICRISAT(TheInternationalCropsResearchInstitutefortheSemi-AridTropics)arealsounderimplementation.

ACCOLADES & AWARDS

TheexcellentperformanceofyourCompanyhasbeenrecognisedandappreciatedbytheGovt.ofIndiaandotherprestigiousorganisations&institutionsinformofvariousawards/accoladesinvariouscategoriesfromtimetotime.

Duringtheyear,yourCompanyhasreceivedfollowingimportantawards/accolades

“Gold Shield” in the “National Awards for Meritorious Performance in Power Sector for the Year 2013-14”

“Rajiv Gandhi National Quality Award”byBISunderLargeScaleServiceUtilitiescategory.

“CBIP Award for Best Transmission Utility”byCentralBoardofIrrigationandPower(CBIP)

“Dun & Bradstreet PSU Award 2015” under the Power Transmission & Distribution sector category & “Dun & Bradstreet Infra Award 2015” under Power Transmission category.

“Most Valuable Company” and “Best Performing Company” awardfromIndiaTodayinNavratna(PSU)category.

Felicitated at The Economic Times Power Focus 3rd Annual SummitforcommendableinitiativesandexcellentcontributionininPowerSector.

“India Pride Award 2014-15”inthecategoryofExcellenceinEnergyandPowerbyDainikBhaskar.

POWERGRIDRegionalHeadquartersBuildingatBengaluruawarded“Green Building” underGreenRatingforIntegratedHabitatAssessment(GRIHA).

“Rajbhasha Navratna Award 2015-16” by Indian Language & Cultural Centre.

“Most Innovative use of Training & Development as an HR Initiative for Organization Development” AwardbyWorldHRDCongress

“Training Excellence in HR-Silver Award”foroutstandingachievementsinTrainingatthe5th AnnualGreentechHRAward2015.

“Training Excellence Award” and “Knowledge Management Leadership Award” byWorldHRDCongress.

“Fastest Growing Electric Utility in Asia”forsecondsuccessiveyearandonlyIndianPSUinthe“Platts Top 50 Fastest Growing Energy Companies 2015” in the World.

Rankedno.3amongalistof49companiesselectedunderthecategoryof“Asia’s Best Analyst Days” in the Institutional Investor Survey of Asia.

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MANAGEMENT DISCUSSION AND ANALYSIS

InadditiontotheissuesintheDirectors’Report,someissueshavebeenbroughtoutinreportonManagementDiscussionandAnalysisplacedatAnnexure-I.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report as stipulated under Regulation 34 (2) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations,2015isgiveninAnnexure-IIandformspartoftheAnnualReport.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

AsperrequirementsofdisclosuresunderSection134(3)(m)ofCompaniesAct,2013readwithRule8ofTheCompanies(Accounts)Rules,2014informationrelatingtoconversationofenergy,technologyabsorptionandforeignexchangeearningsandoutgo,informationisgiveninAnnexure-IIItothisReport.

COMPTROLLER AND AUDITOR GENERAL’S COMMENTS

Companyhasreceived‘NIL’commentsontheaccountsfortheyearendedMarch31,2016bytheComptrollerandAuditorGeneralofIndiaunderunderSection143(5)oftheCompaniesAct,2013.CopyofthesameisattachedinAnnexure-IVtothisreport.

CORPORATE GOVERNANCE

AreportontheCorporateGovernance(Annexure-VII),formingpartofthisreport,togetherwiththeCertificatethereonisgiveninAnnexure-VIII to this report.

YourCompanyhasgotitsSecretarialComplianceAuditconductedforthefinancialyearendedMarch31,2016fromM/sChandrasekaran&Associates,PractisingCompanySecretary.TheirReportformspartofthisAnnualReport(Annexure-V).

DIRECTORS’ RESPONSIBILITY STATEMENT

Asrequiredu/s134(3)(c)&134(5)oftheCompaniesAct,2013,yourDirectorsconfirmthat:

(a) inthepreparationoftheannualaccounts,theapplicableaccountingstandardshadbeenfollowedalongwithproperexplanationrelatingtomaterialdepartures;

(b) thedirectorshadselectedsuchaccountingpoliciesandappliedthemconsistentlyandmadejudgmentsandestimatesthatarereasonableandprudentsoastogiveatrueandfairviewofthestateofaffairsoftheCompanyattheendofthefinancialyearandoftheprofitoftheCompanyforthatperiod;

(c) thedirectorshadtakenproperandsufficientcareforthemaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsofthisActforsafeguardingtheassetsoftheCompanyandforpreventinganddetectingfraudandotherirregularities;

(d) thedirectorshadpreparedtheannualaccountsonagoingconcernbasis;and

(e) thedirectors,hadlaiddowninternalfinancialcontrolstobefollowedbytheCompanyandthatsuchinternalfinancialcontrolsareadequateand were operating effectively.

(f) thedirectorshaddevisedpropersystemstoensurecompliancewith theprovisionsofallapplicable lawsandthatsuchsystemswereadequateandoperatingeffectively.

COMPANY’S BOARD

YourCompany’scompositionofBoardofDirectorsunderwentsomechangesduringtheyear2015-16.Duringtheyear,ShriI.S.Jha,Director(Projects)tookovertheadditionalchargeofChairman&ManagingDirectorwitheffectfrom1stOctober,2015andregularchargeofChairman&ManagingDirectorwitheffect from10thNovember,2015.ShriR.N.NayakdemittedtheofficeofChairman&ManagingDirectoron30th September,2015uponattainingtheageofsuperannuation.TheBoardplacedonrecorditsappreciationandgratitudetoShriR.N.Nayakfortheinvaluablecontribution,unstintedsupportandadviceinthedecisionmakingprocess&affairsoftheCompany,providedbyhimtotheCompanyduringhistenureasCMDofPOWERGRID.

ShriJagdishIshwarbhaiPatelhasbeenappointedasnon-officialparttimedirector(IndependentDirector)w.e.f.17thNovember,2015.

ShriR.K.Gupta,ShriA.K.Mittal,ShriR.Krishnamoorthy,Dr.K.RamalingamandShriMaheshShahnon-officialparttimedirectors(IndependentDirectors) ceased to be Directors on the Board of the Companyw.e.f. January 16, 2016. The Boardwishes to place on record its deepappreciationandgratitudeforthesignificantcontributionandsupporttotheCompanyextendedbyIndependentDirectorsofthecompany.

InaccordancewiththeprovisionsofSection160of theCompaniesAct,2013readwithArticle31(iii)of theArticlesofAssociationof theCompany,Dr.PradeepKumarandMs.JyotiArora,DirectorsshallretirebyrotationattheAnnualGeneralMeetingofyourCompanyandbeingeligible,offerthemselvesforre-appointment.

NUMBER OF MEETINGS OF THE BOARD

ThedetailsofnumberofBoard/CommitteemeetingsheldduringtheyearareprovidedintheReportonCorporateGovernance,whichformspart of this report.

DECLARATION BY INDEPENDENT DIRECTORS

AlltheIndependentDirectorshavemettherequirementsspecifiedunderSection149(6)oftheCompaniesAct,2013forholdingthepositionof‘IndependentDirector’andnecessarydeclarationfromeachIndependentDirectorunderSection149(7)wasreceived.

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PERFORMANCE EVALUATION OF DIRECTORS

The requirement of performance evaluation of directors under Section 178(2) of the Companies Act, 2013 has been done awaywith forGovernmentCompaniesvideMinistryofCorporateAffairs’Notificationdt.5thJune,2015.TheIndependentDirectorsintheirseparatemeetinghavereviewedtheworkassignedtothemunderScheduleIVoftheCompaniesAct,2013.

Further, the appointment, tenure and remuneration ofDirectors are decidedby thePresident of India.Remunerationpaid toChairman&Managing Director and Functional Directors are as per terms and conditions determined by the Department of Public Enterprises, Govt. of India. IndependentDirectorsarepaidonlysitting feeperBoard /Committeemeetingattended.POWERGRIDenters intoMemorandumofUnderstanding(MoU)withMinistryofPowereveryyearwhereinCompanyisevaluatedonvariousfinancialandnon-financialparameters.

SECRETARIAL AUDITOR

M/sChandrasekaran&Associates,PractisingCompanySecretarieshaveconductedSecretarialAuditoftheCompanyforthefinancialyearended31stMarch,2016.TheirReportformspartofthisAnnualReport(Annexure-V).TheSecretarialAuditorobservedasunder:

“During the period under review the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc.mentionedabovesubjecttothefollowingobservation:

1. The Company has not compliedwith provision of Section 149 of the Companies Act, 2013 readwith Regulation 17 of SEBI (ListingObligationsDisclosureRequirements)Regulations,2015inrespecttotheappointmentofrequisitenumberofIndependentDirectors.

2. TheCompanyhasnotcompliedwithprovisionofSection177oftheCompaniesAct,2013andRegulation18ofSEBI(ListingObligationsDisclosureRequirements)Regulations,2015withrespecttoconstitutionofAuditCommittee.

3. TheCompanyhasnotcompliedwithprovisionofSection178oftheCompaniesAct,2013andRegulation19ofSEBI(ListingObligationsDisclosureRequirements)Regulations,2015withrespecttoconstitutionofNominationandRemunerationCommittee.

4. The Company has not filed certain e-forms relating to creation of chargeswith the office of the Registrar of Companieswhere thePermanentAccountNumber(PAN)ofthelendersarenotavailable,whichismandatory.

Further,theexplanationgivenbytheBoardontheobservationgivenbytheSecretarialAuditorisasunder:

1. POWERGRID,beingaGovt.CompanywithinthemeaningofSection2(45)oftheCompaniesAct,2013,thepowertoappointDirectorsvestswiththePresidentofIndia.Ason31st March, 2016, the Company had only one Independent Director and thus the Company has not beenabletocomplywithprovisionsof149,177&178oftheCompaniesAct,2013asobservedbytheSecretarialAuditor.ThematterhasalreadybeentakenupwithAdministrativeMinistryforfillingsixexistingvacanciesofIndependentDirectorsontheBoardoftheCompany.

2. POWERGRIDcouldnotfilecertaine-formsrelatingtochargesinMCA21,whereintheLendersareMultilateralAgencies-WorldBank,ADBandIFCfornonavailabilityofPANoftheseAgencies.PANisamandatoryfillundere-filinginMCA-21.

EXTRACT OF ANNUAL RETURN

InaccordancewithSection134(3)(a)oftheCompaniesAct,2013anextractoftheannualreturnintheprescribedformatinMGT-9isgivenasAnnexureVIofthisReport.

COMMITTEES OF THE BOARD

POWERGRID’shasAuditCommittee,StakeholdersRelationshipCommitteeandotherCommittees.ThecompositionandscopeoftheCommitteesare provided in the Report on Corporate Governance.

AreportontheCorporateGovernance(Annexure-VII),formingpartofthisreport,togetherwiththeCertificatethereonisgiveninAnnexure-VIII to this Report.

RISK MANAGEMENT POLICY

AStatementindicatingdevelopmentandimplementationofaRiskManagementpolicyoftheCompanyincludingmajorelementsofriskandmitigationthereofaregivenintheManagementDiscussionandAnalysisReportatAnnexure-IofthisReport.

STATUTORY AUDITORS OF THE COMPANY

TheStatutoryAuditorsofyourCompanyareappointedbytheComptroller&AuditorsGeneralofIndia.M/sS.K.Mittal&Co.,M/sR.G.N.Price&Co.,M/sKothari&Co.andM/sParakh&Co.wereappointedasJointStatutoryAuditorsforthefinancialyear2015-16.

COST AUDITORS OF THE COMPANY

YourCompanyappointedM/s.K.G.Goyal&Associates,CostAccountantsandM/s.R.M.Bansal&Co.,CostAccountantsasCostAuditorsfortheFinancialYear(FY)2015-16underSection148oftheCompaniesAct,2013.

TheCostAuditReportfortheFY2015-16willbefiledwiththeCostAuditBranch,MinistryofCompanyAffairsbeforeduedatei.e.September27,2016.

ACKNOWLEDGEMENTS

OurBoardofDirectorswouldliketoexpresstheirdeepsenseofappreciationfortheguidanceandco-operationreceivedfromGovt.ofIndia,particularlyMinistryofPower,MinistryofFinance,MinistryofHomeAffairs,MinistryofExternalAffairs,MinistryofStatisticsandProgrammeImplementation,MinistryofEnvironment&Forests,MinistryofCorporateAffairs,CentralElectricityRegulatoryCommission,AppellateTribunalfor Electricity, Central Electricity Authority, NITI Aayog, Department of Public Enterprises, Regional Power Committees, and other concerned Govt.departments/agenciesattheCentralandStatelevelaswellasfromSecuritiesandExchangeBoardofIndia,NationalStockExchangeof

40

India Ltd., and BSE Ltd., Mumbai without whose active support, the achievements of the Corporation during the year under review would not have been possible.

Specialthankstoourvaluedcustomers,StateGovernmentsandStatePowerUtilitiesandotherclients,whohaveawardedvariousconsultingworksandreposed faith inCompany’scapability tohandle them.TheBoardalsoappreciates thecontributionofContractors,VendorsandConsultantsforsuccessfulimplementationofvariousprojectsbytheCompany.

OurDirectorsalsoacknowledgethevaluablesuggestionsandguidancereceivedfromthestatutoryauditorsduringtheauditofaccountsoftheCompanyfortheyearunderreview.TheBoardalsoconveysitssincerethankstonational/internationalfinancialinstitutions/multilateralFinancialInstitutions(TheWorldBank&AsianDevelopmentBank)/Banks/National(CARE,ICRA&CRISIL)&International(Standard&Poor’sandFitchRatings)creditratingagenciesfortheirassistance,continuedtrustandconfidencereposedbythemonPOWERGRID.

OnbehalfofBoardofDirectors,IwouldliketoplaceonrecordourdeepappreciationforthededicatedeffortsandvaluableservicesrenderedbythemembersofthePOWERGRIDfamilyintheCompany’sachievementsduringtheFinancialYear2015-16.Iwouldalsoliketothanktheexecutiveteamfortheirstrongleadership,theemployeeunionsfortheirsupportandallouremployeesfortheircommitmentandenthusiasmtoachieveouraimtobetheworld’spremiertransmissionutility.

For and on behalf of the Board of Directors

(I.S. Jha)

Chairman & Managing Director

Place: New Delhi Date: 08.08.2016

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ANNEXURE - I TO THE DIRECTORS’ REPORT

Management Discussion and AnalysisEconomic outlook

IndianEconomygainedmomentuminFiscal2016andisexpectedtogrowatfastpaceinnextfiveyears.Robusturbanconsumptionandpublicinvestmenthavesupportedgrowthdespiteanunfavourableexternalenvironment.During2015-16,theGDPofIndiaadvanced7.6percent,higherthan7.2percentinthepreviousyear.Electricitydemandinthecountryhasincreasedrapidlyandisexpectedtorisefurtherintheyearstocome.Inordertomeettheincreasingdemandforelectricityinthecountry,massiveadditiontotheinstalledgeneratingcapacityisrequired.Powergenerationduringthe2015-16is1,107.385BUshowingagrowthrateof5.6%overthepreviousyear.

Sectoral outlook

DuringtheTwelfthPlanperiodi.e.2012-17,thecapacityadditionisestimatedat88,537MWcomprising26,182MWintheCentralSector,15,530MWintheStateSector,and46,825MWinthePrivateSector,respectively.SummaryofCapacityAdditionProgrammeduringTwelfthPlan is as under:

(MW)

Type/Sector Central State Private Total

Thermal 14,878.00 13,922.00 43,540.00 72,340.00

Hydro 6,004.00 1,608.00 3,285.00 10,897.00

Nuclear 5,300.00 0.00 0.00 5,300.00

Total 26,182.00 15,530.00 46,825.00 88,537.00

Source:CEAwebsite-www.cea.nic.in

Againstaforesaidtargetof88,537MW,about85000MWcapacityhasbeenaddeduptoMarch,2016,whichconstitutesabout96%percentofthetargetenvisagedintheTwelfthPlan.Theindividualtargetsachievedbythecentre,states,andprivatesectorduringthisperiodare61.65percent,124.22percent,and105.84percent,respectively.AchievementuptoMarch,2016duringtheTwelfthPlanisasunder:

(MW)

Type/Sector Central State Private Total

Thermal 12,638.10 18,579.10 48,962.50 80,179.70

Hydro 2,504.02 712.00 595.00 3,811.02

Nuclear 1,000.00 0.00 0.00 1,000.00

Total 16,142.12 19,291.10 49,557.50 84,990.72

Achievement % 61.65 124.22 105.84 95.99

Source:CEAwebsite-www.cea.nic.in

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Capacity addition target and achievement during April, 2015 to March, 2016 are as under:

Thegenerationcapacityadditionduring2015-16was23,976.6MWagainstatargetof16,894.1MW.Outof23,979.6MWaddedduringtheyear2015-16,contributionofthermalsectorwassignificanti.e.22,460.6MW(93.68%ofthetotal)andHydrosectorwas1516MW.

AllIndiaInstalledCapacity(MW)ason31-03-2016(Sector-wise)isasunder:

Sector THERMALNuclear Hydro RES Grand Total

Coal Gas Diesel Total

Central 51,390.00 7,555.33 0.00 58,945.33 5,780 11,571.42 0.00 76,296.75

State 64,320.50 6,975.30 438.57 71,734.37 0.00 28,092.00 1,934.22 1,01,760.59

Private 69,462.38 9,978.00 554.96 79,995.34 0.00 3,120.00 36,887.29 1,20,002.63

All India 1,85,172.88 24,508.63 993.53 2,10,675.04 5,780.00 42,783.42 38,821.51 2,98,059.97

Source:CEAwebsite-www.cea.nic.in

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Electricity Generation during 2015-16TheOverallgenerationinthecountryhasbeenincreasedfrom1048.673BUduring2014-15to1107.386BUduringtheyear2015-16.TheCategorywisegenerationperformanceasfollows:-

Thermal Increased by 7.45%

HydroReducedby 6.09%

Nuclear Increased by 3.63%

Bhutan Import Increased by 4.72%

Overall Growth rate recorded by 5.64%

Theelectricitygeneration(MU)targetsandachievementfor2015-16isasunder:

Sector April, 2015 to March, 2016 % AchievementTarget Achievement

ThermalCentral Sector 3,19,878.00 3,15,075.33 98.50State Sector 3,35,320.00 2,91,758.65 87.01Pvt. IPP Sector 2,90,273.00 3,15,608.62 108.73Pvt.UTLSector 21,229.00 20,964.82 98.76Total 9,66,700.00 9,43,407.42 97.59Hydro

Central Sector 48,925.00 56,695.85 115.88

State Sector 66,505.00 53,123.60 79.88Pvt. IPP Sector 11,120.00 10,424.20 93.74Pvt.UTLSector 1,450.00 1,097.51 75.69Total 1,28,000.00 1,21,341.16 94.80NuclearCentral Sector 38,000.00 37,392.47 98.40Total 38,000.00 37,392.47 98.40Bhutan Import 4,800.00 5,244.74 109.27Grand Total 11,37,500.00 11,07,385.79 97.35Source:CEAwebsite-www.cea.nic.in

Transmission Sector:

During the year 2015-16, a total of 28,114 circuit-kmof transmission lines and 62,849MVA transformation capacitywas added,which is118.56%oftheannualtargetof23,712ckmandabout124%ofthetargetof50,542MVA,respectively,fixedfor2015-16.Thisincludes1no.of800kVHVDCline,19nos.of765kVlinesand66nos.of400kVlines.Withthecommissioningofthesetransmissionlines,theinter-stateandintra-statecapabilityofpowertransferinthecountryenhancedconsiderably.

GrowthofTransmissionSectorason31st March, 2016 is as under:

Voltage Level/Sector

April, 2015 to March, 2016

Transmission Lines (Fig. in ckms) Sub-stations (Fig. in MVA)

Programme Achievement Programme Achievement±800 kVCentral Sector 0 3,506 1,500 1,500

State Sector 0 0 0 0JV/Pvt.Sector - - 0 0Total 0 3,506 1,500 1,500765 kVCentral Sector 4,204 4,324 16,500 18,000State Sector 0 0 1,500 1,500JV/Pvt.Sector 1,257 1,277 0 0Total 5,461 5601 18,000 19,500400 kVCentral Sector 3,943 6,009 7,830 5,560State Sector 3,759 4,047 11,560 9,855JV/Pvt.Sector 1,466 1,125 0 1,630Total 9,168 11,181 19,390 17,045

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Voltage Level/Sector

April, 2015 to March, 2016

Transmission Lines (Fig. in ckms) Sub-stations (Fig. in MVA)

Programme Achievement Programme Achievement220 kVCentral Sector 867 399 0 870State Sector 8,216 7,427 11,652 23,934JV/Pvt.Sector 0 0 0 0Total 9,083 7,826 11,652 24,804Grand Total 23,712 28,114 50,542 62,849Source:CEAwebsite-www.cea.nic.in

All India actual power supply position during 2015-16:

Duringtheyear2015-16,thetotalex-busenergyavailabilityincreasedby5.8%overthepreviousyearandthepeakmetincreasedby5.2%.Theenergyrequirementregisteredagrowthof4.3%duringtheyearagainsttheprojectedgrowthof8.7%andPeakdemandregisteredagrowthof3.5%againsttheprojectedgrowthof5.9%.Overall,theshortageconditionsprevailedintheCountrybothintermsofenergyandpeakingavailability as given below:

Energy (MU) Peak (MW)

Requirement 11,14,408 1,53,366

Availability 10,90,851 1,48,463

Shortage -23,557 -4,903

(%) -2.1 -3.2Source:CEAwebsite-www.cea.nic.in

Region-wisepictureinregardtoactualpowersupplypositioninthecountryduringtheyear2015-16inenergyandpeaktermsisgivenbelow:

Region

Energy Peak

Requirement Availability Surplus / Deficit (-) Demand Met Surplus / Deficit (-)

(MU) (MU) (MU) (%) (MU) (MU) (MU) (%)

Northern 3,40,475 3,24,009 -16,466 -4.8 54,474 50,622 -3,852 -7.0

Western 3,46,767 3,45,967 -800 -0.2 48,640 48,199 -441 -0.9

Southern 2,88,025 2,83,494 -4,531 -1.6 40,030 39,875 -155 -0.4

Eastern 1,24,653 1,23,646 -1,007 -0.8 18,169 18,056 -113 -0.6

North-Eastern

14,488 13,735 -753 -5.2 2,573 2,367 -206 -8.0

Source:CEAwebsite-www.cea.nic.in

TheAllIndiaVillageElectrificationason31.03.2015isasunder:

Total Number of Villages Villages Electrified (Nos.) as on 31.03.2016

% villages electrified

5,97,464 5,86,065 98.10Source:CEAwebsite-www.cea.nic.in

POWERGRID – ‘Central Transmission Utility’ of the Country and A ‘Navratna’ Public Sector Enterprise.

POWERGRID is the ‘CentralTransmissionUtility (CTU)’of theCountryanda ‘Navratna’CentralPublicSectorEnterprise,engaged inpowertransmission businesswith the responsibility for planning, implementation, operation andmaintenance of Inter-State Transmission System(ISTS)andoperationofNational&RegionalLoadDispatchCenters.POWERGRIDowns&operatesExtraHighVoltage(EHV)transmissionlinesspreadoverthelengthandbreadthoftheCountryalongwithEHVAC&HVDCSub-stations.Itsvasttransmissionnetworkwheelsabout45%ofthetotalpowergeneratedintheCountry.ThroughdeploymentofState-of-the-Artoperation&maintenancetechniques,theavailabilityofthishugetransmissionnetworkisconsistentlybeingmaintainedover99%.POWERGRIDhasevolvedthenationalgridintheCountry,whichisoneofthelargestsynchronouslyoperatingelectricalgridsintheworldwithallitsfiveelectricalRegionsinterconnected.Ason31stMarch,2016,POWERGRID:

• owns&operatetransmissionnetworkofabout1,29,354ckmofExtraHighVoltage(EHV)transmissionlines,207Nos.EHVAC&HighVoltageDirectCurrent(HVDC)Sub-stationsand2,54,848MVAtransformationcapacity;and

• maintainedthetransmissionavailabilityat99.72%duringF.Y.2015-16.

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POWERGRID’S commitment towards strong & reliable National Grid:

YourCompanyhasadded13,717ckm.oftransmissionnetworkand15Sub-stationswithtransformationcapacityof23,139MVA.NationalGridofabout59,650MWinter-regionalpowertransmissioncapacitieshasbeenestablishedtillMarch,2016.

TheMoUtargetsvis-a-visachievementsofPOWERGRIDinprojectimplementationduringyear2015-16areasunder:

Works Target (for Excellent MoU rating) Achievement

Foundation(Nos.) 12,000 12,036

TowerErection(Nos.) 15,000 15,554

Stringing(ckms) 8,500 11,114

Transmissionlinesreadyforcommissioning(GW-ckms) 11,200 14,970

TransformationCapacity/readyforcommissioning(MVA) 27,500 27,845

Inter-regionalpowertransmissioncapacityaddition/readyforcommissioning 5,800 13,200

Major constraints /Challenges faced in construction and operation & maintenance of Inter-State Transmission system (ISTS) & mitigation thereof:Rapid urbanization, growth in population density, habitation & infrastructure development, etc. over the period have resulted in reducedavailabilityofusablelandfordevelopmentofinfrastructureprojects.Majorconstraintsandconcernsindevelopment,operation&maintenanceoftransmissioninfrastructureandinitiatives/effortsofyourCompanyforaddressingthemareasunder:(i) RightofWay(RoW)constraints(ii) PublicresistanceanddemandforhighercompensationforlayingofTransmissionLines(iii) Obtainingforestclearance(iv) Non-availabilityofskilledmanpower(v) VendorDevelopment(vi) Technologydevelopmentandup-gradation(vii) EfficiencyEnhancementinoperational&maintenanceYourCompanyhastakenvariousinitiativestoaddresstheaboveconcernsthroughintroductionaswellasdevelopmentofnewtechnologiesforincorporationintheIndianpowersystem.Themajorinitiativesareadoptionof765kVEHVACsystem,HighTemperatureLowSag(HTLS)conductors,HighSurgeImpedanceLoadingLines,MultiCircuits,Compact&talltowers,Fixed&ThyristorControlledSeriesCompensation,DigitalSubstationetc.Inthenewtechnologydevelopmentfront1200kVUltraHighVoltage(UHV)ACand±800kVHVDCmultiterminaltechnologyhavebeendeveloped.Aiming towards continuous improvements, yourCompany is alsoestablishing ‘POWERGRIDAdvancedResearchandTechnologyCentre’alongwithState-of-the-Artlaboratoriesforpowersystemanalysis,advancedequipmentdiagnostics,smartgridtechnologyfortransmission&distribution,IEC61850protocolbasedcontrolandautomation,materialscienceandengineeringdesign.Thiscentrewillhelpinknowledgeassimilation,enhancementanddisseminationaswellasadoptionofinnovativetechnologiesinpowersector.Some of the above initiatives are discussed in detail below: (i) Addressing Right of Way (RoW) constraints:

YourCompanyhasbeenadoptinghighervoltageslevels,speciallydesignedtowersandnewtechnologiestograduallyincreasethepowercarryingcapacityoftransmissionlinestooptimizetheRoWrequirement.SomeofthetechnologicalinitiativestakenbytheCompanyareas under:• Adoption of higher voltage for bulk power transfer Towardsdevelopmentof1200kVUltraHighVoltage(UHC)ACtechnology,thehighesttransmissionvoltagelevelintheworld,your

Companyhassuccessfullyestablisheda1200kVUHVACNationalTestStationatBinaandcommissioned1200kVsingleanddoublecircuittransmissionlinesectionsalongwithassociated1200kVbaysasapilotprojectusingindigenouslydevelopedequipment.Fieldtrialsarebeingcarriedout.InMay2016,powerflowthrough1200kVNationalTestStationhasbeencommencedsuccessfully.

With introduction of higher capacity transmission systems like 765 kV Double Circuit transmission lines, ±800 kV HVDC in theCountry considerable reduction could be achieved in RoW requirement perMW of power transfer. A number of 765 kVDoublecircuit lineshavealreadybeen commissionedandmany linesareunder construction.OnePoleof±800kV,6000MWHVDC linkfromBiswanathChariyali(Assam)toAgra(UttarPradesh)viaAlipurduar(WestBengal)(about1750kmlong),facilitatingtransferofbulkpowerfromNorthEasternRegiontoNorthernRegionandviceversathroughtheconstrictedchickenneckarea,hasbeencommissionedandisoneofthelongestHVDCmulti-terminal line intheworld.PowerflowandcommercialoperationofPole-Iof ±800kV,6000MWHVDCsystemfromBiswanathChariyali(Assam)toAgra(UttarPradesh)hasstartedwitheffectfrom01-11-2015.Constructionworkforanother±800kVHVDCsystembetweenChampa(WesternRegion)andKurukshetra(NorthernRegion)havinglengthofapprox.1300kmsisunderadvancestageofcompletion.Also,totransferpowertoSouthernRegion,another±800kVHVDClinebetweenRaigarhtoPugalurisbeingtakenup.Fortransferof2000MWpowertoKeralathrough±320kVPugalur-TrichurHVDCVSClink,yourCompanywouldbeimplementing±320kVHVDCVSCtechnologywith320kVDCXLPEcablewhichshallbepartlyoverheadandpartlyundergroundtotakecareofRoWissues.

ThecomparisonofactualswithFinancialMOUtargetsisgivenbelow:-

MOU Parameters Actual 2015-16 MOU 2015-16 (Excellent)

Sales Turnover (`crore) 20,802 20,200

Gross operating Margin (`crore) 18,329 17,396

PAT/Networth(%) 14.15 12.33

PAT per Employee ( `Lakh) 68.07 56.58

(`inCrore)

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• Use of High Performance Conductors in existing & new lines High performance conductors of different configurations having the capacity to carrymore powerwithin the same transmission

corridorwhichfacilitatefasterimplementationvis-à-viscreatingnewparallelcorridorsandconservationofscarceland,RoWandforestresources,etc.Thekeybenefitsare(i)transfermorepowerusingthesametowersandlinecorridor,and(ii)lowersagasagainstconventional conductor at higher operating temperatures.

Keepinginviewtheaforesaidadvantages,initiativeshavebeentakenbyyourCompanyforre-conductoringofsomeoftheexistinglinessuchasSiliguri–PurneahasalreadycompletedandreconductingofFarakka-Malda400kVD/ClineswithHighTemperatureLowSag(HTLS)conductorstoenhancetheirpowercarryingcapacity.Tooptimizeresourcesrequirement,efforts&cost,yourCompanyhasalsooptedtousetwinHTLSconductorsinsteadofquad/triplebundleACSRconductorsinmulti-circuitstretchesofsomeofthelinessuchasGaya-Koderma,Gaya-Maithon,Jallandhar-Kurukshetra&LILOofAbdullapur-SonepatatKurukshetra400kVD/Clines.HTLSconductorhasalsobeenusedin400kVD/CSagardighi-Behramporelineforhighpowertransferrequirement.

Considering superconductor technology as a promising future technology, your Company is in the process of implementing a demonstrationprojectonHighTemperatureSuperconductor(HTS)cablesystem,forassessingthefeasibilityandoperationalissues.SuccessfulHTScablesystemwillfacilitatehigherpowertransmissionwithouterectingtowers.

• Selection of appropriate type of towers InordertoaddresstheRoWconstraintsandtoconserveforestareas,yourCompanyhasbeendesigningandusingvarioustypesof

towersdependinguponlandtopographyandconditions–compact,pole-type,multi-circuittowers.(ii) Public resistance and demand for higher compensation for laying of transmission lines

YourCompanyhasbeenfacingseverepublicresistanceposedbythelandownersandfarmerswiththedemandforhighercompensationincluding cost towards diminution value of the land within the tower base and the transmission line corridor. Ministry of Power issued Guidelinessuggestingauniformmethodologyforcalculating/paymentofcompensationinrespectoftowerbaseandcorridorasdamageson15thOctober,2015.YourcompanyhaspromptlyadoptedsaidGuidelinesinNovember,2015andispursuingwithStatesforitsadoption/notification at the earliest. Once the said Guidelines are implemented across the Country, it will facilitate smooth disbursement ofcompensationtolandownersandtimelyimplementationofproject.

(iii) Obtaining Forest ClearancesForest&wildlifeclearancehasbeenbigchallengesfortimelycompletionofprojectduetolengthyandcumbersomeprocessinvolved.However,yourCompany’sconcertedeffortsandsupportofMoP/GoIhasresultedineasingofvariousclearanceprocessesparticularlyforlinearprojectincludingtransmissionlinesbyMinistryofEnvironment,Forests&ClimateChange(MoEFCC)thathasfacilitatedexpeditiousforestclearanceinrecentyears.Similarly,recentdecisionofHon’bleSupremeCourtofdoingawayitspermissionforallcasesinvolvingprotectedareasinsteadapplicableonlyforspecificcasesreferredtoitbyCentralEmpoweredCommittee(CEC)hasreducedconsiderabletimerequirementforsuchpermission.Moreover,empowermentofStandingCommitteeoftheNationalBoardforWildlife(NBWL)forgrantofsuchpermissioncoupledwithenhancedfrequencyofitsmeetinghasfurthereasedtheprocessofwildlifeclearance.SuchsmootheningofprocesshashelpedPOWERGRIDingettingpermissionof765kVD/CBanaskantha-Bhuj linepassingthroughWildAssSanctuaryinGujaratinrecordtime.DuringFY2015-16,POWERGRIDobtainedIn-Principle(Stage-I)forestclearancesformorethan1500ha.offorestlandcovering29linessuchas±800kVChampa-Kurukshetra,400kVD/CKala-Kudus,765kVD/CAngul-Srikakulam,400kVD/CBetul–KhandwaandFinal(Stage-II)clearanceformorethan1000ha.covering30linessuchas765kVS/CRanchi-Dharamjaygarh,765kVD/CRaipur-Wardha,400kVD/CRAPP-Kota,etc..

(iv) Non Availability of Skilled ManpowerManytechnologicalupgradationsaretakingplace inpowergeneration,transmissionanddistributionareas.State-of-the-artgenerationprojects,HighCapacityTransmissionSystems,GasInsulatedSubstations(GIS),±800kVTransmissionLines,SmartTransmissionGridwithself-healingpropertiesarerealitiesnowandPOWERGRIDisgrowingatafastpaceandnewjointventureshavebeenformedtoexcelinour business verticals. Accordingly, to align with growing competitive business environment, your Company is continuously imparting training in relevant areas of technology up gradation to its employees.DuringtheYear,132executiveshavebeencertifiedforProjectManagement.ForoverallskilldevelopmentintheCountryparticularlyintheareaofpowertransmissionlineconstruction,CapacityBuildingProgrammesarebeingconductedwiththehelpofvendorsofTransmissionLineconstructionandmorethan900youthsweretrainedduringFY2015-16.Cumulatively,about2500personshavebeentrainedupto31st March 2016 under this initiative.

(v) Vendor DevelopmentForcapacitybuilding,especially,consideringuseofnewtechnologiesandlargenetwork765KVlevelbeingdevelopedbyPOWERGRID,vendordevelopmenthasbeentakenuponprioritytomeetprojectrequirementsinexecutionaswellasinsupplyof765kVGISequipment,othercriticalEHVequipmentandtheiraccessories/components.POWERGRIDhasalsotakenvariousinitiativestowards“MakeinIndia”conceptsuchastechnologydevelopment,skilldevelopmentandsupplychainmanagementtoensuretroublefreemaintenanceofexecutedprojects.

(vi) Increasing operational & maintenance efficiency:Company’sassetshavegrownexponentiallywithincreasednumberof765kVtransmissionlinesinthesystem.GeographicalspreadofassetsallovertheCountry,openelectricitymarket,widevariationinpowerflowintermsofquantumanddirection,increasedpenetrationofrenewablegeneration,needforeffectiveutilizationofexistingassetsetc.havemadeitachallengingtasktomaintainsuchlargepowersysteminrealtimebasiswithhighreliability,safety&security.Recognizingtheneedforeffectivecontrolonrealtimebasisandtoimproveplanning and operations of power system as a whole, your Company is adopting various measures such as:• Digital Substations: The pilot initiative of your Company on IEC 61850 protocol based process bus architecture, whichwas

successfullycommissionedduringFY2014-15atthe400kVBhiwadiSub-station,hasbeenasignificantsteptakeninthedirectionto completely digitized substations. Further to this, your companyhas also takenup a pilot project to optimize the control andprotectioncableusedintransformerandhasbeensuccessfullycompletedat400/220kVNeemranasubstationintheFY2015-16.Afterimplementationofnewschemeatthissubstation,significantreductioninthenumberofcablesbetweentransformermarshallingboxandprotectionpanelhasbeenachieved.Theschemeisexpectedtoeasethemaintenanceandtrouble-shootinginfutureandalsorestorationtimewillbeextremelylowincaseofanyeventuality.Gainingexperiencefromtheseprojects,yourCompanyisplanningfortakingupanotherpilotprojectforretrofittingageingsubstationshavingconventionalprotectionandcontrolschemeswithadvancedautomation systems.

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• Remote operation of Substations:Asmentionedabove,yourCompanyisoperating&maintaininglargenumberofEHVsubstationsandtransmissionlinesacrosstheCountry.Roundtheclockmonitoringofsystemisessentialtoprovidereliablepower.Alltheassetsare closely monitored locally as well as remotely.

Thereare104substationsunderremoteoperation&monitoringfromNTAMC/RTAMC.• YourCompanyhasadoptedstate-of-the-artconditionmonitoringtechniquestodetectdefectsattheirincipientstage.Theseinclude

FrequencyResponseAnalysis(FRA),FrequencyDomainSpectroscopy,DissolvedGasAnalysis(DGA),DGAofbushing&CTs,Vibro-AcousticsofOnLoadTapChangeretc.forTransformersandReactors,DynamicContactResistanceMeasurementforCircuitBreakers,ThirdHarmonicResistiveCurrentMeasurement for SurgeArrestors, Thermo-vision scanningetc. for smoothoperationwithhighreliabilityandavailabilityduringtheirusefulservicelife.POWERGRIDhasintroducedonlineCapacitance&Tandeltamonitoringofthebushings, dynamic temperature record through Fibre Optic sensors in Transformer and Reactor and multi gas monitoring system and all these monitoring systems are being integrated with SCADA for remote monitoring as well as getting information regarding dynamic changeinconditionoftheequipment.

• Hotline maintenance, a highly specializedmaintenance activity, is being undertaken by your Companywherein highly skilledmanpower carry out maintenance activities such as replacement of insulator, vibration dampers, hardware etc. on live lines and thus avoid outages of transmission lines, hence higher availibility.

• InlinewiththeinternationalO&Mpractices,yourCompanyhascommencedtowertoppatrollingof±500kVHVDCBalia-BhiwadilineusingUnmannedAerialVehicles(UAVs)from6thApril2016,aftergettingrequisiteclearancesfromDGCA&MHA.TheUAVsareequippedwithgimbalmountedUltraHDvideocameraswhichcantakehighresolutionclosephotographsandvideooftowersanditscomponentfordetectionoffault/defects.PatrollingoftowersusingUAVwilleliminatetheneedoftowertoppatrolling(byclimbingthetower)forsuchinspections,improvingtime&costefficiencyinmaintainingoftransmissionlines.

• YourCompanyhasalsointroducedAerialPatrollingoflinesusingHelicoptersforthefirsttimeinIndiainselectedareassuchasdeepforests,hillyterrain&snowboundareaswheregroundpatrollingisdifficultandverytimeconsuming.HelicopterequippedwithGimbalmountedLIDAR(LightRangingandDetection),Thermo-visionCamera,HighresolutionVideoandDigitalcamerahasbeendeployedtoidentifythedefectswithinshortperiodincomparisonwithpatrollingoflinesonfootbyhumanbeingandtakingcorrectiveactions.

• Installationoflightningarrestorsintransmissionlineshasbeentakenuptominimizetrippingsduetolightning,particularlyinareaspronetolightninglikeNorthEasternRegionsofthecountry.

• URTDSM Project:TowardsSmartgriddevelopmentendeavors,yourCompanyhasundertakenfullscaleimplementationofWAMS(WideAreaMeasurementSystem) technologyonpan Indiabasisunder “UnifiedRealTimeDynamicStateMeasurementSystem(URTDSM)”Projectwhichislikelytoenhanceefficiencyinoverallgridmanagement.TheProjectshallenablesynchronousmeasurementofgridparametersacrossthewidelyspreadgridonrealtimebasis.SynchronizedPMUswillfacilitateimprovedmonitoring,visualizationand enhanced situational awareness of the grid events on real time which will improve grid reliability.

Underthisproject,PhasorMeasurementUnits(PMUs)wouldbeplacedatallHVDC,400kVandabovesubstationsandgeneratingstationsincludingat220kVlevel.ThroughtheexperiencegainedduringimplementationofWAMSPilotProject,yourCompanyhasnowinstalledmorethan400PMUsispartofURTDSMProject.URTDSMinvolves installationofaround1200PMUsandcomputerhardware&softwareat34controlcentersinPhase-I.Thisprojectisunderimplementation.

POWERGRIDisalsodevelopingvariousanalyticsusingPMUmeasurementsfordiagnosis,validationandcontrolpurpose.TheanalyticswillenableforimplementationofWideAreaProtection&ControlSystems,whichwillimprovegridstability.

YourCompanyhasalsoundertakenPowerSystemstudythroughRealTimeDigitalSimulator(RTDS)forHVDC.RTDShasaspecializedcomputerhardwareand softwaredesigned specifically toachieve real time simulationofpower systemswithHVDC,FACTSandprotectiverelays,etc.specificallyforstudyofdynamicperformancewhichislikelytoenhanceefficiencyinoperation.

TomeetthecommunicationrequirementofURTDSMandSCADAupgradation,allthesubstationsofPOWERGRID,CentralGeneratingstationsandimportantstationofStatesarebeingconnectedonFiberOpticnetwork.During2015-16,10421kms.ofOPGWnetworkhasbeenestablishedtoconnectadditionalsub-stations,powerplantsandprovideredundantpathalso.ThisshallensureavailabilityofrequiredbandwidthforvariousapplicationsbeingprovidedatSLDCs,RLDCsandNLDCforgridoperations.LayingoffibersshallalsofacilitatereliableoperationofNationalTransmission&AssetManagementCentre(NTAMC)andhelpinexpansionoftelecombusiness.DuringthisfinancialyearOPGWfromindigenousmanufacturerhavealsobeensuppliedwhichensuresthefuturedomesticmarketdevelopmentasapartof‘MakeinIndia’.

Challenges of Tariff-based Competitive BiddingYourCompany,apartfromitsendeavortomitigatetheaforesaidconcerns,hasmaderemarkableeffortstoachievesuccessinTariffBasedCompetitiveBidding(TBCB).Tariff Policy dated 28th January2016statesthatwhileallfutureinter-statetransmissionprojectsshall,ordinarily,bedevelopedthroughcompetitivebiddingprocess,theCentralGovernmentmaygiveexemptionfromcompetitivebiddingfor(a)specificcategoryofprojectsofstregicimportance,technicalupgradationetc.or(b)worksrequiredtobedonetocatertoanurgentsituationonacasetocasebasis.POWERGRIDemergedassuccessfulBidderandwonninetransmissionprojectsandacquiredtheSpecialPurposeVehicles(SPV)fromtheBidProcessCoordinator(s).TheProjectSPVsareviz.POWERGRIDVizagTransmissionLimited,POWERGRIDNMTransmissionLimited,POWERGRIDUnchaharTransmissionLimited,POWERGRIDKalaAmbTransmissionLimited,POWERGRIDJabalpurTransmissionLimited,POWERGRIDWaroraTransmissionLimited,POWERGRIDParliTransmissionLimited,POWERGRIDSouthernInterconnectorTransmissionSystemLimitedandPOWERGRIDVemagiriTransmissionLimited.AlltheseprojectsareonBuild,Own,Operate&Maintain(BOOM)basisandareundervariousstagesof implementationexceptforTransmissionSystemassociatedwithIPPsofVemagiriArea(POWERGRIDVemagiriTransmissionLimited)whichhasnotbeentakenuppursuanttotheCERCorderdated27.09.2013and06.04.2015.OneoftheelementsunderPOWERGRIDVizagTransmissionLimitedviz.,400kVD/CKhammam–Nagarjunasagar400kVD/CTransmissionlinehasbeensuccessfullycommissionedintheFY2015-16andtransmissionchargesarebeingrealizedforthesame.

Your Company has also made its presence felt in the area of Telecom Business, Consultancy and Smart Grid.

Telecom business of POWERGRID:YourCompanyhasavisiontobecomeamajorTelecomservicesproviderbyestablishingarobuststateofthearthighcapacitynetwork.Telecombusinessis,day-by-day,gettinghighlycompetitiveandthereisalwaysapressurefordownwardrevisionofprices.However,yourCompany isexploringnewbusinesssegmentsandofferingnovelsolutionssuchasMPLSVPN,peeringwithcontentdeliverynetworks

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etc.Further,byundertakingtimelyinvestmentsinnetworkexpansionforprojecteddemand,POWERGRIDisminimizinglossinrevenueduetounmetdemand.POWERGRIDisalsopartneringwith lastmileconnectivityprovidersandStateElectricityBoardsforRoW,fiberleasing,etc.toincreaseitsnetworkreachandpresence.POWERGRID’sextensivebackbonetelecomnetworkwithitslocalaccesspartnershas demonstrated that the location disadvantage of small towns towards accessibility and affordability of high speed internet could be eliminated.Ithasthepotentialtobridgethedigitaldivideandbeachangeagenttowardsrealizingthevisionof“DigitalIndia”.Consultancy business of POWERGRID:Ourconsultancybusiness issubject tocompetition fromvariouscompetitorsarealsosuppliersofgoods/services toourconsultancyprojects. There is also emergence of low cost competitors. However, State Utilities and Government of India have reposed faith onPOWERGRIDandwehavebeenabletogeneratesignificantamountofConsultancybusiness.Asaresult,ourConsultancyRevenuehasgrown more than 20% w.r.t previous year. POWERGRID’s initiatives in the area of Smart Grid & Renewable IntegrationGovernmentofIndiahassetambitioustargetofbringingenergygenerationcapacitythroughrenewableenergysourcesofabout175000MWby2022.Itincludes100000MWsolarpowercapacityand60000MWwindpowercapacity.YourcompanyhastakenaleadroleinimplementationofGreenEnergyCorridorstofacilitategridintegrationofrenewablegenerationcapacityadditioninTwelfthFiveYearPlanacrosstheCountry.Theimplementationcoversconstructionofinter-statetransmissionsystemsandadvancedcontrolinfrastructurelikeforecastingtoolforrenewablegeneration,establishmentofrenewableenergymanagementcenter,etc.Inaddition,Intra-StatetransmissionstrengtheningisbeingcarriedoutbytherespectiveStateTransmissionUtilities(STUs).POWERGRIDhasalsoevolvedcomprehensiveplanstoevacuatepowerunderGreenEnergyCorridors-II(GEC-II)fromvariousultra-megasolarpowerparksbeingdevelopedinvariousstates.InthefirstphaseofGEC-II,transmissionschemesforSolarPowerParksofover20,000MWcapacityacrosstwentyone(21)Stateshavebeenevolved.POWERGRIDisimplementinginter-statetransmissionsystemforeightsolarparksofabout7,200MWinfiveStates.Toenhancecleanenergyandenergysecurity,yourcompanyisprogressivelyinstallingon-gridsolarPVsystemsbymeticulouslyutilizingtheavailablespaceinitsofficecomplexesacrossthenation.POWERGRIDhasundertakenimplementationofmaidenpilotprojectongridscalebatteryenergystoragesystemsinIndiacomprisingofbatteries, power conditioning system, battery management system etc. at Puducherry based on three different technologies to establish proofofconcept,application(s),policyadvocacyetc.inIndiancontext.Theresearchfindingsoftheseenergystorageprojectswouldbecrucial in delineating the roadmap for large scale energy storage systems to address intermittency, variability, uncertainty etc. of renewable power towards grid stability.POWERGRIDhasmadepioneereffortsinidentificationofenergyefficiencyopportunitiesbywayofcarryingoutenergyauditsofvariousindustries, institutions and other commercial establishment. It has carried out energy audits at various integrated steel plants and has also designed,developedandsuccessfullyinstalledwasteheatrecoverysystemsforsteelre-rollingmills.POWERGRIDisaBEEGrade-IEnergyServiceCompany(ESCO)forundertakingenergyefficiencyprojectsinvariousindustriesanditiswellpreparedtostandasastarperformerandkeyenablerinthechallengingenvironment,byofferingEnergyEfficiencysolution.Initseffortstowardsknowledgedissemination,POWERGRIDisimplementingState-of-the-artSmartGridKnowledgeCentre.Thisfacilitywouldhelpincapacitybuildingofutilities,stakeholdersetc.inthisfield.Your Company is also providing consultancy services for various projects covering distribution infrastructure, advanced meteringinfrastructure,intellegentoutagemanagement,powerqualitymanagement,netmeteringetc.YourCompanyiscloselyassociatedwithimplementation of smart Grid at Varanasi and Gurgaon as part of government endevour towards smart city. Thrust on Sustainable DevelopmentSustainable Development is vital to our business operations which allow us to position our concerns for people and environment to centrestage.Thisisembeddedandreflectedinourmotto,“Reducewhereyoucanandmitigatewhereyoucannot”.Themainthrustofoursustainabilityefforts includesmaintaininghighstandardsofbusinessconduct,reducingenvironmental&social impact,providingasafeworkplacewhilepromotingprofessionaldevelopment.Key initiatives takenbyPOWERGRID towardssustainabledevelopmentaretechnologicalinitiativesforconservationofpreciousRightofWay(RoW),Rainwaterharvestingsystemwhichisnowanintegralpartofeverynewsubstationdesign,installationofLEDbulbs&solarstreetlightinginsubstation,fuelcatalystsdevicesforDGsetsetc.Towardsgreeninitiatives,a50kWpSolarPVSystemhasbeeninstalledatourGurgaonOfficeComplexwhichwillmeetaround4%oftotalenergyrequirementandwillalsoresultinreductionof40tonsofCO2annually.Toreduceourcarbonfootprintfurther,weareoperating“WastePaper Recycling Plant” to recycle waste paper generated at Corporate Officewhich has not only resulted in conservation of naturalresourcesliketree,wateretc.butalsoreducedprocurementofpaper/stationaryitemsfromtheopenmarket.Companyhasadopted“GreenRatingforIntegratedHabitatAssessment”(GRIHA)normsforbuildingsatManesarandRegionalOffice,Bengaluru.Itisalsoamatterofprivilege that Bengaluru building has been awarded 2ndPrizebyHUDCOunder“GreenBuilding”categoryin2015.Equity Leveraging and complaince of Financial CovenantInPOWERGRIDEquityLeveraginggenerallyrefersto:-i. LongtermborrowingsandfurthercapacitytoborrowonthebasisofNetWorth&ii. RetentionofprofitforfurtherleveraginginlinewiththeCAPEXneedsCentralElectricityRegulatoryCommissionregulationsfortarifffixationforBlockYear2014-19providesformaximumDebt-Equityfundingof70:30asoncommercialoperationdatewithaReturnonEquityof15.5%andtakesintoaccountupto30%oftotalfundingasequitycontribution.POWERGRIDhasleverageditsexistingNetworthtothemaximumpossibleextentandtheDebtEquityRatiooftheCompanyis71:29ason31stMarch,2016whichishighestamongthemajorinfrastructurecompanies.Asondate,returnonequityasacomponentoftariffistheprimarysourceofinternalresource(IR)generationandanequitybaseof30%oftotalfundsdeployedisrequiredformaximisingIRgeneration.Theceilingofdebttoequityratiohasalsobeencappedat75:25byvariouslenderslikeADB,WorldBank,IFC,SBIetc.asloan covenants.POWERGRIDisrequiredtoensurecomplianceofmainlyfollowingFinancialCovenantsinrespectoflongtermloans:i. The Debt Service Coverage Ratio should not be less than 1.20 times in any year on all long term debt with additional comfort that the

averageofthreeyearsshouldnotfallbelow1.30timesonalllongtermdebt,ii. TheFixedAssetCoverageRatioshallnotfallbelow1.00times,iii. GoIshareholdinginourcompanyshallnotfallbelow51%,

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iv. Maintainsan‘AAA’ratingduringthecurrencyofthelongtermborrowing,v. MaintainoverallDebt-EquityRatioof75:25.vi. Corporateaccountreceivablenotexceedingtheprevious3months’invoicingamounts,vii. Irrevocableletterofcreditfromallcustomersinanaggregateamountequivalentto105%ofthemonthlyaveragebillingofprevious

financialyear.POWERGRIDisincompliancewithreferredfinancialcovenantsduringtheFinancialYear2015-16.POWERGRIDisabletomobilizelongtermborrowingsataveryeffectiverateofinterest.Theweightedaveragecostoflongtermborrowing(Domesticaswellasexternalsources)duringthefiscalisaround7.07%.Insurance of Company for its assets / Loss of profit, etc.YourCompanyhasaMegaInsurancePolicyfromexternalinsurancecompanyfor(i)ACsubstationsequipmentinswitchyardareaincludingControl Room building (ii) all HVDC stations (including back-to-back and bi-pole) (iii) assets such as transformers and reactors andassociatedbaysownedbyyourcompanybutinstalledatSEBs,STUsandpowergenerationfacilitiesand(iv)allofficebuildingsownedbyus and their assets.Further,POWERGRIDmaintainSelfInsuranceSchemetocoveratransmissionlineandallotherassetswhicharenotcoveredunderMegaInsurancePolicy.UnderSelfInsuranceSchemematerialdamage/lossduetofire,naturalcalamity/earthquake,terrorismarecoveredforwhichanamountequalto0.1%ofourGrossBlockoffixedassets(exceptforthevalueofassetscoveredunderMegaInsurancePolicy)is contributed.E-Reverse Auction for procurement processPOWERGRIDasapioneerofleveraginguseoftechnologyinitsvariousprocesses,hasadoptede-ReverseAuction(eRA)foritsprocurementprocess.eRA,anonlinerealtimedynamicprocess,isatacticaltoolinthee-sourcingstrategytoolkitthatcanbeusedasameanstodiscovercompetitivepricesinafairandtransparentmanner.Itprovidessimplicity,quickresultsandcompetitivepricingacrosssuppliersandgeographies. The eRAprocess benefits suppliers aswell as buyer by reducing spend, improving supplymarket intelligence, andprovidingprocesstransparency.Moreover,itprovidesrealtimefeedbackonthecompetitivenessofabid.Risk Management Procedure For thepurposeofevaluatingandmanagingtheuncertainties theenterprise faces,EnterpriseRiskManagement frameworkhasbeenimplementedinPOWERGRID.Theframeworkisastructured,consistentandcontinuousprocessforidentification,assessment,monitoringandmanagementofrisks.Asperthisframework,thesignificantbusinessprocesses/risksaremonitoredandcontrolledthroughvariousKeyPerformanceIndicators(KPIs).POWERGRIDhasadulyconstitutedRiskManagementCommittee.TheCommitteemeetsatregularintervalsandreviewsKPIsonregularbasisandprovidesupdatestotheAuditCommittee/Board.Inadditiontorisk&challengesdiscussedabove,thefollowingmajorrisksinvolvedandtheirmitigationare:• Synchronization Risk with Generation Projects Therecouldalwaysbeagapinthecommissioningofgenerationunitsvis-à-vistheassociatedtransmissionsystemandtheremight

bedelaysinthematerialisationofsomeofthegenerationprojects. To mitigate the same, the Agreements are being signed with the Generators by your Company to share and bear the transmission

charges as applicable as per CERC guidlines.• Revenue Risk TheCentralElectricityRegulatoryCommission(SharingofInter-StateTransmissionChargesandLosses)Regulations,2010which

came intoeffect from01.07.2011,provides forcomputationofPointofConnection(PoC)chargesand lossesby introducingnewmethodologyforsharingoftransmissioncharges.However,StatesnamelyBihar,Odisha,WestBengal,MaharashtraandJharkhandhadchallengedtheaforesaidsharingmethodologyinthecourtoflawandfinaldecisionisawaited.IntermsofinterimorderoftheDelhiHighCourt,alltheaboveStateswerehowevermakingpaymentaspersaidRegulation.MeanwhileCERChasnotifiedthethirdamendmenttothesaidSharingRegulationsonApril01,2015leadingtochangeinsharingpatternandlowertransmissiontarifftoBihar,Odisha,WestBengalandJharkhand.

There couldalwaysbeagap in the commissioningof ISTS transmission systemvis-à-vis thedownstream/upstreamnetwork, tobe implementedby the respectiveStateTransmissionUtilities (STUs). In fourthamendment to theCentralElectricityRegulatoryCommission(IndianElectricityGridCode)Regulations,2010provisionhasbeenmadetosigntheimplementationagreementwiththetransmissionlicenseesimplementingthedownstream/upstreamnetworkundercostplustocoverthemismatch.

CERC Tariff Regulations allow payment against monthly bills towards transmission charges within a period of 60 days from the date of bills and levying of Surcharge @ 18% per annum on delayed payment beyond 60 days. Further, graded rebate is also provided in case ofpaymentismadewithin60days.Mostoftheutilitiesareavailing60daysallowableperiodforclearingtheirdues.DuringtheFY2015-16,collectionefficiencyhasbeenverygoodandappropriateactionsforrealizationofduesweretakenbythecompanyagainstdefaulting utilities.

• Integrated Management Policy: POWERGRIDiscommittedto: establishandmaintainanefficientandeffective“NationalGrid”withdueregardtotime,cost,technologyandvalueaddition, sustainable development through conservation of natural resources and adopting environment friendly technology on principles

ofAvoidance,MinimizationandMitigation, ensuresafe,occupationalhazardfreeandhealthyworkenvironment, tothesatisfactionofstakeholdersinallareasofitsactivitiesandshallendeavortoimprovecontinuallyitsmanagementsystems

and practices in conformity to legal and regulatory provisions. • Internal Control POWERGRIDhasacomprehensiveinternalcontrolmechanisminplacetoverifytheAccountingandFinancialManagementSystem,

adequacyofcontrols,materialchecks,financialproprietyaspectsandcomplianceimplementationmechanism.TheelaborateguidelinesforpreparationofAccountsarefollowedconsistentlyforuniformcompliance.InlinewiththeprovisionsofSection179readwithRule8oftheCompanies(MeetingsofBoardanditsPowers)Rules,2014theInternalAuditorswereappointedbytheBoardofDirectors.TheregularandexhaustiveInternalAuditonhalfyearlybasisiscarriedoutbytheexperiencedCost/CharteredAccountantFirmsincloseco-ordinationwithCompany’sownInternalAuditdepartmenttoensurethatallchecksandbalancesare inplaceandall

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FACTORS AFFECTING OUR RESULTS OF OPERATIONSTariff normsOurchargesfortransmissioncustomersaregovernedbytariffnormsdeterminedbytheCentralElectricityRegulatoryCommission(“CERC”)pursuant to Central Government Tariff Policy and Legislation. As per the Tariff Policy issued by GoI on 6th January, 2006, Central Electricity RegulatoryCommission(CERC)shallbeguidedbytheTariffPolicywhilespecifyingthetermsandconditionsforthedeterminationoftariff.TheCERChasvideitsnotificationdated21st February,2014notifiedthetariffregulationsapplicablefortransmissionsystemincludingcommunicationsystemusedforinter-statetransmissionofelectricityforthetariffBlock2014-19,whichshallremaininforcefrom01.04.2014to31.03.2019.Underthetariff regulationsapplicableforthetariffBlock2014-19,wearepermittedtochargeourcustomersthetransmissionchargesforrecoveryofannualfixedcost(“AFC”)consistingofcomponents-ReturnonEquity,Interestonoutstandingdebt,Depreciation,Operation&MaintenanceexpenditureandInterestonworkingcapital.TheReturnonequityiscomputedonpre-taxbasisbygrossingupthebaserateofreturnonequityof15.5%attheeffectivetaxrateoftherespectivefinancialyear.Incaseofprojectscommissionedonorafter1stApril,2014,anadditionalReturnonEquity(ROE)of0.5%willbeallowedifsuchprojectsarecompletedwithinthetimelinespecifiedundertheCERCtariffregulationsfortheBlock2014-19.However,additionalROEof0.5%willnotbeadmissiblefortransmissionlinehavinglengthoflessthan50kilometers.TherateofROEmaybereducedby1%forsuch period as may be decided by CERC if any transmission system is declared under commercial operation without commissioning of data telemetry, communication system up to load dispatch center or protection system.The repayment of loan capital for the year of the tariff period 2014-19 is deemed to be equal to the depreciation allowed for that year.Irrespectiveofanymoratoriumperiodavailedbyyourcompany,therepaymentofloanisconsideredfortarifffromthefirstyearofcommercialoperationoftheprojectandshallbeequaltotheannualdepreciationallowed.Forinterestonworkingcapital,theworkingcapitalamountiscalculatedas-(i)consistingofreceivablesequivalenttotwomonthsoffixedcost;(ii)maintenancespares@15%ofoperationandmaintenanceexpensesand(iii)operationandmaintenanceexpensesforonemonth.RateofinterestonworkingcapitalfortheyearisonnormativebasisandisequaltotheBaseRateplus350basispointsofStateBankofIndia(BankRate)ason01.04.2014orason1st April of the year in which the transmission system, is declared under commercial operation, during the tariff period2014-15to2015-19whicheverislater.UnderthetariffnormsprescribedbyCERCforthetariffBlock2014-2019,recoveryoftransmissionchargeispermittedtoyourcompanyontheachievementoftheoperationalnormsof98%and95%forACsystemandHVDCsystemrespectively.Anincentiveisalsoallowediftheavailabilityofourtransmissionnetworkisabove98.5%andupto99.75%inrespectofalternatingcurrentsystems,above96%andupto99.75%inrespectofHVDCsystemsandpenalizediftheavailabilityofournetworkisbelow98%or95%respectively.TheAvailabilityIncentivesarelinkedwithmonthlytransmissioncharges.The sharing of transmission charges by Beneficiaries are governed by Central Electricity Regulatory Commission (Sharing of TransmissionCharges&LossesinInterstateTransmissionSystem)Regulations,2010issuedbyCERC.ThetariffregulationsapplicableforthetariffBlock2014-19providesthat:- thespecifiedtimelineforcompletionofprojectshavebeenincreasedby06monthsforvariouscategoriesbyCERC;- therateofescalationinO&MchargesonyeartoyearbasisfortheTariffBlock2009-14was5.72%andthesamehasbeenconsideredas

3.32%introducingCompoundAnnualGrowthRate(CAGR)conceptforthefirsttime.AsperRegulationsonSharingofInter-StateTransmissionCharges&Losses,2010whichcameintoforcefrom01.07.2011,POWERGRID,asCTU,isperformingtheactivityofBilling,CollectionandDisbursement(BCD)onbehalfofalltheISTSlicenseesandalsocertainnon-ISTSlicenseeswhoselineshavebeencertifiedbyRPCstobeusedasISTS.

Revenue from Operations Fiscal 2016 Fiscal 2015

Revenue from transmission charges 19,944.51 16,521.74

Consultancy-ProjectManagement&SupervisionSaleofServices 465.46 380.60

Revenue from telecom 392.25 274.89

Total 20,802.22 17,177.23

(Rs.inCrore)

internalcontrols/systemsareinorder.TheCorporateInternalAuditDepartmentalsocarryoutSystemAuditandManagementAudittoreassure the effectiveness of internal control mechanism. The scope and authority of the Internal Auditor is derived from the Internal Audit Plan approved by the Audit Committee.

Till15.01.2016,AuditCommitteehadthreeIndependentDirectorsandoneNon-officialPart-timeDirector.However,oncessationoffiveIndependentDirectorsfromtheBoardofPOWERGRIDw.e.f.15.01.2016,theAuditCommitteewasreconstitutedwithoneIndependentDirector(ChairmanoftheAuditCommittee),oneGovt.NomineeDirectorandaFunctionalDirector.TheAuditCommitteemeetsatregularintervalsandisinformedofcompliancewithinternalcontrolmechanism.Thesignificant/materialauditfindingsareplacedbeforetheAuditCommitteeforreview,discussionandsubsequentaction.

Financial Discussion and Analysis

ComparisonofFiscal2016toFiscal2015

Your company’s total income in Fiscal 2016was `21,281.18 crore, which represented an increase of 20% over the total income of `17,780.04croreinFiscal2015.InFiscal2016,transmissionandtransmission-relatedactivitiesconstituted93.72%ofourtotalincome,with the balance coming from our consultancy, telecommunication business and other income.

Income

Revenue from Operations

51

Other Income Fiscal 2016 Fiscal 2015

Dividend–SubsidiaryandOthers 84.77 97.77

Interestincome-BondsandLongTermAdvances 14.03 31.06

Interestincome–Banks 60.52 229.22

Interest income others 22.96 15.30

Interest on Loans to Subsidiaries 49.23 -

Profitonsaleoffixedassets 1.59 1.90

Deferredincome(transfersfromgrantsinaid) 21.96 21.95

Transferfrominsurancereservesona/coflossoffixedassets 5.29 20.21

LeaseincomefromStateSectorULDC 34.76 37.18

Surcharge on late payment from customers 92.91 65.95

FERV gain 0.05 12.46

Miscellaneous income 86.99 64.31

Provisionwrittenback 3.90 5.50

Total Other Income 478.96 602.81

(`inCrore)

TheotherincomedecreasedmainlybecausetherehadbeendecreaseininterestonBank,dividendreceivedfromJointVentureCompanies.

Expenses have been categorized as- (i) Employees’ benefits expense, (ii) Finance Costs, (iii) Depreciation and amortization expense, (iv)Transmission,AdministrationandOtherExpensesand(v)Priorperioditems.

Yourcompany’stotalexpenditurewere`13,662.45croreinFiscal2016,anincreaseof18.90%overthetotalexpendituresof`11,490.66croreinFiscal2015.Thetotalexpendituresasapercentageoftotalincomewere64.20%inFiscal2016comparedto64.63%inFiscal2015.

(i) Employees’ benefits expense

Employees’remunerationandbenefitsexpensesincludesalariesandwages,incentives,allowances,benefits,contributionstoprovidentandotherfundsandStaffwelfareexpenses.

Yourcompanyhad8,606employeesonpayrollasofMarch31,2016,comparedto8,575employeesasofMarch31,2015.Employees’remunerationandotherbenefitsdecreasedby4.21%to`980.54CroreinFiscal2016from`1023.65CroreinFiscal2015.

(ii) Finance Cost

Financecostincreasedby26.23%to`5,022.97croreinFiscal2016from`3,979.32croreinFiscal2015.TheincreasewasmainlyduetointerestonloansfromSecured/UnsecuredredeemableBonds.

These charges include guarantee fee of `194.22crore(previousyear`167.43crore)(netofIEDC)payabletotheGoIforgivingguaranteesto the lenders of our foreign currency loans.

(iii) Depreciation and Amortisation Expenses

Yourcompany’sdepreciation increasedbyabout21.58%to`6,182.76crore inFiscal2016 from`5,085.41crore inFiscal2015.Theincrease was mainly because of the commissioning of new transmission assets worth `31,787.66croreandfull-yearimpactinFiscal2016of transmission assets `21,761crorewhichwerecommissionedduringFiscal2015.

Foreign Exchange Rate VariationYourcompanyunderthetariffregulationsfortheblock2014-19hasanoptiontohedgeforeignexchangeexposureinrespectoftheinterestonforeigncurrencyloanandrepaymentofforeignloanacquiredforthetransmissionsystem,inpartorfullandrecoverthecostofhedgingofforeignexchangeratevariationcorrespondingtothenormativeforeigndebt,intherelevantyear.If hedging of the foreign exchange exposure is not undertaken, the extra rupee liability towards interest payment and loan repaymentcorresponding to the normative foreign currency loan in the relevant year is permissible provided it is not attributable to the generating company orthetransmissionlicenseeoritssuppliersorcontractors.Duringthefinancialyear2015-16,nohedgingforforeignexchangeexposurehasbeenundertakenbyyourcompany.Revenue from Other ServicesYourcompanyalsoearnsrevenuefromconsultancy(includingprojectmanagementandsupervisionservices)andtelecommunicationbusiness.OurconsultancyincomemainlyconsistsoffeefromtheRuralElectrificationworks,theexecutionoftransmission-andcommunicationsystem-related projects and technical consulting assignments for Indian state utilities, joint venture companies, subsidiaries and utilities in othercountries. The income from Consultancy business against sale of services in the Fiscal 2016 was `465.46croreasagainst`380.60croreintheFiscal2015,anincreaseof22.30%.Therevenuefromourtelecommunicationbusinessismainlyonaccountofleasingbandwidthofourfibre-opticlines.TheincomefromTelecombusiness in the Fiscal 2016 was `392.25croreasagainst`274.89croreintheFiscal2015,anincreaseof42.69%.Other IncomeYourcompany’sotherincomewas`478.96croreinFiscal2016,adecreaseof20.55%overtheotherincomeof`602.81croreinFiscal2015.

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Year ended March 31

2016 2015

Net cash from operating activities 16,151.11 15,041.77

Netcash(usedin)investmentactivities (21,147.61) (23,843.45)

Net cash from Financing activities 5,387.24 6,447.14

Cashandcashequivalentsattheendoftheyear 2,453.72 2,062.98

(`inCrore)

ThedepreciationhasbeenappliedconsideringthetechnicallifeofeachdepreciableassetclassasprescribedbyCERCviz.transmissionlines–35yearsandsubstations–25yearsonstraightlinemethod.TheusefullifeforACandDCSubstationandGISforwhichNoticeInvitingTenderhasbeenfloatedonorafter01/04/2014shallbeconsideredas35years.

DepreciationonassetsoftelecomandconsultingbusinessisprovidedforonstraightlinemethodasperusefullifespecifiedinSchedule-IIoftheCompaniesAct,2013.ULDCassetscommissionedpriorto1stApril,2014aredepreciatedonstraightlinemethod@6.67%perannum.

(iv) Transmission, Administration and Other Expenses

Transmission,administrationandotherexpensesconsistprimarilyofcostsoftherepairandmaintenanceofbuildings,plantandmachineryandpowercharges.Otheritemsinthiscategoryincludeexpendituresfortravel,security,vehiclehirecharges,insuranceandrentrates&taxesonourproperties.

Transmission,administrationandotherexpensesincreasedby13.70%to 1,540.87croreinFiscal2016from 1,355.16croreinFiscal2015.TheincreaseisonaccountoftheincreaseinGrossBlock(tangibleandintangibleassets)by`31,787.66croreaddedatvariouspointsoftimeduringFiscal2016andfullyearimpactofassetsaddedinGrossBlockduringFiscal2015ascertainexpensesthatwereearlierbeingcapitalizedduringtheconstructionoftheprojectarenowtreatedasanoperatingexpensesubsequenttothecommissioningoftheproject.

Profit before Tax

Yourcompany’sprofitbeforetaxinFiscal2016was`7,618.73crore,anincreaseof21.14%overtheprofitbeforetaxof`6,289.38croreinFiscal2015.

Provision for Tax

In Fiscal 2016, we provided for `1,574.79croreofMinimumAlternateTax,compared to`1,280.99crore inFiscal2015.The increasewasprimarilyduetoincreaseinProfitbeforetaxinFiscal2016.

Provisionfordeferredtaxismadeinrespectoftimingdifferencemainlyonaccountofhigherdepreciationchargeavailableunderincometaxprovisions.

Thetariffnormsfortheblockperiod2014-19notifiedbytheCERCprovideforgrossingupofthereturnonequitybasedoneffectivetaxrateforthefinancialyearbasedontheactualtaxpaidduringtheyearonthetransmissionincome.Accordingly,deferredtaxprovidedduringtheyearended31stMarch,2016onthetransmissionincomeisaccountedas‘DeferredAssetsagainstDeferredTaxliability’.DeferredAssetsagainstDeferredTaxliabilityfortheyearwillbereversedinfutureyearswhentherelateddeferredtaxliabilityformsapartofcurrenttax.

Profit after Tax

Yourcompany’sProfitafterTaxinFiscal2016was`6,026.72crore,anincreaseof21.04%overtheProfitafterTaxof`4,979.17croreinFiscal2015.

Liquidity and Capital Resources

Yourcompanydependsonbothinternalandexternalsourcesofliquiditytoprovideworkingcapitalandtofundcapitalrequirements.Thecapitalexpenditureshavebeenfundedwithinternallygeneratedfundsanddebtfinancing.AsatMarch31,2016,yourcompanyhadcashandcashequivalentsof`2,453.72crore.AsatMarch31,2016,wealsohadunutilizedBankGuaranteeslimitsofapproximately`149.18croreforcapitalrequirementsandcommittedandundrawncashcreditfacilitiesofapproximately`300crore(“cashcredit”)towardsourworkingcapitalfacilities.

Cash Flows

Net Cash from Operating Activities

Yourcompany’snetcashflowsfromoperatingactivitiesareprincipallyusedtoservicelong-termdebt,forcapitalexpenditures,forinvestmentsand for payment of dividend.

The net cash from operating activities was `16,151.11croreinFiscal2016asagainst`15,041.77croreinFiscal2015.

Net Cash (Used in) Investment Activities

Yourcompany’snetcashusedininvestingactivitieswas`21,147.61croreinFiscal2016asagainst 23,843.45croreinFiscal2015.Thisprimarilyreflectedexpendituresonfixedassetsandcapitalwork-in-progressaswellasconstructionstoresof`20,487.78crore,receiptofinterestanddividend income of `167.69crore&loangiventoSubsidiariesof`930.02crore.

Net Cash from Financing Activities

InFiscal2016,yourcompany’snetcashflowfromfinancingactivitieswas`5,387.24croreasagainst`6,447.14crore inFiscal2015.Yourcompany raised `17,199.23croreofnewborrowings.TheseborrowingsincludedprincipallyRupeedenominatedbondsandforeigncurrency

53

borrowings. The company repaid `5,772.15croreofborrowingsandpaidinterestandfinancechargesof`4,714.84crore.IntheFiscal2016,wepaid dividends of `1,103.87crorecomprisingfinaldividendforFiscal2015andaninterimdividendforFiscal2016.Thedividendforthefinancialyear2015-16(includingproposedfinaldividend@15.10%)is`1,208.50crore.Thedividendpayoutworksto20.05%ofPAT.

Capital Expenditure

Yourcompany’scapitalexpenditureisprimarilyfortheinstallationofnewtransmissioncapacityandtheexpansionofexistingcapacity.OurcapitalexpenditureinFiscal2016andFiscal2015,were`22,584croreand`22,456crore,respectively.

Return on Equity

ThereturnonequitythatwerepermittedinFiscal2016ontransmissionassetsunderourtariffshasbeen15.5%.OuractualReturnonEquityfromperiodtoperiodacrossourentirebusinessinFiscal2016is14.15%asagainst13.09%inFiscal2015.

Fixed Assets

Yourcompany’s totalfixedassets (NetBlock)were`1,49,108.59croreand`1,29,568.40croreasatMarch31,2016andMarch31,2015,respectively.Fixedassetshavebeencategorizedas–(i)TangibleAssets;(ii)Intangibleassets;(iii)Capitalworkinprogress;and(iv)Intangibleassets under development.

(i) Tangible Assets

Our Tangible Assets consist of plant and machinery such as transmission lines, substations, HVDC and ULDC equipment and othertransmission equipment; buildings; land; office equipment; fixtures; andmotor vehicles. Tangible Assets value (Net Block) increasedfrom `88,902.51croreinFiscal2015to`1,14,207.36croreinFiscal2016,anincreaseby28.46%.Theseincreasesaremainlyduetothecommissioning of new transmission assets.

(ii) Intangible assets

OurIntangibleAssetsconsistofElectronicDataProcessingSoftwareandRightofWay-AfforestationExpenses.Thevalueofunamortizedintangible assets increased from `783.70croreinFiscal2015to`950.54croreinFiscal2016,anincreaseby21.29%.

(iii) Capital work in progress

Yourcompany’scapitalwork-in-progresswas`33,778.58croreand`39,670.90crore,asatMarch31,2016and2015,respectively,andecreaseof14.85%.Thecostofmaterialsconsumed,erectionchargesandotherexpensesincurredfortheimplementationofprojectsareshownonthebalancesheetascapitalwork-in-progress,pendingcapitalizationofthecompletedproject.Thechangeinthisamountisduetocapitalizationofanumberoftransmissionprojectsoncommissioningoftheseprojectsandduetoundertakingofnewtransmissionprojects.

(iv) Intangible assets under development

AfforestationExpensesincurredinrelationtotheimplementationofprojects(pendingcapitalization)areshownonthebalancesheetasintangible assets under development. The value of Intangible assets under development was `172.11croreand`211.29crore,asatMarch31,2016and2015,respectively.

Construction stores

Construction stores were `9,859.27croreand`13,041.96croreasatMarch31,2016and2015,respectively.Theseamountsrepresentcapitalexpenditureonthenewaswellasongoingtransmissionprojects.Thedecreaseismainlyduetothecapitalisationofnewtransmissionprojects.

Investments

Investmentshavebeenclassifiedintocurrentandnon-currentcategories.AsatMarch31,2016,theNon-currentInvestmentsandCurrentInvestments were `771.28croreand`35.64croreasagainst`740.99croreand`185.43crore,respectivelyasatMarch31,2015.Investmentsunder‘Current’categoryarethosewhicharerealizableorintendedtoberealizablewithin12monthsafterthereportingdate.Yourcompany’sInvestmentsforFiscal2016consistofbondsissuedbytheSEBsandequityinvestmentinSubsidiaries/JointVentures.

Loans and Advances

Theloansandadvanceshavebeenclassifiedintolong-term&short-termcategories.AsatMarch31,2016,thelong-termloans&advancesandshort-termloans&advanceswere`4,838.56croreand`794croreasagainst`4,177.89croreand`566.42crore,respectivelyasatMarch31,2015.Long-termloansandadvancesincludeadvancesforcapitalexpenditure,loanstoemployees,leasereceivables(representingcertaincapitalexpendituresmadebythecompanyinrespectofthestatesectorULDCsofallfiveregions,forwhichtheconstituentsofthoseregionsarereimbursingthecompanyonafinanceleasebasis),loansandadvancestocontractors,advanceincometax&TDSandotherdepositswithtaxauthorities(NetofTaxprovided),LoanstoSubsidiaries,advancestorelatedpartiesandallotherloansandincludeadvanceswhicharenotexpectedtoberealizedwithinnext12monthsfromthereportingdateorwithinnormaloperatingcyclewhicheverislonger.TheincreaseinloansandadvancesfromFiscal2015toFiscal2016wasmainlyduetoincreaseinLoanstoSubsidiaries.

Inventories

Inventoriesarevaluedat lowerofthecost,determinedonweightedaveragebasis,andnetrealizablevalue.Thecostsof inventorieswere`823.68croreasatMarch31,2016asagainst`717.75croreinfiscal2015.Ourinventoriesconsistsoftransmissionlineitemssuchastowerparts,conductors,insulatorsandotheritemsandsubstationitemssuchastransformers,circuitbreakers,ICTsandotheritems.ThecostofourinventoriesincreasedinFiscal2016ascomparedwithFiscal2015,onaccountofyourcompanycontinuingtoexpandthetransmissionnetworkandcapitalizationofnewprojects.

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Long-term borrowings

Yourcompany’slong-termborrowings(excludingcurrentmaturities)asatMarch31,2016and2015were`1,00,239.75croreand`89,375.84crore,respectively.Long-termborrowingsincludeamountsraisedfromourprivateplacementofbonds,termloansfrombanks,loansfromtheWorldBank,AsianDevelopmentBank,kfwGermanyandotherForeignFinancialInstitutions.Duetotheincreasedinvestmentinnewprojectsduring the last year, our borrowings have increased.

Secured Loans

Oursecuredloans(excludingcurrentmaturitiesoflongtermloans)asatMarch31,2016and2015were`94,176.18croreand`84,554.04crore,respectively.MostoftheseloanshavebeensecuredbyfloatingchargesonthemoveableandimmoveablepropertiesoftheCompany.Thefollowingtablepresentsthesecureddebtasat31st March, 2016:

Unsecured Loans

Ourunsecuredloans(excludingcurrentmaturitiesasatMarch31,2016and2015)were`6,063.57croreand`4,821.80 crore respectively, which consistof(tenyear)foreigncurrencybonds,loansfromforeignfinancialinstitutionssuchastheNatixis(FormerlyCreditNational)inFrance,JapanInternationalCo-operationAgency(FormerlyJapanBankforInternationalCo-operation) inJapan,SkandinaviskaEnskildaBankenAB(publ)inSwedenandABSvenskExportkredit,Sweden.

Loan Name 2016-17 2017-18 2018-19 2019-20 Beyond 2020-21 Balance as on 31.03.2016

Domestic Bond 3,446.00 3,812.47 5,211.98 6,742.98 43,174.51 62,387.94

Domestic Loan 454.23 454.00 454.00 1,454.00 9,669.00 12,485.23

Foreign Loan

US$ 1,793.50 1,579.11 1,659.46 1,906.65 20,950.15 27,888.87

EUR 48.60 57.10 57.10 57.10 628.32 848.22

SEK 328.47 367.90 367.90 367.90 1159.51 2,591.68

JPY 10.86 10.86 10.86 10.86 76.03 119.47

Grand Total 6,081.66 6,281.44 7,761.30 10,539.49 75,657.52 10,6321.41

Amount (` in crore) % of total secured debt

Bonds denominated in Rupees 58,941.94 62.59

OtherLoansandAdvancesFromBanksandFinancialInstitutions:

Denominated in Foreign Currency* 23,203.24 24.64

Denominated in Rupees 12,031 12.77

Total 94,176.18 100

(`inCrore)

Trade Receivables

Trade Receivables consist mainly of receivables relating to transmission services, and also receivables from consultancy services and telecom services.OurTradeReceivablesasonMarch31,2016and2015were`2,737.97croreand`2,118.65crore, respectively.Tradereceivablesincreasedby29.23%inFiscal2016ascomparedtoFiscal2015.

Substantially, all of our receivables are covered by letters of credit, following which we have no material debt collection problems.

Other Current Assets

OurothercurrentassetsasatMarch31,2016and2015respectively,were`3,136.79croreand`2,278.87crore.Othercurrentassetsincreasedby37.65%inFiscal2016ascomparedtoFiscal2015,mainlyduetoincreaseinmonthlybillandnon-availabilityofCERCTariffOrdersforsomeof the assets commissioned during Fiscal 2016.

Indebtedness

WerelyonbothRupeeandforeigncurrencydenominatedborrowings.Asignificantpartofourexternalfundinghasbeenthroughlong-termforeigncurrencyloansfrommultilateralagenciessuchastheWorldBankandtheAsianDevelopmentBank,withourperformanceundersuchloans guaranteed by the GoI.

The following table sets forth, by currency, our outstanding debt and the periods during which debt amounts mature or payment is otherwise due.Currencyconversionsareasof31st March, 2016:

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ThefollowingtablepresentsourunsecureddebtasatMarch31,2016:

Advance Against Depreciation (AAD)

Advanceagainstdepreciation(AAD)isacomponentoftariffandwerepermittedtochargeunderCERCregulationsfortheBlock2004-09,tocovershortfallinrespectofdepreciationinayearonassets,forrepaymentofdebts.AADwasdoneawaywithinthetariffblock2009-2014anddepreciationratewerereworked.Duetochangeinthesetariffnormsandthedepreciationratesw.e.f.01.04.2009,theoutstandingAADhasbeentakentotransmissionincomeafter12yearsfromthedateofcommercialoperationtotheextentthedepreciationchargedinrespectoftransmissionsystemismorethanthedepreciationrecoveryundertariff.Ason31stMarch,2016,ourAADhasdecreasedby7.38%from`1,938.57croreinFiscal2015to`1,795.57croreinFiscal2016.

