Close
x
  • SMC open account icon Open an A/C
    • Open an A/C
    • CHOOSE YOUR OPTION(S)
    • Trading A/c
    • Mutual Fund A/c
    • NBFC A/c
    • NPS A/c
  • SENSEX Nov 30 2021 12:00
    57,064.87 -195.71 (-0.34%)
  • NIFTY Nov 30 2021 12:00
    16,983.20 -70.75 (-0.41%)
  • SENSEX Nov 30 2021 12:00
    57,064.87 -195.71 (-0.34%)
  • NIFTY Nov 30 2021 12:00
    16,983.20 -70.75 (-0.41%)
  • Nasdaq Nov 30 2021 04:30
    15,782.83 +291.17 ( +1.88%)
  • DJIA Nov 30 2021 04:30
    35,135.94 +236.60 ( +0.68%)
  • S&P 500 Nov 30 2021 04:30
    4,655.27 +60.65 ( +1.32%)
  • Hang Seng Nov 30 2021 02:10
    23,475.26 -376.98 (-1.58%)
  • Crude Oil Nov 30 2021 11:22
    4,963.00 -380.00 (-7.11%)
  • Gold Nov 30 2021 11:14
    47,600.00 +13.00 ( +0.03%)
  • Silver Nov 30 2021 11:04
    61,670.00 +30.00 ( +0.05%)
  • Copper Nov 30 2021 11:22
    724.15 -10.65 (-1.45%)
  • Pound / Rupee Dec 23 2016 22:30
    99.73 +0.54 ( +0.54%)
  • Dollar / Rupee Dec 23 2016 22:30
    74.83 +0.41 ( +0.55%)
  • Euro / Rupee Dec 23 2016 22:30
    84.59 +1.15 ( +1.37%)
  • Yen / Rupee Dec 23 2016 22:30
    0.66 +0.01 ( +2.25%)

REC Ltd

BSE Code : 532955 | NSE Symbol : RECLTD | ISIN:INE020B01018| SECTOR : Finance |

NSE BSE
 
SMC up arrow

134.55

5.65 (4.38%) Volume 280564

30-Nov-2021 EOD

Prev. Close

128.90

Open Price

130.00

Bid Price (QTY)

134.55(287251)

Offer Price (QTY)

0.00(0)

 

Today’s High/Low 141.40 - 127.85

52 wk High/Low 168.85 - 119.00

Key Stats

MARKET CAP (RS CR) 26799.64
P/E 2.88
BOOK VALUE (RS) 241.8663357
DIV (%) 127.1
MARKET LOT 1
EPS (TTM) 47.18
PRICE/BOOK 0.561053689457288
DIV YIELD.(%) 9.37
FACE VALUE (RS) 10
DELIVERABLES (%) 25.13
4

News & Announcements

25-Nov-2021

REC Ltd - REC Limited - Code of Conduct under SEBI(PIT) Reg., 2015

22-Nov-2021

Volumes jump at REC Ltd counter

17-Nov-2021

REC appoints directors

17-Nov-2021

REC Ltd drops for fifth straight session

17-Nov-2021

REC appoints directors

29-Oct-2021

Board of REC recommends Second Interim Dividend

23-Oct-2021

REC to conduct board meeting

18-Sep-2021

Board of REC approves sale of SPV MP Power Transmission Package II

Corporate Actions

Bonus
Splits
Dividends
Rights
Capital Structure
Book Closure
Board Meeting
AGM
EGM
 

Financials

Income Statement

Standalone
Consolidated
 

Peers Comparsion

Select Company Name BSE Code NSE Symbol
Gujarat State Financial Corporation 532160 GUJSTATFIN
Haryana Financial Corporation Ltd 530927
ICICI Ltd (Merged) 500015 ICICI
IFCI Ltd 500106 IFCI
Indian Railway Finance Corporation Ltd 543257 IRFC
Power Finance Corporation Ltd 532810 PFC
SCICI Ltd (Merged) 500017 SCICI
Tourism Finance Corporation of India Ltd 526650 TFCILTD

Share Holding

Category No. of shares Percentage
Total Foreign 534555821 27.07
Total Institutions 187191010 9.48
Total Govt Holding 0 0.00
Total Non Promoter Corporate Holding 11513080 0.58
Total Promoters 1039495247 52.64
Total Public & others 202175186 10.24
Total 1974918000 100
  • Total Foreign
  • Total Institutions
  • Total Govt Holding
  • Total Non Promoter Corporate Holding
  • Total Promoters
  • Total Public & others