Current liabilities

Yourcompany’scurrentliabilitiesasat31st March, 2016 were `25,253.57crore(previousyear`21,864.52crore).Thecurrentliabilitiesincludeshort-termborrowings,Tradepayables,shorttermprovisionsandothercurrentliabilities.CurrentliabilitiesatMarch31,2016were15.50%higherascomparedtoMarch31,2015.Theincreaseismainlyduetoincreaseinshort–termborrowingsfrom`1,200croreinFiscal2015to`2,000 crore Fiscal 2016, increase in current maturities of Long Term Loans and increase in interest accrued but not due.

Contingent Liabilities

ThefollowingtablesetsforththeprincipalcomponentsofourContingentLiabilitiesasatMarch31,2016and2015:

Amount (` in crore) % of total secured debt

Bonds denominated in Foreign Currency 3,345.00 55.17

OtherLoansandAdvancesFromBanksandFinancialInstitutions:

Denominated in Foreign Currency 2,718.57 44.83

Denominated in Rupees - -

Total 6,063.57 100

Contingent Liabilities (` in Crore)

Description As at 31st March, 2016 As at 31st March, 2015

Claims against the Company not acknowledged as debt in respect of

CapitalWorks 1,666.86 219.14

Land Compensation cases 4,041.30 2,253.11

OtherClaims- 28.66 44.09

DisputedTaxMatters-IncomeTax/SalesTax/Excise 359.03 391.22

Others 342.33 303.56

Bank Guarantee given on behalf of wholly owned subsidiaries of POWERGRID towards performance of the work awarded for-

-POWERGRIDNMTransmissionLtd. 45.00 45.00

-POWERGRIDVizagTransmissionLtd. 45.00 45.00

-POWERGRIDUnchaharTransmissionLtd. 5.40 5.40

-POWERGRIDKalaAmbTransmissionLtd. 5.96 5.96

-POWERGRIDJabalpurTransmissionLtd. 31.50 31.50

-POWERGRIDWaroraTransmissionLimited 62.10 -

-POWERGRIDParliTransmissionLtd. 63.90 -

-POWERGRIDSouthernInterconnectorTransmissionSystemLtd. 110.04 -

-Guaranteefordues&punctualpaymentanddischargeofobligationsagainstbondissuedbyPOWERGRIDVizagTransmissionLimited.

290.00 -

Sub Total 658.90 132.86

Total 7,097.08 3,343.98

Contingentliabilitiesincreasedby112.33%inFiscal2016comparedtoFiscal2015.Thisincreasewasmainlyonaccountof-(i)capitalworks;(ii)Landcompensationcasesand(iii)BankGuaranteegivenonbehalfofwhollyownedSubsidiaries.

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BUSINESS AND FINANCIAL REVIEW OF JOINT VENTURE COMPANIES and SUBSIDIARIES

Joint Venture Company

A) Powerlinks Transmission Limited (POWERLINKS)

POWERGRIDandTataPoweraretheJointVenturePartnersinthisJointVentureCompanyandhold49%and51%equity,respectively.TheCompanywasincorporatedtoundertaketheimplementationofTransmissionLinesassociatedwithTalaHEP,East-NorthinterconnectorandNorthernRegionTransmissionSystemfromSiliguriinWestBengalviaBihartoUttarPradeshandwasthefirstpublic-privatepartnershipinPowerTransmission.POWERLINKShadprogressivelycommissionedtheprojectinAugust,2006anditisundercommercialoperationsince 1stSeptember,2006.Ason31.03.2016,POWERLINKShasAuthorizedsharecapitalof`483.60croreandpaid-upsharecapitalof `468croreoutofwhichPOWERGRIDholdsSharesof`229.32crore.POWERLINKShaspaiddividendof19%amountingto`43.57crorefor Fiscal 2016.

Financial Highlights of the Company

*Face value per Share is `10 each.

B) Jaypee Powergrid Limited (JPL)

ThemainobjectiveoftheCompanywastoimplementatransmissionsystemtoevacuatepowergeneratedby1000MWKarchamWangtooHydroElectricPowerProjectinKinnaurDistrictinHimachalPradesh,fromWangtootoAbdullapur.JaiprakashPowerVenturesLimitedandPOWERGRIDhold74%and26%equityrespectivelyinJPL.Ason31.03.2016,JPLhasAuthorizedandpaid-upsharecapitalof`300croreoutofwhichPOWERGRIDholdsSharesof`78crore.TheprojectwasprogressivelycommissionedinApril,2012.JPLhaspaiddividendof12.5%amountingto`9.75croreforFiscal2016.

Financial Highlights of the Company

*Face value per Share is `10 each.

C) Torrent Powergrid Limited (TPL)

ThemainobjectiveoftheCompanywastoestablishtransmissionsystemassociatedwith1100MWGasBasedproject(Sugen)GenerationStationofTorrentPowerLtd.(TPL)atAkhakholinSuratDistrictofGujarat.POWERGRIDandTorrentPowerLtd.hold26%and74%equity,respectivelyinTPL.Ason31.03.2016,TPLhasAuthorizedsharecapitalof`125croreandpaid-upsharecapitalof`90croreoutofwhichPOWERGRIDholdsSharesof`23.40crore.TheprojectwasprogressivelycommissionedinMarch,2011anditisinoperation.

Financial Highlights of the Company

*Face value per Share is `10 each.

D) North East Transmission Company Ltd.(NETC)

POWERGRIDenteredintoaJointVentureAgreementinFebruary,2009withONGCTripuraPowerProjectCompanyLtd.(OPTC),GovernmentofTripura,Manipur,Mizoram,AssamElectricityGridCorporationLtd,MeghalayaandNagalandforestablishmentofTransmissionLineof400kVD/CPalatana-SilcharBongaigoanTransmissionProjectassociatedwith726.6MWPalatanaGasbasePowerProject inthestate

Particulars Fiscal 2016 Fiscal 2015

POWERGRID’sinvestmentinEquity 229.32 229.32

Gross Income 248.24 257.98

ProfitafterTax 108.96 112.11

Earning per Share* 2.33 2.40

Particulars Fiscal 2016 Fiscal 2015

POWERGRID’sinvestmentinequity 78.00 78.00

Gross Income 50.37 68.31

Profit/(loss)afterTax 50.37 68.31

Earnings per Share* 1.68 2.28

Particulars Fiscal 2016 Fiscal 2015

POWERGRID’sinvestmentinEquity 23.40 23.40

Gross Income 56.25 60.15

ProfitafterTax 7.72 13.90

Earning per Share* 0.86 1.55

(`incrore)

(`incrore)

(`incrore)

57

ofTripura.TheJointVentureCompanyisnamed‘NorthEastTransmissionCompanyLimited’.OTPC,thegeneratingCompanyisajointventureofONGCLtd.,GovernmentofTripuraandInfrastructureLeasing&FinanceServicesLtd.,(IL&FSLtd.).Ason31.03.2016,NETCLhasAuthorizedcapitalof`600croreandpaid-upsharecapitalof`411.4croreoutofwhichPOWERGRIDholdsSharesof`106.96crore.TheprojectwasprogressivelycommissionedinFebruary,2015.

Financial Highlights of the Company

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

E) Parbati Koldam Transmission Company Limited (PKTCL)

POWERGRIDenteredintoaJointVentureAgreementon23rdNovember,2007withRelianceEnergyLimited(REL)nowRelianceInfrastructureLtd,forimplementationoftransmissionlinesassociatedwithParbati-II(800MW)HEPandKoldam(800MW)HEP.TheCompanynamed‘ParbatiKoldamTransmissionCompanyLimited’tookupimplementationofParbatiandKoldamTransmissionsystemsthroughJointventurerouteandgottheTransmissionLicenseinSeptember,2008.Ason31.03.2016,PKTCLhasAuthorizedsharecapitalof`331.00croreandpaid-upsharecapitalof`272.82croreoutofwhichPOWERGRIDholdsSharesof`70.94crore.TheProjectcommissionedprogressivelyinNov’2015andthereisprofitof`15.16Cr.

F) Teestavalley Power Transmission Limited (TPTL)

POWERGRIDenteredintoaJointVentureAgreementwithTeestaUrjaLimitedon23rdNovember,2007on26%equity-POWERGRIDand74%equityTeestaUrjaLimited(TUL)forimplementationoftransmissionlinesofTeesta-IIIviz.400k/VD/Clineassociatedwith1200MWTeesta-IIIHydroElectricPowerProjecttoKishanganjsub-stationandgottheTransmissionLicenceinFiscal2009.Ason31.03.2016,TPTLhasAuthorizedsharecapitalof`275croreandpaid-upsharecapitalof`258.14croreoutofwhichPOWERGRIDholdsSharesof`67.11crore.Sincetheprojectisunderimplementation,thereisnooperatingprofit.

G) National High Power Test Laboratory Private Limited (NHPTL)

NHPTLisajointventureCompanyofNTPC,NHPC,POWERGRID,DVC&CPRIwithequalequityparticipationof20%each.ThemainaimoftheNHPTListoestablishanonlinehighpowershortcircuittestfacilityinthecountry.Thiswillbefullyindependent,standalone,state-of-the-art,professionallymanaged,internationalclass,OnLineHighPowerShortCircuitTestFacilitybeingestablishedfirsttimeinthecountyatBina(M.P.)toprovideafullrangeofshortcircuittestingfortheelectricalequipmentsinconformancetoIndianandInternationalStandards.Ason31.03.2016,NHPTLhasAuthorisedsharecapitalof`153croreandpaidupsharecapitalof`110.48 crore out of which POWERGRIDholdsSharesof`23.90crore.Theprojectisunderimplementationandhencethereisnooperatingprofit.

H) Energy Efficiency Services Limited (EESL)

POWERGRIDenteredintoaJointVentureAgreementinNovember,2009withequalparticipation(25%equityeach)withNTPCLtd.,PowerFinanceCorporationLtd.andRuralElectrificationCorporationLtd.EESLwillpromotemeasuresofEnergyefficiency,EnergyConservationandClimateChangeandiscarryingoutbusinessrelatedtoenergyauditofGovt.buildings,consultancyassignmentsetc.Ason31.03.2016,EESL has Authorised share capital of `500croreandpaid-upsharecapitalof`165croreoutofwhichPOWERGRIDholdsSharesof`22.5crorei.e.(13.6%).

I) Bihar Grid Company Limited (BGCL)

POWERGRIDenteredintoaShareholders’Agreementon29.12.2012withBiharStatePower(Holding)CompanyLimited{BSP(H)CL}forimplementationofintra-StateTransmissionSystemintheStateofBiharon50:50equityparticipationbasis.TheCompanyisimplementingBihar Transmission System Strengthening Schemes in Phase IV, Part I worth `1699crore.ThecompanyhasbeengrantedtransmissionlicensebyBERCinJune,2013.Ason31.03.2016,theAuthorisedsharecapitalofBGCLis`200croreandpaid-upsharecapitalof`80.61 croreoutofwhichPOWERGRIDholdsSharesof`40.30crore.Theprojectisunderimplementation,thereisnooperatingprofit.

J) Kalinga Bidyut Prasaran Nigam Private Limited (KBPNL)

POWERGRID has entered into a Shareholders’ Agreement on 04.01.2013with OPTCL for implementation of intra-State TransmissionSystemintheStateofOdishaonthebasisof50:50equityparticipation.ThecompanyhasbeengrantedtransmissionlicenseforPhase-IProjects(worth`599.50Crore)byOERC.

K) RINL POWERGRID TLT Private Limited (RPTPL)

POWERGRIDandRINLhaveformedajointventurecompany,“RINLPOWERGRIDTLTPrivateLimited(RPTPL)”,on50:50equityparticipationbasis,forsettingupaTransmissionLineTower(TLT)manufacturingplantatVisakhapatnamwithaviewtoexploittheemergingopportunityin transmission line tower manufacturing business in India and abroad.

RINLwillsupplyqualityrawmaterialinformofre-rollablesteel/blackanglestothejointventurecompanytofurtherproduceTransmissionLine Tower and Tower Parts. The TLT Manufacturing Plant will have an annual capacity of 120,000 tonnes.

Particulars Fiscal 2016 Fiscal 2015

POWERGRID’sinvestmentinEquity 106.96 106.96

Gross Income 439.43 373.16

ProfitafterTax (135.05) 124.68

Earning per Share* (3.28) 3.03

(`incrore)

58

ThejointVentureCompanywasincorporatedon19.08.2015withaninitialAuthorizedshareCapitalof`20Lakhs.Subsequently,Authorizedsharecapitalwasincreasedandason31.03.2016,RPTPLhasAuthorizedsharecapitalof`2.00crore.Theprojectisunderimplementation.

L) Cross Border Power Transmission Company Limited (CPTCL)

POWERGRIDentered intoaJointVentureAgreement inJuly,2012withIL&FSEnergyDevelopmentCompanyLimited(IEDCL),SJVNLLimited(SJVNL)&NepalElectricityAuthority(NEA)forimplementationofIndianportionofthetransmissionline,i.e.Muzaffarpur-SursandsectiononIndiansideof400kVD/CMuzaffarpur-DhalkebarIndo-NepalCrossBordertransmissionline.InCPTCLequityparticipationofPOWERGRID,SJVNL,IEDCLandNEAare26%,26%,38%and10%respectively.Theestimatedcostoftheprojectis 252.83croreandtheprojectisbeingimplementedon80:20debt:equityratio.Ason31.03.2016,CPTCLhasAuthorizedsharecapitalof`75croreandpaid-upshare capital of `39.69croreoutofwhichPOWERGRIDholdsSharesof`10.32crore.Thelineisundercommercialoperationw.e.f.19th February, 2016.

M) Power Transmission Company Nepal Limited (PTCN)

POWERGRIDenteredintoaJointVentureAgreementinApril,2014withNEA,HydroelectricityInvestmentandDevelopmentCompanyLtd(HIDCL)andIEDCLforimplementationofNepaleseportionofthetransmissionline,i.e.Dhalkebar-BhittamodsectiononNepalsideof400k/VD/CMuzaffarpur-DhalkebarIndo-NepalCrossBordertransmissionline.InPTCNequityparticipationofPOWERGRID,NEA,HIDCLandIEDCLare26%,50%,14%and10%respectively.Theestimatedcostoftheprojectis`101croreandtheprojecthasbeenenvisagedtobeimplementedon70:30debt:equityratio.Ason31.03.2016,PTCNhasAuthorizedsharecapitalofNPR300Millionandpaid-upsharecapitalNPR300Million.AtpresentPOWERGRIDequityisNPR78Million(`4.88crore).TheNepaleseandIndianportionofthelineshallfacilitateexchangeofpowerbetweentwocountries.Thelineisundercommercialoperationw.e.f.19th February, 2016.

Subsidiary Company

A) Power System Operation Corporation Limited

Power SystemOperation Corporation Ltd (POSOCO)was incorporated as awholly owned subsidiary of POWERGRID on 20.03.2009.POSOCO,isresponsibleforIndependentSystemOperation.Ason31.03.2016,POSOCOhasAuthorizedsharecapitalof`200 crore and paid-upsharecapitalof`30.64crore.Thecompanypaidaninterimdividendof`4.75croreduringtheFY2015-16.

*(in ` per Share Face value per Share is `10each.)

B) POWERGRID NM Transmission Limited

POWERGRIDNMTransmissionCompanyLimited(PNMTL),formerlyknownasNagapattinam-MadhugiriTransmissionCompanyLimitedwasacquiredbyPOWERGRIDonMarch29,2012underTariffBasedCompetitiveBiddingforestablishingTransmissionSystemassociatedwithIPPsofNagapattinam/CuddaloreArea(PackageA)fromPFCConsultingLtd(theBidProcessCo-ordinator).Consequenttosuchacquisition,PNMTLbecamethewhollyownedsubsidiaryofPOWERGRID.Thetransmissionsystemcomprising765kVD/Cand765kVS/CistotraversethestatesofTamilNaduandKarnataka.Ason31.03.2016,PNMTLhasanAuthorizedsharecapitalof`65.00Croreandpaid-upsharecapital of `24Crore.ThecompanyhasbeengrantedtransmissionlicensebyCERCinJune,2013.TheProjectisunderimplementation.

C) POWERGRID Vizag Transmission Limited

POWERGRIDVizagTransmissionLimited(PVTL)formerlyknownasVizagTransmissionLimitedwasacquiredbyPOWERGRIDonAugust30,2013underTariffBasedCompetitivebiddingforestablishingTransmissionsystemfor‘SystemStrengtheninginSouthernRegionforimportofpowerfromEasternRegion’fromRECTransmissionProjectsCompanyLimited(theBidProcessCo-ordinator).Consequenttosuchacquisition,PVTLbecamewhollyownedsubsidiaryofPOWERGRID.ThetransmissionsystemcomprisingSrikakulam-Vemagiri765KVD/cLine&Khammam-Nagarjunasagar400kVD/CLine is to traverse thestateofAndhraPradeshandTelangana.Ason31.03.2016,POWERGRIDVTLhasAuthorizedsharecapitalof`90Croreandpaid-upsharecapitalof`54.73Crore.ThecompanyhasbeengrantedtransmissionlicensebyCERCinJanuary,2014.POWERGRIDVizagTransmissionLimitedhassuccessfullyraisedanamountof`290crorefromdomesticsourcesthroughBondIssueat8.90%p.a.interestrepayableafter5years.Khammam-Nagarjunasagar400KVD/CLinehasbeencommissionedduringFY2015-16.Srikakulam-Vemagiri765KVD/cLineisunderconstructionandexpectedtobecompletedby30th August, 2016.

Particulars FY 2015-16 FY 2014-15

Gross Income 231.65 250.02

ProfitafterTax 55.55 48.04

Earnings per Share* 17.90 14.97

Particulars FY 2015-16 FY 2014-15

Gross Income 7.91 NIL

ProfitafterTax 2.97 NIL

Earnings per share 0.54 NIL

(`incrore)

(`incrore)

59

D) POWERGRID Unchahar Transmission Limited

POWERGRIDUnchaharTransmissionLimited(PUTL)(formerlyUnchaharTransmissionLimited)wasacquiredbyPOWERGRIDonMarch24,2014underTariffBasedCompetitivebidding fromRECTransmissionProjectsCompanyLimited (theBidProcessCo-ordinator) forestablishmentofTransmissionSystemforATSofUnchaharTPS.Consequenttosuchacquisition,PUTLbecamewhollyownedsubsidiaryofPOWERGRID.Thetransmissionsystemcomprising400kVD/CistotraversethestateofUttarPradesh.Ason31.03.2016,PUTLhasAuthorizedsharecapitalof`5Croreandpaid-upsharecapitalof`5Lac.ThecompanyhasbeengrantedtransmissionlicensebyCERCinJuly,2014.TheprojectcomparisesUnchahar-Fatehpur400kVtransmmisionlinewhichisunderconstructionandexpectedtobecompletedin September, 2016.

E) POWERGRID Kala Amb Transmission Limited

POWERGRIDKalaAmbTransmissionLimited(PKATL)(formerlyNRSSXXXI(A)TransmissionLimited)wasacquiredbyPOWERGRIDonMay12,2014underTariffBasedCompetitivebiddingfromRECTransmissionProjectsCompanyLimited(theBidProcessCo-ordinator)forestablishmentofTransmissionSystemforNorthernRegionsystemStrengtheningScheme,NRSS-XXXI(Part-A).Consequenttosuchacquisition,PKATLbecamewhollyownedsubsidiaryofPOWERGRID.Thetransmissionsystemcomprising400/220kVGISsubstation,400kVD/CLILOandSeriesCompensationiscontemplatedinthestateofHimachalPradesh.Ason31.03.2016,PKATLhasAuthorizedsharecapital of `5Croreandpaid-upsharecapitalof`5Lac.ThecompanyhasbeengrantedtransmissionlicensebyCERCinSeptember,2014.

F) POWERGRID Jabalpur Transmission Limited

POWERGRIDJabalpurTransmissionLimited(PJTL)(formerlyVindhyachalJabalpurTransmissionLimited)wasacquiredbyPOWERGRIDonFebruary26,2015underTariffBasedCompetitivebidding fromRECTransmissionProjectsCompanyLimited (theBidProcessCo-ordinator) for establishment of Transmission System Strengthening associated with Vindhyachal-V. Consequent to such acquisition,PJTL became wholly owned subsidiary of POWERGRID. The transmission system comprising 765kV D/C transmission line is totraversethestateofMadhyaPradesh.Ason31.03.2016,PJTLhasAuthorizedsharecapitalof`20Croreandpaid-upsharecapitalof `5Lac.TheCompanyhasbeengrantedtransmissionlicensebyCERCinJune,2015.

G) POWERGRID Warora Transmission Limited

POWERGRID Warora Transmission Limited (PWTL) (formerly Gadarwara (A) Transco Limited) was acquired by POWERGRIDon April 24, 2015 under Tariff Based Competitive bidding from REC Transmission Projects Company Limited (the Bid ProcessCo-ordinator) for establishment of Transmission System Associated with Gadarwara STPS (2 x 800 MW) of NTPC (Part-A).Consequent to such acquisition, PWTL became wholly owned subsidiary of POWERGRID. The transmission system iscontemplated in the states of Maharashtra and Madhya Pradesh and comprises 765kV D/C, 400kV D/C transmission lines andestablishment of 2X1500 MVA 765/400 kV new substation in Warora. As on 31.03.2016, PWTL has Authorized share capital of `20Croreandpaid-upsharecapitalof`5Lac.TheCompanyhasbeengrantedtransmissionlicensebyCERCinAugust,2015.

H) POWERGRID Parli Transmission Limited

POWERGRIDParli TransmissionLimited (PPTL) (formerlyGadarwara (B)TransmissionLimited)wasacquiredbyPOWERGRIDonApril24,2015underTariffBasedCompetitivebidding fromRECTransmissionProjectsCompanyLimited (theBidProcessCo-ordinator) forestablishmentofTransmissionSystemAssociatedwithGadarwaraSTPS(2x800MW)ofNTPC(Part-B).Consequenttosuchacquisition,PPTLbecamewhollyownedsubsidiaryofPOWERGRID.ThetransmissionsystemiscontemplatedinthestateofMaharashtraandcomprises765kVD/C,400kVD/Ctransmissionlinesandestablishmentof2X1500MVA765/400kVnewsubstationinParli.Ason31.03.2016,PPTLhasAuthorizedsharecapitalof 20Croreandpaid-upsharecapitalof 5Lac.TheCompanyhasbeengrantedtransmissionlicensebyCERCinJuly,2015.

(I) POWERGRID Southern Interconnector Transmission System Limited

POWERGRIDSouthernInterconnectorTransmissionSystemLimited(PSITSL)(formerlyVemagiriIITransmissionLimited)wasacquiredbyPOWERGRIDon4thDecember,2015underTarrifbasedCompetitivebiddingfromRECTransmissionProjectsCompanyLimited(theBidProcessCo-ordinator)for“StrengtheningofTransmissionSystemBeyondVemagiri’Project.Consequenttosuchacquisition,PSITSLbecamewhollyownedsubsidiaryofPOWERGRID.Thetransmissionprojectcomprises765kV&400kV,D/CtransmissionlinesistotraversethestatesofAndhraPradesh,Telangana&Karnatakaand includeestablishmentofone765/400kVSubstationaswellas400kVbayextensionsattwoexistingsub-stationsintheStateofAndhraPradesh.Ason31.03.2016,PSITSLhasAuthorizedsharecapitalof`1 Crore andpaid-upsharecapitalof`5Lac.TheCompanyhasbeengrantedtransmissionlicensebyCERCinMarch,2016

J) Grid Conductors Limited (GCL)

GridConductorsLimited(GCL),a100%wholeownedsubsidiaryofPOWERGRIDwasincorporatedon15.09.2015tosetupanAluminiumConductorManufacturingPlantof30,000kmperannum(60,000TPAapprox.)CapacityatAluminiumParkAngul,Odisha,withanobjectivethathavingownmanufacturingfacilitywillbeadvantageoustoPOWERGRIDforcompetingunderTariffBasedCompetitiveBidding(TBCB)Projects,improvingreliability,ensuretimelysupplyandalsohelpinmeetingcontingencyrequirements.

K) POWERGRID Vemagiri Transmission Limited

POWERGRIDVemagiriTransmissionLimited(formerlyVemagiriTransmissionSystemLimited)wasacquiredbyPOWERGRIDonApril18,2012underTariffBasedCompetitivebidding forestablishingTransmission systemassociatedwith IPPsofVemagiriArea (PackageA)fromRECTransmissionProjectsCompanyLimited(theBidProcessCo-ordinator).Consequenttosuchacquisition,POWERGRIDVemagiriTransmissionLtd.becamewhollyownedsubsidiaryofPOWERGRID.Thetransmissionsystemcomprising765kVD/CistotraversethestateofAndhraPradeshandTelangana.Ason31.03.2016,POWERGRIDVemagiriTransmissionLtd.hasAuthorizedandpaid-upsharecapital

60

of `5Lac.CERCvideOrderdated06.04.2015statedthatVemagiri-Khammam-Hyderabad765kVD/Clinesundertheprojectisneitherrequiredasanevacuationlinenorasasystemstrengtheningline,nousefulpurposewillbeservedbyadoptingthetransmissionchargesandgrantinglicensetothepetitionerforthesaidtransmissionlineandhaswithdrawntheregulatoryapprovalfortheTransmissionproject.

Consolidated financial statement of POWERGRID

TheconsolidatedfinancialstatementshavebeenpreparedinaccordancewithAccountingStandards(AS-21)‘ConsolidatedFinancialStatements’andAccountingStandards(AS-27)‘FinancialreportingofInterestsinJointVentures’andareincludedinthisAnnualReport.

A brief summary of the results on a consolidated basis is given below:

Cautionary Statement:

StatementintheManagementDiscussionandAnalysisandDirectors’ReportdescribingtheCompany’sobjectives,projectionsandestimates,areforward-lookingstatementsandprogressivewithinthemeaningofapplicablelawsandregulations.Actualresultsmayvaryfromthoseexpressedor implied, depending upon economic conditions, Government Policies and other incidental factors. Readers are cautioned not to place undue relianceontheforwardlookingstatements.

For and on behalf of the Board of Directors

(I.S.JHA)

Chairman&ManagingDirector

FY 2015-16 FY 2014-15

Gross Income 21,780.76 18,233.04

ProfitbeforeTax 7,644.95 6,404.11

ProfitafterTax 6,014.56 5,046.25

Net Cash from operating activities 16,900.00 15,800.08

(`incrore)

Place: New DelhiDate: 08.08.2016

61

ANNEXURE II TO THE DIRECTORS’ REPORT

Business Responsibility ReportSection A: General Information about the Company

Section B: Financial Details of the Company

Section C: Other Details

1. Does the Company have any Subsidiary Company/ Companies?

Yes.AsonMarch31, 2016,POWERGRIDhadeleven wholly owned subsidiaryCompanies viz. PowerSystemOperationCorporationLtd.(POSOCO),POWERGRIDNMTransmissionLimited(formerlyNagapattinam-MadhugiriTransmissionCompanyLimited),POWERGRIDVemagiriTransmissionLimited(formerlyVemagiriTransmissionSystemLimited),POWERGRIDVizagTransmissionLimited(formerlyVizag

1 CorporateIdentityNumber(CIN)oftheCompany L40101DL1989GOI038121

2 Name of the Company Power Grid Corporation of India Ltd

3 Registered address B-9,QutabInstitutionalArea,KatwariaSarai,NewDelhi-110016

4 Website www.powergridindia.com

5 E-mailid sustainability.report@powergrid.co.in

6 FinancialYearreported 2015-16

7 Sector(s)thattheCompanyisengagedin(industrialactivitycode-wise)

Sector(s) ITC Code No.

InterStateTransmissionSystem(ISTS),CentralTransmissionUtility(CTU)ofcountry

99691110

Telecom 99841100

Consultancy&ProjectManagement 99833244

8 Listthreekeyproducts/servicesthattheCompanymanufactures/provides(asinbalancesheet)

i)Transmission

ii)Telecom

iii)ConsultancyServices(Domestic/International)

9 Total number of locations where business activity is undertakenbytheCompany

i)NumberofInternationalLocations(Providedetailsofmajor5)

ii)NumberofNationalLocations

(i) International: POWERGRIDhasstrongpresenceinConsultancybusiness in all facets of services of Transmission System with its InternationalClientelespreadineighteencountriesWorldover.Majorfive include Kenya, Nepal, Bhutan, Bangladesh and CASA (KyrgyzRepublic,Tajikistan,Afghanistan&Pakistan).

(ii) National: Total217which includes207sub-stations,9Regionalheadquartersand1corporateofficeatGurgaon.Telecomdepartmenthasitspointsofpresenceinmorethan500locationsspreadacrossthecountry. Apart from above, a no. of substations and transmission lines are presently under construction and personnel are located on various site(s).

10 MarketsservedbytheCompany-Local/State/National/International/

POWERGRIDhasfootprintinallthemarkets-Local/State/National/International.

1 Paid up Capital ` 5231,589,6480

2 Total Turnover ` 21281.13crore

3 TotalProfitafterTaxes` 6026.72Crore

4 Total Spending on Corporate Social Responsibility (CSR)asapercentageofprofitaftertax(%)

During FY 2015-16, the Company has spent `121.79 Crore [2% ofaverage net profit of the Company for last three financial years] onvarious CSR activities.

5 Listofactivitiesinwhichexpenditurein4abovehasbeen incurred

InfrastructurecreationforRuralDevelopment,SkillDevelopmentprogrammes,Education,Health,EnvironmentalSustainability,etc.

62

TransmissionLimited),POWERGRIDUnchaharTransmissionLimited(formerlyUnchaharTransmissionLimited),POWERGRIDKalaAmbTransmissionLimited{formerlyNRSSXXXI(A)TransmissionLimited},POWERGRIDJabalpurTransmissionLimited(formerlyVindhyachalJabalpurTransmissionLimited),POWERGRIDWaroraTransmissionLimited{formerlyGadarwara(A)TranscoLimited},POWERGRIDParliTransmissionLimited{formerlyGadarwara(B)TransmissionLimited},POWERGRIDSouthernInterconnectorTransmissionSystemLimited{formerlyVemagiriIITransmissionLimited}andGridConductorsLimited.

2. Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s)

Yes.SubsidiariesofPOWERGRIDgenerallycontibuteinitsBRinitiatives,however,POSOCOalsoundertakeaddtionalactivitiesindependently.

3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30-60%, More than 60%]

Yes.TheEnvironmentalandSocialPolicy&Procedures(ESPP)ofPOWERGRIDencompassthecompany, itsJointVentureCompany–PowerlinksTransmission Limited, subsidiaries in general and relative aspects pertaining toVendors / Suppliers /Contractors throughcontractconditions.Vendors/Suppliers/Contractorsarerequiredtocomplywiththeprovisionsofthelabourlaws,environmentallaws&effectualsafetyplansthroughstipulationsintheConditionsofContract.ThepercentageofsuchVendors’/Suppliers’/Contractors’aremorethan 60%.

Section D: BR Information

1. Details of Director/Directors responsible for BR

a) DetailsoftheDirector/DirectorresponsibleforimplementationoftheBRpolicy/policies

ThedetailoftheDirectorresponsibleforimplementationoftheBRpolicy/policiesisasunder:

• DINNumber:02319702

• Name:ShriR.P.Sasmal

• Designation:Director(Operations&Projects)

b) DetailsoftheBRhead

2. Principle-wise (as per NVGs) BR Policy/policies (Reply in Y/N)

The National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business released by the Ministry of Corporate Affairs has adopted following nine areas of Business Responsibility:

S.No. Particulars Details

1. DINNumber(ifapplicable) NA

2. Name Shri Atul Trivedi

3. Designation ExecutiveDirector(Envt.&SocialManagement,CSR&LACDeptt.)

4. Telephone number 0124-2571980

5. e-mailid atul.trivedi@powergridindia.com

P1 Business should conduct and govern themselves with ethics, Transparency and Accountability

P2 Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle

P3 Businesses should promote the wellbeing of all employees

P4 Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalised.

P5 Businesses should respect and promote human rights

P6 Businessshouldrespect,protect,andmakeeffortstorestoretheenvironment

P7 Businesses,whenengagedininfluencingpublicandregulatorypolicy,shoulddosoinaresponsiblemanner

P8 Businessesshouldsupportinclusivegrowthandequitabledevelopment

P9 Businesses should engage with and provide value to their customers and consumers in a responsible manner

63

*Conformsto/areupdated/reviewedinaccordancewith,theNationalStandardsincludingGOI/CVC/DPEGuidelines,applicablelawsetc

#POWERGRID’sESPPiscomprehensivelyanalysedbytheWorldBankunderits‘UseofCountrySystem(UCS)’policyandiscertifiedtobecompliantwithBank’senvironmentalandsocialsafeguardsrequirement.

2a. If answer to S.No. 1 against any principle, is ‘No’, please explain why: (Tick up to 2 options)

S.No. Questions P 1 P 2 P 3 P 4 P 5 P 6 P 7 P 8 P 9

1. Doyouhavepolicy/policiesfor.... Y Y Y Y Y Y N Y Y

2. Hasthepolicybeingformulatedinconsultationwiththerel-evantstakeholders?*

Y Y Y Y Y Y NA Y Y

3. Doesthepolicyconformtoanynational/internationalstan-dards?Ifyes,specify?*(50words)

Y Y Y Y Y Y# NA Y Y

4. HasthepolicybeingapprovedbytheBoard?Ifyes,hasitbeensignedbyMD/owner/CEO/appropriateBoardDirector?

Y Y Y Y Y Y NA Y Y

5. DoesthecompanyhaveaspecifiedcommitteeoftheBoard/Director/Officialtooverseetheimplementationofthepolicy?

Y Y Y Y Y Y NA Y Y

6. Indicatethelinkforthepolicytobeviewedonline? www.powergridindia.com

7. Hasthepolicybeenformallycommunicatedtoallrelevantinternalandexternalstakeholders?

Y Y Y Y Y Y NA Y Y

8. Doesthecompanyhavein-housestructuretoimplementthepolicy/policies.

Y Y Y Y Y Y NA Y Y

9. Does the Company have a grievance redressal mechanism re-latedtothepolicy/policiestoaddressstakeholders'grievancesrelatedtothepolicy/policies?

Y Y Y Y Y Y NA Y Y

10. Hasthecompanycarriedoutindependentaudit/evaluationoftheworkingofthispolicybyaninternalorexternalagency?*

Y Y Y Y Y Y NA Y Y

S.No. Questions Principle 7- Responsible public policy advocacy

1. The company has not understood the Principles -

2. Thecompanyisnotatastagewhereitfindsitselfina position to formulate and implement the policies on specifiedprinciples

-

3. Thecompanydoesnothavefinancialormanpowerresourcesavailableforthetask

-

4. Itisplannedtobedonewithinnext6months -

5. Itisplannedtobedonewithinthenext1year -

6. Anyotherreason(pleasespecify) POWERGRIDisamemberofvariousindustrialandtradebodiesandparticipates in these forums on issues and policy matters that impact theinterestofourstakeholders.Keepinginviewthesignificantinterestof POWERGRID in the Transmission sector, a separate RegulatoryCell is inplacetoundertakePOWERGRID’sendeavorofapro-activeapproachaspartofpolicyadvocacywiththestakeholdersandCERC.Whereverfeltnecessary,wegiveourcommentsonvariousapproachpapers, consultation papers, draft regulations etc issued by CERC, TRAI, other authorities.

3. Governance related to BR

• Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year

3-6months

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• Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is published?

POWERGRIDpublishesaseparate“SustainabilityReport”biennially.POWERGRIDcameoutwithits3rd‘SustainabilityReport’inSept.,2015fortheyears2011-13whichisdulycertifiedbyanIndependentAgencyas“A+”.SustainabilityReportsareavailableforpublicinformationonPOWERGRIDwebsiteat:

http://www.powergridindia.com/_layouts/PowerGrid/User/QuickLinksDetail.aspx?LangID=English&Category=Documents

Section E: Principle-wise performance

Principle 1- Business should conduct and govern themselves with ethics, Transparency and Accountability

1. Does the policy relating to ethics, bribery and corruption cover only the company? Yes/ No. Does it extend to the Group/Joint Ventures/Suppliers/Contractors/NGOs/Others?

POWERGRID is committed to observe transparency and consistency in all its operations. Since, POWERGRID is a designated publicauthority,theprovisionsoftheRighttoInformationAct,2005areapplicableonus.TheChiefPublicInformationOfficers(CPIO)attheCorporate and regional level ensure smooth access to information in a timely manner.

POWERGRIDfollowsvariouspolicies/rulestostrengthenethicalconductatalllevelsincludingthefollowing:

a) Code of Business Ethics & Conduct: POWERGRID has laid down two separate Code of Business Ethics & Conduct – oneforBoardMembersandanother forSeniorManagementPersonnel (including thosedeputed inSubsidiaries/JointVentures) inalignmentwithCompany’sVision&MissionandaimsatenhancingethicalandtransparentprocessinmanagingtheaffairsoftheCompany.

b) The Conduct and Discipline Appeal rules (CDA Rules): TheCDARulesofPOWERGRIDdefinethedesirableandnon-desirableactsandconductfortheemployeesandextendtoallemployeesworkingwithit(includingthosedeputedinSubsidiaries/JointVentures).TheaspectsofBriberyandCorruptionarealsocoveredunderCDArules.Thereislaidprocedureforactionsinthecaseofnon-compliancewiththedefinedtermsaswellasforanymisconduct.

c) Whistle Blower and Fraud Prevention Policy: WhistleBlowerandFraudPreventionPolicyprovidesasystemfordisclosuresmadebyemployeesorcomplaintofanyfraudorsuspectedfraudinvolvingemployeesofPOWERGRID(allfulltime,parttimeoremployeesappointedonadhoc/ temporary/contractbasis)aswell as representativeof vendors, suppliers, contractors, serviceprovidersoranyoutsideagency(ies)doinganytypeofbusinessinPOWERGRID.

Besides, several initiativeshavebeen taken/arebeing takenbyPOWERGRID to strengthen Integrity, transparencyand fairness in itsbusiness practices which includes the following:

(i) Welldefined“DelegationofPowers”isinplacedelineatingthepowersofthetopexecutivesandbelowforcarryingoutworkinsystematic manner.

(ii) POWERGRID has prepared and implemented “Works and Procurement Policy and Procedure (WPPP) for Pre-award and Post-awardStages”withaviewtomakingthepoliciesandproceduresmoresystematic,transparentandeasytoadministeruniformlythroughoutitsbusinessoperationswithmajorthrustonexpeditiousanddecentralizeddecisionmakingcoupledwithaccountabilityand responsibility.

(iii) “IntegrityPact”hasbeensignedwithTransparencyInternationalwhichisconsideredasausefultoolinensuringtransparencyinawarding contracts. Contracts above `100Crorearealsomonitoredbyapanelof“IndependentExternalMonitors(IEMs)”.

(iv) ManualsandProceduresareinplaceforConstruction,Operation&Maintenance.

(v) e-procurementmechanismformostoftheprojectprocurementshasbeenimplemented.

(vi) e-Reverseauctionmechanismisinplace.

(vii) TheProject“RUPANTAR”,theEnterpriseResourcePlanning(ERP)initiativeofourCompanyhasbeenimplementedandmajorityofthekeyprocessesrelatedtobusinessarerunningonERP.

(viii) SystemexistsforOn-linePaymentofDocumentFees&SubmissionofSoftCopyofBid.

(ix) AfterAward,summaryofevaluationispostedonthewebsite.

(x) POWERGRIDlaysprimaryemphasisonPreventiveVigilance.Aimingatbettertransparencyandtoinculcategoodgovernancewithintheorganization,POWERGRIDhastakenanumberofinitiatives.Fordetails,sectionon‘CommitmenttoTransparency&VigilanceFunction’underDirectors’Reportmaybereferred.

2. How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management? If so, provide details thereof, in about 50 words or so.

DuringtheFY2015-16,atotalof56complaintswerereceivedfromvariousstakeholdersoutofwhichapprox.79%ofcomplaintshavebeentakenupandtheremainingareunderdueprocess.

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Principle 2 -Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle

1. List up to 3 of your products or services whose design has incorporated social or environmental concerns, risks and/or opportunities.

TowerdesigninrelationtoElectric&MagneticFields(EMF)andcompacttowertoreduceRoWthatconservesnaturalresourceslikeforest/land.

TransitiontoconstructGasInsulatedSwitchyard(GIS)substationinandaroundhabitationareainplaceoftraditionalAirInsulatedSwitchyard (AIS) substation to conserve precious land resource and to reduce environment & social related implications. GISrequiresverylesslandareaincomparisontoAIS.

RainWaterHarvestingmademandatoryinallestablishments/substationstoconservewater.

AlltheTransmissionlinesandSub-stationsaredesignedandimplementedconsistentlycomplyingwiththeStatutorylawsandconformingtotheNational&InternationalStandards.

2. For each such product, provide the following details in respect of resource use (energy, water, raw material etc.) per unit of product(optional):

i. Reduction during sourcing/production/ distribution achieved since the previous year throughout the value chain?

ii. Reduction during usage by consumers (energy, water) has been achieved since the previous year?

Theseactivitiesarebeingcarriedoutundervariouspolicies/guidelinesandareimplementedfromtimetotime.

3. Does the company have procedures in place for sustainable sourcing (including transportation)? If yes, what percentage of your inputs was sourced sustainably? Also, provide details thereof, in about 50 words or so.

SustainabilityinsourcingisenforcedthroughtheEnvironmentalandSocialPolicy&Procedures(ESPP)ofPOWERGRIDwhichextendstoSuppliers/Contractors/Vendorsthroughcontractconditions.Vendors/Suppliers/ContractorsarerequiredtocomplywithESPP,Labourlaws,Environmentallaws&effectualSafetyplansthroughstipulationsintheConditionsofContract.ContractsprovidepenaltiestobeimposedontheVendors/suppliers/contractorsintheeventofbreachofthesaidprovisions.

4. Has the company taken any steps to procure goods and services from local & small producers, including communities surrounding their place of work? If yes, what steps have been taken to improve their capacity and capability of local and small vendors?

Weencourageparticipationoflocalvendorsforcertainworksin&aroundourestablishmentsthroughlocalcompetitivebiddingprocess.

5. Does the company have a mechanism to recycle products and waste? If yes what is the percentage of recycling of products and waste (separately as <5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so.

POWERGRIDhaveputinplacesystemsforsegregation/disposalofwastematerialslikemetalscraps,packagingitems,usedbatteries,usedoiletc. forreuseandrecycling.Metalscraps&packaging itemsarerecycledthroughauctionwhereasusedbatteries&usedoilgenerated are channelizedback either to the registered recyclers ormanufacturers for recyclingasper prescribed laws/ regulations.Inaddition,POWERGRIDhassetupa“WastePaperRecycling”plantinthepremisesof400/220kVGISSubstationatGurgaonhavingrecyclingcapacitytohandle40-60kgsofwastepaperdaily.Thepercentageofrecyclingwaste/usedpaperwasabout5-10%duringthecurrent year of operation.

Principle 3- Businesses should promote the wellbeing of all employees

1. Please indicate the Total number of employees.

TotalnumbersofemployeesasonMarch31,2016were8606.

2. Please indicate the Total number of employees hired on temporary/contractual/casual basis.

TotalnumberofemployeeshiredoncontractualbasisasonMarch31,2016were308.

3. Please indicate the Number of permanent women employees.

NumberofpermanentwomenemployeesasonMarch31,2016were589.

4. Please indicate the Number of permanent employees with disabilities

NumberofpermanentemployeeswithdisabilitiesasonMarch31,2016were166.

5. Do you have an employee association that is recognized by management.

Employeesunderthe‘Workmen’categoryarerepresentedthroughTradeUnionsandtheorganizationhasrecognizedworkmen-managementforum.

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6. What percentage of your permanent employees is members of this recognized employee association?

Allemployeesunderthe‘Workmen’categoryaremembersofTradeUnion.Workmenrepresentabout29%oftheemployeestrengthinPOWERGRID.

7. Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year.

S.No. Category No of complaints filed dur-ing the financial year

No of complaints pend-ing as on end of the financial year

1. Childlabour/forcedlabour/involuntarylabour NIL NIL

2. Sexualharassment NIL NIL

3. Discriminatory employment NIL NIL

Employees % of Employees given safety & skill up-gradation training in the last year i.e. FY 2015-16

Permanent Employees 89.36%

PermanentWomenEmployees 85.30%

Casual/Temporary/Contractual Employees

67.80%

Employees with Disabilities 80.23%

8. What percentage of your under mentioned employees were given safety & skill up-gradation training in the last year?

Principle 4- Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalised.

1. Has the company mapped its internal and external stakeholders? Yes/No

POWERGRIDhasmapped its internalandexternal stakeholders.We recognizeShareholders,RegulatoryAuthorities (GoI),Customers,Projects Affected Persons (PAPs)/Communities, Communities/persons residing around our areas of operation, Employees, Suppliers &Contractors,Research&DevelopmentInstitutions,FundingAgenciesandMediaasourkeystakeholdersineconomic,environment&socialdimensions.

POWERGRID engageswith its identified stakeholders on an ongoing basis and the prioritization of such engagement has been doneconsideringfactorslikeDependency,Influence,ResponsibilityandProximity.ThereisastructuredStakeholderEngagementMatrixwhichdetailsspecificengagementmechanismsincludingmode&frequencyofengagementforeachstakeholdercategory.

2. Of the above, has the company identified the disadvantaged, vulnerable & marginalized stakeholders?

Yes,thecompanyhasidentifiedthedisadvantaged,vulnerable&marginalizedstakeholderswhicharebroadlydividedintotwocategoriesviz.InternalStakeholders(Employees–PersonswithDisabilities(PWD)/SC/ST/Women)andExternalStakeholders{ProjectAffectedPersons/Families(PAPs/PAFs):Widowwomenheadedfamilies,SC/ST/PersonswithDisabilities(PWD)}.

3. Are there any special initiatives taken by the company to engage with the disadvantaged, vulnerable and marginalized stakeholders. If so, provide details thereof, in about 50 words or so.

POWERGRIDhastakenfollowinginitiativestoengagewiththedisadvantaged,vulnerableandmarginalizedstakeholders:

InternalStakeholders(Employees-PersonswithDisabilities(PWD)/SC/ST/Women)–POWERGRIDensuresdiversityatworkplacethrougheffortstorecruit,developandretainthemosttalentedpeoplefromthepoolofSC/ST/OBC/Ex-servicemen/PersonswithDisabilities(PWD)candidates,inaccordancewithGoIdirectivesonreservationmatters.Thespecialinitiativestakeninclude-

A time bound mechanism for the redressal of grievances is in place as under:

a) AReservationCellhasbeenconstitutedatthecorporate,aswellasregionalleveltocomplywithGoIdirectivesonreservationmattersforSC/ST/OBC/Ex-servicemen/PersonswithDisabilities(PWD).Thiscellisundercontrolofnominatedliaisonofficer.TheLiaisonOfficersareavailableonapre-fixeddayandtimeforinteractiononceinaweek.WidepublicityregardingavailabilityoftheliaisonofficerisensuredamongstSC/STemployees.RegularmeetingswithSC/ST/OBCEmployee’sAssociationareconducted.‘Awareness Programme’ are organized to acquaint the SC/ST/OBC/PWD employees about the relaxations and concessionsavailable to them under Government directives.

b) InternalComplaintsCommittees(ICCs)undertheSexualHarassmentofWomeninWorkplace(Prevention,Prohibition,Redressal)Act,2013existinthecompanyinordertohandlecomplaintsrelatedtotheharassmentofsexualnatureofwomen.

Womenemployeesareextendedcertainrelaxationlikepostinginsoftlocations,etc.FacilitieslikeRampetcareprovidedtoPersonswithDisabilities.

ExternalStakeholders{ProjectsAffectedPersons/Families(PAPs/PAFs)-Widowwomenheadedfamilies,SC/ST/PhysicallyHandicap}-Thespecialinitiativestakeninclude–

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a) Rehabilitation and Resettlement (R&R)measures: Vulnerable groups like widowwomen headed / SC / ST/ physically handicap/disabledfamilieswhohavesuffered lossof land/ lossofstructure/ lossof livelihood(wageoroccupation)areconsideredforadditionalneedbasedbenefits.

b) CSR Initiatives:Our Corporate Social Responsibility (CSR) addresses the issues of CommunityDevelopment (including livehiloodgenerationthroughskilldevelopment,InfrastructurecreationforRuralDevelopment,environmentalsustainability,education,healthetc.)primarilyaroundourareasofoperations.PrimaryfocusoftheCSRinterventionofPOWERGRIDwasforinclusivedevelopmentofunder-privileged,vulnerableanddeprivedsectionofthesociety.Alargenumberofwomen,SC/ST/Minority,poor&marginalizedsectionofthepopulationwerebenefittedasaresultofCSRinitiatives.VariousCSRinitiativessuchasconstructionofroads,Solarstreetlights,Watersupplypumps,treatmentplants,WaterATMs,communitycentresinvillages,classrooms,toilets,schoolsfurniture,water supply arrangements in different schools, Scholarship to students, supply of Ambulances, aids and appliances to Divyangs, medicaldevicesetc.wereundertaken.Inaddition,theCompanycontinuestoundertakeseveralCSRSkillDevelopment initiativesbyconductingvocationaltrainingprogrammesuchastailoring,automobilerepairing&servicing,weaving,food&fruitprocessing,repairingofhouseholdelectricalequipments&domesticwiring,customerserviceexecutive,Agriculturepractices,CivilConstructionarea etc.

Principle 5 - Businesses should respect and promote human rights

1. Does the policy of the company on human rights cover only the company or extend to the Group/Joint Ventures/Suppliers/Contractors/NGOs/Others?

HumanRightsissuesareincorporatedunderrelatedpolicies&practicesofPOWERGRIDwhichextendtotheemployeesincludingthosedeputedinSubsidiaries/JointVenturesandrelativeaspectspertainingtoVendors/Suppliers/Contractorsthroughcontractcondition.

TheConductandDisciplineAppealrules(“CDARules”)definethedesirableandnon-desirableactsandconductfortheemployees(includingthosedeputedinSubsidiaries/JointVentures).Thereisalaidprocedureforactionsincaseofnon-compliancewiththedefinedtermsaswellasanyinappropriateorunwelcomesexually-determinedbehavior.Topromotefairandequitableemploymentrelationship,aschemefor Grievance Redressal of employees is also in place which ensures a time bound mechanism for the redressal of grievances. Internal Complaints Committees (ICCs) have been constituted under the SexualHarassment ofWomen inWorkplace (Prevention, Prohibition,Redressal)Act,2013

POWERGRIDalsogot certified toSocialAccountability standardSA-8000:2008 for itshuman resourceand labormanagementpoliciesandpractices.Vendors/Suppliers/contractorsarerequiredtocomplywiththeprovisionsofthelabourlaws/Humanrightsetcthroughstipulationsintheconditionsofcontract.AspertheContractagreement,contractorsareprohibitedfromsubjectingtheirworkerstoforcedorcompulsorylabour.Allcontractorsarerequiredtocomplywithvariouscompensationandregulatoryacts.AllsupplierstoPOWERGRIDhavetoconfirmtoGeneralConditionsofContractandSA8000clauses.POWERGRIDtakesdeclarationregardingSocialAccountabilityfromthebidders/contractorsforcomplianceofallrequirementsofSocialAccountabilityStandardsi.e.,SA8000(latestStandardavailableatwww.sa-intl.org),thisdeclarationformspartofContractDocuments.Provisionofpenaltiesfornon-adherenceofthesamearealsoincludedinthe contract conditions.

POWERGRIDpromotesawarenessoftheimportanceofrespectingHumanRightswithinitsvaluechainanddiscourageinstancesofabuse.Besides conducting technical and behavioral trainings, the training on Human Rights issues to sensitize people towards women, thedifferently-abledandthesociallyweakersectionsofthesocietyhavealsobeenimparted.

2. How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management?

Nocomplaintwasreceivedpertainingtohumanrightsviolationduringthereportingperiod(2015-16).

Principle 6 - Business should respect, protect, and make efforts to restore the environment

1. Does the policy related to Principle 6 cover only the company or extends to the Group/Joint Ventures/Suppliers/Contractors/NGOs/others.

The Environmental and Social Policy & Procedures (ESPP) of POWERGRID encompass the company, its Joint Venture – PowerlinksTransmissionLimited,subsidiariesingeneralandrelativeaspectspertainingtoVendors/Suppliers/Contractorsthroughcontractcondition.

2. Does the company have strategies/initiatives to address global environmental issues such as climate change, global warming, etc? Y/N. If yes, please give hyperlink for webpage etc.

POWERGRIDhastakenvariousinitiativesintheareaofenvironmentsustainability.Takingintoconsiderationtheimpactonnaturalresources(likeforestandland)duetoourprojectactivities,wehavetakenmeasurestoreducedeforestationandincreaseafforestationaswellasadoptnewtechnologiesandmeasurestoreducetheRightofWay(RoW)requirements.Several initiativestakentowardsEnvironmentConservation including energy management, water management, emission control, waste management, material conservation and other technological initiatives are as under:

a) Energy Management: Our approach towards energy conservation is based on adopting a low carbon growth path through reduction inspecificenergyconsumptionandenhancingtheuseofrenewableenergysources.Sinceourmajorsourceofelectricityconsumptionisforlightingpurposeinsubstation,colonyandofficebuildings,tooptimizeenergyconsumptionvariousinitiativessuchasinstallationofLEDbulbs,fuelcatalystsdevicesforDGsetsetc.havebeentakenuptoreducespecificenergyconsumption.Wearealsoinstallingsolarphotovoltaicinofficebuildingstomeettheinternalenergyrequirements.

b) Water Management: WaterManagementthroughjudicioususeandeffectivemanagementisourprimefocus.Variousinitiativeshave been undertaken for improving the water use efficiency and achieving zero discharge. Though no industrial effluents aregenerated in our operation, all the substations have implemented integrated water management approach focused on rain water harvesting system, which is now an integral part of every new substation design.

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c) Emission Control: PowerTransmissionprojectsdonotinvolveanyactivitywhichdirectlyemitswaste/toxicgaseslikeSOx,NOx,CO2etc.intotheatmosphere.However,DGsets,thatareadirectsourceofemission,areusedforbackup,emergencypower,andconstructionactivitiesatsubstationsandinCorporateofficeandRegionaloffices.MaintenanceisensuredtocomplywiththeemissionnormsprescribedbyPollutionControlBoard.ManagementofSF6which isused inCircuitBreakers, isgivenutmostpriorityandimportanceconsideringitsGlobalWarmingPotential.Systemsareinplaceforstorage,handlingandrefillingofSF6gascylinders.MostofouroldequipmentcontainingOzoneDepletingSubstances(ODS)hasbeenreplacedandallournewequipment&refrigerationareCFC(chlorofluorocarbons)-freecertified.

d) Waste Management:Ourwastemanagementprogramisbasedontheprincipleofreduce,reuseandrecycle.Thereisnomajorsolidorliquidwastegeneratedduetoouractivitiesexceptmetalscraps,usedbatteriesandelectronicwaste.However,systemsareinplaceforsegregation/disposalofwastematerialforreuseandrecycling.Usedbatteriesandelectronicwastearechanneledbacktoeitherthemanufacturersorregisteredrecyclersforrecycling.Asapartofsustainableinitiative,wehaveestablisheda“WastePaperRecyclingPlant”atGurgaonSubstationtorecyclewastepaperproducedinthecorporateofficewiththecapacitytohandle40-60kgsofpaperdaily.Therecycledpaperisutilizedformakingcompany’sletterheads,visitingcards,file/folders,D.O.padsetc.Withthisinitiative,wehavefurtherreducedourcarbonfootprintas1tonofvirginprintingpaperrequires17trees,4kilolitresofwater,1350kWofenergy&400kgfossilfuels.

e) Material Conservation: Our contribution to the conservation of the natural resource base and efforts to reduce the material intensityisanintegralpartofcorporation’ssustainabilitystrategy.WefocusonreducingtheconsumptionofmajorrawmaterialslikeSteel,Aluminumetc.throughefficientdesignsofourtransmissionline&substation.Thespecificconsumptionoftheserawmaterialshavebeenreducedovertheyearsthroughtechnologicalinnovationusinghighcapacitytransmissionlinesi.e.765KV,±800HVDCfortransmittingbulkpower.

f) Technological Initiatives: Effortsaremade for conservationofenergy inourprojects - right from theplanningstage, to theexecutionstageandthroughouttheO&Mperiod.Weareimplementing±800kVHVDCsystemsand765kVD/clinestominimizeRoWandenvironmentalproblems.Wehavealsodeveloped indigenously1200kVUltraHighVoltage(UHC)AC technology, thehighesttransmissionvoltagelevelintheworld,incollaborativeeffortswithdomesticmanufacturers.Thiswillenabletransferof6000-8000MWpoweroversinglecorridor.Inaddition,effortsarebeingmadetoswitchtohighPerformanceConductorsinExisting&NewLineswhich involve lower sag as against conventional conductor at higher operating temperatures thereby resulting in reduction of tower weightandincreasingspanandconsequently,reducethetotalsteelrequirementresultingintolowercarbonfootprint.Consideringsuperconductor technology as a promising future technology, we are planning a demonstration project on High TemperatureSuperconductor(HTS)cablesystem,forassessingthefeasibilityandoperationalissues.HTScablesystemfacilitateshigherpowertransmissionwithouttowers.Theselatesttechnologieswillhavewideinfluenceinminimizingenvironmentalandsocialimpactofhighvoltagetransmissionlineandtheseinitiativeswillshowextensiveresults inoptimisationofRoWanditsassociatedenvironmentalandsocialimpact.POWERGRIDhasalsobeendesigningandusingCompacttowers/Poletypetowers/Multi-circuittowersdependinguponlandTopographyandconditions.GasInsulatedSubstation(GIS)arealsobeingestablishedbyPOWERGRIDtoreducethelanduse.POWERGRIDisinprocessofimplementingSubstationAutomationSystemswithProcessBusarchitecturetoreducetheusageofcableinsubstation.Apartfromabove,wehavetakeninitiativesfordevelopmentofSmartGridinIndiatowardsbringingefficiencyindistributionandareextendingconsultancyservicesforimplementationofvariousprojectsonSmartGridTechnologyindifferentstates.

Besides, POWERGRID has been taking several other initiatives including despatch of annual reports/postal ballot notices & othercommunications toshareholders inelectronicmodeunder ‘Green Initiative in theCorporateGovernance’ thereby reducingwastageofnaturalresources.Formoredetails,SustainabilityreportsavailableonPOWERGRIDwebsiteonfollowinghyperlinkmaybereferred:

http://www.powergridindia.com/_layouts/PowerGrid/User/QuickLinksDetail.aspx?LangID=English&Category=Documents.

3. Does the company identify and assess potential environmental risks? Y/N

Yes.AdetailedRiskAssessmentandManagementprocedureisinplacetoidentifyandassesspotentialenvironmentalandsocialrisks,aspartofoverallprojectanalysis.ThePOWERGRID’sESPPwhich isbasedontheprinciplesofAvoidance,MinimizationandMitigationoutlinesPOWERGRID’sapproachandcommitmenttodealwithenvironmentalandsocialrisk/issuesandlaysoutmanagementproceduresandprotocolstomitigatethesame.Itprovidesaframeworkforidentification,assessment,andmanagementofenvironmentalandsocialconcernsatbothorganizationalandprojectlevel.ESPPframeworkincludesproceduresfor:(a)ScreeningandIdentificationofRisks(fromenvironmentalreceptors,socialreceptorsandotherstakeholders);(b)avoidanceofrisks(includingcriteriaandproceduresforalternativerouting);(c)mitigationofriskthrough impactmanagement, implementationofGoodInternationalIndustryPractices(GIIP),adequatecompensationtoaffectedstakeholders,publicconsultationanddisclosure,andgrievanceredress;(d)monitoring,reporting,evaluation,feedback,managementreviewandcorrectiveaction;and(e)responsibilityandresourceallocationincludinganorganizationstructureformanagementofsocialandenvironmentalrisks.

POWERGRIDiscertifiedwithIntegratedManagementSystemasperPubliclyAvailableSpecification(PAS99)integratingrequirementofISO9001forQualityManagementSystem,ISO14001forEnvironmentManagementSystem,OHSAS18001forOccupationalHealthandSafetyManagement System.

4. Does the company have any project related to Clean Development Mechanism? If so, provide details thereof, in about 50 words or so. Also, if Yes, whether any environmental compliance report is filed?

No.

5. Has the company undertaken any other initiatives on - clean technology, energy efficiency, renewable energy, etc. Y/N. If yes, please give hyperlink for web page etc.

Yes.POWERGRIDcontinuestoundertakeinitiativesonEnergyEfficiencywhichincludesenergyauditsofvariousindustries/institutions/other commercial establishments resulting in prevention of CO2emission;installationofIn-housedesignedwasteheatrecoverysystemsforsteelre-rollingmillsinvarioussteelmakingindustries;etc.WearealsoaBEEGrade-IEnergyServiceCompany(ESCO)toimplement

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energyefficiencysolutions.

Towards integration of renewable energy resources into the National Grid as well as enlarging the balancing area to address renewable volatility,GreenEnergycorridorsarebeingimplementedbyPOWERGRID.Inaddition,transmissionschemesfor7200MWUltraMegaSolarPowerParksarealsounderimplementationinvariousstates.ApartfromGreenEnergyCorridorsimplementationandGrid-integrationofultra-megasolarparks,weareintheprocessofestablishingthefirstgridinteractiveenergystoragepilotprojectswithdifferentbatterytechnologies.

Formoredetails,inadditiontoSectionson‘EnergyEfficiency’and‘IntegrationofRenewables’undertheDirectors’Report,theinformationavailableonCompany’swebsiteonfollowinghyperlinkmaybereferred:

http://www.powergridindia.com/_layouts/PowerGrid/User/ContentPage.aspx?PId=154&LangID=English

6. Are the Emissions/Waste generated by the company within the permissible limits given by CPCB/SPCB for the financial year being reported?

TherearenoemissionsorwastegeneratedbyPOWERGRID’sPowertransmissionprojectactivities.TheonlyemissionthatcanbeattributedtoouractivitiesarefromoperationofDGsetsforpowerbackup,whichismaintainedwellwithinthepermissiblelimits.

7. Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year.

NIL

POWERGRIDdidnotreceiveanyshowcause/legalnoticefromCPCB/SPCB.

Principle 7 - Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner

1. Is your company a member of any trade and chamber or association? If Yes, Name only those major ones that your business deals with:

POWERGRIDisamemberofvariousindustrybodiesincludingthefollowing:

1. FederationofIndianChambersofCommerceandIndustry(FICCI)

2. ConfederationofIndianIndustry(CII)

3. CIICPSECouncil

4. TERI Business Council for Sustainable Development

5. TheAssociatedChambersofCommerce&IndustryofIndia(ASSOCHAM)

6. PHDChamberofCommerce&Industry(PHDCCI)

7. CentralBoardofIrrigation&Power(CBIP)

8. WECIndia(formerlyknownasWorldEnergyCouncil-IndiaMemberCommittee)

9. IndianInstituteofPlantEngineers(IIPE)

10. StandingConferenceofPublicEnterprises(SCOPE)

11. IndiaEnergyForum(IEF)

12. GlobalCompactNetwork(GCN)

13. InternetServicesProvidersAssociationofIndia(ISPAI)

14. AssociationofCompetitiveTelecomOperators(ACTO)

15. InfrastructureIndustry&LogisticsFederationofIndia(ILFI)

2. Have you advocated/lobbied through above associations for the advancement or improvement of public good? Yes/No; if yes specify the broad areas. (dropbox: Governance and Administration, Economic Reforms, Inclusive Development Policies, Energy security, Water, Food Security, Sustainable Business Principles, Others)

POWERGRIDparticipatesthroughassociationsin(1)aboveontheissuesandpolicymattersthatimpacttheinterestofourstakeholders.

Keeping inview thesignificant interestofPOWERGRID in theTransmissionsector,aseparateRegulatorycell is inplace toundertakePOWERGRID’sendeavorofapro-activeapproachaspartofpolicyadvocacywiththestakeholdersandCERC.Whereverfeltnecessary,wegiveourcommentsonvariousapproachpapers,consultationpapers,draftregulations,etcissuedbyCERC/TRAI/otherauthorities.Besides,POWERGRIDalsogives its comments in thefieldofGovernance&Administration,EconomicReforms, InclusiveDevelopmentPolicies,Energysecurity,Water,SustainableBusinessPrinciplesetc,asandwhensoughtbyGoI.

Principle 8- Businesses should support inclusive growth and equitable development

1. Does the company have specified programmes/initiatives/projects in pursuit of the policy related to Principle 8? If yes details thereof.

BytheverynatureofourbusinessandastheCentralTransmissionUtility,wetouchmillionsofliveseverydayandunderstandthatrealsuccessistheresultofinclusivedevelopmentoftheinvolvedentitiesandstakeholders.Wesupporttheprinciplesofinclusivegrowthand

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equitabledevelopmentthroughcorporatesocialresponsibilityinitiativesaswellasthroughourcorebusiness.

OurcommitmenttowardsSocialResponsibility(Labour,Employees,Communities,Employee’sfamilies)isamplyreflectedinouralreadyadoptedIntegratedManagementPolicy,EnvironmentalandSocialPolicy&Procedures(ESPP),RehabilitationActionPlan(RAP),CorporateObjectives,OSHAS-18001andSocialAccountabilitySA8000.CorporateSocialResponsibilityisprimarilytoshowcaseourabidingcommitmentandconcerntopay-backtothesocietyandenvironmentforthebenefitsreapedsofar.CSRhasalwaysbeenanintegralpartofourvisionandthecornerstoneofCoreValuesofGoodCorporateCitizenship.Wearecommittedtowardstakingresponsibilityforitsimpact,thoughveryminimalinnature,onsocietyandbeingaccountabletotheinhabitantsofMotherNature.Weemphasizeonoverallsocio-economicdevelopment of areas and communities around our operations through various community development programmes, initiatives such as Livelihoodgeneration,Skilldevelopment,Healthcare,Education,Plantation,sanitation,drinkingwater,roads,drainagesystem,communitycentres, development and conservation of water bodies,etc.

2. Are the programmes/projects undertaken through in-house team/own foundation/external NGO/government structures/any other organization?

Theprograms/projectsareundertakenlargelyby in-houseteams,howeverGovt./SemiGovt.agencies/agenciesofInternationalandNationalrepute,etcarealsoengagedtoundertakesuchprojects.

3. Have you done any impact assessment of your initiative?

ImpactAssessmentstudieshavebeencarriedout.POWERGRIDinternallyperformsimpactassessmentofitsinitiativesto–(i)understand/evaluatethecommunitydevelopmentactivitiesundertaken,thebenefitsaccruedtocommunitiesand(ii)gaininsightsforformulating&improving the community development activities in future.

4. What is your company’s direct contribution to community development projects- Amount in INR and the details of the projects undertaken?

An amount of 121.79CrorehasbeenincurredunderCSRactivitiesandabout 5.85CroreprovidedasRehabilitationAssistance(RA)underRehabilitation&Resettlement(R&R)measuresduringtheFY2015-16.InadditiontothemeasurestakenforR&R,communitydevelopmentworksarealsoundertakenfortheoverallimprovementofsurroundingvillagesandcommunity.Basedonsocialassessmentoutcome,weimplementneedbaseddevelopmentworks likeconstructionof roads,drinkingwater facility,schoolbuilding,communitycenteretc. inassociation with local authorities. In addition, `4.28Crorewasspentoncommunitydevelopmentworksduringtheyear.

5. Have you taken steps to ensure that this community development initiative is successfully adopted by the community? Please explain in 50 words, or so.

Regular awareness programs as well as inclusive Public Consultation at each and every step as per the Environment and Social Policy and Procedures(ESPP)havebeencarriedout.For thatpurpose,variousmeansatvariousstageswereadopted includingPublicMeetings,Informal Small Group Meetings, Information Brochures and Pamphlets, Operating Field Officers, Local planning visits and site visits,ResponsetopublicEnquiries,Pressreleaseinvitingcomments,Projectcoordinationcommittees,OmbudsmanorrepresentativeandPublicDisplays.

Principle 9- Businesses should engage with and provide value to their customers and consumers in a responsible manner

1. What percentage of customer complaints/consumer cases are pending as on the end of financial year.

NIL

2. Does the company display product information on the product label, over and above what is mandated as per local laws? Yes/No/N.A. /Remarks(additional information)

Not Applicable.

3. Is there any case filed by any stakeholder against the company regarding unfair trade practices, irresponsible advertising and/or anti-competitive behaviour during the last five years and pending as on end of financial year. If so, provide details thereof, in about 50 words or so.

No

4. Did your company carry out any consumer survey/ consumer satisfaction trends?

Weengagewithourcustomersonanongoingbasisandgenerallyholdmeetingsonaregularbasis.Theobjectiveofsaidmeetingsinteraliaincludesidentificationofprocessimprovementareasandunderstandingconcernsofcustomers.Basedonfeedback,Companytakesmeasuresforsystemimprovement,whereverrequired.

For and on behalf of the Board of Directors

Place: New Delhi (I. S. Jha)Date:08.08.2016 Chairman&ManagingDirector

71

ANNEXURE - III TO THE DIRECTORS’ REPORT

1. Particulars required under Rule 8 (3) of the Companies (Accounts) Rules, 2014 read with Section 134 (1) (m) of the Companies Act, 2013.

A. CONSERVATION OF ENERGY (a) Energy conservation measures taken and on hand: IthasbeentheendeavourofPOWERGRIDtomakeallouteffortsforconservationofenergyinallitsprojects-rightfromtheplanning

stage, to the execution stage and throughout theO&Mperiod. Before finalizing the transmission schemes, various alternatives/technologiesforpowertransferareexaminedandoneofthemajorcriteriaforselectionoftransmissionsystem/technologyislowerlosses. In fact, POWERGRIDhas adoptedhigher voltage levels like 765kVAC,+500kVHVDC,+800kVHVDC in its transmissionsystemsforbulkpowertransferacrossvariousregionswhichresultinlowerlossesinthesystem.1200kVACsystemisalsobeingconsideredforbulkpowertransmissionwhichisunderfieldtrialstagenow.POWERGRIDisalsoexploringsuperconductorcablefortransmission, which is almost lossless transmission.

Atdesignstageofthetransmissionsystem,optimizationofvariousparametersisdonesothatlossesinthetransmissionsystemareoptimized.Theconductorsareselectedafterdetailedoptimizationstudieswhichconsiderreductionoflinelossesasoneoftheprimarycriteria.Thebusbarmaterialsandtheclampsandconnectorsarechosenmeetingstringentinternationalrequirementssothatlossesareoptimized.Duringevaluationoftransformer&shuntreactorpackages,equipmentwithminimumlossesisgivenweightage.IncaseofHVDCsystemalso,theselectionofparametersoffiltercomponents,ThyristorValves,ConverterTransformeretc.isdoneinsuchawaythatoveralllossesareminimizedevenundervarioussystemoperatingcondition.Further,incaseoftransmissionhardware,thematerialwithlowerlossesisspecified.Parametersandtypesofvariousotherequipmentsarealsochoseninamannerthatthelossesareoptimized.Thus,energyconservationmeasuresare takenbyPOWERGRIDateverystepsoas todevelopanefficientandlow-losstransmissionnetwork.POWERGRIDhasalsoestablishedadedicatedEnergyEfficiencyCell tomake inroads intotheconservation of energy and reduction of carbon emission in industrial and commercial sectors. Energy audits are regularly carried outtoidentifyopportunitiesforenergysavingandfewimplementationshavealsobeenundertakensuccessfullytoreduceenergyconsumptioninindustriesandagriculturesector.POWERGRIDhasundertakenEnergyAuditofIntegratedSteelPlants.

(b) Additional investment and proposals, if any, being implemented for reduction of consumption of Energy: Asstatedabove,POWERGRIDundertakesenergyconservationmeasuresbymeansofreductionoflossesinitstransmissionschemes

rightfromplanningtoexecutionstage. RESEARCH AND DEVELOPMENT IthasbeenPOWERGRID’sendeavourtopursuetheresearchanddevelopmenteffortsinthefieldofnewtechnologiesintransmission

systemtoremainatparwithinternationalstandards.Also,realizingtheneedforconservationofRight-of-Wayandfuturerequirementofdevelopmentofhighcapacitytransmissionsystemtomeetthefuturepowerrequirement,POWERGRIDisactivelypursuingseamlessintegrationofnewandefficienttechnologiesinIndianpowerGridtocreateenvironment-friendlytransmissionsystem.POWERGRIDhasaccordedspecialemphasisonadoptionofnewtechnologiesavailablearoundtheglobeforimprovingthequalityofpowersupply,reductionoflosses,optimumutilizationoftheavailabletransmissionassets,conservationofenvironmentandoptimizinguponthecostofdeliveredpower.ThecompanyisworkingincollaborationwithInternational/Nationalresearch/academicinstitutions,manufacturersetc.andisthusenhancingitsin-housecapabilitiesfordesignandengineeringofState-of-the-Arttransmissionsystems.

POWERGRID Advanced Research and Technology Centre POWERGRIDisestablishingworldclasslaboratoriesandtestfacilitiesatManesar,Gurgaonforcarryingoutresearchanddevelopment

inpowertransmissionarea.ThisR&DcentreshallcatertotheresearchneedsofPOWERGRIDandoftheCountrytoalargeextentwithstate-of-the-artlaboratoriesforpowersystemanalysis,advancedequipmentdiagnostics,smartgrid,energyefficiency,controland automation, material science, engineering design etc.

B. TECHNOLOGY DEVELOPMENT POWERGRID adopts and encourages the research & development (R&D) activities in pursuit of technological excellence in power

transmission.Notableamongthem,aretheprestigious1200kVNationalTestStationprojectatBinaMadhyaPradeshandtheProcess-busin Substation Automation System

SpecificareasinwhichR&Dhasbeencarriedoutbythecompanyandbenefitsderivedtherebyaregivenbelow:1. Indigenous Development of 1200kV UHVAC Technology -POWERGRIDhassuccessfullytestchargedPhase-IIoftheprestigious

projectof1200kVNationalTestStationinthemonthofMarch2016.Withthis,allthe1200kVequipmentintheteststationhasbeensuccessfullychargedat1200kVvoltagelevel.Forthis project of national importance your company has collaborated with Indianequipmentmanufacturersforgettingthe1200kVequipmentdeveloped,whichhavebeeninstalledpresentlyatthetestbaseinBinaforlongtermfieldoperationandperformancemonitoring.Synchronizationwiththegridandloadingofthe1200kVequipmenthasbeencarriedout in May 2016.

2. HighCapacity,±800kV,6000MWHVDCmultiterminalsystemforlongdistancepowertransferover1700kmfromNER/ERtoNR.3. HighCapacity,±800kV,6000MWHVDCforlongdistancepowertransferover1300kmfromWRtoNR.4. HighCapacity,±800kV,6000MWHVDCBipoleLinkbetweenWesternRegion(Raigarh,Chhatisgarh)&SouthernRegion(Pugalur,Tamil

Nadu)andPugalur(TamilNadu)–NorthTrichur(Kerala)2000MWVSCbasedHVDCBipoleline.DuetosevereROWissuesinKerala,asection of the line has been considered as underground cable.

5. Re-conductoringoffollowinglineswithhightemperatureenduranceconductortoenhancethecapacityofthetransmissioncorridorbyabout two times:

• Maithon–Maithon-RB400kVD/C(TwinMoose) • Agartala-AgartalaGBPP132kVD/C

72

• Imphal(PG)-Yurembam132kVS/c • NeyveliTS-II–NeyveliTS-IExpansion400kVS/c6. Fault Current Limiters:Tocontrolincreasingshortcircuitcurrentlevelsinthenetwork,applicationofseriesreactorsasfaultcurrent

limitersintheGridisbeingtakenup.Initially4no.seriesreactorscomprisingof2no.seriesbusreactorsatMandolaandBallabgarhand2nos.serieslinereactorsatMandolaendofDadri-Mandola400kVD/Cistakenupandsubsequentlywithoperationalexperience,additionalseries reactors would be considered for implementation.

7. Dynamic Compensation:StaticVARCompensatorsat3locationsinNRgridandSTATCOMsat14locationsonallIndiagrid(4no.inWesternRegion,4no.inEasternRegion,4no.inSouthernRegionand2no.inNorthernRegion)arebeingimplementedfordynamiccontrol of reactive power in order to maintain the voltage and improve the stability of the grid. These dynamic compensations would be basedonState-of-the-ArttechnologiesandwouldprovideonlinedynamicsupporttotheGrid.

8. Developmentofin-housetowerandfoundationdesignsincluding66kV,132kV,220kV,±320kVHVDC,±800kVHVDCand765kVD/CMultiCircuittowersforuseinon-goingtransmissionlineprojects.

9. DevelopmentofIndigenousVendorsforHTLSConductors.10. Designofspecialnarrowbasetowertoenablecrossingof765kVD/Ctransmissionlines.11. VendorDevelopmentfor765kVGISinIndia.12. Green Energy Corridors: Tofacilitateintegrationoflargescalerenewablegeneration,POWERGRIDhasstartedimplementationofGreen

EnergyCorridors(GEC)ineightrenewableresourcerichstatesintheCountry.Thesecorridors,coversestablishmentofpoolingsubstations,inter-statetransmissionlinesat765kV&400kVlevelalongwithreactivecompensation.Furthertohandlevariability&intermittencyofrenewableenergysources,weareestablishingrenewableenergymanagementcentres(REMC)invariousSLDC/RLDC/NLDC.REMCwouldenableforecastingofrenewableresourcesandefficientmanagementofintermittentrenewablegeneration.

Wearealsoperformingavitalroleinevacuatingrenewablegenerationthroughsolarresourcesacrossnationandhasevolvedcomprehensiveplanstoevacuatepowerfromvariousultra-megasolarparksthroughInter-statetransmissionnetwork.Further,YourCompany isalsoimplementingtheevacuationsystemforvarioussolarparksintegratedwithISTSnetworkintheCountry.

13. ImplementationofControlledSwitchingschemesofcircuitbreakersfor400kVtransmissionlinereactorsandtransformers.14. Engineering Data Integration on GIS Platform.15. Process bus Technology - The pilot initiative of your company on IEC 61850 protocol based process bus architecture,whichwas

successfully commissionedduringFY2014-15at the400kVBhiwadiSub-station,hasbeenasignificantstep taken in thedirection tocompletelydigitizedsubstations.Furthertothis,yourcompanyhasalsotakenupapilotprojecttooptimizethecontrolandprotectioncableusedintransformerandhasbeensuccessfullycompletedat400/220kVNeemranasubstationintheFY2015-16.Afterimplementationofnewschemeatthissubstation,significantreductioninthenumberofcoresbetweentransformermarshallingboxandprotectionpanelwasachieved.Theschemeisexpectedtoeasethemaintenanceandtroubleshootinginfutureandalsorestorationtimewillbeextremelylowincaseofanyeventuality.Gainingexperiencefromtheseprojects,yourcompanyisplanningfortakingupanotherpilotprojectforretrofittingageing substations having conventional protection and control schemes with advanced automation systems.

16. Superconducting Transmission Technology - POWERGRIDisactivelyconsideringademonstrationprojecton220kVHighTemperatureSuperconductor(HTS)cablesystemingrid.HTS

cablescanoffersubstantialsavinginROWrequirementbesidesincreasingpowertransfercapabilitywithreducedlosses.17. TransmissionLineArrestor:Toimprovethelightningperformanceoflineinsulators,TransmissionLineArrestorshasbeeninstalledon220kV

line in North Eastern Region on trial basis.18. Pollution mapping: POWERGRID in associationwithNorthernRegional Power Committee (NRPC) and the constituent STU’s of the

Northern Region has completed Pollution Mapping activity in Northern Region. The same is being carried out at Southern and Eastern Regions also.

19. DevelopmentofIndigenousvendorsfor765kVIsolatorsandsurgearrestors.20. Developmentofindigenous765kVclamps,connectorsandinsulatorstringhardware.21. Sparephaseswitchingarrangementisbeingadoptedfor765kVtransformersandreactorstominimizeoutage/shutdownperiod.22. Implementationofsmartgridtechnologyinpowersystemisbeingcarriedoutthroughinstallationofphasormeasurementunits(PMU)

onEHV substations in pan Indiabasis integratedwith control centres forWideAreaMeasurements and real timemonitoringof gridparameters.

23. ProvidingSmartGridconsultancyfornine(9)projectscoveringdistribution infrastructure,advancedmetering infrastructure, intelligentoutagemanagement,electricvehiclechargingstations,powerqualitymanagement,distributedgeneration,netmeteringetc.

Technology Absorption:1. Forrouteselection,lengthoptimisationandestimationofBOQfortransmissionlines,POWERGRIDhasemployedmodernSurveytechniques.2. SubstationAutomationwithIEC61850protocolisbeingadoptedforallnewSubstationsofPOWERGRID.Thiswouldresultinsavingsin

operationalcostandincreasedoperationalandmaintenanceefficiency.3. AsasteptowardsNationalgrid,765kVACDoublecircuitand±500kVHVDC&±800kVHVDCtechnologyhasbeenimplementedinour

country.4. Inspecialareas,compacttowerslikepoletowers,deltaconfigurationtowersandnarrowbasedtowerswhichreducethespaceoccupied

bythetowerbase,arebeingused.Alsotalltowersandmulti-circuittowersarebeingusedforconservationofscarceright-of-way.5. UseofmetallicreturninHVDCsystemhasbeenadopted.6. Specialinsulatorslikepolymercompositeinsulatorshavebeenadoptedintransmissionlinesinpollutedareas.7. Hightemperaturelowsagconductorshavebeenadoptedforincreasingthetransfercapacityoftransmissioncorridors.

73

8. GIStechnologyat400kVand765kVlevelhasbeenadoptedinsubstationswherespaceconstraintsexist.9. Multi-levelbeamshavebeenusedinGISandAISsubstationswithmulti-ckt.linestooptimizelinecorridorareasnearsubstation10. Onlinetransformermonitoringtechniquesarebeingusedformonitoringofcriticalparametersofpowertransformers.11. Dynamic compensation in the form of SVCs and STATCOMs are being implemented for dynamic control of reactive power in order to

maintain the voltage and improve the stability of the grid. For controlling short circuit current in the system, fault current limiters have been planned in the Grid.

CONSERVATION OF LAND AND ENVIRONMENTAL CONCERNS ForthegroundreturnmodeofoperationofHVDCBipolarTransmissionsystem,electrodestationsarebeinguseduptonow,whichrequire

approx.150acreofland(75acreforeachterminalofBipolarsystem)atelectrodesite.Thelandfortheseelectrodestationshavetobeselectedkeepinginviewthattherearenometallicburiedobjectsi.e.metallicoilandgaspipeline,metallicpipes,railwayline,telephonelinesusingmetallicwires,electricaloperatedwaterpumpsetsetcwithinaradiusofabout8to10kmfromthecentreoftheproposedsiteoftheearthelectrodestation.SincetheinverterTerminalisgenerallylocatedneartheloadcentres,thecostoflandacquisitionisveryhigh.

Further,theelectrodelineoftheHVDCTerminalalsorequiresitsrightofwaywhichcreatestheconstraintinlandusage. Therefore,forfuture±800KV/±600KVprojects,theusageofthirdreturnconductoronthesametowercarryingtheline/poleconductor,

instead of having a ground electrode as return path has been adopted. Apart from eliminating the element of uncertainty about the proper functionalityoftheearthelectrodestation,theusageofthirdconductorasareturnpathwillresultinconservationoflandrequiredforconventional electrode station. It will avoid a separate electrode line and corresponding right of way related to the electrode line resulting in further land conservation.

POWERGRIDiscommittedtotheconservationofnaturalresourcesandhastakenmanyinitiativesinthisregard.Landwhichhasnowbecome a scarce resource hence a plethora of issues arise during the land acquisition process for the construction of sub-stations.POWERGRIDhassubstantiallyreducedthelandrequirementbyutilizingnewtechnology(e.g.AirInsulatedSubstationtoGasInsulatedSubstation).NowadayslandacquisitionismajorissuewiththeenactmentofNewLandAcquisitionAct.POWERGRIDhastakenapolicydecisionfordirectpurchaseoflandthroughacommitteeonwillingbuyerwillingselleronmarket/negotiatedratetoavoidpublicresistanceandcourtinterventionfacedduringlandacquisition.LandforPadghe,Varanasi,Orai,Aligarhetc.havebeenpurchasedthroughabovemethod.