About REC Ltd

Rural Electrification Corporation Ltd is a Navratna Central Public Sector Enterprise under the Ministry of Power. The company is engaged in the financing and promotion of transmission, distribution and generation projects throughout India. Their main objective is to finance and promote rural electrification projects all over the country. They provide financial assistance to State Electricity Boards, State Government Departments and Rural Electric Cooperatives for rural electrification projects sponsored by them. The company provides loan assistance to SEBs/State Power Utilities for investments in rural electrification schemes through its extensive network of 23 offices across the country. The Project Offices in the States coordinate the programmes of REC's financing with the concerned SEBs/State Power Utilities and facilitate in formulation of schemes, loan sanction and disbursement and implementation of schemes by the concerned SEBs/ State Power Utilities. The company assists clients in formulating and implementing a broad array of power projects and finance those projects. Their clients primarily include Indian public sector power utilities at the central and state levels and private sector power utilities. Their primary financial product is project-based long-term loans. They fund their business with market borrowings of various maturities, including bonds and term loans. Rural Electrification Corporation Ltd was incorporated on July 25, 1969 at New Delhi as a private limited company with the name Rural Electrification Corporation Pvt Ltd. In the year 1970, the company commenced lending operations to SEBs. In the year 1979, they set up CIRE in Hyderabad. In the year 1988, the company launched Kutir Jyoti and Jal Dhara programmes for rural electrification. In the year 1992, the company was declared a public financial institution. In the year 1993, the company entered into MoU with the MoP for the first time to achieve certain performance related targets. In February 1998, the company was registered as a Non Banking Financial Company. In the year 2002, the company was granted Mini Ratna - I Status. In September 27, 2002, the company was converted into a public limited company and the name was changed to Rural Electrification Corporation Ltd. From the year 2002, the company diversified into financing of Generation projects for creation of new generation capacity. In the year 2005, the company was appointed as the nodal agency for RGGVY. In the year 2006, the company entered into agreement with Japan International Cooperation Agency for availing a loan facility of JPY 20,629 million. Also, they entered into an agreement with KfW, Frankfurt am Main for availing a loan facility of Euro 70 million. In the year 2007, the company entered into a syndicated facility agreement with Standard Chartered Bank and DEPFA Investment Bank for availing a loan facility of JPY 23,570 million. In January 2007, REC Transmission Projects Company Ltd, a subsidiary company was incorporated as a public limited company with the main object of REC TPCL is to promote, organize and carry on the business of consultancy services and/or Project implementation in any field of activity relating to transmission & distribution of electricity in India or abroad. During the year 2007-08, the company made an Initial Public Offer and their shares were listed on the stock exchanges. In the Post-IPO scenario, the shareholding of the Government of India has reduced from 100% to 81.82%. The company entered into agreement with Japan International Cooperation Agency for availing a loan of JPY 20,902 million. In May 2008, the company was granted 'Navratna' status by the Department of Public Enterprise, GoI for their operational efficiency and financial strength, which affords greater operational freedom and autonomy in decision making. During the year 2008-09, the company sanctioned 20 Nos of new generation/R&M loans and 3 Nos additional loan assistance with total financial outlay of Rs.21525.31 crore, including consortium financing with other financial institutions. Also, they sanctioned a total of 317 system improvement schemes and bulk loan schemes involving a loan outlay of Rs.14511.49 crore. They reported 188,743 electric irrigation pumpsets energized under REC financed schemes. Also, the company entered into agreement with KfW, Frankfurt am Main for availing a loan facility of Euro 70 million. During the year 2009-10, the company sanctioned 26 Nos of generation / R&M loans including 5 Nos additional loan assistance with total financial outlay of Rs.24031.32 crore. Also, they sanctioned a total of 289 system improvement schemes and bulk loan schemes involving a loan outlay of Rs.15421.64 crore. They reported 240,020 electric irrigation pumpsets energized under REC financed schemes. Also, the company made the Further Public Offer (FPO) during the year and the shareholding of the Government of India in the company reduced to 66.80%. During the year 2010-11, the Company sanctioned 34 nos. of generation loans including additional loan assistance with total financial outlay of Rs 40,101 crore, including consortium financing with other financial institutions. During the year, 11 nos. Renewable Energy projects including 6 nos. Solar projects were sanctioned with total project cost of Rs 621.06 crore and loan assistance of Rs 390.71 crore. In September 17, 2010, Reserve Bank of India (RBI) categorized the company as an Infrastructure Finance Company (IFC). In December 2010, the company's subsidiary REC Transmission Projects Company Ltd sold 50,000 shares held in Raichur Sholapur Transmission Company Ltd to consortium of Patel engineering Ltd, Simplex Infrastructure Ltd and BS TransComm Ltd for a consideration of Rs 18.89 crore. In April 21, 2011, Vemagiri Transmission System Ltd (a wholly owned subsidiary of RECTPCL) was incorporated in respect of Transmission System associated with IPPs of Vemagiri Area: Package A. The company received India Pride Award 2010 for being adjudged 'The Best NBFC' and also Third DSIJ Award 2010-11 - 'Speed King' for fastest growing PSUs across Maharatnas, Navratnas & Miniratnas. The company also featured in Dun & Bradstreet's India's Top PSUs 2011. During 2012, the corporation sought the approval of Reserve Bank of India (RBI) for issuing bonds to raise up to USD 500 million. The company was awarded India Today - PSUs Awards 2014 for Best HR Practices. During the year, the company Signed MoU with Ministry of Power for the Financial Year 2014-15. In 2015, the corporation has signed two separate agreements with Andhra Pradesh Power Generation Corporation Limited and Transmission Corporation of Andhra Pradesh Limited. During the year, the Corporation incorporated three Project Specific Special Purpose Vehicles (SPVs), as Subsidiary Companies of Rural Electrification Corporation Limited. The Board of Directors of REC at its meeting held on 11 August 2016 recommended the issue of bonus shares in the ratio of 1:1. MOUs were signed between REC Limited and APGENCO, APTRANSCO and AP DISCOMS on 27 January 2017 for extending a financial assistance to the tune of Rs 60000 crore to the power utilities in Andhra Pradesh for the next five years (till March 2022). As per the MOU, APGENCO can avail debt of Rs 40000 crore for generation projects and other loan requirements. APTRANSCO can avail a debt of Rs 10000 crore for transmission system strengthening, augmentation, upgradation, new transmission, power evacuation, R&M projects, etc. in the upcoming capital region and other districts of Andhra Pradesh. APEPDCL and ADSPDCL can avail a debt of Rs 10000 crore for implementation of Distribution projects in the state for strengthening, augmentation, upgradation of distribution infrastructure, sub-transmission system, new distribution, under-ground cabling works, R&M works, works under DDUJGY & IPDS, implementation of smart grid, smart meters, creation of distribution infrastructure for agricultural services, conversion of conventional pump sets into solar pump sets, etc. Apart from financial assistance power utilities have agreed to avail consultancy and management services from REC's subsidiaries for their various activities/projects for the next five years. Loan agreements were signed between REC and TANGEDCO, TANTRANSCO for financial assistance of Rs 6890 crore on 28 January 2017 in Chennai for implementation of 1X 800 MW super critical thermal power plant at North Chennai, renovation and modernisation of TANGEDCO' s existing thermal power plants and establishment of new 765 KV, 400 KV substations in and around Chennai. On 6 February 2017, REC announced that it has entered into Memorandums of Understanding (MoUs) with Karnataka Power Corporation Limited (KPCL) and Bangalore Electricity Supply Company Limited (BESCOM) for extending financial assistance to the tune of Rs 39121 crore for the next five years (i.e. till March 2022); i.e. financial assistance upto Rs 27121 crore to KPCL and upto Rs 12000 crore to BESCOM. On 20 February 2017, REC announced that it has entered into Memorandums of Understanding (MoUs) with Jharkhand Bijli Vitran Nigam Limited (JBVNL) and Jharkhand Urja Sancharan Nigam Limited (JUSNL) for extending financial assistance to the tune of Rs 15150 crore; i.e. financial assistance upto Rs 8150 crore to JBVNL and upto Rs 7000 crore to JUSNL. On 23 March 2017, REC announced that it has entered into Memorandum of Understanding (MoU) with Damodar Valley Corporation (DVC) for extending financial assistance to the tune of Rs 4650 crore for ongoing and upcoming projects of DVC. On 5 April 2017, REC announced that its wholly owned subsidiary REC Transmission Projects Company Limited has handed over project specific Special Purpose Vehicles (SPV) namely NER-II Transmission Limited to M/s Sterlite Grid 4 Limited on 31 March 2017. On 15 May 2017, REC announced that the company has entered into Memorandums of Understanding (MoUs) with Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) and Tamil Nadu Transmission Corporation Limited (TANTRANSCO) for extending financial assistance to the tune of Rs 85723 crore, i.e. financial assistance upto Rs 60063 crore to TANGEDCO and upto Rs 25660 crore to TANTRANSCO. The MoUs are non-binding in nature and the financial assistance is subject to appraisal of the proposal(s) to be submitted by the respective entities to REC and approval of Competent Authority. On 30 May 2017, REC reported its highest ever annual net profit of Rs 6246 crore for the financial year 2016-17. On 30 June 2017, REC's Green Bond was listed on the London Stock Exchange. REC launched its maiden USD Green Bonds to become the first Indian PSU corporate to launch Green Bonds denominated in US Dollars, against the backdrop of green energy's enormous potential in the Indian power sector and the Indian Government's thrust on developing this space. On 24 August 2017, REC signed a Memorandum of Understanding (MoU) extending a term loan worth Rs 13000 crore to Maharashtra State Power Generation Company Limited ( Mahagenco) for generation projects, FGD systems, STP, working capital and special loan requirements. REC and Patratu Vidyut Utpadan Nigam Limited (PVUNL) signed a loan agreement on 14 November 2017 for establishing 3x800 MW Patratu Super Thermal Power Project Phase-I in Jharkhand. The project cost of Rs 18668 crore is funded in debt: equity ratio of 75:25 and Rs 14000 crore (entire debt component of project) is sanctioned by REC as sole lender for the project. With a view to have better operational efficiency and to reap the benefits of higher capital base, pooled resources and to create one big consultancy firm, the Board of Directors of REC at its meeting held on 6 February 2018 approved the Scheme of Amalgamation of both wholly owned subsidiaries of the company viz. REC Transmission Projects Company Limited (Transferor Company) and REC Power Distribution Company Limited (Transferee Company). REC concluded a USD 400 million Reg S bonds deal in London on 11 December 2007 for refinancing the existing ECB. The bond was priced at 115 basis points over three years US Treasury. On 12 January 2018, REC announced that it has signed a loan agreement of Rs 10453 crore with TANGEDCO for setting up of TANGEDCO's Udangudi Stage-I, 2x660 MW Coal based Supercritical Thermal Power Project in Tuticorin District of Tamil Nadu. The loan assistance from REC will not only improve the power infrastructure of the state utilities but will also improve their financial and operational performance. On 16 January 2018, REC Transmission Projects Company Limited (RECTPCL), a wholly owned subsidiary of Rural Electrification Corporation Ltd (REC), handed over project specific Special Purpose Vehicle (SPV) namely ERSS XXI Transmission Limited to M/s Power Grid Corporation of India Limited (PGCIL) on 12 January 2017 On 15 March 2018, REC announced that it has successfully priced 10-year USD Reg-S Bond at a coupon of 4.625% and raised USD 300 million. The issuance received an excellent response with order book of more than USD 900 million. The net proceeds will be used for power sector development.

REC Ltd Chairman Speech

Dear Shareholders,

It is my privilege to present to you the 51st Annual Report of your Company. With the COVID-19 pandemic still impacting our lives, these are turbulent times for our businesses and economies. However, adversity caused by the pandemic has also revealed to us new ways of survival and doing business. Despite the challenging times, REC stands tall as a leading financial & development institution of the country, delivering strong performance on all counts while cautiously managing its risks. The Company has also made its humble contribution towards managing the pandemic, by arranging food & shelter for migrant workers, distribution of essentials for communities and medical gear for frontline workers, besides contribution to the PM CARES Fund.

Global economic conditions had been witnessing a gradual decline since the last two years. The world economy, which grew at 4% in 2017, continued to soften to a growth of 3.6% in 2018 and 2.9% in 2019. With the outbreak of COVID-19 in early 2020, one country after the other was hit with high human costs and a resultant public health crisis. At the same time, economic activity was adversely impacted at an unprecedented level. China, which happened to be the epicentre of the pandemic, saw a sharp decline in its production activities. This had a cascading effect on global supply chains, prolonging the halt in manufacturing activities & cross border trade. Simultaneously, asset prices, commodity prices and equity markets also plummeted. Softening oil prices provided some relief, but uncertainty in the economic outlook continues.

Governments of advanced economies as well as developing economies were swift in providing fiscal response to market disruptions, alongwith support to heavily-impacted sectors and workers. Broad-based fiscal stimulus has prevented a further decline in the business sentiment and a bigger downturn.

India was also impacted by the pandemic, but the adverse effects have been contained well by swift and strong measures taken by the Government. The Indian economy, which had a strong performance in the recent decades, grew at 4.2% in fiscal 2019-20 as the last quarter was hit by COVID-19 and nationwide lockdown. The IMF has projected a contraction in the Indian economy in 2020, due to continuing challenges posed by the pandemic. However, the economy is expected to bounce back in the next year.

The Hon'ble Prime Minister has given us the vision of AtmanirbharBharat, of making India a self-reliant nation. A huge fiscal package has been provided alongwith policy push, in order to minimize the adverse economic impact of the pandemic. RBI has cut down the repo rate to a 15-year-low of 4% and reverse repo rate to 3.35%, besides allowing banks, NBFCs and housing finance companies to stall EMIs and extend moratorium up to six months.

The new norms of 'social distancing' and 'work-from-home' brought into fore by COVID-19, have put an increased focus on the centrality of electricity in powering our current and future societies. Having said that, power sector is not immune to the adverse effects of the pandemic and decreased economic activity. The long-term impact would become apparent only with passage of time. On the whole, sustained economic growth is necessary to maintain the demand for power and better energy systems. In the coming years, we would see enhanced power generation through renewable sources, as also new technologies like smart grids, geospatial data systems and widespread e-Mobility, which should form basis of our energy planning to be done today.

POWER SECTOR SCENARIO

The power sector in the country witnessed limited disruption due to COVID-19, as power comes under essential services category. However, demand for power fell steeply on account of drop in the commercial and industrial activity. Power distribution was impacted the most, with fall in revenue collections affecting the financial and liquidity position of players. As the lockdown eased out, power demand started to recover. Further, the Government announced liquidity infusion to the power sector, granting relief from the sudden cash crunch.

India is the third largest producer and third largest consumer of electricity in the world, with total installed power capacity of 370 GW as on March 31, 2020. The Indian power sector is highly diversified with conventional sources such as coal, lignite, natural gas, oil, hydropower and nuclear power on one hand; and renewable sources such as solar power, wind power and agricultural & domestic waste on the other. The share of renewable energy in the generation mix is consistently increasing. Further, the Government is pursuing various energy efficiency measures through innovative programmes such as UJALa, SLNP, National E-mobility Programme and Super-Efficient Air Conditioning Programme etc., which serve the dual purposes of power saving and environmental sustainability.

The Government's focus on attaining '24x7 Power For All' has accelerated the capacity addition in the country. Around 750 million people in the country gained access to electricity between years 2000 to 2019, reflecting strong and effective policy implementation. There is keen focus on becoming a low carbon economy. India has a huge potential to become the world leader in renewable energy space. Furthermore, development of smart cities and introduction of energy saving & storage devices might become the new sources of investment traction.

OPERATIONAL PERFORMANCE

REC is engaged in financing projects / schemes of power generation (both conventional and renewable energy), transmission, distribution, rural electrification and activities having forward / backward linkage with power projects, in both public and private sectors. Its key products include Long Term, Medium Term and Short Terms Loans etc. for the entire power sector value chain.

In addition to that, REC also acts as nodal agency or project management / implementing agency for various schemes and programmes of national importance of the Ministry of Power, Government of India, such as DDUGJY, SAUBHAGYA and NEF, to name a few.

During the financial year 2019-20, the Company sanctioned total loan assistance of Rs 1,10,907.99 crore towards various power sector projects/schemes. The same included Rs 55,811.89 crore sanctioned towards generation projects, Rs 7,026.33 crore towards renewable energy projects, Rs 41,604.77 crore towards T&D projects and Rs 6,465.00 crore towards short term, medium term & other loans.

Further, the Company disbursed a total loan amount of Rs 75,666.95 crore in the financial year 2019-20. The same included Rs 27,490.87 crore towards generation projects, Rs 5,699.09 crore towards renewable energy projects, Rs 30,856.19 crore towards T&D projects, Rs 6,390.00 crore towards short term, medium term & other loans and Rs 5,230.80 crore of counter-part funding under DDUGJY including DDG (Decentralized Distributed Generation) and SAUBHAGYA schemes. Further, grant/subsidy of Rs 6,473.88 crore provided by the Government of India was also disbursed to various states/implementing agencies during the financial year 2019-20 under the dDuGJY, DDUGJY-DDG and SAUBHAGYA schemes.

FINANCIAL PERFORMANCE

REC's Total Operating Income for the financial year 2019-20 was Rs 29,791.06 crore, as against Rs 25,309.72 crore during the last financial year. Further, the Profit After Tax and Total Comprehensive Income for the financial year 2019-20 were Rs 4,886.16 crore and Rs 4,336.37 crore, as compared to Rs 5,763.72 crore and Rs 5,703.18 crore in the last financial year.