POWERGRIDisconsciousofthefactthattheirprojectsarebyandlargeenvironmentalbenignduetoinherentflexibilityavailableinroutingthetransmissionlinesaswellasforsettingupofsubstations.ButunderstandingEnvironmentalandSocialResponsibilities,POWERGRIDhasalwaysendeavoredtoprotecttheenvironmentinareasofouractivitiesrightfromplanningtocompletionandsubsequentoperationofprojects.POWERGRIDcommitsitselftothegoalofsustainabledevelopmentwhichisreflectedthroughourmotto,“Reducewhereyoucanandmitigatewhereyoucannot”,alongwithourwell-definedEnvironmentalandSocialPolicyandProcedures.

OneofthemostimportantconcernpresentlyfacedbyusistheaccessibilityofRightofWayfortransmissionlines.Variousfactorssuchashighpopulationdensity,otheron-goinginfrastructuraldevelopmentsaswellasourdutyforenvironmentalpreservation,limitthefreedomofselectingamostoptimumroutedevoidofRoWissues.InordertoaddresssuchissuetotheextentpossiblePOWERGRIDhasadoptedinnovativetowerdesigntoreducewidthofRoWandhasalsotakenapolicydecisiontoinstallonlyDoublecircuit(D/C)orMulti-Circuittowersinforestandotherecologicallysensitiveareas.Extensiveutilizationofextrahighvoltagelike765/800kVthattooonD/Clineshavingextendedcarryingcapacityupto6000MWhasalsohelpedinconservingthepreciousnaturalresourcesandRoW.

` in Crore Foreign Exchange Earnings

(i) Interest 0.19(ii) Consultancy Fee 37.85(iii) ExportofGoods 0.00 Total 38.04

Foreign Exchange outgo

(i) Capital goods and Spare Parts 3,731.84(ii) Interest 341.71(iii) Others 82.93

Total 4,156.48

For and on behalf of the Board of Directors

Place: New Delhi (I. S. Jha)Date:08.08.2016 Chairman&ManagingDirector

C. Foreign Exchange Earnings and Outgo

74

ANNEXURE -IV TO THE DIRECTORS’ REPORT

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIEES ACT, 2013 ON THE FINANCIAL STATEMENTS OF POWER GRID CORPORATION OF INDIA LIMITED FOR THE YEAR ENDED 31 MARCH, 2016

ThepreparationoffinancialstatementsofPowerGridCorporationofIndiaLimitedfortheyearended31March,2016inaccordancewiththefinancialreportingframeworkprescribedundertheCompaniesAct,2013(Act) istheresponsibilityofthemanagementofthecompany.ThestatutoryauditorsappointedbytheComptrollerandAuditorGeneralofIndiaunderSection139(5)oftheActareresponsibleforexpressingopiniononthefinancialstatementsunderSection143oftheActbasedonindependentauditinaccordancewithstandardsonauditingprescribedunderSection143(10)oftheAct.ThisisstatedtohavebeendonebythemvidetheirAuditReportdated26May,2016.

I,onthebehalfoftheComptrollerandAuditorGeneralofIndia,haveconductedasupplementaryauditunderSection143(6)(a)oftheActofthefinancialstatementsofPowerGridCorporationofIndiaLimitedfortheyearended31March,2016.Thissupplementaryaudithasbeencarriedoutindependentlywithoutaccesstotheworkingpapersofthestatutoryauditorsandislimitedprimarilytoinquiriesofthestatutoryauditorsandcompanypersonnelandaselectiveexaminationofsomeoftheaccountingrecords.Onthebasisofmyauditnothingsignificanthascometomyknowledgewhichwouldgiverisetoanycommentuponorsupplementtostatutoryauditors”report.

For and on behalf of the Comptroller & Auditor General of India

Sd/-(Ritika Bhatia)

Principal Director of Commercial Audit &Ex-officio Member, Audit Board — III,

New Delhi

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) READ WITH SECTION 129(4) OF THE COMPANIES ACT, 2013 ON THE CONSOLIDATED FINANCIAL STATEMENTS OF POWER GRID CORPORATION OF INDIA LIMITED FOR THE YEAR ENDED 31 MARCH, 2016

ThepreparationofconsolidatedfinancialstatementsofPowerGridCorporationofIndiaLimitedfortheyearended31March,2016inaccordancewiththefinancialreportingframeworkprescribedundertheCompaniesAct,20]3(Act)istheresponsibilityofthemanagementofthecompany.ThestatutoryauditorappointedbytheComptrollerandAuditorGeneralofIndiaunderSection139(5)readwithSection129(4)oftheActisresponsibleforexpressingopiniononthefinancialstatementsunderSection143readwithSection129(4)oftheActbasedonindependentauditinaccordancewiththestandardsonauditingprescribedunderSection143(10)oftheAct.Thisisstatedtohavebeendonebythemvidetheir Audit Report dated 26 May, 2016.

1,onbehalfoftheComptrollerandAuditorGeneralofIndia,haveconductedasupplementaryauditunderSection143(6)(a)readwithSection129(4)oftheActoftheconsolidatedfinancialstatementsofPowerGridCorporationofIndiaLimitedfortheyearended31March,2016.WeconductedasupplementaryauditofthefinancialstatementsofPowerGridCorporationofIndiaLimited,PowerSystemOperationCorporationLimited,NationalHighPowerTestLaboratoryPrivateLimited,PowergridNMTransmissionLimitedandNorthEastTransmissionCompanyLimitedbutdidnotconductsupplementaryauditofthefinancialstatementsofsubsidiaries,associatecompaniesandjointlycontrolledentitieslistedinAnnexure1fortheyearendedonthatdate.Further,Section139(5)and143(6)(b)oftheActarenotapplicabletoPowerlinksTransmissionLimited,TorrentPowerGridLimited,JaypeePowergridLimitedandParbatiKoldamTransmissionCompanyLimitedbeingprivateentitiesandPower Transmission Company Nepal Limited being incorporated in Foreign country under the respective laws, for appointment of their statutory auditororforconductofsupplementaryaudit.Accordingly,C&AGhasneitherappointedthestatutoryauditornorconductedthesupplementaryauditofthesecompanies.Thissupplementaryaudithasbeencarriedoutindependentlywithoutaccesstotheworkingpapersofthestatutoryauditorsand is limitedprimarily to inquiriesof the statutoryauditorsandcompanypersonnel anda selectiveexaminationof someof theaccounting records.

Onthebasisofmyauditnothingsignificanthascometomyknowledgewhichwouldgiverisetoanycommentuponorsupplementtostatutoryauditors’report.

For and on behalf of the Comptroller & Auditor General of India

Sd/-

(Ritika Bhatia)Principal Director of Commercial Audit &

Ex-officio Member, Audit Board — III,New Delhi

Place: New DelhiDated:25July,2016

Place: New DelhiDated:25July,2016

75

ANNEXURE 1

List of subsidiaries„ associate companies and jointly controlled entities whosefinancial statements were not audited bv the Comptroller and Auditor General of India

A. Subsidiary Companies

1. Powergrid Vemagiri Transmission Limited

2. PowergridVizagTransmissionLimited

3. PowergridUnchaharTransmissionLimited

4. PowergridKalaAmbTransmissionLimited

5. PowergridJabalpurTransmissionLimited

6. Powergrid Parli Transmission Limited

7. PowergridWaroraTransmissionLimited

8. Powergrid Southern interconnector Transmission System Limited

9. GridConductorLimited

B. Joint Ventures Incorporated in India

1. EnergyEfficiencyServicesLimited

2. Bihar Grid Company Limited

3. KalingaVidyutPrasaranNigamPrivateLimited

4. Cross Border Power Transmission Company Limited

5. RINLPowergridTLTPrivateLimited

6. TeestaValley Power Transmission Limited

76

ANNEXURE -V TO THE DIRECTORS’ REPORT

Annexure-A

Secretarial Audit Report

To, The Members Power Grid Corporation of India Limited B-9,QutabInstitutionalArea, KatwariaSaraiNewDelhi-110016

1. MaintenanceofsecretarialrecordistheresponsibilityofthemanagementoftheCompany.Ourresponsibilityistoexpressanopiniononthese secretarial records based on our audit.

2. Wehavefollowedtheauditpracticesandprocessesaswereappropriatetoobtainreasonableassuranceaboutthecorrectnessof thecontents of the secretarial records. The verificationwas done on the random test basis to ensure that correct facts are reflected insecretarialrecords.Webelievethattheprocessesandpractices,wefollowedprovideareasonablebasisforouropinion.

3. WehavenotverifiedthecorrectnessandappropriatenessoffinancialrecordsandBooksofAccountsoftheCompany.

4. Whereeverrequired,wehaveobtainedtheManagementrepresentationaboutthecomplianceoflaws,rulesandregulationsandhappeningof events etc.

5. ThecomplianceoftheprovisionsofCorporateandotherapplicablelaws,rules,regulations,standardsistheresponsibilityofmanagement.Ourexaminationwaslimitedtotheverificationofproceduresonrandomtestbasis.

6. TheSecretarialAuditreportisneitheranassuranceastothefutureviabilityofthecompanynoroftheefficacyoreffectivenesswithwhichthe management has conducted the affairs of the Company.

Rupesh Agarwal

Partner

Sd/-

ChandrasekaranAssociates

Company Secretaries

MembershipNo.A16302

CertificateofPracticeNo.:5673

Date: 04.08.2016

Place: New Delhi

77

Secretarial Audit ReportFORTHEFINANCIALYEARENDEDMARCH31,2016

The Members, Power Grid Corporation of India Limited B-9,QutabInstitutionalArea, KatwariaSaraiNewDelhi-110016

WehaveconductedthesecretarialauditofthecomplianceofapplicablestatutoryprovisionsandtheadherencetogoodcorporatepracticesbyPowerGridCorporationofIndiaLimited(hereinaftercalledthecompany).SecretarialAuditwasconductedinamannerthatprovidedusareasonablebasisforevaluatingthecorporateconducts/statutorycompliancesandexpressingouropinionthereon.

BasedonourverificationoftheCompany’sbooks,papers,minutebooks,formsandreturnsfiledandotherrecordsmaintainedbythecompanyandalsotheinformationprovidedbytheCompany,itsofficers,agentsandauthorizedrepresentativesduringtheconductofsecretarialaudit,weherebyreportthatinouropinion,thecompanyhas,duringtheauditperiodcoveringthefinancialyearendedonMarch31,2016compliedwiththestatutoryprovisionslistedhereunderandalsothattheCompanyhasproperBoard-processesandcompliance-mechanisminplacetotheextent,inthemannerandsubjecttothereportingmadehereinafter:

Wehaveexaminedthebooks,papers,minutebooks,formsandreturnsfiledandotherrecordsmaintainedbytheCompanyforthefinancialyearendedonMarch31,2016accordingtotheprovisionsof:

(i) TheCompaniesAct,2013(theAct)andtherulesmadethereunder;

(ii) TheSecuritiesContracts(Regulation)Act,1956(‘SCRA’)andtherulesmadethereunder;

(iii) TheDepositoriesAct,1996andtheRegulationsandBye-lawsframedthereundertotheextentofRegulation55A;

(iv) ForeignExchangeManagementAct,1999andtherulesandregulationsmadethereunder to theextentofForeignDirect Investment,OverseasDirectInvestmentandExternalCommercialBorrowings;

(v) ThefollowingRegulationsandGuidelinesprescribedundertheSecuritiesandExchangeBoardofIndiaAct,1992(‘SEBIAct’):-

(a) TheSecuritiesandExchangeBoardofIndia(SubstantialAcquisitionofSharesandTakeovers)Regulations,2011;

(b) TheSecuritiesandExchangeBoardofIndia(ProhibitionofInsiderTrading)Regulations,2015;

(c) TheSecuritiesandExchangeBoardofIndia(IssueofCapitalandDisclosureRequirements)Regulations,2009;

(d) TheSecuritiesandExchangeBoardofIndia(ShareBasedemployeeBenefits)Regulations,2014;NotApplicable

(e) TheSecuritiesandExchangeBoardofIndia(IssueandListingofDebtSecurities)Regulations,2008;

(f) TheSecuritiesandExchangeBoardof India(Registrars toanIssueandShareTransferAgents)Regulations,1993regarding theCompaniesActanddealingwithclienttotheextentofsecuritiesissued;

(g)TheSecuritiesandExchangeBoardofIndia(DelistingofEquityShares)Regulations,2009;NotApplicableand

(h) TheSecuritiesandExchangeBoardofIndia(BuybackofSecurities)Regulations,1998;NotApplicable

(vi) Asconfirmedandcertifiedbythemanagement,followinglawisspecificallyapplicabletotheCompanybasedontheSectors/Businesses:

(a) TheElectricityAct,2003andRulesandRegulationmade:

Wehavealsoexaminedcompliancewiththeapplicableclauses/Regulationsofthefollowing:

(i) SecretarialStandardsissuedbyTheInstituteofCompanySecretariesofIndiaeffectivefrom01.07.2015.

(ii) TheListingAgreementsenteredintobytheCompanywithNationalStockExchangeofIndiaLimited,BSELimited/SEBI(ListingObligationsandDisclosureRequirements)Regulations,2015effectivefrom01.12.2015.

During the period under review the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc.mentionedabovesubjecttothefollowingobservation:

1. The Company has not compliedwith provision of Section 149 of the Companies Act, 2013 readwith Regulation 17 of SEBI (ListingObligationDisclosureRequirements)Regulation,2015inrespecttotheappointmentofrequisitenumberofIndependentDirectors.

2. TheCompanyhasnotcompliedwithprovisionofSection177oftheCompaniesAct,2013andRegulation18ofSEBI(ListingObligationDisclosureRequirements)Regulation,2015withrespecttoconstitutionofAuditCommittee.

3. TheCompanyhasnotcompliedwithprovisionofSection178oftheCompaniesAct,2013andRegulation19ofSEBI(ListingObligationDisclosureRequirements)Regulation,2015withrespecttoconstitutionofNominationandRemunerationCommittee.

4. The Company has not filed certain e-forms relating to creation of chargeswith the office of the Registrar of Companieswhere thePermanentAccountNumber(PAN)ofthelendersarenotavailable,whichismandatory.

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Wefurtherreportthat

TheBoardofDirectorsoftheCompanyisdulyconstitutedwithproperbalanceofExecutiveDirectors,Non-ExecutiveDirectorsandIndependentDirectorssubjecttoabovementionedobservations.Thechanges,ifany,inthecompositionoftheBoardofDirectorsthattookplaceduringtheperiod under review were carried out in compliance with the provisions of the Act.

Adequatenotice isgiventoalldirectors toschedule theBoardMeetings,agendaanddetailednotesonagendaweresent inadvanceandasystemexistsforseekingandobtainingfurtherinformationandclarificationsontheagendaitemsbeforethemeetingandformeaningfulparticipation at the meeting.

Majoritydecisioniscarriedthroughwhilethedissentingmembers’view,ifany,arecapturedandrecordedaspartoftheminutes.

Wefurtherreportthatthereareadequatesystemsandprocessesinthecompanycommensuratewiththesizeandoperationsofthecompanyto monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

Wefurtherreportthatduringtheauditperiod,theCompanyhasissuedbondof`7326CrorethroughPrivatePlacementsduringtheFinancialYear2015-16asperdetailsmentionedbelow:

Rupesh AgarwalPartner

Sd/-ChandrasekaranAssociatesCompany SecretariesMembershipNo.A16302CertificateofPracticeNo.:5673

Date: 04.08.2016

Place: Delhi

Note:ThisreportistobereadwithourletterofevendatewhichisannexedasAnnexure-Aandformanintegralpartofthisreport.

Sl. No. Type of Bonds Amount (` in crore)

1 Secured,NonCumulative,Redeemable,taxablePOWERGRIDBondLIssue. 2928.00

2 Secured,NonCumulative,Redeemable,taxablePOWERGRIDBondLIIssue. 3000.00

3 Secured,NonCumulative,Redeemable,taxablePOWERGRIDBondLIIIssue. 1398.00

79

ANNEXURE - VI TO THE DIRECTORS’ REPORT

FORM NO. MGT 9EXTRACT OF ANNUAL RETURN

AsonFinancialYearendedon31.03.2016,pursuanttoSection92(3)oftheCompaniesAct,2013andRule12(1)oftheCompany

(Management&Administration)Rules,2014.

I REGISTRATION & OTHER DETAILS:

i CIN L40101DL1989GOI038121

ii Registration Date 23.10.1989

iii Name of the Company POWERGRIDCORPORATIONOFINDIALIMITED

iv Category/Sub-categoryoftheCompany COMPANYLIMITEDBYSHARES/UNIONGOVERNMENTCOMPANY

v "AddressoftheRegisteredoffice &contactdetails"

B-9,QUTABINSTITUTIONALAREA,KATWARIASARAI,NEWDELHI-110016.Tel:011-26560112,26560121,26564812,26564892Fax:011-26601081

vi Whetherlistedcompany YES

vii Name,Address&contactdetailsoftheRegistrar&TransferAgent,ifany.

KarvyComputersharePrivateLimited,KarvySeleniumTowerB,PlotNo.31&32,Gachibowli,FinancialDistrict,Nanakramguda,Serilingampally,Hyderabad-500032.Tele:+91-40-67162222,Fax:+91-40-23420814,TollfreeNo. 1800-345-4001.

II PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the company shall be stated

III PARTICULARS OF HOLDING , SUBSIDIARY & ASSOCIATE COMPANIES

SL No

Name & Description of main products/services NIC Code of the Product /service

% to total turnover of the company

1 Transmission 35107 95.72%

Sl No

Name & Address of the Company CIN/GLN HOLDING/ SUBSIDIARY/

ASSOCIATE

% OF SHARES

HELD

APPLICABLE SECTION

1 Power System Operation Corporation LimitedRegd.Office:1stFloor,B-9,QutabInstitutionalArea,KatwariaSarai,NewDelhi–110016.

U40105DL2009GOI188682 Subsidiary 100 Section2(87)

2 POWERGRIDVemagiriTransmissionLimitedRegd. Office: B-9, Qutab Institutional Area,KatwariaSarai,NewDelhi–110016.

U40300DL2011GOI217975 Subsidiary 100 Section2(87)

3 POWERGRID NM Transmission Limited Regd. Office: B-9, Qutab Institutional Area,KatwariaSarai,NewDelhi–110016.

U40106DL2011GOI219542 Subsidiary 100 Section2(87)

4 POWERGRID Vizag Transmission Limited Regd. Office: B-9, Qutab Institutional Area,KatwariaSarai,NewDelhi–110016.

U40300DL2011GOI228136 Subsidiary 100 Section2(87)

5 POWERGRIDUnchaharTransmissionLimitedRegd. Office: B-9, Qutab Institutional Area,KatwariaSarai,NewDelhi–110016.

U40300DL2012GOI246341 Subsidiary 100 Section2(87)

6 POWERGRID Kala Amb Transmission Limited Regd. Office: B-9, Qutab Institutional Area,KatwariaSarai,NewDelhi–110016.

U40106DL2013GOI256048 Subsidiary 100 Section2(87)

7 POWERGRID Jabalpur Transmission Limited Regd. Office: B-9, Qutab Institutional Area,KatwariaSarai,NewDelhi–110016.

U40300DL2014GOI270433 Subsidiary 100 Section2(87)

8 POWERGRID Warora Transmission LimitedRegd. Office: B-9, Qutab Institutional Area,KatwariaSarai,NewDelhi–110016.

U40300DL2014GOI269918 Subsidiary 100 Section2(87)

80

Sl No

Name & Address of the Company CIN/GLN HOLDING/ SUBSIDIARY/

ASSOCIATE

% OF SHARES

HELD

APPLICABLE SECTION

9 POWERGRID Parli Transmission LimitedRegd. Office: B-9, Qutab Institutional Area,KatwariaSarai,NewDelhi–110016.

U40109DL2014GOI269652 Subsidiary 100 Section2(87)

10 POWERGRID Southern InterconnectorTransmission System Limited Regd. Office: B-9, Qutab Institutional Area,KatwariaSarai,NewDelhi–110016.

U40106DL2015GOI278746 Subsidiary 100 section2(87)

11 Grid Conductors LimitedRegd.Office:8thfloor,'A'Wing,SaudaminiPlot.No.2,Sector29,Gurgaon-122001,Haryana

U31909HR2015GOI056647 Subsidiary 100 Section2(87)

12 PowerlinksTransmissionLimited 10th Floor, DLF Tower A, District Center Jasola, NewDelhi-110025

U40105DL2001PLC110714 Joint Venture 49 Section2(6)

13 Torrent Power Grid LimitedTorrent House, Off Ashram road Ahmedabad-380009.

U40104GJ2005PLC046660 Joint Venture 26 Section2(6)

14 Jaypee Powergrid Limited ‘JAHouse’,63BasantLok,VasantVihar,NewDelhi-110057

U40101DL2006PLC154627 Joint Venture 26 Section2(6)

15 North East Transmission Company LimitedHouse No. 051358, Daleshwar, Road No. 3,PostOffice,Dhaleshwar,Agartala799007

U40101TR2008PLC008249 Joint Venture 26 Section2(6)

16 ParbatiKoldamTransmissionCompanyLimitedB-9,QutabInstitutionalArea,KatwariaSarai,NewDelhi-110016

U40108DL2002PLC116786 Joint Venture 26 Section2(6)

17 Teestavalley Power Transmission Limited 2nd Floor, Vijaya Building 17, BarakhambaRoad,CannaughtPlace,NewDelhi-110001

U40109DL2006SGC151871 Joint Venture 26 Section2(6)

18 National High Power Test Laboratory Pvt.Limited Core-7,ScopeComplex,7, InstitutionalArea,LodiRoad,NewDelhi-110003.

U73100DL2009PTC190541 Joint Venture 20 Section2(6)

19 EnergyEfficiencyServicesLimited4thFloor,SewaBhavan,R.KPuram,NewDelhi110066

U40200DL2009PLC196789 Joint Venture 13.63 Section2(6)

20 Bihar Grid Company Limited 2ndFloor,BoringRoad,AlankarPlace,Patna,Bihar 800001

U40100BR2013PLC019722 Joint Venture 50 Section2(6)

21 KalingaBidyutPrasaranNigamPrivateLimited27,ShahidNagar,Bhubaneswar,Khorda-751007

U40102OR2012PTC016411 Joint Venture 50 Section2(6)

22 Cross Border Power Transmission Company LimitedC/oIL&FSSecuritiesServicesLtd.,10,Community Center, 2ndFloor,EastofKailash,NewDelhi-110065

U40102DL2006PLC156738 Joint Venture 26 Section2(6)

23 RINLPOWERGRIDTLTPrivateLimitedRoomNo.31,'B'Block,ProjectOffice,VisakhapatnamSteelPlant,Visakhapatnam-530031,AndhraPradesh,India

U28121AP2015PTC097211 Joint Venture 50 Section2(6)

24 Power Transmission Company Nepal Limited C/oNepalElectricityAuthority,DurbarMarg,Kathmandu,Nepal

- Joint Venture 26 Section2(6)

81

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EUROPACIFICGROWTH

FUND

296023422

5.66

31/03/2015

296023422

5.66

Sale

15/05/2015

-1427235

Tran

sfer

294596187

5.63

Sale

22/05/2015

-19022244

Tran

sfer

275573943

5.27

Sale

29/05/2015

-5702278

Tran

sfer

269871665

5.16

Sale

05/06/2015

-8659600

Tran

sfer

261212065

4.99

Sale

12/06/2015

-10638274

Tran

sfer

250573791

4.79

Sale

03/07/2015

-714055

Tran

sfer

249859736

4.78

Sale

24/07/2015

-2404058

Tran

sfer

247455678

4.73

Sale

31/07/2015

-2815976

Tran

sfer

244639702

4.68

Sale

07/08/2015

-2722774

Tran

sfer

241916928

4.62

Sale

14/08/2015

-633410

Tran

sfer

241283518

4.61

Sale

21/08/2015

-342439

Tran

sfer

240941079

4.61

Sale

04/09/2015

-266276

Tran

sfer

240674803

4.60

Sale

11/09/2015

-7410493

Tran

sfer

233264310

4.46

Sale

18/09/2015

-2131638

Tran

sfer

231132672

4.42

Sale

25/09/2015

-5478556

Tran

sfer

225654116

4.31

Sale

09/10/2015

-339338

Tran

sfer

225314778

4.31

Sale

16/10/2015

-40228

Tran

sfer

225274550

4.31

Sale

23/10/2015

-4367655

Tran

sfer

220906895

4.22

Sale

30/10/2015

-140294

Tran

sfer

220766601

4.22

Sale

06/11/2015

-11504102

Tran

sfer

209262499

4.00

Sale

26/02/2016

-258805

Tran

sfer

209003694

4.00

Sale

04/03/2016

-3191913

Tran

sfer

205811781

3.93

Sale

11/03/2016

-2061067

Tran

sfer

203750714

3.89

Sale

18/03/2016

-1196349

Tran

sfer

202554365

3.87

Sale

31/03/2016

-706643

Tran

sfer

201847722

3.86

Clos

ing

Bala

nce

31/03/2016

201847722

3.86

2O

peni

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CORPO

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IND

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-ULIF00220091

199107827

3.81

31/03/2015

199107827

3.81

Sale

10/04/2015

-4782644

Tran

sfer

194325183

3.71

Sale

17/04/2015

-300000

Tran

sfer

194025183

3.71

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PA

TTER

N O

F TO

P 1

0 S

HA

REH

OLD

ERS

BET

WEE

N 0

1/0

4/2

01

5 A

ND

31

/03

/20

16

Shar

ehol

din

g at

th

e be

ggin

nin

g of

th

e Y

ear

Cu

mu

lati

ve S

har

ehol

din

g du

rin

g th

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ear

Sl.

no

Type

Nam

e of

th

e Sh

are

Hol

der

No

of

Shar

es%

of

tota

l sh

ares

of

the

com

pan

y

Dat

eIn

crea

se/

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sh

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hol

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g

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son

No

of S

har

es%

of

tota

l sh

ares

of

the

com

pan

ySa

le24/04/2015

-2001086

Tran

sfer

192024097

3.67

Sale

01/05/2015

-941166

Tran

sfer

191082931

3.65

Sale

08/05/2015

-1363520

Tran

sfer

189719411

3.63

Sale

15/05/2015

-2360000

Tran

sfer

187359411

3.58

Sale

22/05/2015

-1562898

Tran

sfer

185796513

3.55

Sale

09/10/2015

-295000

Tran

sfer

185501513

3.55

Sale

16/10/2015

-313009

Tran

sfer

185188504

3.54

Sale

23/10/2015

-465929

Tran

sfer

184722575

3.53

Sale

30/10/2015

-883569

Tran

sfer

183839006

3.51

Sale

06/11/2015

-74193

Tran

sfer

183764813

3.51

Sale

20/11/2015

-40000

Tran

sfer

183724813

3.51

Sale

27/11/2015

-20000

Tran

sfer

183704813

3.51

Sale

04/12/2015

-1692

Tran

sfer

183703121

3.51

Sale

08/01/2016

-10000

Tran

sfer

183693121

3.51

Sale

15/01/2016

-10000

Tran

sfer

183683121

3.51

Sale

29/01/2016

-10000

Tran

sfer

183673121

3.51

Sale

05/02/2016

-30000

Tran

sfer

183643121

3.51

Sale

12/02/2016

-2807299

Tran

sfer

180835822

3.46

Sale

19/02/2016

-235907

Tran

sfer

180599915

3.45

Sale

26/02/2016

-499650

Tran

sfer

180100265

3.44

Sale

18/03/2016

-1983413

Tran

sfer

178116852

3.40

Sale

25/03/2016

-3510749

Tran

sfer

174606103

3.34

Sale

31/03/2016

-5132809

Tran

sfer

169473294

3.24

Clos

ing

Bala

nce

31/03/2016

169473294

3.24

3O

peni

ng B

alan

ceICICIPRUDENTIALVALUE

FUNDSERIES2

113493562

2.17

31/03/2015

113493562

2.17

Purc

hase

10/04/2015

3401943

Tran

sfer

116895505

2.23

Sale

10/04/2015

-3553

Tran

sfer

116891952

2.23

Purc

hase

17/04/2015

437697

Tran

sfer

117329649

2.24

Sale

17/04/2015

-342169

Tran

sfer

116987480

2.24

Purc

hase

24/04/2015

1286547

Tran

sfer

118274027

2.26

Purc

hase

01/05/2015

2281961

Tran

sfer

120555988

2.30

Sale

01/05/2015

-645

Tran

sfer

120555343

2.30

Purc

hase

08/05/2015

31447

Tran

sfer

120586790

2.30

Sale

08/05/2015

-1123

Tran

sfer

120585667

2.30

86

SHA

REH

OLD

ING

PA

TTER

N O

F TO

P 1

0 S

HA

REH

OLD

ERS

BET

WEE

N 0

1/0

4/2

01

5 A

ND

31

/03

/20

16

Shar

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din

g at

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Cu

mu

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Sl.

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Type

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are

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No

of

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ares

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com

pan

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Dat

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No

of S

har

es%

of

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ares

of

the

com

pan

yPu

rcha

se15/05/2015

1174310

Tran

sfer

121759977

2.33

Purc

hase

22/05/2015

2901772

Tran

sfer

124661749

2.38

Sale

22/05/2015

-808000

Tran

sfer

123853749

2.37

Purc

hase

29/05/2015

788849

Tran

sfer

124642598

2.38

Purc

hase

05/06/2015

4070961

Tran

sfer

128713559

2.46

Sale

05/06/2015

-301631

Tran

sfer

128411928

2.45

Purc

hase

12/06/2015

389419

Tran

sfer

128801347

2.46

Sale

12/06/2015

-1668000

Tran

sfer

127133347

2.43

Purc

hase

19/06/2015

390310

Tran

sfer

127523657

2.44

Sale

19/06/2015

-62000

Tran

sfer

127461657

2.44

Purc

hase

26/06/2015

1293027

Tran

sfer

128754684

2.46

Purc

hase

30/06/2015

566000

Tran

sfer

129320684

2.47

Sale

30/06/2015

-652125

Tran

sfer

128668559

2.46

Sale

03/07/2015

-421202

Tran

sfer

128247357

2.45

Sale

10/07/2015

-764738

Tran

sfer

127482619

2.44

Purc

hase

17/07/2015

6000

00Tr

ansf

er128082619

2.45

Sale

17/07/2015

-319

Tran

sfer

128082300

2.45

Purc

hase

24/07/2015

457215

Tran

sfer

128539515

2.46

Purc

hase

31/07/2015

532489

Tran

sfer

129072004

2.47

Sale

31/07/2015

-309196

Tran

sfer

128762808

2.46

Purc

hase

07/08/2015

21032

Tran

sfer

128783840

2.46

Sale

07/08/2015

-607135

Tran

sfer

128176705

2.45

Sale

14/08/2015

-50

Tran

sfer

128176655

2.45

Purc

hase

21/08/2015

845862

Tran

sfer

129022517

2.47

Purc

hase

28/08/2015

1811

146

Tran

sfer

130833663

2.50

Purc

hase

04/09/2015

231461

Tran

sfer

131065124

2.51

Purc

hase

11/09/2015

12819

Tran

sfer

131077943

2.51

Purc

hase

18/09/2015

330072

Tran

sfer

131408015

2.51

Purc

hase

25/09/2015

1920

Tran

sfer

131409935

2.51

Purc

hase

30/09/2015

402425

Tran

sfer

131812360

2.52

Sale

30/09/2015

-824740

Tran

sfer

130987620

2.50

Purc

hase

09/10/2015

2862

Tran

sfer

130990482

2.50

Sale

09/10/2015

-324713

Tran

sfer

130665769

2.50

Sale

16/10/2015

-1147264

Tran

sfer

129518505

2.48

87

SHA

REH

OLD

ING

PA

TTER

N O

F TO

P 1

0 S

HA

REH

OLD

ERS

BET

WEE

N 0

1/0

4/2

01

5 A

ND

31

/03

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16

Shar

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g at

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ear

Cu

mu

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Sl.

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Type

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are

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No

of

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of

tota

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ares

of

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com

pan

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Dat

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son

No

of S

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es%

of

tota

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ares

of

the

com

pan

yPu

rcha

se23/10/2015

6659

Tran

sfer

129525164

2.48

Sale

23/10/2015

-566696

Tran

sfer

128958468

2.46

Sale

30/10/2015

-5998

Tran

sfer

128952470

2.46

Purc

hase

06/11/2015

7314

Tran

sfer

128959784

2.47

Purc

hase

13/11/2015

958241

Tran

sfer

129918025

2.48

Purc

hase

20/11/2015

1081

2Tr

ansf

er129928837

2.48

Purc

hase

27/11/2015

1423

Tran

sfer

129930260

2.48

Sale

27/11/2015

-2000

Tran

sfer

129928260

2.48

Purc

hase

04/12/2015

1330647

Tran

sfer

131258907

2.51

Sale

04/12/2015

-296000

Tran

sfer

130962907

2.50

Purc

hase

11/12/2015

664185

Tran

sfer

131627092

2.52

Sale

11/12/2015

-448000

Tran

sfer

131179092

2.51

Purc

hase

18/12/2015

370884

Tran

sfer

131549976

2.51

Purc

hase

25/12/2015

2409811

Tran

sfer

133959787

2.56

Sale

25/12/2015

-223504

Tran

sfer

133736283

2.56

Purc

hase

31/12/2015

636

Tran

sfer

133736919

2.56

Sale

31/12/2015

-3214235

Tran

sfer

130522684

2.49

Sale

01/01/2016

-1132387

Tran

sfer

129390297

2.47

Purc

hase

08/01/2016

1070914

Tran

sfer

130461211

2.49

Sale

08/01/2016

-2475166

Tran

sfer

127986045

2.45

Purc

hase

15/01/2016

2027479

Tran

sfer

130013524

2.49

Sale

15/01/2016

-8302653

Tran

sfer

121710871

2.33

Purc

hase

22/01/2016

13240

Tran

sfer

121724111

2.33

Sale

22/01/2016

-693789

Tran

sfer

121030322

2.31

Purc

hase

29/01/2016

5088

Tran

sfer

121035410

2.31

Sale

29/01/2016

-217595

Tran

sfer

120817815

2.31

Purc

hase

05/02/2016

510478

Tran

sfer

121328293

2.32

Sale

05/02/2016

-2582630

Tran

sfer

118745663

2.27

Purc

hase

12/02/2016

490048

Tran

sfer

119235711

2.28

Sale

12/02/2016

-764624

Tran

sfer

118471087

2.26

Purc

hase

19/02/2016

1254482

Tran

sfer

119725569

2.29

Sale

19/02/2016

-1215938

Tran

sfer

118509631

2.27

Purc

hase

26/02/2016

8879

Tran

sfer

118518510

2.27

Sale

26/02/2016

-2294015

Tran

sfer

116224495

2.22

88

SHA

REH

OLD

ING

PA

TTER

N O

F TO

P 1

0 S

HA

REH

OLD

ERS

BET

WEE

N 0

1/0

4/2

01

5 A

ND

31

/03

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16

Shar

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din

g at

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Cu

mu

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Sl.

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Type

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Hol

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No

of

Shar

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com

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Dat

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son

No

of S

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of

tota

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ares

of

the

com

pan

yPu

rcha

se04/03/2016

1135173

Tran

sfer

117359668

2.24

Sale

04/03/2016

-705197

Tran

sfer

116654471

2.23

Purc

hase

11/03/2016

2184

0Tr

ansf

er116676311

2.23

Sale

11/03/2016

-600000

Tran

sfer

116076311

2.22

Purc

hase

18/03/2016

1456850

Tran

sfer

117533161

2.25

Sale

18/03/2016

-106

Tran

sfer

117533055

2.25

Purc

hase

25/03/2016

57150

Tran

sfer

117590205

2.25

Sale

25/03/2016

-16770

Tran

sfer

117573435

2.25

Purc

hase

31/03/2016

1223065

Tran

sfer

118796500

2.27

Sale

31/03/2016

-200000

Tran

sfer

118596500

2.27

Clos

ing

Bala

nce

31/03/2016

118596500

2.27

4O

peni

ng B

alan

ceNEW

WORLDFUNDINC

97858870

1.87

31/03/2015

97858870

1.87

Sale

15/05/2015

-307317

Tran

sfer

97551553

1.86

Sale

22/05/2015

-4095922

Tran

sfer

93455631

1.79

Sale

29/05/2015

-1227832

Tran

sfer

92227799

1.76

Sale

05/06/2015

-1864608

Tran

sfer

90363191

1.73

Sale

12/06/2015

-2290662

Tran

sfer

88072529

1.68

Sale

03/07/2015

-153752

Tran

sfer

87918777

1.68

Sale

24/07/2015

-517649

Tran

sfer

87401128

1.67

Sale

31/07/2015

-606344

Tran

sfer

86794784

1.66

Sale

07/08/2015

-586274

Tran

sfer

86208510

1.65

Sale

14/08/2015

-136388

Tran

sfer

86072122

1.65

Sale

21/08/2015

-73734

Tran

sfer

85998388

1.64

Sale

04/09/2015

-71007

Tran

sfer

85927381

1.64

Sale

11/09/2015

-1976133

Tran

sfer

83951248

1.60

Sale

18/09/2015

-566760

Tran

sfer

83384488

1.59

Sale

25/09/2015

-1376441

Tran

sfer

82008047

1.57

Sale

09/10/2015

-90490

Tran

sfer

81917557

1.57

Sale

16/10/2015

-10727

Tran

sfer

81906830

1.57

Sale

23/10/2015

-1164708

Tran

sfer

80742122

1.54

Sale

30/10/2015

-37412

Tran

sfer

80704710

1.54

Sale

06/11/2015

-3067760

Tran

sfer

77636950

1.48

Sale

25/12/2015

-5450000

Tran

sfer

72186950

1.38

Sale

26/02/2016

-161692

Tran

sfer

72025258

1.38

89

SHA

REH

OLD

ING

PA

TTER

N O

F TO

P 1

0 S

HA

REH

OLD

ERS

BET

WEE

N 0

1/0

4/2

01

5 A

ND

31

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16

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Cu

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No

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No

of S

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of

tota

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ares

of

the

com

pan

ySa

le04/03/2016

-1994185

Tran

sfer

70031073

1.34

Sale

11/03/2016

-1321052

Tran

sfer

68710021

1.31

Sale

18/03/2016

-1281702

Tran

sfer

67428319

1.29

Sale

31/03/2016

-757058

Tran

sfer

66671261

1.27

Clos

ing

Bala

nce

31/03/2016

66671261

1.27

5O

peni

ng B

alan

ceCOMGESTGROWTHPLC

A/CCOMGESTGROWTH

EMER

GIN

G M

AR

65881497

1.26

31/03/2015

65881497

1.26

Purc

hase

15/05/2015

900000

Tran

sfer

66781497

1.28

Purc

hase

30/10/2015

7500000

Tran

sfer

74281497

1.42

Clos

ing

Bala

nce

31/03/2016

74281497

1.42

6O

peni

ng B

alan

ceCAPITALWORLD

GROWTHANDINCOME

FUND

64038000

1.22

31/03/2015

64038000

1.22

Clos

ing

Bala

nce

31/03/2016

64038000

1.22

7O

peni

ng B

alan

ceAMERICANFUNDS

INSURANCESERIES

INTERNATIONALFUND

62539040

1.20

31/03/2015

62539040

1.20

Sale

25/09/2015

-194666

Tran

sfer

62344374

1.19

Sale

30/09/2015

-14707

Tran

sfer

62329667

1.19

Sale

02/10/2015

-1230478

Tran

sfer

61099189

1.17

Sale

09/10/2015

-1508001

Tran

sfer

59591188

1.14

Sale

16/10/2015

-432148

Tran

sfer

59159040

1.13

Sale

19/02/2016

-1465000

Tran

sfer

57694040

1.10

Sale

26/02/2016

-34015

Tran

sfer

57660025

1.10

Sale

04/03/2016

-419507

Tran

sfer

57240518

1.09

Sale

11/03/2016

-339372

Tran

sfer

56901146

1.09

Sale

18/03/2016

-1253592

Tran

sfer

55647554

1.06

Sale

31/03/2016

-740457

Tran

sfer

54907097

1.05

Clos

ing

Bala

nce

31/03/2016

54907097

1.05

8O

peni

ng B

alan

ceM

AG

ELLA

N

61276308

1.17

31/03/2015

61276308

1.17

Sale

17/04/2015

-600000

Tran

sfer

60676308

1.16

Sale

24/04/2015

-731557

Tran

sfer

59944751

1.15

Sale

04/09/2015

-350000

Tran

sfer

59594751

1.14

Sale

11/09/2015

-1539199

Tran

sfer

58055552

1.11

Purc

hase

30/10/2015

4165430

Tran

sfer

62220982

1.19

90

SHA

REH

OLD

ING

PA

TTER

N O

F TO

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REH

OLD

ERS

BET

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N 0

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Cu

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hol

din

g

Rea

son

No

of S

har

es%

of

tota

l sh

ares

of

the

com

pan

ySa

le25/12/2015

-1953212

Tran

sfer

60267770

1.15

Clos

ing

Bala

nce

31/03/2016

60267770

1.15

9O

peni

ng B

alan

ceIC

ICI

PR

UD

ENTI

AL

LIFE

IN

SUR

AN

CE

CO

MP

AN

Y L

IMIT

ED N

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60781048

1.16

31/03/2015

60781048

1.16

Purc

hase

10/04/2015

259883

Tran

sfer

61040931

1.17

Purc

hase

17/04/2015

338073

Tran

sfer

61379004

1.17

Purc

hase

24/04/2015

223861

Tran

sfer

61602865

1.18

Sale

01/05/2015

-220873

Tran

sfer

61381992

1.17

Purc

hase

08/05/2015

195266

Tran

sfer

61577258

1.18

Purc

hase

15/05/2015

1332252

Tran

sfer

62909510

1.20

Purc

hase

22/05/2015

15171533

Tran

sfer

78081043

1.49

Sale

29/05/2015

-93496

Tran

sfer

77987547

1.49

Sale

05/06/2015

-508105

Tran

sfer

77479442

1.48

Sale

12/06/2015

-185665

Tran

sfer

77293777

1.48

Purc

hase

19/06/2015

135228

Tran

sfer

77429005

1.48

Sale

26/06/2015

-6570

Tran

sfer

77422435

1.48

Purc

hase

30/06/2015

15844

Tran

sfer

77438279

1.48

Purc

hase

03/07/2015

796877

Tran

sfer

78235156

1.50

Purc

hase

10/07/2015

370424

Tran

sfer

78605580

1.50

Purc

hase

17/07/2015

399476

Tran

sfer

79005056

1.51

Purc

hase

24/07/2015

340111

Tran

sfer

79345167

1.52

Purc

hase

31/07/2015

1064

00Tr

ansf

er79451567

1.52

Purc

hase

07/08/2015

484990

Tran

sfer

79936557

1.53

Purc

hase

14/08/2015

85982

Tran

sfer

80022539

1.53

Sale

21/08/2015

-419803

Tran

sfer

79602736

1.52

Purc

hase

28/08/2015

2923805

Tran

sfer

82526541

1.58

Purc

hase

04/09/2015

2590210

Tran

sfer

85116751

1.63

Purc

hase

11/09/2015

789295

Tran

sfer

85906046

1.64

Sale

18/09/2015

-1525500

Tran

sfer

84380546

1.61

Sale

25/09/2015

-617172

Tran

sfer

83763374

1.60

Purc

hase

30/09/2015

56464

Tran

sfer

83819838

1.60

Purc

hase

02/10/2015

1157681

Tran

sfer

84977519

1.62

Purc

hase

09/10/2015

672342

Tran

sfer

85649861

1.64

Sale

16/10/2015

-268484

Tran

sfer

85381377

1.63

91

SHA

REH

OLD

ING

PA

TTER

N O

F TO

P 1

0 S

HA

REH

OLD

ERS

BET

WEE

N 0

1/0

4/2

01

5 A

ND

31

/03

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16

Shar

ehol

din

g at

th

e be

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ear

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mu

lati

ve S

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rin

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no

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No

of

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es%

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pan

y

Dat

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se/

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sh

are

hol

din

g

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son

No

of S

har

es%

of

tota

l sh

ares

of

the

com

pan

ySa

le23/10/2015

-21166

Tran

sfer

85360211

1.63

Sale

30/10/2015

-210845

Tran

sfer

85149366

1.63

Purc

hase

06/11/2015

2833929

Tran

sfer

87983295

1.68

Purc

hase

13/11/2015

199732

Tran

sfer

88183027

1.69

Sale

20/11/2015

-42990

Tran

sfer

88140037

1.68

Purc

hase

27/11/2015

396531

Tran

sfer

88536568

1.69

Purc

hase

04/12/2015

921173

Tran

sfer

89457741

1.71

Sale

11/12/2015

-796523

Tran

sfer

8866

1218

1.69

Purc

hase

18/12/2015

149231

Tran

sfer

88810449

1.70

Sale

25/12/2015

-21616

Tran

sfer

88788833

1.70

Purc

hase

31/12/2015

191739

Tran

sfer

88980572

1.70

Sale

08/01/2016

-127116

Tran

sfer

88853456

1.70

Sale

15/01/2016

-989132

Tran

sfer

87864324

1.68

Purc

hase

22/01/2016

170517

Tran

sfer

88034841

1.68

Sale

29/01/2016

-1689280

Tran

sfer

86345561

1.65

Purc

hase

05/02/2016

80015

Tran

sfer

86425576

1.65

Sale

12/02/2016

-102120

Tran

sfer

86323456

1.65

Purc

hase

19/02/2016

676077

Tran

sfer

86999533

1.66

Purc

hase

26/02/2016

394114

Tran

sfer

87393647

1.67

Purc

hase

04/03/2016

22550

Tran

sfer

87416197

1.67

Purc

hase

11/03/2016

119067

Tran

sfer

87535264

1.67

Purc

hase

18/03/2016

14779

Tran

sfer

87550043

1.67

Purc

hase

25/03/2016

340191

Tran

sfer

87890234

1.68

Purc

hase

31/03/2016

115317

Tran

sfer

88005551

1.68

Clos

ing

Bala

nce

31/03/2016

88005551

1.68

10O

peni

ng B

alan

ceHDFCTRUSTEECOMPANY

LIMITEDA/CHDFC

BALANCEDFUN

25178770

0.48

31/03/2015

25178770

0.48

Purc

hase

24/04/2015

5832

Tran

sfer

25184602

0.48

Purc

hase

01/05/2015

1548

Tran

sfer

25186150

0.48

Sale

01/05/2015

-325000

Tran

sfer

24861150

0.48

Purc

hase

08/05/2015

450000

Tran

sfer

25311150

0.48

Sale

08/05/2015

-1750000

Tran

sfer

23561150

0.45

Purc

hase

15/05/2015

1000

00Tr

ansf

er23661150

0.45

Purc

hase

22/05/2015

1741

Tran

sfer

23662891

0.45

92

SHA

REH

OLD

ING

PA

TTER

N O

F TO

P 1

0 S

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BET

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N 0

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ND

31

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16

Shar

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ear

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Sl.

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No

of

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es%

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pan

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Dat

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se/

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sh

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hol

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son

No

of S

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es%

of

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ares

of

the

com

pan

yPu

rcha

se29/05/2015

4111

Tran

sfer

23667002

0.45

Purc

hase

05/06/2015

74Tr

ansf

er23667076

0.45

Purc

hase

12/06/2015

77330

Tran

sfer

23744406

0.45

Purc

hase

19/06/2015

576927

Tran

sfer

24321333

0.46

Sale

19/06/2015

-300000

Tran

sfer

24021333

0.46

Purc

hase

26/06/2015

1707649

Tran

sfer

25728982

0.49

Sale

10/07/2015

-1072

Tran

sfer

25727910

0.49

Purc

hase

17/07/2015

325000

Tran

sfer

26052910

0.50

Purc

hase

24/07/2015

361

Tran

sfer

26053271

0.50

Purc

hase

07/08/2015

253

Tran

sfer

26053524

0.50

Sale

07/08/2015

-80000

Tran

sfer

25973524

0.50

Sale

14/08/2015

-200000

Tran

sfer

25773524

0.49

Purc

hase

28/08/2015

2373

Tran

sfer

25775897

0.49

Purc

hase

04/09/2015

2345

Tran

sfer

25778242

0.49

Sale

04/09/2015

-75000

Tran

sfer

25703242

0.49

Purc

hase

11/09/2015

6472012

Tran

sfer

32175254

0.62

Purc

hase

18/09/2015

6800

Tran

sfer

32182054

0.62

Purc

hase

30/09/2015

35000

Tran

sfer

32217054

0.62

Sale

09/10/2015

-31

Tran

sfer

32217023

0.62

Purc

hase

16/10/2015

2878980

Tran

sfer

35096003

0.67

Purc

hase

23/10/2015

2200378

Tran

sfer

37296381

0.71

Sale

30/10/2015

-32218

Tran

sfer

37264163

0.71

Purc

hase

06/11/2015

7000000

Tran

sfer

44264163

0.85

Purc

hase

13/11/2015

2488

84Tr

ansf

er44513047

0.85

Purc

hase

20/11/2015

2773

Tran

sfer

44515820

0.85

Purc

hase

27/11/2015

985

Tran

sfer

44516805

0.85

Sale

27/11/2015

-271796

Tran

sfer

44245009

0.85

Purc

hase

04/12/2015

469750

Tran

sfer

44714759

0.85

Purc

hase

11/12/2015

970432

Tran

sfer

45685191

0.87

Purc

hase

18/12/2015

1361

Tran

sfer

45686552

0.87

Purc

hase

25/12/2015

2214

Tran

sfer

45688766

0.87

Purc

hase

31/12/2015

246

Tran

sfer

45689012

0.87

Purc

hase

08/01/2016

500000

Tran

sfer

46189012

0.88

Purc

hase

15/01/2016

3136590

Tran

sfer

49325602

0.94

93

SHA

REH

OLD

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PA

TTER

N O

F TO

P 1

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BET

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N 0

1/0

4/2

01

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ND

31

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16

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th

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Cu

mu

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Sl.

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Type

Nam

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No

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com

pan

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Dat

eIn

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se/

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e in

sh

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hol

din

g

Rea

son

No

of S

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es%

of

tota

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ares

of

the

com

pan

ySa

le15/01/2016

-575000

Tran

sfer

48750602

0.93

Purc

hase

22/01/2016

2221415

Tran

sfer

50972017

0.97

Purc

hase

29/01/2016

2931

Tran

sfer

50974948

0.97

Purc

hase

05/02/2016

732083

Tran

sfer

51707031

0.99

Purc

hase

12/02/2016

1239703

Tran

sfer

52946734

1.01

Purc

hase

19/02/2016

1204843

Tran

sfer

54151577

1.04

Purc

hase

26/02/2016

1024

Tran

sfer

54152601

1.04

Purc

hase

04/03/2016

8288

0Tr

ansf

er54235481

1.04

Sale

04/03/2016

-48000

Tran

sfer

54187481

1.04

Purc

hase

11/03/2016

5317

Tran

sfer

54192798

1.04

Purc

hase

18/03/2016

1798

Tran

sfer

54194596

1.04

Sale

18/03/2016

-965245

Tran

sfer

53229351

1.02

Sale

25/03/2016

-209122

Tran

sfer

53020229

1.01

Purc

hase

31/03/2016

4165

Tran

sfer

53024394

1.01

Sale

31/03/2016

-403

Tran

sfer

53023991

1.01

Clos

ing

Bala

nce

31/03/2016

53023991

1.01

Shar

ehol

din

g at

th

e en

d of

th

e ye

arC

um

ula

tive

Sh

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oldi

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the

year

For

Each

of

the

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ecto

rs &

KM

PN

o.of

sh

ares

% o

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tal s

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es o

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mpa

ny

No

of s

har

es%

of

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l sh

ares

of

the

com

pan

yAtthebeginningoftheyear01/04/2015

2,998

02,998

0

Datewiseincrease/decreaseinShareholdingduringtheyearspecifyingthereasons

forincrease/decrease(e.g.allotment/transfer/bonus/sweatequityetc)

00

00

Attheendoftheyear31/03/2016

2,998

02,998

0

(v)

Sh

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oldi

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of D

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tors

& K

MP

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hri

I.S

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tor

(Ch

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agin

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w.e

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cts)

till

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ny

No

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har

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l sh

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of

the

com

pan

yAtthebeginningoftheyear01/04/2015

3,056

03,056

0

Datewiseincrease/decreaseinShareholdingduringtheyearspecifyingthereasons

forincrease/decrease(e.g.allotment/transfer/bonus/sweatequityetc)

00

00

Attheendoftheyear31/03/2016

3,056

03,056

0

Shar

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ny

No

of s

har

es%

of

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l sh

ares

of

the

com

pan

yAtthebeginningoftheyear01/04/2015

9,016

09,016

0

Datewiseincrease/decreaseinShareholdingduringtheyearspecifyingthereasons

forincrease/decrease(e.g.allotment/transfer/bonus/sweatequityetc)

00

00

Attheendoftheyear31/03/2016

9,016

09,016

0

Shar

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ny

No

of s

har

es%

of

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l sh

ares

of

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com

pan

yAtthebeginningoftheyear01/04/2015

1,798

01,798

0

Datewiseincrease/decreaseinShareholdingduringtheyearspecifyingthereasons

forincrease/decrease(e.g.allotment/transfer/bonus/sweatequityetc)

00

00

Attheendoftheyear31/03/2016

1,798

01,798

0

Shar

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l sh

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yAtthebeginningoftheyear01/04/2015

00

00

Datewiseincrease/decreaseinShareholdingduringtheyearspecifyingthereasons

forincrease/decrease(e.g.allotment/transfer/bonus/sweatequityetc)

00

00

Attheendoftheyear31/03/2016

00

00

2. S

hri

R. T

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rwal

, Dir

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r (F

inan

ce)

3. S

hri

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ingh

, Dir

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r (P

erso

nn

el)

4. S

hri

R. P

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mal

, Dir

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r (O

pera

tion

s &

Pro

ject

s)

5. D

r. P

rade

ep K

um

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yAtthebeginningoftheyear01/04/2015

00

00

Datewiseincrease/decreaseinShareholdingduringtheyearspecifyingthereasons

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00

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Attheendoftheyear31/03/2016

00

00

Shar

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yAtthebeginningoftheyear01/04/2015

00

00

Datewiseincrease/decreaseinShareholdingduringtheyearspecifyingthereasons

forincrease/decrease(e.g.allotment/transfer/bonus/sweatequityetc)

00

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Attheendoftheyear31/03/2016

00

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Shar

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No

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yAtthebeginningoftheyear01/04/2015

15,337

015,337

0

Datewiseincrease/decreaseinShareholdingduringtheyearspecifyingthereasons

forincrease/decrease(e.g.allotment/transfer/bonus/sweatequityetc)

00

00

Attheendoftheyear31/03/2016

15,337

015,337

0

Shar

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100

ANNEXURE - VII TO THE DIRECTORS’ REPORT

REPORT ON CORPORATE GOVERNANCE

TheDirectorspresenttheCompany’sReportonCorporateGovernance.

1. THE COMPANY’S GOVERNANCE PHILOSOPHY:

CorporateGovernanceisaboutpromotingcorporatefairness,transparencyandaccountability inthebest interestofvariousstakeholdersinaCompany.It isasystembywhichbusinesscorporationsaredirectedandcontrolled.POWERGRIDbelieves thatgoodgovernanceshouldentailtrusteeship,empowermentandaccountabilityofthemanagementwhileremainingproactivetotheGovernmentpolicies.POWERGRID’sGovernance process is focused towards its Vision of “World Class, Integrated, Global Transmission Company With Dominant Leadership in Emerging Power Markets Ensuring Reliability, Safety and Economy” and its mission i.e. “To become a Global Transmission Company with Dominant Leadership in Emerging Power Markets with World Class Capabilities by:

1. Setting superior standards in capital project management and operations for the industry and ourselves.

2. Leveraging capabilities to consistently generate maximum value for all stakeholders in India and in emerging and growing economies.

3. Inspiring, nurturing and empowering the next generation of professionals.

4. Achieving continuous improvements through innovation and State-of-the-Art technology.

5. Committing to highest standards in health, safety, security and environment.”

TheCorporateGovernanceofPOWERGRIDisgearedbythefollowing:

(i) Tomeettheshortterm,mediumterm&longtermobjectivesandspecifictargetseveryyearsetbytheGovernmentofIndiaandthepersonsatthehelmofitsaffairs,i.e.theBoard,byempoweringpeopleatthemostappropriatelevelskeepingthejobprofile/functionsinview.

(ii) Torespondtothechallengesandtheemergingopportunitiesandtoplayapivotalroleintheeconomicdevelopmentofthecountry.

Thecorporategovernancestructurespecifiesthedistributionofrights,responsibilitiesandpowersamongdifferentparticipantsinthecorporation.All strategicdecisions regarding investment,diversification,majordecisions regardingprocurement,commercialandfinanceareproceededahead after approval by the Board.

POWERGRIDisa“NAVRATNAPSE”sinceMay,2008.TheNAVRATNAstatushasprovidedtheCompanymoreflexibilityandautonomyintermsofmaking investments and operational decisions. Now, the Board of Directors of POWERGRID is the approving Authority to incur capitalexpenditureonpurchaseofnewitemsorforreplacementwithoutanymonetaryceiling.Theceilingonequity investmenttoestablishjointventuresandwhollyownedsubsidiariesinIndiaorabroadis15%ofthenetworthofPOWERGRID.However,inoneprojecttheceilingonequityinvestment is limited to `1000crore.Theoverallceilingonsuchinvestmentinallprojectsputtogetheris30%ofthenetworthofPOWERGRID.

TheBoardofDirectorscomprisesChairmanandManagingDirector,FunctionalDirectors,Govt.NomineeDirectorsandNonOfficialPartTimeDirectors.TherightsandobligationsoftheemployeesaredelineatedinthepolicyManualspublishedandtheamendmentsarenotified,fromtimetotime.Thepowersoftheinternalparticipantsi.e.topexecutivesandbelowarelaiddowninthewellestablishedandpracticed“DelegationofPowers”.POWERGRIDhasalsopreparedand implemented“WorksandProcurementPolicyandProcedureforPre-awardandPost-awardStages”withaviewtomakingthepoliciesandproceduresmoresystematic,transparentandeasytoadministerwithmajorthrustonexpeditiousand decentralized decisionmaking coupledwith accountability and responsibility. The Board has also constituted several Committees viz.AuditCommittee;StakeholdersRelationshipCommittee;NominationandRemunerationCommittee;RiskManagementCommittee;Committeeon Investment on Projects; Committee onAward of Contracts; Committee for Bonds; Committee for Award of Contracts relating toRuralElectrification (RE)andotherDepositWorks;CSRCommitteeetc. tohavebetterandmore focusedattention.AdvisoryBoardsofeminentpersonsareinplaceforEnvironmentandSocialPolicyandProcedures,R&DandforTelecomtoadvisePOWERGRIDoncriticalissues/consensusbuilding in these areas.

PursuanttoSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015,whichcameintoeffectfrom01.12.2015,theCompanyhasexecutedfreshListingAgreementswithNSEandBSE.BesidesadheringtoprovisionsofClause49oferstwhileListingAgreements/SEBI(ListingObligationsandDisclosureRequirements)Regulations,2015,POWERGRIDalsofollowstheGuidelinesonCorporateGovernanceissuedby Department of Public Enterprises, Government of India.

ThecomplianceoftheCompanywiththeconditionsoftheCorporateGovernanceandthedisclosurerequirementsfortheYear2015-16aregiven below:

2. Board of Directors:

2.1 Size of the Board

POWERGRIDisaGovernmentCompanywithinthemeaningofSection2(45)oftheCompaniesAct,2013andthePresidentofIndiapresentlyholds57.89%ofthetotalpaid-upsharecapital.AsperArticlesofAssociation,thepowertoappointDirectorsrestswiththePresidentofIndia.

In terms of Articles of Association of the Company, the strength of our Board shall not be less than four Directors and not more than eighteen Directors.TheseDirectorsmaybeeitherwhole-timeDirectorsorpart-timeDirectors.

2.2 Composition of the Board

Ason31stMarch,2016,theBoardcomprisedsevendirectorsoutofwhichfourwerewhole-timedirectorsincludingtheChairman&Managing

101

Director, two government nominees and one Independent Director. The Board composition also comprises a woman director.

Sub-section(4)ofsection149oftheCompaniesAct2013stipulatesthateverylistedcompanyshouldhaveatleastone-thirdofthetotalnumberof directors as independent directors.

AlltheIndependentDirectorshavemettherequirementsspecifiedunderSection149(6)oftheCompaniesAct,2013forholdingthepositionof‘IndependentDirector’.

SEBI(ListingObligationsandDisclosuresRequirements)Regulations,2015,stipulatesthathalfoftheBoardmembersofCompanyshouldbeIndependentDirectors.ForthelastQuarter(i.e.FourthQuarter)ofFinancialYear2015-16therequirementofindependentDirectorsasperthisclause was not fully met.

2.3 Age Limit and Tenure of Directors

TheagelimitoftheChairman&ManagingDirectorandotherwhole-timeDirectorsis60years.

TheChairman&ManagingDirectorandotherwhole-timeDirectorsareappointedforaperiodoffiveyearsfromthedateoftakingoverofcharge or till the date of superannuation of the incumbent or till further orders from the Government of India, whichever event occurs earlier.

Government Nominee Directors representing the Ministry of Power, Government of India will retire from the Board after completion of tenure of threeyearsfromthedateofappointment,unlessthetenureisextendedbyGovernmentofIndia.

Independent Directors have been appointed by the Government of India usually for tenure of three years.

InlinewiththeprovisionsofArticlesofAssociationofPOWERGRID,thewhole-timeFunctionalDirectorsoftheCompanyincludingDirector(Finance)referredtoasCFOhavebeenappointedbytheAdministrativeMinistrythroughPublicEnterprisesSelectionBoard.

ThedetailsofDirectorsason31st March, 2016 were as follows:

Details of DirectorsName Date of Joining

on the BoardDate of superannuation/

completion of TenureCategory (Functional/ Official/ Non-official)

Designation

1. Whole Time Directors Chairman&ManagingDirector

Shri I. S. Jha 10.11.2015 Dateofsuperannuation-30.06.2019.

Director(Finance) Shri R. T. Agarwal 29.07.2011 Dateofsuperannuation–31.08.2016.

Director(Personnel) Shri Ravi P. Singh 01.04.2012 Completion of tenure –31.03.2017.Dateofsuperannuation–31.01.2020.

Director(Operations&Projects)*

Shri R. P. Sasmal 01.08.2012 Completion of tenure –31.07.2017.Dateofsuperannuation–28.02.2018.

2. Govt. Nominees Part – time Directors

JS&FA,MinistryofPower Dr.PradeepKumar 10.09.2013 Till the President desires

JS(Trans.)MinistryofPower

Smt. Jyoti Arora 20.03.2014 Till the President desires

3. Non-official Part-time Directors

Non-officialPart-timeDirector (Independent Director)

Shri Jagdish Ishwarbhai Patel

17.11.2015 Completionoftenure–16.11.2018

EventhoughappointedattheAnnualGeneralMeetingheldintheyear2013asdirectorShriR.K.Gupta,Dr.K.Ramalingam,ShriR.Krishnamoorthy,ShriAjayKumarMittalandShriMaheshShahdemittedtheirofficeasIndependentDirectorsw.e.f.15thJanuary,2016oncompletionoftheirtenureof3yearsintermsoftheGovernmentletterNo.1/38/96-PGdt.16thJanuary,2013.AsfromthesaiddatethecompositionoftheBoardisnotinaccordancewiththeprovisionsofsection149oftheCompaniesAct,2013andtheSecuritiesandExchangeBoardofIndia(ListingobligationsandDisclosureRequirements)Regulations,2015

*ShriR.P.SasmalDirector(Operations)hastakenovertheadditionalchargeofDirector(Projects)w.e.f.24.11.2015till22.11.2016ortilltheregularappointmentismade or until further orders, whichever is the earliest.

2.4 Board Meetings and Attendance:

ThemeetingsoftheBoardofDirectorsarenormallyheldattheRegisteredOfficeoftheCompany.MeetingsaregenerallyscheduledwellinadvanceandtheNotice,detailedBoardagenda,managementreportsandotherexplanatoryBoardnotesarecirculatedtotheDirectors.Themembers of the Board have complete access to all information of the Corporation. Senior management is also invited to the Board meetings to provide additional input to the items being discussed by the Board. In case of urgency, resolutions are passed by circulation.

Duringthefinancialyearended31stMarch,2016fourteenBoardmeetingswereheldon17th April, 11th May, 28thMay,30th May, 02nd July, 23rd &24th July, 10thAugust,15th September, 28thSeptember,3rdNovember,30thNovemberoftheyear2015and12thJanuary,27th January and 9th Marchoftheyear2016.Themaximumintervalbetweenanytwomeetingsduringthisperiodwas42days.DetailofnumberofBoardmeetingsattendedbyDirectors,attendanceatlastAGM,numberofotherdirectorship/committeemembership[viz.AuditCommitteeandStakeholders’RelationshipCommitteeasperSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015]heldbythemduringtheyear2015-16are tabulated below:

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Name of the Director

Meeting held during respective tenure of Directors

No. of Board Meetings attended

Attendance at the last

AGM (held on 15.09.15)

No. of other Director

ship held on 31.03.16

No. of Other Committee Membership held on 31.03.2016*

Chairman Member

Whole Time DirectorsShri I. S. Jha,AsChairman&ManagingDirector(w.e.f.10.11.2015)

05 05 Yes 09 NIL NIL

Shri I. S. Jha, AsDirector(Projects)(w.e.f.01.09.2009)

09 09 Yes 09 NIL NIL

Shri R. T. Agarwal Director(Finance)(w.e.f.29.07.2011)

14 14 Yes Nil Nil 01

Shri Ravi P. SinghDirector(Personnel)(w.e.f.01.04.2012)

14 13 Yes 08 NIL 02

Shri R. P. Sasmal Director(Operations)(w.e.f.24.11.2015)WithadditionalchargeasDirector(Projects)

14 11 Yes 11 01 01

ShriR.N.NayakChairman&ManagingDirector (superannuated on 30.09.2015)

09 09 Yes 10 NIL NIL

Non-executive Directors(Government Nominees)Dr.PradeepKumarJt.Secy.&Fin.Adv.,Ministry of Power

14 12 Yes 01 NIL 3

Smt. Jyoti AroraJt.Secy.(T),MinistryofPower

14 08 Yes 02 NIL NIL

Independent DirectorsShri Jagdish I. Patel**(w.e.f.17.11.2015)

04 04 N/A 02 02 NIL

ShriR.K.Gupta# 12 12 Yes N/A N/A N/ADr.K.Ramalingam# 12 11 Yes N/A N/A N/AShriR.Krishnamoorthy# 12 10 Yes N/A N/A N/AShriAjayKumarMittal# 12 12 Yes N/A N/A N/AShri Mahesh Shah# 12 12 Yes N/A N/A N/A

N/AindicatesthatconcernedpersonwasnotaDirectoronPOWERGRID’sBoardontherelevantdate.

* In linewithSEBI (ListingObligations andDisclosureRequirements)Regulations, 2015, only theAuditCommittee andStakeholders’RelationshipCommitteehavebeentakenintoconsiderationinreckoningthenumberofcommitteemembershipsofDirectorsasChairmanandasMemberincludingcommitteepositioninPOWERGRID.

None of the Directors of the company are in any way related with each other.

**AppointedasanIndependentDirectorw.e.f.17.11.2015.

#ShriR.K.Gupta,Dr.K.Ramalingam,ShriR.Krishnamoorthy,ShriAjayKumarMittalandShriMaheshShahceasedtobeIndependentDirectorsw.e.f.15th January, 2016oncompletionoftheirtenureofthreeyearsintermsoftheGovernment’sletterreferredtoearlier.

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2.5 Information to be placed before the Board of Directors, inter alia, includes:

The Board has complete access to any information with the Company. The information regularly supplied to the Board includes:

1. Annual operating plans and budgets and any updates.

2. AnnualAccounts,Directors’Report,etc.

3. Quarterlyresultsofthecompany.

4. Minutes of meetings of Audit Committee and other committees of the Board including minutes of Subsidiary Companies.

5. MajorInvestments,formationofSubsidiariesandJointVentures,StrategicAlliances,etc.

6. Award of large Contracts.

7. DisclosureofInterestbyDirectorsaboutdirectorshipandcommitteepositionsoccupiedbytheminotherCompanies.

8. Monthly Report on Commercial Status of the Company.

9. Reportonthestatusofvariousongoingprojects/SchemeandBudgetUtilization.

10. ReportontheO&MReview.

11. AnysignificantdevelopmentinHumanResources/IndustrialRelationsfrontlikesigningofwageagreementetc.

12. Non-complianceofanyRegulatory,statutoryorlistingrequirementsandshareholders’servicesuchasnon-paymentofdividend,delay in share transfer etc.

13. Short-Terminvestmentofsurplusfunds.

14. Other materially important information.

Post meeting follow-up system:

15. TheGovernanceprocessintheCompanyincludesaneffectivepost-meetingfollow-up,reviewandreportingprocessforactiontakenondecisionsoftheBoardandtheBoardCommittee(s).

3. Committees of the Board of Directors:

The Board has constituted the following Committees:

i) AuditCommittee

ii) Stakeholders’RelationshipCommittee

iii) NominationandRemunerationCommittee

iv) CommitteeonInvestmentonProjects

v) CommitteeonAwardofContracts

vi) CommitteeforTransfer/Split/Rematerialisationetc.ofShares

vii) CommitteeforBonds,

viii) CommitteeforAwardofContractsrelatingtoREandotherDepositWorks

ix) CSRCommittee

x) RiskManagementCommittee

3.1 Audit Committee:

Ason31st March, 2016, the Audit Committee comprised the following Directors:

(i) Shri Jagdish I. Patel Non-officialPart-timeDirector : Chairman of the Committee(ii) Dr.PradeepKumar JS&FA,Govt.NomineeDirector : Member(iii) Shri R. P. Samsal Director(Operation&Project) : Member

The Company Secretary is the Secretary of the Committee.

Theconstitution,quorum,scope,etc.oftheAuditCommitteeisinlinewiththeGuidelinesonCorporateGovernanceforCentralPublicSectorEnterprises,2010, theCompaniesAct,2013and theprovisionsof theSEBI (ListingObligationsandDisclosureRequirements)Regulations,2015,upto15th January, 2016 and thereafter the constitution of the committee is not in the line with the Guidelines on Corporate Governance for Central Public Sector Enterprises, 2010, the Companies Act, 2013 and the provisions of the SEBI (Listing Obligations and DisclosureRequirements)Regulations,2015.

Meetings of Audit Committee

The Audit Committee meets at least four times in a year and not more than one hundred twenty days elapse between two meetings in that year. ThequorumfortheAuditCommitteemeetingsiseithertwomembersoronethirdofthemembersoftheAuditCommitteewhicheverisgreater,but there should be a minimum of two independent members present.

Powers of Audit Committee

The powers of the Audit Committee include the following:

1. To investigate any activity within its terms of reference

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2. Toseekinformationonandfromanyemployee.

3. Toobtainoutsidelegalorotherprofessionaladvice.

4. Tosecureattendanceofoutsiderswithrelevantexpertise,ifitconsidersnecessary.

5. Toprotectwhistleblowers.

6. To consider other matters as referred by the Board.

Role of Audit Committee

The Role of the Audit Committee includes the following:

1. OversightofourCompany’sfinancialreportingprocessandthedisclosureofitsfinancialinformationtoensurethatthefinancialstatementiscorrect,sufficientandcredible.

2. Recommendationto theBoardregardingfixationofaudit feetobepaidtostatutoryauditorsappointedbytheComptroller&AuditorGeneral under the Companies Act and approval for payment with respect to any other services rendered by the statutory auditors.

3. Reviewing, with themanagement, the annual financial statements and Auditors’ Report thereon before submission to the Board forapproval, with particular reference to:

a. MattersrequiredtobeincludedintheDirector’sResponsibilityStatementtobeincludedintheBoard’sreportintermsofClause(c)ofSub-section3ofSection134oftheCompaniesAct,2013.

b. Changes, if any, in accounting policies and practices and reasons for the same.

c. Majoraccountingentriesinvolvingestimatesbasedontheexerciseofjudgmentbymanagement.

d. Significantadjustmentsmadeinthefinancialstatementsarisingoutofauditfindings.

e. Compliancewithlistingandotherlegalrequirementsrelatingtofinancialstatements.

f. Disclosure of any related party transactions.

g. Qualificationsinthedraftauditreport.

4. Reviewing/examine,withthemanagement,thequarterlyfinancialstatementsbeforesubmissiontotheboardforapproval.

5. Reviewing,withthemanagement,thestatementofuses/applicationoffundsraisedthroughanissue(publicissue,rightsissue,preferentialissue,etc.),thestatementoffundsutilizedforpurposesotherthanthosestatedintheofferdocument/prospectus/noticeandthereportsubmittedbythemonitoringagencymonitoringtheenduse/utilizationofproceedsofapublicorrightsissue&relatedmattersandmakingappropriaterecommendationstotheBoardtotakeupstepsinthismatter.

6. Reviewing,withthemanagement,performanceofstatutoryandinternalauditorsandadequacyoftheinternalcontrolsystems.

7. Reviewingtheadequacyofinternalauditfunction,ifany,includingthestructureoftheinternalauditdepartment,staffingandseniorityoftheofficialheadingthedepartment,reportingstructure,coverageandfrequencyofinternalaudit.

8. Discussionwithinternalauditorsand/orauditorsanysignificantfindingsandfollowupthereon.

9. Reviewingthefindingsofanyinternalinvestigationsbytheinternalauditors/auditors/agenciesintomatterswherethereissuspectedfraudor irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

10. Discussionwithstatutoryauditorsbeforetheauditcommences,aboutthenatureandscopeofauditaswellaspost-auditdiscussiontoascertain any area of concern.

11. Tolookintothereasonsforsubstantialdefaultsinthepaymenttothedepositors,debentureholders,shareholders(incaseofnonpaymentofdeclareddividends)andcreditors.

12. Toreview/overseethefunctioningofvigilmechanism/WhistleBlowermechanismofCompany;

13. ToreviewthefollowupactionontheauditobservationsoftheComptroller&AuditorGeneralaudit.

14. ToreviewthefollowupactiontakenontherecommendationsofCommitteeonPublicUndertakings(COPU)oftheParliament.

15. Provideanopenavenueofcommunicationbetweentheindependentauditor,internalauditorandtheBoard.

16. Approvaloranysubsequentmodificationoftransactionsofthecompanywithrelatedparties;

17. Reviewall relatedparty transactions in theCompany. For this purpose, theAuditCommitteemaydesignate amemberwho shall beresponsibleforreviewingrelatedpartytransactions;

Explanation(i):Theterm“relatedpartytransactions”shallhavethesamemeaningasprovidedinSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.

18. Reviewwiththeindependentauditortheco-ordinationofauditeffortstoassurecompletenessofcoverage,reductionofredundantefforts,and the effective use of all audit resources.

19. Considerandreviewthefollowingwiththeindependentauditorandthemanagement:

a. Theadequacyofinternalcontrolsincludingcomputerizedinformationsystemcontrolsandsecurity;and

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b. Relatedfindingsandrecommendationsoftheindependentauditorandinternalauditor,togetherwiththemanagementresponses.

20. Consider and review the following with the management, internal auditor and the independent auditor:

a. Significantfindingsduringtheyear,includingthestatusofpreviousauditrecommendations;and

b. Anydifficultiesencounteredduringauditworkincludinganyrestrictionsonthescopeofactivitiesoraccesstorequiredinformation.

21. ReviewandmonitortheAuditor’sindependenceandperformance,andeffectivenessofauditprocess.

22. Scrutinyofinter-corporateloansandinvestments.

23. ValuationofundertakingsorassetsoftheCompany,whereveritisnecessary.

24. EvaluationofInternalFinancialControlsandRiskManagementSystems.

25.CarryingoutanyotherfunctionasismentionedinthetermsofreferenceoftheAuditCommitteeundertheCompaniesAct,2013,listingrequirements/DPEGuidelines,asamendedfromtimetotime.

Review of information by Audit Committee

The Audit Committee shall mandatorily review the following information:

1. Managementdiscussionandanalysisoffinancialconditionandresultsofoperations.

2. Statementofsignificantrelatedpartytransactionssubmittedbymanagement.

3. Managementletters/lettersofinternalcontrolweaknessesissuedbythestatutoryauditors.

4. Internalauditreportsrelatingtointernalcontrolweaknesses.

5. Theappointment,removalandtermsofremunerationofthechiefinternalauditor.

6. Certification/declarationoffinancialstatementsbytheChiefExecutiveOfficer/ChiefFinancialOfficer.

Composition of Audit Committee during the F.Y. 2015-16

TheCompositionofAuditCommitteeatthebeginningthefinancialyear2015-16wasasunder:

ShriR.Krishnamoorthy** Chairman Non-officialPart-timeDirectorDr.PradeepKumar Member JS&FA,Govt.NomineeDirectorShri Mahesh Shah** Member Non-officialPart-timeDirectorShriAjayKumarMittal** Member Non-officialPart-timeDirector

(i) Shri Jagdish I. Patel Non-officialPart-timeDirector : Chairman of the Committee*(ii) Dr.PradeepKumar JS&FA,Govt.NomineeDirector : Member(iii) Shri R. P. Samsal Director(Operation&Projects) : Member

OncessationoffiveIndependentDirectorsontheBoardofPOWERGRIDw.e.f.15.01.2016, intermsoftheGovernment’s letterreferredtoabove,theAuditCommitteewasreconstitutedwithfollowingDirectorsasChairman/MembersoftheAuditCommittee.

Attendance:During the financial year till 31st March, 2016, ten meetings of the Audit committee were held on 11th May, 28thMay, 30th May, 22nd July, 10thAugust,15th September, 28thSeptember,3rdNovemberand30thNovemberoftheyear2015and27th January, 2016.

Attendance at Audit Committee Meetings during the Financial Year 2015-16:

*Co-optedasChairmanandMemberoftheCommitteew.e.f.12.01.2016

Name Audit Committee Meeting held during the tenureShriR.Krishnamoorthy,Director** 09 09Dr.PradeepKumar,JS&FA,MOP 10 05Shri Jagdish I. Patel 01 01Shri R. P. Samal 01 01ShriAjayKumarMittal** 09 09Shri Mahesh Shah** 09 09

**ShriR.Krishnamoorthy,ShriMaheshShahandShriAjayKumarMittalceasedtobeIndependentDirectorsw.e.f.15th January, 2016 on completion of their tenure of three years.

3.2 Stakeholders’ Relationship Committee.TheCompanyhasinplaceStakeholders’RelationshipCommitteeinlinewiththeprovisionsofSection178(5)oftheCompaniesAct,2013andtheSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.

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Scope of the Committee

The scope of the Committee is to consider and resolve the grievances of shareholders, debenture holders, and other security holders of the company includingthecomplaintsrelatedtotransferofshares,non-receiptofbalancesheet,non-receiptofdeclareddividends,etc.oftheCompany.

Composition of Stakeholders’ Relationship Committee during the F.Y. 2015-16

ThecompositionofStakeholders’RelationshipCommitteeduringthefinancialyear2015-16wasasunder:

Shri Mahesh Shah* Chairman Non-officialPart-timeDirectorDr.K.Ramalingam* Member Non-officialPart-timeDirectorShri Ravi P. Singh Member Director(Finance)Shri R.T. Agarwal Member Director(Personnel)

On cessation of five IndependentDirectors on theBoard of POWERGRIDw.e.f. 15.01.2016, in terms of theGovernment’s Letter referredto above, theStakeholders’RelationshipCommitteewas reconstitutedwith followingdirectors asChairman/Memberson theStakeholders’Relationship committee:

(i) Shri Jagdish I. Patel Non-officialPart-timeDirector : Chairman of the Committee*(ii) Shri R. T. Agarwal Director(Finance) : Member(iii) Shri Ravi P. Singh Director(Personnel) : Member*Co-optedasChairmanandmemberoftheCommitteew.e.f.12.01.2016

*ceasedtobeIndependentDirectoron15Jan,2015oncompletionoftheirtenureof03years.

The Company Secretary is the Secretary of the Committee.

Twomeetings of the Stakeholders’ Relationship Committeewere held during the financial year 2015-16 i.e. on 30th November, 2015 and 30th March 2016.

Attendance at Stakeholders’ Relationship Committee meeting during the Financial Year 2015-16:Name Shareholders’/Investors’ Grievance Committee Meeting held during the tenure

Held AttendedShri Mahesh Shah* 01 01Dr.K.Ramalingam* 01 01Shri R. T. Agarwal 02 01Shri Ravi P. Singh 02 01Shri Jagdish I. Patel 01 01

*CeasedtobeIndependentDirectorsw.e.f.15th January, 2016 on completion of their tenure of three years.

Name and designation of Compliance Officer

Ms. Divya Tandon, Company Secretary is the Compliance Officer in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015.

Investors’ Grievances

During the financial year ending 31stMarch, 2016, the Company has attended to investors’ grievances expeditiously except for the casesconstrained by disputes or legal impediment. The details of the complaints received and disposed of during the year are as under:

S.No. Description Opening Balance Received Attended Pending

1 Non receipt of refund orders 0 44 44 0

2 Non receipt of dividend warrants 0 993 993 0

3 Nonreceiptofsharecertificate 0 3 3 0

4 SEBI 0 9 9 0

5 StockExchange 0 3 3 0

6 Advocate Notices 0 0 0 0

7 ConsumerForum/Courtcases 0 0 0 0

Total 0 1052 1052 0

Investors’complaintspendingason31stMarch,2016havebeensubsequentlyattended.

Shares lying in Share Escrow Account

InpursuanceofScheduleV(F)ofSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015,itisdisclosedthat:

i) InrespectofyourCompany’sIPO,35,698sharesheldby185shareholdersason01.04.2015werelyingintheSuspenseAccount.

ii) InrespectofFPO,3735sharesheldby19shareholdersason01.04.2015werelyingintheSuspenseAccount.

iii) Inrespectof2ndFPO,526sharesheldby1shareholderason01.04.2015werelyingintheSuspenseAccount.

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iv) 4shareholdershadapproachedPOWERGRIDfortransferof603sharesfromSuspenseAccountduringtheyear2015-16inrespectofIPOandPOWERGRIDhastransferred603sharesrelatedto4shareholdersduringtheyear.

v) 1shareholderhadapproachedPOWERGRIDfortransferof296sharesfromSuspenseAccountduringtheyear2015-16inrespectofFPOandPOWERGRIDhastransferred296sharesrelatedto1shareholderduringtheyear.

vi) 1shareholderhadapproachedPOWERGRIDfortransferof526sharesfromSuspenseAccountduringtheyear2015-16inrespectof2ndFPOandPOWERGRIDhastransferred526sharesrelatedto1shareholderduringtheyear.

vii) InrespectofIPO,theaggregatenumberofshareholdersason31.03.2016were181andtheoutstandingsharesintheSuspenseAccountlyingason31.03.2016were35095shares.

viii) InrespectofFPO,theaggregatenumberofshareholdersason31.03.2016were18andtheoutstandingsharesintheSuspenseAccountlyingason31.03.2016were3439shares.

ix) Inrespectof2ndFPO,theaggregatenumberofshareholdersason31.03.2016is0(Zero)andtheoutstandingsharesintheSuspenseAccountlyingason31.03.2016is0(Zero).

ThevotingrightsonthesharesinDematSuspenseAccountwillremainfrozentilltherightfulownerofsuchsharesclaimstheshares.ThesesharesarelyinginthedematforminaPoolAccountwiththeRegistrarsi.e.M/sKarvyComputersharePvt.Ltd.andthebenefitsaccruedonthem are being properly accounted for.

Centralized Web Based Complaint Redressal System- SCORES.

ThecentralizedwebbasedComplaintRedressalSystemofSEBIi.e.SCORES(SEBIComplaintsRedressSystem)isinplacesinceJune,2011.ThroughSCORES,shareholderscanregistertheircomplaintsagainsttheCompanyforredressal.Whenthecomplaintisregistered,auniquecomplaintregistrationnumberisallottedforfuturereferenceandtracking.StatusofeverycomplaintlodgedcanalsobeviewedonlineandtheShareholdercansendreminderfortheircomplaint.Theconcernedentity(CompanyorIntermediary)takesactionforredressalofthecomplaintsanduploadsActionTakenReportonline.SEBIdisposesoffthecomplaintsifitissatisfiedthatthecomplaintshavebeenredressedadequately.AShareholder,whoisnotaccessingSCOREScanlodgehis/hercomplaintinphysicalformalso.

3.3 Nomination and Remuneration Committee

POWERGRIDhadconstitutedNominationandRemunerationCommitteeinlinewiththerequirementsofSection178oftheCompaniesAct,2013andRegulation19ofSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015andguidelinesonCorporateGovernanceforCPSEs issued by DPE with the following Directors as members of the Committee:

ShriR.Krishnamoorthy* Chairman Non-officialPart-timeDirectorShriR.N.Nayak** Member Chairman&ManagingDirectorDr.PradeepKumar Member JS&FA,MOPSmt. Jyoti Arora Member Jt. Secy., MOPShriR.K.Gupta* Member Non-officialPart-timeDirectorShriAjayKumarMittal* Member Non-officialPart-timeDirector*CeasedtobeIndependentDirectorsw.e.f.15th January, 2016 on completion of their tenure of three years.**Superannuatedon30.09.2015.

TheNominationandRemunerationCommitteedecidestheannualbonus/variablepaypoolandpolicyforitsdistributionacrosstheemployeeswithin the prescribed limits.

OnemeetingofNominationandRemunerationcommitteewasheldduringtheFinancialYear2015-16on23rdApril,2015.

Attendance at Nomination and Remuneration Committee meeting during the Financial Year 2015-16:Name Nomination and Remuneration Committee meeting held during the tenure

Held AttendedShriR.Krishnamoorthy* 01 01ShriR.N.Nayak 01 01Dr.PradeepKumar 01 01Smt. Jyoti Arora 01 NilShriR.K.Gupta* 01 01ShriAjayKumarMittal* 01 01*CeasedtobeIndependentDirectorsw.e.f.15th January, 2016 on completion of their tenure of three years.

DuetocessationoffiveIndependentDirectorsontheBoardofPOWERGRIDw.e.f.15.01.2016,NominationandRemunerationcommitteewasnotconstitutedandtheCompanywasnon-compliantwithSection178oftheCompaniesAct.,2013andRegulation19oftheSEBI(ListingObligationsandDisclosureReguirements)Regulations,2013forthefourthquarterofFinancialYear2015-16.PERFORMANCE EVALUATION OF DIRECTORS

The requirement of performance evaluation of directors under Section 178(2) of the Companies Act, 2013 has been done awaywith forGovernmentCompaniesvideMinistryofCorporateAffairs’Notificationdt.5thJune,2015.TheIndependentDirectorsintheirseparatemeetinghavereviewedtheworkassignedtothemunderScheduleIVoftheCompaniesAct,2013.

Further, the appointment, tenure and remuneration ofDirectors are decidedby thePresident of India.Remunerationpaid toChairman&Managing Director and Functional Directors are as per terms and conditions determined by the Department of Public Enterprises, Govt. of India. IndependentDirectorsarepaidonlysitting feeperBoard /Committeemeetingattended.POWERGRIDenters intoMemorandumofUnderstanding(MoU)withMinistryofPowereveryyearwhereinCompanyisevaluatedonvariousfinancialandnon-financialparameters.

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Remuneration of Directors

POWERGRID,beingaGovernmentCompany, theappointment, tenureand remunerationofDirectors isdecidedby thePresidentof India.RemunerationpaidtoChairman&ManagingDirectorandFunctionalDirectorsduringtheYear2015-16wasaspertermsandconditionsoftheirappointment.IndependentDirectorsarepaidonlysittingfeeperBoard/Committeemeetingattended{ratefixedbytheBoardwithintheceilingfixedforpaymentofsittingfeewithoutGovernmentapprovalundertheRule4oftheCompanies(AppointmentandRemunerationofManagerialPersonnel)Rules,2014readwiththeSection197oftheCompaniesAct,2013}andinaccordancewiththeGovernmentGuidelinesforattendingthe Board Meeting as well as Committee Meetings.

TheremunerationpaidtotheWholetimeDirectorsduringtheyear2015-16isasunder:

TheGovernmentNomineesDirectorsonthePOWERGRID’sBoarddonotdrawanyremuneration/sittingfeeforattendingBoard/Committeemeetings from the Company. The Independent Directors were paid sitting fee of ` 20,000/- permeeting for attending Board/CommitteeMeetings.

DetailsofPaymentmadetowardssittingfeetoIndependentDirectorsduringtheyear2015-16aregivenbelow:

*ShriR.K.Gupta,Dr.K.Ramalingam,ShriR.Krishnamoorthy,ShriAjayKumarMittalandShriMaheshShahceasedtobeIndependentDirectorsw.e.f.15th January, 2016oncompletionoftheirtenureofthreeyearsintermsofGovernment’sLetterreferredtoabove

Ason31.03.2016,theDirectors’Shareholdingwereasunder:

S No.

Directors Designation Salary (in `)

Benefits (in `)

Bonus /Commission (in `)

Performance Linked Incentive (in `)

Total (in `)

1. Shri I. S. Jha(Appointed as CMD w.e.f.10.11.2015)and was Director (Projects)till09.11.2015

Chairman&Managing Director

2798603.00 1486280.00 - 1603556.00 5888439.00

2. Shri R. T. Agarwal Director(Finance) 2702715.00 1802660.20 - 1502191.00 6007566.20

3. Shri Ravi P. Singh Director (Personnel)

2675286.00 991658.20 - 1500007.00 5166951.20

4. Shri R. P. Sasmal Director (Operations&Projects)

2648285.00 810702.70 - 1460005.00 4918992.70

5. ShriR.N.Nayak(Superannuated on 30.09.2015)

Chairman&Managing Director

1314296.00 1959878.40 - 1716437.00 4990611.40

Name of Non-official Part-time Directors Sitting Fee Total (`)

Board Meeting (in `) Committee of Board of Directors Meeting (in `)

ShriR.K.Gupta* 2.16 2.52 4.68

Dr.K.Ramalingam* 1.98 1.26 3.24

ShriR.Krishnamoorthy* 1.98 4.32 6.30

ShriAjayKumarMittal* 2.34 5.22 7.56

Shri Mahesh Shah* 2.34 2.52 4.86

Shri Jagdish Ishwarbhai Patel 0.72 0.36 1.08

S.No. Name of Directors No. of Equity Shares Held1. Shri I. S. Jha 29982. Shri R. T. Agarwal 30563. Shri Ravi P. Singh 90164. Shri R. P. Sasmal 17985. Dr.PradeepKumar Nil6. Smt. Jyoti Arora Nil7. Shri Jagdish Ishwarbhai Patel Nil

(`inlacs.)

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3.4 Committee on Investment on Projects

TheBoardhasconstitutedthisCommitteeofDirectorstoconsiderinvestmentsanctionfornewprojectsandRevisedCostEstimateproposalsofongoingprojectsasmayberequiredfromtheBoard.

ThecompositionofCommitteeonInvestmentonProjectsduringthefinancialyear2015-16wasasunder:

OncessationoffiveIndependentDirectorsontheBoardofPOWERGRIDw.e.f.15.01.2016, intermsoftheGovernment’s letterreferredtoabove, the Committee on Investment on Projects was reconstituted with following directors as chairman/members on the Committee onInvestmentonProjects:

*Superannuatedon30.09.2015**CeasedtobeIndependentDirectorsw.e.f.15th January, 2016 on completion of their tenure of three years.

*ShriR.P.SasmalDirector(Operations)hastakenovertheadditionalchargeofDirector(Projects)w.e.f.24.11.2015till22.11.2016ortilltheregularappointmentis made or until furture orders, whichever is the earliest.

*ShriR.P.SasmalDirector(Operations)hastakenovertheadditionalchargeofDirector(Projects)w.e.f.24.11.2015till22.11.2016ortilltheregularappointmentis made or until furture orders, whichever is the earliest.

EightmeetingsoftheCommitteeonInvestmentonProjectswereheldduringthefinancialyear2015-16.

3.5 Committee on Award of Contracts

This Committee of Directors has been constituted for approval of award of contracts of value more than `30Cr.butnotexceeding` 100 Cr. Ason31st March, 2016, the following Directors were members of the Committee:

ThecompositionofCommitteeonAwardofContractsduringthefinancialyear2015-16was:

TwelvemeetingsoftheCommitteeonAwardofContractswereheldduringthefinancialyear.

3.6 Committee for Transfer/Split/Rematerialization etc. of Shares

TheCompanyhas re-constituted aCommittee ofDirectors forTransfer/ Split/Rematerialisation etc.with followingdirectors asChairman/MembersonelevationofShriI.S.Jha,Director(Projects)tothepostofChairman&ManagingDirectoroftheCompany.

(i) ShriR.N.Nayak* Chairman CMD(ii) Shri I.S. Jha Member Director(Projects)(iii) Shri R. T. Agarwal Member Director(Finance)(iv) Dr.PradeepKumar Member JS&FA,Govt.NomineeDirector(v) Smt. Jyoti Arora Member JS(Trans.)Govt.NomineeDirector(vi) ShriR.Krishnamoorthy** Member Non-officialPart-timeDirector(vii) ShriAjayKumarMittal** Member Non-officialPart-timeDirector

(i) Shri I. S. Jha CMD : Chairman of the Committee(ii) Shri R. P. Sasmal Director(Projects&Operations) : Member(iii) Shri R. T. Agarwal Director(Finance) : Member(iv) Dr.PradeepKumar JS&FA,Govt.NomineeDirector : Member(v) Smt. Jyoti Arora JS(Trans.),Govt.NomineeDirector : Member

(i) Shri I. S. Jha CMD : Chairman of the Committee(ii) Shri R. T. Agarwal Director(Finance) : Member(iii) Shri R. P. Sasmal Director(Operations&Projects)* : Member(iv) Smt. Jyoti Arora JS(Trans.),Govt.NomineeDirector : Member

(i) ShriR.N.Nayak* CMD : Chairman of the Committee(ii) Shri I. S. Jha Director(Projects) : Member(iii) Shri R. T. Agarwal Director(Finance) : Member(iv) Shri R. P. Sasmal Director(Operations) : Member(v) Smt. Jyoti Arora JS(Trans.),Govt.NomineeDirector : Member(vi) ShriR.K.Gupta** Non-officialPart-timeDirector : Member(vii) ShriAjayKumarMittal** Non-officialPart-timeDirector : Member

(i) ShriRaviP.Singh-Director(Personnel) -Chairman(ii) ShriR.P.Sasmal-Director(Projects&Operations)* -Member(iii) ShriR.T.Agarwal-Director(Finance) -Member

*Superannuatedon30.09.2015**CeasedtobeIndependentDirectorsw.e.f.15th January, 2016 on completion of their tenure of three years.

110

ShareTransferseffectedduringtheyearhavebeenwellwithinthetimeprescribedbytheSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.

EighteenmeetingsoftheCommitteeforTransfer/Split/Rematerializationetc.ofShareswereheldduringthefinancialyear2015-16.

3.7 Committee for Bonds

The Board of Directors of the Company has constituted a Committee of Directors to consider and approve allotment, transfer, transmission, splittingandconsolidationofPOWERGRIDBonds/AllotmentLettersandothermattersrelatingtotheBondsincludingappointmentofMerchantBankers,RegistrartotheIssueetc.Ason31st March, 2016, the Committee for Bonds comprised following directors as members:

TwentythreemeetingsoftheCommitteeforBondswereheldduringthefinancialyear2015-16.

3.8 Committee for Award of Contracts relating to RE and other Deposit Works

ThisCommitteeofDirectorswasconstitutedtoconductRGGVYProgrammeofGovt.ofIndia.ThepowerofthiscommitteeistoawardthecontractsrelatingtoREandotherDepositWorksformorethan`30Cr.andupto`100Cr.Ason31st March, 2016, the Committee comprised following directors as members:

FivemeetingsoftheCommitteeforAwardofContractsrelatingtoREandotherDepositWorkswereheldduringthefinancialyear2015-16.

3.9 CSR Committee

POWERGRIDhasconstitutedaCSRCommitteeinlinewiththerequirementsoftheCompaniesAct,2013andDepartmentofPublicEnterprises’GuidelinesonCorporateSocialResponsibilityandSustainabilityforCentralPublicSectorEnterprises’.Ason31st March, 2016, the CSR Committee comprised following directors as members:

(i) ShriRaviP.Singh-Director(Personnel) -Chairman(ii) ShriI.S.Jha-Director(Projects)* -Member,and(iii) ShriR.T.Agarwal-Director(Finance) -Member

(i) ShriI.S.Jha-Chairman&ManagingDirector –Chairman(ii) ShriR.T.Agarwal-Director(Finance) –Memberiii) ShriR.P.Sasmal-Director(Operations&Projects)* –Member

i) Shri I. S. Jha, CMD –Chairmanii) ShriR.T.Agarwal,Director(Finance) –Memberiii) ShriRaviP.Singh,Director(Personnel) –Memberiv) ShriR.P.Sasmal,Director(Operations&Projects)* –Member

ThecompositionofCommitteeforTransfer/Split/Rematerializationetc.ofSharesduringthefinancialyear2015-16was:

(i) Shri I. S. Jha CMD : Chairman of the Committee(ii) Shri Ravi P. Singh Director(Personnel) : Member(iii) Shri R. T. Agarwal Director(Finance) : Member(iv) Shri R. P. Samsal Director(Projects&Operations)* : Member(v) Smt. Jyoti Arora JS(Trans.),Govt.NomineeDirector : Member(vi) Shri Jagdish I. Patel Non-officialPart-timeDirector : Member**

*ShriR.P.SasmalDirector(Operations)hastakenovertheadditionalchargeofDirector(Projects)w.e.f.24.11.2015till22.11.2016ortilltheregularappointmentis made or until furture orders, whichever is the earliest.

*ElevatedtothepostofCMDw.e.f.10.11.2015-inhisplaceShriR.P.Sasmal,Director(Operations&Projects)wasco-opetedasmemberofthisCommittee.

*ShriR.P.SasmalDirector(Operations)hastakenovertheadditionalchargeofDirector(Projects)w.e.f.24.11.2015till22.11.2016ortilltheregularappointmentis made or until furture orders, whichever is the earliest.

*ShriR.P.SasmalDirector(Operations)hastakenovertheadditionalchargeofDirector(Projects)w.e.f.24.11.2015till22.11.2016ortilltheregularappointmentis made or until furture orders, whichever is the earliest.**Co-optedasmemberoftheCommitteew.e.f.12.01.2016.

111

TwomeetingsoftheCSRCommitteewereheldduringthefinancialyear2015-16.

3.10 Risk Management Committee

POWERGRIDhadconstitutedRiskManagementCommitteeinlinewiththerequirementofSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015,withthefollowingDirectorsasmembersoftheCommittee:

ThecompositionofRiskManagementCommitteeearlierintheFinancialYear2015-16wasasunder:

ThreemeetingsofRiskManagementCommitteewereheldduringtheFinancialYear2015-16.

The‘EnterpriseRiskManagementFramework’(ERMframework)hasbeenimplementedinPOWERGRID.ThedetailsofthesamearegiveninManagement Discussion and Analysis.

3.11 Vigilance Disciplinary Cases Committee

DuetodemittingofofficebyfiveIndependentDirectorsontheBoardofPOWERGRIDw.e.f.15.01.2016,VigilanceDisciplinaryCasesCommitteewasnotconstitutedforthefourthquarterofFinancialYear2015-16.

ThecompositionofVigilanceDisciplinaryCasesCommitteeearlierintheFinancialYear2015-16wasasunder:

ThreemeetingsofVigilanceDisciplinaryCasesCommitteewereheldintheFinancialYear2015-16.

4. Monitoring of Subsidiaries:

TheCompanydoesnothaveanymaterialunlistedSubsidiaryCompany intermsofSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015or thesubsidiariesasdefinedunderGuidelinesonCorporateGovernance forCentralPublicSectorEnterprises issuedbyDepartmentofPublicEnterprises,Govt.ofIndia.However,minutesofthemeetingoftheBoardofDirectorsofthesubsidiariesareplacedbeforetheCompany’sBoardperiodically.Further,pursuanttoRegulations16(c)and43oftheSEBI(ListingObligationsandDisclosureRequirements)Regulations, 2015, POWERGRID has formulated a policy for determining ‘material’ subsidiaries and the policy has been disclosed on thecompany’swebsiteandaweblinktheretoisalsogivenasunder:

http://www.powergridindia.com/_layouts/PowerGrid/WriteReadData/file/Investors/Code%20of%20conduct/06_Policy%20on%20Subsidiaries.pdf

Shri R. P. Sasmal Director(Operations&Projects)* ChairmanShri R. T. Agarwal Director(Finance) MemberShri R. P. Singh Director(Personnel) Member

ShriR.Krishnamoorthy* Chairman Non-officialPart-timeDirectorShri Mahesh Shah* Member Non-officialPart-timeDirectorShri I. S. Jha Member Director(Projects)Shri R. P. Sasmal Member Director(Operations)

ThecompositionofCSRCommitteeearlierintheFinancialYear2015-16wasasunder:

(i) Dr.K.Ramalingam* Non-officialPart-timeDirector : Chairman of the Committee(ii) ShriR.Krishnamoorthy* Non-officialPart-timeDirector : Member(iii) Shri Ravi P. Singh Director(Personnel) : Member

(i) ShriR.N.Nayak* CMD : Chairman of the Committee(ii) Shri Ravi P. Singh Director(Personnel) : Member(iii) Shri R. T. Agarwal Director(Finance) : Member(iv) Shri I. S. Jha Director(Projects) : Member(v) Shri Mahesh Shah** Non-officialPart-timeDirector : Member(vi) Dr.K.Ramalingam** Non-officialPart-timeDirector : Member(vii) ShriR.K.Gupta** Non-officialPart-timeDirector : Member(viii) Smt. Jyoti Arora JS(Trans.),Govt.NomineeDirector : Member

*ShriR.P.SasmalDirector(Operations)hastakenovertheadditionalchargeofDirector(Projects)w.e.f.24.11.2015till22.11.2016ortilltheregularappointmentis made or until furture orders, whichever is the earliest.

*CeasedtobeIndependentDirectorsw.e.f.15th January, 2016 on completion of their tenure of three years.

*CeasedtobeIndependentDirectorsw.e.f.15th January, 2016 on completion of their tenure of three years.

*Superannuatedon30.09.2015**CeasedtobeIndependentDirectorsw.e.f.15th January, 2016 on completion of their tenure of three years.

112

5. General Body Meetings:

Date, time and location where the last three Annual General Meetings were held are as under:

Resolutions passed through Postal Ballot: TheShareholdersoftheCompanyhaveapprovedwithrequisitemajority,theSpecialResolutionsundertheprovisionsoftheCompanies

Act,2013for:(1)ToraisefundsinINRoranyotheracceptableforeigncurrencyaspermittedbyRBIupto`13,000Crore,fromdomestic/externalsources

throughissueofsecured/unsecured,non-convertible,non-cumulative,redeemable,taxable/tax-freeBondsunderPrivatePlacementduringtheFinancialYear2015-16,inuptoeighttranches/offersandeachtranche/offershallbeupto`2,000CroreofBondswith/without Green Shoe Option.

(2) To provide any security(ies) / guarantee(s) in connection with loan(s) and/or any form of debt including ECBs and/or provide intercorporateloan(s)oncosttocostbasisandbacktobackservicing,oracombinationthereof,uptoanamountof`1,400 Crore (Rupees One ThousandFourHundredCroreOnly)toProjectSPVsacquired/tobeacquiredbyPOWERGRIDunderTariffbasedcompetitivebiddingviz.,VindhyachalJabalpurTransmissionLimited,Gadarwara(A)TranscoLimitedandGadarwara(B)TransmissionLimited.

(3)TorenderallinputsandservicesasmayberequiredoncosttocostbasistotheProjectSPVsacquired/tobeacquiredbyPOWERGRIDunderTariffbasedcompetitivebiddingviz.,VindhyachalJabalpurTransmissionLimited,Gadarwara(A)TranscoLimitedandGadarwara(B)TransmissionLimitedoncosttocostbasisthroughpostalballotpursuanttoSection110ofthecompaniesact2013videnoticedated 8thApril2015.

Notice dated 8thApril2015wasservedtoallshareholdersforvotingthroughpostalballotaspertheprovisionsofSection110oftheCompaniesAct,2013readwiththeCompanies(ManagementandAdministration)Rules,2014.Ms.SavitaJyoti,PracticingCompanySecretarywasappointedasscrutinizerforconductofPostalBallot.Thedetailsofthevotingareasunder:(1) To raise funds in INR or any other acceptable foreign currency as permitted by RBI upto `13,000 Crore, from domestic /

external sources through issue of secured / unsecured, non-convertible, non-cumulative, redeemable, taxable / tax-free Bonds under Private Placement during the Financial Year 2015-16, in upto eight tranches / offers and each tranche / offer shall be upto `2000 Crore of Bonds with / without Green Shoe Option.

2407totalnumberofBallotsreceived

Promoter/PublicNo. of Shares Held (1)

No. of Votes Polled

(2)

% of Votes Polled on Outstand-ing shares

(3) = [2/1]*100

No. of Votes in favour

(4)

No. of votes

Against (5)

% of votes in favour on votes Polled (6) =

[4/2]*100

% of votes

against on votes Polled (7) =

[5/2]*100Promoter and Promoter Group

3028835198 3028835198 100.000 3028835198 0 100.000 0.000

Public-InstitutionalHolders 1856722375 1576146436 84.889 1574810895 1335541 99.915 0.085Public-Others 346032075 20501001 5.925 20478434 22567 99.890 0.110Total 5231589648 4625482635 88.414 4624124527 1358108 99.971 0.029

Promoter/PublicNo. of Shares Held (1)

No. of Votes Polled

(2)

% of Votes Polled on Outstand-ing shares

(3) = [2/1]*100

No. of Votes in favour

(4)

No. of votes

Against (5)

% of votes in favour on votes Polled (6) =

[4/2]*100

% of votes

against on votes Polled (7) =

[5/2]*100Promoter and Promoter Group

3028835198 3028835198 100.000 3028835198 0 100.000 0.000

Public-InstitutionalHolders 1856722375 1576146436 84.889 1574810895 1335541 99.915 0.085Public-Others 346032075 20497804 5.924 20468114 29690 99.855 0.145Total 5231589648 4625479438 88.414 4624114207 1365231 99.970 0.030

Year Date Time Venue Special Resolution2012-13 19thSeptember,2013 11.00 a.m. AirForceAuditorium,SubrotoPark,NewDelhi-110010 32013-14 18th September, 2014 11.00 a.m. AirForceAuditorium,SubrotoPark,NewDelhi-110010 12014-15 15thSeptember,2015 11.00 a.m. ManekshawCentre,ParadeRoad,DelhiCantt.,NewDelhi 2

(2) To provide any security(ies) / guarantee(s) in connection with loan(s) and/or any form of debt including ECBs and/or provide inter corporate loan(s) on cost to cost basis and back to back servicing, or a combination thereof, upto an amount of `1,400 Crore (Rupees One Thousand Four Hundred Crore Only) to Project SPVs acquired / to be acquired by POWERGRID under Tariff based competitive bidding viz., Vindhyachal Jabalpur Transmission Limited, Gadarwara (A) Transco Limited and Gadarwara (B) Transmission Limited.

2407totalnumberofBallotsreceived

113

Promoter/PublicNo. of Shares Held (1)

No. of Votes Polled

(2)

% of Votes Polled on Outstand-ing shares

(3) = [2/1]*100

No. of Votes in favour

(4)

No. of votes

Against (5)

% of votes in favour on votes Polled (6) =

[4/2]*100

% of votes

against on votes Polled (7) =

[5/2]*100Promoter and Promoter Group

3028835198 3028835198 100.000 3028835198 0 100.000 0.000

Public-InstitutionalHolders 1856722375 1576101314 84.886 1576101314 0 100.000 0.000Public-Others 346032075 20493543 5.922 20465293 28250 99.862 0.138Total 5231589648 4625430055 88.413 4625401805 28250 99.999 0.001

(3) To render all inputs and services as may be required on cost to cost basis to the Project SPVs acquired / to be acquired by POWERGRID under Tariff based competitive bidding viz., Vindhyachal Jabalpur Transmission Limited, Gadarwara (A) Transco Limited and Gadarwara (B) Transmission Limited.

2407totalnumberofBallotsreceived

The Special Resolutions as mentioned in the notice of the postal ballot dt. 8thApril,2015havebeenpassedwithrequisitemajority.

6. Disclosures:

(I) Thetransactionswithrelatedpartiescontain(i)paymenttoCompaniesunderJointVentureAgreementandonaccountofcontractsforworks/services,(ii)remunerationtokeymanagementpersonneland(iii)equitycontributiontosubsidiaries,whicharenotinthenatureofpotentialconflictsofinterestoftheCompanyatlarge.DetailsofrelatedpartytransactionsareincludedintheNotestotheAccountsasperAccountingStandard–18issuedbytheInstituteofCharteredAccountantsofIndiaandnotifiedbytheCentralGovernmentinconsultationwith National Advisory Committee on Accounting Standards.

(II) TheCEO&Director(Finance)oftheCompanyhavecertifiedtotheBoard,thespecifiedmattersasspecifiedinPartBofScheduleIIofRegulation17(8)oftheSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.

(III)POWERGRIDdonothaveany‘materialsubsidiary’Company.

(IV) POWERGRIDestablishedEnterpriseRiskManagement Framework and Internal Control Framework forCEO/CFOCertification.GeneralManager(CorporatePlanning)hasbeenappointedasChiefRiskOfficeroftheCompany.

(V) Therearenomaterialindividualtransactionswithrelatedpartieswhicharenotinthenormalcourseofbusiness.

(VI) Therearenomaterial individualtransactionswithrelatedpartiesorothers,whicharenotonanarm’s lengthbasis.Further,pursuanttoRegulation23SEBI (ListingObligationsandDisclosuresRequirements)Regulations,2015,POWERGRIDhas formulatedapolicyonmaterialityofrelatedpartytransactionsanddisclosethesameonthewebsiteofPOWERGRIDandaweblinkisprovidedasunder:

http://www.powergridindia.com/_layouts/PowerGrid/WriteReadData/file/Investors/Code%20of%20conduct/11_Policy%20on%20Related%20Party%20Transactions.pdf

(VII)The Company has compliedwith the requirements of the Clause 49 of erstwhile Listing Agreements / SEBI (ListingObligations andDisclosure Requirements) Regulations, 2015 andGuidelines on CorporateGovernance for Central Public Sector Enterprises issued byMinistryofHeavyIndustriesandPublicEnterprises,DepartmentofPublicEnterprises,GovernmentofIndiaaswellasRegulationsandGuidelinesprescribedbySEBI.POWERGRID isnon-compliantw.r.t. compositionof (i)BoardofDirectors (ii)AuditCommitteeand(ii)NominationandRemunerationCommitteeduetovacantpostsofsixIndependentDirectorsontheBoardofPOWERGRID,whichistobefilledupbytheGovernmentofIndia.TherewerenopenaltiesorstricturesimposedontheCompanybyanystatutoryauthoritiesfornon-complianceonanymatterrelatedtocapitalmarkets,duringtheyear.

(VIII)The Company has separate Vigilance Departmentwhich deals with fraud or suspected fraud involving employees/representatives ofsuppliers, contractors, consultants, service provider or any other party doing business with POWERGRID.Whistle Blower and FraudPreventionPolicyhavebeenapprovedbytheBoardofDirectorsandthesamehasbeenuploadedonthewebsiteofPOWERGRID.TheweblinkoftheWhistleBlowerandFraudPreventionPolicyisasunder:

http://www.powergridindia.com/_layouts/PowerGrid/WriteReadData/file/Investors/Code%20of%20conduct/10_Whistle%20Blower%20and%20Fraud%20Preventation%20Policy-Estt(Nish).pdf

(IX) TheBalanceSheet,ProfitandLossAccountandCashFlowStatement for thefinancial year2015-16havebeenpreparedasper theAccountingStandardsreferredtoinSection133oftheCompaniesAct,2013.

(X) TheCompanyhasadoptedall suggested items tobe included in theReportofCorporateGovernance. Informationonadoption (andcompliance)/Non-adoptionofthenon-mandatoryrequirementsisplacedatAnnexure-A.

(XI) ThecompliancewithCorporateGovernancerequirementsspecifiedinRegulation17to27andClauses(b)to(i)ofsub-regulation(2)ofRegulation46oftheSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015havebeenmadeexceptcompositionof (i)BoardofDirectors (ii)AuditCommitteeand (ii)NominationandRemunerationCommitteedue tovacantpostsof six IndependentDirectorsontheBoardofPOWERGRID,whichistobefilledupbytheGovernmentofIndia.

114

CEO/CFO Certification

AsrequiredbyRegulation17(8)oftheSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015,theComplianceCertificateasspecifiedinPartBofScheduleIIofthesaidRegulationdulysignedbyShriI.S.Jha,Chairman&ManagingDirectorandShriR.T.Agarwal,Director(Finance)wasplacedbeforetheBoardofDirectorsatthemeetingheldon26th May, 2016.

7. Means of Communication

The Company communicates with its shareholders through its Annual Report, General Meeting, Newspapers and disclosure through website.

TheCompanyalsocommunicateswithitsInstitutionalshareholdersthroughAnalystsandInvestorsmeetsheldduringtheendofeachquarterwhereDirectorsandSeniorOfficialsoftheCompanyinteractwiththeinvestingcommunity.

InformationandlatestupdatesandannouncementsmadebytheCompanycanbeaccessedatCompany’swebsite:www.powergridindia.comincluding the following:

• Quarterly/Half-Yearly/AnnualFinancialResults

• QuarterlyShareholdingPattern

• QuarterlyCorporateGovernanceReport

• CorporatedisclosuresmadefromtimetotimetoStockExchanges

In order to save trees and environment by cutting down the consumption of costly paper habits, our Company has sent the Annual Report and othercommunicationstolargenumberofshareholdersfromtheFinancialYear2010-2011onwardsthroughe-mailoftheshareholdersregisteredwithNSDL/CDSLandafterseekingtheirconsenttosendtheAnnualReportsthroughe-mail.Thiswasincomplianceof‘GreenInitiativeintheCorporateGovernance’byMinistryofCorporateAffairs,GovernmentofIndiaandnowunderSections101&136oftheCompaniesAct,2013allowing paperless communication by the companies to the shareholders.

Quarterly Results

TheseResultsarealsodisplayedatCompany’swebsitewww.powergridindia.com

Official Releases and Presentations

TheCompany’sofficialnewsreleases,otherpresscoverage,presentationsmadetoinstitutionalinvestorsandtotheanalystsarealsohostedontheWebsite.

8. Code of Conduct

TheBoardofDirectorshavelaiddowntwoseparateCodesofConduct–oneforBoardMembersandanotherforSeniorManagementPersonnelin alignmentwith Company’sMission&Objectives and aims at enhancing ethical and transparent process inmanaging the affairs of theCompany.The‘CodeofBusinessConductandEthicsforBoardmembers’andthe‘CodeofBusinessConductandEthicsforSeniorManagementPersonnel’areavailableatthewebsiteoftheCompany.

Publication of Financial Results in Newspapers

Sl. No.

Publication of Financial Results for the quarter ended

Date(s) of publication

Newspapers

1. 30/06/2015 12/08/2015&13/08/2015

TimesofIndia,EconomicTimes,HindustanTimes,Mint,FinancialExpress,Jansatta,NewIndianExpress,AmarUjala,DivyaBhaskar,HindustanHindi

2. 30/09/2015 05/11/2015&06/11/2015

Times of India, Economic Times, Hindustan Times,Mint, Business Line,Pioneer,NewIndianExpress,DainikJagran,RajasthanPatrika,Aaj

3. 31/12/2015 29/01/2016&30/01/2016

TimesofIndia,EconomicTimes,HindustanTimes,Mint,IndianExpress,FinancialExpress,Jansatta,AmarUjala,DivyaBhaskar,Hindustan

4. 31/03/2016 25/05/2016&30/05/2016

TimesofIndia,EconomicTimes,HindustanTimes,Mint,BusinessStandard,DainikJagran,RajasthanPatrika,BusinessLine

Declaration required under Regulation 26 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

AllthemembersoftheBoardandSeniorManagementPersonnelhaveaffirmedcompliancewiththeCodeofBusinessConductandEthicsforthefinancialyearended31st March, 2016.

New Delhi

Dt.20.07.2016

Sd/- (I. S. Jha)

Chairman&ManagingDirector

115

9. Code of Insider Trading

InpursuanceoftheSecuritiesandExchangeBoardofIndia(ProhibitionofInsiderTrading)Regulations,2015,POWERGRIDBoardhaslaiddown“CodeofPractices&ProceduresforFairDisclosureofUnpublishedPriceSensitiveInformationandConductforRegulating,Monitoring&ReportingofTradingbyInsidersofPowerGridCorporationofIndiaLimited”withanaimthat‘DesignatedPersons’shallnotderiveanybenefitorassistotherstoderiveanybenefitfromtheaccesstoandpossessionofUnpublishedPriceSensitiveInformationabouttheCompanywhichisnotinthepublicdomainandthusconstitutesinsiderinformation.CompanySecretaryhasbeendesignatedasComplianceOfficerforthisCode.

10. Separate Meeting of Independent Directors:

POWERGRID’sBoardhasfiveIndependentDirectorstill15thJanuary,2016.Duringthefinancialyearended31st March, 2016, one meeting of IndependentDirectorswasheldon10.08.2015withouttheattendanceofFunctionalDirectorsandGovernmentDirectorsandthemembersofmanagement.

11. Familiarization programme for Independent Directors:

TheCompanyfamiliarizestheindependentdirectorswiththecompany,theirroles,rights,responsibilitiesinthecompany,natureoftheindustryin which the company operates, business model of the company, etc., through various programmes and presentations. The details of such familiarizationprogrammesaredisclosedonthecompany’swebsiteandaweblinktheretoisalsogivenasunder:

http://www.powergridindia.com/_layouts/PowerGrid/User/ContentPage.aspx?PId=336&LangID=English

12. General Shareholders’ Information

i) Annual General Meeting

Date : 16th September, 2016

Time : 11:00 a.m.

Venue :ManekshawCentre,ParadeRoad,DelhiCantt.,NewDelhi

ii) Financial Year

TheCompany’sFinancialYearisfrom1stAprilto31st March.

iii) Book Closure

TheRegisterofMembersandShareTransferBooksoftheCompanywillremainclosedfrom10th September, 2016 to 16th September, 2016 (bothdaysinclusive).

iv) Payment of dividend

TheBoardofDirectorsoftheCompanyhasrecommendeddeclarationofafinalDividendof15.10%(`1.50pershare)forthefinancialyearended31st March, 2016 in addition, an Interim Dividend of 8% (`0.80pershare)paidon16thFebruary,2016.[DividendpaidinthePreviousYearwas`1,046.32Crorei.e.20.00%(6.90%InterimDividendand13.10%FinalDividend)].

TherecorddateforthepaymentofDividendis9th September, 2016.

v) Dividend History

Year Total Paid-up Capital as on 31st March of the Year

(` in Crore)

Total Amount of Dividend Paid for the Financial

Year (` in Crore)

Date of AGM in which dividend was declared

Date of Payment of Final Dividend

2009-10 4208.84 631.34 24.09.2010 19.10.20102010-11 4629.73 810.23 19.09.2011 07.10.20112011-12 4629.73 976.87 19.09.2012 08.10.20122012-13 4629.73 1,273.17 19.09.2013 10.10.20132013-14 5231.59 1,349.75 18.09.2014 09.10.20142014-15 5231.59 1,046.32 15.09.2015 06.10.20152015-16 5231.59 418.53* 27.01.2016** 16.02.2016#

* Amount of Interim Dividend

** Date of Board Meeting declaring Interim Dividend

# Date of Payment of Interim Dividend

vi) Listing on Stock Exchange

POWERGRIDequitysharesarelistedonthefollowingStockExchanges:

National Stock Exchange of India Limited. ExchangePlaza,PlotNo.C/1,GBlock,Bandra-KurlaComplex,Bandra(E),Mumbai-400051.

BSE Ltd.,PhirozeJeejeebhoyTowers,DalalStreet,Mumbai–400001

Scrip Code : POWERGRID EQ Scrip Code: 532898

Stock Code: ISIN – INE752E01010

ThepaymentofannuallistingfeefortheFinancialYear2016-17hasbeenmadetoNationalStockExchangeofIndiaLimitedandBSELtd.

116

vii) POWERGRID’s Shares Market Price Data - NSE

viii) POWERGRID’s Shares Market Price Data - BSE

High (`) Low (`) Sum of Turnover in Lac (`) during the Month

April,2015 156 140.4 47472.43

May,2015 146.65 137.4 78893.68

June,2015 148.2 137.65 89557.66

July,2015 143.3 136.4 37486.87

August,2015 142.9 125.15 47032.45

September,2015 137 120.55 50488.51

October,2015 137.55 126.2 36745.95

November,2015 136.9 126.65 42162.97

December,2015 142.75 126.75 77661.72

January, 2016 148.4 130.55 143715.86

February, 2016 150.35 129.2 156998.41

March, 2016 141 130.25 157827.78

High (`) Low (`) Sum of Turnover in Lac (`) during the Month

April,2015 155.7 140.5 4727.91

May,2015 146.55 137.5 28751.88

June,2015 148 135.55 3337.85

July,2015 144 136.4 2779.47

August,2015 142.9 125.4 5274.30

September,2015 137 120.75 3230.28

October,2015 137.7 126.25 2238.60

November,2015 136.5 126.7 3453.06

December,2015 142.3 127 2625.99

January, 2016 148.2 130.55 8417.23

February, 2016 150.2 129.25 7765.01

March, 2016 141 130.2 11366.39

117

ix) Performance in comparison to indices NSE NIFTY, BSE Sensex and POWERGRID

118

x) Registrar and Transfer Agents.

xi) Share Transfer System

EntiresharetransferactivitiesunderphysicalsegmentarebeingcarriedoutbyKarvyComputersharePrivateLimited.Thesharetransfersystemconsistsofactivitieslikereceiptofsharesalongwithtransferdeedfromtransferees,itsverification,preparationofMemorandumofTransfer,etc.SharetransfersareapprovedbyCommitteeoftheBoardforTransfer/Split/Rematerializationetc.ofShares.

Pursuant toSEBI (ListingObligationsandDisclosureRequirements)Regulations,2015withStockExchange,certificateonhalf-yearlybasisconfirmingduecomplianceofsharestransferformalitiesbytheCompanyfromPracticingCompanySecretaryhavebeensubmittedtoStockExchangeswithinstipulatedtime.

xii) Shareholding as on 31st March, 2016

Sharesheldbydifferentcategoriesofshareholdersandaccordingtothesizeoftheholdingsason31st March, 2016 are given below:

According to Size

a. Distribution of shareholding according to size, % of holding as on 31st March, 2016:

EQUITY SHARES BONDS

KarvyComputersharePvt.Ltd.KarvySeleniumTowerB,PlotNo.31&32,Gachibowli,FinancialDistrict,Nanakramguda,Serilingampally,Hyderabad-500032.Tele:+91-40-67162222,Fax:+91-40-23420814,TollfreeNo.1800-345-4001.E-mail:einward.ris@karvy.com

MCS Share Transfer Agent Limited,F-65,OkhlaIndustrialArea,Phase-I,NewDelhi-110020.Ph:011-41406149-52Telefax.:011-41709881E-mail:admin@mcsregistarars.com

Category No. of Cases % of Cases Amount % of Amount1–5000 638277 90.41 968775670.00 1.855001-10000 42591 6.03 292764160.00 0.5610001-20000 19547 2.77 249218210.00 0.4820001-30000 2059 0.29 50828470.00 0.1030001-40000 855 0.12 30232740.00 0.0640001-50000 542 0.08 25173180.00 0.0550001-100000 863 0.12 61300350.00 0.12100001&Above 1276 0.18 50637603700.00 0.12TOTAL 706010 100.00 52315896480.00 100.00

Sl. No. Category Total Shares % To Equity1 PRESIDENT OF INDIA 3028835198 57.902 PROMOTERS 0 0.003 INDIANPUBLIC 174089797 3.334 FIIs/FCB/FPI 1385985927 26.495 BODIES CORPORATE 185247255 3.546 MUTUALFUNDS 249258323 4.767 BANKS&FI 41222176 0.798 NRI/OCBs 3403231 0.079 OTHERS 163547741 3.13

Total 5231589648 100

b. Shareholding pattern as on 31st March, 2016

Shareholding Pattern as on 31st March, 2016

119

S. No. Name of the shareholder Shares % Equity Category1 PRESIDENT OF INDIA * 2927565398 55.96 POI2 EUROPACIFICGROWTHFUND 201847722 3.86 FII3 LIFEINSURANCECORPORATIONOFINDIA 131741859 2.52 INS4 PRESIDENT OF INDIA** 101269800 1.94 POI5 ICICIPRUDENTIALLIFEINSURANCECOMPANYLTD 87236431 1.67 LTD6 COMGESTGROWTHPLC-COMGESTGROWTHEMERGINGMARKET 74281497 1.42 FPI7 NEWWORLDFUNDINC 66671261 1.27 FII8 CAPITALWORLDGROWTHANDINCOMEFUND 64038000 1.22 FII9 MAGELLAN 60267770 1.15 FPI10 AMERICANFUNDSINSURANCESERIESINTERNATIONALFUND 54907097 1.05 FII

S. No Number of Holders Number of Shares % of total capital issued1 Physical 27352 45559 0.002 HeldindematerializedforminNSDL 477364 5181478180 99.043 HeldindematerializedforminCDSL 201294 50065909 0.96

Total 706010 5231589648 100.00

c. Major Shareholders

DetailsofShareholdersholdingmorethan1%ofthepaid-upcapitaloftheCompanyason31st March, 2016 are given below:

* represented through Ministry of Power

** represented through Ministry of DoNER

xiii) Dematerialization of Shares

ThesharesoftheCompanyareincompulsorydematerializedsegmentandareavailablefortradingsystemofbothNationalSecuritiesDepositoryLimited(NSDL)andCentralDepositoryServices(India)Limited(CDSL).

SecretarialHalf-yearlyAuditReportsforreconciliationofthesharecapitaloftheCompanyobtainedfromPracticingCompanySecretaryhavebeensubmittedtoStockExchangeswithinstipulatedtime.

No. of shares held in dematerialized and physical mode:

The name and addresses of the Depositories are as under:

1. National Securities Depository Limited

TradeWorld,4th Floor,

KamalaMillsCompound,SenapathiBapatMarg,

LowerParel,Mumbai–400013.

2. Central Depository Services (India) Limited

PhirozeJeejeebhoyTowers,

17thFloor,DalalStreet,Mumbai–400023.

xiv) Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impact on equity

NoGDRs/ADRs/WarrantsoranyConvertibleinstrumentshavebeenissuedbytheCompany.

120

Dispatch of Documents in electronic form:

Sections101and136oftheCompaniesAct,2013readwiththeCompanies(ManagementandAdministration)Rules,2014andRegulation36ofSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015,listedcompaniesarerequiredtosupplysoftcopiesofthesaiddocumentstoalltheshareholderswhohaveregisteredtheiremailaddress(es)forthepurpose.

Accordingly, the said documentswill be sent by e-mail to thosememberswhohave registered their e-mail address(es)with theirDP/thecompany, in terms of the said clause

Annexure-’A’

Non-Mandatory Requirements

1. The Board: TheCompanyisheadedbyanexecutiveChairman.

2. Shareholder Rights: Thefinancialresultsforthehalfyearended30thSeptember,2015werepublishedinTimesofIndiaandEconomicsTimesdated5thNovember,2015andalsoputuponwebsite.Separatehalfyearreporthas,however,notbeensenttoeachhouseholdofshareholders.SignificanteventshavebeendisclosedontheCompanywebsite:www.powergridindia.com.

3. Audit qualifications: Thefinancialstatementfortheyear2015-16hasnoauditqualificationsasdetailedinthe‘IndependentAuditors’report.

4. Separate posts of Chairman and CEO: POWERGRIDbeingaGovernmentCompany,thepostofChairmanandManagingDirectorexists;there is no separate post of CEO.

5. Reporting of Internal Auditor: The Internal auditor directly report to the Audit Committee.

Certificate on Corporate Governance:

TheCertificateonCorporateGovernancehasbeenpublishedasannexure-VIIItotheDirectors’Report.

For and on behalf of the Board of Directors

(I. S. JHA)

Chairman&ManagingDirector

Place: New DelhiDate: 08.08.2016

Telephone No. Fax No.RegisteredOffice 011-26560112,26560121,26564812,26564892 011-26601081E-mailID investors@powergridindia.comPublicSpokesperson(w.e.f.21.05.2012)ShriRaviP.Singh,Director(Personnel)

0124-2571901-02 0124-2571903

E-mailID ravipsingh@powergridindia.comCompany Secretary: Ms. Divya Tandon 0124-2571968 0124-2571969E-mailID dtandon@powergridindia.com

xv) Location of POWERGRID Plants

POWERGRIDhasnoplantsasitisinthebusinessofTransmissionofPower.

xvi) Address for correspondence:

Power Grid Corporation of India Limited, B-9,QutabInstitutionalArea, KatwariaSarai,NewDelhi–110016.

121

ANNEXURE - VIII TO THE DIRECTORS’ REPORT

Certificate on Corporate Governance

To

The Members,

Power Grid Corporation of India Limited

IhaveexaminedthecomplianceofconditionsofcorporategovernancebyPowerGridCorporationofIndiaLimited,fortheyearendedon31st March,2016asstipulatedintheSecuritiesandExchangeBoardofIndia(ListingObligationsandDisclosureRequirements)Regulations,2015inrespectofEquitySharesofthesaidCorporationwithStockExchangesandintheDPEGuidelines.

Thecomplianceofconditionsofcorporategovernanceistheresponsibilityofthemanagement.Myexaminationwaslimitedtotheproceduresand implementation thereof, adopted by the Corporation for ensuring the compliance of the conditions of the Corporate Governance. It is neither anauditnoranexpressionofopiniononthefinancialstatementoftheCorporation.

Inmyopinionandtothebestofmyinformationandaccordingtotheexplanationgiventome,Icertifythat,theCorporationhascompliedwithalltheconditionsofCorporateGovernanceasstipulatedintheCompaniesAct,2013andtheSecuritiesandExchangeBoardofIndia(ListingObligationsandDisclosureRequirements)Regulations,2015,exceptthatthecorporationdidnotmeetwiththerequirementofthecompositionoftheBoardthroughouttheyearandthecompositionoftheAuditCommitteeinthelastquarterasindicatedintheReport..

IfurtherstatethatsuchcomplianceisneitheranassuranceastothefutureviabilityoftheCorporationnortheefficiencyoreffectivenesswithwhich the management has conducted the affairs of the Corporation.

(T.V. NARAYNASWAMY)

COMPANYSECRETARY

Place : New Delhi

Date : 04.08.2016

122

FORM NO. AOC -2(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

FormforDisclosureofparticularsofcontracts/arrangementsenteredintobythecompanywithrelatedpartiesreferredtoinsubsection(1)ofsection188oftheCompaniesAct,2013includingcertainarmslengthtransactionunderthirdprovisothereto.

1 Details of contracts or arrangements or transactions not at arm’s length basisa) Name(s)oftherelatedpartyandnatureofrelationship -b) Natureofcontracts/arrangements/transactions -c) Durationofthecontracts/arrangements/transactions -d) Salient terms of the contracts or arrangements or

transactions including the value, if any-

e) Justifications for entering into such contracts orarrangements or transactions

-

f) Date(s)ofapprovalbytheBoard -g) Amount paid as advances, if any : -h) Date on which the special resolution was passed in

general meeting as required under first proviso tosection 188

-

2 Details of material contracts or arrangement or transactions at arm’s length basis(A) a) Name(s) of the related party and nature of

relationship1. POWERGRIDNMTransmissionLimited2. POWERGRIDVizagTransmissionLimited3. POWERGRIDUnchaharTransmissionLimited4. POWERGRIDKalaAmbTransmissionLimited5. POWERGRIDJabalpurTransmissionLimited6. POWERGRIDWaroraTransmissionLimited7. POWERGRIDParliTransmissionLimited8. POWERGRID Southern Interconnector Transmission System

LimitedTheaforementionedProjectSPVsare100%whollyownedsubsidiariesof POWERGRID acquired by POWERGRID under Tariff BasedCompetitiveBidding(TBCB).

b) Nature of contracts / arrangements / transactions

Part(A)POWERGRID to provide security (ies) / guarantee(s) inconnectionwithloan(s)an/oranyformofdebt includingECBs and / or to provide inter corporate loan (s) on costto cost basis andback toback servicing, or a combinationthereof, upto an amount of `7,324 Crore (Rupees Seventhousand three hundred and Twenty four Crore only) toaforementionedProjectSPVs.However,theagreementsenteredintoarepresentlylimitedto`6,714croreasperthefollowingamounts:1. POWERGRIDNMTransmissionLimited…`800Cr2. POWERGRIDVizagTransmissionLimited…`1200Cr3. POWERGRIDUnchaharTransmissionLimited…`90Cr4. POWERGRIDKalaAmbTransmissionLimited….`300Cr5. POWERGRIDJabalpurTransmissionLimited….`400Cr6. POWERGRIDWaroraTransmissionLimited….`500Cr7. POWERGRIDParliTransmissionLimited….`500Cr8. POWERGRID Southern Interconnector Transmission

SystemLimited….`2924CrPart(B)POWERGRIDtorenderallinputsandservicesasmaybe

requiredbytheaforementionedProjectsSPVsatSl.1and2oncosttocostbasisandforProjectSPVsatSl.3to8@5%oftheactualprojectcost(excl.IDCandConsultancyFee)plusservicetaxasapplicable.

a) Duration of the contracts / arrangements / transactions

Part(A)AsmutuallyagreedPart(B)Commissioningof theTBCBProject includingassociated

reconciliation activities.

ANNEXURE - IX TO THE DIRECTORS’ REPORT

123

d) Salient terms of the contracts or arrangements or transactions including the value, if any

Refer(b)

a) Date(s) of approval by the Board, if any 29th May, 2014, 4thMarch2015&27th January 2016b) Amount paid as advances, if any: NIL

(B) a) Name(s) of the related party and nature of relationship

Power Transmission Company Nepal Ltd, JV Company

b) Nature of contracts / arrangements / transactions

ToprovideProjectManagementConsultancyforexecutionof400kVD/CDhalkebarBittamod(41.5km)section(NepalPortion)of400kVD/CMuzaffarpur(India)-Dhalkebar(Nepal)TransmissionLine.

c) Duration of the contracts / arrangements / transactions

24monthsfrom13-Aug-2012(Extended automatically in case ofdelaytillcompletionofthescopeasperagreement)

d) Salient terms of the contracts or arrangements or transactions including the value, if any

Providingprojectmanagementconsultancyi.e.preparationofMasterN/w design & Engineering, Preparation of technical specificationsincluding BOQ, NIT and cost estimate; preparation of technical &commercial bid documents, preparation of draft NIT, evaluation of bid draft LOA, post contract Engg. and projectmanagement activitiesandsupervisionofsitework,openingofsiteofficesandotherworkincidentaltoexecutionofwork.Value:Consultancyfeeshallbe10%ofthefinalactualexecutedcostoftheprojectplusapplicabletaxes/dutiesinIndia/Nepal.

e) Date(s) of approval by the Board 6-Jan-2010f) Amount paid as advances, if any : `52,60,000receivedon25-Jul-14

(C) a) Name(s) of the related party and nature of relationship

Cross-BorderPowerTransmissionCompanyLtd,JVCompany

b) Nature of contracts / arrangements / transactions

ToprovideProjectManagementConsultancyforexecutionof400kVD/C Muzaffarpur-Sursand (86km) section (India Portion) of 400kVD/CMuzaffarpur(India)-Dhalkebar(Nepal)TransmissionLine

c) Duration of the contracts / arrangements / transactions

30monthsfrom10-Aug-2012(Extendedautomaticallyincaseofdelaytillcompletionofthescopeasperagreement)

d) Salient terms of the contracts or arrangements or transactions including the value, if any

Providingprojectmanagementconsultancyi.e.preparationofMasterN/w design & Engineering, Preparation of technical specificationsincluding BOQ, NIT and cost estimate; preparation of technical &commercial bid documents, preparation of draft NIT, evaluation of bid draft LOA, award of the Contract, post contract Engg. and projectmanagementactivitiesandsupervisionofsitework,openingofsiteofficesandotherworkincidentaltoexecutionofworkValue:Consultancyfeeshallbe12%ofthefinalactualexecutedcostoftheprojectplusapplicabletaxes/dutiesinIndia/Nepal.

e) Date(s) of approval by the Board, if any 24-Aug-2009f) Amount paid as advances, if any: `1,31,30,000receivedon19-Apr-2013

(D) a) Name(s) of the related party and nature of relationship

BiharGridCompanyLimited(BGCL),JointVentureCompany

b) Nature of contracts / arrangements / transactions

Consultancy for Pre-award Techno Managerial services forStrengtheningofTransmissionSysteminBihar-Phase-IV,(Part-1).

c) Duration of the contracts / arrangements / transactions

9monthsfromJan’15(ExtendableautomaticallyincaseofdelaytillcompletionofthescopeasperAgreement)

d) Salient terms of the contracts or arrangements or transactions including the value, if any

Providing all services for finalization and appointment of agency/contractorbyBGCLforStrengtheningofTransmissionSysteminBihar-Phase-IV(Part-1).Agreementsignedon21stNov'13withlumpsumservice charges of `14.0 Cr.

e) Date(s) of approval by the Board, if any Not applicablef) Amount paid as advances, if any: Received ` 11.24 Cr. including `1.4Cr.towardsfirstinstallmentfrom

BGCLinJan’15.However,noamountwaspaidtoBGCLasadvancefor this contract.

E) a) Name(s) of the related party and nature of relationship

BiharGridCompanyLimited(BGCL),JointVentureCompany

b) Nature of contracts / arrangements / transactions

Consultancy forPost-awardTechnoManagerialservices(Post-awardEngineering&QA&Ionly)forStrengtheningofTransmissionSysteminBihar-Phase-IV(Part-1).

124

c) Duration of the contracts / arrangements / transactions

24monthsfromMar’15(ExtendableautomaticallyincaseofdelaytillcompletionofthescopeasperAgreement)

d) Salient terms of the contracts or arrangements or transactions including the value, if any

Providing post-award engineering, quality assurance & inspectionrelatedservicesforthepackagesawardedbyBGCLunderstrengtheningofTransmissionSysteminBihar-Phase-IV,(Part-1).Agreementsignedon 1stJan’15.Theestimatedcostoftheproject is`1700.0Cr.andservicecharges@2%oftheactualexecutedcostoftheproject.

e) Date(s) of approval by the Board, if any 24thDec’14(308thBoardmeetingofPOWERGRID)f) Amount paid as advances, if any: Received ` 3.43Cr. as advance fromBGCL inMar’15.However, no

amount was paid to BGCL as advance for this contract.(F) a) Name(s) of the related party and nature of

relationshipTeestavalley Power Transmission Company Limited(TPTL), JointVenture Company

b) Nature of contracts / arrangements / transactions

Consultancyforexecutionof2nos.400kVAISbaysand2x63MVARReactors at Kishenganj POWERGRID S/S ( Subsequently, scoperevisedtoGISfromAIS)

c) Duration of the contracts / arrangements / transactions

26monthsfromMar'10(ExtendableautomaticallyincaseofdelaytillcompletionofthescopeasperAgreement)

d) Salient terms of the contracts or arrangements or transactions including the value, if any

Providing all services i.e procurement, engineering, implementation includingtestingandcommissioningfor2nos.400kVGISbaysand2x63MVARreactorsatKishenganj.Agreementsignedon1stSep’09having estimated project cost of ` 26.78 Cr. and consultancy fee@15%oftheactualexecutedcostoftheproject.

e) Date(s) of approval by the Board, if any Not applicablef) Amount paid as advances, if any: Received `4.68Cr.asadvancefromTPTLinMar/Apr'10.However,no

amount was paid to TPTL as advance for this contract.(G) a) Name(s) of the related party and nature of

relationshipTeestavalley Power Transmission Company Limited(TPTL), JointVenture Company

b) Nature of contracts / arrangements / transactions

Consultancy for Engineering services for execution of 400 kVD/CTeestaIII-Kishenganjline(about211km)associatedwithTeesta-IIIHEP(1200MW)inSikkim.

c) Duration of the contracts / arrangements / transactions

Mutually agreed (Matching with commissioning of the transmission line)

d) Salient terms of the contracts or arrangements or transactions including the value, if any

Providing all services for finalization and appointment of agency/contractor byTPTL, pre-award andpost-award engineering, qualityassurance&inspectionrelatedservices(exceptissueofNIT,placementof award,payment towardsproject cost to contractors, supervisionof erection, testing& commissioning) for execution of 400 kVD/CTeestaIII-Kishanganjline(about211km)associatedwithTeesta-IIIHEP(1200MW)inSikkim.Workorderdate21stApr’09andlumpsumconsultancy fee is `16.0 Cr.

e) Date(s) of approval by the Board, if any Not applicablef) Amount paid as advances, if any: Received ` 1.56Cr. as advance fromTPTL inMay’09.However, no

amount was paid to TPTL as advance for this contract.(H) a) Name(s) of the related party and nature of

relationshipNorth East Transmission Company Limited(NETC), Joint VentureCompany

b) Nature of contracts / arrangements / transactions

Consultancyforexecutionof400kVD/CPalatana-Silchar-Byrnihat-Bongaigaonline(about661km)associatedwith726.6MWPalatanaGBPP in Tripura.

c) Duration of the contracts / arrangements / transactions

36monthsfromMay’07(ExtendableautomaticallyincaseofdelaytillcompletionofthescopeasperAgreement)

d) Salient terms of the contracts or arrangements or transactions including the value, if any

Providing all services i.e procurement, engineering, implementation including testing and commissioning (except placement of award& payment towards project cost to contractors ) for 400 kV D/CPalatana-Silchar-Byrnihat-Bongaigaon line(about 661km) associatedwith Palatana GBPP in Tripura. Agreement signed on 16th Mar'07havingestimatedprojectcostof`1195.2Cr.andconsultancyfee@10%oftheactualexecutedcostoftheproject.

e) Date(s) of approval by the Board, if any Not applicable

125

f) Amount paid as advances, if any: Received ` 11.95 Cr. as advance from NETC in May'07/Aug'08.However,noamountwaspaidtoNETCasadvanceforthiscontract.

(I) a) Name(s) of the related party and nature of relationship

North East Transmission Company Limited(NETC), Joint VentureCompany

b) Nature of contracts / arrangements / transactions

Consultancy forOperation&Maintenanceof400KVD/CPallatana-Silchar-Byrnihat-Bongaigaonline(about661km).

c) Duration of the contracts / arrangements / transactions

3yearsfromFeb’13

d) Salient terms of the contracts or arrangements or transactions including the value, if any

Providing all services for Operation & Maintenance of 400 KVD/C Pallatana-Silchar-Byrnihat-Bongaigaon line (about 661 km).Agreement signed on 16thJan'13.TheconsultancyfeeisasperCERCnorms plus 10% Overhead.

e) Date(s) of approval by the Board, if any Not applicablef) Amount paid as advances, if any: Received ` 2.77Cr. as advance fromNETC in Feb'13.However, no

amount was paid to NETC as advance for this contract.(J) a) Name(s) of the related party and nature of

relationshipNationalHighPowerTestLaboratoryPvt.Ltd.(NHPTL),JointVentureCompany

b) Nature of contracts / arrangements / transactions

ConsultancyforestablishmentofOn-lineHighPowerShortCircuitTestFacility at Bina Substation.

c) Duration of the contracts / arrangements / transactions

Mutually agreed

d) Salient terms of the contracts or arrangements or transactions including the value, if any

Providing all services i.e procurement, engineering, implementation includingtestingandcommisioningforestablishmentofOn-lineHighPower Short Circuit Test Facility at Bina Substation. Agreement signed on 25th Nov'10 having estimated project cost of ` 247.06 Cr. andconsultancyfee@10%oftheactualexecutedcostoftheproject.

e) Date(s) of approval by the Board, if any Not applicablef) Amount paid as advances, if any: Received `2.45Cr.asadvancefromNHPTLinDec'10.However,no

amountwaspaidtoNHPTLasadvanceforthiscontract.(K) a) Name(s) of the related party and nature of

relationshipPower System Operation Corporation Ltd(POSOCO), SubsidiaryCompany(100%)

b) Nature of contracts / arrangements / transactions

Consultancy for expansion/replacement of SCADA/EMS system andassociatedITInfrastructureat5-RLDCs&NLDC.

c) Duration of the contracts / arrangements / transactions

5years fromApr'11 (Extendableautomatically in caseofdelay tillcompletionofthescopeasperAgreement)

d) Salient terms of the contracts or arrangements or transactions including the value, if any

Providing all services i.e procurement, engineering, implementation includingtestingandcommissioning(exceptpaymenttowardsprojectcosttocontractors)forexpansion/replacementofSCADA/EMSsystemand associated IT Infrastructure at 5-RLDCs & NLDC. Agreementsignedon31stMar'11&amendedon2ndMay'12.TheestimatedcostoftheprojectworkedoutsubsequenttosigningoftheAgreementasper the provision in the Agreement is `65.16Cr.andconsultancyfee@12%oftheactualexecutedcostoftheproject.

e) Date(s) of approval by the Board, if any Not applicablef) Amount paid as advances, if any: Received `1.53Cr.towardsfirstinstallmentfromPOSOCOinSep’11/

Mar’12.However,noamountwaspaidtoPOSOCOasadvanceforthiscontract.

126

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129

Annexure XI to the Directors’ Report

Annual Report on Corporate Social Responsibility

1 TheCSRPolicyoftheCompanywasapprovedbytheBoardofDirectorsinits307th meetingheldon11.11.2014andwasmodifiedinits323rdmeetingheldon30thNovember,2015.MajorchangeswereincorporatedintheNameofthePolicy,inclusionofVisionandMissionStatements,defininglocalareaandcommunicationstrategy.ThePolicyisavailableoncompany’swebsite www.powergridindia.com/administrator/ Lists/Menu/Attachments/172/CSR_Policy_2015.pdf

The main features of the Policy are:

ThePolicyisrenamedasPOWERGRID’sCorporateSocialResponsibilityandSustainabilityPolicy.

Vision:

TobeaCorporatethatsetsalongtermstrategyforSocial&EconomicDevelopmentofcommunitiesthroughinitiativesinruraldevelopment,education,skilldevelopment,healthandotherareasofnationalimportanceandadheretosustainableenvironmentalpractices.

Mission

To align CSR and Sustainability Policy with the business policy so as to conduct business in a sustainable manner adhering to the principles of Avoidance,MinimizationandMitigationindealingwithenvironmentalandsocialissuesandtoundertakehighimpactcommunitydevelopmentprojectsofnationalandlocalimportanceinconsultationwithstakeholders.

Activities under CSR:

TheactivitiesproposedtobeundertakenunderCSRshallincludealltheactivitiesmentionedinScheduleVIImentionedinSection135(3)(a)oftheCompaniesAct,2013.

TheCorporationwill givepreference to the stakeholders directly impactedby its operation forCSRactivities. Since such stakeholders aregenerallylocatedintheperipheryofthecommercialoperationsoftheCorporation,POWERGRIDwillaccordpriorityforCSRactivitiesinthelocalareas and neighbourhood areas of its operations.

TheGeographicallimitsofadistrictwherePOWERGRIDhasitspresenceshallbeconsideredas“localarea”forCSR&Sactivities.Inaddition,POWERGRIDshallalsoundertakeCSRactivitiesoutsideit.TheratioofCSRspendsbetweenthelocalareasandoutsidewouldbeapproximately75:25.However,projects/activitiesexecutedunderthedirectivesofGoIorofforemostconcerninthenationaldevelopmentagendawillbeoutsidethepurviewofthisratio.TheCSRCommitteeisauthorizedtoapproveanyproject,irrespectiveoftheamountinvolved,whichisbeyondthe above ratio.

PrioritywillbegivenforCSRactivitiestothestakeholdersdirectlyimpactedbytheoperationsoftheCorporation.

CSRprojectsorprogramsoractivitiesundertakeninIndiaonlyshallamounttoCSRexpenditure.

Endeavourshallbemadetopromotesustainabledevelopmentthroughinitiativesbyconductingbusinessinamannerthatisbeneficialtobothbusiness and society.

Mode of execution of CSR activities:

TheCSRactivitiesshallpreferablybeimplementedinprojectmode.TheimplementationofvariousactivitieswillbenormallydonethroughplacementofawardbytheCorporationasperWorks&ProcurementPolicyoftheCorporation.ServicesofvariousdepartmentsofCentral/StateGovt.,PanchayatiRajInstitutionsetc.mayalsobeavailedforimplementationofCSRactivitiesasdepositworks.

CSRactivities/projects/programsmayalsobetakenupinassociationwitharegisteredtrustoraregisteredsocietyoracompanyestablishedbytheCorporationoritsholdingorsubsidiaryorassociatecompanysubmittedtofulfillingrequirementsasmentionedinCompany’sAct.

Communication Strategy

Theelectronicmediashallbeusedforbroadercommunicationwiththestakeholders.Displayinwebsite,emails,AnnualCSRbooklet,AnnualReportetc.willbekeyinstrumentstodeciphertheCSRinitiativesofPOWERGRID.

Funding of CSR activities:

TheCorporationwillberequiredtospendannuallyatleasttwopercentoftheaveragenetprofitmadeduringthethreeimmediatelyprecedingfinancialyearsonCSRPolicy.

Shri I. S. Jha - CMD,ChairmanoftheCommittee–w.e.f.01.10.2015

Shri R. T. Agarwal - Director

Shri Ravi P Singh - Director

Ms. Jyoti Arora - Director(Govt.representative)

Prof.R.K.Gupta - Director(Independent)Tenurecompleted

Dr.K.Ramalingam - Director(Independent)on15.01.2016

Shri Mahesh Shah - Director(Independent)

Shri Jagdish Ishwarbhai Patel - Director(Independent)-w.e.f.17.11.2015

*ShriR.N.NayakformerCMDwastheChairmanoftheCommiteetill30.09.2015

130

2. The composition of the CSR Committee.

3.AverageNetProfitofthecompanyforlastthreefinancialyears:`60,897,086,200.

4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above).

CSR@2%forFY2015-16 : `1,217,941,724

5. Details of CSR spent during the financial year :

a. Totalamounttobespentforthefinancialyear:

`1,217,941,724/-

b. Amount unspent, if any

` 6.01 Crore.

c. Mannerinwhichtheamountspentduringthefinancialyear.

AmountspentduringtheyearisattachedatAnnexure-I.

6. The shortfall of ` 6.01 Crore (`121.79cr.-`115.78cr.)isduetofollowingreasons:-

a. MajorityoftheprojectswereofInfrastructureDevelopmentinruralarea,whichinvolvedlongimplementationperiod.

b. Theimplementingagenciestooklongertimeinmobilizationandexecutionofwork.

7. ItistostatethattheimplementationandmonitoringofCSRPolicy,isincompliancewithCSRobjectivesandPolicyoftheCompany.

Sd/-(Chief Executive Officer or Managing

Director or Director)

Sd/-(Chairman CSR Committee)

Sd/-(Person specified under clause (d) of sub-

section (1) of section 380 of the Act)

131

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POWERGRID

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34.80

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POWERGRID

29Installationof25nos.Hand

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POWERGRID

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POWERGRID

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POWERGRID

33Constructionofbricksoling

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41Supply&Installationof

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42Co

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POWERGRID

51ProvidingWaterSupplyin

SchoolComplex

Prom

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Loca

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Trip

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POWERGRID

52Co

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Hill

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hala

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42.74

POWERGRID

54Co

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Rura

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Loca

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POWERGRID

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57Constructionofmarketshed

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7.68

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POWERGRID

58Co

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Loca

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POWERGRID

61Co

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POWERGRID

62Co

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POWERGRID

63Tr

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73Co

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74Supply&installationof

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81ImpartingSkillDevelopment

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POWERGRID

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roadatBurenjewadi/

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POWERGRID

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Zilaparishad,

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Loca

lBh

opal

Mad

hya

Prad

esh

58.00

29

.00

29.00

POWERGRID

103

Ruraldevelopmentworks

Rura

l Dev

Loca

lBe

tul

Mad

hya

Prad

esh

134.19

14

.32

14.32

POWERGRID

137

S.N

o.C

SR P

roje

cts

or a

ctiv

ity

iden

tifi

edSe

ctor

in

wh

ich

th

e pr

ojec

t is

co

vere

d

Loca

l A

rea

or

oth

er

Dis

tric

tSt

ate

Am

oun

t ou

tlay

(R

s/la

khs)

Am

oun

t sp

ent

on t

he

proj

ect

or p

rogr

amm

e du

rin

g 2

01

5-1

6

Cu

mm

ula

tive

ex

pen

ditu

re u

pto

the

repo

rtin

g pe

riod

Am

oun

t sp

ent:

D

irec

t or

th

rou

gh

impl

emen

tin

g A

gen

cy

104

ImpartingSkillDevelopment

Trai

ning

SkillDev

Loca

lM.P.&Gujarat

Mad

hya

Pradesh&

Gujarat

145.63

43

.69

43.69

Indo

Ger

man

Too

l Ro

om, I

ndor

e

105

Fabr

icat

ion

and

erec

tion

of

shed

Ru

ral D

evLo

cal

vapi

Gujarat

3.59

3.5

93.59

POWERGRID

106

Cons

truc

tion

of t

wo

nos.

RCCoverheadwatertanks

DrinkingWater

Loca

lAnjar,Kutch

Gujarat

11.74

6.7

56.75

POWERGRID

107

Cons

truc

tion

of

mul

tipur

pose

Com

mun

ity

Build

ing

Rura

l Dev

Loca

lN

arsi

nghp

urM

adhy

a Pr

ades

h26.23

25

.47

25.47

POWERGRID

108

Constructionofparking

plat

form

and

bou

ndry

wal

l fo

r pa

ncha

yat

bhav

an

Rura

l Dev

Loca

lSu

rat

Gujarat

18.2

01

6.0

716.07

POWERGRID

109

ConstructionofMid-Day

mea

l bui

ldin

g fo

r Sc

hool

Prom

otio

n of

Ed

ucat

ion

Loca

lG

andh

inag

arGujarat

8.55

1.9

36.

18POWERGRID

110

Cons

truc

tion

of

RCC

Roa

dRu

ral D

evLo

cal

Gan

dhin

agar

Gujarat

51.28

32

.86

32.86

POWERGRID

111

Supp

ly o

f 10

whe

el

mountedtractorpull-able

4KLcapacitywatertankers

to v

illag

es

DrinkingWater

Loca

lKhandwa

Mad

hya

Prad

esh

14.74

14

.74

14.74

POWERGRID

112

Cons

truc

tion

of B

ound

ary

wal

l of

the

Prim

ary

Scho

ol

build

ing

Prom

otio

n of

Ed

ucat

ion

Loca

lD

amoh

Gujarat

13.54

0.8

013.54

POWERGRID

113

Cons

truc

tion

of c

rem

ator

ium

Ru

ral D

evLo

cal

Ankalas

Gujarat

4.53

4.2

14.

21POWERGRID

114

Supp

ly o

f m

obile

den

tal v

an Health

Loca

lDaman&Diu

Dad

ar N

agar

Haveli(UT)

21.89

21

.89

21.89

POWERGRID

115

RenovationofKatta(Pond),

cons

truc

tion

of b

ound

ary

wal

l and

app

roac

h ro

ad t

o sc

hool

Rura

l Dev

Loca

lJh

arsu

guda

Odi

sha

11.0

01

1.0

011

.00

Gov

t. o

f O

dish

a

116

Supply&installationof

MedicalEquipmentstoSub-

DivisionalHospital

Health

Loca

lJe

ypor

eO

dish

a12.65

3.2

83.28

POWERGRID

117

Cons

truc

tion

of P

acha

ri (steps)forCommonpond

Rura

l Dev

Loca

lSu

nder

garh

Odi

sha

4.27

1.4

31.43

POWERGRID

118

Cons

truc

tion

of b

ound

ry

wal

l at

Suda

m C

hara

n D

egre

e Co

llege

Prom

otio

n of

Ed

ucat

ion

Loca

lBo

lang

irO

dish

a9.17

2.0

12.

01POWERGRID

119

ConstructionofWater

supp

ly s

yste

m

DrinkingWater

Loca

lRe

ngal

iO

dish

a1.63

1.4

31.43

POWERGRID

138

S.N

o.C

SR P

roje

cts

or a

ctiv

ity

iden

tifi

edSe

ctor

in

wh

ich

th

e pr

ojec

t is

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vere

d

Loca

l A

rea

or

oth

er

Dis

tric

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ate

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s/la

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ect

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pto

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oun

t sp

ent:

D

irec

t or

th

rou

gh

impl

emen

tin

g A

gen

cy

120

Cons

truc

tion

of 0

2 N

os

Clas

s Ro

om e

ach

in 0

4 Sc

hool

s

Prom

otio

n of

Ed

ucat

ion

Loca

lB.

Char

iali

Assa

m40

.00

2.1

311.36

POWERGRID

121

Constructionof03Resting

shed

Rura

l Dev

Loca

lSo

nitp

urAs

sam

7.50

0.1

95.60

POWERGRID

122

Cons

truc

tion

of

Boundarywall&Roomin

Crem

ator

ium

Rura

l Dev

Loca

lB.

Char

iali

Assa

m10

.00

3.0

09.50

POWERGRID

123

ConstructionofVillageHaat

Rura

l Dev

Loca

lB.

Char

iali

Assa

m10

.00

6.0

39.04

NEI

TCO

124

Supply&installationof

MedicalequipmentinGovt.

Hospital

Health

Loca

lAl

ipur

duar

WestBengal

29.50

15

.49

27.99

POWERGRID

125

Const.of02Multi-purpose

room

Rura

l Dev

Loca

lB.

Char

iali

Assa

m13.45

0.3

913.16

POWERGRID

126

Cond

uctin

g “F

ive

mon

ths

certificateprogrammein

Tailoringforunder-privilege

child

ren

SkillDev

Loca

lG

urga

onHaryana

4.28

2.3

62.36

POWERGRID

127

Prom

otin

g En

ergy

conservation-Painting

Com

petit

ion

for

stud

ents

Env.

Su

stai

nabi

lity

Loca

lva

rious

par

ts

of t

he c

ount

ryva

rious

pa

rts

of t

he

coun

try

139.65

48

.77

48.77

POWERGRID

128

Rest

orat

ion

of M

onum

ent

at T

auru

Nat

iona

l Heritage

Loca

lNuh-Mewat

Haryana

21.17

3.7

021.17

INTACH

129

Part

icip

atio

n in

"N

amam

i G

ange

" an

inte

grat

ed r

iver

co

nser

vatio

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issi

on.

Env.

Su

stai

nabi

lity

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lVa

rious

di

stric

tsVa

rious

st

ates

th

roug

h w

hich

Gangaflows

200.

002

00

.00

200.

00G

ovt.

of

Indi

a

130

Scho

lars

hip

for

Educ

atio

n of

1315children

Prom

otio

n of

Ed

ucat

ion

Loca

lAssam&

Man

ipur

Assam&

Man

ipur

166.50

16

6.5

0166.50

NFCH

131

ImpartingSkillDevelopment

trainingto5000youthsin

33locations”

SkillDev

Loca

lva

rious

par

ts

of t

he c

ount

ryva

rious

pa

rts

of t

he

coun

try

653.00

56

.84

56.84

NSD

C

132

Scho

lars

hip

for

Educ

atio

n of

416

6 ch

ildre

n of

Arm

ed

ForcesveteransandWar-

wid

ows

Prom

otio

n of

Ed

ucat

ion

Loca

lva

rious

par

ts

of t

he c

ount

ryva

rious

pa

rts

of t

he

coun

try

499.92

49

9.9

2499.92

KendriyaSainik

Boar

d

133

Com

mun

ity D

evel

opm

ent

initi

atai

ves

Prom

otio

n of

Ed

ucat

ion

Loca

lLucknow

U.P.

18.2

11

.08

16.91

Sam

arpa

n Tr

ust

139

S.N

o.C

SR P

roje

cts

or a

ctiv

ity

iden

tifi

edSe

ctor

in

wh

ich

th

e pr

ojec

t is

co

vere

d

Loca

l A

rea

or

oth

er

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tric

tSt

ate

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oun

t ou

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(R

s/la

khs)

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oun

t sp

ent

on t

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proj

ect

or p

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amm

e du

rin

g 2

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5-1

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pen

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g pe

riod

Am

oun

t sp

ent:

D

irec

t or

th

rou

gh

impl

emen

tin

g A

gen

cy

134

Cons

truc

tion

of

DharamshalaatJaiPrakash

NarayanApexTrauma

Cent

re, A

IIM

S

Health

Loca

lD

elhi

Del

hi2,900.00

1,7

14

.66

2,00

0.00

AIIM

S

135

Dis

trib

utio

n of

aid

s an

d ap

plia

nces

to

Pers

ons

with

D

isab

ilitie

s”

Health

Loca

lva

rious

par

ts

of t

he c

ount

ryva

rious

pa

rts

of t

he

coun

try

198.00

16

5.8

3185.63

ALIM

CO

136

ImpartingSkillDevelopment

trai

ning

on

Tran

smis

sion

Li

ne t

ower

ere

ctio

n

SkillDev

Loca

lBa

rdha

man

, Ja

lpai

guri,

M

alda

, N

agao

n,

Kokrajhar,

Imph

al,

Jorh

at,

Nagpur&

Kanchipuram

wes

t Be

ngal

, As

sam

, M

anip

ur,

Mah

aras

htra

, Ta

mil

Nad

u

576.37

14

6.0

3240.71

POWERGRID

137

Healthcampsat30

loca

tions

Health

Loca

lva

rious

par

ts

of t

he c

ount

ryva

rious

pa

rts

of t

he

coun

try

86.0

05

8.8

666.45

HLLLifecareLtd.

138

Constructionoftoiletblocks

in v

ario

us lo

catio

ns a

cros

s th

e co

untr

y

Prom

otio

n of

Ed

ucat

ion

Loca

lva

rious

par

ts

of t

he c

ount

ryAn

dhra

Pr

ades

h,

Assa

m,

Biha

r, Ch

attis

garh

, M

adhy

a Pr

ades

h,

Odi

sha,

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Prad

esh

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00.0

05

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8.5

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HPL/IrconISL/GVT

139

Dis

trib

utio

n of

10,

000

Nos

. So

lar

Lant

erns

to

stud

ents

of

Gov

t. S

choo

l

Env.

Su

stai

nabi

lity

Loca

lVa

rious

di

stric

tsBi

har,

Jharkhand&

Odi

sha

195.8

15

4.8

6174.44

TERI

140

Swac

hh B

hara

t Ab

hiya

n (CleaningDrive)

Health

Loca

lva

rious

par

ts

of t

he c

ount

ryva

rious

pa

rts

of t

he

coun

try

10.36

7.2

07.20

POWERGRID

141

Supplyof55nos.

ambu

lanc

e to

G

ovt.

HospitalsandPrimary

HealthCentres

Health

Loca

lva

rious

par

ts

of t

he c

ount

ryAs

sam

, Bi

har,

Chat

tisga

rh,

Arun

acha

l Pr

ades

h,

Gujarat,

WestBengal

452.72

34

5.7

1345.71

POWERGRID

140

S.N

o.C

SR P

roje

cts

or a

ctiv

ity

iden

tifi

edSe

ctor

in

wh

ich

th

e pr

ojec

t is

co

vere

d

Loca

l A

rea

or

oth

er

Dis

tric

tSt

ate

Am

oun

t ou

tlay

(R

s/la

khs)

Am

oun

t sp

ent

on t

he

proj

ect

or p

rogr

amm

e du

rin

g 2

01

5-1

6

Cu

mm

ula

tive

ex

pen

ditu

re u

pto

the

repo

rtin

g pe

riod

Am

oun

t sp

ent:

D

irec

t or

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rou

gh

impl

emen

tin

g A

gen

cy

142

Ove

rhea

ds (

capa

city

bu

ildin

g, a

dmin

istr

atio

n etc.)

Ove

rhea

ds1

81

.05

181.05

POWERGRID

Tota

l1

1,5

78

.24

* *

*

141

Particulars

Balance Sheet as at 31st March, 2016

As at 31st March, 2016

Note No. As at 31st March, 2015

(` in Crore)

I. EQUITY AND LIABILITIES Shareholders’ funds (a) Sharecapital 2.1 5231.59 5231.59(b) Reservesandsurplus 2.2 37502.38 32935.00 42733.97 38166.59Deferred revenue 2.3 5723.85 4762.91

Non-current liabilities (a) Long-termborrowings 2.4 100239.75 89375.84(b) Deferredtaxliabilities(Net) 2.5 2489.37 2472.15(c) Otherlongtermliabilities 2.6 1337.96 1078.64(d) Long-termprovisions 2.7 650.45 580.23 104717.53 93506.86Current liabilities (a) Short-termborrowings 2.8 2000.00 1200.00(b) Tradepayables 2.9 313.89 392.97(c) Othercurrentliabilities 2.10 21391.30 19059.60(d) Short-termprovisions 2.11 1548.38 1211.95 25253.57 21864.52Total 178428.92 158300.88

II.ASSETSNon-current assets (a) Fixedassets (i) Tangibleassets 2.12 114207.36 88902.51 (ii) Intangibleassets 2.13 950.54 783.70 (iii)Capitalworkinprogress 2.14 33778.58 39670.90 (iv)Intangibleassetsunderdevelopment 2.15 172.11 211.29 149108.59 129568.40(b) Constructionstores 2.16 9859.27 13041.96(c) Non-currentinvestments 2.17 771.28 740.99(d) Deferredforeigncurrencyfluctuationasset 3831.75 2803.82(e) RegulatoryAssets 37.67 37.72(f) Long-termloansandadvances 2.18 4838.56 4177.89 9479.26 7760.42Current assets (a) Currentinvestments 2.19 35.64 185.43(b) Inventories 2.20 823.68 717.75(c) Tradereceivables 2.21 2737.97 2118.65(d) CashandBankbalances 2.22 2453.72 2062.98(e) Short-termloansandadvances 2.23 794.00 566.42(f) Othercurrentassets 2.24 3136.79 2278.87 9981.80 7930.10Total 178428.92 158300.88 Accounting Policies 1 Notes on Accounts 2 Notes referred above are integral part of the Balance Sheet

Place: New DelhiDate: 26th May, 2016

(Divya Tandon)Company Secretary

(R.T. Agarwal)Director(Finance)

( I. S. Jha)Chairman&ManagingDirector

( CA. M.K. Juneja)Partner

M.No.013117

( CA. R.Rangarajan)Partner

M.No.041883

( CA.Manaswy Kothari )Partner

M.No. 064601

( CA.Indra Pal Singh )Partner

M.No.410433

For S.K. Mittal & Co.Chartered AccountantsFirm Regn No. 001135N

For R.G.N.Price & Co.Chartered AccountantsFirmRegnNo.002785S

For Kothari & Co.Chartered AccountantsFirmRegnNo.301178E

For Parakh & Co.Chartered AccountantsFirmRegnNo.001475C

For and on behalf of the Board of Directors

As per our report of even date

142

I. Revenuefromoperations 2.25 20802.22 17177.23II. Other income 2.26 478.96 602.81 III. Total Revenue (I + II) 21281.18 17780.04 IV. Expenses: Employeebenefitsexpense 2.27 980.54 1023.65 Finance costs 2.28 5022.97 3979.32 Depreciationandamortizationexpense 2.29 6182.76 5085.41 Transmission,administrationandotherExpenses 2.30 1540.87 1355.16 Priorperioditems(net) 2.31 (64.74) 47.12 Total expenses 13662.40 11490.66 V. Profit before tax and Rate Regulated Activities (III-IV) 7618.78 6289.38VI. Add:RegulatoryIncome/(Expense) (0.05) -VII. Profit before tax (V+VI) 7618.73 6289.38VIII. Tax expense: (1)Currenttax -CurrentYear 1574.81 1281.25 -Earlieryears (0.02) (0.26) 1574.79 1280.99 (2)Deferredtax- 1827.26 824.25 Less:DeferredAssetfordeferredtaxliability 2.5 1810.04 795.03 17.22 29.22 1592.01 1310.21IX. Profit for the year (VII-VIII) 6026.72 4979.17X. Earnings per equity share (Par value ` 10/- each): 2.46 Basic&Diluted(`) 11.52 9.52Accounting Policies 1 Notes on Accounts 2 NotesreferredaboveareintegralpartoftheStatementofProfitandLoss Therearenoexceptionalorextraordinaryitemsintheaboveperiods

Particulars

Statement of Profit and Loss for the year ended 31st March, 2016(` inCrore)

For the year ended 31st March, 2016

For the year ended 31st March, 2015

Note No.