The Gross Loan Asset Book of REC as on March 31, 2020 was Rs 3,22,424.68 crore, as compared to Rs 2,81,209.68 crore in the last financial year. The Net Worth of the Company as on March 31, 2020 stood at Rs 35,076.56 crore, i.e., 2.26% higher as compared to Net Worth of Rs 34,302.94 crore as on March 31, 2019.

The overall weighted average annualized interest rate of borrowing raised during the financial year 2019-20 and for the borrowings outstanding as on March 31, 2020, excluding other finance charges, was 6.70% and 7.32% respectively. As a result, your Company was able to deliver debt financing at competitive rates. The domestic debt instruments of REC continued to enjoy "AAA" rating, the highest rating assigned by CRISIL, CARE, India Ratings & Research & ICRA. REC also enjoys international credit rating of "Baa3" and "BBB-", at par with sovereign ratings, from international credit rating agencies viz. Moody's and FITCH respectively.

REC's Credit Impaired Assets (Stage III) continue to be at low levels. As on March 31, 2020, the Gross Credit Impaired Assets (Stage III) were Rs 21,255.55 crore, which was 6.59% of the gross loan assets; and the Net Credit Impaired Assets (Stage III) were Rs 10,703.42 crore, i.e., 3.32% of the loan assets.

DIVIDEND

The Board of Directors of your Company has declared an Interim Dividend of Rs 11/- per equity share of Rs 10/- each for the financial year 2019-20, which was paid in February, 2020. The Board has not recommended any final dividend for the year. Thus, the total dividend for financial year 2019-20 works out to Rs 11/- per equity share of Rs 10/- each, representing 110% of the paid-up share capital of the Company, consistent with the dividend of Rs 11/- per equity share of Rs 10/- each paid for the last financial year.

CAPITAL STRUCTURE

As on March 31, 2020, the Authorized Share Capital of the Company was Rs 5,000 crore comprising of 500,00,00,000 Equity Shares of Rs 10/- each; and the Issued & Paid up Share Capital of the Company was Rs 1,974.92 crore comprising of 197,49,18,000 Equity Shares of Rs 10/- each. Power Finance Corporation Limited (PFC), a Government Company, holds 52.63% equity stake in REC, in line with the Share Purchase Agreement dated March 20, 2019 entered between the President of India, acting through the Ministry of Power, Government of India and PFC.

FLAGSHIP GOVERNMENT PROGRAMMES

REC is proud to be associated with various flagship programmes of the Ministry of Power, Government of India, which are contributing immensely towards development of power sector in the country, besides improving socio-economic conditions and quality of life.

REC is the Nodal Agency for Deendayal Upadhyaya Gram Jyoti Yojana i.e., DDUGJY, a flagship scheme of the Ministry of Power, Government of India launched in December 2014, covering all aspects of rural power distribution, facilitating towards achievement of '24x7 Power For All' in rural areas of the country through defined project components. In a landmark achievement, all remaining census inhabited villages in India stand electrified as on April 28, 2018.

The Ministry of Power has also designated REC as the Nodal agency for operationalization of SAUBHAGYA scheme, i.e., Pradhan Mantri Sahaj Bijli Har Ghar Yojana launched in financial year 2017-18. With the concerted efforts of States and DISCOMs, electricity connections were provided to 2.63 crore households under SAUBHAGYA, DDUGJY and State Government schemes during the period from October 11, 2017 to March 31, 2019. Further, on request of seven States (Assam, Chhattisgarh, Jharkhand, Karnataka, Manipur, Rajasthan and Uttar Pradesh), the Ministry of Power had accorded time extension approval to electrify additional 19.09 lakh un-electrified households, which were unwilling earlier to get electrified and had expressed their willingness before March 2019. Out of these, States/DISCOMs have released connections to 13.92 lakh households during financial year 2019-20.

Under the 'Atmanirbhar Bharat' package of the Government of India, REC has disbursed Special Long-Term Transition Loans to DISCOMs for making payment to generators, as they were facing severe cash crunch owing to the pandemic. These loans provided much needed relief to the power sector by injecting liquidity.

REC is also supporting the Ministry of Power for implementation of Ujwal DISCOM Assurance Yojana i.e., UDAY scheme launched in financial year 2015-16 for financial turnaround and revival of Power DISCOMs in the country. REC has developed a state-of-the-art web portal and an online App for monitoring the performance of DISCOMs, which has resulted in transparency and accountability.

POLICY INITIATIVES

REC regularly reviews and amends its policy framework to meet the demands of dynamic business environment and changing statutory requirements. During the financial year 2019-20, REC amended its 'Code for Regulating, Monitoring and Reporting of Trading by Designated Persons & their Immediate Relatives and for Fair Disclosure', 'Policy for determining Material Subsidiaries', 'Policy on Materiality of Related Party Transactions & Dealing with Related Party Transactions' and 'Policy for Prevention of Frauds'. The Company also adopted a policy for resolution of stressed assets; and additional guidelines for working capital loan to state power utilities. Regular review of policies has helped REC in achieving its corporate objectives effectively.

HUMAN RESOURCES MANAGEMENT

Human resources continue to play a significant role in the journey of REC. During the year under review, the Company appointed 37 Executives in various disciplines from reputed institutes, thus infusing fresh talent. Training and capacity-building programmes are regularly conducted, to upgrade the skill sets and performance of the employees. REC believes in effective deployment of human resources for meeting the organizational goals. At the same time, employee well-being and work-life balance is also promoted. This is reflected in a motivated workforce continuously striving towards organizational excellence.

INFORMATION TECHNOLOGY INITIATIVES

Information Technology is a key focus area of REC for enhancing automation of its business processes. Your Company was the first CPSE in the power sector to go paperless, with organization wide implementation of 'E-office' for automated workflow and electronic document management. The Company has revamped its e-Business ERP to the latest version and also migrated the ERP hardware to private cloud environment. Video conferencing is used extensively in REC, to conduct meetings of the Board, Committees, senior management, review meetings, meetings with Government agencies, imparting training to employees and for meetings with business associates.

REC has also implemented the IT Security framework prescribed by RBI, as per its Master Direction to NBFCs. The Primary Data Centre and Disaster Recovery Center of REC are ISO/IEC 27001:2013 certified and also comply with the Government's National Cyber Security Policy. Further, REC has a secured VPN network, enabling users to work remotely and ensure business continuity.

REC INSTITUTE OF POWER MANAGEMENT AND TRAINING

The Company has a training institute at Hyderabad, namely, REC Institute of Power Management and Training (RECIPMT), which conducts specialized training programmes relevant to the power sector. The trainings are imparted to engineers, managers and other employees of various organizations from India and abroad, besides in-house training sessions for employees of REC. During the financial year 2019-20, RECIPMT conducted a total of 132 programmes and workshops on various topics ranging from energy conservation relating to power generation, transmission & distribution, management, finance, information technology and renewable energy. In all, 3,109 personnel were trained and an aggregate of 11,993 training man-days were achieved during the year.

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT

REC's Corporate Social Responsibility and Sustainable Development initiatives are pursued with a focus on socially beneficial projects, giving priority to issues of foremost concern in the national development agenda and to reach a wide spectrum of beneficiaries. The Company's CSR funds are channelized through 'REC Foundation', a society registered under the Societies Registration Act, 1860.