Place: New DelhiDate: 26th May, 2016

(Divya Tandon)Company Secretary

(R.T. Agarwal)Director(Finance)

( I. S. Jha)Chairman&ManagingDirector

( CA. M.K. Juneja)Partner

M.No.013117

( CA. R.Rangarajan)Partner

M.No.041883

( CA.Manaswy Kothari )Partner

M.No. 064601

( CA.Indra Pal Singh )Partner

M.No.410433

For S.K. Mittal & Co.Chartered AccountantsFirm Regn No. 001135N

For R.G.N.Price & Co.Chartered AccountantsFirmRegnNo.002785S

For Kothari & Co.Chartered AccountantsFirmRegnNo.301178E

For Parakh & Co.Chartered AccountantsFirmRegnNo.001475C

For and on behalf of the Board of Directors

As per our report of even date

143

A. CASH FLOW FROM OPERATING ACTIVITIES

NetProfitBeforeTax 7618.73 6289.38

Less:RateRegualatedIncome/(Expense) (0.05) -

7618.78 6289.38

Adjustment for :

Depreciation(includingpriorperiod) 6122.69 5085.41

TransferfromGrantsinAid (21.96) (21.95)

ReceiptofGrant 58.00 -

Deferredrevenue-AdvanceagainstDepreciation (143.00) (79.50)

Provisions 7.50 43.95

TransferfromSelfInsuranceReserve (5.29) (20.21)

NetLossonDisposal/WriteoffofFixedAssets (1.10) (1.64)

InterestandFinanceCharges 5022.97 3979.32

ProvisionsWrittenBack (3.90) (5.50)

FERVloss/(gain) 4.56 -

InterestearnedonDeposits,BondsandloanstoStateGovts. (74.55) (260.28)

Dividendreceived (84.77) (97.77)

10881.15 8621.83

Operating profit before Working Capital Changes 18499.93 14911.21

Adjustment for :

(Increase)/DecreaseinInventories (105.93) (25.24)

(Increase)/DecreaseinTradeReceivables (621.61) (560.27)

(Increase)/DecreaseinLoansandAdvances (279.93) (84.50)

(Increase)/DecreaseinOthercurrentassets (866.29) (619.50)

Increase/(Decrease)inLiabilities&Provisions 703.60 2392.87

(Increase)/DecreaseinDeferredForeignCurrency

FluctuationAsset/Liability(Net) 236.93 153.68

(Increase)/DecreaseinRateRegulatedAssets (0.00) -

(933.23) 1257.04

Cash generated from operations 17566.70 16168.25

Directtaxespaid (1415.59) (1126.48)

Net Cash from operating activities 16151.11 15041.77

B. CASH FLOW FROM INVESTING ACTIVITIES

Fixedassets(includingincidentalexpenditureduringconstruction) (443.96) (1153.45)

Capitalworkinprogress (23573.75) (28156.76)

ConstructionStores&AdvancesforCapitalExpenditure 3529.93 5067.73

(Increase)/DecreaseinInvestments 119.50 72.26

(Increase)/DecreaseinLongTermLoansunderSecuritisationScheme 15.43 23.14

Loans&AdvancestoSubsidiaries (930.02) (229.70)

Leasereceivables (32.43) 97.93

InterestearnedonBondsandloanstoStateGovts. 82.92 337.63

Dividendreceived 84.77 97.77

Net cash used in investing activities (21147.61) (23843.45)

Particulars

Cash Flow Statement for the year ended 31st March, 2016

For the year ended 31st March, 2016

For the year ended 31st March, 2015

(` in Crore)

144

C. CASH FLOW FROM FINANCING ACTIVITIES

Loansraisedduringtheyear 17199.23 17756.54

Loansrepaidduringtheyear (5772.15) (6398.68)

InterestandFinanceChargesPaid (4714.84) (3678.70)

Dividendpaid (1103.87) (1046.32)

DividendTaxpaid (221.13) (185.70)

Net Cash from Financing Activities 5387.24 6447.14

D.NetchangeinCashandCashequivalents(A+B+C) 390.74 (2354.54)

E.CashandCashequivalents(Openingbalance) 2062.98 4417.52

F.CashandCashequivalents(Closingbalance) 2453.72 2062.98

Notes:

Cash and cash equivalents consists of Cash in hand and balances with banks. Cash and cash equivalents included in the cash flow statement comprise of following balance sheet amounts as per Note 2.22.

Cashandcashequivalents 1,540.64 2,052.59

OtherBankbalances(*) 913.08 10.39

2,453.72 2,062.98

(*)BreakupofOtherBankbalances

1.EarmarkedbalancewithBank# 10.29 10.39

2.InTermDepositshavingmaturityover3months 902.79 -

913.08 10.39

#EarmarkedbalancewithBankincludesunpaiddividendandrefundofFPOproceeds

Previous year figures have been re-grouped / re-arranged wherever necessary.

Particulars

Cash Flow Statement for the year ended 31st March, 2016 (contd.)

For the year ended 31st March, 2016

For the year ended 31st March, 2015

(` in Crore)

Place: New DelhiDate: 26th May, 2016

(Divya Tandon)Company Secretary

(R.T. Agarwal)Director(Finance)

( I. S. Jha)Chairman&ManagingDirector

( CA. M.K. Juneja)Partner

M.No.013117

( CA. R.Rangarajan)Partner

M.No.041883

( CA.Manaswy Kothari )Partner

M.No. 064601

( CA.Indra Pal Singh )Partner

M.No.410433

For S.K. Mittal & Co.Chartered AccountantsFirm Regn No. 001135N

For R.G.N.Price & Co.Chartered AccountantsFirmRegnNo.002785S

For Kothari & Co.Chartered AccountantsFirmRegnNo.301178E

For Parakh & Co.Chartered AccountantsFirmRegnNo.001475C

For and on behalf of the Board of Directors

As per our report of even date

145

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS Thefinancialstatementsarepreparedonaccrualbasisofaccountingunderthehistoricalcostconvention,inaccordancewithgenerally

acceptedaccountingprinciplesinIndia,therelevantprovisionsoftheCompaniesAct,2013(totheextentnotified),theCompaniesAct,1956(totheextentapplicable)includingAccountingStandardsnotifiedthereunderandtheprovisionsoftheElectricityAct,2003totheextentapplicable.

1.2 USE OF ESTIMATES Thepreparationoffinancialstatements requiresestimatesandassumptions thataffect the reportedamountofassets, liabilities,

revenue and expenses during the reporting period. Although, such estimates and assumptions are made on a reasonable andprudentbasistakingintoaccountallavailableinformation,actualresultscoulddifferfromtheseestimatesandassumptionsandsuchdifferencesarerecognizedintheperiodinwhichtheresultsarecrystallized.

1.3 RESERVES AND SURPLUS Selfinsurancereserveiscreated@0.1%p.a.onGrossBlockofFixedAssets(exceptassetscoveredundermegainsurancepolicy)as

attheendoftheyearbyappropriatingcurrentyearprofittowardsfuturelosseswhichmayarisefromun-insuredrisks.Thesameisshownas“Selfinsurancereserve”under‘Reserves&Surplus’.

1.4 GRANTS-IN-AID1.4.1 Grants-in-aid received from Central Government or other authorities towards capital expenditure for projects, betterment of

transmissionsystemsandspecificdepreciableassetsareshownas“grants-in-aid”tilltheutilizationofgrant.1.4.2 Oncapitalizationofrelatedassets,grantsreceivedforspecificdepreciableassetsaretreatedasdeferredincomeandrecognizedinthe

StatementofProfitandLossovertheusefullifeofrelatedassetandinproportiontowhichdepreciationontheseassetsisprovided.1.5 RATE REGULATED ASSETS & LIABILITIES Certainexpensesandincome,allowedunderCERCregulationstobereimbursed/passedonby/tofrombeneficiariesinfuture,are

tobeaccountedinthestatementofProfitandLossaspertheprovisionsofaccountingstandardsandpractices.Suchexpensesandincome,totheextentallowable/payableunderCERCregulations,aretreatedasregulatedassetsandliabilities.

1.6 SEGMENT REPORTING The accounting policies adopted for segment reporting are in line with the accounting policies of the company. Segment revenue,

segmentexpenses,segmentassetand liabilitiesare identifiedon thebasisof their relationship to theoperatingactivitiesof thesegment. Revenue, expenses, assets and liabilities which relates to the company as a whole and not allocable to segment onreasonablebasisareincludedunderunallocatedrevenue/expenses/assets/liabilities.

1.7 CASH FLOW STATEMENT Cash Flow statement is prepared in accordance with the indirect method prescribed in the relevant Accounting Standard. 1.8 FIXED ASSETS1.8.1 Fixedassetsareshownathistoricalcostcomprisingofpurchasepriceandanyattributablecostofbringingtheassetstoitsworking

conditionforitsintendeduselessaccumulateddepreciation/amortization.1.8.2 Inthecaseofcommissionedassets,depositworks/cost-pluscontractswherefinalsettlementofbillswithcontractorsisyettobe

effected,capitalizationisdoneonprovisionalbasissubjecttonecessaryadjustmentsintheyearoffinalsettlement.1.8.3 Assetsandsystemscommontomorethanonetransmissionsystemarecapitalizedonthebasisoftechnicalestimates/assessments.1.8.4 Transmission system assets are consideredwhen they are ‘Ready for intended use’, for the purpose of capitalization, after test

charging/successfulcommissioningofthesystems/assetsandoncompletionofstabilizationperiodwherevertechnicallyrequired.1.8.5 Thecostoflandincludesprovisionaldeposits,payments/liabilitiestowardscompensation,rehabilitationandotherexpenseswherever

possessionoflandistaken.1.8.6 Expenditureonleveling,clearingandgradingoflandiscapitalizedaspartofcostoftherelatedbuildings.1.8.7 Insurancespares,whichcanbeusedonlyinconnectionwithanitemoffixedassetandwhoseuseisexpectedtobeatirregular

intervalsandMandatoryspares inthenatureofsub-stationequipments/capitalspares i.e.stand-by/service/rotationalequipmentandunitassemblies,arecapitalizedanddepreciatedovertheresidualusefullifeoftherelatedplant&machinery.Incasetheyearofpurchase and consumption is same, amount of such spares are charged to revenue.

1.9 CAPITAL WORK-IN-PROGRESS (CWIP)1.9.1 Costofmaterialconsumedanderectionchargesthereonalongwithotherrelatedexpensesincurredfortheprojectsareshownas

CWIPtillthedateofcapitalization.1.9.2 CostofmaterialforconstructionofSubstation(includingHVDC)isbeingtransferredtoCapitalWorkinProgressduringtheprogress

oferectionwork.1.9.3 ExpenditureofCorporateoffice,RegionalOfficesandProjects,attributabletoconstructionoffixedassetsareidentifiedandallocated

on a systematic basis to the cost of the related assets. 1.9.4 Interestduringconstructionandexpenditure(net)allocatedtoconstructionasperpolicyNo.1.9.3above(allocatedtotheprojectson

proratebasistotheircapitalexpenditure),areapportionedtocapitalworkinprogress(CWIP)ontheclosingbalanceofspecificassetorpartofassetbeingcapitalized.Balance,ifany,leftaftersuchcapitalizationiskeptasaseparateitemundertheCWIPSchedule.

1.9.5 Depositworks/cost-pluscontractsareaccountedforonthebasisofstatementreceivedfromthecontractorsortechnicalassessmentofworkcompleted.

1.9.6 Unsettledliabilityforpricevariation/exchangeratevariationincaseofcontractsareaccountedforonestimatedbasisaspertermsof the contracts.

ACCOUNTING POLICIES FOR THE FINANCIAL YEAR 2015-16

146

1.10 INTANGIBLE ASSETS1.10.1 Thecostofsoftware(whichisnotanintegralpartoftherelatedhardware)acquiredforinternaluseandresultinginsignificantfuture

economicbenefits,isrecognizedasanintangibleassetsinthebooksofaccountswhenthesameisreadyforitsuse.1.10.2 Afforestationchargespaidforacquiringright-of-wayforlayingtransmissionlinesareaccountedforasintangibleassetsandsame

are amortized over the period of thirty five years following the rates andmethodology notified byCentral Electricity RegulatoryCommission(CERC)TariffRegulation.

1.10.3 Expenditureincurred,eligibleforcapitalizationundertheheadIntangibleAssets,arecarriedas“IntangibleAssetsunderDevelopment”where such assets are not yet ready for their intended use.

1.10.4 Expenditureincurredonthedevelopmentofnewtechnologyiskeptunder“Intangibleassetsunderdevelopment”tillitscompletion.Aftersatisfactorycompletionofdevelopmentstage,theexpenditurekeptunderas“IntangibleAssets”tobeincludedintheprojectcost of new assets.

1.11 CONSTRUCTION STORES Construction stores are valued at cost.1.12 BORROWING COST1.12.1 Alltheborrowedfunds(exceptshorttermfundsforworkingcapital)areearmarkedtospecificprojects.Theborrowingcosts(including

bondissueexpenses,interest,discountonbonds,frontendfee,guaranteefee,managementfeeetc.)areallocatedtotheprojectsinproportiontothefundssoearmarked.

1.12.2 Theborrowingcostssoallocatedarecapitalisedorchargedtorevenue,basedonwhethertheproject isunderconstructionorinoperation.

1.13 TRANSACTION IN FOREIGN CURRENCY1.13.1 Transactionsinforeigncurrenciesareinitiallyrecordedattheexchangerateprevailingonthedateoftransaction.Foreigncurrency

monetaryitemsaretranslatedwithreferencetotheratesofexchangerulingonthedateoftheBalanceSheet.Non-monetaryitemsdenominatedinforeigncurrencyarereportedattheexchangeraterulingonthedateoftransaction.

1.13.2 ForeignExchangeRateVariation(FERV)arisingonsettlement/translationofforeigncurrencyloansrelatingtofixedassets/capitalwork-in-progressareadjustedtothecarryingcostofrelatedassets.

1.13.3 FERVaccountedforasperpolicyno1.13.2 isrecoverable/payablefromthebeneficiariesonactualpaymentbasisasperCentralElectricityRegulatoryCommission(CERC)normsw.e.f.1stApril,2004orDateofCommercialOperation(DOCO)whicheverislater.

TheaboveFERVtotheextentrecoverableorpayableaspertheCERCnormsisaccountedforasfollows: a) FERVrecoverable/payableadjustedtocarryingcostoffixedassets isaccountedforas ‘Deferredforeigncurrencyfluctuation

asset/liabilitya/c’withacorrespondingcredit/debitto‘Deferredincome/expenditurefromforeigncurrencyfluctuationa/c’. b) ‘Deferred income/expenditure from foreign currency fluctuation a/c’ is amortized in the proportion inwhich depreciation is

charged on such FERV. c) Theamountrecoverable/payableasperCERCnormsonyeartoyearbasisisadjustedtothe‘Deferredforeigncurrencyfluctuation

asset/liabilitya/c’withcorrespondingdebit/credittothetradereceivables.1.13.4 FERVearlierchargedtoStatementofProfitandLoss&includedinthecapitalcostforthepurposeoftariffisadjustedagainst‘Deferred

foreigncurrencyfluctuationasset/liabilitya/c’inthefollowingmanner: i) Depreciation component of transmission charges (being 90% of such FERV) is adjusted against Deferred foreign currency

fluctuationasset/liabilitya/cinthetransmissioncharges. ii) Balance10%ofDeferredforeigncurrencyfluctuationasset/liabilitya/cisamortisedoverthetenureofrespectiveloans.1.13.5 FERVarisingoutofsettlement/translationoflongtermmonetaryitems(otherthanforeigncurrencyloans)relatingtofixedassets/

CWIPareadjustedinthecarryingcostofrelatedassets.1.13.6 FERVarisingduringtheconstructionperiodfromsettlement/translationofmonetaryitemsdenominatedinforeigncurrency(other

thanlongterm)totheextentrecoverable/payabletothebeneficiariesascapitalcostasperCERCtariffRegulationareaccountedas‘Deferredforeigncurrencyfluctuationasset/liabilitya/c’.Transmissionchargesrecognisedonsuchamountisadjustedagainstaboveaccount.

1.13.7 Otherexchangedifferencesarerecognizedasincomeorexpensesintheperiodinwhichtheyarise.1.14 INVESTMENTS1.14.1 Currentinvestmentsarevaluedatlowerofcostandmarketvaluedeterminedonanindividualinvestmentbasis.1.14.2 Long term investments are carried at cost. Provision is made for diminution other than temporary, in the value of such investments. 1.15 INVENTORIES1.15.1. Inventoriesarevaluedatlowerofthecost,determinedonweightedaveragebasisandnetrealizablevalue.1.15.2 Steelscrapandconductorscraparevaluedatestimatedrealizablevalueorbookvalue,whicheverisless.1.15.3 Mandatorysparesofconsumablenatureandtransmissionlineitemsaretreatedasinventoryaftercommissioningofthesystem.1.15.4 Surplusmaterialsasdeterminedbythemanagementareheldforintendeduseandareincludedintheinventory.1.15.5 Thediminutioninthevalueofobsolete,unserviceableandsurplusstoresandsparesisascertainedonreviewandprovidedfor.1.16 REVENUE RECOGNITION 1.16.1 TransmissionIncomeisaccountedforbasedontariffordersnotifiedbytheCERC.Incaseoftransmissionprojectswherefinaltariff

ordersareyettobenotified,transmissionincomeisaccountedforaspertariffnormsandotheramendmentsnotifiedbytheCERCinsimilarcases.Difference,ifany,isadjustedbasedonissuanceoffinalnotificationoftariffordersbytheCERC.TransmissionIncomein

147

respectofadditionalcapitalexpenditureincurredafterthedateofcommercialoperationisaccountedforbasedonactualexpenditureincurred on year to year basis as per tariff norms of the CERC.

1.16.2 TheTransmissionsystemIncentive/disincentiveisaccountedforbasedoncertificationofavailabilitybytherespectiveRegionalPowerCommitteesandinaccordancewiththenormsnotified/approvedbytheCERC.

1.16.3.1 Advanceagainstdepreciation(AAD),formingpartoftariffpertaininguptotheblockperiod2004-09,tofacilitaterepaymentofloans,isreducedfromtransmissionincomeandconsideredasdeferredincometobeincludedintransmissionincomeinsubsequentyears.

1.16.3.2 TheoutstandingdeferredincomeinrespectofAADisrecognizedastransmissionincome,aftertwelveyearsfromtheendofthefinancialyearinwhichtheassetwascommissioned,totheextentdepreciationrecoveredinthetariffduringtheyearislowerthandepreciation charged in the accounts.

1.16.4 Surcharge recoverable from trade receivables and liquidated damages /warranty claims / interest on advances to suppliers arerecognizedwhennosignificantuncertaintyastomeasurabilityandcollectabilityexists.

1.16.5 IncomefromTelecomServicesareaccountedforonthebasisoftermsofagreements/purchaseordersfromthecustomers.1.16.6 Income from sole consultancy contracts are accounted for on technical assessment of progress of services rendered.1.16.7 Inrespectof‘Cost-plus-consultancycontracts’,involvingexecutiononbehalfoftheclient,incomeisaccountedfor(whereverinitial

advancesreceived)inphasedmannerasunder: a) 10%ontheissueofNoticeInvitingTenderforexecution b) 5%ontheAwardofContractsforexecution c) Balance85%onthebasisofactualprogressofworkincludingsupplies1.16.8 IncomefromSaleofGoodsisrecognizedonthetransferofsignificantrisksandrewardofownershiptothebuyer.1.16.9 ApplicationFeesreceivedonaccountofLongTermOpenAccess(LTOA)Chargesisaccountedforasandwhenreceivedinaccordance

with CERC Guidelines.1.16.10 Scrapotherthansteelscrap&conductorscrapareaccountedforasandwhensold.1.16.11 Dividendincomeisrecognizedwhenrighttoreceivepaymentisestablished.1.17 LEASED ASSETS1.17.1 Statesectorunified loaddispatchcentre (ULDC)/FiberOpticCommunicationAssets (FOC)assets leased to thebeneficiariesare

consideredasFinanceLease.Net investment insuch leasedassetsalongwithaccretion insubsequentyears isaccounted forasLeaseReceivablesunderLongTermLoans&Advances.Wherevergrant-in-aidisreceivedforconstructionofStateSectorULDC,leasereceivable is accounted for net of such grant.

1.17.2 Financeincomeonleasedassetsarerecognisedbasedonapatternreflectingaconstantperiodicrateofreturnonthenetinvestmentasperthetariffnotified/tobenotifiedbytheCERC.

1.17.3 FERVonforeigncurrencyloansrelatingtoleasedassetsisadjustedtotheamountofleasereceivablesandisamortisedovertheremainingtenureoflease.FERVrecovery(asperCERCnorms)fromtheconstituentsisrecognisednetofsuchamortisedamount.

1.18 DEPRECIATION / AMORTIZATION1.18.1 Depreciation/amortizationontheassetsrelatedtotransmissionbusinessisprovidedonstraightlinemethodfollowingtheratesand

methodologynotifiedbytheCERCforthepurposeofrecoveryoftariff.1.18.2 ULDC assets commissioned prior to 1st April 2014 are depreciated on Straight LineMethod@ 6.67% per annum. Such assets

commissionedonorafter1stApril2014isprovidedonstraightlinemethodfollowingtheratesandmethodologynotifiedbytheCERCfor the purpose of recovery of tariff.

1.18.3 Depreciationonassetsof telecomandconsultancybusiness isprovidedforonstraight linemethodasperuseful lifespecified inScheduleIIoftheCompaniesAct,2013.

1.18.4 Depreciation on following assets is provided based on estimated useful life as evaluated by the management.

Residual value of above assets is considered as Nil.1.18.5 CostofSoftwarescapitalizedasIntangibleAssetisamortizedovertheperiodoflegalrighttouseor3years,whicheverislesswith

Nil residual value.1.18.6 Mobile phones are charged off in the year of purchase. 1.18.7 Depreciation/Amortizationonadditionsto/deductionsfromfixedassetsduringtheyearischargedonpro-ratabasisfrom/uptothe

dateonwhichtheassetisavailableforuse/disposal1.18.8 Where the cost of depreciable fixed asset has undergone a change due to increase/decrease in long termmonetary items on

accountofexchangeratefluctuation,priceadjustment,changeindutiesorsimilarfactors,theunamortizedbalanceofsuchassetisdepreciatedprospectivelyattheratesandmethodologyasspecifiedbytheCERCTariffRegulations,exceptfortelecomassetswhereresiduallifeisdeterminedonthebasisofusefullifeoffixedassetasspecifiedinScheduleIIoftheCompaniesAct,2013.

1.18.9 Plantandmachinery,loosetoolsanditemsofscientificappliances,includedunderdifferentheadsoffixedassets,costing`5,000/-orless, or where the written down value is `5,000/-orlessasatthebeginningoftheyear,arechargedofftorevenue.

1.18.10 Otherfixedassetscostingupto`5,000/-arefullydepreciatedintheyearofacquisition.1.18.11 LeaseholdLandisfullyamortizedover25yearsorleaseperiodwhicheverislowerinaccordancewiththeratesandmethodology

specifiedintheCentralElectricityRegulatoryCommission(CERC)TariffRegulation.LeaseholdLandacquiredonperpetualleaseisnot amortised.

a.Computers&Peripherals 3years

b.Servers&NetworkComponents 5years

148

1.18.12 InthecaseoffixedassetsofNationalthermalpowercorporationlimited(NTPC),Nationalhydro-electricpowercorporationlimited(NHPC),North-easternelectricpowercorporationlimited(NEEPCO),Neyvelilignitecorporationlimited(NLC)transferredw.e.f.April1,1992,JammuandKashmirLinesw.e.f.April1,1993,andTehrihydrodevelopmentcorporationlimited(THDC)w.e.f.August1,1993,depreciationischargedbasedongrossblockasindicatedintransferor’sbookswithnecessaryadjustmentssothatthelifeoftheassetsaslaiddownintheCERCnotificationfortariffismaintained.

1.19 PRIOR PERIOD ITEMS Pre-paid/prior-periodexpenses/Incomeofitemsupto`100,000/-arechargedtonaturalheadsofaccount.1.20 IMPAIRMENT OF ASSETS CashgeneratingunitsasdefinedinAccountingStandard-28on‘ImpairmentofAssets’areidentifiedatthebalancesheetdatewith

respecttocarryingamountvis-à-visrecoverableamountthereofandimpairmentloss,ifany,isrecognisedinStatementofprofit&loss.Impairmentloss,ifneedtobereversedsubsequently,isaccountedforintheyearofreversal.

1.21 EMPLOYEE BENEFITS1.21.1 Companycontributionpaid/payableduringtheyeartodefinedpensioncontributionschemeandprovidentfundschemeisrecognized

intheStatementofProfitandLoss.Thesameispaidtoafundandadministeredthroughaseparatetrust.1.21.2 TheliabilityforretirementbenefitsofemployeesinrespectofGratuity,isascertainedannuallyonactuarialvaluationattheyearend,

is provided and funded separately.1.21.3 Theliabilitiesforcompensatedabsences,leaveencashment,postretirementmedicalbenefits,settlementallowance&longservice

awards to employees are ascertained annually on actuarial valuation at the year end and provided for.1.21.4 ShorttermemployeebenefitsarerecognizedattheundiscountedamountintheStatementofProfitandLossintheyearinwhichthe

related services are rendered.1.21.5 Actuarialgains/lossesarerecognizedimmediatelyintheStatementofProfit&Loss.1.22 PROVISIONS AND CONTINGENT LIABILITIES Aprovisionisrecognizedwhenthecompanyhasapresentobligationasaresultofpasteventanditisprobablethatanoutflowof

resourceswillberequiredtosettletheobligation,inrespectofwhichareliableestimatecanbemadebasedontechnicalvaluationandpastexperience.Provisionsaredeterminedbasedonmanagementestimaterequiredtosettletheobligationatthebalancesheetdateandarenotdiscountedtoitspresentvalue.Noprovisionisrecognizedforliabilitieswhosefutureoutcomecannotbeascertainedwithreasonablecertainties.Suchcontingentliabilitiesarenotrecognizedbutaredisclosedonthebasisofjudgmentofthemanagement/independentexpert.Thesearereviewedateachbalancesheetdateandadjustedtoreflectthecurrentmanagementestimate.

1.23 TAXES ON INCOME IncomeTaxcomprisesofcurrentanddeferredtax.Currentincometaxesaremeasuredattheamountexpectedtobepaidtoincome

taxauthorities inaccordancewiththeprovisionsofIncomeTaxAct,1961.Deferredtaxresultingfromtimingdifferencebetweenaccountingandtaxableprofitisaccountedforusingthetaxratesandthetaxlawsenactedorsubstantivelyenactedatthebalancesheetdate.Deferredtaxassetsarerecognizedonly to theextent that there is reasonablecertainty thatsufficient future taxableincomewillbeavailableagainstwhichsuchdeferredtaxassetscanberealized.

1.24 OTHERS 1.24.1 Expenditureofresearchanddevelopment,otherthanCapitalExpenditure,arechargedtorevenueintheyearofincurrence.1.24.2 Capitalexpenditureonassetsnotownedbythecompanyischargedofftorevenueasandwhenincurred.

149

Particulars

Particulars

Note 2.1/Share capital

Note 2.2/Reserves and surplus

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2015

As at 31st March, 2015

Equity Share Capital Authorised 1000,00,00,000(Previousyear1000,00,00,000)equitysharesof`10/-eachatpar 10000.00 10000.00 Issued, subscribed and paid up 523,15,89,648(PreviousYear523,15,89,648)equitysharesof`10/-eachatparfullypaidup 5231.59 5231.59Total 5231.59 5231.59Further Notes: 1) ReconciliationofNumberandamountofsharecapitaloutstandingatthebeginningandattheendofthereportingperiod

Securities Premium Account Asperlastbalancesheet 9578.29 9578.29Closing Balance 9578.29 9578.29

Bonds Redemption Reserve Asperlastbalancesheet 5870.47 4886.61Additionsduringtheyear 1719.88 1600.44Deductionsduringtheyear 697.93 616.58Closing Balance 6892.42 5870.47 Self Insurance Reserve

Through appropriation Asperlastbalancesheet 348.18 268.40Additionsduringtheyear 102.43 79.78Deductionsduringtheyear - -ClosingBalance 450.61 348.18Through charge to Profit Asperlastbalancesheet 39.00 59.21Additionsduringtheyear - -Deductionsduringtheyear 5.29 20.21ClosingBalance 33.71 39.00

484.32 387.18

Shares outstanding at the beginning of the year 5231589648 5231.59 5231589648 5231.59SharesIssuedduringtheyear - - - -Sharesboughtbackduringtheyear - - - -Shares outstanding at the end of the year 5231589648 5231.59 5231589648 5231.592) Theholdersofequitysharesareentitledtoreceivedividendsasdeclaredfromtimetotimeandareentitledtovotingrightsproportionate

to their shareholding at meetings of the Shareholders. 3) Shareholdersholdingmorethan5%equitysharesoftheCompany

i) GovernmentofIndia 3028835198 57.90 3028835198 57.90ii) EuropacificGrowthFund - - 296023422 5.66

(` inCrore)

(` inCrore)

Particulars For the year ended 31st March, 2016 For the year ended 31st March, 2016

No.of Shares Amount ( ` in crore) No.of Shares Amount ( ` in crore)

Particulars As at 31st March, 2016 As at 31st March, 2015

No.of Shares % of holding No.of Shares % of holding

150

Particulars

Note 2.2/Reserves and surplus (contd.)

As at 31st March, 2016

As at 31st March, 2015

(` inCrore)

As at 31st March, 2016

As at 31st March, 2015

a) Advanceagainstdepreciation 1795.57 1938.57b) Grantsinaid AsperlastBalanceSheet 73.12 95.07 Receivedduringtheyear* 58.00 - Adjustmentsduringtheyear 21.96 21.95 Closing balance 109.16 73.12c) Deferredincomefromforeigncurrencyfluctuation(Net) 3819.12 2751.22TOTAL 5723.85 4762.91Further Notes: *GrantreceivedduringtheyearforschemeofUnifiedRealTimeDynamicStateMeasurement.

Note 2.3/Deferred Revenue

Particulars

(` inCrore)

Corporate Social Responsibility( CSR) Activity Reserve Asperlastbalancesheet 129.52 46.74Additionsduringtheyear 6.01 82.78Deductions/Adjustmentsduringtheyear - -Closing Balance 135.53 129.52 General ReserveAsperlastbalancesheet 16773.12 14373.17Additionsduringtheyear 3500.00 2400.00Deductionsduringtheyear - 0.05Closing Balance 20273.12 16773.12 37363.68 32738.58Surplus( Balance in statement of Profit and Loss ) Asperlastbalancesheet 196.42 15.62Add:Additions

ProfitaftertaxasperStatementofProfit&Loss 6026.72 4979.17TransferfromBondRedemptionReserve 697.93 616.58Dividendtaxadjusted 0.28 1.93

Less: Appropriations BondsRedemptionReserve 1719.88 1600.44CSRActivitiesReserve 6.01 82.78SelfInsuranceReserve 102.43 79.78GeneralReserve 3500.00 2400.00Interimdividendpaid 418.53 360.98TaxonInterimdividend 85.01 71.16ProposedDividend 789.97 685.34TaxonproposedDividend 160.82 136.40

Closing Balance 138.70 196.42TOTAL 37502.38 32935.00

151

As at 31st March, 2016

As at 31st March, 2015

A) BONDS

A1) Secured (Taxable, Redeemable, Non-Cumulative, Non-Convertible)

A1.1 i) Bonds of `10Lakheach

XXXIX Issue- 9.40% redeemable at par on 29.03.2027 1800.00 1800.00

XXXVIII Issue- 9.25% redeemable at par on 09.03.2027 855.00 855.00

XLII Issue-8.80% redeemable at par on 13.03.2023 1990.00 1,990.00

ii) Bonds of `30Lakheachconsistingof3STRPPsofRs10 lakheach redeemable at par in 3( Three) equal installments on23.12.2020,23.12.2025and23.12.2030

LII Issue-8.32% redeemable w.e.f. 23.12.2020 1398.00 -

iii) Bonds of `30Lakheachconsistingof3STRPPsofRs10 lakheach redeemable at par in 3( Three) equal installments on09.03.2020,09.03.2025and09.03.2030

XLIX Issue-8.15% redeemable w.e.f. 09.03.2020 1305.00 1305.00

iv) Bonds of `40Lakheachconsistingof4STRPPsofRs10 lakheachredeemableatparin4(Four)equalinstallmentson23.01.2020,23.01.2022,23.01.2025and23.01.2030

XLVIII Issue-8.20% redeemable w.e.f. 23.01.2020 2580.00 2580.00

v) Bonds of`1.20croreeachconsistingof12STRPPsofRs10lakheachredeemableatparin12(twelve)equalinstallments

LI Issue-8.40% redeemable w.e.f. 14.09.2019 3000.00 -

vi) Bonds of `30Lakheachconsistingof3STRPPsofRs10 lakheach redeemable at par in 3( Three) equal installments on04.09.2019,4.09.2024and04.09.2029

XLVI Issue-9.30% redeemable w.e.f. 04.09.2019 4362.00 4362.00

vii) Bonds of`1.20croreeachconsistingof12STRPPsofRs10lakheachredeemableatparin12(twelve)equalinstallments

L Issue-8.40% redeemable w.e.f. 27.05.2019 2928.00 -

viii) Bonds of ` 1.20 crore each consisting of 12 STRPPs of Rs 10 lakheachredeemableatparin12(Twelve)equalinstallments

XLVII Issue-8.93% redeemable w.e.f 20.10.2018 2640.00 2640.00

ix) Bonds of 10Lakheachredeemableatparin3equalinstalmentson15.07.2018,15.07.2023and15.07.2028

XLIV Issue-8.70% redeemable w.e.f. 15.07.2018 3966.00 3,966.00

x) Bonds of `1.2 crores each consisting of 12 STRPPs of `10lakhseachredeemableatparin12(twelve)equalannualinstalments

XLV Issue-9.65% redeemable w.e.f. 28.02.2018 1999.20 1,999.20

XLIII Issue-7.93% redeemable w.e.f. 20.05.2017 3126.00 3,126.00

xi) Bonds of `1.5 croreseachconsistingof12STRPPsof`12.50Lakhs each redeemable at par in 12 (twelve) equal annualinstalments.

XLI Issue-8.85% redeemable w.e.f. 19.10.2016 2605.62 2,842.50

xii) Bonds of `1.50croreseach,consistingof15STRPPsof`10.00 Lakhs each redeemable at par in 15 (fifteen) equal annualinstalments

Note 2.4/Long-term borrowings

Description

(` inCrore)

152

As at 31st March, 2016

As at 31st March, 2015

Note 2.4/Long-term borrowings (contd.)

Description

(` inCrore)

XXXVI Issue- 9.35% redeemable w.e.f. 29.08.2016 2884.00 3090.00

xiii) Bonds of `1.5 croreseachconsistingof12STRPPsof`12.50Lakhs each redeemable at par in 12 (twelve) equal annualinstalments.

XL Issue-9.30% redeemable w.e.f. 28.06.2016 3664.37 3,997.50

XXXVII Issue- 9.25% redeemable w.e.f 26.12.2015 1662.50 1828.75

XXXV Issue- 9.64% redeemable w.e.f 31.05.2015 1631.25 1794.38

XXXIV Issue- 8.84% redeemable w.e.f 21.10.2014 2615.62 2906.25

XXXIII Issue- 8.64% redeemable w.e.f 08.07.2014 2160.00 2400.00

XXXII Issue- 8.84% redeemable w.e.f 29.03.2014 690.00 776.25

XXXI Issue- 8.90% redeemable w.e.f 25.02.2014 1365.00 1535.62

XXX Issue- 8.80% redeemable w.e.f 29.09.2013 1555.00 1749.38

XXIX Issue- 9.20% redeemable w.e.f 12.03.2013 756.88 865.00

XXVIII Issue- 9.33% redeemable w.e.f 15.12.2012 1400.00 1600.00

XXVII Issue- 9.47% redeemable w.e.f 31.03.2012 352.50 411.25

XXVI Issue- 9.30% redeemable w.e.f 07.03.2012 499.50 582.75

XXV Issue- 10.10% redeemable w.e.f 12.06.2011 532.50 621.25

XXIV Issue- 9.95% redeemable w.e.f 26.03.2011 333.13 399.75

XXIII Issue- 9.25% redeemable w.e.f 09.02.2011 128.12 153.75

XXII Issue- 8.68% redeemable w.e.f 07.12.2010 287.50 345.00

XXI Issue- 8.73% redeemable w.e.f 11.10.2010 212.50 255.00

XX Issue- 8.93% redeemable w.e.f 07.09.2010 625.00 750.00

XIX Issue- 9.25% redeemable w.e.f 24.07.2010 206.25 247.50

XVIII Issue- 8.15% redeemable w.e.f 09.03.2010 333.00 416.25

xiv) Bonds of `1.00 crores each, consisting of 10 STRPPs of `10.00Lakhseachredeemableatparin10(ten)equalannualinstalments.

XVII Issue- 7.39% redeemable w.e.f 22.09.2009 200.00 300.00

XVI Issue- 7.10% redeemable w.e.f 18.02.2009 75.00 150.00

xv) Bonds of `1.5croreseachconsistingof12STRPPsof`12.50Lakhs each redeemable at par in 12 (twelve) equal annualinstalments.

XV Issue-6.68% redeemable w.e.f. 23.02.2008 150.00 225.00

Secured by way of Registered Bond Trust Deed ranking paripassuonimmovablepropertysituatedatMoujeAmbhetiTalukaKaparada indistrictValsadGujaratandfloatingchargeontheassets of the company.

A1.2 Bonds of `1.5croreseachconsistingof12STRPPsof`12.50lakheachredeemableatparin12(twelve)equalannualinstalments

XIII issue-8.63% redeemable w.e.f 31.07.2006 67.50 135.00

SecuredbywayofRegisteredBondTrustDeedrankingpari-passuonimmovablepropertysituatedatMoujeAmbhetiTalukaKaparadainDistrictValsadGujaratandmortgage&hypothecationonassetsofKishenpurMoga&DulhastiContingencyTransmissionSystem

153

As at 31st March, 2016

As at 31st March, 2015

Note 2.4/Long-term borrowings (contd.)

Description

(` inCrore)

A1.3 Bonds of 1.5croreseachconsistingof12STRPPsof 12.50lakheachredeemableatparin12(twelve)equalannualinstalments

XII issue-.9.70% redeemable w.e.f 28.03.2006 - 15.38

SecuredbywayofRegisteredBondTrustDeedrankingpari-passuonimmovable property situated at Mouje Ambheti Taluka Kaparada inDistrictValsadGujaratandmortgageandhypothecationonassetsofKayamkulam&RamagundamHyderabadTransmissionSystem

A1.4 Bonds of `3 crores each consisting of 12 STRPPs of `25 lakh eachredeemableatparin12(twelve)equalannualinstalments

XI issue-9.80% redeemable w.e.f 07-12-2005 - 45.25

Secured by way of Registered Bond Trust Deed ranking pari-passuon immovable property situated at Mouje Ambheti Taluka KaparadainDistrictValsadGujaratandmortgage&hypothecationonassetsofAnta,Auriya, Moga-Bhiwani, Chamera-Kishenpur, Sasaram-Allahbad,LILOofSingraulli-KanpurandAllahabadSub-Station

A2) Unsecured 58941.94 55061.96

A2.1 Redeemable Foreign Currency Bonds

3.875% Foreign Currency Bonds to be redeemed at par on 17.01.2023

3345.00 3,159.50

Total (A) 62286.94 58221.46

B) Term loans from Banks

B1) Rupee Loan (Secured)

B1.1 Line of Credit (LOC) from State Bank of India -I 4546.00 5000.00

Line of Credit (LOC) from State Bank of India -II 7485.00 2600.00

Securedbywayofparipassuchargeonassetsofthecompanyexceptinvestments, Land and Buildings, roads and bridges, water supply , drainage and sewerage and Current Assets.

Total (B1) 12031.00 7600.00

B2) Foreign Currency Loans(Secured)

B2.1 Bank of India Cayman Islands 211.26 232.80

Secured by a Floating charge on the immovable properties of the company

B2.2 i) Nordic Investment Bank (PIL5120) 452.86 505.71

Secured by way of pari passu charge on movable assets of the companyexceptinvestmentsandCurrentAssets.

ii) ADB-VIII (2788-IND) 1080.42 530.35

iii) International Finance Corporation 669.00 1,011.04

iv) ICF Debt Pool LLP 334.50 315.95

Secured by way of pari passu charge on assets of the company except investments, Land and Buildings, roads and bridges,water supply , drainage and sewerage and Current Assets.

B2.3 Guaranteed by Government of India

FromAsianDevelopmentBank(ADB)

ADB-II (1764-IND) 710.32 801.43

154

As at 31st March, 2016

As at 31st March, 2015

Note 2.4/Long-term borrowings (contd.)

Description

(` inCrore)

ADB-III (2152-IND) 1822.66 1869.95

ADB-IV (2415-IND) 2475.75 2387.71

ADB-V (2510-IND) 786.59 668.94

ADB-VI (2823-IND) 341.19 307.94

ADB-VII (2787-IND) 1125.28 903.18

FromInternationalBankforReconstructionandDevelopment(IBRD)

PSDP-II (4603-IN) 1188.86 1332.41

PSDP-III (4813-IN) 1804.63 1856.74

PSDP-IV (4890-IN) 3201.64 3202.56

PSDP-IV (Addl.) (7593-IN) 2290.86 2253.74

PSDP-V (7787-IN) 4707.42 3711.41

Secured by pari passu interest in the lien created on the assets as security for the debts.

Total B2 23203.24 21891.86

B3) Foreign currency Loans (Unsecured)

B3.1 Skandinaviska Enskilda Banken AB(publ) Sweden - 19.42

AB Svensk Exportkredit,Sweden 2120.84 1458.64

B3.2 Guaranteed by Government of India

Natixis Banque (Formerely Credit National) France 78.05 78.79

Japan International Cooperation Agency(Formerly Japan Bank for International Cooperation ) Japan

108.61 105.45

KFW 411.07 -

Total (B3) 2718.57 1662.30

Total B 37952.81 31154.16

C Term Loan From Others

Rupee Loans (Secured)

C1 Life Insurance Corporation of India-III - 0.22

SecuredbyafloatingchargeonthefixedassetsoftheCompany. - 0.22

TOTAL (A to C) 100239.75 89375.84

Further notes: The Term loans are repayable in installments as per the terms of respective agreement generally over the period of 10 to 20 years after the moratoriumperiodof3to5years.

155

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2015

As at 31st March, 2015

As at 31st March, 2015

As at 31st March, 2015

Deferred Tax LiabilityTowardsFixedAssets(Net)(A) 8556.83 6779.74Deferred Tax AssetsIncome during Construction Period 92.34 110.25Self Insurance Reserve 11.67 13.49Provisions allowable on payment basis 135.58 113.07Advance Against Depreciation 621.41 670.90Others 3.38 6.84 Sub-total (B) 864.38 914.55DeferredTaxLiability(Net)(A-B) 7692.45 5865.19Less:Deferredassetsfordeferredtaxliability 5203.08 3393.04Net Deferred Tax Liability 2489.37 2472.15Further Note: a) Chargeof`17.22crore(Previousyear`29.22crore)hasbeenmadeinthestatementofProfit&Loss. b)Thetariffnormsfortheblockperiod2014-2019notifiedbytheCERCprovideforgrossingupofthereturnonequitybasedoneffective

taxrateforthefinancialyearbasedontheactualtaxpaidduringtheyearonthetransmissionincome.Accordingly,deferredtaxprovidedduringtheyearended31stMarch,2016onthetransmission income isaccountedas ‘Deferred AssetsagainstDeferredTaxLiability’.DeferredAssetsagainstDeferredTaxLiabilityfortheyearwillbereversedinfutureyears(includingtaxholidayperiod)whentherelateddeferredtaxliabilityformsapartofcurrenttax.ThisisinlinewithGuidanceNoteonRateRegulatedActivities,issuedbyICAI.

Other liabilities i) Deposits/Retentionmoneyfromcontractorsandothers 906.33 654.69ii) Advancefromcustomers(Consultancy/Telecomcontracts) 431.21 401.03iii) DuesforCapitalExpenditure 0.04 22.88iv) Others* 0.38 0.04Total 1337.96 1078.64Further Notes: DisclosurewithregardtoMicroandSmallenterprisesasrequiredunder“TheMicro,SmallandMediumEnterprisesDevelopmentAct,2006” isgiveninNoteNo.2.43 *Othersincludeamountrecoverablefromcontractorsforpaymentofcompensation,PFLoan&InterestRecoveryPayableetc.

Employee Benefits Asperlastbalancesheet 580.23 524.37Additions/(adjustments)duringtheyear 70.22 55.86Closing Balance 650.45 580.23Total 650.45 580.23

Short Term Loans (Unsecured) FromBanks 2000.00 1200.00Total 2000.00 1200.00

Note 2.5/Deferred tax liabilities (Net)

Note 2.6/Other Long term liabilities

Note 2.7/Long-term provisions

Note 2.8/Short-term borrowings

Particulars

Particulars

Particulars

Particulars

(` inCrore)

(` inCrore)

(` inCrore)

(` inCrore)

156

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2015

As at 31st

March, 2015

For goods and services 313.89 392.97Total 313.89 392.97Further Notes: DisclosurewithregardtoMicroandSmallenterprisesasrequiredunder“TheMicro,SmallandMediumEnterprisesDevelopmentAct,2006”isgiveninNoteNo.2.43

A) Current maturities of long term borrowings Secured

Bonds 3446.00 2791.71RupeeTermLoans 454.23 101.72ForeignCurrencyLoans 1906.71 1489.18

5806.94 4382.61Un-secured

ForeignCurrencyLoans 274.72 86.10 6081.66 4468.71B) Interest accrued but not due on borrowings from

IndianBanks,FinancialInstitutions&Corporations - 5.78ForeignBanks&FinancialInstitutions 69.18 39.30Secured/UnsecuredredeemableBonds 2600.02 2315.99

2669.20 2361.07C) Others

i) Duesforcapitalexpenditure 4173.00 4647.30ii) Employeerelatedliabilities 84.96 116.09iii) Unclaimeddividends* 9.31 10.39iv) Deposits/Retentionmoneyfromcontractorsandothers. 4501.90 4814.79vi) Advancesfromcustomers 3431.49 2229.62vii) Statutorydues 101.08 188.47viii)Relatedparties** 56.25 51.84ix) Others# 282.45 171.32

12640.44 12229.82Total 21391.30 19059.60Further notes: DisclosurewithregardtoMicroandSmallenterprisesasrequiredunder“TheMicro,SmallandMediumEnterprisesDevelopmentAct,2006”isgiveninNoteNo2.43 * No amount is due for payment to Investor Education and Protection Fund **BreakupofrelatedpartiesisprovidedinNote2.47(b) #Othersincludeliabilityfordeadcheques,Pricevariation,LTAetc

Note 2.9/Trade payables

Note 2.10/Other current liabilities

Particulars

Particulars

(` inCrore)

(` inCrore)

157

As at 31st March, 2016

As at 31st

March, 2015

A) Employee Benefits

i) Transmission incentive/special incentive

Asperlastbalancesheet 198.87 121.13

Additionduringtheyear 160.31 106.45

Amountpaid/adjustedduringtheyear 176.66 28.71

ClosingBalance 182.52 198.87

ii) Other Employee Benefits

( Leave Encashment, Settlement Allowance and Long Service Award etc.)

Asperlastbalancesheet 40.71 37.78

Additions/(adjustments)duringtheyear 5.85 2.93

ClosingBalance 46.56 40.71

Total (A) 229.08 239.58

B) Others

i) Taxation (Including interest on tax)

Asperlastbalancesheet 140.47 -

Additionsduringtheyear 1574.81 1281.25

Amountadjustedduringtheyear (2417.69) (3221.97)

Netoffagainsttaxespaid(Note2.18) 3833.30 4362.75

ClosingBalance 299.67 140.47

ii) Proposed Dividend

Asperlastbalancesheet 685.34 685.34

Additionsduringtheyear 789.97 685.34

Amountspaidduringtheyear 685.34 685.34

ClosingBalance 789.97 685.34

iii) Tax on proposed Dividend

Asperlastbalancesheet 136.40 116.47

Additionsduringtheyear 160.82 136.40

Amountspaid/adjustedduringtheyear 136.40 116.47

ClosingBalance 160.82 136.40

iv) Downtime Service Credit-Telecom

Asperlastbalancesheet 6.78 5.23

Additionsduringtheyear 4.06 2.15

Amountsadjusted/paidduringtheyear 0.75 0.60

ClosingBalance 10.09 6.78

v) Provision Others

Asperlastbalancesheet 3.38 2.07

Additions/(adjustments)duringtheyear 55.37 1.31

ClosingBalance 58.75 3.38

Total (B) 1319.30 972.37

Total (A+B) 1548.38 1211.95

Note 2.11/Short-term provisions

Particulars

(` inCrore)

158

Not

e 2

.12

/Tan

gibl

e as

sets

(` inCrore)

Par

ticu

lars

Gro

ss B

lock

Dep

reci

atio

n/A

mor

tisa

tion

N

et B

lock

A

s at

1st

Apr

il,20

15A

ddit

ions

du

ring

the

ye

ar

Sale

/

Dis

posa

lA

djus

tmen

t du

ring

th

e ye

ar

As

at 3

1st

Mar

ch,

2016

Upt

o 31

st

Mar

ch,

2015

Add

itio

ns

duri

ng t

he

year

Sale

/

Dis

posa

lA

djus

tmen

t du

ring

the

ye

ar

As

at 3

1st

Mar

ch,

2016

As

at 3

1st

Mar

ch,

2016

As

at 3

1st

Mar

ch,

2015

Lan

da)Freehold

1809.52

191.32

-

(3.80)

20

04

.64

-

-

-

-

-

20

04

.64

1809.52

b)Leasehold

277.98

5.31

0.36

0.74

28

2.1

9

46.74

9.53

-

2.03

54

.24

2

27

.95

231.24

Bu

ildin

gs

a)Sub-Stations&Office

721.74

195.72

-

3.18

91

4.2

8

217.74

26.2

8 -

1.18

2

42

.84

6

71

.44

504.00

b)Township

525.12

38.10

-

(0.06)

56

3.2

8

155.11

20.70

-

1.63

17

4.1

8

38

9.1

0

370.01

Tem

pora

ry E

rect

ion

10.43

0.39

-

-1

0.8

2

10.4

1 0.

40

-

-1

0.8

1

0.0

1

0.0

2 Roads&Bridges

179.19

16.94

-

-1

96

.13

54.34

7.42

-

1.57

60

.19

1

35

.94

124.85

WaterSupplyDrainage&

Sew

erag

e110.58

5.52

-

(0.10)

11

6.2

0

34.88

4.21

-

0.49

38

.60

7

7.6

0

75.70

Pla

nt

& E

quip

men

ta)Transmission

72501.33

22333.35

36.93

(1014.86)

95

81

2.6

1 16495.33

4054.07

8.2

6 34.49

20

50

6.6

5

75

30

5.9

6 56006.00

b)Substation

38313.35

7036.99

21.91

(358.83)

45

68

7.2

6 10048.19

2008.75

4.2

1 15.65

12

03

7.0

8

33

65

0.1

8 28265.16

c)UnifiedLoadDespatch

&Communication

646.38

215.71

-

(0.11)

86

2.2

0

376.77

39.83

-

-4

16

.60

4

45

.60

269.61

d)Telecom

1431.22

40.8

1 -

(0.16)

14

72

.19

636.57

96.39

-

-7

32

.96

7

39

.23

794.65

FurnitureFixtures

96.50

27.30

0.08

0.

11

12

3.6

1

45.34

5.39

0.03

0.12

5

0.5

8

73

.03

51.16

Officeequipment

111.

48

35.65

4.86

0.23

14

2.0

4

48.74

6.45

4.32

0.03

50

.84

9

1.2

0

62.74

Elec

tron

ic D

ata

Processing&Word

Proc

essi

ng M

achi

nes

117.05

11.2

0 0.05

0.04

1

28

.16

86.49

20.31

0.38

0.46

1

05

.96

2

2.2

0

30.56

Vehi

cles

4.60

0

.01

0.03

0.22

4

.36

2.

60

0.34

0.10

-

2.8

4

1.5

2

2.00

Co

nstr

uctio

n a

nd

Workshopequipment

216.

61

43.57

-

-2

60

.18

49.07

12.09

-

0.24

6

0.9

2

19

9.2

6

167.54

Elec

tric

al I

nsta

llatio

n127.31

2.27

-

0.14

1

29

.44

49.06

5.91

-

0.09

54

.88

7

4.5

6

78.25

LaboratoryEquipments

75.59

0.04

0.03

(0.09)

75

.69

37.20

3.24

0.2

4 0.23

39

.97

3

5.7

2

38.39

Workshop&Testing

Equipments

39.47

43.37

-

-8

2.8

4

16.6

8 2.27

-

0.0

2 1

8.9

3

63

.91

22.79

MiscellaneousAssets/

Equipments

0.11

-

-

(0.01)

0.1

2

0.07

-

-

-

0.0

7

0.0

5

0.04

Tot

al117315.56

30243.57

64.25

(1373.36)1

48

86

8.2

4 28411.33

6323.58

17.54

58.23

34

65

9.1

4 1

14

20

9.1

0 88904.23

Less

: Pr

ovis

ion

for

asse

ts

disc

arde

d10.33

0.07

-

-

10

.40

8.

61

0.05

--

8.6

6

1.7

4

1.72

Gra

nd

Tota

l117305.23

30243.50

64.25

(1373.36)1

48

85

7.8

4 28402.72

6323.53

17.54

58.23

34

65

0.4

8 1

14

20

7.3

6 88902.51

PreviousYearTotal

95740.51

20949.10

9.63

(635.58)

117315.56

23236.82

5208.00

1.32

32.1728411.33

88904.23

Le

ss:

Prov

isio

n fo

r as

sets

di

scar

ded

10.4

0 -

-

0.07

10.33

8.66

-

-

0.05

8.61

1.72

PreviousYearGrand

Tota

l95730.11

20949.10

9.63

(635.65)

117305.23

23228.16

5208.00

1.32

32.12

28402.72

88902.51

159

Note 2.12/Tangible assets (contd.)

Further Notes: a) Thecompanyowns7003hectare(previousYear6647hectare)oflandamountingto`2286.83crore(previousYear`2087.50crore)which

hasbeenclassifiedintofreehold`2004.64 crore (previous year `1809.52crore)andleasehold`282.19crore(previousyear`277.98crore)basedonavailabledocumentation

b) i) ThelandclassifiedasleaseholdlandheldintheStateofJammuandKashmiramountingto`68.53crore(PreviousYear`68.53crore)isacquiredbystateGovernmentasperproceduresunderStateLandAcquisitionAct.Asperprevailinglawthestategovernmentremainstheownerofthelandsoacquiredandcompanyisonlygivenpossessionforthespecificuse.

ii) ThetransmissionsystemsituatedinthestateofJammuandKashmirhavebeentakenoverbythecompanyw.e.f1stApril1993fromNationalHydroelectricPowerCorporationofIndiaLtd.(NHPC)uponmutuallyagreedtermspendingcompletionoflegalformalities.

c) Freeholdlandincludes`191.39crore(previousyear`33.71crore)inrespectoflandacquiredbytheCompanyforwhichconveyancedeedin favour of the Company is pending and `305.74crore(previousyear`192.08crore)inrespectoflandacquiredbytheCompanyforwhich mutation in revenue records is pending.

d) Leaseholdlandincludes`7.64crore(previousyear`7.64crore)inrespectoflandacquiredforofficecomplexonperpetualleasebasiswithanunlimitedusefullifeatKatwariaSarai,NewDelhiandhencenotamortised.

e) Leaseholdlandincludes 13.97crore(previousyear 13.97crore)inrespectoflandinchamba(HP)acquiredfromNHPCbythecompanyfor which legal formalities are pending.

f) Townshipbuildingsincludes`7.27crore(previousyear`7.27crore)for28flatsatMumbai,forwhichregistrationinfavourofthecompanyis pending.

g) LandatBinaSub-stationmeasuring13.90acres(Previousyear13.90acres)havingvalueofRs` 0.04 crore (Previous year `0.04crore)hasbeentransferredtoNationalHighPowerTestLaboratoryPvt.Ltd.onrighttousewithoutgrantingownership.

h) Freeholdlandincludes`21.21crorespaidinrespectofTumkur(MadhugiriSS)landacquiredbythecompanythroughleasecumsaleagreementforwhichalltheconditionsrelatedtotransferoftitlefromKIADBhavebeenfulfilledandconveyancedeed/titleinfavourofthecompany and mutation in revenue records are pending.

Note 2.13/Intangible assets

Note 2.14/Capital work in progress

Particulars Gross Block Depreciation/Amortisation Net BlockAs at

1st

April,2015

Additions during

the year

Sale / Disposal

Adjustment during

the year

As at 31st

March, 2016

Upto 31st

March,2015

Additions during

the year

Sale/ Disposal

Adjustment during the

year

As at 31st

March,2016

As at 31st

March,2016

As at 31st

March,2015

Electronic Data Processing Software

49.05 2.00 - 51.05 14.08 14.71 - 0.04 28.75 22.30 34.97

RightofWay-Afforestation Expenses

909.98 98.16 - (134.89) 1143.03 161.25 53.54 - -214.79 928.24 748.73

Total 959.03 100.16 - (134.89) 1194.08 175.33 68.25 - 0.04 243.54 950.54 783.70Previous Year Total

773.55 184.95 - (0.53) 959.03 121.43 47.80 - (6.10) 175.33 783.70

(` inCrore)

(` inCrore)

Particulars As at 1st April,2015

Additions during the year

Adjustments Capitalised during the year

As at 31st March,2016

LandDevelopment of land 4.34 58.41 - 54.96 7.79

Buildingsa)Sub-Stations&Office 303.75 306.22 75.50 195.92 338.55 b)Township 62.54 44.06 (19.30) 37.85 88.05

Temporary erection 0.02 - - 0.02 - Roads&Bridges 5.94 10.45 - 0.78 15.61 WaterSupplyDrainageandSewerage 2.26 0.04 - - 2.30 Plant & Equipments (including associated civil works)

a)Transmission 26446.78 12648.93 - 18974.83 20120.88 b)Sub-Station 6225.24 7367.55 - 5981.82 7610.97 c)UnifiedLoadDespatch&Communication 352.30 143.81 17.44 202.26 276.41 d)Telecom 47.67 12.90 - 20.61 39.96

Furniture&Fixtures 0.15 - 0.15 - 0.00 Otherofficeequipments 5.04 17.56 - 6.50 16.10

160

Particulars As at 1st April,2015

Additions during the year

Adjustments Capitalised during the year

As at 31st March,2016

Expenditure pending allocation -i)Survey,investigation,consultancy&

supervision Charges25.79 6.32 - 11.20 20.91

ii)DifferenceinExchangeonforeigncurrencyloans

817.05 525.95 - 702.05 640.95

iii)Expenditureduringconstructionperiod(net)(Note2.32)

5375.67 2825.29 (146.74) 3,743.96 4603.74

TOTAL 39674.54 23967.49 (72.95) 29932.76 33782.22 Less: Provision for unserviceable Assets 3.64 - - - 3.64 Grand Total 39670.90 23967.49 (72.95) 29932.76 33778.58 Previous Year 31502.41 30088.33 2053.11 19863.09 39674.54 Less: Provision for unasserviceable Assets - - - - 3.64 Total 31502.41 30088.33 2053.11 19863.09 39670.90

Note 2.15/Intangible assets under development

Note 2.16/Construction stores(For mode of valuation refer note 1.11)

Particulars As at 1st April,2015

Additions Adjustments Capitalised during the year

As at 31st March,2016

Electronic Data Processing Software 0.09 1.67 - 0.30 1.46 RightofWay-Afforestationexpenses 137.45 52.88 - 98.14 92.19 DevelopmentExpenditure 73.75 10.97 6.26 - 78.46 Total 211.29 65.52 6.26 98.44 172.11 PreviousYearTotal 349.00 33.17 (12.12) 183.00 211.29

(` inCrore)

(` inCrore)

Towers 1811.68 2461.98Conductors 1770.88 3386.47OtherLineMaterials 1183.60 1576.19Sub-StationEquipments 2182.43 2523.66HighVoltageDirectCurrent(HVDC)Equipments 2650.37 2850.07UnifiedLoadDespatch&Communication(ULDC)Materials 186.98 200.78TelecomMaterials 15.54 8.39Others 57.81 34.44 9859.29 13041.98Less: Provision for shortages and obsolete material 0.02 0.02TOTAL 9859.27 13041.96Construction Stores include:

i) Material in transit Towers 13.42 6.39Conductors 2.23 13.35Other Line Materials 82.53 62.93Sub-StationEquipments 94.74 794.03HighVoltageDirectCurrent(HVDC)Equipments 267.35 413.54UnifiedLoadDespatch&Communication(ULDC)Materials - 11.68 Others - 12.05

Total 460.27 1313.97

As at 31st March, 2016

As at 31st March, 2015

Particulars

Note 2.14/Capital work in progress (contd.) (` inCrore)

161

(` inCrore)

As at 31st March, 2016

As at 31st March, 2015

Particulars

ii) Material with Contractors Towers 1798.26 2455.59Conductors 1768.65 3373.12Other Line Materials 1101.07 1513.26Sub-StationEquipments 2087.69 1729.63HighVoltageDirectCurrent(HVDC)Equipments 2383.02 2436.53UnifiedLoadDespatch&Communication(ULDC)Materials 186.98 189.10Telecom Materials 15.54 8.39Others 57.81 -

Total 9399.02 11705.62Grand total 9859.29 13019.59Further Notes: Pending reconciliation, materials amounting to `199.55crore(previousyear`112.34crore)incommissionedlinesisshownasconstructionstores lying with contractors.

LONG TERM A. TRADE INVESTMENTS (AT COST) I. Equity Instruments-Fully Paid up :- Quoted PTC India Limited 12000006(Previousyear12000006)Sharesof`10/-each 12.00 12.00 {MarketValue`76.80crore@`64.00(NSE)pershare (Previous year `97.08crore@80.90(NSE)pershare)} Unquoted Subsidiary Companies Power System Operation Corporation Limited 30640000(Previousyear30640000)Sharesof`10each.(ReferNoteNo2.39) - 30.64 Powergrid NM Transmission Limited 24000000(Previousyear24000000)Sharesof` 10 each. 24.00 24.00 Powergrid Vemagiri Transmission Limited 50000(Previousyear50000)Sharesof`10each. 0.05 0.05 Less:ProvisionfordiminutioninthevalueofInvestment 0.05 0.05

- - PowergridVizagTransmissionLimited 54730000(Previousyear54730000)Sharesof`10each. 54.73 54.73 PowergridUnchaharTransmissionLimited 50000(Previousyear50000)Sharesof`10each. 0.05 0.05 PowergridKalaAmbTransmissionLimited 50000(Previousyear50000)Sharesof`10each. 0.05 0.05 POWERGRID-JabalpurTransmissionLimited 50000(Previousyear50000)Sharesof`10each. 0.05 0.05 POWERGRIDWaroraTransmissionLimited 50000(PreviousyearNIL)Sharesof`10each. 0.05 - POWERGRIDParliTransmissionLimited 50000(PreviousyearNIL)Sharesof`10each. 0.05 - POWERGRIDSouthernInterconnectorTransmissionSystemLimited 50000(PreviousyearNIL)Sharesof`10each. 0.05 -

(` inCrore)

As at 31st March, 2016

As at 31st March, 2015

Particulars

Note 2.17/Non-current investments

Note 2.16/Construction stores (contd.)

162

(` inCrore)

As at 31st March, 2016

As at 31st March, 2015

Particulars

Note 2.17/Non-current investments (contd.)

Joint Venture Companies Torrent Power Grid Limited 23400000(Previousyear23400000)Sharesof`10/-each 23.40 23.40 Jaypee Powergrid Limited 78000000(Previousyear78000000)Sharesof`10/-each 78.00 78.00 ParbatiKoldamTransmissionCompanyLimited 70937620(Previousyear70937620)Sharesof`10/-each 70.94 70.94 Teestavalley Power Transmission Limited 67115620(PreviousYear41011762)Sharesof`10/-each 67.11 41.01 PowerlinksTransmissionLimited 229320000(Previousyear229320000)Sharesof`10/-each 229.32 229.32 North East Transmission Company Limited 106964000(Previousyear106964000)Sharesof`10/-each 106.96 106.96 EnergyEfficiencyServicesLimited 22500000(Previousyear22500000)Sharesof`10/-each 22.50 22.50 NationalHighPowerTestLaboratoryLimited 23900000(Previousyear23900000)Sharesof`10/-each 23.90 23.90 Cross Border Power Transmission Company Limited 10322000(Previousyear4940000)Sharesof`10/-each 10.32 4.94 KalingaBidyutPrasaranNigamPrivateLimited 5000(Previousyear5000)Sharesof`10/-each 0.01 0.01 Bihar Grid Company Limited 40309000(Previousyear10025000)Sharesof`10/-each 40.31 10.02 Power Transmission Company Nepal Ltd 780000(Previousyear156000)SharesofNepali`100/-each 4.88 0.98 RINLPOWERGRIDTLTPvt.Limited 100000(PreviousyearNIL)Sharesof`10/-each 0.10 - 768.78 733.50II. Govt.Securities ( Unquoted ):- 8.5% Bonds redeemable in 20 half yearly instalments w.e.f. 1.10.2006 2.50 7.49 TOTAL (A) 771.28 740.99B. Non-trade investments ( Unquoted ) Equity shares-Fully paid-up 500(Previousyear500)sharesof`10/-eachinEmployeesCo-opSocietyLimitedItarsi(`5000/-) 0.00 0.00 500(Previousyear500)sharesof`10/-eachinEmployeesCo-opSocietyLimitedNagpur(`5000/-) 0.00 0.00 500(Previousyear500)sharesof`10/-eachinEmployeesCo-opSocietyLimitedJabalpur(`5000/-) 0.00 0.00 1(Previousyear1)shareof`10/-eachinBharatBroadbandNetworkLtd(`10/-) 0.00 0.00Total (B ) GRAND TOTAL (A+B) 771.28 740.99Further notes: 1) AggregateamountofQuotedInvestments Bookvalue 12.00 12.00 MarketValue 76.80 97.08 AggregateamountofUnquotedInvestments - - Bookvalue 759.28 728.99

2) 229319997shares(Previousyear229319997)ofPowerlinksTransmissionLtd.heldbytheCompanyhavebeenpledgedascontinuoussecuritywithconsortiumoffinancialinstitutionsagainstfinancialassistanceobtainedbyPowerlinksTransmissionLimited.

3) Investmentshavebeenvaluedasperaccountingpolicyno1.14

163

A) Advances for Capital Expenditure i) Secured - 0.26 ii) Unsecured a.Againstbankguarantees 2824.61 2783.94 b.Others 195.59 583.24 iii) Unsecuredconsidereddoubtful 2.95 3.00 3023.15 3370.18 Less:Provisionforbad&doubtfulAdvances 2.95 3.00 3020.20 3367.18 3020.20 3367.44B) Loans i) Employees(includinginterestaccrued) Secured 174.98 169.74 Unsecured 13.40 7.82 188.38 177.56 ii) Leasereceivables 400.00 376.61 iii) LoanstoSubsidiaries 1159.72 229.70 1748.10 783.87C) Security Deposits 4.89 9.58D) Advances to related parties* i) Consideredgood 0.05 - ii) Considereddoubtful** 19.39 19.37 19.44 19.37 Less:ProvisionforDoubtfuladvances** 19.39 19.37 0.05 -E) Advances recoverable in cash or in kind or for value to be received Contractors&Suppliers(includingmaterialissuedonLoan) 0.33 1.05 Employees 10.00 12.75 BalancewithCustomsPortTrustandotherauthorities 20.82 - AdvancetaxandTaxdeductedatsource 3833.30 4362.75 Less:Provisionfortaxation 3833.30 4362.75 - - Others 34.17 3.20 65.32 17.00 Considereddoubtful 3.59 3.59 68.91 20.59 Less:ProvisionfordoubtfulAdvances 3.59 3.59 65.32 17.00TOTAL 4838.56 4177.89 Due from: Directors 0.10 0.11 Officersincludingkeymanagementpersonnel 7.64 6.31Further notes: *BreakupofadvancestorelatedpartiesisprovidedinNote2.47(b) **CERCinitsOrderdated06/04/2015inPetitionNos.127/2012,128/TL/2012&156/MP/2012hasorderedthat80%oftheacquisitionpriceincurredbyPGCILforVemagiriTransmissionCompanyLimited(VSTL)shallbereimbursedbythetwobeneficiariesofLTAviz.SPLandSPGLtothecompnayandthebalance20%andtheexpenditureincurredbyVSTLfromthedateofacquisitiontilltheliquidationoftheCompanyshallbebornebycompany.TheCompanyhasfiledaReviewPetitiondtd.28/05/2015prayingmodificationoftheOrderdtd.06/04/2015

(` inCrore)

As at 31st March, 2016

As at 31st March, 2015

Particulars

Note 2.18/Long-term loans and advances(Unsecured considered good unless otherwise stated)

164

CURRENT MATURITIES OF LONG TERM INVESTMENTS (AT COST) TRADE INVESTMENTS I. Equity Instruments-Fully Paid up :- Unquoted Subsidiary Company Power System Operation Corporation Ltd. 30640000(Previousyear30640000)Sharesof`10each.(ReferNoteNo2.39) 30.64 -Govt.Securities ( Unquoted ):- 8.5% Bonds redeemable in 20 half yearly instalments w.e.f. 1.10.2006 5.00 185.43GRAND TOTAL 35.64 185.43Further notes: 1) AggregateamountofUnquotedInvestments Bookvalue 35.64 185.432) Investmentshavebeenvaluedasperaccountingpolicyno1.14(NoteNo1)

(` inCrore)

As at 31st March, 2016

As at 31st March, 2015

Particulars

Note 2.19/Current investments

(As taken, valued and certified by the Management) (For mode of valuation refer Note 1.15) Loose tools 11.19 10.64Consumable stores 5.99 5.06Components,Spares&otherspareparts: Towers 185.03 167.46 Conductors 67.00 51.08 Other Line Materials 250.02 212.70 Sub-StationEquipments/Spares 214.90 187.32 HighVoltageDirectCurrentEquipments/spares 71.84 82.13 UnifiedLoadDespatchCentreSpares 5.59 3.79 Telecom Spares 20.47 5.70 Other Stores 11.81 12.03 843.84 737.91LessProvisionforShortages/damagesetc 20.16 20.16TOTAL 823.68 717.75Inventories includes material in transit Towers - 0.01 Other Line Materials 1.96 0.01 Total 1.96 0.02

i) Outstandingforaperiodexceedingsixmonthsfromthe date they are due for payment Consideredgood 290.90 194.64 Considereddoubtful 29.62 27.33 320.52 221.97ii) Others 2447.07 1924.01 2767.59 2145.98Less:Provisionforbad&doubtfultradereceivables 29.62 27.33TOTAL 2737.97 2118.65 *BreakupofTradereceivablesfromrelatedpartiesisprovidedinNote2.47(b)

(` inCrore)

(` inCrore)

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2015

As at 31st March, 2015

Particulars

Particulars

Note 2.20/Inventories

Note 2.21/Trade receivables(Unsecured considered good unless otherwise stated)

165

1) Cash and Cash Equivalents Balancewithbanks- -InCurrentaccounts 866.06 1067.53 -Indesignatedcurrentaccounts(tobeutilisedforconsultancyassignments) 674.56 984.90 Drafts/Chequesinhand - - Cash in hand 0.01 0.01 StampsandImprest 0.01 0.15 1540.64 2052.592) Other Bank Balances -EarmarkedbalancewithBank* 10.29 10.39 -InTermDepositshavingmaturityover3months(tobeutilisedforconsultancyassignments) 902.79 - TOTAL 2453.72 2062.98Further notes: BalancewithBanksincurrentaccountsanddesignatedcurrentaccountsundercashandcashequivalentsabove, includesliquidflexitermdeposit `182.32crore(previousyear`442.62crore)and`449.43crore(previousyear`982crore)respectively.Interestonflexideposit iscredited to designated party accounts. *EarmarkedbalancewithBankincludesunpaiddividendandrefundofFPOproceeds

A) Loans a) Employees including interest accrued i) Secured 18.06 15.06 ii) Unsecured 6.87 5.68 24.93 20.74b) Others CurrentmaturitiesofLongTermAdvances(UndersecuritisationScheme) 7.71 23.14 CurrentMaturitiesofLeaseReceivables 82.72 73.68 Others - 0.03 90.43 96.85Total(A) 115.36 117.59B) Advances to related parties* 173.58 151.63C) Advances recoverable in cash or in kind or for value to be received a) Employees 13.74 14.95b) Others Contractors&Suppliers(IncludingMaterialissuedonloan) 158.84 27.78 BalancewithCustomsPortTrustandotherauthorities 88.17 31.98 Others# 244.34 222.49 491.35 282.25 Total (C) 505.09 297.20Total(A+B+C) 794.03 566.42Less: Provision for doubtful Advances 0.03 -Total 794.00 566.42 Directors 0.08 0.08 Officersincludingkeymanagementpersonnel 2.40 1.98Further notes: *BreakupofadvancestorelatedpartiesisprovidedinNote2.47(b) Advancesrecoverableincashorinkindorforvaluetobereceived-OthersincludeamountrecoverablefromGratuity,PFtrust,prepaidexpensesetc.

(` inCrore)

(` inCrore)

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2015

As at 31st March, 2015

Particulars

Particulars

Note 2.22/Cash and Bank balances

Note 2.23/Short-term loans and advances(Unsecured considered good unless otherwise stated)

166

a) UnbilledRevenue 3023.89 2232.34b) Interestaccruedbutnotdue InterestaccruedonInvestments(Bonds) 4.36 12.09 InterestaccruedonTerm/FixedDeposits 0.22 0.86 InterestaccruedonOthers* 2.38 - InterestaccruedonLoantoSubsidiaries 25.45 -c) Claimsrecoverable 5.80 3.85d) Others# 74.69 29.73 3136.79 2278.87Less:Provisionfordoubtfulclaims - -TOTAL 3136.79 2278.87

Further notes:

Unbilled revenue `1445.24crore (Previous year`947.31Crore) representamount forwhich thecompany isyet to raisebills inviewofrecognitionofrevenueasperCERCTariffnormsandalsoincludestransmissionchargesforthemonthofMarch,2016amountingto1578.65crores (previous year `1285.03crore)billedtobeneficiariesinthemonthofApril,2016(PreviousyearApril,2015).

*Interest accrued on Others include interest accrued on advances to contractors.

#Others include Other accrued income and recoverable from customers.

i) Transmission Business Sales of services Transmission Charges 19734.16 16371.36 Add:Revenuerecognisedoutofadvanceagainstdepreciation 142.92 79.50 19877.08 16450.86 Other operating revenue InterestondifferentialbetweenProvisionalandFinalTariffbyCERC 67.43 70.88 19944.51 16521.74ii) Telecom Business Sales of services NLD 391.28 272.48 IP-1 8.28 8.44 ISP 2.09 2.77 Others 33.27 15.59 434.92 299.28Less: Inter Divisional Transfer NLD 37.27 18.97 IP-1 5.16 5.16 ISP 0.24 0.26 42.67 24.39 392.25 274.89iii) Consultancy Project Management and Supervision Salesofservices 465.46 380.60 465.46 380.60Total 20802.22 17177.23

(` inCrore)

(` inCrore)

As at 31st March, 2016

For the year ended 31st March,2016

For the year ended 31st March,2015

As at 31st March, 2015

Particulars

Particulars

Note 2.24/Other current assets(Unsecured considered good unless otherwise stated)

Note 2.25/Revenue from operations

167

A) Income from non-current Investments i) Dividend Subsidiary 20.07 15.32 Others 64.70 82.45 ii) Interest on Govt.securities 14.03 28.11B) Other Interest LoantoStateGovt.insettlementofdues - 2.95 IndianBanks 82.51 262.30 Interestfromadvancestocontractors 57.06 150.99 Interstonloantosubsidiaries 49.23 - Others* 11.90 12.90 299.50 555.02C) Others ProfitonsaleofFixedAssets 1.59 1.90 DeferredIncome(TransferredfromGrants-in-aid) 21.96 21.95 TransferfromInsuranceReserveonA/cofLossesofFixedAssets 5.29 20.21 LeaseIncome-StateSectorULDC 34.76 37.18 Surcharge 92.91 65.95 Hirechargesforequipments 0.03 0.22 FERV gain 0.05 12.46 Rebate 0.32 0.34 Provisionswrittenback 3.90 5.50 Miscellaneous income 90.32 74.76 550.63 795.49Less:Incometransferredtoexpenditureduringconstruction(Net)-Note2.32 71.67 192.68TOTAL 478.96 602.81Further Notes: *OtherInterest-Othersincludeinterestonemployeeloans

(` inCrore)

For the year ended 31st March,2016

For the year ended 31st March,2015

Particulars

Note 2.26/Other income

a) Inexerciseofpowersu/s178oftheElectricityAct2003,CentralElectricityRegulatoryCommission(CERC)hasnotified“CERC(TermsandConditionsofTariff)Regulations2014”videorderdated21stFebruary,2014forthedeterminationoftransmissiontarifffortheblockperiod2014-19.

b) ThecompanyhasrecognisedTransmissionincomeduringtheyearasperthefollowing: i) Rs.3915.15Crores(previousyearRs.4272.76Crore)forwhichprovisionalordershavebeenisuedbytheCentralElectricityRegulatory

Commission(CERC)allowingprovisionalbillingupto90%ofthetariffclaimed. ii) Rs.12767.92Crores(previousyearRs.Nil)forwhichfinaltariffordershavebeenisuedbyCERC. iii) Rs.3194.01Crores(previousyearRs.12178.10Crore)basedonCERCTariffnormsapplicableforthetariffblock2014-19forwhich

tariffordersareyettobeisuedbyCERC.Thisalsoincludesrevenuefromassetscommissionedupto31.03.2014.

Salarieswagesallowances&benefits 1155.84 1185.87Contributiontoprovidentandotherfunds 181.42 268.33StaffWelfareexpenses 146.63 145.56 1483.89 1599.76Less:TransferredtoExpenditureduringConstruction(Net)-Note2.32 503.35 576.11TOTAL 980.54 1023.65Further notes: a) Employees’remunerationandbenefitsincludethefollowingforthewholetimedirectorsandKeyManagementpersonnelincludingchairman

andmanagingdirectorandexcludingarrearspaidtoex-directors.

(` inCrore)

For the year ended 31st March,2016

For the year ended 31st March,2015

Particulars

Note 2.27/Employee benefits expense

Note 2.25/Revenue from operations (contd.)

168

Salaries and Allowances 2.31 1.95

Contribution to Provident Fund and other Funds, Gratuity and Group Insurance 0.35 0.24

Otherbenefits 0.41 0.71

b) Inadditiontotheaboveremuneration,thewholetimedirectorshavebeenallowedtousethestaffcar(includingforprivatejourneys)onpayment of `2000/-p.m.ascontainedintheDepartmentofpublicenterprises(DPE)OMNo.2(23)/11-DPE(WC)-GL-V/13dt.21.01.2013.

c) PendingapprovalofMinistryofPowerandDepartmentofPublicEnterprises,specialallowanceup to10%ofBasicpay amounting to`17.67croreforthefinancialyear2015-16(Cumulativeamountingto`114.01croreupto31.03.2016)isbeingpaidtoemployeeswhoarepostedinthedifficultandfarflungareas.Theaboveallowanceisinadditiontothemaximumceilingof50%ofBasicPayasperDPEofficememorandumno.2(70)/08-DPE(WC)-GL-XVI/08dated26-Nov-2008.

d) EmployeebenefitexpensesfortheFin.Year2014-15includes`87.28croreasbalancecontributiontowardsPowergridEmployeesDefinedContributionSuperannuationBenefit(Pension)Schemefortheperiod01.01.2007to31.03.2012.

e) Salarieswagesallowances&benefitsincludes`14.10croreagainstexcessprovisionwrittenbackofperformancerelatedpaywrittenback.

(` inCrore)

Current YearParticulars Previous year

A) i) Interest on loans from IndianBanks,FinancialInstitutions&Corporations 1092.82 1058.04 ForeignBanksandFinancialInstitutions 270.00 210.61 Secured/UnsecuredredeemableBonds 5381.89 4755.96 ForeignCurrencyBonds 135.07 126.13 ii) Interest-Others 68.51 14.21 6948.29 6164.95B) Other borrowing costs Commitmentcharges 12.07 14.40 GuaranteeFee 259.49 238.52 Otherfinancecharges 42.03 21.05 313.59 273.97 7261.88 6438.92Less:TransferredtoExpenditureduringConstruction(Net)-Note2.32 2238.91 2459.60TOTAL 5022.97 3979.32

(` inCrore)

For the year ended 31st March,2016

For the year ended 31st March,2015

Particulars

Note 2.28/Finance costs

Depreciation/amortisationonTangibleAssets 6323.58 5208.00

Amortisation of Intangible assets 68.25 47.80

6391.83 5255.80

Less:TransferredtoExpenditureDuringConstruction(Net)-Note2.32 12.11 12.64

6379.72 5243.16

Less:DepreciationamortisedduetoFERVadjustment 196.96 157.75

ChargedtotheStatementofProfit&Loss 6182.76 5085.41

(` inCrore)

For the year ended 31st March,2016

For the year ended 31st March,2015

Particulars

Note 2.29/Depreciation and amortization expense

Note 2.27/Employee benefits expense (contd.)