For the financial year 2019-20, REC had allocated a CSR budget of Rs 156.68 crore. Further, REC disbursed an amount of Rs 258.40 crore in financial year 2019-20 towards various CSR projects (including amounts carried forward from previous years) in the fields of sanitation and hygiene, promotion of healthcare facilities, skill development, women empowerment, environmental sustainability and rural infrastructural development, besides contribution to the PM CARES Fund. The implementation of CSR projects is done in project-mode with baseline survey, specified time-frame, identified milestones, periodic monitoring and impact assessment studies. The disbursements are linked with achievement of pre-defined milestones and deliverables of each project.

During the year under review, the Company also observed Swachhta Pakhwada and Swachhta Hi Seva initiatives, to undertake cleanliness drive and to raise awareness about harmful effects of single use plastic. Close to 500 kgs. of single use plastic waste was segregated, collected and sent for recycling under REC's Swacchta Shramdaan activity on October 2, 2019. REC was also presented the "Swachh Bharat PuraskaP by the Ministry of Jal Shakti, Government of India.

CORPORATE GOVERNANCE

REC is committed to the highest standards of Corporate Governance. We strive to conduct our business operations in an ethical and responsible manner within the prevalent regulatory framework, for sustainable value creation for all our stakeholders. As a listed Public-Sector Enterprise, REC complies with all applicable provisions relating to Corporate Governance stipulated under the Companies Act, SEBI (Listing Obligations & Disclosure Requirements) Regulations, DPE Guidelines and other laws. Further, the matter pertaining to appointment of requisite number of Independent Directors, including Woman Independent Director on the Board of REC is under consideration of the Ministry of Power, Government of India, i.e. the appointing authority.

The Company believes in adopting best practices in the field of Corporate Governance. During the financial year 2019-20, REC was conferred the 'PSE Excellence Award, 2018' for excellence in Corporate Governance by the Indian Chamber of Commerce, as runner-up in the Navratna and Maharatna category.

MoU RATING AND AWARDS

The performance of the Company in terms of the Memorandum of Understanding signed with the Ministry of Power, Government of India for the financial year 2018-19 has been rated as "Excellent'. During the financial year 2019-20, REC was conferred the "ICAI Award for Excellence in Financial Reporting for FY 2018-19" by the Institute of Chartered Accountants of India in the 'Public Sector Entities' category, in recognition of its disclosure practices followed in the first Ind-AS (Indian Accounting Standards) Financial Statements and Annual Report. REC also received three awards for corporate communications, namely first prize for "Best House Journal (English)", second prize for ‘‘Best Corporate Communications-Internal" and third prize for "Effective use of Digital Media", under the SCOPE Corporate Communication Excellence Awards, 2019.

SUBSIDIARY COMPANIES AND JOINT VENTURES

REC has two wholly-owned subsidiary companies, namely REC Power Distribution Company Limited (RECPDCL) and REC Transmission Projects Company Limited (RECTPCL), which provide project consultancy and implementation services in the areas concerned with the power sector.

RECPDCL is engaged in the businesses of project implementation and consultancy services in power sector viz. implementation of distribution system strengthening works, implementation of grid/off-grid solar (PV) projects, implementation of smart meters, preparation of detailed project reports, third party inspections, pre-dispatch material inspections and acting as project management consultant / project management agency under some projects of State-funded schemes such as DDUGJY, IPDS etc. As on March 31, 2020, RECPDCL was working on about 100 on-going projects spread across 57 DISCOMs / power departments / co-operative societies in 26 States and 4 Union Territories. During the financial year 2019-20, RECPDCL's Total Revenue and Profit After Tax were Rs 143.01 crore and Rs 12.47 crore respectively, and its Net Worth as on March 31, 2020 was Rs 168.20 crore.

RECTPCL acts as the "Bid Process Coordinator" for selection of Transmission Service Providers through Tariff Based Competitive Bidding (TBCB) process, for independent inter-state and intra-state transmission projects assigned by the Ministry of Power and State Governments from time to time. In order to initiate development of each independent inter-state / intra-state transmission project, RECTPCL incorporates a project-specific Special Purpose Vehicle (SPV), as its wholly owned subsidiary. After selection of the successful bidder in accordance with the TBCb Guidelines, such subsidiary is transferred by RECTPCL to the successful bidder along with all assets & liabilities. RECTPCL is also handling other assignments such as 11 kV Rural Feeder Monitoring Scheme, online web platforms namely Urja Mitra and TARANG (Transmission App for Real Time Monitoring & Growth) etc., under the guidance of the Ministry of Power. During the financial year 2019-20, RECTPCL's Total Revenue and Profit After Tax were Rs 70.55 crore and Rs 54.44 crore respectively, and its Net Worth as on March 31, 2020 was Rs 112.60 crore.

REC's joint venture company viz. Energy Efficiency Services Limited (EESL) with three other power sector PSUs, is a market leader in the field of energy efficiency. REC's equity stake in EESL was 22.18%, as on March 31,2020. EESL is implementing various flagship schemes of the Government, such as UJALA (world's largest non-subsidy based LED lighting programme), SLNP (world's largest programme to replace existing street lights with smart & energy efficient LED street lights), National E-Mobility Programme (providing e-Vehicles to Government entities for replacing existing petrol & diesel vehicles) and Super-Efficient Air Conditioning Programme (for providing Super-Efficient ACs to customers at affordable prices), to name a few. Based on the standalone provisional financials of EESL for financial year 2019-20, its Turnover was Rs 1,934.07 crore and Profit After Tax was Rs 44.92 crore.

THE PATH AHEAD

The Indian power sector is experiencing a considerable reformation, transitioning from fossil-fuel centric to renewable-centric systems and increased energy efficiency. The Government has already affirmed its commitment to implementation of the covenants of Paris Agreement and has set a target of 175 GW of renewable energy by 2022. The sector is also looking forward to increase in the share of green energy to 40% of the total installed capacity by 2030, push for e-Mobility, promotion of energy saving devices and adoption of new & emerging technologies. Economic growth of coming years would also lead to significant investments in the power sector. With implementation of programmes like '24x7 Power For All' and electrification of all villages & households in the country, it is expected that there will be huge latent demand for power in the near future.

The increase in power demand would also require robustness in the Transmission & Distribution infrastructure, to cater to 24x7 power demand, thereby attracting more investment in underground cabling, smart meters & equipment, AMI / AMR infrastructure and Smart Grid etc. Further, the investment needs for creation of dedicated Green Corridors and new network under Tariff Based Competitive Bidding route are enormous. REC offers a wide range of products to finance the diverse needs of the power sector, across the value-chain and throughout the country.

FUTURE STRATEGY

With a strong foothold in its existing area of operations, REC is poised to enter into new areas of business. This will include extending assistance for activities having a forward or backward linkage with energy related projects, financing electro-mechanical and hydro-mechanical components and associated civil works in large lift irrigation projects, pollution control equipment in thermal power plants and other emerging technologies. Renewable Energy would continue to be a key focus area for REC over the next few years, in keeping with the Government of India's strong policy support to develop this segment. E-Vehicles, agriculture pumpsets, energy efficient equipment, smart transmission and distribution systems, TBCB projects etc. would continue to create new business opportunities.

In the wake of the economic repercussions of the COVID-19 pandemic, many companies across the world are now considering diversifying their supply chain and relocate to India. Persistent economic and agricultural growth is also likely to drive the electricity demand further in the coming years. Power sector is going to witness a paradigm shift due to these changes. The Government is already taking several measures to support the power sector in this evolving scenario. To meet these challenges and harness emerging opportunities, REC is well placed in the short-term as well as long-term.

ACKNOWLEDGEMENTS

I express my sincere gratitude to the Hon'ble Minister of State (Independent Charge) for Power and New & Renewable Energy, Secretary (Power), Additional Secretaries, Joint Secretaries and other Officials of the Ministry of Power, for their continued support and guidance to the Company. I also thank the officials of NITI Aayog, Ministry of Finance, Ministry of Corporate Affairs, DIPAM, DPE, RBI, SEBI, Stock Exchanges and Depositories, for their goodwill and cooperation. I am grateful to the Comptroller & Auditor General of India, Statutory Auditors, Secretarial Auditors, Registrars and other professionals associated with the Company for their support.

My special thanks to all investors, lenders, borrowers and clients including the State Governments, power utilities and private power sector entrepreneurs, for placing their trust in the Company. I record deep appreciation for my esteemed colleagues on the Board, who have contributed immensely in the growth of the Company. I also convey my heartfelt thanks to all employees and staff of REC, for their untiring efforts. I am confident that with the cooperation of all stakeholders, Team REC will strive to achieve greater heights in the future.

With warm wishes,

Sanjeev Kumar Gupta
Chairman & Managing Director and Director (Technical)
August 31, 2020

   

REC Ltd Company History

Rural Electrification Corporation Ltd is a Navratna Central Public Sector Enterprise under the Ministry of Power. The company is engaged in the financing and promotion of transmission, distribution and generation projects throughout India. Their main objective is to finance and promote rural electrification projects all over the country. They provide financial assistance to State Electricity Boards, State Government Departments and Rural Electric Cooperatives for rural electrification projects sponsored by them. The company provides loan assistance to SEBs/State Power Utilities for investments in rural electrification schemes through its extensive network of 23 offices across the country. The Project Offices in the States coordinate the programmes of REC's financing with the concerned SEBs/State Power Utilities and facilitate in formulation of schemes, loan sanction and disbursement and implementation of schemes by the concerned SEBs/ State Power Utilities. The company assists clients in formulating and implementing a broad array of power projects and finance those projects. Their clients primarily include Indian public sector power utilities at the central and state levels and private sector power utilities. Their primary financial product is project-based long-term loans. They fund their business with market borrowings of various maturities, including bonds and term loans. Rural Electrification Corporation Ltd was incorporated on July 25, 1969 at New Delhi as a private limited company with the name Rural Electrification Corporation Pvt Ltd. In the year 1970, the company commenced lending operations to SEBs. In the year 1979, they set up CIRE in Hyderabad. In the year 1988, the company launched Kutir Jyoti and Jal Dhara programmes for rural electrification. In the year 1992, the company was declared a public financial institution. In the year 1993, the company entered into MoU with the MoP for the first time to achieve certain performance related targets. In February 1998, the company was registered as a Non Banking Financial Company. In the year 2002, the company was granted Mini Ratna - I Status. In September 27, 2002, the company was converted into a public limited company and the name was changed to Rural Electrification Corporation Ltd. From the year 2002, the company diversified into financing of Generation projects for creation of new generation capacity. In the year 2005, the company was appointed as the nodal agency for RGGVY. In the year 2006, the company entered into agreement with Japan International Cooperation Agency for availing a loan facility of JPY 20,629 million. Also, they entered into an agreement with KfW, Frankfurt am Main for availing a loan facility of Euro 70 million. In the year 2007, the company entered into a syndicated facility agreement with Standard Chartered Bank and DEPFA Investment Bank for availing a loan facility of JPY 23,570 million. In January 2007, REC Transmission Projects Company Ltd, a subsidiary company was incorporated as a public limited company with the main object of REC TPCL is to promote, organize and carry on the business of consultancy services and/or Project implementation in any field of activity relating to transmission & distribution of electricity in India or abroad. During the year 2007-08, the company made an Initial Public Offer and their shares were listed on the stock exchanges. In the Post-IPO scenario, the shareholding of the Government of India has reduced from 100% to 81.82%. The company entered into agreement with Japan International Cooperation Agency for availing a loan of JPY 20,902 million. In May 2008, the company was granted 'Navratna' status by the Department of Public Enterprise, GoI for their operational efficiency and financial strength, which affords greater operational freedom and autonomy in decision making. During the year 2008-09, the company sanctioned 20 Nos of new generation/R&M loans and 3 Nos additional loan assistance with total financial outlay of Rs.21525.31 crore, including consortium financing with other financial institutions. Also, they sanctioned a total of 317 system improvement schemes and bulk loan schemes involving a loan outlay of Rs.14511.49 crore. They reported 188,743 electric irrigation pumpsets energized under REC financed schemes. Also, the company entered into agreement with KfW, Frankfurt am Main for availing a loan facility of Euro 70 million. During the year 2009-10, the company sanctioned 26 Nos of generation / R&M loans including 5 Nos additional loan assistance with total financial outlay of Rs.24031.32 crore. Also, they sanctioned a total of 289 system improvement schemes and bulk loan schemes involving a loan outlay of Rs.15421.64 crore. They reported 240,020 electric irrigation pumpsets energized under REC financed schemes. Also, the company made the Further Public Offer (FPO) during the year and the shareholding of the Government of India in the company reduced to 66.80%. During the year 2010-11, the Company sanctioned 34 nos. of generation loans including additional loan assistance with total financial outlay of Rs 40,101 crore, including consortium financing with other financial institutions. During the year, 11 nos. Renewable Energy projects including 6 nos. Solar projects were sanctioned with total project cost of Rs 621.06 crore and loan assistance of Rs 390.71 crore. In September 17, 2010, Reserve Bank of India (RBI) categorized the company as an Infrastructure Finance Company (IFC). In December 2010, the company's subsidiary REC Transmission Projects Company Ltd sold 50,000 shares held in Raichur Sholapur Transmission Company Ltd to consortium of Patel engineering Ltd, Simplex Infrastructure Ltd and BS TransComm Ltd for a consideration of Rs 18.89 crore. In April 21, 2011, Vemagiri Transmission System Ltd (a wholly owned subsidiary of RECTPCL) was incorporated in respect of Transmission System associated with IPPs of Vemagiri Area: Package A. The company received India Pride Award 2010 for being adjudged 'The Best NBFC' and also Third DSIJ Award 2010-11 - 'Speed King' for fastest growing PSUs across Maharatnas, Navratnas & Miniratnas. The company also featured in Dun & Bradstreet's India's Top PSUs 2011. During 2012, the corporation sought the approval of Reserve Bank of India (RBI) for issuing bonds to raise up to USD 500 million. The company was awarded India Today - PSUs Awards 2014 for Best HR Practices. During the year, the company Signed MoU with Ministry of Power for the Financial Year 2014-15. In 2015, the corporation has signed two separate agreements with Andhra Pradesh Power Generation Corporation Limited and Transmission Corporation of Andhra Pradesh Limited. During the year, the Corporation incorporated three Project Specific Special Purpose Vehicles (SPVs), as Subsidiary Companies of Rural Electrification Corporation Limited. The Board of Directors of REC at its meeting held on 11 August 2016 recommended the issue of bonus shares in the ratio of 1:1. MOUs were signed between REC Limited and APGENCO, APTRANSCO and AP DISCOMS on 27 January 2017 for extending a financial assistance to the tune of Rs 60000 crore to the power utilities in Andhra Pradesh for the next five years (till March 2022). As per the MOU, APGENCO can avail debt of Rs 40000 crore for generation projects and other loan requirements. APTRANSCO can avail a debt of Rs 10000 crore for transmission system strengthening, augmentation, upgradation, new transmission, power evacuation, R&M projects, etc. in the upcoming capital region and other districts of Andhra Pradesh. APEPDCL and ADSPDCL can avail a debt of Rs 10000 crore for implementation of Distribution projects in the state for strengthening, augmentation, upgradation of distribution infrastructure, sub-transmission system, new distribution, under-ground cabling works, R&M works, works under DDUJGY & IPDS, implementation of smart grid, smart meters, creation of distribution infrastructure for agricultural services, conversion of conventional pump sets into solar pump sets, etc. Apart from financial assistance power utilities have agreed to avail consultancy and management services from REC's subsidiaries for their various activities/projects for the next five years. Loan agreements were signed between REC and TANGEDCO, TANTRANSCO for financial assistance of Rs 6890 crore on 28 January 2017 in Chennai for implementation of 1X 800 MW super critical thermal power plant at North Chennai, renovation and modernisation of TANGEDCO' s existing thermal power plants and establishment of new 765 KV, 400 KV substations in and around Chennai. On 6 February 2017, REC announced that it has entered into Memorandums of Understanding (MoUs) with Karnataka Power Corporation Limited (KPCL) and Bangalore Electricity Supply Company Limited (BESCOM) for extending financial assistance to the tune of Rs 39121 crore for the next five years (i.e. till March 2022); i.e. financial assistance upto Rs 27121 crore to KPCL and upto Rs 12000 crore to BESCOM. On 20 February 2017, REC announced that it has entered into Memorandums of Understanding (MoUs) with Jharkhand Bijli Vitran Nigam Limited (JBVNL) and Jharkhand Urja Sancharan Nigam Limited (JUSNL) for extending financial assistance to the tune of Rs 15150 crore; i.e. financial assistance upto Rs 8150 crore to JBVNL and upto Rs 7000 crore to JUSNL. On 23 March 2017, REC announced that it has entered into Memorandum of Understanding (MoU) with Damodar Valley Corporation (DVC) for extending financial assistance to the tune of Rs 4650 crore for ongoing and upcoming projects of DVC. On 5 April 2017, REC announced that its wholly owned subsidiary REC Transmission Projects Company Limited has handed over project specific Special Purpose Vehicles (SPV) namely NER-II Transmission Limited to M/s Sterlite Grid 4 Limited on 31 March 2017. On 15 May 2017, REC announced that the company has entered into Memorandums of Understanding (MoUs) with Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) and Tamil Nadu Transmission Corporation Limited (TANTRANSCO) for extending financial assistance to the tune of Rs 85723 crore, i.e. financial assistance upto Rs 60063 crore to TANGEDCO and upto Rs 25660 crore to TANTRANSCO. The MoUs are non-binding in nature and the financial assistance is subject to appraisal of the proposal(s) to be submitted by the respective entities to REC and approval of Competent Authority. On 30 May 2017, REC reported its highest ever annual net profit of Rs 6246 crore for the financial year 2016-17. On 30 June 2017, REC's Green Bond was listed on the London Stock Exchange. REC launched its maiden USD Green Bonds to become the first Indian PSU corporate to launch Green Bonds denominated in US Dollars, against the backdrop of green energy's enormous potential in the Indian power sector and the Indian Government's thrust on developing this space. On 24 August 2017, REC signed a Memorandum of Understanding (MoU) extending a term loan worth Rs 13000 crore to Maharashtra State Power Generation Company Limited ( Mahagenco) for generation projects, FGD systems, STP, working capital and special loan requirements. REC and Patratu Vidyut Utpadan Nigam Limited (PVUNL) signed a loan agreement on 14 November 2017 for establishing 3x800 MW Patratu Super Thermal Power Project Phase-I in Jharkhand. The project cost of Rs 18668 crore is funded in debt: equity ratio of 75:25 and Rs 14000 crore (entire debt component of project) is sanctioned by REC as sole lender for the project. With a view to have better operational efficiency and to reap the benefits of higher capital base, pooled resources and to create one big consultancy firm, the Board of Directors of REC at its meeting held on 6 February 2018 approved the Scheme of Amalgamation of both wholly owned subsidiaries of the company viz. REC Transmission Projects Company Limited (Transferor Company) and REC Power Distribution Company Limited (Transferee Company). REC concluded a USD 400 million Reg S bonds deal in London on 11 December 2007 for refinancing the existing ECB. The bond was priced at 115 basis points over three years US Treasury. On 12 January 2018, REC announced that it has signed a loan agreement of Rs 10453 crore with TANGEDCO for setting up of TANGEDCO's Udangudi Stage-I, 2x660 MW Coal based Supercritical Thermal Power Project in Tuticorin District of Tamil Nadu. The loan assistance from REC will not only improve the power infrastructure of the state utilities but will also improve their financial and operational performance. On 16 January 2018, REC Transmission Projects Company Limited (RECTPCL), a wholly owned subsidiary of Rural Electrification Corporation Ltd (REC), handed over project specific Special Purpose Vehicle (SPV) namely ERSS XXI Transmission Limited to M/s Power Grid Corporation of India Limited (PGCIL) on 12 January 2017 On 15 March 2018, REC announced that it has successfully priced 10-year USD Reg-S Bond at a coupon of 4.625% and raised USD 300 million. The issuance received an excellent response with order book of more than USD 900 million. The net proceeds will be used for power sector development.