169

(` inCrore)

For the year ended 31st

March, 2016

For the year ended 31st

March, 2015

Particulars

Note 2.30/Transmission, Administration and other expenses

Repair & Maintenance Buildings 47.59 45.82Plant&Machinery Sub-Stations 266.93 226.27 Transmissionlines 91.53 116.63 Telecomequipments 45.34 20.37 Others 25.32 12.95 429.12 376.22SystemandMarketOperationCharges 11.13 17.57Powercharges 158.03 170.01Less:Recoveryfromcontractors 0.74 1.25 157.29 168.76ExpensesofDieselGeneratingsets 4.49 6.53Storesconsumed 4.59 1.02Watercharges 3.24 1.22RightofWaycharges(Telecom) 4.88 4.41PatrollingExpenses-Telecom 1.92 1.99LastMileconnectivity-Telecom 6.61 2.21 Training&RecruitmentExpenses 28.23 24.31Less:Feesfortrainingandapplication 1.01 0.03 27.22 24.28Legalexpenses 15.68 10.55Professionalcharges(IncludingTA/DA) 12.27 11.52Consultancyexpenses(IncludingTA/DA) 1.60 4.59Communicationexpenses 15.96 14.68Travelling&Conv.exp.(excludingforeigntravel) 101.06 107.45Foreigntravel 11.62 13.21 112.68 120.66Tenderexpenses 28.80 22.04Less:Saleoftenders 4.19 5.04 24.61 17.00Payments to Statutory Auditors AuditFees 0.59 0.57 TaxAuditFees 0.06 0.11 InOtherCapacity 0.72 1.13 Arrears - 0.13 OutofpocketExpenses 0.94 0.78 2.31 2.72Advertisementandpublicity 11.85 12.22Printingandstationery 6.90 6.36BooksPeriodicalsandJournals 1.27 1.16EDPhireandothercharges 9.32 3.94Entertainmentexpenses 1.62 2.09Brokerage&Commission 0.41 0.36Research&Developmentexpenses 5.40 3.40CostAuditandPhysicalverificationFees 1.34 0.76Rent 10.31 11.32CapitalExpenditureonassetsnotownedbytheCompany 0.62 3.93CERCpetition&Othercharges 48.85 37.88Miscellaneousexpenses 61.50 59.81

170

(` inCrore)

Particulars

HorticultureExpenses 14.04 12.23SecurityExpenses 119.87 103.28HiringofVehicle 107.41 124.12Insurance 84.34 72.38Ratesandtaxes 6.35 7.85LicenseFeestoDOT 34.28 23.44Bandwidthchargesdarkfibreleasecharges(Telecom)etc 22.14 22.35ExpenditureonCorporateSocialResponsibility(CSR)&Sustainabledevelopment 114.06 27.73TransitAccomodationExpenses 11.21 9.17Less:IncomefromTransitAccomodation 1.15 0.92 10.06 8.25RebatetoCustomers* 115.70 114.29ForeignExchangeRateVariation(NetofFERVgain&amountrecoverable) 4.56 -Provisions Others 7.50 43.95 7.50 43.95 1682.89 1534.85Less:TransferredtoExpenditureduringConstruction(Net)-Note2.32 142.51 179.95 1540.38 1354.90 LossonDisposal/WriteoffofFixedAssets 0.49 0.26Total 1540.87 1355.16Stores consumption included in repair and maintenance 178.78 137.53

Further Notes: *TheCompanyhasallowedrebateagainstpaymentreceivedthroughLC/cheques/RTGSforeffectingbetterandtimelyrecoveryofduesfromStatePowerUtilitiesonconsistentbasis.

Income Transmission charges 17.87 1.74 Depreciation/amortisationwrittenback 60.07 - Others 0.79 (0.66) 78.73 1.08 Expenditure Power charges 0.66 37.77 Ratesandtaxes 0.25 3.76 Interest 11.92 - Others 1.24 5.96 14.07 47.49Prior period expenditure/(income) (Net) (64.66) 46.41 Less:TransferredtoExpenditureduringConstruction(Net)-Note2.32 0.08 (0.71)Total (64.74) 47.12

(` inCrore)

For the year ended 31st March,2016

For the year ended 31st March,2015

Particulars

Note 2.31/Prior period items(Net)

Note 2.30/Transmission, Administration and other expenses (contd.)

For the year ended 31st

March, 2016

For the year ended 31st

March, 2016

171

A. Employees Remuneration & Benefits Salarieswagesallowancesandbenefits 407.99 465.94 Contributiontoprovidentandotherfunds 64.05 80.69 Welfareexpenses 31.31 29.48Total(A) 503.35 576.11B. Other Expenses Repair and maintenance Buildings 4.22 4.40 Others 17.81 3.81 22.03 8.21 Powercharges 3.63 11.40 Less:Recoveryfromcontractors 0.24 0.39 3.39 11.01 ExpensesonDieselGeneratingsets 0.35 0.88 Watercharges 0.80 0.50 Training&RecruitmentExpenses 2.28 0.07 Legalexpenses 2.27 2.74 Professionalcharges 4.89 2.59 Consultancyexpenses 0.49 1.41 Communicationexpenses 1.97 2.43 Travelling&Conv.exp.(IncludingForeignTravel) 33.60 46.28 Tenderexpenses 6.95 8.28 Less:Saleoftenders 4.03 4.49 2.92 3.79 PaymenttoAuditors 0.13 0.06 AdvertisementandPublicity 1.35 0.53 Printingandstationery 0.62 0.78 Books,PeriodicalsandJournals 0.02 0.02 EDPhireandothercharges 0.28 1.07 Entertainmentexpenses 0.03 0.13 Brokerageandcommission 0.07 0.07 Rent 3.11 4.91 Miscellaneousexpenses 12.99 15.51 HorticultureExpenses 0.59 0.42 SecurityExpenses 16.77 19.47 HiringofVehicles 30.52 55.53 Insurance 0.04 0.61 Ratesandtaxes 0.40 0.23 Bandwidthcharges,darkfibreleasecharges(Telecom) 0.14 0.19 TransitAccomodationExpenses 0.47 0.54 Less:IncomefromTransitAccomodation 0.01 0.03 0.46 0.51 Sub-total 142.51 179.95 PriorPeriodadjustment(net) 0.08 (0.71)Total(B) 142.59 179.24C. Depreciation/Amortisation 12.11 12.64

Note 2.32/ Expenditure during Construction (Net)(` inCrore)

Particulars For the year ended 31st

March, 2016

For the year ended 31st

March, 2016

172

(` inCrore)

Particulars For the year ended 31st

March, 2016

For the year ended 31st

March, 2016

D. Finance Costs a) Interest on Loans from IndianBanks,FinancialInstitutionsandCorporations 541.73 557.31 ForeignBanksandFinancialInstitutions 94.23 107.15 Secured/UnsecuredRedeemableBonds 1449.31 1637.90 ForeignCurrencyBonds 60.05 70.72 2145.32 2373.08 b) Other borrowing costs Commitmentcharges 11.67 13.24 Guaranteefee 65.27 71.09 OtherFinanceCharges 16.65 2.19 93.59 86.52Total ( D ) 2238.91 2459.60E. Less: Other Income Interest from Indianbanks 21.99 33.08 Contractors 45.80 147.22 Others 0.20 1.37 67.99 181.67 Miscellaneousincome 3.68 11.01Total (E) 71.67 192.68GRAND TOTAL (A+B+C+D-E) 2825.29 3034.91

Note 2.32/ Expenditure during Construction (Net) (contd.)

173

(` inCrore)

2.33 Cashequivalentofdeemedexportbenefitsavailedof`209.99croreinrespectofsupplieseffectedforEastSouthInterConnector-IITransmissionProject (ESI)andSasaramTransmissionProject (STP),werepaid to theCustomsandCentralExciseAuthorities inaccordancewithdirectionfromMinistryofPower(Govt.ofIndia)during2002-03duetononavailabilityofWorldBankloanfortheentiresuppliesinrespectofESIprojectandforthesuppliespriortoMarch2000inrespectofSTPprojectandthesamewascapitalisedinthebooksofaccounts.Thereafter,WorldBankhadfinancedboththeESIprojectandSTPprojectasoriginallyenvisagedandtheybecameeligiblefordeemedexportbenefits.Consequently,thecompanyhaslodgedclaimswiththeCustomsandExciseAuthorities.

InthisregardtheCumulativeamountreceivedandde-capitalizedupto31st March 2016 is ` 12.12 crore (previous year `12.12crore).The company continued to show the balance of `197.87croreasat31st March 2016 (previous year `197.87crore)inthecapitalcostoftherespectiveassets/projectspendingreceiptofthesamefromCustomsandExciseAuthorities.

2.34 a) BalancesofTradeReceivablesandrecoverableshownunderAssetsandTradeandOtherPayablesshownunderLiabilitiesincludebalancessubjecttoconfirmation/reconciliationandconsequentialadjustmentsifany.Howeverreconciliationsarecarriedoutonongoing basis.

b) In the opinion of themanagement, the value of any of the assets other than fixed assets and non current investments onrealizationintheordinarycourseofbusinesswillnotbelessthanvalueatwhichtheyarestatedintheBalanceSheet.

2.35 Informationinrespectofcostplusconsultancycontracts,consideringthesameasconsultancybusinessasrequiredunderAccountingStandard(AS)-7(Revised2002)“ConstructionContracts”isprovidedasunder:

2.36 Thecompanyhasbeenentrustedwiththeresponsibilityofbillingcollectionanddisbursement(BCD)ofthetransmissionchargesonbehalfofall the ISTS(Interstate transmissionSystem) licensees throughthemechanismof thePOC(PointofConnection)chargesintroduced w.e.f. 01stJuly2011whichinvolvesbillingbasedonapproveddrawl/injectionofpowerinplaceofoldmechanismbasedonMegaWattallocationofpowerbyMinistryofPower.Bythismechanism,revenueofthecompanywillremainunaffected.

SomeofthebeneficiariesaggrievedbythePOCmechanismhavepreferredappealbeforevariousHighCourtsofIndia.AllsuchappealshavebeentransferredtoDelhiHighCourtasperorderoftheSupremeCourtontheappealpreferredbythecompanyandcompanyhasalsorequestedfordirectingagitatingstatestopayfulltransmissionchargesaspernewmethodologypendingsettlementofthematter.HonorableDelhiHighCourthasdirectedalltheabovebeneficiariestoreleasepaymentsandaccordinglythebeneficiarieshavestartedmakingpaymentsasperthesaiddirections.

2.37 CERC issued tariff orderdated29.04.2011 in respect ofBarh-BaliaTransmission line considering thedateof commercial operation(DOCO)01.07.10inlinewiththeirRegulation.Againstthistarifforder,oneofthebeneficiariesfiledappealbeforetheAppellateTribunalforElectricity(ATE)challengingthetariffapprovedbyCERCbasedonaboveDOCOclaimedbythecompany.TheATEvideitsorderdated02.07.2012observedthattheDOCOof01.07.2010wasnotappropriateastheappellanthadreportedthatthetransmissionlinewas put in regular service from August 2011 i.e. when it was put in regular service when the other end in the scope of the generating companyviz.NTPCwascompletedi.e.August2011thoughCompanyhadcompleteditsscopeason01.07.2010.Accordingly,theATEremandedCERCforredeterminationofDOCOandtariffoftheTransmissionline.Uponthis,thecompanyfiledanappealintheSupremeCourtexplainingthattheDOCOof01.07.2010wasasperCERCRegulations.TheHon’bleSupremeCourton15.03.2013hadstayedalltheproceedingsbeforetheCERCforthesaidTransmissionSystembasedontheappealfiledbytheCompany.

TheCompanyhadalsofiledanotherpetitionon28.02.2013beforetheCentralElectricityRegulatoryCommission(CERC)fordeterminationofrevisedtransmissiontariffonthebasisofrevisedcostestimateapprovedbyitsBoardofDirectors.Subsequentlyon08.10.2013,initsinterimorder,theHon’bleSupremeCourthasdirectedtheCERCtoproceedwithdeterminationoftariffforthesaidTransmissionSystempendingdisposaloftheappealregardingdeterminationofDOCOdate.TheCERChasvideitsorderdated30.06.2015hasre-determinedtheDOCOw.e.f01.09.2011andrevisedthetariffasperdecisionoftheHonb’leATE.

TheHonb’leSupremeCourt,hasvide itsorderdated03.03.2016hasupheldthejudgementoftheHon’bleATE.Reviewapplicationfiledbythecompanyagainsttheorderdt.03.03.2016hasalsobeendismissedbyHonb’leSupremeCourtvideorderdt.12.05.2016.inaccordancewiththeaboveorderoftheHon’bleSupremeCourt,revenueforthisTLhasbeenrecognisedw.e.f.01.09.2011inplaceofearlierDOCOof01.07.2010andtransmissionincomefortheperiodfrom01.07.2010to31.08.2011amountingto`112.57crore(netof`18.63crorerecoveredfromNTPCasperorderofCERC)hasbeenreversedduringtheyear.

2.38 AsperCERCGrantofConnectivity,Long-termAccessandMedium-termOpenAccessininter-StateTransmissionandrelatedmattersRegulations,2009asamendedfromtimetotime,alltransmissionelementsareconstructedaspertherequirementofthelongtermcustomers(LTA)upto25yearsandtransmissionchargesarerecoverablefromsuchlongtermcustomers.Formediumtermopenaccess

ParticularsFor the

Year ended 31.03.2016

For the Year ended 31.03.2015

i) Theamountofrevenuerecognisedoncostplusconsultancycontractworks 360.02 286.65ii) The methods used to determine the contract revenue recognised

15%oftotalconsultancyfeesuptoawardstagetoexecutingagencies(outofwhich10%uptoissueofnoticesinvitingtenders),85%withprogressofworkincludingsupplies(Progressofworkistakenascertifiedbyengineerincharge).

Accounting Policy-1.16.7

Accounting Policy-1.16.7

iii) Cumulative amount of costs incurred on construction contracts 16057.72 13297.23iv) Cumulative amount of advance received from customers as at the year end 18167.29 15493.67v) Amount of retention money with customers as at the year end 14.95 31.70vi) Grossamountduefromcustomersforcontractworksasanassetasattheyearend 25.97 44.28vii) Grossamountduetocustomersforcontractworksasaliabilityasattheyearend 2289.82 1312.14

OTHER NOTES

174

(MTOA),noadditionaltransmissionelementisconstructedbutonlytheexistingsurplustransmissioncapacitiesareutilised.Thechargesrecovered from the MTOA customers, upon utilisation of the surplus capacity which is very small and temporary in nature, are used to reduce the charges of the LTA customers. The company is revenue neutral.

OneoftheMTOAcustomer,signedanagreementforMTOAforaperiodof3yearsfrom16.06.2013butdidnotutilisethecapacity.Thecompany, however, billed the customer as per the agreement. But the MTOA customer defaulted on its dues of `15.64crorebilledduringtheperiodfrom16.06.2013to31.01.2014.Duetonon-recoveryofdues,thecompanyhascancelledtheMTOAw.e.f.01.02.2014asperorderoftheATE.Thetotaltransmissionchargesarebeingrecoveredfromothercustomerssincethen.Anapplication,filedbythecompanyispendingbeforeCERCforallowingrecoveryoftheduesofsuchMTOAcustomerfortheperiodfrom16.06.2013to31.01.2014from other customers during this period.

Due to default made by the same customer in their agreement with the company for LTA, the company has encashed during the yearconstructionbankguaranteesworth`48.00crore,andadjustedtheproceedsofthesameagainstitsduesof`15.64croreandoutstanding surcharge of `.6.80croreupto31.03.2016.

2.39 PursuanttocommunicationofministryofPowervideofficememorandum18/2/2015-PGdated25thMarch2015and29thDec2015,BoardofDirectorsinitsmeetingheldon9thmarch2016hasapprovedtosell&transfer30640000equityshares(100%shareholding)heldbythecompanyinPowerSystemOperationCorporationLimited(POSOCO)toGovt.OfIndia.CabinethasapprovedfortransferofsharesofPOSOCO to the Government of India. Board has further approved that purchase consideration be calculated based on the balance sheet of POSOCO as on date preceding the date of transfer. Shares are yet to be transferred.

2.40 (i) FERVLossof`1841.03crore(PreviousYear`510.52crore)hasbeenadjustedintherespectivecarryingamountofFixedAssets/CapitalworkinProgress(CWIP)/leasereceivables.

(ii) FERVLossof`4.56crore(PreviousYearFERVGain`12.46crore)hasbeenrecognisedintheStatementofProfitandLoss.2.41 Change in accounting policy/accounting practice a) CostofMobilePhoneswhichwerehithertocapitalisedandbeingdepreciatedovertheusefullifeoftheassetisnowbeingcharged

tostatementofprofitandloss.Thechangehasresultedindecreaseinprofitby`1.89crorewithcorrespondingdecreaseinGrossBlockandAccumulatedDepreciationby`7.13croreand`5.24crorerespectively.

b) InTelecomandConsultancySegmentResidualValueinrespectofComputer&PeripheralsandServer&NetworkComponentsisconsideredasNilinsteadofasspecifiedinScheduleIIofCompaniesAct2013.Thechangehasresultedindecreaseinprofitby `0.30crorewithcorrespondingincreaseindepreciation.

c) CostofServerwhichwerehithertodepreciatedovertheuseful lifeof3years isnowbeingdepreciatedovertheuseful lifeof 5years.Thechangehasresultedinincreaseinprofitby` 1.10 crore with corresponding decrease in depreciation.

2.42 Borrowing cost capitalised during the year is `2238.91crore(previousyear`2459.60crore)asperAS16-“BorrowingCosts”.2.43 Based on information availablewith the company, there are few suppliers/service providerswho are registered asmicro, small or

mediumenterpriseunderTheMicro,SmallandMediumEnterprisesDevelopmentAct,2006(MSMEDAct,2006).InformationinrespectofmicroandsmallenterprisesasrequiredbyMSMEDAct,2006isgivenasunder:

OTHER NOTES (contd.)

(` inCrore)

Sr. No Particulars Current Year Previous Year

1 Principal amount and interest due thereon remaining unpaid to any supplier as at end of each accounting year:PrincipalInterest

NilNil

0.020.06

2 The amount of Interest paid by the buyer in terms of section 16 of the MSMED Act, 2006 along with the amount of the payment made to the supplier beyond the appointed day during each accounting year

Nil Nil

3 Theamountofinterestdueandpayablefortheperiodofdelayinmakingpayment(whichhavebeenpaidbutbeyondtheappointeddayduringtheyear)butwithoutaddingtheinterestspecifiedunderMSMEDAct,2006

Nil Nil

4 The amount of interest accrued and remaining unpaid at the end of each accounting year.

Nil 0.06

5 The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the smallenterpriseforthepurposeofdisallowanceasadeductibleexpenditureundersection23oftheMSMEDAct2006

Nil 0.00

2.44 Disclosures as per Accounting Standard AS 15 -“Employee Benefits” Definedemployeebenefit/contributionschemesareasunder:- A. Provident Fund CompanypaysfixedcontributiontoProvidentFundatpredeterminedratetoaseparatetrust,whichinveststhefundsinpermitted

securities. Contribution to family pension scheme is paid to the appropriate authorities. The contribution to the fund and EPS scheme for the year amounting to `84.57crore(previousyear`76.48crore)hasbeenrecognizedasexpenseandischargedto

175

Description GRATUITY PRMF Leave ODRB

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Service Cost 25.54 23.75 9.44 8.23 21.27 19.38 0.79 0.74

Interestcostonbenefitobligation 37.51 36.48 20.55 18.64 26.62 25.06 1.21 1.21

Expectedreturnonplanassets (37.37) (33.84) - - - - - -

Netactuarial(gain)/lossrecognizedinthe year

(28.04) 0.93 16.22 16.29 48.85 52.53 (0.26) (0.38)

ExpensesrecognizedintheStatementofprofitandloss

(2.36) 27.32 46.21 43.16 96.74 96.97 1.74 1.57

Description GRATUITY PRMF Leave ODRB

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

(i)Presentvalueofobligationasattheyear end

477.48 468.86 295.36 256.79 369.61 332.79 16.02 15.14

(ii)Fairvalueofplanassetsasattheyearend

506.72 467.08 - - - - - -

Difference(ii)–(i) 29.24 (1.78) (295.36) (256.79) (369.61) (332.79) (16.02) (15.14)

Netasset(liability)recognizedintheBalance Sheet

29.24 (1.78) (295.36) (256.79) (369.61) (332.79) (16.02) (15.14)

(` inCrore)

(` inCrore)

StatementofProfitandLoss.TheobligationofthecompanyislimitedtosuchfixedcontributionandtoensureaminimumrateofinterestoncontributionstothemembersasspecifiedbyGOI.Asperthereportofactuaryoverallinterestearningandcumulativesurplus‘ismore’thanstatutoryinterestpaymentrequirement.Hence,nofurtherprovisionisconsiderednecessary.

B. Gratuity Thecompanyhasadefinedbenefitgratuityplan.Everyemployeewhohasrenderedcontinuousserviceoffiveyearsormoreis

entitledtogetgratuityat15dayssalary(15/26Xlastdrawnbasicsalaryplus,dearnessallowance)foreachcompletedyearofserviceonsuperannuation,resignation,termination,disablementorondeathsubjecttoamaximumof` 10 lacs. The scheme is funded by the company and is managed by a separate trust. The liability for the same is recognised on the basis of actuarial valuation on annual basis on the Balance Sheet date.

C. Pension TheCompanyhasschemeofemployeesdefinedPensionContribution.Companycontributionispaidtoseparatetrust.Amount

ofcontributionpaid/payablefortheyearis`102.19crore(previousyear`73.11crore)hasbeenrecognisedasexpenseandischargedtostatementofprofit&loss.

D. Post-Retirement Medical Facility (PRMF) ThecompanyhasPost-RetirementMedicalFacility(PRMF),underwhichretiredemployeesandthespouseareprovidedmedical

facilitiesintheempanelledhospitals.TheycanalsoavailtreatmentasOut-Patientsubjecttoaceilingfixedbythecompany.Thescheme is unfunded and liability for the same is recognised on the basis of actuarial valuation on annual basis on the Balance Sheet date.

E. Leave Encashment TheCompanyprovidesforearnedleavebenefit(includingcompensatedabsences)andhalf-payleavetotheemployeesofthe

Companywhichaccrueannuallyat30daysand20daysrespectively.Earnedleaveisen-cashablewhileinservice.Half-payleaves(HPL)areen-cashableonlyonseparationbeyondtheageof55yearsuptothemaximumof300days(HPL).However,totalamountofleavethatcanbeencashedonsuperannuationshallberestrictedto300daysandnocommutationofhalf-payleaveshallbepermissible. The liability for the same is recognised on the basis of actuarial valuation.

F. Other Defined Retirement Benefits (ODRB) The Company has a scheme for settlement at the time of superannuation at home town for employees and dependents to

superannuated employees. The scheme is unfunded and liability for the same is recognised on the basis of actuarial valuation on annual basis on the Balance Sheet date.

Theaboveschemes(D,EandF)areunfunded. G. ThesummarisedpositionofvariousdefinedbenefitsrecognizedintheStatementofProfit&LossandBalanceSheetisasunder:- a) ExpensesrecognisedinStatementofprofitandloss:

b) Actualreturnonplanassetsis` 41.42 crore (previous year `38.99crore) c) TheamountrecognizedintheBalanceSheet:

OTHER NOTES (contd.)

176

Description GRATUITY PRMF Leave ODRB

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Present value of obligation as at the beginning of the year

468.85 429.21 256.80 219.33 332.80 313.26 15.14 14.26

Interest cost 37.51 36.48 20.54 18.64 26.62 25.06 1.21 1.21

Current Service Cost 25.54 23.75 9.44 8.23 21.27 19.38 0.78 0.74

Benefitspaid (30.44) (26.66) (7.65) (5.70) (59.94) (77.44) (0.85) (0.69)

Netactuarial(gain)/lossonobligation (23.98) 6.07 16.23 16.29 48.86 52.53 (0.26) (0.38)

Presentvalueofthedefinedbenefitobligation as at the end of the year

477.48 468.85 295.36 256.79 369.61 332.79 16.02 15.14

Description GRATUITY

Current Year Previous Year

Fair value of plan assets as at beginning of the year 467.08 423.01

Expectedreturnonplanassets 37.37 33.84

Contribution by employer 28.66 31.74

Benefitspaid (30.44) (26.65)

Actuarialgain/(loss) 4.05 5.14

Fair value of plan assets as at end of the year 506.72 467.08

d) Changesinthepresentvalueofthedefinedbenefitobligations:

e) Changesinthefairvalueofplanassets:

H. Other Employee Benefits Provision for Long Service Award amounting to `0.95crore(previousyear`1.24crore)hasbeenmadeonthebasisofactuarial

valuation at the year end. I. Plan Asset (Gratuity) Thedetailsoftheplanassetsatcostareasfollows:-

J. Actuarial Assumptions Principal assumptions used for actuarial valuation are: i) Methodused-Projectedunitcredit(PUC)(PreviousYear(PUC)) ii) Discountrate-8.00%(previousyear8.00%) iii) Expectedrateofreturnonassets(Gratuityonly)–8.00%(previousyear8.00%) iv) Futuresalaryincrease-6.50%(previousyear6.50%) Theestimateoffuturesalaryincreases,consideredinactuarialvaluation,takesintoaccount(i)inflation,(ii)Seniority(iii)Promotion

and(iv)Otherrelevantfactors,suchassupplyanddemandintheemploymentmarket.Furthertheexpectedreturnonplanassetsisdeterminedconsideringseveralapplicablefactorsmainlythecompositionofplanassets,assessedriskofassetmanagementandhistorical return for plan assets.

K. TheCompany’sbestestimateofcontributiontowardsgratuityforthefinancialyear2015-16isNil(previousyear`1.51crore) L.Theeffectofthepercentagepointincrease/decreaseinthemedicalcostofPRMFwillbeasunder:-

(` inCrore)

(` inCrore)

DescriptionSr. No.

(At Purchase Value) As at 31 March

2016 As at 31 March

2015

(` inCrore)

i) StateGovernmentSecurities 104.05 96.14ii) CentralGovernmentSecurities 129.44 121.24iii) CorporateBonds/Debentures 279.58 254.32iv) RBISpecialDeposit 5.13 5.13v) OtherAssets 12.75 13.97

Total:- 530.95 490.80 Less:ShareofPOSOCOintheplanAssets 24.23 23.72 Grand Total 506.72 467.08

OTHER NOTES (contd.)

177

Description Increase by Decrease by

Current Year Previous Year Current Year Previous Year

Service and Interest Cost 8.30 5.26 (3.25) (4.37)

Present value of obligation 68.68 60.24 (27.54) (24.38)

(` inCrore)

Description Current Year Previous YearGratuity i)Planassets–Loss/(Gain)ii)Obligation-Loss/(Gain)

4.0523.99

3.037.72

PRMFObligation–Loss/(Gain) (16.22) (10.44)

ODRBObligation–Loss/(Gain) 0.26 0.90

Leave Obligation–Loss/(Gain) (48.85) (50.97)

M. ExperienceAdjustments (` inCrore)

2.45 Disclosure as per AS 17-“ Segment Reporting” a) BusinessSegments Thecompany’sprincipalbusinessistransmissionofbulkpoweracrossdifferentStatesofIndia.However,telecomandconsultancy

businessarealsotreatedasareportablesegmentinaccordancewithpara28ofAS-17“SegmentReporting”. b) SegmentRevenueandExpense RevenuedirectlyattributabletothesegmentsisconsideredasSegmentRevenue.Expensesdirectlyattributabletothesegments

andcommonexpensesallocatedonareasonablebasisareconsideredassegmentexpenses. c) SegmentAssetsandLiabilities Segmentassetsincludealloperatingassetscomprisingofnetfixedassets,currentassetsandloanandadvances.Construction

work-in-progress,constructionstores&advancesandinvestmentsareincludedinunallocatedassets.Segmentliabilitiesincludeoperating liabilities and provisions.

Transmission Consultancy Telecom Elimination TotalCurrent

YearPrevious

YearCurrent

YearPrevious

YearCurrent

YearPrevious

YearCurrent

YearPrevious

YearCurrent

YearPrevious

YearRevenue: Revenue from Operations (including allocable other income)

20183.10 16742.40 473.34 387.73 393.23 276.56 21049.67 17406.69

Inter Segment Revenue 42.67 24.39 (42.67) (24.39)

Net Revenue from Operations 20183.10 16742.40 473.34 387.73 435.90 300.95 (42.67) (24.39) 21049.67 17406.69

Segment results 11919.00 9579.20 340.56 252.82 162.55 63.33 12422.11 9895.35UnallocatedInterestandOther Income 231.51 373.35

UnallocatedFinanceCosts 5034.89 3979.32

ProfitbeforeTax 7618.73 6289.38

ProvisionforTaxes 1592.01 1310.21

Profit after Tax 6026.72 4979.17

Other information:

Segment Assets 126171.06 98916.96 1703.82 1099.30 816.71 800.82 129691.59 100817.08

UnallocatedAssets 49737.33 57483.80

Total Assets 178428.92 158300.88

Segment Liabilities: 8272.46 6786.89 2776.46 1845.83 391.81 550.09 11440.73 9182.81

(`incrore)Segment Reporting

OTHER NOTES (contd.)

178

Transmission Consultancy Telecom Elimination TotalCurrent

YearPrevious

YearCurrent

YearPrevious

YearCurrent

YearPrevious

YearCurrent

YearPrevious

YearCurrent

YearPrevious

YearUnallocatedOtherLiabilities(includingloans) 124254.22 110951.48

Total liabilities 135694.95 120134.29

Depreciation and Amortisation 6091.26 4994.34 0.90 0.77 90.60 90.30 6182.76 5085.41Non-cashexpenditureotherthan Depreciation 0.56 24.18 2.88 0.46 4.53 19.57 7.97 44.21

CapitalExpenditure 25826.80 29740.87 1.10 0.26 28.00 53.82 25855.90 29794.95

d) Theoperationofthecompanymainlycarriedoutwithinthecountryandthereforethereisnoreportablegeographicalsegment.2.46 Disclosure as per AS -20 “ Earning Per Share” TheelementsconsideredincalculationofEarningsPerShare(BasicandDiluted)isgivenasunder:

2.47 Disclosure as per AS 18- “Related Party Disclosure” a) List of Related Parties:- i) Key Management Personnel Sh. I.S. Jha Chairman and Managing Director (w.e.f 10thNovember2015) Sh.R.N.Nayak ChairmanandManagingDirector(superannuatedon30thSeptember2015) Sh.R.T.Agarwal Director(Finance) Sh.RaviPSingh Director(Personnel) Sh.R.P.Sasmal Director(Operations) Smt. Divya Tandon Company Secretary ii) Subsidiaries:- Wholly Owned i) PowerSystemOperationCorporationLimited(POSOCO) ii) PowergridNMTransmissionLimited iii) PowergridVemagiriTransmissionLimited iv) PowergridVizagTransmissionLimited v) PowergridUnchaharTransmissionLimited vi) PowergridKalaAmbTransmissionLimited vii) PowergridJabalpurTransmissionLimited(erstwhileVindhyachalJabalpurTransmissionLimited) viii) PowergridWaroraTransmissionLimited(erstwhileGadarwada(A)TranscoLimited) ix) PowergridParliTransmissionLimited(erstwhileGadarwada(B)TranscoLimited) x) PowergridSouthernInterconnectorTransmissionSystemLimited.(erstwhileVemagiriIITransmissionLimited) xi) GridConductorsLimited* *Share Capital of `0.05crs inGridConductorsLimitedhasbeenpaid inApril2016.Howeverbasedoncontrolofcomposition

of board of directors by Power Grid Corporation of India Limited, the company has been considered as wholly owned subsidiary company.

iii) Joint Ventures:- i) PowerlinksTransmissionLimited ii) TorrentPowerGridLimited iii) JaypeePowergridLimited iv) ParbatiKoldamTransmissionCompanyLimited v) TeestavalleyPowerTransmissionLimited vi) NorthEastTransmissionCompanyLimited vii) NationalHighPowerTestLaboratoryPrivateLimited viii) EnergyEfficiencyServicesLimited. ix) BiharGridCompanyLimited x) KalingaBidyutPrasaranNigamPrivateLimited xi) CrossBorderPowerTransmissionCompanyLimited xii) PowerTransmissionCompanyNepalLtd xiii) RINLPowergridTLTPvt.Ltd

Description Current Year Previous Year

NetProfitaftertaxusedasnumerator(` incrore) 6026.72 4979.17

Weightedaveragenumberofequitysharesusedadenominator 5231589648 5231589648

Earningpershare(Basic&Diluted)(in`) 11.52 9.52

Face Value per share (in `) 10 10

OTHER NOTES (contd.)

179

b) Transactionswiththerelatedpartiesat2.47(a)aboveduringtheyearareasfollows:

Description Current Year Previous Year

Transactions for services received by the company 12.94 17.57

Power System Operation Corporation Limited 11.13 17.57

NationalHighPowerTestLaboratoryPrivateLimited 1.81 -

Transactions for services provided by the company 102.79 52.60

Jaypee Powergrid Limited - 0.19

North East Transmission Company Limited 12.18 18.39

NationalHighPowerTestLaboratoryPrivateLimited 29.42 7.93

PowerlinksTransmissionLimited 0.08 -

EnergyEfficiencyServicesLimited 0.15 0.24

Power System Operation Corporation Limited 7.07 4.90

Cross Border Power Transmission Company Limited 3.94 3.94

Bihar Grid Company Limited 30.38 16.76

KalingaVidyutPrasaranNigamPrivateLimited - 0.25

Teesta Valley Transmission Co Ltd 16.93 -

Power Transmission Company Nepal Limited 2.41 -

Power System Operation Corporation Limited 0.23 -

Amount recoverable at the end of the year 193.00 200.29

ParbatiKoldamTransmissionCompanyLimited - 0.01

North East Transmission Company Limited 21.50 22.21

NationalHighPowerTestLaboratoryPrivateLimited - 4.19

EnergyEfficiencyServicesLimited 0.13 0.25

Bihar Grid Company Limited 9.19 7.08

KalingaVidyutPrasaranNigamPrivateLimited 0.85 0.84

Power System Operation Corporation Limited 57.15 47.12

Powergrid Vemagiri Transmission Limited 19.37 19.37

Powergrid NM Transmission Limited 4.30 23.26

PowergridVizagTransmissionLimited 4.47 50.19

PowergridUnchaharTransmissionLimited 0.42 2.95

Cross Border Power Transmission Company Limited - 0.30

PowerlinksTransmissionLimited 0.06 0.10

PoweergridKalaAmbTransmissionLimited 0.04 4.08

Powergrid Jabalpur Transmission Limited 18.71 18.34

Power Transmission Company Nepal Limited 0.03 -

Grid Conductors Limited 0.08 -

PowergridWaroraTransmissionLimited 18.57 -

Powergrid Parli Transmission Limited 18.87 -

(` inCrore)

OTHER NOTES (contd.)

180

Description Current Year Previous Year

Powergrid Southern Interconnector Transmission System Limited 19.18 -

RINL Powergrid TLT Pvt. Ltd 0.08 -

Amount payable at the end of the year 56.25 51.84

ParbatiKoldamTransmissionCompanyLimited 0.09 0.09

NationalHighPowerTestLaboratoryPrivateLimited 5.36 -

PowerlinksTransmissionLimited 2.78 2.78

Bihar Grid Company Limited - 3.28

Cross Border Power Transmission Company Limited 7.58 1.70

Power System Operation Corporation Limited - 3.61

Teestavalley Power Transmission Limited 40.44 40.38

Investment made during the year

Equity 65.92 113.45

Teestavalley Power Transmission Limited 26.11 -

ParbatiKoldamTransmissionCompanyLimited - 14.71

Cross Border Power Transmission Company Limited 5.38 -

Bihar Grid Company Limited 30.28 10.00

NationalHighPowerTestLaboratoryPrivateLimited - 9.03

Powergrid NM Transmission Limited - 23.95

PowergridVizagTransmissionLimited - 54.68

PowergridKalaAmbTransmissionLimited - 0.05

Powergrid Jabalpur Transmission Limited - 0.05

Power Transmission Company Nepal Limited 3.90 0.98

PowergridWaroraTransmissionLimited 0.05 -

Powergrid Parli Transmission Limited 0.05 -

Powergrid Southern Interconnector Transmission System Limited 0.05 -

RINL Powergrid TLT Pvt. Ltd 0.10 -

Consultancy Income 29.27 -

PowergridUnchaharTransmissionCompanyLtd 0.12 -

PowergridKalaAmbTransmissionLimited 0.26 -

Powergrid Jabalpur Transmission Limited 2.03 -

PowergridWaroraTransmissionLimited 7.48 -

Powergrid Parli Transmission Limited 4.52 -

Powergrid Southern Interconnector Transmission System Limited 14.86 -

Loan Given 1159.72 229.70

Powergrid NM Transmission Limited 535.50 91.34

PowergridVizagTransmissionLimited 532.36 138.36

PowergridUnchaharTransmissionCompanyLtd 26.12 -

PowergridKalaAmbTransmissionLimited 30.31 -

OTHER NOTES (contd.)

181

Description Current Year Previous Year

Powergrid Jabalpur Transmission Limited 2.34 -

PowergridWaroraTransmissionLimited 12.17 -

Powergrid Parli Transmission Limited 5.28 -

Powergrid Southern Interconnector Transmission System Limited 15.64 -

Interest on Loan 49.23 3.41

Powergrid NM Transmission Limited 24.09 1.17

PowergridVizagTransmissionLimited 22.83 2.24

PowergridUnchaharTransmissionCompanyLtd 0.70 -

PowergridKalaAmbTransmissionLimited 1.60 -

Powergrid Jabalpur Transmission Limited 0.00 -

PowergridWaroraTransmissionLimited 0.00 -

Powergrid Parli Transmission Limited 0.00 -

Powergrid Southern Interconnector Transmission System Limited 0.01 -

Interest Accrued on Loan 25.45 3.41

Powergrid NM Transmission Limited 14.29 1.17

PowergridVizagTransmissionLimited 9.08 2.24

PowergridUnchaharTransmissionCompanyLtd 0.63 -

PowergridKalaAmbTransmissionLimited 1.44 -

Powergrid Jabalpur Transmission Limited 0.00 -

PowergridWaroraTransmissionLimited 0.00 -

Powergrid Parli Transmission Limited 0.00 -

Powergrid Southern Interconnector Transmission System Limited 0.00 -

Dividend Received 82.13 95.36

PowerlinksTransmissionLimited 44.72 44.14

Power System Operation Corporation Limited 20.07 15.32

Jaypee Powergrid Limited 4.68 12.87

Torrent Power Grid Limited 1.29 1.64

North East Transmission Company Limited 10.69 21.39

EnergyEfficiencyServicesLimited 0.68 -

Recovery for Deputation of Employees 0.35 0.67

EnergyEfficiencyServicesLimited - 0.02

Bihar Grid Company Limited - 0.35

Cross Border Power Transmission Company Limited 0.35 0.30

c) AsperCentralElectricityRegulatorycommission(CERC)(SharingofInterstateTransmissionchargesand losses)Regulation2010, theCompanybeingtheCentralTransmissionUtility(CTU)undertheregulationisentrustedwiththeresponsibilityoftheBilling,CollectionandDisbursementofTransmissionchargesonbehalfofallInterStateTransmissionSystem(ISTS)licensee.Accordingly,thetransactionsofthecompanyforcollectionmadeincapacityofCTUfortherelatedpartiesisasunder:

OTHER NOTES (contd.)

182

d)RemunerationtowholetimedirectorsincludingchairmanandmanagingdirectorandCompanySecretaryis 3.00crore(previousyear`2.90crore)andamountofduesoutstandingtothecompanyason31stMarch,2016are` 0.18 crore (previous year `0.19crore).

2.48 Disclosure as per AS 19-“Leases” a) Finance Leases :- Long Term Loans and Advances and Short Term Loans and Advances include lease receivables representing the present value of

futureleaserentalsreceivableonthefinanceleasetransactionsenteredintobythecompanywiththeconstituentsinrespectofStateSectorULDC.DisclosurerequirementsofAccountingStandard(AS)–19“Leases”notifiedundertheCompaniesAct,2013aregiven as under:

(i) Thereconciliationoftheleasereceivables(asperprojectcostdatasubmittedto/approvedbytheCERCfortarifffixation)is as under:

(ii) Detailsofgrossinvestmentinleaseandpresentvalueofminimumleasepaymentsreceivablesattheendoffinancialyearis given as under:

(iii) Theunearnedfinanceincomeasat31st March, 2016 is `110.35crore(previousyear`157.42crore). (iv) ThevalueofcontractualmaturityofsuchleasesasperAS-19areasunder:

Description Current Year Previous Year

TransactionsofthecompanyincapacityofCTUwiththerelatedparties 1054.89 789.29

ParbatiKoldamTransmissionCompanyLimited 163.13 21.73

Torrent Power Grid Limited 57.62 55.70

Jaypee Powergrid Limited 170.69 190.37

North East Transmission Company Limited 401.29 261.91

PowerlinksTransmissionLimited 260.98 259.58

PowergridVizagTransmissionLimited 1.18 -

Particulars Current Year Previous Year

Grossvalueofassetsacquiredandleasedatthebeginningoftheyear 1154.08 1099.56

Add Adjustmentforgrossvalueofassetsacquiredpriortothebeginningoftheyear (18.13) 21.92

Revised Gross value of the assets at the beginning of the year 1135.95 1121.48

Less Capital recovery provided up to the beginning of the year 782.26 706.45

Add Capitalrecoveryforassetsacquiredpriortothebeginningoftheyear (1.30) 6.65

Revised Capital recovery provided up to the beginning of the year 780.96 713.10

Capitalrecoveryoutstandingason31stMarchoflastfinancialyear 354.99 408.38

Add Grossvalueofassetsacquiredandleasedduringcurrentfinancialyear 75.95 32.60

Less Capital recovery for the current year 74.54 69.16

Lease receivables at end of the year 356.40 371.82

Particulars Current Year Previous Year

Gross investment in Lease 466.75 529.24

Un-earnedFinanceIncome 110.35 157.42

PresentvalueofMinimumLeasePayment(MLP) 356.40 371.82

(` inCrore)

(` inCrore)

(` inCrore)

(` inCrore)

Particulars Gross Investment in Lease Present Value of MLPs

As at 31st March, 2016

As at 31st March, 2015

As at 31st March, 2016

As at 31st March, 2015

Not later than one year 103.54 101.35 82.72 73.67

Laterthanoneyearandnotlaterthanfiveyears 186.22 245.46 132.63 173.49

Laterthanfiveyears 176.98 182.43 141.05 124.66

Total 466.74 529.24 356.40 371.82

OTHER NOTES (contd.)

183

(v) Therearedifferencesinbalanceleasereceivableasatyearendasperaccountsandtariffrecordsonaccountof: (a) Undischargedliabilitiesamountingto`68.52crore(PreviousYear`17.33crore).Suchcostbecomepartofprojectcostonly

on discharge of such liabilities. (b) UnamortizedFERVonloansincludedinleasereceivableamountingto`57.79crore(PreviousYear`61.14crore).SuchFERV

are allowed to be recovered as part of tariff on actual payment basis. b) Operating leases:- The company’s significant leasing arrangements are in respect of operating leases of premises for residential use of employees,

officesandguesthouses/transitcampsareusuallyrenewableonmutuallyagreedtermsbutarenotnon-cancellable.Employees’remunerationandbenefitsinclude`40.59crore(previousyear`31.87crore)towardsleasepayments,netofrecoveries,inrespectof premises for residential use of employees. Lease payments of `10.31crore(previousyear`10.52crore)inrespectofpremisesforofficesandguesthouse/transitcampsareshownundertheheadRentinNote2.30Transmission,AdministrationandOtherexpenses.

2.49 Disclosure as per AS-27-“ Financial Reporting of Interest in Joint Ventures”

*Refernote2.52(1)(v)(c) Thecompany’sshareinassets,liabilities,contingentliabilitiesandcapitalcommitmentason31stMarch2016andincomeandexpenses

fortheyearinrespectofabovejointventureentitiesbasedontheiraccountsaregivenbelow:-

Name of Joint Venture EntityProportion (%) of ownership as at

31st March, 2016 31st March, 2015A Joint Ventures Incorporated in India1 PowerlinksTransmissionLimited* 49% 49%2 Torrent Power Grid Limited 26% 26%

3 Jaypee Powergrid Limited 26% 26%

4 ParbatiKoldamTransmissionCompanyLtd 26% 26%

5 Teestavalley Power Transmission Limited 26% 26%

6 North East Transmission Company Limited 26% 26%

7 NationalHighPowerTestLaboratoryPrivateLimited 21.64% 20%

8 EnergyEfficiencyServicesLimited 13.63% 25%

9 Bihar Grid Company Limited 50% 50%

10 KalingaVidyutPrasaranNigamPrivateLimited 50% 50%

11 Cross Border Power Transmission Company Limited 26% 26%

12 RINL Powergrid TLT Pvt. Ltd 50% -

B Joint Ventures Incorporated Outside India

1 Power Transmission Company Nepal Limited 26% 26%

As at 31st March, 2016 As at 31st March, 2015A. Assets

lNon Current Assets lFixedAssets 2064.52 1766.63lLong term loans and advances 119.04 85.77

lCurrent Assets 332.05 333.96

Total 2515.61 2186.36

B. Liabilities

lNon current liabilities 1364.46 1232.61

lCurrent Liabilities 388.00 236.33

Total 1752.46 1468.94

C. Contingent Liabilities 40.48 31.55

D. Capital Commitments 493.84 579.59

Current Year Previous Year

E. Income 435.02 328.36

F. Expenses(Includingprovisionfortaxes) 393.54 203.21

(` inCrore)

TheabovefigurespertainingtoFY2015-16arecompiledbasedonunauditedaccountsexceptNationalHighPowerTestLaboratoryPrivate Limited.

OTHER NOTES (contd.)

184

Sr no Name of SPV 31.03.2016 31.03.20151 Powergrid NM Transmission Company Ltd 45.00 45.002 PowergridVizagTransmissionCompanyLtd 45.00 45.00

3 PowergridUnchaharTransmissionCompanyLtd 5.40 5.40

4 PowergridKalaAmbTransmissionLimited 5.96 5.96

5 Powergrid Jabalpur Transmission Limited 31.50 31.50

6 PowergridWaroraTransmissionLimited 62.10 -

7 Powergrid Parli Transmission Limited 63.90 -

8 Powergrid Southern Interconnector Transmission System Limited 110.04 -

2.50 Disclosure as per AS 28-“ Impairment of assets” InaccordancewithAccountingStandard(AS-28)“ImpairmentofAssets”, thecompanyhasassessedasontheBalanceSheetdate

whether there are any indications with regard to impairment of any of the assets. Based on such assessment, it has been ascertained thatnopotentiallossispresent.Accordingly,noimpairmentlosshasbeenprovidedinthebooksofaccounts.

2.51 Capital and Other Commitments i) Estimatedamountofcontractsremainingtobeexecutedoncapitalaccountandnotprovidedforis`23502.87crore(previousyear

`24189.22crore). ii) Asat31st March,2016, the company has commitment of `336.24crore(previousyear`427.61crore)towardsfurtherinvestment

injointventureentities. iii) As at 31st March,2016, the company has commitment of ` 12260.25 crore (previous year ` 4261.42 crore) towards further

investment in subsidiary companies.2.52 Contingent Liabilities 1. ClaimsagainsttheCompanynotacknowledgedasdebtsinrespectof: (i) Capital Works Someofthecontractorsforsupplyandinstallationofequipmentsandexecutionofworksatourprojectshavelodgedclaims

on the company for ` 1666.86 crore (previous year `219.14crore)seekingenhancementofthecontractprice,revisionofworkschedulewithpriceescalation,compensationfortheextendedperiodofwork,idlechargesetc.Theseclaimsarebeingcontested by the Company as being not admissible in terms of the provisions of the respective contracts.

The company is pursuing various options under the dispute resolution mechanism available in the contract for settlement of theseclaims.Itisnotpracticabletomakearealisticestimateoftheoutflowofresources,ifany,forsettlementofsuchclaimspending resolution.

(ii) Land Compensation cases Inrespectoflandacquiredfortheprojects,thelandlosershaveclaimedhighercompensationbeforevariousauthorities/

courts which are yet to be settled. In such cases, contingent liability of `4041.30crore(previousyear`2253.11crore)hasbeen estimated.

(iii) Other claims InrespectofclaimsmadebyvariousState/CentralGovernmentDepartments/Authoritiestowardsbuildingpermissionfees,

penaltyondiversionofagriculturelandtonon-agricultureuse,Nalatax,waterroyaltyetc.andbyothers,contingentliabilityof ` 28.66 crore (previous year `44.09crore)hasbeenestimated.

(iv) Disputed Income Tax/Sales Tax/Excise/Municipal Tax Matters DisputedIncomeTax/SalesTax/Excise/MunicipalTaxMattersamountingto`359.03crore(previousyear`391.22crore)are

being contested before various Appellate Authorities. Many of these matters are disposed off in favour of the company but are disputed before higher authorities by the concerned departments.

(v) Others a) Othercontingentliabilitiesamountsto`342.33crore(previousyear`303.56crore) b) SomeofthebeneficiarieshavefiledappealsagainstthetariffordersoftheCERC.Theamountofcontingentliabilityinthis

regard is not ascertainable. c) Under theTransmissionServiceAgreement (TSA)withPowerlinksTransmissionLtd, thecompanyhasanobligation to

purchasetheJVcompany(PowerlinksTransmissionLtd)atabuyoutpricedeterminedinaccordancewiththeTSA.SuchanobligationmayresultincaseJVcompany(PowerlinksTransmissionLtd)servesaterminationnoticeeitheron“POWERGRIDevent of default” or on “forcemajeure event” prescribedunderTSA.No contingent liability on this accounthasbeenconsidered as the same is not ascertainable.

2. a)Specialpurposevehicle(SPV)companies(whollyownedsubsidiaries)namelyPowergridNMTransmissionCompany,PowergridVemagiriTransmissionCompanyLtd.,PowergridVizagTransmissionLimited,PowergridUnchaharTransmissionLimited,PowergridKalaAmbTransmissionLimited,PowergridJabalpurTransmissionLimited,PowergridWaroraTransmissionLimited,PowergridParliTransmissionLimitedandPowergridSouthernInterconnectorTransmissionSystemLimitedhasbeentakenovertocarryoverthebusinessawardedunderTariffbasedbidding.DetailsofBankguaranteesgivenbythecompanyonbehalfofSPVcompaniestowardsperformanceoftheworkawardedareasunder:

(` inCrore)

OTHER NOTES (contd.)

185

b) TheCompanyhasgivenguaranteeforthedues&punctualpaymentanddischargeoftheobligationsamountingto`290croreagainstbondissuedbyPowergridVizagTransmissionCompanyLtd.

2.53. Foreign Currency Exposure Not hedged by a derivative instrument or otherwise

Particulars Amount in Foreign Currency (inCrore) Amount (` in Crore)31.03.2016 31.03.2015 31.03.2016 31.03.2015

Borrowings USD 416.87 412.01 27888.87 26034.82

EURO 11.17 4.33 848.22 297.12

SEK 314.14 250.27 2591.68 1841.97

JPY 199.95 218.13 119.47 115.04

Interest accrued but not due thereon including Agency FeeCommitmentFee&otherCharges.

USD 1.33 0.94 88.86 59.54

EURO 0.02 0.02 1.64 1.04

SEK 0.60 1.16 4.97 8.51

JPY 0.52 0.55 0.31 0.29

TradePayables/depositsandretentionmoney USD 8.50 10.79 568.85 679.18

EURO 1.70 7.92 128.85 543.53

SEK 19.81 114.61 163.40 843.58

CHF 0.00 0.03 0.00 1.51

GBP 1.19 0.64 114.64 58.71

TradereceivablesandBankbalances USD 0.08 0.22 5.37 13.78

NPR 0.09 0.07 0.06 0.04

Unexecutedamountofcontractsremainingtobeexecuted

USD 49.79 23.44 3331.02 1480.92

EURO 8.15 10.00 618.45 685.64

SEK 0.40 25.80 3.30 189.89

CHF 0.12 0.90 8.62 54.14

GBP 15.38 18.66 1481.71 1709.07

2.54 Guidance Note (GN) on Rate Regulated Activities issued by ICAI is applicable from the financial year 2015-16. The company is mainly engaged in Transmission of power. The price to be charged by the company for transmission of power to its

customerisdeterminedbytheCERCthroughtariffregulations.Thetariffisbasedoncostlikedepreciation,interest,returnonequity,operationandmaintenanceExpensesetc.Thisformofregulationisknownascostofserviceregulationswhichprovidesthecompanytorecoveritscostofprovidingtheservicesplusstipulatedreturn.ThecompanyhasadoptedGNinpreparationoffinancialstatementsforthe year, considering the provisions of tariff regulations issued by CERC.

TheCERCtariff regulationsprovide thatexchangedifferences arisingfromsettlement/ translationofmonetary itemsdenominatedinforeigncurrency(otherthanlongterm)arerecoverablefromorpayabletothebeneficiariesinsubsequentperiods.Suchexchangedifferencesarerecognizedas‘RegulatoryAsset/Liabilitybycredit/debitto‘Regulatoryincome/Expense’duringconstructionperiodandadjustedfromtheyearinwhichthesamebecomesrecoverablefromorpayabletobeneficiaries.

Theregulatedassets/liabilityrecognizedinthebookstoberecoveredfromorpayabletothebeneficiariesinfutureperiodsareasfollows:

Particulars Regulated Assets ( ` in crore )

A.OpeningBalanceason01.04.2015* 37.72

B.Addition/(deduction)duringtheyear (0.05)

C.Amountcollected/refundedduringtheyear 0.00

D.RegulatedIncome/(Expense)recognizedinthestatementofProfitandLoss(B-C)

(0.05)

E.ClosingBalanceason31.03.3016(A-D) 37.67

OTHER NOTES (contd.)

186

*Suchexchangedifferenceswerehithertoaccountedas ‘Deferred foreigncurrencyfluctuationasset/liability’ inaccordancewithanopinionbytheExpertAdvisorycommitteeoftheICAI.Therelatedfiguresforthepreviousyearhavebeenregrouped.

2.55 Disclosure as required by Clause 34 (3) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015: A. Loans and Advances in nature of Loans: 1. To Subsidiary Companies

2. Tofirms/companiesinwhichdirectorsareinterested:NIL 3. Wherethereisnorepaymentscheduleorrepaymentbeyondsevenyearsornointerestorinterestaspersection186ofThe

CompaniesAct2013:`1159.72Crore(PreviousYear`229.70Crore)(Repaymentschedulebeyondsevenyears) B. Investmentbytheloanee(asdetailedabove)inthesharesofPowerGridCorporationofIndiaLtd:NIL2.56 Corporate Social Responsibility Expenses (CSR) AsperSection135of theCompaniesAct,2013alongwithCorporateSocialResponsibilityRules,2014readwithDPEguidelinesno

F.No.15(13)/2013-DPE(GM),theCompanyisrequiredtospend,ineveryfinancialyear,atleasttwopercentoftheaveragenetprofitsoftheCompanymadeduringthethreeimmediatelyfinancialyearsinaccordancewithitsCSRPolicy.ThedetailsofCSRexpensesfortheyearareasunder:-

Name of the Company Outstanding balance as at Maximum amount outstanding during

31.03.2016 31.03.2015 31.03.2016 31.03.2015

Powergid NM Transmission Limited 535.50 91.34 535.50 91.34

PowergidVizagTransmissionLimited 532.36 138.36 532.36 138.36

PowergridUnchaharTransmissionCompanyLtd 26.12 - 26.12 -

PowergridKalaAmbTransmissionLimited 30.31 - 30.31 -

Powergrid Jabalpur Transmission Limited 2.34 - 2.34 -

PowergridWaroraTransmissionLimited 12.17 - 12.17 -

Powergrid Parli Transmission Limited 5.28 - 5.28 -

Powergrid Southern Interconnector Transmission System Limited 15.64 - 15.64 -

PARTICULARS AMOUNT

A.Amountrequiredtobespentduring2015-16 121.79

B.AmountspentonCSR-Revenueexpenses 88.17

-CapitalExpenses 27.61

C. Shortfall amount appropriated to CSR Reserve 6.01

D.Break-upoftheamountspentonCSR

1.EducationandSkillDevelopmentexpenses(Note2.30) 53.53

2.EcologyandEnvironmentExpenses(Note2.30) 4.44

3.HealthandSanitationexpenses(Note2.30) 27.71

4.Sports,ArtandCultureexpenses(Note2.30) 0.46

5.Miscellaneousexpenses(Note2.30) 0.31

6.Salaries,wagesandotherbenefitsofCompany’sownCSRpersonnellimitedto5%oftotalamountrequiredtobespentonCSR(Note2.27) 1.72

7.CapitalExpenditure 27.61

TOTAL 115.78

Amount spent on CSR

E. Total amount of `115.78crore,`115.26crorehasbeenspentincashandthebalanceamountof`0.52croreisyettobepaidincashasat31st March, 2016

(` inCrore)

(` inCrore)

2.57InviewofmassiveexpansionofbusinessconsideringuncertaintyofpayingnormaltaxMATcreditisnotrecognisedasanasset

OTHER NOTES (contd.)

187

2.58 a) VALUE OF IMPORTS CALCULATED ON CIF BASIS

b) EXPENDITURE IN FOREIGN CURRENCY (ON ACCRUAL BASIS)

Particulars Current Year Previous Yeari)CapitalGoods 2481.15 3718.56ii)SpareParts 16.23 13.28

Particulars Current Year Previous Yeari)Interest 410.66 341.71ii)Others 58.21 82.93

(`incrore)

(`incrore)

(`incrore)

(`incrore)

c) VALUE OF COMPONENTS, STORES AND SPARE PARTS CONSUMED :

d) EARNINGS IN FOREIGN EXCHANGE

Particulars Current Year Previous Year

Interest 0.01 0.19

Consultancy Fee 20.27 37.85

Particulars % Current Year % Previous Yeari)Imported 7.70% 13.77 9.91% 13.63ii)Indigenous(Includingfuel) 92.30% 165.01 90.09% 123.90

2.59 a)Figureshavebeenroundedofftonearestrupeesincroreuptotwodecimal. b)Previousyearfigureshavebeenregrouped/rearrangedwhereverconsiderednecessary.

OTHER NOTES (contd.)

Place: New DelhiDate: 26th May, 2016

(Divya Tandon)Company Secretary

(R.T. Agarwal)Director(Finance)

( I. S. Jha)Chairman&ManagingDirector

( CA. M.K. Juneja)Partner

M.No.013117

( CA. R.Rangarajan)Partner

M.No.041883

( CA.Manaswy Kothari )Partner

M.No. 064601

( CA.Indra Pal Singh )Partner

M.No.410433

For S.K. Mittal & Co.Chartered AccountantsFirm Regn No. 001135N

For R.G.N.Price & Co.Chartered AccountantsFirmRegnNo.002785S

For Kothari & Co.Chartered AccountantsFirmRegnNo.301178E

For Parakh & Co.Chartered AccountantsFirmRegnNo.001475C

For and on behalf of the Board of Directors

As per our report of even date

188

Independent Auditors’ ReportTo the Members of Power Grid Corporation of India Limited

Report on the Standalone Financial Statements

WehaveauditedtheaccompanyingstandalonefinancialstatementsofPower Grid Corporation of India Limited (“theCompany”),whichcomprisetheBalanceSheetasat31st March,2016,theStatementofProfitandLoss,theCashFlowStatementfortheyearthenended,andasummaryofthesignificantaccountingpoliciesandotherexplanatoryinformation,

Management’s Responsibility for the Standalone Financial Statements

TheCompany’sBoardofDirectorsisresponsibleforthemattersstatedinSection134(5)oftheCompaniesAct,2013(“theAct”)withrespecttothepreparationofthesestandalonefinancialstatementsthatgiveatrueandfairviewofthefinancialposition,financialperformanceandcashflowsoftheCompanyinaccordancewiththeaccountingprinciplesgenerallyacceptedinIndia,includingtheAccountingStandardsspecifiedunderSection133of theAct, readwithRule7of theCompanies (Accounts)Rules,2014.This responsibilityalso includesmaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsoftheActforsafeguardingoftheassetsoftheCompanyandforpreventinganddetectingfraudsandotherirregularities;selectionandapplicationofappropriateaccountingpolicies;makingjudgmentsandestimatesthatarereasonableandprudent;anddesign,implementationandmaintenanceofadequateinternalfinancialcontrols,thatwereoperatingeffectivelyforensuringtheaccuracyandcompletenessoftheaccountingrecords,relevanttothepreparationandpresentationofthefinancialstatementsthat give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Ourresponsibilityistoexpressanopiniononthesestandalonefinancialstatementsbasedonouraudit.WehavetakenintoaccounttheprovisionsoftheAct,theaccountingandauditingstandardsandmatterswhicharerequiredtobeincludedinthe audit report under the provisions of the Act and the Rules made there under.WeconductedourauditinaccordancewiththeStandardsonAuditingspecifiedunderSection143(10)oftheAct.ThoseStandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefree from material misstatement.Anaudit involvesperformingprocedures toobtainaudit evidenceabout theamounts and thedisclosures in thefinancial statements.Theprocedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalfinancialcontrolrelevanttotheCompany’spreparationofthefinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimatesmadebytheCompany’sDirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopiniononthestandalonefinancialstatements.

Opinion

Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,theaforesaidstandalonefinancialstatementsgivetheinformationrequiredbytheActinthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerally accepted in India:(a)inthecaseoftheBalanceSheet,ofthestateofaffairsoftheCompanyasat31stMarch,2016;(b)inthecaseoftheStatementofProfitandLoss,oftheprofitfortheyearendedonthatdate;(c)inthecaseoftheCashFlowStatement,ofthecashflowsfortheyearendedonthatdate.

Emphasis of Matter

WedrawattentiontothefollowingmattersintheNotestotheFinancialStatements:(a) NoteNo.2.25(b)inrespectofprovisionalrecognitionofrevenuefromtransmissioncharges.(b) NoteNo.2.34(a)inrespectofBalanceconfirmation,reconciliationandconsequentialadjustments,ifany,ofTradeReceivableand

Recoverable and Trade and Other Payables.Ouropinionisnotmodifiedinrespectofthesematters.Report on Other Legal and Regulatory Requirements 1. AsrequiredbytheCompanies(Auditor’sReport)Order,2016(“theOrder”),issuedbytheCentralGovernmentofIndiaintermsofsub-

section(11)ofSection143oftheAct,wegiveintheAnnexure ‘1’astatementonthemattersspecifiedinparagraphs3and4oftheOrder,totheextentapplicable.

189

2. Intermsofsubsection(5)ofsection143oftheCompaniesAct,2013,wegiveintheAnnexure‘2’ a statement on the directions issued under the aforesaid section by the Comptroller and Auditor General of India.

3. Asrequiredbysection143(3)oftheAct,wereportthat: a. Wehavesoughtandobtainedalltheinformationandexplanationswhichtothebestofourknowledgeandbeliefwerenecessaryfor

thepurposesofouraudit; b.Inouropinion,properbooksofaccountasrequiredbylawhavebeenkeptbytheCompanysofarasitappearsfromourexamination

ofthosebooks; c. TheBalanceSheet,theStatementofProfitandLossandtheCashFlowStatementdealtwithbythisReportareinagreementwiththe

booksofaccount; d.Inouropinion,theaforesaidstandalonefinancialstatementscomplywiththeAccountingStandardsspecifiedundersection133ofthe

Act,readwithRule7oftheCompanies(Accounts)Rules,2014; e. Onthebasisofthewrittenrepresentationsreceivedfromthedirectorsason31stMarch,2016,andtakenonrecordbytheBoardof

Directors,noneofthedirectorsisdisqualifiedason31stMarch,2016,frombeingappointedasadirectorintermsofsection164(2)ofthe Act.

f. WithrespecttotheadequacyoftheinternalfinancialcontrolsoverfinancialreportingoftheCompanyandtheoperatingeffectivenessof such controls, refer to our separate report in Annexure ‘3’.

g.WithrespecttotheothermatterstobeincludedintheAuditor’sReport inaccordancewithRule11oftheCompanies(AuditandAuditors)Rules,2014,inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous:

i. TheCompanyhasdisclosedtheimpactofpendinglitigationsonitsfinancialpositioninitsfinancialstatements–ReferNote2.38and2.52tothefinancialstatements;

ii. TheCompanydidnothaveanylong-termcontractsincludingderivativecontractsforwhichtherewereanymaterialforeseeablelosses;

iii. Therehasbeennodelayintransferringamounts,requiredtobetransferred,totheInvestorEducationandProtectionFundbythe Company.

Place : New DelhiDate : 26th May, 2016

For S.K. Mittal & Co. Chartered AccountantsFirm Regn No. 001135N

( CA. M.K.Juneja)Partner

M.No.013117

For R.G.N.Price & Co.Chartered AccountantsFirmRegnNo.002785S

( CA. R.Rangarajan )Partner

M.No.041883

For Kothari & Co.Chartered AccountantsFirmRegnNo.301178E

( CA.Manaswy Kothari )Partner

M.No. 064601

For Parakh & Co.Chartered AccountantsFirmRegnNo.001475C

( CA.Indra Pal Singh )Partner

M.No.410433

190

Annexure ‘1’AsreferredtoinourIndependentAuditors’ReporttothemembersofthePower Grid Corporation of India Limited (‘the Company’), on thestandalonefinancialstatementsfortheyearended31stMarch,2016,wereportthat:

(i) a)TheCompanyhasgenerallymaintainedrecords,showingfullparticularsincludingquantitativedetailsandsituationofFixedAssets. b)Thefixedassetshavebeenphysicallyverifiedbyexternalagenciesduringtheyear.Inouropinion,frequencyofverification is

reasonablehavingregardtothesizeoftheCompanyandnatureofitsbusiness.Nomaterialdiscrepancieswerenoticedonsuchverification.

c)InouropinionandaccordingtoinformationandexplanationsgiventousandonthebasisofanexaminationoftherecordsoftheCompany,thetitledeedsofimmovablepropertiesareheldinthenameoftheCompanyexcept:

(ii) Theinventorieshavebeenphysicallyverifiedbyexternalagenciesduringtheyear.Inouropinion,frequencyofverificationisreasonablehavingregardtothesizeoftheCompanyandnatureofitsbusiness.Nomaterialdiscrepancieswerenoticedonsuchverification.

(iii) Accordingtotheinformationandexplanationsgiventous,theCompanyhasgrantedunsecuredloanstowhollyownedsubsidiariescoveredintheregistermaintainedundersection189oftheCompaniesAct,2013(‘theAct’).

a) Thetermsandconditionsonwhichloanshavebeengrantedtotheborrowercompaniescoveredundersection189oftheActarenot,primafacie,prejudicialtotheinterestofthecompany.

b) Thescheduleofrepaymentofprincipalandpaymentofinteresthasbeenstipulatedandtherepaymentsandreceiptsareregular. c) Therearenooverdueamountsofmorethan90daysinrespectofloansgrantedtothecompanieslistedintheregistermaintained

undersection189oftheAct.(iv) Inouropinionandaccordingtoinformationandexplanationgiventous,thecompanyhascompliedwithprovisionsofsection185and

186 of the Act in respect of loans, investments, guarantees and security. (v) Inouropinionandaccordingtotheinformationandexplanationsgiventous,theCompanyhasnotacceptedanydepositfromthe

publicinaccordancewiththeprovisionsofthesections73to76oranyotherrelevantprovisionsoftheAct,andtherulesframedthereunder.Accordingly,paragraph3(v)oftheorderisnotapplicabletotheCompany.

(vi)WehavebroadlyreviewedthecostrecordsmaintainedbytheCompanyspecifiedbytheCentralGovernmentundersubsection(1)ofsection148oftheCompaniesAct,2013,inrespectofTransmission&TelecomOperationsoftheCompanyandweareoftheopinionthatprimafacietheprescribedrecordshavebeenmadeandmaintained.Wehave,however,notmadedetailedexaminationofthecost records with a view to determine whether they are accurate or complete.

(vii) a) Accordingtotheinformationandexplanationsgiventous,theCompanyisgenerallyregularindepositingundisputedstatutorydueswithappropriateauthoritiesincludingProvidentFund,IncomeTax,SalesTax,WealthTax,ServiceTax,DutyofCustom,DutyofExcise,ValueAddedTax,CessandotherstatutoryduesapplicabletotheCompanyandthattherearenoundisputedstatutoryduesoutstandingasat31stMarch,2016foraperiodofmorethansixmonthsfromthedatetheybecamepayable.Asinformed,provisions of the Employees State Insurance Act are not applicable to the Company.

b) Accordingtoinformationandexplanationsgiventous,therearenodisputedduesofDutyofCustomsorDutyofExcisewhichhavenotbeendeposited.However,followingdisputeddemandsofIncomeTaxorSalesTaxorServiceTaxorValueAddedTaxorCess dues have not been deposited:

No. of Cases Gross Block Net Block Remarks

Leasehold Land 12 49.57 42.39 ---

Freehold Land 36 212.60 212.60 ---

Buildings 28 7.27 2.64 Flats in Mumbai

Annexure to the Independent Auditors’ Report

Name of the Statute

Nature of dues

Amount* (` in Crore)

Period to which the amount relates Forum where dispute is pending

IncomeTaxAct,1961 IncomeTax 10.23 2004-05,2005-06,2008-09,2009-10,2010-11 ITAT, Delhi

IncomeTaxAct,1961 IncomeTax 10.86 2008-09,2009-10,2011-12,2012-13 CIT(A)Delhi

IncomeTaxAct,1961 IncomeTax 8.74 2007-08to2014-15 JurisdictionalAssessingOfficersofTANs

IncomeTaxAct,1961 IncomeTax 1.15 2006-07,2007-08,2008-09,2012-13,2015-16 JurisdictionalAssessingOfficer,Delhi

FinanceAct,1994 ServiceTax 1.57 2003-04 CESTAT,Kolkata

FinanceAct,1994 ServiceTax 1.89 2007-08,2008-09 Commissioner(CentralExcise),Bhubaneswar

J&KGSTAct,1962 SalesTax 50.88 1995-96to2001-02 SalesTaxAppellateTribunal,J&K

191

Name of the Statute

Nature of dues

Amount* (` in Crore)

Period to which the amount relates Forum where dispute is pending

J&KGSTAct,1962 SalesTax 72.99 2002-03to2010-11 Dy.CommissionerofSalesTax(appeals)Jammu,J&K

PunjabVatAct,2005 EntryTax 9.64 2011-12to2013-14 Hon'ableHighCourtPunjab&Haryana,

Building and Other ConstructionWorkersWelfareCessAct,1996

Cess 3.85 2007-08 Hon'ableHighCourt,HimachalPradesh,Shimla

Total 171.80

(viii)Inouropinionandaccordingto the informationandexplanationsgiventous theCompanyhasnotdefaultedduringtheyear inrepaymentofloanstoitsfinancialinstitutions,bankersandduestotheBondholders.

(ix) Inouropiniononanoverallbasisandaccordingtotheinformationandexplanationsgiventous,theCompanyhasappliedthetermloans including funds raised through bonds for the purpose they were obtained. The Company has raised funds by issuance of debt instruments(bonds)duringtheyear.TheCompanyhasnotraisedmoneybywayofinitialpublicofferorfurtherpublicofferduringthe year.

(x) Accordingtotheinformationandexplanationsgiventousandasrepresentedbythemanagement,wehavebeeninformedthatnocase of frauds has been committed on or by the Company during the year.

(xi) Accordingtotheinformationandexplanationsgiventousmanagerialremunerationhasbeenpaidorprovidedinaccordancewiththerequisiteapprovalmandatedbytheprovisionsofsection197readwithscheduleVtotheAct.

(xii) TheCompanyisnotaNidhiCompanyasprescribedundersection406oftheAct.Accordingly,paragraph3(xii)oftheorderisnotapplicable to the Company.

(xiii)Accordingtotheinformationandexplanationsgiventousandasrepresentedbythemanagement,alltransactionswiththerelatedpartiesareincompliancewithsections177and188oftheAct,whereapplicableandthedetailshavebeendisclosedinthefinancialstatementsasrequiredbytheapplicableaccountingstandards.

(xiv)AccordingtotheinformationandexplanationsgiventousandbasedonourexaminationoftherecordsoftheCompany,theCompanyhas not made any preferential allotment or private placement of shares or fully or party convertible debentures during the year.

(xv) AccordingtotheinformationandexplanationsgiventousandbasedonourexaminationoftherecordsoftheCompany,theCompanyhasnotenteredintonon-cashtransactionswithdirectorsorpersonsconnectedwiththem.

(xvi)AccordingtotheinformationandexplanationsgiventoustheCompanyisnotrequiredtoberegisteredundersection45IAoftheReserveBankofIndiaAct,1934.Accordingly,paragraph3(xvi)isnotapplicabletotheCompany.

Place: New DelhiDate: 26th May, 2016

For S.K. Mittal & Co. Chartered AccountantsFirm Regn No. 001135N

( CA. M.K.Juneja)Partner

M.No.013117

For R.G.N.Price & Co.Chartered AccountantsFirmRegnNo.002785S

( CA. R.Rangarajan )Partner

M.No.041883

For Kothari & Co.Chartered AccountantsFirmRegnNo.301178E

( CA.Manaswy Kothari )Partner

M.No. 064601

For Parakh & Co.Chartered AccountantsFirmRegnNo.001475C

( CA.Indra Pal Singh )Partner

M.No.410433

* Demand amount including interest, net of amount paid under protest.

192

Place: New DelhiDate: 26th May, 2016

For S.K. Mittal & Co. Chartered AccountantsFirm Regn No. 001135N

( CA. M.K.Juneja)Partner

M.No.013117

For R.G.N.Price & Co.Chartered AccountantsFirmRegnNo.002785S

( CA. R.Rangarajan )Partner

M.No.041883

For Kothari & Co.Chartered AccountantsFirmRegnNo.301178E

( CA.Manaswy Kothari )Partner

M.No. 064601

For Parakh & Co. Chartered AccountantsFirmRegnNo.001475C

( CA.Indra Pal Singh )Partner

M.No.410433

Annexure ‘2’AnnexurereferredtoinourreportofevendatetothemembersofPower Grid Corporation of India Limited (‘theCompany)ontheaccountfortheyearended31st March 2016.

S. No.

Directions Auditor’s comments Action taken by management

Impact on financial statements

1. Whether the company has clear title /lease deeds for freehold and leasehold landrespectively? Ifnot,pleasestate thearea of the freehold and leasehold land for whichtitle/leasedeedsarenotavailable.

The Company is having clear title/deedsfor freehold and leasehold land except452.04 hectares of freehold land valuingRs. 212.60 Crores and 323.56 hectaresacresof leasehold landvaluingRs.49.57Crores.

The company is taking appropriatesteps for getting clear title for such freehold and leasehold land.

Nil

2. Whether there are any cases ofwaiver /writeoffofdebts/loans/interestetc.Ifyes, the reasons thereof and the amount involved.

According to the information and explanations given to us, there are nocasesofwaiver/writeoffofdebts/loans/interestetc.

N.A. Nil

3. Whetherproperrecordsaremaintainedforinventorieslyingwiththirdparties&assetsreceivedasgift,grant(s)fromtheGovt.orother authorities.

The company has maintained adequaterecords in respect of inventories lying with third parties and grant(s) received fromthe Govt. or other authorities. No assets have been received by the company as gift from Govt. or other authorities.

Proper records are maintained

Nil

193

ANNEXURE – 3 AsreferredtoinourIndependentAuditors’ReporttothemembersofthePower Grid Corporation of India Limited (‘the Company’), onthestandalonefinancialstatementsfortheyearended31st March, 2016Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the act”)WehaveauditedtheinternalfinancialcontrolsoverfinancialreportingofthecompanyasatMarch31,2016inconjunctionwithourauditofthefinancialstatementsoftheCompanyfortheyearendedonthatdate.Management’s Responsibility for Internal Financial ControlsTheCompany’smanagementisresponsibleforestablishingandmaintaininginternalfinancialcontrolbasedon“theinternalcontroloverfinancialreportingcriteriaestablishedbytheCompanyconsideringtheessentialcomponentsofinternalcontrolstatedintheGuidanceNoteonAuditofInternalFinancialControlsoverFinancialReportingissuedbytheInstituteofCharteredAccountantsofIndia(ICAI)”.Theseresponsibilitiesincludethedesign,implementationandmaintenanceofadequateinternalfinancialcontrolsthatwereoperatingeffectivelyforensuringtheorderlyandefficientconductofbusiness,includingadherencetoCompany’spolicies,thesafeguardingofitsassets,theprevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliablefinancialinformation,asrequiredundertheAct.Auditors’ ResponsibilityOurresponsibilityistoexpressanopinionontheCompany’sinternalfinancialcontrolsoverfinancialreportingbasedonouraudit.Weconducted our audit in accordance with the Guidance Note on Audit of Internal Financial Control over Financial Reporting (the “Guidance Note”)andtheStandardsonAuditing,issuedbyICAIanddeemedtobeprescribedundersection143(10)oftheCompaniesAct,2013,totheextentapplicabletoanauditofinternalfinancialcontrols,bothapplicabletoanauditofInternalFinancialControlsand,bothissuedbytheInstituteofCharteredAccountantsofIndia.ThoseStandardsandtheGuidanceNoterequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetheradequateinternalfinancialcontrolsoverfinancialreportingwas established and maintained and if such controls operated effectively in all material respects.Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controls systemoverfinancialreportingandtheiroperatingeffectiveness.Ourauditofinternalfinancialcontrolsoverfinancialreportingincludedobtaininganunderstandingof internalfinancialcontrolsoverfinancialreporting,assessingtheriskthatamaterialweaknessexistsandtestingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedontheassessedrisk.Theproceduresselecteddependontheauditor’sjudgement,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.WebelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinionontheCompany’sinternalfinancialcontrolssystemoverfinancialreporting.Meaning of Internal Financial Controls over Financial ReportingAcompany’sinternalfinancialcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples.Acompany’sinternalfinancialcontroloverfinancialreportingincludesthosepoliciesandproceduresthat:(1)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(2)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresoftheCompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthecompany;and(3)providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,use,ordispositionoftheCompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.Inherent Limitations of internal Financial Controls over Financial ReportingBecauseoftheinherentlimitationsofinternalfinancialcontrolsoverfinancialreporting,includingthepossibilityofcollusionorimpropermanagementoverrideofcontrols,materialmisstatementsduetoerrororfraudmayoccurandnotbedetected.Also,projectionsofanyevaluationoftheinternalfinancialcontrolsoverfinancialreportingtofutureperiodsaresubjecttotheriskthattheinternalfinancialcontrolsoverfinancialreportingmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorprocedures may deteriorate.OpinionInouropinion,theCompanyhas,inallmaterialrespects,anadequateinternalfinancialcontrolssystemoverfinancialreportingandsuchinternalfinancialcontrolsoverfinancialreportingwereoperatingeffectivelyasat31stMarch,2016,basedon“theinternalfinancialcontrolsoverfinancialreportingcriteriaestablishedbytheCompanyconsideringtheessentialcomponentsofinternalcontrolstatedintheGuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.”

Place: New DelhiDate: 26th May, 2016

For S.K. Mittal & Co. Chartered AccountantsFirm Regn No. 001135N

( CA. M.K.Juneja)Partner

M.No.013117

For R.G.N.Price & Co.Chartered AccountantsFirmRegnNo.002785S

( CA. R.Rangarajan )Partner

M.No.041883

For Kothari & Co.Chartered AccountantsFirmRegnNo.301178E

( CA.Manaswy Kothari )Partner

M.No. 064601

For Parakh & Co.Chartered AccountantsFirmRegnNo.001475C

( CA.Indra Pal Singh )Partner

M.No.410433

194

Place: New DelhiDate: 26th May, 2016

(Divya Tandon)Company Secretary

(R.T. Agarwal)Director(Finance)

( I.S.Jha) Chairman&ManagingDirector

( CA. Gaurav Mittal)Partner

M.No.099387

( CA. R.Rangarajan )Partner

M.No.041883

( CA.Manaswy Kothari ) Partner

M.No. 064601

( CA.Indra Pal Singh )Partner

M.No.410433

I. EQUITY AND LIABILITIESShareholders’ funds (a) Sharecapital 2.1 5231.59 5231.59(b) Reservesandsurplus 2.2 37736.09 33207.14 42967.68 38438.73Deferred revenue 2.3 5773.29 4812.59Non-current liabilities (a) Long-termborrowings 2.4 101775.73 90492.47(b) Deferredtaxliabilities(Net) 2.5 2524.51 2490.45(c) Otherlongtermliabilities 2.6 1379.53 1110.15(d) Long-termprovisions 2.7 686.45 610.50 106366.22 94703.57Current liabilities (a) Short-termborrowings 2.8 2002.90 1206.49(b) Tradepayables 2.9 344.00 430.19(c) Othercurrentliabilities 2.10 23056.60 20016.60(d) Short-termprovisions 2.11 1408.85 1156.11 26812.35 22809.39Total 181919.54 160764.28II. ASSETS Non-current assets (a) Fixedassets (i)Tangibleassets 2.12 115876.14 90385.78 (ii)Intangibleassets 2.13 1011.09 805.28 (iii)Capitalworkinprogress 2.14 35610.74 40262.76 (iv)Intangibleassetsunderdevelopment 2.15 172.11 213.28 152670.08 131667.10(b) Constructionstores 2.16 10350.69 13205.24(c) Non-currentinvestments 2.17 14.50 19.49(d) Deferredforeigncurrencyfluctuationasset 3831.75 2803.82(e) RegulatoryAssets 37.67 37.72(f) Long-termloansandadvances 2.18 3886.72 4147.11(g) Othernon-currentassets 2.18A 1.55 0.02 7772.19 7008.16Current assets (a) Currentinvestments 2.19 25.27 200.10(b) Inventories 2.20 848.23 718.84(c) Tradereceivables 2.21 2822.11 2206.96(d) CashandBankbalances 2.22 3587.86 2988.55(e) Short-termloansandadvances 2.23 679.95 424.52(f) Othercurrentassets 2.24 3163.16 2344.81 11126.58 8883.78Total 181919.54 160764.28Accounting Policies 1 Notes on Accounts 2 Notes referred above are integral part of the Balance Sheet

Particulars

Consolidated Balance Sheet as at 31st March, 2016

As At 31st March, 2016

Note No. As At 31st March, 2015

(` in Crore)

For S.K. Mittal & Co.Chartered AccountantsFirm Regn No. 001135N

For R.G.N.Price & Co.Chartered AccountantsFirmRegnNo.002785S

For Kothari & Co.Chartered AccountantsFirmRegnNo.301178E

For Parakh & Co.Chartered Accountants

FirmRegnNo.001475C

For and on behalf of the Board of Directors

As per our report of even date

Consolidated Account

195

I. Revenuefromoperations 2.25 21352.32 17658.51II. Other income 2.26 428.44 574.53III. Total Revenue (I + II) 21780.76 18233.04

IV. Expenses: Employeebenefitsexpense 2.27 1084.61 1124.41 Finance costs 2.28 5085.95 4081.23Depreciationandamortizationexpense 2.29 6302.18 5173.33Transmission,administrationandotherExpenses 2.30 1662.15 1407.90Priorperioditems(net) 2.31 0.87 47.19Total expenses 14135.76 11834.06

V. Profit before extraordinary items , Rate Regulated Activities and tax (III - IV) 7645.00 6398.98

VI. Extraordinary items-(Income)/Expenses 2.37 - (5.13)

VII. Profit before tax and Rate Regulated Activities (V-VI) 7645.00 6404.11

VIII.Add:RegulatoryIncome/(Expense) (0.05) -

IX. Profit before tax (VII-VIII) 7644.95 6404.11

X. Tax expense:(1) Currenttax -CurrentYear 1618.62 1345.90 -Earlieryears (20.41) (0.82) 1598.21 1345.08(2) CreditforMATentitelment (11.12) (24.21)(3) Deferredtax- 1860.60 839.01 Less:DeferredAssetfordeferredtaxliability 2.5 1817.30 802.02 43.30 36.99 1630.39 1357.86

VII. Profit for the year (V-VI) 6014.56 5046.25VIII.Earningsperequityshare(Parvalue`10/-each): 2.48 Basic&DilutedbeforeextraordinaryItem(`) 11.50 9.64 Basic&DilutedafterextraordinaryItem(`) 11.50 9.65

Accounting Policies 1 Notes on Accounts 2 NotesreferredaboveareintegralpartoftheStatementofProfitandLoss Therearenoexceptionalorextraordinaryitemsintheaboveperiods

Particulars

Consolidated Statement of Profit and Loss for the year ended 31st March, 2016(` inCrore)

Note No. For the year ended 31st March, 2016

For the year ended 31st March, 2015

Total revenue, total expenses and Profit after Tax includes `435.02 crore (previous year `328.36 crore), `317.57 crore (previous year `187.23crore)and`41.48 crore (previous year `125.16crore)respectivelytowardsshareofjointlycontrolledentities.