REC Ltd Directors Reports

To

The Shareholders,

Your Directors have pleasure in presenting the Fifty First Annual Report together with the Audited Financial Statements of your Company for the financial year ended on March 31, 2020.

1. PERFORMANCE HIGHLIGHTS

1.1 Summary of Performance

The highlights of performance of the Company for the financial year 2019-20 were as under, with comparative position of previous year's performance:

(Rs in crore)
Parameter FY 2019-20 FY 2018-19
Loans Sanctioned 1,10,907.99 1,15,957.35
Disbursements 75,666.95 72,165.43
Subsidy under DDUGJY (including DDG) and SAUBHAGYA 6,473.88 19,662.13
Recoveries (including interest) 62,559.74 55,093.20
Total Operating Income 29,791.06 25,309.72
Profit Before Tax 6,983.29 8,100.50
Profit After Tax 4,886.16 5,763.72
Total Comprehensive Income 4,336.37 5,703.18

1.2 Financial Performance

The Total Operating Income of your Company for the financial year 2019-20 was Rs 29,791.06 crore, as compared to Rs 25,309.72 crore during the financial year 2018-19. The Profit After Tax and Total Comprehensive Income for financial year 2019-20 was Rs 4,886.16 crore and Rs 4,336.37 crore respectively, as compared to Rs 5,763.72 crore and Rs 5,703.18 crore for the financial year 2018-19.

Gross Loan Asset Book of your Company as on March 31, 2020 was Rs 3,22,424.68 crore, as compared to Rs 2,81,209.68 crore in the previous year. The outstanding borrowings as on March 31, 2020 were Rs 2,80,115.85 crore. Earnings Per Share (EPS) for the financial year ended March 31, 2020 was Rs 24.74 per share of Rs 10/- each. Net Worth of the Company as on March 31, 2020 has increased to Rs 35,076.56 crore, i.e., an increase of 2.26% above the Net Worth of Rs 34,302.94 crore as on March 31, 2019.