Consolidated Account

Place: New DelhiDate: 26th May, 2016

(Divya Tandon)Company Secretary

(R.T. Agarwal)Director(Finance)

( I.S.Jha) Chairman&ManagingDirector

( CA. Gaurav Mittal)Partner

M.No.099387

( CA. R.Rangarajan )Partner

M.No.041883

( CA.Manaswy Kothari ) Partner

M.No. 064601

( CA.Indra Pal Singh )Partner

M.No.410433

For S.K. Mittal & Co.Chartered AccountantsFirm Regn No. 001135N

For R.G.N.Price & Co.Chartered AccountantsFirmRegnNo.002785S

For Kothari & Co.Chartered AccountantsFirmRegnNo.301178E

For Parakh & Co.Chartered Accountants

FirmRegnNo.001475C

For and on behalf of the Board of Directors

As per our report of even date

196

A. CASH FLOW FROM OPERATING ACTIVITIES NetProfitBeforeTax 7644.95 6404.11 Less:RateRegulatedIncome/(Expenditure) (0.05) - 7645.00 6404.11 Adjustment for :Depreciation(includingpriorperiod) 6242.11 5173.33TransferfromGrantsinAid (22.20) (21.86)ReceiptofGrant 58.00 0.00Deferredrevenue-AdvanceagainstDepreciation (143.00) (79.50)Provisions 7.50 43.95ChangeinpreviousyearprofitofJVsandSubsidiarieafterAudit (47.56) (20.98)TransferfromSelfInsuranceReserve (5.29) (20.21)NetLossonDisposal/WriteoffofFixedAssets (0.47) (1.32)InterestandFinanceCharges 5097.87 4081.23ProvisionsWrittenBack (21.80) (5.52)FERVloss/(gain) 4.80 0.00InterestearnedonDeposits,BondsandloanstoStateGovts. (123.78) (316.46)Dividendreceived (2.64) (2.41) 11043.54 8830.25Operating profit before Working Capital Changes 18688.54 15234.36 Adjustment for : (Increase)/DecreaseinInventories (129.39) (25.29)(Increase)/DecreaseinTradeReceivables (608.92) (608.75)(Increase)/DecreaseinLoansandAdvances (333.00) (30.82)(Increase)/DecreaseinOthercurrentassets (826.39) (626.38)Increase/(Decrease)inLiabilities&Provisions 1397.01 2855.18(Increase)/DecreaseinDeferredForeignCurrencyFluctuationAsset/Liability(Net) 236.93 153.68(Increase)/DecreaseinRateRegulatedAssets 0.05 (263.71) 1717.62Cash generated from operations 18424.83 16951.98 Directtaxespaid (1524.83) (1151.90)Net Cash from operating activities 16900.00 15800.08 B. CASH FLOW FROM INVESTING ACTIVITIES Fixedassets(includingincidentalexpenditureduringconstruction) (541.67) (1205.78)Capitalworkinprogress (25066.98) (28653.99)ConstructionStores&AdvancesforCapitalExpenditure 3208.02 4881.71(Increase)/DecreaseinInvestments 179.82 203.85(Increase)/DecreaseinLongTermLoansunderSecuritisationScheme 15.43 23.14Leasereceivables (32.43) 97.93InterestearnedonBondsandloanstoStateGovts. 131.80 386.03DividendfromJVCompanies(Adj.throughSurplusAccount) 82.13 80.04Dividend received 2.64 2.41 Net cash used in investing activities (22021.24) (24184.66)

Particulars

Consolidated Cash Flow Statement for the Year ended 31st March, 2016

For the year ended 31st March, 2016

For the year ended 31st March, 2015

(` in Crore)

Consolidated Account

197

Particulars

Consolidated Cash Flow Statement for the Year ended 31st March, 2016 (contd...)

For the year ended 31st March, 2016

For the year ended 31st March, 2015

(` in Crore)

C. CASH FLOW FROM FINANCING ACTIVITIES Loansraisedduringtheyear 17969.23 17968.04Loansrepaidduringtheyear (6093.09) (6461.05)InterestandFinanceChargesPaid (4767.67) (3781.61)Dividendpaid (1152.28) (1123.64)DividendTaxpaid (235.64) (202.98)Net Cash from Financing Activities 5720.55 6398.76 D.NetchangeinCashandCashequivalents(A+B+C) 599.31 (1985.82)E.CashandCashequivalents(Openingbalance) 2988.55 4974.37F.CashandCashequivalents(Closingbalance) 3587.86 2988.55

Cashandcashequivalents 1940.68 2530.20

OtherBankbalances(*) 1647.18 458.35

3587.86 2988.55

(*)BreakupofOtherBankbalances

1.Balanceincurrentaccounts(unclaimeddividend)# 10.29 10.39

2.InCurrentaccounts/FlexiDeposits(OperatedandmaintainedintermsofCERCregulations) 646.88 319.43

3.Intermdepositshavingmaturityover3months 990.01 128.53

1647.18 458.35

Notes: Cash and cash equivalents consists of Cash in hand and balances with banks. Cash and cash equivalents included in the cash flow statement comprise of following balance sheet amounts as per Note 2.22.

#EarmarkedbalancewithBankincludesunpaiddividendandrefundofFPOproceedsPrevious year figures have been re-grouped / re-arranged wherever necessary.

Consolidated Account

Place: New DelhiDate: 26th May, 2016

(Divya Tandon)Company secretary

(R.T. Agarwal)Director(Finance)

( I.S.Jha) Chairman&ManagingDirector

( CA. Gaurav Mittal)Partner

M.No.099387

( CA. R.Rangarajan )Partner

M.No.041883

( CA.Manaswy Kothari ) Partner

M.No. 064601

( CA.Indra Pal Singh )Partner

M.No.410433

For S.K. Mittal & Co.Chartered AccountantsFirm Regn No. 001135N

For R.G.N.Price & Co.Chartered AccountantsFirmRegnNo.002785S

For Kothari & Co.Chartered AccountantsFirmRegnNo.301178E

For Parakh & Co.Chartered Accountants

FirmRegnNo.001475C

For and on behalf of the Board of Directors

As per our report of even date

198

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS Thefinancialstatementsarepreparedonaccrualbasisofaccountingunderthehistoricalcostconvention,inaccordancewithgenerally

acceptedaccountingprinciplesinIndia,therelevantprovisionsoftheCompaniesAct,2013(totheextentnotified),theCompaniesAct,1956(totheextentapplicable)includingAccountingStandardsnotifiedthereunderandtheprovisionsoftheElectricityAct,2003totheextentapplicable.

1.2 USE OF ESTIMATES Thepreparationoffinancialstatements requiresestimatesandassumptions thataffect the reportedamountofassets, liabilities,

revenue and expenses during the reporting period. Although, such estimates and assumptions are made on a reasonable andprudentbasistakingintoaccountallavailableinformation,actualresultscoulddifferfromtheseestimatesandassumptionsandsuchdifferencesarerecognizedintheperiodinwhichtheresultsarecrystallized.

1.3 RESERVES AND SURPLUS Selfinsurancereserveiscreated@0.1%p.a.onGrossBlockofFixedAssets(exceptassetscoveredundermegainsurancepolicy)as

attheendoftheyearbyappropriatingcurrentyearprofittowardsfuturelosseswhichmayarisefromun-insuredrisks.Thesameisshownas“Selfinsurancereserve”under‘Reserves&Surplus’.

1.4 GRANTS-IN-AID1.4.1 Grants-in-aid received from Central Government or other authorities towards capital expenditure for projects, betterment of

transmissionsystemsandspecificdepreciableassetsareshownas“grants-in-aid”tilltheutilizationofgrant.1.4.2 Oncapitalizationofrelatedassets,grantsreceivedforspecificdepreciableassetsaretreatedasdeferredincomeandrecognizedinthe

StatementofProfitandLossovertheusefullifeofrelatedassetandinproportiontowhichdepreciationontheseassetsisprovided.1.5 RATE REGULATED ASSETS & LIABILITIES Certainexpensesandincome,allowedunderCERCregulationstobereimbursed/passedonby/tofrombeneficiariesinfuture,are

tobeaccountedinthestatementofProfitandLossaspertheprovisionsofaccountingstandardsandpractices.Suchexpensesandincome,totheextentallowable/payableunderCERCregulations,aretreatedasregulatedassetsandliabilities.

1.6 SEGMENT REPORTING The accounting policies adopted for segment reporting are in line with the accounting policies of the company. Segment revenue,

segmentexpenses,segmentassetand liabilitiesare identifiedon thebasisof their relationship to theoperatingactivitiesof thesegment. Revenue, expenses, assets and liabilities which relates to the company as a whole and not allocable to segment onreasonablebasisareincludedunderunallocatedrevenue/expenses/assets/liabilities.

1.7 CASH FLOW STATEMENT Cash Flow statement is prepared in accordance with the indirect method prescribed in the relevant Accounting Standard. 1.8 FIXED ASSETS1.8.1 Fixedassetsareshownathistoricalcostcomprisingofpurchasepriceandanyattributablecostofbringingtheassetstoitsworking

conditionforitsintendeduselessaccumulateddepreciation/amortization.1.8.2 Inthecaseofcommissionedassets,depositworks/cost-pluscontractswherefinalsettlementofbillswithcontractorsisyettobe

effected,capitalizationisdoneonprovisionalbasissubjecttonecessaryadjustmentsintheyearoffinalsettlement.1.8.3 Assetsandsystemscommontomorethanonetransmissionsystemarecapitalizedonthebasisoftechnicalestimates/assessments1.8.4 Transmission system assets are consideredwhen they are ‘Ready for intended use’, for the purpose of capitalization, after test

charging/successfulcommissioningofthesystems/assetsandoncompletionofstabilizationperiodwherevertechnicallyrequired.1.8.5 Thecostoflandincludesprovisionaldeposits,payments/liabilitiestowardscompensation,rehabilitationandotherexpenseswherever

possessionoflandistaken.1.8.6 Expenditureonleveling,clearingandgradingoflandiscapitalizedaspartofcostoftherelatedbuildings.1.8.7 Insurancespares,whichcanbeusedonlyinconnectionwithanitemoffixedassetandwhoseuseisexpectedtobeatirregular

intervalsandMandatoryspares inthenatureofsub-stationequipments/capitalspares i.e.stand-by/service/rotationalequipmentandunitassemblies,arecapitalizedanddepreciatedovertheresidualusefullifeoftherelatedplant&machinery.Incasetheyearofpurchase and consumption is same, amount of such spares are charged to revenue.

1.9 CAPITAL WORK-IN-PROGRESS (CWIP)1.9.1 Costofmaterialconsumedanderectionchargesthereonalongwithotherrelatedexpensesincurredfortheprojectsareshownas

CWIPtillthedateofcapitalization.

1.9.2 CostofmaterialforconstructionofSubstation(includingHVDC)isbeingtransferredtoCapitalWorkinProgressduringtheprogressoferectionwork.

1.9.3 ExpenditureofCorporateoffice,RegionalOfficesandProjects,attributabletoconstructionoffixedassetsareidentifiedandallocatedon a systematic basis to the cost of the related assets.

1.9.4 Interestduringconstructionandexpenditure(net)allocatedtoconstructionasperpolicyNo.1.9.3above(allocatedtotheprojectsonproratebasistotheircapitalexpenditure),areapportionedtocapitalworkinprogress(CWIP)ontheclosingbalanceofspecificassetorpartofassetbeingcapitalized.Balance,ifany,leftaftersuchcapitalizationiskeptasaseparateitemundertheCWIPSchedule.

1.9.5 Depositworks/cost-pluscontractsareaccountedforonthebasisofstatementreceivedfromthecontractorsortechnicalassessmentofworkcompleted.

1.9.6 Unsettledliabilityforpricevariation/exchangeratevariationincaseofcontractsareaccountedforonestimatedbasisaspertermsof the contracts.

CONSOLIDATED ACCOUNTING POLICIES FOR THE FINANCIAL YEAR 2015-16

Consolidated Account

199

1.10 INTANGIBLE ASSETS1.10.1 Thecostofsoftware(whichisnotanintegralpartoftherelatedhardware)acquiredforinternaluseandresultinginsignificantfuture

economicbenefits,isrecognizedasanintangibleassetsinthebooksofaccountswhenthesameisreadyforitsuse.1.10.2 Afforestationchargespaidforacquiringright-of-wayforlayingtransmissionlinesareaccountedforasintangibleassetsandsame

are amortized over the period of thirty five years following the rates andmethodology notified byCentral Electricity RegulatoryCommission(CERC)TariffRegulation.

1.10.3 Expenditureincurred,eligibleforcapitalizationundertheheadIntangibleAssets,arecarriedas“IntangibleAssetsunderDevelopment”where such assets are not yet ready for their intended use.

1.10.4 Expenditureincurredonthedevelopmentofnewtechnologyiskeptunder“Intangibleassetsunderdevelopment”tillitscompletion.Aftersatisfactorycompletionofdevelopmentstage,theexpenditurekeptunderas“IntangibleAssets”tobeincludedintheprojectcost of new assets.

1.11 CONSTRUCTION STORES Construction stores are valued at cost.1.12 BORROWING COST1.12.1 Alltheborrowedfunds(exceptshorttermfundsforworkingcapital)areearmarkedtospecificprojects.Theborrowingcosts(including

bondissueexpenses,interest,discountonbonds,frontendfee,guaranteefee,managementfeeetc.)areallocatedtotheprojectsinproportiontothefundssoearmarked.

1.12.2 Theborrowingcostssoallocatedarecapitalisedorchargedtorevenue,basedonwhethertheproject isunderconstructionorinoperation.

1.13 TRANSACTION IN FOREIGN CURRENCY1.13.1 Transactionsinforeigncurrenciesareinitiallyrecordedattheexchangerateprevailingonthedateoftransaction.Foreigncurrency

monetaryitemsaretranslatedwithreferencetotheratesofexchangerulingonthedateoftheBalanceSheet.Non-monetaryitemsdenominatedinforeigncurrencyarereportedattheexchangeraterulingonthedateoftransaction.

1.13.2 ForeignExchangeRateVariation(FERV)arisingonsettlement/translationofforeigncurrencyloansrelatingtofixedassets/capitalwork-in-progressareadjustedtothecarryingcostofrelatedassets.

1.13.3 FERVaccountedforasperpolicyno1.13.2 isrecoverable/payablefromthebeneficiariesonactualpaymentbasisasperCentralElectricityRegulatoryCommission(CERC)normsw.e.f.1stApril,2004orDateofCommercialOperation(DOCO)whicheverislater.

TheaboveFERVtotheextentrecoverableorpayableaspertheCERCnormsisaccountedforasfollows: a) FERVrecoverable/payableadjustedtocarryingcostoffixedassets isaccountedforas ‘Deferredforeigncurrencyfluctuation

asset/liabilitya/c’withacorrespondingcredit/debitto‘Deferredincome/expenditurefromforeigncurrencyfluctuationa/c’. b) ‘Deferred income/expenditure from foreign currency fluctuation a/c’ is amortized in the proportion inwhich depreciation is

charged on such FERV. c) Theamountrecoverable/payableasperCERCnormsonyeartoyearbasisisadjustedtothe‘Deferredforeigncurrencyfluctuation

asset/liabilitya/c’withcorrespondingdebit/credittothetradereceivables.1.13.4 FERVearlierchargedtoStatementofProfitandLoss&includedinthecapitalcostforthepurposeoftariffisadjustedagainst‘Deferred

foreigncurrencyfluctuationasset/liabilitya/c’inthefollowingmanner: i) Depreciation component of transmission charges (being 90% of such FERV) is adjusted against Deferred foreign currency

fluctuationasset/liabilitya/cinthetransmissioncharges. ii) Balance10%ofDeferredforeigncurrencyfluctuationasset/liabilitya/cisamortisedoverthetenureofrespectiveloans.1.13.5 FERVarisingoutofsettlement/translationoflongtermmonetaryitems(otherthanforeigncurrencyloans)relatingtofixedassets/

CWIPareadjustedinthecarryingcostofrelatedassets.1.13.6 FERVarisingduringtheconstructionperiodfromsettlement/translationofmonetaryitemsdenominatedinforeigncurrency(other

thanlongterm)totheextentrecoverable/payabletothebeneficiariesascapitalcostasperCERCtariffRegulationareaccountedas‘Deferredforeigncurrencyfluctuationasset/liabilitya/c’.Transmissionchargesrecognisedonsuchamountisadjustedagainstaboveaccount.

1.13.7 Otherexchangedifferencesarerecognizedasincomeorexpensesintheperiodinwhichtheyarise.1.14 INVESTMENTS1.14.1 Currentinvestmentsarevaluedatlowerofcostandmarketvaluedeterminedonanindividualinvestmentbasis.1.14.2 Long term investments are carried at cost. Provision is made for diminution other than temporary, in the value of such investments. 1.15 INVENTORIES1.15.1. Inventoriesarevaluedatlowerofthecost,determinedonweightedaveragebasisandnetrealizablevalue.1.15.2 Steelscrapandconductorscraparevaluedatestimatedrealizablevalueorbookvalue,whicheverisless.1.15.3 Mandatorysparesofconsumablenatureandtransmissionlineitemsaretreatedasinventoryaftercommissioningofthesystem.1.15.4 Surplusmaterialsasdeterminedbythemanagementareheldforintendeduseandareincludedintheinventory.1.15.5 Thediminutioninthevalueofobsolete,unserviceableandsurplusstoresandsparesisascertainedonreviewandprovidedfor.1.16 REVENUE RECOGNITION 1.16.1 TransmissionIncomeisaccountedforbasedontariffordersnotifiedbytheCERC.Incaseoftransmissionprojectswherefinaltariff

ordersareyettobenotified,transmissionincomeisaccountedforaspertariffnormsandotheramendmentsnotifiedbytheCERCinsimilarcases.Difference,ifany,isadjustedbasedonissuanceoffinalnotificationoftariffordersbytheCERC.TransmissionIncomeinrespectofadditionalcapitalexpenditureincurredafterthedateofcommercialoperationisaccountedforbasedonactualexpenditureincurred on year to year basis as per tariff norms of the CERC.

Consolidated Account

200

1.16.2 TheTransmissionsystemIncentive/disincentiveisaccountedforbasedoncertificationofavailabilitybytherespectiveRegionalPowerCommitteesandinaccordancewiththenormsnotified/approvedbytheCERC.

1.16.3.1 Advanceagainstdepreciation(AAD),formingpartoftariffpertaininguptotheblockperiod2004-09,tofacilitaterepaymentofloans,isreducedfromtransmissionincomeandconsideredasdeferredincometobeincludedintransmissionincomeinsubsequentyears.

1.16.3.2 TheoutstandingdeferredincomeinrespectofAADisrecognizedastransmissionincome,aftertwelveyearsfromtheendofthefinancialyearinwhichtheassetwascommissioned,totheextentdepreciationrecoveredinthetariffduringtheyearislowerthandepreciation charged in the accounts.

1.16.4 Surcharge recoverable from trade receivables and liquidated damages /warranty claims / interest on advances to suppliers arerecognizedwhennosignificantuncertaintyastomeasurabilityandcollectabilityexists.

1.16.5 IncomefromTelecomServicesareaccountedforonthebasisoftermsofagreements/purchaseordersfromthecustomers.1.16.6 Income from sole consultancy contracts are accounted for on technical assessment of progress of services rendered.1.16.7 Inrespectof‘Cost-plus-consultancycontracts’,involvingexecutiononbehalfoftheclient,incomeisaccountedfor(whereverinitial

advancesreceived)inphasedmannerasunder: a)10%ontheissueofNoticeInvitingTenderforexecution b)5%ontheAwardofContractsforexecution c)Balance85%onthebasisofactualprogressofworkincludingsupplies1.16.8 IncomefromSaleofGoodsisrecognizedonthetransferofsignificantrisksandrewardofownershiptothebuyer.1.16.9 ApplicationFeesreceivedonaccountofLongTermOpenAccess(LTOA)Chargesisaccountedforasandwhenreceivedinaccordance

with CERC Guidelines.1.16.10 Scrapotherthansteelscrap&conductorscrapareaccountedforasandwhensold.1.16.11 Dividendincomeisrecognizedwhenrighttoreceivepaymentisestablished.1.17 LEASED ASSETS1.17.1 Statesectorunified loaddispatchcentre (ULDC)/FiberOpticCommunicationAssets (FOC)assets leased to thebeneficiariesare

consideredasFinanceLease.Net investment insuch leasedassetsalongwithaccretion insubsequentyears isaccounted forasLeaseReceivablesunderLongTermLoans&Advances.Wherevergrant-in-aidisreceivedforconstructionofStateSectorULDC,leasereceivable is accounted for net of such grant.

1.17.2 Financeincomeonleasedassetsarerecognisedbasedonapatternreflectingaconstantperiodicrateofreturnonthenetinvestmentasperthetariffnotified/tobenotifiedbytheCERC.

1.17.3 FERVonforeigncurrencyloansrelatingtoleasedassetsisadjustedtotheamountofleasereceivablesandisamortisedovertheremainingtenureoflease.FERVrecovery(asperCERCnorms)fromtheconstituentsisrecognisednetofsuchamortisedamount.

1.18 DEPRECIATION / AMORTIZATION1.18.1 Depreciation/amortizationontheassetsrelatedtotransmissionbusinessisprovidedonstraightlinemethodfollowingtheratesand

methodologynotifiedbytheCERCforthepurposeofrecoveryoftariff.1.18.2 ULDC assets commissioned prior to 1st April 2014 are depreciated on Straight Line Method@ 6.67% per annum. Such assets

commissioned on or after 1stApril2014isprovidedonstraightlinemethodfollowingtheratesandmethodologynotifiedbytheCERCfor the purpose of recovery of tariff.

1.18.3 Depreciationonassetsof telecomandconsultancybusiness isprovidedforonstraight linemethodasperuseful lifespecified inScheduleIIoftheCompaniesAct,2013.

1.18.4 Depreciation on following assets is provided based on estimated useful life as evaluated by the management.

Residual value of above assets is considered as Nil.1.18.5 CostofSoftwarescapitalizedasIntangibleAssetisamortizedovertheperiodoflegalrighttouseor3years,whicheverislesswith

Nil residual value.1.18.6 Mobile phones are charged off in the year of purchase. 1.18.7 Depreciation/Amortizationonadditionsto/deductionsfromfixedassetsduringtheyearischargedonpro-ratabasisfrom/uptothe

dateonwhichtheassetisavailableforuse/disposal1.18.8 Where the cost of depreciable fixed asset has undergone a change due to increase/decrease in long termmonetary items on

accountofexchangeratefluctuation,priceadjustment,changeindutiesorsimilarfactors,theunamortizedbalanceofsuchassetisdepreciatedprospectivelyattheratesandmethodologyasspecifiedbytheCERCTariffRegulations,exceptfortelecomassetswhereresiduallifeisdeterminedonthebasisofusefullifeoffixedassetasspecifiedinScheduleIIoftheCompaniesAct,2013.

1.18.9 Plantandmachinery,loosetoolsanditemsofscientificappliances,includedunderdifferentheadsoffixedassets,costing`5,000/-orless, or where the written down value is `5,000/-orlessasatthebeginningoftheyear,arechargedofftorevenue.

1.18.10 Otherfixedassetscostingupto`5,000/-arefullydepreciatedintheyearofacquisition.1.18.11 LeaseholdLandisfullyamortizedover25yearsorleaseperiodwhicheverislowerinaccordancewiththeratesandmethodology

specifiedintheCentralElectricityRegulatoryCommission(CERC)TariffRegulation.LeaseholdLandacquiredonperpetualleaseisnot amortised.

1.18.12 InthecaseoffixedassetsofNationalthermalpowercorporationlimited(NTPC),Nationalhydro-electricpowercorporationlimited(NHPC),North-easternelectricpowercorporationlimited(NEEPCO),Neyvelilignitecorporationlimited(NLC)transferredw.e.f.April

a.Computers&Peripherals 3years

b.Servers&NetworkComponents 5years

Consolidated Account

201

1,1992,JammuandKashmirLinesw.e.f.April1,1993,andTehrihydrodevelopmentcorporationlimited(THDC)w.e.f.August1,1993,depreciationischargedbasedongrossblockasindicatedintransferor’sbookswithnecessaryadjustmentssothatthelifeoftheassetsaslaiddownintheCERCnotificationfortariffismaintained.

1.19 PRIOR PERIOD ITEMS Pre-paid/prior-periodexpenses/Incomeofitemsupto`100,000/-arechargedtonaturalheadsofaccount.1.20 IMPAIRMENT OF ASSETS CashgeneratingunitsasdefinedinAccountingStandard-28on‘ImpairmentofAssets’areidentifiedatthebalancesheetdatewith

respecttocarryingamountvis-à-visrecoverableamountthereofandimpairmentloss,ifany,isrecognisedinStatementofprofit&loss.Impairmentloss,ifneedtobereversedsubsequently,isaccountedforintheyearofreversal.

1.21 EMPLOYEE BENEFITS1.21.1 Companycontributionpaid/payableduringtheyeartodefinedpensioncontributionschemeandprovidentfundschemeisrecognized

intheStatementofProfitandLoss.Thesameispaidtoafundandadministeredthroughaseparatetrust.1.21.2 TheliabilityforretirementbenefitsofemployeesinrespectofGratuity,isascertainedannuallyonactuarialvaluationattheyearend,

is provided and funded separately.1.21.3 Theliabilitiesforcompensatedabsences,leaveencashment,postretirementmedicalbenefits,settlementallowance&longservice

awards to employees are ascertained annually on actuarial valuation at the year end and provided for.1.21.4 ShorttermemployeebenefitsarerecognizedattheundiscountedamountintheStatementofProfitandLossintheyearinwhichthe

related services are rendered.1.21.5 Actuarialgains/lossesarerecognizedimmediatelyintheStatementofProfit&Loss.1.22 PROVISIONS AND CONTINGENT LIABILITIES Aprovisionisrecognizedwhenthecompanyhasapresentobligationasaresultofpasteventanditisprobablethatanoutflowof

resourceswillberequiredtosettletheobligation,inrespectofwhichareliableestimatecanbemadebasedontechnicalvaluationandpastexperience.Provisionsaredeterminedbasedonmanagementestimaterequiredtosettletheobligationatthebalancesheetdateandarenotdiscountedtoitspresentvalue.Noprovisionisrecognizedforliabilitieswhosefutureoutcomecannotbeascertainedwithreasonablecertainties.Suchcontingentliabilitiesarenotrecognizedbutaredisclosedonthebasisofjudgmentofthemanagement/independentexpert.Thesearereviewedateachbalancesheetdateandadjustedtoreflectthecurrentmanagementestimate.

1.23 TAXES ON INCOME IncomeTaxcomprisesofcurrentanddeferredtax.Currentincometaxesaremeasuredattheamountexpectedtobepaidtoincome

taxauthorities inaccordancewiththeprovisionsofIncomeTaxAct,1961.Deferredtaxresultingfromtimingdifferencebetweenaccountingandtaxableprofitisaccountedforusingthetaxratesandthetaxlawsenactedorsubstantivelyenactedatthebalancesheetdate.Deferredtaxassetsarerecognizedonly to theextent that there is reasonablecertainty thatsufficient future taxableincomewillbeavailableagainstwhichsuchdeferredtaxassetscanberealized.

1.24 OTHERS 1.24.1 Expenditureofresearchanddevelopment,otherthanCapitalExpenditure,arechargedtorevenueintheyearofincurrence.1.24.2 Capitalexpenditureonassetsnotownedbythecompanyischargedofftorevenueasandwhenincurred.

Consolidated AccountConsolidated Account

202

Particulars

Particulars

Note 2.1/Share capital

Note 2.2/Reserves and surplus

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2015

As at 31st March, 2015

Equity Share Capital Authorised 1000,00,00,000(Previousyear1000,00,00,000)equitysharesof`10/-eachatpar 10000.00 10000.00 Issued, subscribed and paid up 523,15,89,648(PreviousYear523,15,89,648)equitysharesof`10/-eachatparfullypaidup 5231.59 5231.59Total 5231.59 5231.59Further Notes: 1) ReconciliationofNumberandamountofsharecapitaloutstandingatthebeginningandattheendofthereportingperiod

Securities Premium Account Asperlastbalancesheet 9578.29 9578.29Closing Balance 9578.29 9578.29

Bonds Redemption ReserveAsperlastbalancesheet 5870.47 4886.61Additionsduringtheyear 1720.62 1600.44Deductionsduringtheyear 697.93 616.58Closing Balance 6893.16 5870.47

Self Insurance Reserve Through appropriation Asperlastbalancesheet 350.31 268.68Additionsduringtheyear 104.21 81.30Deductionsduringtheyear - (0.33)ClosingBalance 454.52 350.31Through charge to Profit Asperlastbalancesheet 43.67 63.87Additionsduringtheyear 0.75 -Deductionsduringtheyear 5.29 20.20ClosingBalance 39.13 43.67 493.65 393.98

i) GovernmentofIndia 3028835198 57.90 3028835198 57.90ii) EuropacificGrowthFund - - 296023422 5.66

(` inCrore)

(` inCrore)

Particulars As at 31st March, 2016 As at 31st March, 2015

No.of Shares % of holding No.of Shares % of holding

Shares outstanding at the beginning of the year 5231589648 5231.59 5231589648 5231.59SharesIssuedduringtheyear - - - -Sharesboughtbackduringtheyear - - - -Shares outstanding at the end of the year 5231589648 5231.59 5231589648 5231.592) Theholdersofequitysharesareentitledtoreceivedividendsasdeclaredfromtimetotimeandareentitledtovotingrightsproportionate

to their shareholding at meetings of the Shareholders. 3) Shareholdersholdingmorethan5%equitysharesoftheCompany

Particulars For the year ended 31st March, 2016 For the year ended 31st March, 2016

No.of Shares Amount ( ` in crore) No.of Shares Amount ( ` in crore)

Consolidated Account

203

Corporate Social Responsibility( CSR) Activity Reserve Asperlastbalancesheet 129.52 46.74Additionsduringtheyear 6.19 82.78Deductions/Adjustmentsduringtheyear (0.48)Closing Balance 136.19 129.52

General Reserve Asperlastbalancesheet 16851.90 14461.13Additionsduringtheyear 3507.31 2406.78Deductionsduringtheyear 47.93 16.01Closing Balance 20311.28 16851.90

Load Despatch & Communication (LDC) Development Fund AsperLastBalanceSheet 158.96 130.13Additionsduringtheyear 78.49 34.20Deductionsduringtheyear 80.86 5.37Closing Balance 156.59 158.96

REC Fund As per Last Balance Sheet 10.64 8.46Additionsduringtheyear 0.69 2.18Deductionsduringtheyear - -Closing Balance 11.33 10.64

Capital Reserve AsperLastBalanceSheet 1.52 1.62Additionsduringtheyear - -Deductions during the year 0.11 0.10Closing Balance 1.41 1.52

37581.90 32995.28Surplus( Balance in statement of Profit and Loss )As per last balance sheet 211.86 20.82 Add:Additions

ProfitaftertaxasperStatementofProfit&Loss 6014.56 5046.25TransferfromBondRedemptionReserve 697.93 616.58DividendAdjustment 82.13 80.04Dividendtaxadjusted 0.32 1.93

Less: AppropriationsBondsRedemptionReserve 1720.62 1600.44CSRActivitiesReserve 6.19 82.78LDCDevelopmentReserve 0.17 34.20RECFund 0.69 2.18SelfInsuranceReserve 104.96 81.30GeneralReserve 3507.31 2406.78Interimdividendpaid 466.94 433.14TaxonInterimdividend 94.87 86.51ProposedDividend 789.97 685.34TaxonproposedDividend 160.89 141.09

Closing Balance 154.19 211.86 TOTAL# 37736.09 33207.14#Includes ` 58.41 crore (previous year ` 97.63crore)shareofjointlycontrolledentities.

Particulars

Note 2.2/Reserves and surplus (contd.)

As at 31st March, 2016

As at 31st March, 2015

(` inCrore)

Consolidated Account

204

As at 31st March, 2016

As at 31st March, 2016

As at 31st

March, 2015

As at 31st March, 2015

a) Advanceagainstdepreciation 1843.95 1986.95b) Grantsinaid

AsperlastBalanceSheet 74.42 96.28Receivedduringtheyear* 58.00 -Adjustmentsduringtheyear 22.20 21.86Closing balance 110.22 74.42

c) Deferredincomefromforeigncurrencyfluctuation(Net) 3819.12 2751.22TOTAL # 5773.29 4812.59

# Includes `48.38 crore (previous year `48.38crore)shareofjointlycontrolledentities.*GrantReceivedduringtheyearforschemeofUnifiedRealTimeDynamicStateMeasurement.

A) BONDSA1) Secured (Taxable, Redeemable, Non-Cumulative, Non-Convertible)A1.1 i) Bonds of `10Lakheach XXXIX Issue- 9.40% redeemable at par on 29.03.2027 1800.00 1800.00 XXXVIII Issue- 9.25% redeemable at par on 09.03.2027 855.00 855.00 XLII Issue-8.80% redeemable at par on 13.03.2023 1990.00 1,990.00 ii) Bondsof`30Lakheachconsistingof3STRPPsofRs10lakheach redeemableatparin3(Three)equalinstallmentson23.12.2020, 23.12.2025and23.12.2030 LII Issue-8.32% redeemable w.e.f. 23.12.2020 1398.00 - iii) Bondsof`30Lakheachconsistingof3STRPPsofRs10lakheach redeemableatparin3(Three)equalinstallmentson 09.03.2020,09.03.2025and09.03.2030 XLIX Issue-8.15% redeemable w.e.f. 09.03.2020 1305.00 1305.00 iv) Bondsof`40Lakheachconsistingof4STRPPsofRs10lakheach redeemableatparin4(Four)equalinstallmentson23.01.2020, 23.01.2022,23.01.2025and23.01.2030

XLVIII Issue-8.20% redeemable w.e.f. 23.01.2020 2580.00 2580.00 v) Bondsof`1.20croreeachconsistingof12STRPPsofRs10lakheach redeemableatparin12(twelve)equalinstallments LI Issue-8.40% redeemable w.e.f. 14.09.2019 3000.00 - vi) Bondsof`30Lakheachconsistingof3STRPPsofRs10lakheach redeemableatparin3(Three)equalinstallmentson04.09.2019, 4.09.2024and04.09.2029 XLVI Issue-9.30% redeemable w.e.f. 04.09.2019 4362.00 4362.00 vii) Bondsof`1.20croreeachconsistingof12STRPPsofRs10lakh eachredeemableatparin12(twelve)equalinstallments L Issue-8.40% redeemable w.e.f. 27.05.2019 2928.00 - viii) Bondsof`1.20croreeachconsistingof12STRPPsofRs10lakh eachredeemableatparin12(Twelve)equalinstallments XLVII Issue-8.93% redeemable w.e.f 20.10.2018 2640.00 2640.00 ix) Bondsof`10Lakheachredeemableatparin3equal instalmentson15.07.2018,15.07.2023and15.07.2028 XLIV Issue-8.70% redeemable w.e.f. 15.07.2018 3966.00 3,966.00

Note 2.3/Deferred Revenue

Note 2.4/Long-term borrowings

Particulars

Description

(` inCrore)

(` inCrore)

Consolidated Account

205

x) Bondsof`1.2 crores each consisting of 12 STRPPs of `10lakhseachredeemableatparin12(twelve) equalannualinstalments XLV Issue-9.65% redeemable w.e.f. 28.02.2018 1999.20 1,999.20 XLIII Issue-7.93% redeemable w.e.f. 20.05.2017 3126.00 3,126.00xi) Bondsof`1.5croreseachconsistingof12STRPPsof`12.50Lakhs eachredeemableatparin12(twelve)equalannualinstalments. XLI Issue-8.85% redeemable w.e.f. 19.10.2016 2605.62 2,842.50xii) Bonds of `1.50croreseach,consistingof15STRPPsof`10.00 Lakhseachredeemableatparin15(fifteen)equalannualinstalments XXXVI Issue- 9.35% redeemable w.e.f. 29.08.2016 2884.00 3090.00xiii) Bondsof`1.5croreseachconsistingof12STRPPsof`12.50Lakhs eachredeemableatparin12(twelve)equalannualinstalments. XL Issue-9.30% redeemable w.e.f. 28.06.2016 3664.37 3,997.50 XXXVII Issue- 9.25% redeemable w.e.f 26.12.2015 1662.50 1828.75 XXXV Issue- 9.64% redeemable w.e.f 31.05.2015 1631.25 1794.38 XXXIV Issue- 8.84% redeemable w.e.f 21.10.2014 2615.62 2906.25 XXXIII Issue- 8.64% redeemable w.e.f 08.07.2014 2160.00 2400.00 XXXII Issue- 8.84% redeemable w.e.f 29.03.2014 690.00 776.25 XXXI Issue- 8.90% redeemable w.e.f 25.02.2014 1365.00 1535.62 XXX Issue- 8.80% redeemable w.e.f 29.09.2013 1555.00 1749.38 XXIX Issue- 9.20% redeemable w.e.f 12.03.2013 756.88 865.00 XXVIII Issue- 9.33% redeemable w.e.f 15.12.2012 1400.00 1600.00 XXVII Issue- 9.47% redeemable w.e.f 31.03.2012 352.50 411.25 XXVI Issue- 9.30% redeemable w.e.f 07.03.2012 499.50 582.75 XXV Issue- 10.10% redeemable w.e.f 12.06.2011 532.50 621.25 XXIV Issue- 9.95% redeemable w.e.f 26.03.2011 333.13 399.75 XXIII Issue- 9.25% redeemable w.e.f 09.02.2011 128.12 153.75 XXII Issue- 8.68% redeemable w.e.f 07.12.2010 287.50 345.00 XXI Issue- 8.73% redeemable w.e.f 11.10.2010 212.50 255.00 XX Issue- 8.93% redeemable w.e.f 07.09.2010 625.00 750.00 XIX Issue- 9.25% redeemable w.e.f 24.07.2010 206.25 247.50 XVIII Issue- 8.15% redeemable w.e.f 09.03.2010 333.00 416.25xiv) Bonds of `1.00 crores each, consisting of 10 STRPPs of `10.00Lakhseachredeemableatparin10(ten) equalannualinstalments.

XVII Issue- 7.39% redeemable w.e.f 22.09.2009 200.00 300.00 XVI Issue- 7.10% redeemable w.e.f 18.02.2009 75.00 150.00xv) Bondsof`1.5croreseachconsistingof12STRPPsof] `12.50Lakhseachredeemableatparin12(twelve) equalannualinstalments. XV Issue-6.68% redeemable w.e.f. 23.02.2008 150.00 225.00 SecuredbywayofRegisteredBondTrustDeedrankingpari passuonimmovablepropertysituatedatMoujeAmbhetiTaluka KaparadaindistrictValsadGujaratandfloating charge on the assets of the company. A1.2 Bonds of `1.5croreseachconsistingof12STRPPsof `12.50lakheachredeemableatparin12(twelve) equalannualinstalments

As at 31st March, 2016

As at 31st March, 2015

Note 2.4/Long-term borrowings (contd.)

Description

(` inCrore)

Consolidated Account

206

XIII issue-8.63% redeemable w.e.f 31.07.2006 67.50 135.00 Secured by way of Registered Bond Trust Deed rankingpari-passuonimmovablepropertysituated atMoujeAmbhetiTalukaKaparadainDistrictValsad Gujaratandmortgage&hypothecationonassetsof KishenpurMoga&DulhastiContingencyTransmissionSystemA1.3 Bonds of `1.5croreseachconsistingof12STRPPsof`12.50lakh eachredeemableatparin12(twelve)equalannualinstalments XII issue- 9.70% redeemable w.e.f 28.03.2006 - 15.38 Secured by way of Registered Bond Trust Deed rankingpari-passuonimmovablepropertysituated atMoujeAmbhetiTalukaKaparadainDistrictValsadGujarat andmortgageandhypothecationonassetsofKayamkulam& RamagundamHyderabadTransmissionSystemA1.4 Bonds of `3croreseachconsistingof12STRPPsof`25lakh eachredeemableatparin12(twelve)equalannualinstalments XI issue-9.80% redeemable w.e.f 07-12-2005 - 45.25 SecuredbywayofRegisteredBondTrustDeedrankingpari-passu onimmovablepropertysituatedatMoujeAmbhetiTalukaKaparadain DistrictValsadGujaratandmortgage&hypothecationonassetsof Anta,Auriya,Moga-Bhiwani,Chamera-Kishenpur,Sasaram-Allahbad, LILOofSingraulli-KanpurandAllahabadSub-StationA1.5 Bonds of `0.10croreseachredeemableatparattheendof5thyeari.e2020. 2900 Bond-8.90% redeemable on 5th March 2020 290.00 - SecuredbywayofflottingchargeonalltheMovableassets, tangible or intangible of the subsidiary company (PowergridVizagTransmissionLtd.) 59231.94 55061.96

A2) UnsecuredA2.1 Redeemable Foreign Currency Bonds 3.875% Foreign Currency Bonds to be redeemed at par on 17.01.2023 3345.00 3,159.50 Total (A) 62576.94 58221.46B) Term Loans from BanksB1) Rupee Loan (Secured)B1.1 i) Line of Credit (LOC) from State Bank of India -I 4546.00 5000.00 ii) Line of Credit (LOC) from State Bank of India -II 7485.00 2600.00 Secured by way of pari passu charge on assets of the company exceptinvestments,LandandBuildings,roadsandbridges, water supply , drainage and sewerage and Current Assets. iii) State Bank of India 59.97 74.19 iv) Central Bank of India 22.04 25.43 v) Jammu and Kashmir Bank 14.70 16.96 vi) Punjab National Bank 29.39 33.91 vii) ICICI Bank Ltd. 20.45 - viii) United Bank Of India 20.80 19.37 ix) Union Bank of India 30.84 23.23 SecuredbyaHypothecationofJVCompanies (JayPeePowerGridLtdandPowerlinksTransmissionLtd.

As at 31st March, 2016

As at 31st March, 2015

Note 2.4/Long-term borrowings (contd.)

Description

(` inCrore)

Consolidated Account

207

TeestavalleypowerTransmissionLimited)Tangibleand Intangible Assets, Movable assets, and Current assets and PledgeofShareheldbyTeestaurjaofJVco. Teesta valley powerTransmission Limited

ix) Bank of Baroda 90.80 80.21 SecuredbyfirstparipassuchargeovertheImmovable, movableassets,IntangibleAssetsandequitysharesheldby TorrentPowerLtdofJVCompany(TorrentPowergridLtd.)and TeestaUrjaLtdofJVCompany(TeestavalleyPowerTransmissionLtd.)

x) Andhra Bank 31.72 29.53 xi) Bank of India 20.80 19.36 Secured by First mortgage and charge on all theimmovableandmovableassetsofandequityshares heldbyTeestaUrjaLtdofJVCompany(TeestavalleyPowerTransmissionLtd.) xii) Canera Bank 13.63 - xiii) PFS 13.63 - xiv) Indusind Bank 4.77 - Total (B1) 12404.54 7922.19B2) Foreign Currency Loans(Secured)B2.1 Bank of India Cayman Islands 211.26 232.80 Secured by a Floating charge on the immovable properties of the company B2.2 i) Nordic Investment Bank (PIL5120) 452.86 505.71 Secured by way of pari passu charge on movable assets of the companyexceptinvestmentsandCurrentAssets.

ii) ADB-VIII (2788-IND) 1080.42 530.35 iii) International Finance Corporation 669.00 1011.04 iv) ICF Debt Pool LLP 334.50 315.95 Secured by way of pari passu charge on assets of the company exceptinvestments,LandandBuildings,roadsandbridges, water supply , drainage and sewerage and Current Assets.

v) Asian Development Bank 23.96 35.94 Securedbyfirstparipasuchargeontangible/intangible, allmovableassets&currentassetsofJVCompany (PowerlinksTransmissionLtd.)B2.3 Guaranteed by Government of India FromAsianDevelopmentBank(ADB) ADB-II (1764-IND) 710.32 801.43 ADB-III (2152-IND) 1822.66 1869.95 ADB-IV (2415-IND) 2475.75 2387.71 ADB-V (2510-IND) 786.59 668.94 ADB-VI (2823-IND) 341.19 307.94 ADB-VII (2787-IND) 1125.28 903.18 FromInternationalBankfor ReconstructionandDevelopment(IBRD) PSDP-II (4603-IN) 1188.86 1332.41 PSDP-III (4813-IN) 1804.63 1856.74

PSDP-IV (4890-IN) 3201.64 3202.56 PSDP-IV (Addl.) (7593-IN) 2290.86 2253.74

As at 31st March, 2016

As at 31st March, 2015

Note 2.4/Long-term borrowings (contd.)

Description

(` inCrore)

Consolidated Account

208

As at 31st March, 2016

As at 31st March, 2015

Note 2.4/Long-term borrowings (contd.)

Description

(` inCrore)

PSDP-V (7787-IN) 4707.42 3711.41 Secured by pari passu interest in the lien created on the assets as security for the debts. Total B2 23227.20 21927.80B3) Foreign currency Loans (Unsecured) B3.1 Skandinaviska Enskilda Banken AB(publ) Sweden - 19.42 AB Svensk Exportkredit,Sweden 2120.84 1,458.64 Exim Bank India 11.30 3.71B3.2 Guaranteed by Government of India

Natixis Banque (Formerely Credit National) France 78.05 78.79 Japan International Cooperation Agency (Formerly Japan Bank for International Cooperation ) Japan 108.61 105.45 KFW 441.92 21.94 Total (B3) 2760.72 1687.95 Total B 38392.46 31537.94C Term Loan From Others Rupee Loans (Secured) C1 Life Insurance Corporation of India-III - 0.22 SecuredbyafloatingchargeonthefixedassetsoftheCompany. - 0.22 International Finance Corporation 26.95 40.42 Infrastructure Development Finance Corporation - 30.37 IDFC Infra Debt Fund Ltd 20.25 - Securedbywayoffirstchargerankingparipasuon tangible/intangibleonallmovableassets&currentassetsof JVcompany(PowerlinksTransmissionLtd)

Power Finance Corporation Limited 549.76 582.79 Rural Electrification corporation 209.37 79.27 SecuredbyFirstMortgageofimmovablepropertiesandHypothecation 806.33 733.07 of all movable assets and current assets of JV companies (ParbatiKoldamTransmissionCompanyLtd,NorthEastTransmission CompanyLimited,NationalHighpowerTestlabPvtltdand CrossBorderPowerTransmissionCompnayLimited)

TOTAL (A tO C)# 101775.73 90492.47

# Includes ` 1245.98 crore (previous year `1116.63crore)shareofjointlycontrolledentities. Further notes: The Term loans are repayable in installments as per the terms of respective agreement generally over the period of 10 to 20 years afterthemoratoriumperiodof3to5years.

Consolidated Account

209

Deferred Tax liability TowardsFixedAssets(Net)(A) 8716.79 6900.01

Deferred Tax Assets Income during Construction Period 92.34 110.25Self Insurance Reserve 11.67 13.49Provisions allowable on payment basis 135.58 113.07Advance Against Depreciation 621.41 670.90Others 24.09 39.47Sub-total (B) 885.09 947.18DeferredTaxLiability(Net)(A-B) 7831.70 5952.83Less:Deferredassetsfordeferredtaxliability 5307.19 3462.38Net Deferred Tax Liability# 2524.51 2490.45

# Includes ` 29.95 crore (previous year ` 36.91crore)shareofjointlycontrolledentities.

Further Note: a) Chargeof`43.30crore(Previousyear`36.98crore)hasbeenmadeinthestatementofProfit&Lossaccount&Loss.FurtherCreditof

`9.24croreonaccountofdifferenceinassetasperprovisionalaccountsandauditedaccountsofJV/SubsidiaryCompaniesforthelastyearisadjustedinreservesaccount.

b)Thetariffnormsfortheblockperiod2014-2019notifiedbytheCERCprovideforgrossingupofthereturnonequitybasedoneffectivetaxrateforthefinancialyearbasedontheactualtaxpaidduringtheyearonthetransmissionincome.Accordingly,deferredtaxprovidedduringtheyearended31stMarch,2016onthetransmissionincomeisaccountedas‘DeferredAssetsagainstDeferredTaxLiability’.DeferredAssetsagainstDeferredTaxLiabilityfortheyearwillbereversedinfutureyears(includingtaxholidayperiod)whentherelateddeferredtaxliabilityformsapartofcurrenttax.ThisisinlinewithGuidanceNoteonRateRegulatedActivities,issuedbyICAI.

Other liabilities i) Deposits/Retentionmoneyfromcontractorsandothers. 916.06 661.38ii) Advancefromcustomers(Consultancy/Telecomcontracts) 431.21 401.03iii) DuesforCapitalExpenditure 0.04 22.88iv) Others* 32.22 24.86Total# 1379.53 1110.15

# Includes ` 39.21 crore (previous year ` 29.71crore)shareofjointlycontrolledentities.

Further Notes: DisclosurewithregardtoMicroandSmallenterprisesasrequiredunder“TheMicro,SmallandMediumEnterprisesDevelopmentAct,2006” isgiveninNoteNo.2.45*Otherincludeamountrecoverablefromcontractorsforpaymentofcompensation,PFLoan&InterestRecoveryPayableetc

Employee Benefits Asperlastbalancesheet 610.50 554.97Additions/(adjustments)duringtheyear 75.95 55.53Closing Balance 686.45 610.50TOTAL# 686.45 610.50# Includes ` 0.93 crore (previous year `0.99crore)shareofjointcontrolledentities.

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2015

As at 31st March, 2015

As at 31st March, 2015

Note 2.5/Deferred tax liabilities (Net)

Note 2.6/Other Long term liabilities

Note 2.7/Long-term provisions

Particulars

Particulars

Particulars

(` inCrore)

(` inCrore)

(` inCrore)

Consolidated Account

210

Short Term Loans From Banks Secured* 2.90 6.49Unsecured 2000.00 1200.00Total# 2002.90 1206.49# Includes ` 2.90 crore (previous year `6.49crore)shareofjointlycontrolledentities.*Securedagainstmovableassetsof theJVcompany(JayPeePowergridLimited)bothpresentand futureandachargehasbeencreated rankingparipasuwiththeexistingchargesofTermLoan.

As at 31st March, 2016

As at 31st March, 2015

Note 2.8/Short-term borrowings

Particulars

(` inCrore)

A) Current maturities of long term borrowings Secured Bonds 3446.00 2791.71 RupeeTermLoans 551.29 177.46 ForeignCurrencyLoans 1918.69 1489.18 5915.98 4458.35Un-secured ForeignCurrencyLoans 274.72 86.10 6190.70 4544.45B) Interest accrued but not due on borrowings from IndianBanks,FinancialInstitutions&Corporations 14.59 19.40 ForeignBanks&FinancialInstitutions 69.41 39.30 Secured/UnsecuredredeemableBonds 2620.89 2315.99 2704.89 2374.69C) Others i) Duesforcapitalexpenditure 4510.30 4746.11 ii) Employeerelatedliabilities 85.39 116.59 iii) Unclaimeddividends* 9.31 10.39 iv) Deposits/Retentionmoneyfromcontractorsandothers. 4669.72 4870.77 v) Advancesfromcustomers 3593.18 2402.72 vi) Statutorydues 121.55 210.22 vii)Relatedparties** 56.25 34.26 viii)Liabilitiesinrespectofdesignateda/coperatedand 67.68 55.94 maintained in terms of CERC Regulations ix) LiabilityonaccountofTruingup 86.34 180.31 x) LiabilitiesinrespectofThirdPartiesunder i)ShortTermopenAccessRegulations a)CTU 69.78 47.52 b)STU 45.70 38.13 ii)PSDFA/C 233.61 185.46 iii)PSDFCollectionAccount 246.13 - xi)Others@ 366.07 199.04

As at 31st March, 2016

As at 31st March, 2015

Note 2.10/Other current liabilities

Particulars

(` inCrore)

As at 31st March, 2016

As at 31st March, 2015

For goods and services 344.00 430.19Total# 344.00 430.19# Includes ` 30.11 crore (previous year `35.79crore)shareofjointcontrolledentities.Further Notes:

DisclosurewithregardtoMicroandSmallenterprisesasrequiredunder“TheMicro,SmallandMediumEnterprisesDevelopmentAct,2006”isgiveninNoteNo.2.45

Note 2.9/Trade payablesParticulars

(` inCrore)

Consolidated Account

211

A) Employee Benefits i) Transmission incentive/special incentive

Asperlastbalancesheet 213.13 133.19Additionduringtheyear 171.27 117.12Amountpaid/adjustedduringtheyear 187.32 37.18ClosingBalance 197.08 213.13

ii) Other Employee Benefits (Leave Encashment, Settlement Allowance and Long Service Award etc.) Asperlastbalancesheet 43.63 40.96Additions/(adjustments)duringtheyear 6.07 2.67ClosingBalance 49.70 43.63

Total (A) 246.78 256.76B) Others i) Taxation (Including interest on tax)

Asperlastbalancesheet 62.70 0.10Additionsduringtheyear 1717.82 1345.90Amountadjustedduringtheyear (2470.89) (3287.19)Netoffagainsttaxespaid(Note2.18) 4126.45 4570.49ClosingBalance 124.96 62.70

ii) Proposed Dividend Asperlastbalancesheet 685.34 690.50Additionsduringtheyear 789.97 685.34Amountspaidduringtheyear 685.34 690.50ClosingBalance 789.97 685.34

iii) Tax on proposed Dividend As per last balance sheet 141.10 118.40 Additionsduringtheyear 161.85 141.10Amountspaid/adjustedduringtheyear 141.15 118.40Closing Balance 161.80 141.10

iv) Downtime Service Credit-Telecom Asperlastbalancesheet 6.78 5.23Additionsduringtheyear 4.06 2.15Amountsadjusted/paidduringtheyear 0.75 0.60ClosingBalance 10.09 6.78

v) Provision Others Asperlastbalancesheet 3.43 2.06Additions/(adjustments)duringtheyear 71.82 1.37ClosingBalance 75.25 3.43Total (B) 1162.07 899.35Total (A+B) # 1408.85 1156.11

# Includes ` 22.07 crore (previous year ` 26.32crore)shareofjointlycontrolledentities.

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2015

As at 31st March, 2015

Note 2.11/Short-term provisionsDescription

Description

(` inCrore)

(` inCrore)

14161.01 13097.46Total # 23056.60 20016.60# Includes ` 332.92 crore (previous year ` 167.73crore)shareofjointlycontrolledentities.Further notes: DisclosurewithregardtoMicroandSmallenterprisesasrequiredunder“TheMicro,SmallandMediumEnterprisesDevelopmentAct,2006”isgiveninNoteNo2.45 * No amount is due for payment to Investor Education and Protection Fund **BreakupofrelatedpartiesisprovidedinNote2.48(b) @Others-Othersincludeliabilityfordeadcheques,Pricevariation,LTAetc

Note 2.10/Other current liabilities (contd.)

Consolidated Account

212

Not

e 2

.12

/Tan

gibl

e as

sets

(` inCrore)

Par

ticu

lars

Gro

ss B

lock

Dep

reci

atio

n/A

mor

tisa

tion

N

et B

lock

A

s at

1st

Apr

il,20

15A

ddit

ions

du

ring

the

ye

ar

Sale

/

Dis

posa

lA

djus

tmen

t du

ring

th

e ye

ar

As

at 3

1st

Mar

ch,

2016

Upt

o 31

st

Mar

ch,

2015

Add

itio

ns

duri

ng t

he

year

Sale /

Dis

posa

l

Adj

ustm

ent

duri

ng t

he

year

As

at 3

1st

Mar

ch,

2016

As

at 3

1st

Mar

ch,

2016

As

at 3

1st

Mar

ch,

2015

Lan

da)Freehold

1811.94

197.06

-

(3.80)

20

12

.80

-

-

-

-

-

20

12

.80

1811.94

b)Leasehold

277.98

5.31

0.36

0.74

28

2.1

9

46.74

9.53

-

2.03

54

.24

2

27

.95

231.24

Bu

ildin

gs

a)Sub-Stations&Office

737.86

195.84

-

3.18

93

0.5

2

219.91

26.8

8 -

1.18

2

45

.61

6

84

.91

517.95

b)Township

525.12

38.10

-

(0.06)

56

3.2

8

155.11

20.70

-

1.63

17

4.1

8

38

9.1

0

370.01

c)RLDC

13.28

0.34

-1

3.6

2

2.66

0.47

--

3.1

3

10

.49

10

.62

Tem

pora

ry E

rect

ion

10.49

0.40

0

.04

-1

0.8

5

10.47

0.40

0

.04

-1

0.8

3

0.0

2

0.02

Roads&Bridges

179.19

16.94

-

-1

96

.13

54.34

7.42

-

1.57

60

.19

1

35

.94

124.85

WaterSupplyDrainage&

Sew

erag

e110.65

5.53

0.0

1 (0.10)

11

6.2

7

34.89

4.21

-

0.49

38

.61

7

7.6

6

75.76

Pla

nt

& E

quip

men

ta)Transmission

74367.12

22631.77

36.94

(960.55)

97

92

2.5

0 16936.54

4159.79

8.2

6 40.76

21

04

7.3

1

76

87

5.1

9 57430.58

b)Substation

38326.79

7037.04

21.92

(358.83)

45

70

0.7

4 10050.52

2009.45

4.2

1 15.65

12

04

0.1

1

33

66

0.6

3 28276.27

c)UnifiedLoadDespatch

&Communication

702.53

253.43

6.55

25.87

92

3.5

4

425.31

42.4

0 6.47

26.34

43

4.9

0

48

8.6

4

277.22

d)Telecom

1431.22

40.8

1 -

(0.16)

14

72

.19

636.58

96.39

-

-7

32

.97

7

39

.22

794.64

FurnitureFixtures

104.71

28.05

0.33

0.22

1

32

.21

49.91

5.88

0.24

0.23

55

.32

7

6.8

9

54.80

Officeequipment

115.56

36.37

4.96

0.68

1

46

.29

50.38

6.74

4.39

0.28

5

2.4

5

93

.84

65.18

Elec

tron

ic D

ata

Processing&Word

Proc

essi

ng M

achi

nes

129.80

13.21

0.75

0.30

14

1.9

6

93.88

22.03

1.05

0.74

11

4.1

2

27

.84

35.92

Vehi

cles

4.84

0

.11

0.03

0.24

4

.68

2.73

0.39

0.10

0.

02

3.0

0

1.6

8

2.11

Co

nstr

uctio

n a

nd

Workshopequipment

216.

62

43.58

-

-2

60

.20

49.08

12.09

-

0.24

6

0.9

3

19

9.2

7

167.54

Elec

tric

al I

nsta

llatio

n12

8.26

2.37

0.0

2 0.

14

13

0.4

7

49.21

5.97

0.0

1 0.09

55

.08

7

5.3

9

79.05

LaboratoryEquipments

75.59

0.04

0.03

(0.09)

75

.69

37.20

3.24

0.2

4 0.23

39

.97

3

5.7

2

38.39

Workshop&Testing

Equipments

39.47

43.37

-

-8

2.8

4

16.6

8 2.

28

-

0.0

4 1

8.9

2

63

.92

22.79

MiscellaneousAssets/

Equipments

0.94

0.2

2 -

0.01

1

.15

0.32

0.05

-

-0

.37

0

.78

0.

62

Tot

al119309.96

30589.89

71.94

(1292.21)

1511

20.1

2 28922.46

6436.31

25.01

91.52

3524

2.24

11

5877

.88

90387.50

Less

: Pr

ovis

ion

for

asse

ts

disc

arde

d10.33

0.07

-

-

10

.40

8.

61

0.05

--

8.6

6

1.7

4

1.72

Gra

nd

Tota

l #119299.63

30589.82

71.94

(1292.21)1

51

10

9.7

2 28913.85

6436.26

25.01

91.52

35

23

3.5

8 1

15

87

6.1

4 90385.78

PreviousYearTotal

97249.47

21521.63

9.86

(548.72)

119309.96

23663.73

5292.67

1.46

32.4828922.46

90387.50

Less

: Pr

ovis

ion

for

asse

ts

disc

arde

d10

.40

-

-

0.07

10.33

8.66

-

-

0.05

8.61

1.72

PreviousYearGrand

Tota

l97239.07

21521.63

9.86

(548.79)

119299.63

23655.07

5292.67

1.46

32.4328913.85

90385.78

# NetBlockincludes`

14

51

.47

cro

re (

prev

ious

yea

r `

14

53

.75crore)shareofjointlycontrolledentities.

Consolidated Account

213

Note 2.12/Tangible assets (contd.)Further Notes: a) Thecompanyowns7011hectare(previousYear6647hectare)oflandamountingto`2294.99crore(previousYear`2089.92crore)

whichhasbeenclassifiedintofreehold`2012.80 crore (previous year `1811.94crore)andleasehold`282.19crore(previousyear` 277.98crore)basedonavailabledocumentation.

b) i) ThelandclassifiedasleaseholdlandheldintheStateofJammuandKashmiramountingto 68.53crore(PreviousYear 68.53crore)isacquiredbystateGovernmentasperproceduresunderStateLandAcquisitionAct.Asperprevailinglawthestategovernmentremainstheownerofthelandsoacquiredandcompanyisonlygivenpossessionforthespecificuse.

ii) ThetransmissionsystemsituatedinthestateofJammuandKashmirhavebeentakenoverbythecompanyw.e.f1stApril1993fromNationalHydroelectric Power Corporation of India Ltd. (NHPC) uponmutually agreed terms pending completion of legalformalities.

c) Freeholdlandincludes`191.39crore(previousyear`33.71crore)and`304.79crore(previousyear`192.08crore)inrespectoflandacquiredbytheCompanyforwhichconveyancedeedinfavouroftheCompanyandmutationinrevenuerecordsrespectivelyispending.

d) Leaseholdlandincludes`7.64crore(previousyear`7.64crore)inrespectoflandacquiredforofficecomplexonperpetualleasebasiswithanunlimitedusefullifeatKatwariaSarai,NewDelhiandhencenotamortised

e) Leaseholdlandincludes`13.97crore(previousyear`13.97crore)inrespectoflandinchamba(HP)acquiredfromNHPCbythecompany for which legal formalities are pending.

f) Townshipbuildingsincludes`7.27crore(previousyear`7.27crore)for28flatsatMumbai,forwhichregistrationinfavourofthecompany is pending.

g) LandatBinaSub-stationmeasuring13.90acres(Previousyear13.90acres)havingvalueofRs` 0.04 crore (Previous year ` 0.04 crore)hasbeentransferredtoNationalHighPowerTestLaboratoryPvt.Ltd.onrighttousewithoutgrantingownership.

h) Freeholdlandincludes`20.64crorespaidinrespectofTumkur(MadhugiriSS)landacquiredbythecompanythroughleasecumsaleagreementforwhichalltheconditionsrelatedtotransferoftitlefromKIADBhavebeenfulfilledandconveyancedeed/titleinfavourofthe company and mutation in revenue records are pending.

Note 2.13/Intangible assets

Note 2.14/Capital work in progress

Particulars Gross Block Depreciation/Amortisation Net BlockAs

at 1st

April, 2015

Additions during

the year

Sale / Disposal

Adjustment during

the year

As at 31st

March, 2016

Upto 31st

March,2015

Additions during the

year

Sale/

Disposal

Adjustment during the

year

As at 31st

March,2016

As at 31st

March,2016

As at 31st

March,2015

Electronic Data Processing Software

61.60 5.06 0.32 0.04 66.30 19.90 18.05 0.32 0.04 37.59 28.71 41.70

RightofWay-Afforestation Expenses

925.44 102.42 0.17 (167.48) 1195.17 162.71 56.09 - (5.18) 223.98 971.19 762.73

SCADA Software 193.46 11.21 9.98 148.51 46.18 192.61 0.87 9.98 148.51 34.99 11.19 0.85Total# 1180.50 118.69 10.47 (18.93) 1307.65 375.22 75.01 10.30 143.37 296.56 1011.09 805.28

Previous YearTotal

985.60 194.39 0.12 (0.63) 1180.50 317.93 51.09 0.01 (6.21) 375.22 805.28

# NetBlockIncludes` 43.45 crore (previous year ` 14.63crore)shareofjointlycontrolledentities.

Particulars As at 1st April,2015

Additions during the year

Adjustments Capitalised during the year

As at 31st March,2016

LandDevelopment of land 4.34 59.51 - 54.97 8.88

Buildingsa)Sub-Stations&Office 311.93 316.69 78.66 196.04 353.92 b)Township 62.54 44.06 (19.30) 37.85 88.05

Temporary erection 0.02 0.02 Roads&Bridges 5.96 10.45 - 0.78 15.63 WaterSupplyDrainageandSewerage 2.26 0.04 - - 2.30 Plant & Equipments (including associated civil works)

a)Transmission 26871.07 13906.23 (11.96) 19165.65 21623.61 b)Sub-Station 6225.53 7384.35 - 5981.82 7628.06 c)UnifiedLoadDespatch&Communication 397.54 157.50 18.08 247.28 289.68

(` inCrore)

(` inCrore)

Consolidated Account

214

Note 2.14/Capital work in progress (contd.)

Note 2.15/Intangible assets under development

Note 2.16/Construction stores(For mode of valuation refer note 1.11)

Particulars As at 1st April,2015

Additions Adjustments Capitalised during the year

As at 31st March,2016

Electronic Data Processing Software 0.09 1.67 - 0.30 1.46 RightofWay-Afforestationexpenses 139.44 53.84 101.09 92.19 DevelopmentExpenditure 73.75 10.97 6.26 - 78.46 Total # 213.28 66.48 6.26 101.39 172.11 PreviousYearTotal 374.34 36.75 10.57 187.24 213.28 # Includes ` Nil (previous year ` 1.99crore)shareofjointlycontrolledentities.

(` inCrore)

(` inCrore)

(` inCrore)

Particulars As at 1st April,2015

Additions during the year

Adjustments Capitalised during the year

As at 31st March,2016

d)Telecom 47.67 12.90 - 20.61 39.96 e)DELPProjectPuducherry 2.31 13.11 1.05 - 14.37

Otherofficeequipments 0.15 - 0.15 7.04 (7.04)Electrical Installations 5.58 17.56 - - 23.14 Expenditure pending allocation 0.01 - - - 0.01

i)Survey,investigation,consultancy&supervision Charges

40.61 8.15 (3.95) 11.20 41.51

ii)DifferenceinExchangeonforeigncurrencyloans

817.05 525.95 - 702.05 640.95

iii)Expenditureduringconstructionperiod(net)(Note2.32)

5471.83 2951.40 (187.54) 3759.42 4851.35

TOTAL 40266.40 25407.90 (124.81) 30184.73 35614.38 Less: Provision for unserviceable Assets 3.64 - - - 3.64 Grand Total # 40262.76 25407.90 (124.81) 30184.73 35610.74 PreviousYear 32036.20 30614.32 2082.16 20301.96 40266.40 Less: Provision for assets discarded 19.40 3.64 19.40 3.64Total 32016.80 30610.68 2062.76 20301.96 40262.76 # Includes ` 427.86 crore (previous year ` 291.19crore)shareofjointlycontrolledentities.

Tower 1940.30 2527.36Conductors 1942.13 3400.65OtherLineMaterials 1300.21 1655.27Sub-StationEquipments 2254.99 2523.66HighVoltageDirectCurrent(HVDC)Equipments 2650.37 2850.07UnifiedLoadDespatch&Communication(ULDC)Materials 186.98 200.78TelecomMaterials 15.54 8.39Others 60.19 39.08 10350.71 13205.26Less: Provision for shortages and obsolete material 0.02 0.02TOTAL# 10350.69 13205.24Construction Stores include: i)Materialintransit Towers 13.42 6.39Conductors 2.23 13.35Other Line Materials 82.53 62.93Sub-StationEquipments 94.74 794.03HighVoltageDirectCurrent(HVDC)Equipments 267.35 413.54UnifiedLoadDespatch&Communication(ULDC)Materials - 11.68Others 1.57 12.05Total 461.84 1313.97

As at 31st March, 2016

As at 31st March, 2015

Particulars

Consolidated Account

215

ii) Material with Contractors Towers 1863.83 2520.97Conductors 1845.91 3387.30Other Line Materials 1144.13 1592.34Sub-StationEquipments 2087.69 1729.63HighVoltageDirectCurrent(HVDC)Equipments 2383.02 2436.53UnifiedLoadDespatch&Communication(ULDC)Materials 186.98 189.10Telecom Materials 15.54 8.39Others 57.81 4.65

Total 9584.91 11868.90Grand Total 10046.75 13182.87# Includes ` 141.75 crore (previous year ` 5.08crore)shareofjointlycontrolledentities.Further Notes: Pending reconciliation, materials amounting to `199.55crore(previousyear`112.34crore)incommissionedlinesisshownasconstructionstores lying with contractors.

LONG TERM A. TRADE INVESTMENTS (AT COST) I. Equity Instruments-Fully Paid up :- Quoted PTC India Limited 12000006(Previousyear12000006)Sharesof`10/-each 12.00 12.00 {MarketValue`76.80crore@`64.00(NSE)per share(Previous year `97.08crore@80.90(NSE)pershare)} II. Govt.Securities ( Unquoted ):- 8.5% Bonds redeemable in 20 half yearly instalments w.e.f. 1.10.2006 2.50 7.49TOTAL (A) 14.50 19.49B. Non-trade investments ( Unquoted ) Equity shares-Fully paid-up 500(Previousyear500)sharesof`10/-eachinEmployeesCo-opSocietyLimitedItarsi(`5000/-) 0.00 0.00 500(Previousyear500)sharesof`10/-eachinEmployeesCo-opSocietyLimitedNagpur(`5000/-) 0.00 0.00500(Previousyear500)sharesof`10/-eachinEmployeesCo-opSocietyLimitedJabalpur(`5000/-) 0.00 0.00 1(Previousyear1)shareof`10/-eachinBharatBroadbandNetworkLtd(`10/-) 0.00 0.00Total (B) 0.00 0.00GRAND TOTAL (A+B)# 14.50 19.49# Includes ` Nil (previous year ` Nil)shareofjointlycontrolledentities.Further notes: 1) AggregateamountofQuotedInvestments Bookvalue 12.00 12.00 MarketValue 76.80 97.08 AggregateamountofUnquotedInvestments Bookvalue 2.50 7.492) Investmentshavebeenvaluedasperaccountingpolicyno1.14

(` inCrore)

(` inCrore)

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2015

As at 31st March, 2015

Particulars

Particulars

Note 2.17/Non-current investments

Note 2.16/Construction stores (contd.)

Consolidated Account

216

A) Advances for Capital Expenditure i) Secured - 0.26 ii) Unsecured a.Againstbankguarantees 2859.87 2806.07 b.Others 255.02 662.03 iii) Unsecuredconsidereddoubtful 2.95 3.00 3117.84 3471.10Less:Provisionforbad&doubtfulAdvances 2.95 3.00 3114.89 3468.10 3114.89 3468.36B) Loans i) Employees(includinginterestaccrued) Secured 183.36 177.69 Unsecured 13.74 8.13 197.10 185.82 ii) Leasereceivables 400.00 376.61 597.10 562.43C) Security Deposits 5.59 10.03D) Advances to related parties* i) Consideredgood 0.05 -E) Advances recoverable in cash or in kind or for value to be received Contractors&Suppliers(includingmaterialissuedonLoan) 46.85 46.08 Employees 10.46 13.31 BalancewithCustomsPortTrustandotherauthorities 21.17 0.31 MATCreditEntitlement 53.11 41.99 AdvancetaxandTaxdeductedatsource 4126.45 4570.49 Less:Provisionfortaxation 4126.45 4570.49 - - Others 37.50 4.60 169.09 106.29Considereddoubtful 3.59 3.72 172.68 110.01Less:ProvisionfordoubtfulAdvances 3.59 3.72 169.09 106.29TOTAL # 3886.72 4147.11Due from: Directors 0.10 0.11 Officersincludingkeymanagementpersonnel 7.64 6.72# Includes ` 117.57 crore (previous year ` 85.75crore)shareofjointlycontrolledentities.Further notes: *BreakupofadvancestorelatedpartiesisprovidedinNote2.49(b)

a) FixedDeposits(MaturityMorethan1year) 1.46 -b) Interestaccruedbutnotdue InterestaccruedonTerm/FixedDeposits 0.07 -c) MarginMoneyDepositwithBank 0.02 0.02 1.55 0.02Less:Provisionfordoubtfulclaims - -TOTAL# 1.55 0.02# Includes ` 1.55 crore (previous year ` 0.02crore)shareofjointlycontrolledentities.

(` inCrore)

(` inCrore)

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2015

As at 31st March, 2015

Particulars

Particulars

Note 2.18/Long-term loans and advances(Unsecured considered good unless otherwise stated)

Note 2.18 A/Other Non current assets(Unsecured considered good unless otherwise stated)

Consolidated Account

217

CURRENT MATURITIES OF LONG TERM INVESTMENTS (AT COST) TRADE INVESTMENTS I) Govt.Securities ( Unquoted ):- 8.5% Bonds redeemable in 20 half yearly instalments w.e.f. 1.10.2006 5.00 185.43II) Mutual Funds (Unquoted) ICICIPrudentialLiquidGrowth 0.37 - UTILiquidcashPlanInstitutionalGrowthoption 1.43 - IDFC Cash Fund 4.83 1.68 TataMoneyMarketFundRegularPlan-Growth 0.66 - HDFCCashManagementFund-Reg-Growth 12.20 - JMHighLiquidity-Growth 0.78 - ReligareInvescoLiquidFund - 10.17 SundaramMoneyFundRegular-Growth - 2.82TOTAL# 25.27 200.10# Includes ` 20.27 crore (previous year ` 14.67crore)shareofjointlycontrolledentities.Further notes: 1) AggregateamountofUnquotedInvestments Bookvalue 25.27 200.102) Investmentshavebeenvaluedasperaccountingpolicyno1.14(NoteNo.1)

(As taken valued and certified by the Management) (For mode of valuation refer Note 1.15) Loose tools 11.19 10.64Consumable stores 5.99 5.06Components,Spares&otherspareparts: Towers 185.03 167.46 Conductors 67.00 51.08 Other Line Materials 250.02 212.70 Sub-StationEquipments/Spares 214.90 187.32 HighVoltageDirectCurrentEquipments/spares 71.84 82.13 UnifiedLoadDespatchCentreSpares 5.59 3.79 Telecom Spares 20.47 5.70 Other Stores 36.36 13.12 868.39 739.00LessProvisionforShortages/damagesetc 20.16 20.16TOTAL# 848.23 718.84# Includes ` 24.55 crore (previous year ` 1.09crore)shareofjointlycontrolledentities.Inventories includes material in transit Towers 0.01 Other Line Materials 1.96 0.01 Total 1.96 0.02

i) Outstandingforaperiodexceedingsixmonthsfromthe date they are due for payment Consideredgood 323.01 223.56 Considereddoubtful 29.70 27.41 352.71 250.97ii)Others 2499.10 1983.40 2851.81 2234.37

(` inCrore)

(` inCrore)

(` inCrore)

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2015

As at 31st March, 2015

As at 31st March, 2015

Particulars

Particulars

Particulars

Note 2.19/Current investments

Note 2.20/Inventories

Note 2.21/Trade receivables(Unsecured considered good unless otherwise stated)

Consolidated Account

218

1) Cash and Cash Equivalents Balancewithbanks- -InCurrentaccounts 1144.98 1413.50 -Indesignatedcurrentaccounts(tobeutilisedforconsultancyassignments) 674.56 984.90 -Intermdeposits(havingmaturityperiodupto3months) 15.81 16.92 -InLDCDevelopmentAccount 103.63 114.69 Drafts/Chequesinhand - 0.01 Cashinhand 1.69 0.02 StampsandImprest 0.01 0.15 1940.68 2530.192) Other Bank Balances -EarmarkedbalancewithBank* 10.29 10.39 -InCurrentAccounts/FlexiDeposits(Operatedand maintainedintermsofCERCregulations) 59.91 48.33 a) ShortTermOpenAccessRegulations 115.48 85.65 b)PSDFDisbursementAccount 233.61 185.46 c) PSDFCollectionAccount 221.84 - -InTermDepositshavingmaturityover3months 990.01 128.53 -InFlexidepositAccount-REC 15.74 - -Depositheldasmarginmoney 0.30 -TOTAL# 3587.86 2988.55# Includes ` 176.09 crore (previous year ` 162.84crore)shareofjointlycontrolledentities.Further notes: BalancewithBanksincurrentaccountsanddesignatedcurrentaccountsundercashandcashequivalentsabove, includesliquidflexitermdeposit `182.32crore(previousyear`442.62crore)and`449.43crore(previousyear`982crore)respectively.Interestonflexideposit iscredited to designated party accounts.*EarmarkedbalancewithBankincludesunpaiddividendandrefundofFPOproceeds

A) Loans a) Employees including interest accrued i) Secured 19.34 16.39 ii) Unsecured 7.11 5.95 26.45 22.34b) Others Current maturities of Long Term Advances(UndersecuritisationScheme) 7.71 23.14 CurrentMaturitiesofLeaseReceivables 82.72 73.68 Others - 0.03 90.43 96.85Total(A) 116.88 119.19B) Advances to related parties* 31.79 24.22

(` inCrore)

(` inCrore)

(` inCrore)

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2016

As at 31st March, 2015

As at 31st March, 2015

As at 31st March, 2015

Particulars

Particulars

Particulars

Note 2.22/Cash and Bank balances

Note 2.23/Short-term loans and advances(Unsecured considered good unless otherwise stated)

Note 2.21/Trade receivables (contd.)

Less:Provisionforbad&doubtfultradereceivables 29.70 27.41TOTAL#* 2822.11 2206.96# Includes ` 73.64 crore (previous year `74.54crore)shareofjointlycontrolledentities. *BreakupofTradereceivablesfromrelatedpartiesisprovidedinNote2.49(b)

Consolidated Account

219

(` inCrore)

As at 31st March, 2016

As at 31st March, 2015

Particulars

C) Advances recoverable in cash or in kind or for value to be received a) Employees 14.73 15.91 b) Others 0.22 Contractors&Suppliers(IncludingMaterialissuedonloan) 173.50 33.83 BalancewithCustomsPortTrustandotherauthorities 88.35 31.98 Others@ 254.73 199.17 516.58 264.98Total (C) 531.31 281.11Total(A+B+C) 679.98 424.52Less: Provision for doubtful Advances 0.03 -Total# 679.95 424.52Directors 0.08 0.08 Officersincludingkeymanagementpersonnel 2.40 2.28# Includes ` 9.88 crore (previous year ` 32.80crore)shareofjointlycontrolledentities.Further notes: *BreakupofadvancestorelatedpartiesisprovidedinNote2.49(b) @Advancesrecoverable incashor inkindor forvaluetobereceived-Others includeamountrecoverable fromGratuity,PFtrust,prepaid expensesetc.

a) UnbilledRevenue 3060.23 2287.58b) Interestaccruedbutnotdue InterestaccruedonInvestments(Bonds) 4.36 12.09 InterestaccruedonTerm/FixedDeposits 12.69 12.98c) Claimsrecoverable 15.21 4.06d) Others@ 70.67 28.10e) Doubtfulclaims - - 3163.16 2344.81Less: Provision for doubtful claims - -TOTAL# 3163.16 2344.81Further notes: # Includes ` 27.53 crore (previous year `48.03crore)shareofjointlycontrolledentities.Unbilledrevenue`1481.58crore(Previousyear`1002.55Crore)representamountforwhichthecompanyisyettoraisebills inviewofrecognition of revenue as per CERC Tariff norms and also includes transmission charges for the month of March,2016 amounting to `1578.65crores (previous year `1285.03crore)billedtobeneficiariesinthemonthofApril,2016(PreviousyearApril,2015). Others *Interest accrued on Others include interest accrued on advances to contractors @ Others include Other accrued income and recoverable from customers

i) Transmission Business Sales of services Transmission Charges 20070.29 16668.71 Add:Revenuerecognisedoutofadvanceagainstdepreciation 142.92 79.50 Add:-Shorttermopenaccess-Charges 30.18 39.57 Add:System&MarketOperationCharges 123.77 139.94 20367.16 16927.72 Other operating revenue InterestondifferentialbetweenProvisionalandFinalTariffbyCERC 63.22 70.88 20430.38 16998.60

(` inCrore)

(` inCrore)

As at 31st March, 2016

For the year ended 31st March,2016

For the year ended 31st March,2015

As at 31st March, 2015

Particulars

Particulars

Note 2.24/Other current assets(Unsecured considered good unless otherwise stated)

Note 2.25/Revenue from operations

Note 2.23/Short-term loans and advances (contd.)

Consolidated Account

220

A) Income from non-current Investments i) Dividend Others 2.64 2.41 ii) Interest on Govt.securities 14.03 28.11B) Other Interest LoantoStateGovt.insettlementofdues - 2.95 IndianBanks 139.22 318.94 Interestfromadvancestocontractors 60.71 156.19 Others 14.83 14.41 231.43 523.01C) Others ProfitonsaleofFixedAssets 1.59 1.90 DeferredIncome(TransferredfromGrants-in-aid) 22.20 22.19 TransferfromInsuranceReserveonA/cofLossesofFixedAssets 5.29 20.21 LeaseIncome-StateSectorULDC 34.76 37.18 Surcharge 95.47 66.84 Hirechargesforequipments 0.03 0.22 FERV gain 0.05 12.44 Rebate 0.32 0.34 Provisionswrittenback 21.80 5.52 Miscellaneous income 97.13 84.26 510.07 774.11Less:Incometransferredtoexpenditureduringconstruction(Net)-Note2.32 81.63 199.58TOTAL# 428.44 574.53# Includes ` 14.20 crore (previous year ` 15.17crore)shareofjointlycontrolledentities.Further Notes: OtherInterest-Othersincludeinterestonemployeeloans

(` inCrore)

For the year ended 31st March,2016

For the year ended 31st March,2015

Particulars

Note 2.25/Revenue from operations (contd.)

Note 2.26/Other income

(` inCrore)

For the year ended 31st March,2016

For the year ended 31st March,2015

Particulars

ii) Telecom Business Sales of services NLD 391.05 272.48 IP-1 8.28 8.44 ISP 2.09 2.59 Others 33.27 15.59 434.69 299.10 Less: Inter Divisional Transfer NLD 37.27 18.97 IP-1 5.16 5.16 ISP 0.24 0.26 42.67 24.39 392.02 274.71iii) Consultancy Project Management and Supervision Salesofservices 529.92 385.20 529.92 385.20Total# 21352.32 17658.51# Includes ` 420.82 crore (previous year ` 313.19crore)shareofjointlycontrolledentities.a) Inexerciseofpowersu/s178oftheElectricityAct2003,CentralElectricityRegulatoryCommission(CERC)hasnotified“CERC(Termsand

ConditionsofTariff)Regulations2014”videorderdated21stFebruary,2014forthedeterminationoftransmissiontarifffortheblockperiod2014-19.

b) ThecompanyhasrecognisedTransmissionincomeduringtheyearasperthefollowing i) Rs.3915.15Crores(previousyearRs.4272.76Crore)forwhichprovisionalordershavebeenisuedbytheCentralElectricityRegulatory

Commission(CERC)allowingprovisionalbillingupto90%ofthetariffclaimed. ii) Rs.12767.92Crores(previousyearRs.Nil)forwhichfinaltariffordershavebeenisuedbyCERC. iii) Rs.3194.01Crores(previousyearRs.12178.10Crore)basedonCERCTariffnormsapplicableforthetariffblock2014-19forwhich

tariffordersareyettobeisuedbyCERC.Thisalsoincludesrevenuefromassetscommissionedupto31.03.2014.

Consolidated Account

221

Salarieswagesallowances&benefits 1246.76 1274.59Contributiontoprovidentandotherfunds 194.66 277.90StaffWelfareexpenses 154.37 153.98 1595.79 1706.47Less:TransferredtoExpenditureduringConstruction(Net)-Note2.32 511.18 582.06TOTAL# 1084.61 1124.41# Includes ` 7.77 crore (previous year ` 7.51crore)shareofjointlycontrolledentities.Further notes: a) Employees’remunerationandbenefitsincludethefollowingforthewholetimedirectorsandKeyManagementpersonnelincludingchairman

andmanagingdirectorandexcludingarrearspaidtoex-directors.

A) i) Interest on loans from IndianBanks,FinancialInstitutions&Corporations 1246.71 1169.08 ForeignBanksandFinancialInstitutions 270.61 233.33 Secured/UnsecuredredeemableBonds 5381.89 4755.96 ForeignCurrencyBonds 135.07 126.13 ii) Interest-Others 71.60 14.75 7105.88 6299.25B) Other borrowing costs Commitmentcharges 12.07 14.40 GuaranteeFee 260.20 238.54 Otherfinancecharges 44.45 21.70 316.72 274.64C) ERV as adjustment to Borrowing Cost ForeignExchangeRateVariation 6.71 6.27 Less:Recoverablefrombenificiariesatthetimeoftruingup 6.71 6.27 7422.60 6573.89Less:TransferredtoExpenditureduringConstruction(Net)-Note2.32 2336.65 2492.66TOTAL# 5085.95 4081.23# Includes ` 108.60 crore (previous year ` 78.74crore)shareofjointlycontrolledentities.

SalariesandAllowances 2.31 1.95 ContributiontoProvidentFundandotherFunds,GratuityandGroupInsurance 0.35 0.24 Otherbenefits 0.41 0.71b) Inadditiontotheaboveremuneration,thewholetimedirectorshavebeenallowedtousethestaffcar(includingforprivatejourneys)on

payment of `2000/-p.m.ascontainedintheDepartmentofpublicenterprises(DPE)OMNo.2(23)/11-DPE(WC)-GL-V/13dt.21.01.2013.c) PendingapprovalofMinistryofPowerandDepartmentofPublicEnterprises,specialallowanceup to10%ofBasicpay amounting to

`17.67croreforthefinancialyear2015-16(Cumulativeamountingto`114.01croreupto31.03.2016)isbeingpaidtoemployeeswhoarepostedinthedifficultandfarflungareas.Theaboveallowanceisinadditiontothemaximumceilingof50%ofBasicPayasperDPEofficememorandumno.2(70)/08-DPE(WC)-GL-XVI/08dated26-Nov-2008.

d) EmployeebenefitexpensesfortheFin.Year2014-15includes`87.28croreasbalancecontributiontowardsPowergridEmployeesDefinedContributionSuperannuationBenefit(Pension)Schemefortheperiod01.01.2007to31.03.2012.

e) Salarieswagesallowances&benefitsincludes`14.10croreagainstexcessprovisionwrittenbackofperformancerelatedpaywrittenback.

(` inCrore)

(` inCrore)

(` inCrore)

For the year ended 31st March,2016

For the year ended 31st March,2016

Current Year

For the year ended 31st March,2015

For the year ended 31st March,2015

Previous year

Particulars

Particulars

Note 2.27/Employee benefits expense

Note 2.28/Finance costs

Consolidated Account

222

Depreciation/amortisationonTangibleAssets 6436.31 5292.67Amortisation of Intangible assets 75.01 51.09 6511.32 5343.76Less:TransferredtoExpenditureDuringConstruction(Net)-Note2.32 12.18 12.68 6499.14 5331.08Less:DepreciationamortisedduetoFERVadjustment 196.96 157.75Charged To Statement of Profit & Loss # 6302.18 5173.33# Includes ` 107.98 crore (previous year `79.98crore)shareofjointlycontrolledentities.

(` inCrore)

(` inCrore)

For the year ended 31st March,2016

For the year ended 31st

March,2016

For the year ended 31st

March,2015

For the year ended 31st March,2015

Particulars

Particulars

Note 2.29/Depreciation and amortization expense

Note 2.30/Transmission, Administration and other expenses

Repair & Maintenance Buildings 49.83 46.58Plant&Machinery Sub-Stations 267.10 226.42 Transmissionlines 172.38 128.95 Telecomequipments 45.34 20.37 RLDC 7.06 16.98 Others 30.31 17.29 522.19 410.01SystemandMarketOperationCharges - 4.17Powercharges 162.75 174.38Less:Recoveryfromcontractors 0.74 1.25 162.01 173.13ExpensesofDieselGeneratingsets 4.50 6.54Storesconsumed 4.59 1.02Watercharges 3.24 1.22RightofWaycharges(Telecom) 4.88 4.41PatrollingExpenses-Telecom 1.92 1.99LastMileconnectivity-Telecom 6.61 2.21 Training&RecruitmentExpenses 30.76 26.61Less:Feesfortrainingandapplication 1.01 0.03 29.75 26.58Legalexpenses 16.78 11.63Professionalcharges(IncludingTA/DA) 18.30 14.21Consultancyexpenses(IncludingTA/DA) 14.19 7.92Communicationexpenses 17.76 15.97Travelling&Conv.exp.(excludingforeigntravel) 106.92 113.16Foreigntravel 12.09 13.65 119.01 126.81Tenderexpenses 29.02 22.58Less:Saleoftenders 4.19 5.04 24.83 17.54Payments to Statutory Auditors AuditFees 0.90 0.90 TaxAuditFees 0.11 0.14 InOtherCapacity 0.83 1.14 Arrears - 0.13 OutofpocketExpenses 0.94 0.79 2.78 3.10

Consolidated Account

223

(` inCrore)

Particulars

Advertisementandpublicity 12.56 12.37Printingandstationery 7.09 6.52BooksPeriodicalsandJournals 1.28 1.16EDPhireandothercharges 9.32 3.94Entertainmentexpenses 1.67 2.16Brokerage&Commission 0.41 0.36Research&Developmentexpenses 5.41 3.41CostAuditandPhysicalverificationFees 1.35 0.76Rent 11.16 12.57CapitalExpenditureonassetsnotownedbytheCompany 0.62 3.93CERCpetition&Othercharges 49.63 38.31Miscellaneousexpenses 73.99 70.02HorticultureExpenses 14.04 12.23SecurityExpenses 123.95 107.36HiringofVehicle 109.06 124.63Insurance 84.51 72.87Ratesandtaxes 7.44 9.64LicenseFeestoDOT 34.28 23.44Bandwidthchargesdarkfibreleasecharges(Telecom)etc 22.14 22.17ExpenditureonCorporateSocialResponsibility(CSR)&Sustainabledevelopment 118.31 29.65Nonoperatingexpenses 0.07 0.54TransitAccomodationExpenses 11.23 9.18Less:IncomefromTransitAccomodation 1.15 0.92 10.08 8.26RebatetoCustomers* 120.09 118.55ForeignExchangeRateVariation(NetofFERVgain&amountrecoverable) 4.84 -Provisions Others 7.50 43.95 7.50 43.95 1833.97 1603.84Less:TransferredtoExpenditureduringConstruction(Net)-Note2.32 172.94 196.52 1661.03 1407.32LossonDisposal/WriteoffofFixedAssets 1.12 0.58Total# 1662.15 1407.90Stores consumption included in repair and maintenance 178.78 137.53

# Includes ` 93.22 crore (previous year `21.01crore)shareofjointlycontrolledentities.

Further Notes: *TheCompanyhasallowedrebateagainstpaymentreceivedthroughLC/cheques/RTGSforeffectingbetterandtimelyrecoveryofduesfromStatePowerUtilitiesonconsistentbasis

Income Transmission charges (47.74) 1.74Depreciation/amortisationwrittenback 60.07 -Others 0.79 (0.48) 13.12 1.26

(` inCrore)

For the year ended 31st March,2016

For the year ended 31st March,2015Particulars

Note 2.31/Prior period items(Net)

Note 2.30/Transmission, Administration and other expenses (contd.)

Consolidated Account

For the year ended 31st

March,2016

For the year ended 31st

March,2015

224

A. Employees Remuneration & Benefits Salarieswagesallowancesandbenefits 415.24 471.64 Contributiontoprovidentandotherfunds 64.54 80.88 Welfareexpenses 31.40 29.54Total(A) 511.18 582.06B. Other Expenses Repair and maintenance Buildings 4.22 4.40 Others 18.40 4.41 22.62 8.81 Powercharges 3.88 11.41 Less:Recoveryfromcontractors 0.24 0.39 3.64 11.02 ExpensesonDieselGeneratingsets 0.35 0.88 Watercharges 0.80 0.50 Training&RecruitmentExpenses 2.29 0.09 Legalexpenses 2.83 3.19 Professionalcharges 13.89 5.24 Consultancyexpenses 12.14 6.04 Communicationexpenses 2.03 2.48 Travelling&Conv.exp.(IncludingForeignTravel) 34.96 47.02 Tenderexpenses 7.17 8.82 Less:Saleoftenders 4.03 4.49 3.14 4.33 Payment to Auditors 0.18 0.11 AdvertisementandPublicity 1.53 0.60 Printingandstationery 0.69 0.81 Books,PeriodicalsandJournals 0.03 0.02 EDPhireandothercharges 0.28 1.07 Entertainmentexpenses 0.05 0.16 Brokerageandcommission 0.07 0.07 Rent 3.53 5.26 Miscellaneousexpenses 16.37 19.70 HorticultureExpenses 0.59 0.42 SecurityExpenses 16.91 19.48 HiringofVehicles 32.11 55.87 Insurance 0.04 0.84 Ratesandtaxes 1.25 1.80

Note 2.31/Prior period items(Net) (contd.)

Note 2.32/ Expenditure during Construction (Net)

ExpenditurePower charges 0.66 37.77Ratesandtaxes 0.25 3.76Interest 11.92 -Others 1.24 6.21 14.07 47.74Prior period expenditure/(income )(Net) 0.95 46.48 Less:TransferredtoExpenditureduringConstruction(Net)-Note2.32 0.08 (0.71)Total# 0.87 47.19# Includes ` 15.61 crore (previous year `Nil)shareofjointlycontrolledentities.

(` inCrore)

(` inCrore)

For the year ended 31st March,2016

For the year ended 31st March,2015

Particulars

ParticularsFor the year ended 31st

March, 2016

For the year ended 31st

March, 2015

Consolidated Account

225

(` inCrore)

Particulars

Bandwidthcharges,darkfibreleasecharges(Telecom) 0.14 0.19 TransitAccomodationExpenses 0.49 0.55 Less:IncomefromTransitAccomodation 0.01 0.03 0.48 0.52 Sub-total 172.94 196.52 PriorPeriodadjustment(net) 0.08 (0.71)Total(B) 173.02 195.81C. Depreciation/Amortisation 12.18 12.68D. Finance Costs a) Interest on Loans from IndianBanks,FinancialInstitutionsandCorporations 637.69 590.03 ForeignBanksandFinancialInstitutions 94.45 107.15 Secured/UnsecuredRedeemableBonds 1449.31 1637.90 ForeignCurrencyBonds 60.05 70.72 2241.50 2405.80 b) Other borrowing costs Commitmentcharges 11.67 13.24 Guaranteefee 65.27 71.09 OtherFinanceCharges 18.21 2.53 95.15 86.86Total ( C ) 2336.65 2492.66D. Less: Other Income Interest from Indianbanks 29.47 33.54 Contractors 47.98 152.42 Others 0.20 2.59 77.65 188.55 Miscellaneousincome 3.98 11.03Total (D) 81.63 199.58GRAND TOTAL (A+B+C-D)# 2951.40 3083.63# Includes ` 35.34 crore (previous year ` 41.67crore)shareofjointlycontrolledentities.

Note 2.32/ Expenditure during Construction (Net) (contd.)

For the year ended 31st

March, 2016

For the year ended 31st

March, 2015

Consolidated Account

226

2.33. BASIS OF CONSOLIDATION 1.1 TheconsolidatedfinancialstatementsrelatetoPowerGridCorporationofIndiaLimited(theCompany), itsSubsidiariesand

interest in Joint Venture Companies. a) BasisofAccounting: i) Thefinancialstatementsofthesubsidiarycompaniesandjointventurecompaniesintheconsolidationaredrawnuptothe

same reporting date as of the Company. ii) TheconsolidatedfinancialstatementshavebeenpreparedinaccordancewithAccountingStandard(AS)21-‘Consolidated

Financial Statements’ andAccountingStandard (AS) -27 ‘FinancialReportingof Interests in JointVenturesasprescribedundersection133ofTheCompaniesAct2013(‘Act’)readwithrule7ofTheCompanies(Accounts)Rules,2014andgenerallyacceptedaccountingprinciples(GAAP).

b)PrinciplesofConsolidation: Theconsolidatedfinancialstatementshavebeenpreparedasperthefollowingprinciples:- i) Thefinancialstatementsofthecompanyanditssubsidiariesarecombinedonalinebylinebasisbyaddingtogetherthebook

valueoflikeitemsofassets,liabilities,incomeandexpensesaftereliminatingintra-groupbalances,intra-grouptransactions,unrealisedprofitsorlosses.

ii) Theconsolidatedfinancialstatementsincludetheinterestofthecompanyinjointventures,whichhasbeenaccountedforusingproportionateconsolidationmethodofaccountingandreportingwherebythecompany’sshareofeachasset,liability,incomeandexpenseofajointcontrolledentityisconsideredasaseparatelineitemaftereliminatingproportionateshareofunrealisedprofitinaccordancewiththeAccountingStandard(AS-27)‘FinancialReportingofInterestsinJointVentures’.

iii)Theconsolidatedfinancialstatementsarepreparedusinguniformaccountingpoliciesforliketransactionsandothereventsinsimilarcircumstancesandarepresentedtotheextentpossible,inthesamemannerasthecompany’sseparatefinancialstatementsexceptasotherwisestatedinthenotestotheaccounts.

c) DifferenceinAccountingPoliciesandImpactthereon: ForcertainitemsthecompanyanditsSubsidiaries&jointventureshavefolloweddifferentaccountingpolicies.Howeverthe

impact of the same is not material. 1.2 The Subsidiaries and Joint Venture Companies considered in the financial statements are as follows:-

OTHER NOTES

Name of the CompanyProportion (%) of Share holding as on

31st March, 2016 31st March, 2015Subsidiaries Incorporated in India1.PowerSystemOperationCorporationLimited(POSOCO) 100% 100%2. Powergrid NM Transmission Limited 100% 100%

3.PowergridVemagiriTransmissionLimited 100% 100%

4.PowergridVizagTransmissionLimited 100% 100%

5.PowergridUnchaharTransmissionLimited 100% 100%

6.PowergridKalaAmbTransmissionLimited 100% 100%

7.PowergridJabalpurTransmissionLimited 100% 100%

8. Powergrid Parli Transmission Limited 100% -

9.PowergridWaroraTransmissionLimited 100% -

10. Powergrid Southern Interconnector Transmission System Limited 100% -

11. Grid Conductors Limited** - -

Joint Ventures Incorporated in India

1.PowerlinksTransmissionLimited 49% 49%

2. Torrent Power Grid Limited 26% 26%

3.JaypeePowergridLimited 26% 26%

4.ParbatiKoldamTransmissionCompanyLimited 26% 26%

5.TeestavalleyPowerTransmissionLimited 26% 26%

6. North East Transmission Company Limited 26% 26%

7.NationalHighPowerTestLaboratoryPrivateLimited 21.64% 20%

8.EnergyEfficiencyServicesLimited 13.63% 25%

9.BiharGridCompanyLimited 50% 50%

10.KalingaVidyutPrasaranNigamPrivateLimited 50% 50%

11. Cross Border Power Transmission Company Limited 26% 26%

(` inCrore)

Consolidated Account

227

OTHER NOTES (contd...)

(i) ProportionofshareholdinginEnergyEfficiencyServicesLimited(EESL)hasbeenreducedto4.9%ason25th April,2016andconsequentlytheDirectornominatedbyPOWERGRIDintheBoardofEESL,ceasedtobethememberoftheBoardfromthatdateasperthetermsofJointVenture Agreement.

(ii) Forthepurposeofconsolidation,company’sshareofinteresthasbeentakenaspershareholdingmentionedabove(exceptforNHPTLintheF.Y2014-15takenat20%basedonshareholderagreementinsteadof21.64%whichisactualshareholding.

(iii)FinancialstatementsusedforconsolidationareunauditedexceptNationalHighPowerTestLaboratryPrivateLtd.OtherNotesandaccountingpolicies of two JV companies Teestavally Power Transmission Limited and Power Transmission Company Nepal Limited are not available and have not been considered for consolidation.

**Share Capital of `0.05crsinGridConductorLimitedhasbeenpaidinApril2016.Howeverbasedoncontrolofcompositionofboardofdirectors by Power Grid Corporation of India Limited, the company has been considered as wholly owned subsidiary company.

Thecompany’sshareinassets,liabilities,contingentliabilitiesandcapitalcommitmentason31stMarch2016andincomeandexpensesfortheyearinrespectofabovejointventureentitiesbasedontheiraccountsaregivenbelow:-

1.3 TheCompanyhasmadefurtherinvestmentof`30.28crore(previousyear`10.00crore)inBiharGridCompanyLimited,aJointVentureCompanyinwhich50%sharesareheldbythecompanyandbalance50%sharesareheldbyBiharStatePowerHoldingCompany Limited.

1.4 The Company has made further investment of ` 3.90 crore (previous year ` 0.98 crore) in Power Transmission CompanyNepalLimited,aJointVentureCompanyinwhich26%sharesareheldbythecompanyandbalance50%sharesareheldbyNepalElectricityAuthority,10%sharesareheldbyIL&FSEnergyDevelopmentCompanyLimitedand14%sharesareheldbyHydroelectricityInvestment&developmentcompanyLtd.

1.5 TheCompanyhasmade further investmentof` 5.38 crore (previous year`Nil crore) inCrossBorderPowerTransmissionCompanyLimited,aJointVentureCompanyinwhich26%sharesareheldbythecompanyandbalance74%sharesareheldbyIL&FSEnergyDevelopmentCompanyLimited,SJVNLimited&NepalElectricityAuthority.

1.6 The Company has made further investment of 26.11crore (previous year Nilcrore)inTeestavalleyPowerTransmissionLimited,aJointVentureCompanyinwhich26%sharesareheldbythecompanyandbalance74%sharesisheldbyTeestaUrjaLimited.

1.7 Duringtheyearcompanyhasmadeinvestmentof`0.05croreinPowergridParliTransmissionLimitedLimitedawhollyownedsubsidiary company. The Company was taken over from REC Transmission Projects Company Limited vide share purchaseagreement dated 24thApril,2015tocarryoverthebusinessawardedundertariffbasedbidding.AfterthetransferPowergridParliTransmission Limited becomes the wholly owned subsidiary company of the company.

1.8 During the year company has made investment of ` 0.05 crore in PowergridWarora Transmission Limited a wholly ownedsubsidiarycompany. The Company was taken over from REC Transmission Projects Company Limited vide share purchase

31st March 2016 31stMarch2015

A. AssetslNon Current Assets

lFixedAssets 2064.52 1766.63lLong term loans and advances 119.04 85.77

lCurrent Assets 332.05 333.96

Total 2515.61 2186.37

B. Liabilities

lNon current liabilities 1364.46 1232.61

lCurrent Liabilities 388.00 236.33

Total 1752.46 1468.94

C. Contingent Liabilities 40.48 31.55

D. Capital Commitments 493.84 579.59

CurrentYear PreviousYear

E. Income 435.02 328.36

F. Expenses(Includingprovisionfortaxes) 393.54 203.21

Name of the CompanyProportion (%) of Share holding as on

31st March, 2016 31st March, 2015

12. RINL Powergrid TLT Private Limited 50% -

Joint Ventures Incorporated Outside India1. Power Transmission Company Nepal Ltd 26% 26%

(` inCrore)

(` inCrore)

Consolidated Account

228

OTHER NOTES

agreement dated 24th April,2015tocarryover thebusinessawardedunder tariffbasedbidding.After thetransferPowergridWaroraTransmissionLimitedbecomesthewhollyownedsubsidiarycompanyofthecompany.

1.9 Duringtheyearcompanyhasmade investmentof`0.05crore inPowergridSouthernInterconnectorTransmissionLimitedawhollyownedsubsidiarycompany.TheCompanywastakenoverfromRECTransmissionProjectsCompanyLimitedvidesharepurchaseagreementdated4thDecember,2015tocarryoverthebusinessawardedundertariffbasedbidding.AfterthetransferPowergrid Southern Interconnector Transmission Limited. becomes the wholly owned subsidiary company of the company.

1.10 During the year company has made investment of ` 0.10 crore in RINL Power grid TNT Pvt Limited, a Joint Venture Company in which50%sharesareheldbythecompanyandbalance50%sharesareheldbyRastriyaIspatNigamLimited.

1.11 DuringtheyearcompanyhasnotmadeanyfurtherinvestmentintheJointVentureEnergyEfficiencyServicesLimitedwhereasotherventurershaveincreasedtheirinvestmentresultingindecreaseincompany’sshareholdingfrom25.00%to13.63%andthecompany’sshareforconsolidationhasbeentakenaccordingly.

2.34 Cashequivalentofdeemedexportbenefitsavailedof`209.99croreinrespectofsuppliesaffectedforEastSouthInterConnector-II Transmission Project (ESI) andSasaramTransmission Project (STP),were paid to theCustoms andCentral ExciseAuthorities inaccordancewithdirectionfromMinistryofPower(Govt.ofIndia)during2002-03duetononavailabilityofWorldBankloanfortheentiresuppliesinrespectofESIprojectandforthesuppliespriortoMarch2000inrespectofSTPprojectandthesamewascapitalisedinthebooksofaccount.Thereafter,WorldBankhadfinancedboththeESIprojectandSTPprojectasoriginallyenvisagedandtheybecameeligiblefordeemedexportbenefits.Consequently,thecompanyhaslodgedclaimswiththeCustomsandExciseAuthorities.

InthisregardtheCumulativeamountreceivedandde-capitalizedupto31stMarch2016is` 12.12 crore (Previous year `12.12crore).The company continued to show the balance of `197.87croreasat31stMarch2016(Previousyear`197.87crore)inthecapitalcostoftherespectiveassets/projectspendingreceiptofthesamefromCustomsandExciseAuthorities.

2.35 a)BalancesofTradeReceivablesandrecoverableshownunderAssetsandTradeandOtherPayablesshownunderLiabilities includebalances subject to confirmation/reconciliation and consequential adjustments if any. However reconciliations are carried out onongoing basis.

b)Intheopinionofthemanagement,thevalueofanyoftheassetsotherthanfixedassetsandnoncurrentinvestmentsonrealizationin the ordinary course of business will not be less than value at which they are stated in the Balance Sheet.

2.36 Informationinrespectofcostplusconsultancycontracts,consideringthesameasconsultancybusinessinviewofAccountingStandard(AS)-7(Revised2002)“ConstructionContracts”isprovidedasunder:

2.37 ExtraordinaryitemforthePreviousYear2014-15representsunclaimedadvancesfromcustomersamountingto`5.13crorelyingsincemorethan3yearswrittenbackbyoneofthesubsidiarycompany.Taxof`1.74croreisincludedundercurrenttax.

2.38 PursuanttocommunicationofministryofPowervideofficememorandum18/2/2015-PGdated25thMarch2015and29thDec2015,BoardofDirectorsinitsmeetingheldon9thmarch2016hasapprovedtosell&transfer30640000equityshares(100%shareholding)heldbythecompanyinPowerSystemOperationCorporationLimited(POSOCO)toGovt.OfIndia.CabinethasapprovedfortransferofsharesofPOSOCO to the Government of India. Board has further approved that purchase consideration be calculated based on the balance sheet of POSOCO as on the date preceding the date of transfer. Shares are yet to be transferred.

2.39 Thecompanyhasbeenentrustedwiththeresponsibilityofbillingcollectionanddisbursement(BCD)ofthetransmissionchargesonbehalfofall the ISTS (Interstate transmissionSystem) licensees through themechanismof thePOC (PointofConnection) chargesintroduced w.e.f. 01stJuly2011whichinvolvesbillingbasedonapproveddrawl/injectionofpowerinplaceofoldmechanismbasedonMegaWattallocationofpowerbyMinistryofPower.Bythismechanism,revenueofthecompanywillremainunaffected.

SomeofthebeneficiariesaggrievedbythePOCmechanismhavepreferredappealbeforevariousHighCourtsofIndia.AllsuchappealshavebeentransferredtoDelhiHighCourtasperorderoftheSupremeCourtontheappealpreferredbythecompanyandcompanyhasalsorequestedfordirectingagitatingstatestopayfulltransmissionchargesaspernewmethodologypendingsettlementofthematter.HonorableDelhiHighCourthasdirectedalltheabovebeneficiariestoreleasepaymentsandaccordinglythebeneficiarieshavestartedmakingpaymentsasperthesaiddirections.

2.40 CERC issued tariff order dated 29.04.2011 in respect of Barh-Balia Transmission line considering the date of commercial operation(DOCO)01.07.10inlinewiththeirRegulation.Againstthistarifforder,oneofthebeneficiariesfiledappealbeforetheAppellateTribunal

(` inCrore)

ParticularsFor the

Year ended 31st March, 2016

For the Year ended

31st March, 2015i) Theamountofrevenuerecognisedoncostplusconsultancycontractworks 360.02 286.65ii) The methods used to determine the contract revenue recognised

15%oftotalconsultancyfeesuptoawardstagetoexecutingagencies(outofwhich10% upto issue of notices inviting tenders), 85%with progress of work includingsupplies(Progressofworkistakenascertifiedbyengineerincharge).

Accounting Policy-1.16.7

Accounting Policy -1.16.7

iii) Cumulative amount of costs incurred on construction contracts 16057.72 13297.23iv) Cumulative amount of advance received from customers as at the year end 18167.29 15493.67v) Amount of retention money with customers as at the year end 14.95 31.70vi) Grossamountduefromcustomersforcontractworksasanassetasattheyearend 25.97 44.28vii) Grossamountduetocustomersforcontractworksasaliabilityasattheyearend 2289.82 1312.14

Consolidated Account

229

OTHER NOTES (contd...)

forElectricity(ATE)challengingthetariffapprovedbyCERCbasedonaboveDOCOclaimedbythecompany.TheATEvideitsorderdated02.07.2012observedthattheDOCOof01.07.2010wasnotappropriateastheappellanthadreportedthatthetransmissionlinewasputinregularservicefromAugust2011i.e.whenitwasputinregularservicewhentheotherendinthescopeofthegeneratingcompanyviz.NTPCwascompletedi.e.August2011thoughCompanyhadcompleteditsscopeason01.07.2010.Accordingly,theATEremandedCERCforredeterminationofDOCOandtariffoftheTransmissionline.Uponthis,thecompanyfiledanappealintheSupremeCourtexplainingthattheDOCOof01.07.2010wasasperCERCRegulations.TheHon’bleSupremeCourton15.03.2013hadstayedalltheproceedingsbeforetheCERCforthesaidTransmissionSystembasedontheappealfiledbytheCompany.

TheCompanyhadalsofiledanotherpetitionon28.02.2013beforetheCentralElectricityRegulatoryCommission(CERC)fordeterminationofrevisedtransmissiontariffonthebasisofrevisedcostestimateapprovedbyitsBoardofDirectors.Subsequentlyon08.10.2013,initsinterimorder,theHon’bleSupremeCourthasdirectedtheCERCtoproceedwithdeterminationoftariffforthesaidTransmissionSystempendingdisposaloftheappealregardingdeterminationofDOCOdate.TheCERChasvideitsorderdated30.06.2015hasre-determinedtheDOCOw.e.f01.09.2011andrevisedthetariffasperdecisionoftheHonb’leATE.

TheHonb’leSupremeCourt,hasvide itsorderdated03.03.2016hasupheld the judgementof theHon’bleATE.Reviewapplicationfiledbythecompanyagainsttheorderdt.03.03.2016hasalsobeendismissedbyHonb’leSupremeCourtvideorderdt.12.05.2016.inaccordancewiththeaboveorderoftheHon’bleSupremeCourt,revenueforthisTLhasbeenrecognisedw.e.f.01.09.2011inplaceofearlierDOCOof01.07.2010andtransmissionincomefortheperiodfrom01.07.2010to31.08.2011amountingto`112.57crore(netof`18.63crorerecoveredfromNTPCasperorderofCERC)hasbeenreversedduringtheyear.

2.41 AsperCERCGrantofConnectivity,Long-termAccessandMedium-termOpenAccessininter-StateTransmissionandrelatedmattersRegulations,2009asamendedfromtimetotime,alltransmissionelementsareconstructedaspertherequirementofthelongtermcustomers(LTA)upto25yearsandtransmissionchargesarerecoverablefromsuchlongtermcustomers.Formediumtermopenaccess(MTOA),noadditionaltransmissionelementisconstructedbutonlytheexistingsurplustransmissioncapacitiesareutilised.Thechargesrecovered from the MTOA customers, upon utilisation of the surplus capacity which is very small and temporary in nature, are used to reduce the charges of the LTA customers. The company is revenue neutral.

OneoftheMTOAcustomer,signedanagreementforMTOAforaperiodof3yearsfrom16.06.2013butdidnotutilisethecapacity.Thecompany, however, billed the customer as per the agreement. But the MTOA customer defaulted on its dues of `15.64crorebilledduringtheperiodfrom16.06.2013to31.01.2014.Duetonon-recoveryofdues,thecompanyhascancelledtheMTOAw.e.f.01.02.2014asperorderoftheATE.Thetotaltransmissionchargesarebeingrecoveredfromothercustomerssincethen.Anapplication,filedbythecompanyispendingbeforeCERCforallowingrecoveryoftheduesofsuchMTOAcustomerfortheperiodfrom16.06.2013to31.01.2014from other customers during this period.

Due to default made by the same customer in their agreement with the company for LTA, the company has encashed during the yearconstructionbankguaranteesworth` 48.00crore,andadjustedtheproceedsofthesameagainstitsduesof`15.64croreandoutstanding surcharge of ` 6.80croreupto31.03.2016.

2.42 (i)FERVLossof`1841.04crore(PreviousYear`510.41crore)hasbeenadjustedintherespectivecarryingamountofFixedAssets/CapitalworkinProgress(CWIP)/leasereceivables.

(ii)FERVLossof`4.84crore(PreviousYearFERVLoss`12.44crore)hasbeenrecognisedintheStatementofProfitandLoss.2.43 Change in accounting policy/accounting practice a)CostofMobilePhoneswhichwerehithertocapitalisedandbeingdepreciatedovertheusefullifeoftheassetisnowbeingchargedto

statementofprofitandloss.Thechangehasresultedindecreaseinprofitby`1.89crorewithcorrespondingdecreaseinGrossBlockand Accumulated Depreciation by `7.13croreand`5.24crorerespectively.

b)InTelecomandConsultancySegmentResidualValue inrespectofComputer&PeripheralsandServer&NetworkComponents isconsideredasNil insteadofasspecified inScheduleIIofCompaniesAct2013.Thechangehasresulted indecrease inprofitby `0.30crorewithcorrespondingincreaseindepreciation.

c)CostofServerwhichwerehithertodepreciatedovertheusefullifeof3yearsisnowbeingdepreciatedovertheusefullifeof5years.Thechangehasresultedinincreaseinprofitby` 1.10 crore with corresponding decrease in depreciation.

2.44 Borrowing cost capitalised during the year is `2336.64crore(previousYear`2492.66crore)asperAS16-“BorrowingCost”.2.45 Basedoninformationavailablewiththecompany,therearefewsuppliers/serviceproviderswhoareregisteredasmicro,smallormedium

enterpriseunderTheMicro,SmallandMediumEnterprisesDevelopmentAct,2006(MSMEDAct,2006).InformationinrespectofmicroandsmallenterprisesasrequiredbyMSMEDAct,2006isgivenasunder:

(` inCrore)

Sr. No Particulars Current Year Previous Year

1 Principal amount and interest due thereon remaining unpaid to any supplier as at end of each accounting year:PrincipalInterest

NilNil

0.020.06

2 The amount of Interest paid by the buyer in terms of section 16 of the MSMED Act, 2006 along with the amount of the payment made to the supplier beyond the appointed day during each accounting year

Nil Nil

Consolidated Account

230

OTHER NOTES

Sr. No Particulars Current Year Previous Year

3 Theamountofinterestdueandpayablefortheperiodofdelayinmakingpayment(whichhavebeenpaidbutbeyondtheappointeddayduringtheyear)butwithoutaddingtheinterestspecifiedunderMSMEDAct,2006

Nil Nil

4 The amount of interest accrued and remaining unpaid at the end of each accounting year.

Nil 0.06

5 The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterpriseforthepurposeofdisallowanceasadeductibleexpenditureundersection23oftheMSMEDAct2006

Nil Nil

2.46 DisclosuresasperAccountingStandard(AS)15-“EmployeeBenefits” Definedemployeebenefit/contributionschemesareasunder:-A. Provident Fund CompanypaysfixedcontributiontoProvidentFundatpredeterminedratetoaseparatetrust,whichinveststhefundsinpermitted

securities. Contribution to family pension scheme is paid to the appropriate authorities. The contribution to the fund and EPS Scheme for the year amounting to `84.57crore(previousyear`76.92crore)hasbeenrecognizedasexpenseandischargedtoStatementofProfitandLoss.TheobligationofthecompanyislimitedtosuchfixedcontributionandtoensureaminimumrateofinterestoncontributionstothemembersasspecifiedbyGOI.Asperthereportofactuaryoverallinterestearningandcumulativesurplus‘ismore’thanstatutoryinterestpaymentrequirement.Hence,nofurtherprovisionisconsiderednecessary.

B. Gratuity Thecompanyhasadefinedbenefitgratuityplan.Everyemployeewhohasrenderedcontinuousserviceoffiveyearsormoreisentitled

togetgratuityat15dayssalary(15/26X lastdrawnbasicsalaryplus,dearnessallowance)foreachcompletedyearofserviceonsuperannuation,resignation,termination,disablementorondeathsubjecttoamaximumof` 10 lacs. The scheme is funded by the company and is managed by a separate trust. The liability for the same is recognised on the basis of actuarial valuation on annual basis on the Balance Sheet date.

C. Pension TheCompanyhas schemeof employeesdefinedPensionContribution.Company contribution is paid to separate trust. Amountof

contributionpaid/payablefortheyearis`102.19crore(PreviousYear`76.76crore)hasbeenrecognisedasexpenseandischargedtostatementofprofit&loss.

D. Post-Retirement Medical Facility (PRMF) ThecompanyhasPost-RetirementMedicalFacility(PRMF),underwhichretiredemployeesandthespouseareprovidedmedicalfacilities

intheempanelledhospitals.TheycanalsoavailtreatmentasOut-Patientsubjecttoaceilingfixedbythecompany.Theschemeisunfunded and liability for the same is recognised on the basis of actuarial valuation on annual basis on the Balance Sheet date.

E. Leave Encashment TheCompanyprovidesforearnedleavebenefit(includingcompensatedabsences)andhalf-payleavetotheemployeesoftheCompany

whichaccrueannuallyat30daysand20daysrespectively.Earnedleaveisen-cashablewhileinservice.Half-payleaves(HPL)areen-cashableonlyonseparationbeyondtheageof55yearsuptothemaximumof300days(HPL).However,totalamountofleavethatcanbeencashedonsuperannuationshallberestrictedto300daysandnocommutationofhalf-payleaveshallbepermissible.Theliabilityfor the same is recognised on the basis of actuarial valuation

F. Other Defined Retirement Benefits (ODRB) The Company has a scheme for settlement at the time of superannuation at home town for employees and dependents to superannuated

employees. The scheme is unfunded and liability for the same is recognised on the basis of actuarial valuation on annual basis on the Balance Sheet date.

Theaboveschemes(D,EandF)areunfunded.G. ThesummarisedpositionofvariousdefinedbenefitsrecognizedintheStatementofProfit&LossandBalanceSheetandfundedstatus

isasunder:- a) ExpensesrecognisedinStatementofprofitandloss

Description GRATUITY PRMF Leave ODRB

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Service Cost 27.02 25.09 9.88 8.64 22.78 20.52 0.83 0.78

Interestcostonbenefitobligation 39.46 38.56 21.67 19.65 28.01 26.72 1.28 1.28

Expectedreturnonplanassets (36.12) (35.91) - - - - - -

Netactuarial(gain)/lossrecognizedintheyear

(32.36) (0.26) 17.37 17.53 52.11 56.31 (0.26) (0.45)

ExpensesrecognizedintheStatementofprofitandloss

(2.00) 27.48 48.92 45.82 102.90 103.55 1.85 1.61

(` inCrore)

Consolidated Account

231

Description GRATUITY PRMF Leave ODRB

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

(i)Presentvalueofobligationasattheyear end

502.74 493.31 311.24 270.81 390.34 350.06 16.91 16.00

(ii)Fairvalueofplanassetsasattheyearend

536.43 494.79 - - - - - -

Difference(ii)–(i) 34.69 1.48 (311.24) (270.81) (390.34) (350.06) (16.91) (16.00)

Netasset(liability)recognizedintheBalance Sheet

33.69 1.48 (311.24) (270.81) (390.34) (350.06) (16.91) (16.00)

(` inCrore)

b) Actualreturnonplanassetsis` 41.42 crore (previous year `38.99crore) c) TheamountrecognizedintheBalanceSheet

OTHER NOTES (contd...)

Description GRATUITY PRMF Leave ODRB

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Present value of obligation as at the beginning of the year

493.26 453.65 270.81 231.28 350.06 333.32 16.00 15.11

Interest cost 39.45 38.56 21.67 19.65 27.99 26.72 1.28 1.28

Current Service Cost 27.01 25.09 9.88 8.64 22.73 20.52 0.82 0.78

Benefitspaid (32.39) (29.08) (8.50) (6.30) (62.43) (86.83) (0.93) (0.72)

Netactuarial(gain)/lossonobligation (24.57) 5.04 17.38 17.53 52.11 56.31 (0.26) (0.45)

Presentvalueofthedefinedbenefitobligation as at the end of the year

502.74 493.26 311.24 270.81 390.46 350.06 16.91 16.00

Description GRATUITY

Current Year Previous Year

Fair value of plan assets as at beginning of the year 494.79 448.91

Expectedreturnonplanassets 37.42 35.91

Contribution by employer 28.74 33.76

Benefitspaid (30.60) (29.08)

Actuarialgain/(loss) 6.08 5.29

Fair value of plan assets as at end of the year 536.43 494.79

d) Changesinthepresentvalueofthedefinedbenefitobligations:

e) Changesinthefairvalueofplanassets:

H. Other Employee Benefits Provision for Long Service Award amounting to `0.95crore(PreviousYear`1.24crore)havebeenmadeonthebasisofactuarial

valuation at the year end. I. Details of the Plan Asset (Gratuity) Thedetailsoftheplanassetsatcostareasfollows:-

(` inCrore)

(` inCrore)

DescriptionSr. No.

(At Purchase Value)

As at 31 March 2016

As at 31 March 2015

(` inCrore)

i) StateGovernmentSecurities 104.05 96.14ii) CentralGovernmentSecurities 129.44 121.24iii) CorporateBonds/Debentures 279.58 254.32iv) RBISpecialDeposit 5.13 5.13v) OtherAssets 18.23 17.96 Total:- 536.43 494.79

Consolidated Account

232

J. Actuarial Assumptions Principal assumptions used for actuarial valuation are: i) Methodused-Projectedunitcredit(PUC)(PreviousYear(PUC)) ii) Discountrate-8.00%(previousYear8.00%) iii) Expectedrateofreturnonassets(Gratuityonly)–8.00%(previousYear8.00%) iv) Futuresalaryincrease-6.50%(previousYear6.50%) Theestimateoffuturesalaryincreases,consideredinactuarialvaluation,takesintoaccount(i)inflation,(ii)Seniority(iii)Promotion

and(iv)Otherrelevantfactors,suchassupplyanddemandintheemploymentmarket.Furthertheexpectedreturnonplanassetsisdeterminedconsideringseveralapplicablefactorsmainlythecompositionofplanassets,assessedriskofassetmanagementandhistorical return for plan assets.

K.TheCompany’sbestestimateofcontributiontowardsgratuityforthefinancialyear2016-17is Nil crore (previous year 1.51crore) L.Theeffectofthepercentagepointincrease/decreaseinthemedicalcostofPRMFwillbeasunder:-

Description Increase by Decrease by

Current Year Previous Year Current Year Previous Year

Service and Interest Cost 8.30 5.26 (3.25) (4.37)

Present value of obligation 68.68 60.24 (27.54) (24.38)

(` inCrore)

Description Year ended 31.03.2016

Year ended 31.03.2015

Gratuity i)Planassets–Loss/(Gain)ii)Obligation-Loss/(Gain)

4.2223.54

3.037.72

PRMFObligation–Loss/(Gain) (16.22) (10.44)

ODRBObligation–Loss/(Gain) 0.26 0.90

Leave Obligation–Loss/(Gain) (48.82) (50.97)

M. Experience Adjustments (` inCrore)

2.47 Segment information (AS 17): a) Business Segments Thecompany’sprincipalbusinessistransmissionofbulkpoweracrossdifferentStatesofIndia.However,telecomandconsultancy

businessarealsotreatedasareportablesegmentinaccordancewithpara28ofAS-17“SegmentReporting”. b) Segment Revenue and Expense RevenuedirectlyattributabletothesegmentsisconsideredasSegmentRevenue.Expensesdirectlyattributabletothesegments

andcommonexpensesallocatedonareasonablebasisareconsideredassegmentexpenses. c) Segment Assets and Liabilities Segmentassetsincludealloperatingassetscomprisingofnetfixedassets,currentassetsandloanandadvances.Construction

work-in-progress,constructionstores&advancesandinvestmentsareincludedinunallocatedassets.Segmentliabilitiesincludeoperating liabilities and provisions.

Transmission Consultancy Telecom Elimination TotalCurrent

YearPrevious

YearCurrent

YearPrevious

YearCurrent

YearPrevious

YearCurrent

YearPrevious

YearCurrent

YearPrevious

YearRevenue: Revenue from Operations (including allocable other income)

20694.54 17229.88 538.56 385.20 393.88 276.37 21626.98 17898.58

Inter Segment Revenue 32.50 7.13 42.90 24.39 (75.40) (31.52)

Net Revenue from Operations 20694.54 17229.88 571.06 392.33 436.78 300.76 (75.40) (31.52) 21626.98 17898.58

Segment results 12024.90 9832.59 401.59 255.15 162.55 63.14 12589.04 10150.88UnallocatedInterestandOther Income 153.78 334.46

(`incrore)Segment Reporting

OTHER NOTES (contd...)

Consolidated Account

233

Description Before Extraordinary Item After Extraordinary Item

Current Year Previous Year Current Year Previous Year

NetProfitaftertaxusedasnumerator(`incrore) 6014.56 5042.86 6014.56 5046.25

Weightedaveragenumberofequitysharesusedasdenominator 5231589648 5231589648 5231589648 5231589648

Earningpershare(Basic&Diluted)(in`) 11.50 9.64 11.50 9.65

Face Value per share in ` 10.00 10.00 10.00 10.00

(` inCrore)

Transmission Consultancy Telecom Elimination TotalCurrent

YearPrevious

YearCurrent

YearPrevious

YearCurrent

YearPrevious

YearCurrent

YearPrevious

YearCurrent

YearPrevious

YearUnallocatedFinanceCosts 5097.87 4081.23

ProfitbeforeTax 7644.95 6404.11

ProvisionforTaxes 1630.39 1357.86

ProfitafterTax 6014.56 5046.25

Other information:

Segment Assets 128246.64 100905.24 1906.27 1175.89 816.71 800.82 130969.62 102881.95

UnallocatedAssets 50949.91 57882.33

Total Assets 181919.53 160764.28

Segment Liabilities: 9322.95 7630.83 2923.02 1873.96 391.80 550.09 12637.77 10054.88UnallocatedOtherLiabilities(includingloans) 126314.09 112270.67

Total liabilities 138951.86 122325.55Depreciation and Amortisation 6142.86 5080.77 8.65 2.26 90.60 90.30 6242.11 5173.33

Non-cashexpenditureotherthan Depreciation 1.21 24.50 2.88 0.46 4.53 19.57 8.62 44.53

CapitalExpenditure 27162.78 30230.91 53.33 39.80 28.00 53.82 27244.11 30324.53

d)Theoperationofthecompanymainlycarriedoutwithinthecountryandthereforethereisnoreportablegeographicalsegment.

2.48 Disclosure as per AS -20 “ Earning Per Share”

TheelementsconsideredincalculationofEarningPerShare(BasicandDiluted)areasunder:

2.49 Disclosure as per AS 18- “Related Party Disclosure” a) List of Related Parties:- i) Key Management Personnel Sh.I.S.Jha ChairmanandManagingDirector(w.e.f10thNovember2015) Sh.R.N.Nayak ChairmanandManagingDirector(superannuatedon30thSeptember2015) Sh.R.T.Agarwal Director(Finance) Sh.RaviPSingh Director(Personnel) Sh.R.P.Sasmal Director(Operations) Smt Divya Tandon Company Secretary ii) Joint Ventures:- i) PowerlinksTransmissionLimited ii) TorrentPowerGridLimited iii) JaypeePowergridLimited iv) ParbatiKoldamTransmissionCompanyLimited v) TeestavalleyPowerTransmissionLimited vi) NorthEastTransmissionCompanyLimited vii) NationalHighPowerTestLaboratoryPrivateLimited viii) EnergyEfficiencyServicesLimited. ix) BiharGridCompanyLimited x) KalingaBidyutPrasaranNigamPrivateLimited xi) CrossBorderPowerTransmissionCompanyLimited xii) PowerTransmissionCompanyNepalLtd xiii) RINLPowergridTLTPvt.Ltd

OTHER NOTES (contd...)

Consolidated Account

234

OTHER NOTES (contd...)

b) Transactions with the related parties at 2.49 (a) above during the year are as follows:

Description Current Year Previous Year

Transactions for services received by the company 1.81 -

NationalHighPowerTestLaboratoryPrivateLimited 1.81 -

Transactions for services provided by the company 75.49 47.70

Power Transmission Company Nepal Limited 2.41 -

Jaypee Powergrid Limited - 0.19

North East Transmission Company Limited 12.18 18.39

NationalHighPowerTestLaboratoryPrivateLimited 29.42 7.93

PowerlinksTransmissionLimited 0.08 -

EnergyEfficiencyServicesLimited 0.15 0.24

Cross Border Power Transmission Company Limited 3.94 3.94

Bihar Grid Company Limited 30.38 16.76

Teesta Valley Transmission Co Ltd 16.93 -

KalingaVidyutPrasaranNigamPrivateLimited - 0.25

Amount recoverable at the end of the year 31.84 34.98

ParbatiKoldamTransmissionCompanyLimited - 0.01

Power Transmission Company Nepal Limited 0.03 -

North East Transmission Company Limited 21.50 22.21

NationalHighPowerTestLaboratoryPrivateLimited - 4.19

EnergyEfficiencyServicesLimited 0.13 0.25

Bihar Grid Company Limited 9.19 7.08

KalingaVidyutPrasaranNigamPrivateLimited 0.85 0.84

Cross Border Power Transmission Company Limited - 0.30

PowerlinksTransmissionLimited 0.06 0.10

RINL Powergrid TLT Pvt. Ltd 0.08 -

Amount payable at the end of the year 56.25 48.23

ParbatiKoldamTransmissionCompanyLimited 0.09 0.09

NationalHighPowerTestLaboratoryPrivateLimited 5.36 -

PowerlinksTransmissionLimited 2.78 2.78

Bihar Grid Company Limited - 3.28

Cross Border Power Transmission Company Limited 7.58 1.70

Teestavalley Power Transmission Limited 40.44 40.38

Investment made during the year

Equity 65.77 34.72

(` inCrore)

Consolidated Account

235

OTHER NOTES (contd...)(` inCrore)

Description Current Year Previous Year

Teestavalley Power Transmission Limited 26.11 -

ParbatiKoldamTransmissionCompanyLimited - 14.71

Cross Border Power Transmission Company Limited 5.38 -

Bihar Grid Company Limited 30.28 10.00

NationalHighPowerTestLaboratoryPrivateLimited - 9.03

Power Transmission Company Nepal Limited 3.90 0.98

RINL Powergrid TLT Pvt. Ltd 0.10 -

Dividend Received 62.06 80.04

PowerlinksTransmissionLimited 44.72 44.14

Jaypee Powergrid Limited 4.68 12.87

Torrent Power Grid Limited 1.29 1.64

North East Transmission Company Limited 10.69 21.39

EnergyEfficiencyServicesLimited 0.68 -

Recovery for Deputation of Employees 0.35 0.67

EnergyEfficiencyServicesLimited - 0.02

Bihar Grid Company Limited - 0.35

Cross Border Power Transmission Company Limited 0.35 0.30

Description Current Year Previous Year

TransactionsofthecompanyincapacityofCTUwiththerelatedparties 1054.89 789.29

ParbatiKoldamTransmissionCompanyLimited 163.13 21.73

Torrent Power Grid Limited 57.62 55.70

Jaypee Powergrid Limited 170.69 190.37

North East Transmission Company Limited 401.29 261.91

PowerlinksTransmissionLimited 260.98 259.58

c)AsperCentralElectricityRegulatorycommission(CERC)(SharingofInterstateTransmissionchargesandlosses)Regulation2010,theCompanybeingtheCentralTransmissionUtility(CTU)undertheregulationisentrustedwiththeresponsibilityoftheBilling,CollectionandDisbursementofTransmissionchargesonbehalfofallInterStateTransmissionSystem(ISTS)licensee.Accordingly,thetransactionsofthecompanyforcollectionmadeincapacityofCTUfortherelatedpartiesisasunder:

d)Remuneration to whole time directors including chairman and managing director and Company Secretary is ` 3.00 crore (previous year `2.90crore)andamountofduesoutstandingtothecompanyason31stMarch,2016are` 0.18 crore (previous year `0.19crore).

2.50 Disclosure as per AS 19-“Leases” a) Finance Leases :- Long Term Loans and Advances and Short Term Loans and Advances include lease receivables representing the present value of

futureleaserentalsreceivableonthefinanceleasetransactionsenteredintobythecompanywiththeconstituentsinrespectofStateSectorULDC.DisclosurerequirementsofAccountingStandard(AS)–19“Leases“notifiedundertheCompaniesAct,2013aregivenas under:

(` inCrore)

Consolidated Account

236

OTHER NOTES (contd.)

(i)Thereconciliationoftheleasereceivables(asperprojectcostdatasubmittedto/approvedbytheCERCfortarifffixation)isasunder:

(ii)Detailsofgrossinvestmentinleaseandpresentvalueofminimumleasepaymentsreceivablesattheendoffinancialyearisgivenas under:

(iii) Theunearnedfinanceincomeasat31st March, 2016 is `110.35crore(previousyear`157.42crore). (iv) ThevalueofcontractualmaturityofsuchleasesasperAS-19areasunder:

(v) Therearedifferencesinbalanceofleasereceivableasatyearendasperaccountsandtariffrecordsonaccountof:

(a) Undischargedliabilitiesamountingto 68.52crore(PreviousYear 17.33crore).Suchcostbecomepartofprojectcostonlyon discharge of such liabilities.

(b) UnamortizedFERVonloansincludedinleasereceivableamountingto`57.79crore(PreviousYear`61.41crore).SuchFERV are allowed to be recovered as part of tariff on actual payment basis

b) Operating leases:-

The company’s significant leasingarrangements are in respect of operating leasesof premises for residential useof employees,officesandguesthouses/transitcampsareusuallyrenewableonmutuallyagreedtermsbutarenotnon-cancellable.Employees’remunerationandbenefitsinclude`40.59crore(previousYear`36.36crore)towardsleasepayments,netofrecoveries,inrespectof premises for residential use of employees. Lease payments of `11.16crore(previousYear`12.57crore)inrespectofpremisesforofficesandguesthouse/transitcampsareshownundertheheadRentinNote2.30Transmission,AdministrationandOtherexpenses.

2.51 Disclosure as per AS 28-“ Impairment of assets”

InaccordancewithAccountingStandard(AS-28)“ImpairmentofAssets”,thecompanyhasassessedasontheBalanceSheetdatewhether there are any indications with regard to impairment of any of the assets. Based on such assessment, it has been ascertained thatnopotentiallossispresent.Accordingly,noimpairmentlosshasbeenprovidedinthebooksofaccounts.

Particulars Current Year Previous Year

Grossvalueofassetsacquiredandleasedatthebeginningoftheyear 1154.08 1099.56

Add Adjustmentforgrossvalueofassetsacquiredpriortothebeginningoftheyear (18.13) 21.92

Revised Gross value of the assets at the beginning of the year 1135.95 1121.48

Less Capital recovery provided up to the beginning of the year 782.26 706.45

Add Capitalrecoveryforassetsacquiredpriortothebeginningoftheyear (1.30) 6.65

Revised Capital recovery provided up to the beginning of the year 780.96 713.10

Capitalrecoveryoutstandingason31stMarchoflastfinancialyear 354.99 408.38

Add Grossvalueofassetsacquiredandleasedduringcurrentfinancialyear 75.95 32.60

Less Capital recovery for the current year 74.54 69.16

Lease receivables at end of the year 356.40 371.82

Particulars Current Year Previous Year

Gross investment in Lease 466.75 529.24

Un-earnedFinanceIncome 110.35 157.42

PresentvalueofMinimumLeasePayment(MLP) 356.40 371.82

(` inCrore)

(` inCrore)

(` inCrore)

Particulars Gross Investment in Lease Present Value of MLPs

As at 31st March, 2016

As at 31st March, 2015

As at 31st March, 2016

As at 31st March, 2015

Not later than one year 103.54 101.35 82.72 73.67

Laterthanoneyearandnotlaterthanfiveyears 186.22 245.46 132.63 173.49

Laterthanfiveyears 176.98 182.43 141.05 124.66

Total 466.75 529.24 356.40 371.82

Consolidated Account

237

OTHER NOTES (contd.)2.52 Capital and Other Commitments

Estimatedamountofcontractsremainingtobeexecutedoncapitalaccountandnotprovidedforis`26560.62crore(previousyear`26100.90crore)whichincludesanamountof`493.84crore(previousyear`579.59crore)shareofjointlycontrolledentities.

2.53 Contingent Liabilities

1. ClaimsagainsttheCompanynotacknowledgedasdebtsinrespectof:

(i) Capital Works

Someofthecontractorsforsupplyandinstallationofequipmentsandexecutionofworksatourprojectshavelodgedclaimsonthe company for ` 1666.86 crore (previous year `219.14crore)seekingenhancementofthecontractprice,revisionofworkschedulewithpriceescalation,compensationfortheextendedperiodofwork,idlechargesetc.Theseclaimsarebeingcontestedby the Company as being not admissible in terms of the provisions of the respective contracts.

The company is pursuing various options under the dispute resolution mechanism available in the contract for settlement of theseclaims.Itisnotpracticabletomakearealisticestimateoftheoutflowofresources,ifany,forsettlementofsuchclaimspending resolution.

(ii) Land Compensation cases

Inrespectoflandacquiredfortheprojects,thelandlosershaveclaimedhighercompensationbeforevariousauthorities/courtswhich are yet to be settled. In such cases, contingent liability of ` 4048.60 crore (previous year `2258.43crore)hasbeenestimated.

(iii) Other claims

In respect of claimsmade by various State/Central Government Departments/Authorities towards building permission fees,penaltyondiversionofagriculturelandtonon-agricultureuse,Nalatax,waterroyaltyetc.andbyothers,contingentliabilityof` 28.66 crore (previous year `44.09crore)hasbeenestimated.

(iv) Disputed Income Tax/Sales Tax/Excise/Municipal Tax Matters

DisputedIncomeTax/SalesTax/Excise/MunicipalTaxMattersamountingto`896.05crore(previousyear`896.76crore)arepending before various Appellate Authorities and contested before various Appellate Authorities. Many of these matters are disposed off in favour of the company but are disputed before higher authorities by the concerned departments.

(v) Others

a)Othercontingentliabilitiesamountsto`361.78crore(previousyear`319.54crore)

b)SomeofthebeneficiarieshavefiledappealsagainstthetariffordersoftheCERC.Theamountofcontingentliabilityinthisregard is not ascertainable.

c) UndertheTransmissionServiceAgreement(TSA)withPowerlinksTransmissionLtd,thecompanyhasanobligationtopurchasetheJVcompany(PowerlinksTransmissionLtd)atabuyoutpricedeterminedinaccordancewiththeTSA.SuchanobligationmayresultincaseJVcompany(PowerlinksTransmissionLtd)servesaterminationnoticeeitheron“POWERGRIDeventofdefault”oron“forcemajeureevent”prescribedunderTSA.Nocontingentliabilityonthisaccounthasbeenconsideredasthesame is not ascertainable.

The contingent liabilities disclosed above include `40.48 crore (previous year `31.55crore)shareofjointlycontrolledentities.

2. a) Specialpurposevehicle (SPV)companies (whollyownedsubsidiaries) namelyPowergridNMTransmissionCompanyLtd.(erstwhileNagapattinamMadugiriTransmissionCompanyLtd.),PowergridVemagiriTransmissionCompanyLtd.(erstwhileVemagiri Transmission System Limited), Powergrid Vizag Transmission Limited (erstwhile Vizag Transmission Limited),PowergridUnchaharTransmission Limited (erstwhileUnchaharTransmission Limited), PowergridKalaAmbTransmissionLimitedandVindhyachalJabalpurTransmissionLimitedhasbeentakenovertocarryoverthebusinessawardedunderTariffbasedbidding.DetailsofBankguaranteesgivenbythecompanyonbehalfofSPVcompaniestowardsperformanceoftheworkawardedareasunder:

Sr no Name of SPV 31st March, 2016 31st March, 20151 Powergrid NM Transmission Company Ltd 45.00 45.002 PowergridVizagTransmissionCompanyLtd 45.00 45.003 PowergridUnchaharTransmissionCompanyLtd 5.40 5.404 PowergridKalaAmbTransmissionLimited 5.96 5.96

5 Powergrid Jabalpur Transmission Limited 31.50 31.50

6 PowergridWaroraTransmissionLimited 62.10 -

7 Powergrid Parli Transmission Limited 63.90 -

8 Powergrid Southern Interconnector Transmission System Limited 110.04 -

(` inCrore)

b) TheCompanyhasgivenguaranteeforthedues&punctualpaymentanddischargeoftheobligationsamountingto`290croreagainstbondissuedbyPowergridVizagTransmissionCompanyLtd.

Consolidated Account

238

OTHER NOTES (contd...)

Particulars Amount in Foreign Currency (in Crore) Amount (` in Crore)31.03.2016 31.03.2015 31.03.2016 31.03.2015

Borrowings USD 416.87 412.01 27888.87 26034.82

EURO 11.17 4.33 848.22 297.12

SEK 314.14 250.27 2591.68 1841.97

JPY 199.95 218.13 119.47 115.04

Interest accrued but not due thereon including Agency FeeCommitmentFee&otherCharges.

USD 1.33 0.94 88.86 59.54

EURO 0.02 0.02 1.64 1.04

SEK 0.60 1.16 4.97 8.51

JPY 0.52 0.55 0.31 0.29

TradePayables/depositsandretentionmoney USD 8.50 10.79 568.85 679.18

EURO 1.70 7.92 128.97 543.53

SEK 19.81 114.61 163.40 843.58

CHF - 0.03 - 1.51

GBP 1.19 0.64 114.64 58.71

TradereceivablesandBankbalances USD 0.08 0.22 5.37 13.78

NPR 0.09 0.07 0.06 0.04

Unexecutedamountofcontractsremainingtobeexecuted

USD 49.79 23.44 3331.02 1480.92

EURO 8.15 10.00 618.76 685.64

SEK 0.40 25.80 3.30 189.89

CHF 0.12 0.90 8.62 54.14

GBP 15.38 18.66 1481.71 1709.07

2.55 Guidance Note (GN) on Rate Regulated Activities issued by ICAI is applicable from the financial year 2015-16. The company is mainly engaged in Transmission of power. The price to be charged by the company for transmission of power to its

customerisdeterminedbytheCERCthroughtariffregulations.Thetariffisbasedoncostlikedepreciation,interest,returnonequity,operationandmaintenanceExpensesetc.Thisformofregulationisknownascostofserviceregulationswhichprovidesthecompanytorecoveritscostofprovidingtheservicesplusstipulatedreturn.ThecompanyhasadoptedGNinpreparationoffinancialstatementsforthe year, considering the provisions of tariff regulations issued by CERC.

TheCERCtariff regulationsprovide thatexchangedifferences arisingfromsettlement/ translationofmonetary itemsdenominatedinforeigncurrency(otherthanlongterm)arerecoverablefromorpayabletothebeneficiariesinsubsequentperiods.Suchexchangedifferencesarerecognizedas‘RegulatoryAsset/Liabilitybycredit/debitto‘Regulatoryincome/Expense’duringconstructionperiodandadjustedfromtheyearinwhichthesamebecomesrecoverablefromorpayabletobeneficiaries.

Theregulatedassets/liabilityrecognizedinthebookstoberecoveredfromorpayabletothebeneficiariesinfutureperiodsareasfollows:

Particulars Regulated Assets ( ` in crore )

A.OpeningBalanceason01.04.2015* 37.72

B.Addition/(deduction)duringtheyear (0.05)

C.Amountcollected/refundedduringtheyear -

D.RegulatedIncome/(Expense)recognizedinthestatementofProfitandLoss(B-C)

(0.05)

E.ClosingBalanceason31.03.3016(A-D) 37.67

2.54 Foreign Currency Exposure Not hedged by a derivative instrument or otherwise

OTHER NOTES (contd.)

Consolidated Account

239

*Such exchange differenceswere hitherto accounted as ‘Deferred foreign currency fluctuation asset/liability’ in accordancewith anopinionbytheExpertAdvisorycommitteeoftheICAI.Therelatedfiguresforthepreviousyearhavebeenregrouped.

2.56 Corporate Social Responsibility Expenses During the year, an amount of `120.03crorehasbeenspentonCSRactivitiesinaccordancewithSection135oftheCompaniesAct2013

and rules thereto. Further an amount of `6.19crorehasbeenappropriatedtoCSRReservefromsurplusduringtheyear.2.57 Additional Information as required under Schedule III of The Companies Act 2013 :

Sr No

Power Grid Corporation of India Limited Net assets i.e assets minus total Liabilities Share in profit or loss

2015-16 2014-15 2015-16 2014-15

As % of consolidated

net assets

Amount ( in crore)

As % of consolidated

net assets

Amount ( in crore)

As % of consolidated profit or loss

Amount( in

crore)

As % of consolidated profit or loss

Amount( in crore)

Parent

1 Power Grid Corporation of India Limited 97.40% 41852.49 97.35% 37419.69 98.34% 5914.46 96.57% 4873.08

Subsidiaries- Indian

1 Power System Operation Corporation Limited 0.67% 289.48 0.63% 242.08 0.93% 55.72 0.95% 48.03

2 Powergrid NM Transmission Company Ltd 0.06% 24.00 0.06% 24.00 0.00% 0.00 - -

3 Powergrid Vimagiri Transmission Company Ltd (0.05%) (19.37) (0.05%) (19.37) 0.00% (0.01) - -

4 PowergridVizagTransmission Company Ltd 0.13% 57.70 0.14% 54.73 0.05% 2.97 - -

5 PowergridUnchaharTransmission Company Ltd 0.00% 0.05 0.00% 0.05 0.00% 0.00 - -

6 PowergridKalaAmbTransmission Limited 0.00% 0.05 0.00% 0.05 0.00% 0.00 - -

7 Powergrid Jabalpur Transmission Limited 0.00% 0.05 0.00% 0.05 0.00% 0.00 - -

8 PowergridWaroraTransmission Limited 0.00% 0.05 - - 0.00% 0.00 - -

9 Powergrid Parli Transmission Limited 0.00% 0.05 - - 0.00% 0.00 - -

10Powergrid Southern Interconnector Transmission System Limited

0.00% 0.05 - - 0.00% 0.00 - -

11 Grid Conductors Limited 0.00% (-0.07) - - 0.00% (-0.07) - -

Joint Ventures-Indian

1 PowerlinksTransmissionLimited 0.62% 268.13 0.68% 261.66 0.89% 53.39 1.09% 54.93

2 Torrent Power Grid Limited 0.07% 28.87 0.07% 28.52 0.03% 2.01 0.07% 3.61

3 Jaypee Powergrid Limited 0.23% 97.34 0.23% 87.07 0.22% 13.10 0.35% 17.76

4 ParbatiKoldamTransmissionCompany Ltd 0.18% 75.54 0.19% 71.64 0.07% 3.94 0.02% 1.12

5 Teestavalley Power Transmission Limited 0.15% 66.10 0.12% 46.72 0.00% (0.07) 0.00% (0.07)

6 North East Transmission Company Limited 0.21% 91.78 0.40% 152.52 (0.58%) (35.08) 0.90% 45.19

7 NationalHighPowerTestLaboratory Private Limited 0.05% 23.41 0.06% 21.64 0.00% 0.00 - -

8 EnergyEfficiencyServicesLimited 0.13% 55.90 0.07% 28.73 0.06% 3.65 0.05% 2.59

9 Bihar Grid Company Limited 0.09% 40.31 0.03% 10.03 0.00% 0.00 0.00% 0.00

10 KalingaVidyutPrasaranNigam Private Limited 0.00% 0.01 0.00% 0.01 0.00% 0.00 0.00% 0.00

(`incrore)

OTHER NOTES (contd.)

Consolidated Account

240

OTHER NOTES (contd...)

Sr No

Power Grid Corporation of India Limited Net assets i.e assets minus total Liabilities Share in profit or loss

2015-16 2014-15 2015-16 2014-15

11Cross Border Power Transmission Company Limited

0.03% 10.78 0.01% 5.74 0.01% 0.55 0.00% 0.01

12 RINL Powergrid TLT Pvt. Ltd 0.00% 0.10 - - 0.00% 0.00 - -

Joint Ventures-Foreign

1 Power Transmission Company Nepal Limited 0.01% 4.88 0.01% 3.17 0.00% 0.00 - -

Total 42967.68 38438.73 6014.56 5046.25

2.58 a)Figureshavebeenroundedofftonearestrupeesincroreuptotwodecimal. b)Previousyearfigureshavebeenregrouped/rearrangedwhereverconsiderednecessary.

Consolidated Account

Place: New DelhiDate: 26th May, 2016

(Divya Tandon)Company Secretary

(R.T. Agarwal)Director(Finance)

( I.S.Jha) Chairman&ManagingDirector

( CA. Gaurav Mittal)Partner

M.No.099387

( CA. R.Rangarajan )Partner

M.No.041883

( CA.Manaswy Kothari ) Partner

M.No. 064601

( CA.Indra Pal Singh )Partner

M.No.410433

For S.K. Mittal & Co.Chartered AccountantsFirm Regn No. 001135N

For R.G.N.Price & Co.Chartered AccountantsFirmRegnNo.002785S

For Kothari & Co.Chartered AccountantsFirmRegnNo.301178E

For Parakh & Co.Chartered Accountants

FirmRegnNo.001475C

For and on behalf of the Board of Directors

As per our report of even date

241

Independent Auditors’ ReportTo the Members of Power Grid Corporation of India Limited

Report on the Consolidated Financial Statements

WehaveauditedtheaccompanyingconsolidatedfinancialstatementsofPower Grid Corporation of India Limited (hereinafter referred to as “theHoldingCompany”)anditselevensubsidiaries(Theholdingcompanyanditssubsidiariestogetherreferredtoas“theGroup”)andthirteenjointlycontrolledcompanies,comprisingof theConsolidatedBalanceSheetasat31stMarch,2016, theConsolidatedStatementof ProfitandLoss,theConsolidatedCashFlowStatementfortheyearthenendedandasummaryofthesignificantaccountingpoliciesandotherexplanatoryinformation(hereinafterreferredtoas“theconsolidatedfinancialstatements”).

Management’s Responsibility for the Consolidated Financial Statements

TheHoldingCompany’sBoardofDirectorsisresponsibleforthepreparationoftheseconsolidatedfinancialstatementsintermsoftherequirementsoftheCompaniesAct,2013(hereinafterreferredtoas“theAct”)thatgiveatrueandfairviewoftheconsolidatedfinancialposition,consolidatedfinancial performance and consolidated cash flows of theGroup including its jointly controlled companies in accordancewith the accountingprinciplesgenerallyacceptedinIndia,includingtheAccountingStandardsspecifiedunderSection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014.TherespectiveBoardofDirectorsofthecompaniesincludedintheGroupandofitsjointlycontrolledcompaniesareresponsibleformaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsoftheActforsafeguardingtheassetsoftheGroupandforpreventinganddetectingfraudsandotherirregularities;theselectionandapplicationofappropriateaccountingpolicies;makingjudgmentsandestimatesthatarereasonableandprudent;andthedesign,implementationandmaintenanceofadequateinternalfinancialcontrols,thatwereoperating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror,whichhavebeenusedforthepurposeofpreparationoftheconsolidatedfinancialstatementsbytheDirectorsoftheHoldingCompany,asaforesaid.

Auditors’ Responsibility

Ourresponsibilityistoexpressanopinionontheseconsolidatedfinancialstatementsbasedonouraudit.Whileconductingtheaudit,wehavetakenintoaccounttheprovisionsoftheAct,theaccountingandauditingstandardsandmatterswhicharerequiredtobeincludedintheauditreportunderthe provisions of the Act and the Rules made thereunder.

WeconductedourauditinaccordancewiththeStandardsonAuditingspecifiedunderSection143(10)oftheAct.ThoseStandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhethertheconsolidatedfinancialstatements are free from material misstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsandthedisclosuresintheconsolidatedfinancialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalfinancialcontrolrelevanttotheHoldingCompany’spreparationoftheconsolidatedfinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatare appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness oftheaccountingestimatesmadebytheHoldingCompany’sBoardofDirectors,aswellasevaluatingtheoverallpresentationoftheconsolidatedfinancialstatements.

Webelievethattheauditevidenceobtainedbyusandtheauditevidenceobtainedbytheotherauditorsintermsoftheirreportsreferredtoinsub-paragraph(a)oftheOtherMattersparagraphbelow,issufficientandappropriatetoprovideabasisforourauditopinionontheconsolidatedfinancialstatements.

Opinion

Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,theaforesaidconsolidatedfinancialstatementsgivetheinformationrequiredbytheActinthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyaccepted in India:

(a) InthecaseoftheconsolidatedBalanceSheet,oftheconsolidatedStateofAffairsofthegroupandjointlycontrolledentitiesasat31stMarch,2016;

(b) InthecaseoftheConsolidatedStatementofProfitandLoss,oftheconsolidatedprofitoftheGroupandjointlycontrolledentitiesfortheyearendedonthatdate;and

(c) InthecaseoftheConsolidatedCashFlowStatement,oftheconsolidatedcashflowsoftheGroupandjointlycontrolledentitiesfortheyearended on that date.

Emphasis of Matter

Wedrawattentiontothenoteno.2.25(b)andnoteno.2.35(a)totheconsolidatedfinancialstatements,inrespectofprovisionalrecognitionofrevenuefromtransmissionchargesandbalanceconfirmation.

Ouropinionisnotmodifiedinrespectofthismatter.

Consolidated Account

242

Other Matters

(a) Wedidnotauditthefinancialstatementsofonejointlycontrolledcompany,whosefinancialstatementsreflecttotalassetsason31st March, 2016,totalrevenuesandnetcashflowsfortheyearendedonthatdate,asconsideredintheconsolidatedfinancialstatementsaregivenbelow:

ThesefinancialstatementshavebeenauditedbyotherauditorwhosereporthasbeenfurnishedtousbytheManagementandouropinionontheconsolidatedfinancialstatements,insofarasitrelatestotheamountsanddisclosuresincludedinrespectofthisjointlycontrolledcompanyandourreport, intermsofsub-section(3)ofSection143oftheAct, insofaras itrelatestotheaforesaidjointlycontrolledcompany is based solely on the report of the other auditor.

(b) Wedidnotauditthefinancialstatementsofelevensubsidiariesandtwelvejointlycontrolledcompanies,whosefinancialstatementsreflecttotalassetsason31stMarch,2016,totalrevenuesandnetcashflowsfortheyearendedonthatdate,asconsideredintheconsolidatedfinancialstatementsaregivenbelow:

Name of the Company Total Assets Total Revenues Net Cash FlowsJointly Controlled Company NationalHighPowerTestLab.PrivateLimited 58.59 0 (2.72)Total 58.59 0 (2.72)

Name of the Company Total Assets Total Revenues Net Cash Flows

A. Subsidiaries- Indian

Power System Operation Corporation Limited 1356.24 231.65 213.64

Powergrid NM Transmission Company Ltd 729.67 0.00 0.07

Powergrid Vimagiri Transmission Company Ltd 0.00 0.00 0.00

PowergridVizagTransmissionCompanyLtd 1109.78 7.91 (0.55)

PowergridUnchaharTransmissionCompanyLtd 42.52 0.00 0.00

PowergridKalaAmbTransmissionLimited 32.65 0.00 0.00

Powergrid Jabalpur Transmission Limited 21.30 0.00 0.20

PowergridWaroraTransmissionLimited 33.92 0.00 0.85

Powergrid Parli Transmission Limited 24.65 0.00 0.55

Powergrid Southern Interconnector Transmission System Limited

36.35 0.00 0.10

Grid Conductors Limited 0.01 0.00 0.00

Total A. 3387.09 239.56 214.86

B. Joint Ventures-Indian

PowerlinksTransmissionLimited 509.49 121.64 (1.14)

Torrent Power Grid Limited 66.29 14.63 3.68

Jaypee Powergrid Limited 250.77 45.46 (2.54)

ParbatiKoldamTransmissionCompanyLtd 245.38 39.88 (1.83)

Teestavalley Power Transmission Limited 260.83 0.00 10.82

North East Transmission Company Limited 551.92 116.88 0.33

EnergyEfficiencyServicesLimited 202.45 97.38 19.29

Bihar Grid Company Limited 295.24 0.00 8.23

KalingaVidyutPrasaranNigamPrivateLimited 0.59 0.00 0.00

Cross Border Power Transmission Company Limited 65.21 1.63 (0.59)

RINL Powergrid TLT Pvt. Ltd 0.41 0.00 0.09

Total B. 2448.58 437.50 36.34

C. Joint Ventures-Foreign

Power Transmission Company Nepal Limited 19.37 0.00 (1.65)

Total C. 19.37 0.0 (1.65)

Total (A + B + C) 5855.05 677.06 249.56

(`incrore)

(`incrore)

Consolidated Account

243

ThesefinancialstatementsareunauditedandhavebeenfurnishedtousbytheManagementandouropinionontheconsolidatedfinancialstatements,insofarasitrelatestotheamountsanddisclosuresincludedinrespectofthesesubsidiariesandjointlycontrolledcompaniesandourreportintermsofsub-sections(3),(5)and(11)ofSection143oftheActinsofarasitrelatestotheaforesaidsubsidiariesandjointlycontrolledcompanies,isbasedsolelyonsuchunauditedfinancialstatements.InouropinionandaccordingtotheinformationandexplanationsgiventousbytheManagement,thesefinancialstatementsarenotmaterialtotheGroup.Ouropinionontheconsolidatedfinancialstatements,andourreportonOtherLegalandRegulatoryRequirementsbelow,isnotmodifiedinrespectoftheabovematterswithrespecttoourrelianceontheworkdoneandthereportsoftheotherauditorsandthefinancialstatementscertifiedbytheManagement.Ouropinionontheconsolidatedfinancialstatements,andourreportonotherlegalandregulatoryrequirementsbelow,isnotqualifiedinrespectoftheabovematterswithrespecttoourrelianceontheworkdoneandthereportsofotherauditorsandthefinancialstatements/financialinformationcertifiedbythemanagement.

Report on Other Legal and Regulatory Requirements

Asrequiredbysection143(3)oftheAct,wereportthat:

(a) Wehavesoughtandobtainedalltheinformationandexplanationswhichtothebestofourknowledgeandbeliefwerenecessaryforthepurposesofourauditoftheaforesaidconsolidatedfinancialstatements.

(b)Inouropinionproperbooksofaccountasrequiredbylawrelatingtopreparationoftheaforesaidconsolidatedfinancialstatementshavebeenkeptsofarasitappearsfromourexaminationofthosebooksandthereportsoftheotherauditors.

(c) TheConsolidatedBalanceSheet,theConsolidatedStatementofProfitandLoss,andtheConsolidatedCashFlowStatementdealtwithbythisReportareinagreementwiththerelevantbooksofaccountmaintainedforthepurposeofpreparationoftheconsolidatedfinancialstatements.

(d) InouropiniontheaforesaidconsolidatedfinancialstatementscomplywiththeAccountingStandardsspecifiedunderSection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014.

(e) OnthebasisofthewrittenrepresentationsreceivedfromthedirectorsoftheHoldingCompanyason31stMarch,2016takenonrecordbytheBoardofDirectorsoftheHoldingCompanyandthereportsoftheotherstatutoryauditorofonejointlycontrolledcompanyincorporatedinIndia,noneofthedirectorsoftheHoldingCompanyanditsonejointlycontrolledcompaniesincorporatedinIndiaisdisqualifiedason31stMarch,2016frombeingappointedasadirectorintermsofSection164(2)oftheAct.

(f) Withrespecttotheadequacyof internalfinancialcontrolsoverfinancialreportingofthegroupandtheoperatingeffectivenessofsuchcontrol,refertoourseparatereportin‘Annexure1’,and

(g) WithrespecttotheothermatterstobeincludedintheAuditor’sReportinaccordancewithRule11oftheCompanies(AuditandAuditor’s)Rules,2014,inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous:

i. TheconsolidatedfinancialstatementsdisclosedtheimpactofpendinglitigationsontheconsolidatedfinancialpositionoftheGroupanditsjointlycontrolledcompanies-ReferNote2.41and2.53totheconsolidatedfinancialstatements.

ii. TheGroupanditsjointlycontrolledcompaniesdidnothaveanymaterialforeseeablelossesonlong-termcontractsincludingderivativecontracts.

iii.Therehasbeennodelayintransferringamounts,requiredtobetransferred,totheInvestorEducationandProtectionFundbytheGroupanditsjointlycontrolledcompanies.

Place: New DelhiDate: 26th May, 2016

( CA. Gaurav Mittal)Partner

M.No.099387

( CA. R.Rangarajan )Partner

M.No.041883

( CA.Manaswy Kothari )Partner

M.No. 064601

( CA.Indra Pal Singh )Partner

M.No.410433

For S.K. Mittal & Co.Chartered AccountantsFirm Regn No. 001135N

For R.G.N.Price & Co.Chartered AccountantsFirmRegnNo.002785S

For Kothari & Co.Chartered AccountantsFirmRegnNo.301178E

For Parakh & Co.Chartered AccountantsFirmRegnNo.001475C

Consolidated Account

244

ANNEXURE 1

ATTACHED TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS OF POWER GRID CORPORATION OF INDIA LIMITED FOR THE YEAR ENDED 31ST MARCH, 2016

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

InconjunctionwithourauditoftheconsolidatedfinancialstatementsoftheCompanyasofandfortheyearendedonMarch31,2016,wehaveauditedtheinternalfinancialcontrolsoverfinancialreportingofPowerGridCorporationofIndiaLimited(hereinafterreferredtoas“theHoldingCompany”)anditssubsidiarycompaniesanditsjointventurecompanies,whicharecompaniesincorporatedinIndiaasofMarch31,2016.

Management’s Responsibility for Internal Financial Controls

TheRespectiveBoardofdirectorsof theHoldingcompany, itssubsidiarycompaniesand its jointventurecompanies,whicharecompaniesincorporated inIndiaareresponsible forestablishingandmaintaining internalfinancialcontrolsbasedonthe internalcontroloverfinancialreporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include thedesign,implementationandmaintenanceofadequateinternalfinancialcontrolsthatwereoperatingeffectivelyforensuringtheorderlyandefficientconductofitsbusiness,includingadherencetocompany’spolicies,thesafeguardingofitsassets,thepreventionanddetectionoffraudsanderrors,theaccuracyandcompletenessoftheaccountingrecords,andthetimelypreparationofreliablefinancialinformation,asrequiredundertheCompaniesAct,2013.

Auditors’ Responsibility

OurresponsibilityistoexpressanopinionontheCompany’sinternalfinancialcontrolsoverfinancialreportingbasedonouraudit.WeconductedourauditinaccordancewiththeGuidanceNoteonAuditofInternalFinancialControlsOverFinancialReporting(the“GuidanceNote”)andtheStandardsonAuditing,issuedbyICAIanddeemedtobeprescribedundersection143(10)oftheCompaniesAct,2013,totheextentapplicabletoanauditofinternalfinancialcontrols,bothapplicabletoanauditofInternalFinancialControlsand,bothissuedbytheInstituteofCharteredAccountantsofIndia.ThoseStandardsandtheGuidanceNoterequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetheradequateinternalfinancialcontrolsoverfinancialreportingwasestablishedandmaintainedandif such controls operated effectively in all material respects.Ourauditinvolvesperformingprocedurestoobtainauditevidenceabouttheadequacyoftheinternalfinancialcontrolssystemoverfinancialreportingandtheiroperatingeffectiveness.Ourauditofinternalfinancialcontrolsoverfinancialreportingincludedobtaininganunderstandingofinternalfinancialcontrolsoverfinancialreporting,assessingtheriskthatmaterialweaknessexists,andtestingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedontheassessedrisk.Theproceduresselecteddependontheauditor’sJudgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.WebelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinionontheCompany’sinternalfinancialcontrolssystemoverfinancialreporting.

Meaning of Internal Financial Controls over Financial Reporting

Acompany’sinternalfinancialcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples.Acompany’sinternalfinancialcontroloverfinancialreportingincludesthosepoliciesandproceduresthat: i. Pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassets

ofthecompany; ii. Providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordance

withgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthecompany;and

iii.Providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,use,ordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or impropermanagement override of controls,materialmisstatements due to error or fraudmay occur and not be detected. Also, projections of anyevaluationoftheinternalfinancialcontrolsoverfinancialreportingtofutureperiodsaresubjecttotheriskthattheinternalfinancialcontroloverfinancialreportingmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmay deteriorate.

Consolidated Account

245

Opinion

Inouropinion,theHoldingCompanyandoneJointlyControlledcompanyincorporatedinIndiahave,inallmaterialrespects,anadequateinternalfinancialcontrolssystemoverfinancialreportingandsuchinternalfinancialcontrolsoverfinancialreportingwereoperatingeffectivelyasatMarch31,2016,basedon the internal controloverfinancial reportingcriteriaestablishedby theCompanyconsidering theessentialcomponents of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India, is based on corresponding report of other auditor of the Jointly Controlled Company incorporated inIndia.InrespectofelevensubsidiariesandelevenjointlycontrolledcompaniesincorporatedinIndia,intheabsenceofauditors’reportonInternalFinancialControloverfinancialreportingasrequiredundersection143(3)(i)oftheAct,weareunabletoexpressouropinionontheInternalFinancialControloverfinancialreportinginthosesubsidiariesandjointlycontrolledcompanies. Other Matters Ouraforesaidreportsundersection143(3)(i)oftheActontheadequacyandoperatingeffectivenessoftheinternalfinancialcontrolsoverfinancialreportinginsofarasitrelatestooneJointlyControlledCompanywhichisacompanyincorporatedinIndia,isbasedoncorrespondingreport of one such company incorporated in India.

Place: New DelhiDate: 26th May, 2016

( CA. Gaurav Mittal)Partner

M.No.099387

( CA. R.Rangarajan )Partner

M.No.041883

( CA.Manaswy Kothari )Partner

M.No. 064601

( CA.Indra Pal Singh )Partner

M.No.410433

For S.K. Mittal & Co.Chartered AccountantsFirm Regn No. 001135N

For R.G.N.Price & Co.Chartered AccountantsFirmRegnNo.002785S

For Kothari & Co.Chartered AccountantsFirmRegnNo.301178E

For Parakh & Co.Chartered AccountantsFirmRegnNo.001475C

Consolidated Account

246

NOTES

247

NOTES

248

NOTES