1.3 Dividend

The Board of Directors of your Company declared an Interim Dividend of Rs 11.00 per equity share (representing 110% of the paid-up share capital of the Company) of Rs 10/- each for the financial year 2019-20 and the same was paid on February 24, 2020. Further, no final dividend for the financial year 2019-20 has been recommended by the Board.

Despite challenging business scenario, the Company has consistently rewarded its shareholders by way of dividend @ Rs 11.00 per equity share, which is equivalent to the amount that was paid during the previous year. The total dividend pay-out for the financial year 2019-20 amounted to Rs 2,172.41 crore (excluding dividend distribution tax).

The dividend is paid in accordance with the Company's Dividend Distribution Policy, which is available on the Company's website at https://www.recindia.nic.in/uploads/files/Dividend Distribution Policv.pdf.

1.4 Share Capital

As on March 31,2020, the Authorized Share Capital of the Company was Rs 5,000 crore, consisting of 500 crore Equity Shares of Rs 10/- each; and the Issued & Paid Up Share Capital of the Company was Rs 1,974.92 crore, consisting of 197,49,18,000 Equity Shares of Rs 10/- each. Further, as on March 31, 2020, 52.63% of the paid-up equity share capital of the Company comprising of 103,94,95,247 Equity Shares of Rs 10/- each was held by Power Finance Corporation Limited, a Government of India Undertaking; and the balance 47.37% of the paid-up equity share capital was held by public.

2. LOANS SANCTIONED

The Company sanctioned loans worth Rs 1,10,907.99 crore during the financial year 2019-20, as against Rs 1,15,957.35 crore in the previous financial year. The sanctions for financial year 2019-20 included Rs 55,811.89 crore towards Generation projects, Rs 7,026.33 crore towards Renewable Energy projects, Rs 41,604.77 crore towards T&D projects and Rs 6,465.00 crore towards Short Term, Medium Term & Other Loans. The cumulative sanctions upto March 31, 2020 made by your Company since its inception were Rs 10,99,749.45 crore.

3. DISBURSEMENTS

A total sum of Rs 75,666.95 crore was disbursed during the financial year 2019-20, as against Rs 72,165.43 crore disbursed in the previous financial year. The disbursements for financial year 2019-20 included Rs 27,490.87 crore towards Generation projects, Rs 5,699.09 crore towards Renewable Energy projects, Rs 30,856.19 crore towards T&D projects, Rs 6,390.00 crore towards Short Term, Medium Term & Other Loans and Rs 5,230.80 crore of counter-part funding under DDUGJY including DDG (Decentralized Distributed Generation) and SAUBHAGYA schemes. Further, an amount of Rs 6,473.88 crore from the Government of India (i.e. subsidy of Rs 5,733.62 crore under DDUGJY, subsidy of Rs 44.13 crore under DDUGJY-DDG and subsidy of Rs 696.13 crore under SAUBHAGYA) was also disbursed. The cumulative amount disbursed since inception till March 31,2020 was Rs 5,97,121.87 crore, excluding subsidy under DDUGJY-RE and DDG.

4. RECOVERIES

4.1 The Company gives utmost priority to the timely realization of its dues towards principal, interest, etc. The amount due for recovery including interest for Standard Assets (Stage I & II) during the financial year 2019-20 was Rs 62,340.60 crore (excluding Rs 1,496.20 crore deferred as per the COVID-19 moratorium policy), as compared to Rs 55,155.10 crore during the previous financial year. The Company recovered a total sum of Rs 61,945.04 crore towards Standard Assets (Stage I & II) during the financial year 2019-20, as against Rs 54,502.06 crore during the previous financial year. The Company achieved recovery rate of 99.37% for the financial year 2019-20. The overdues from defaulting borrowers pertaining to Standard Assets (Stage I & II) as on March 31, 2020 was Rs 2,887.29 crore (excluding Rs 1,496.20 crore deferred as per the COVID-19 moratorium policy). Further an amount of Rs 614.69 crore has been recovered during financial year 2019-20 from Credit Impaired Assets (Stage III), as compared to Rs 591.14 crore recovered during financial year 2018-19.

4.2 Your Company's Credit Impaired Assets (Stage III) continue to be at low levels. As on March 31, 2020, the Gross Credit Impaired Assets (Stage III) were Rs 21,255.55 crore, which was 6.59% of the Gross Loan Assets; and the Net Credit Impaired Assets (Stage III) were Rs 10,703.42 crore, i.e., 3.32% of the Loan Assets.

5. FINANCIAL REVIEW

5.1 Summary of Financial Results

The summary of audited financial results of the Company for the financial year 2019-20, vis-a-vis the previous financial year 2018-19, is given as under:

(Rs in crore)

Particulars

Standalone

Consolidated

FY 2019-20 FY 2018-19 FY 2019-20 FY 2018-19
Revenue from Operations 29,791.06 25,309.72 29,929.78 25,399.02
Other Income 63.92 31.44 77.27 32.31
Total Income 29,854.98 25,341.16 30,007.05 25,431.33
Finance Costs 18,997.05 15,641.54 18,991.30 15,639.20
Net translation/transaction exchange loss 2,357.90 521.19 2,357.90 521.19
Fees and Commission Expense 25.44 34.38 25.44 34.38
Net loss on fair value changes 25.85 348.52 25.85 348.52
Particulars

Standalone

Consolidated

FY 2019-20 FY 2018-19 FY 2019-20 FY 2018-19
Impairment on financial instruments 889.56 240.33 919.49 243.49
Other Expenses 575.89 454.70 666.23 564.06
Total Expenses 22,871.69 17,240.66 22,986.21 17,350.84
Share of Profit/Loss of Joint Venture accounted for using equity method 0 0 9.14 9.95
Profit Before Tax 6,983.29 8,100.50 7,029.98 8,090.44
Tax Expenses 2,097.13 2,336.78 2,057.71 2,349.06
Profit After Tax 4,886.16 5,763.72 4,972.27 5,741.38
Other Comprehensive Income for the period (549.79) (60.54) (553.85) (60.59)
Total Comprehensive Income 4,336.37 5,703.18 4,418.42 5,680.79
Add: Opening Balance of Retained Earnings and Other Comprehensive Income 5,036.27 5,304.75 5,226.53 5,536.07
Amount available for appropriation 9,372.64 11,007.93 9,644.95 11,216.86
Less: Appropriations
Special Reserve created u/s 36(1)(viii) of the Income Tax Act, 1961 (1,522.32) (1,323.59) (1,522.32) (1,323.59)
Reserve for bad and doubtful debts u/s 36(1)(viia) of the Income Tax Act, 1961 (336.52) (273.62) (336.52) (273.62)
Reserve Fund u/s 45-IC of the Reserve Bank of India Act, 1934 (978.00) (1,153.00) (978.00) (1,153.00)
Debenture Redemption Reserve (49.15) (196.59) (49.15) (196.59)
Impairment Reserve (793.29) - (793.29) -
Sub-total - Appropriations (3,679.28) (2,946.80) (3,679.28) (2,946.80)
Less: Dividend Payments to Owners (including related taxes)
Dividend (2,172.41) (2,518.02) (2,172.41) (2,518.02)
Dividend Distribution Tax (435.78) (506.84) (446.06) (525.51)
Sub-total - Dividend Payments to Owners (including related taxes) (2,608.19) (3,024.86) (2,618.47) (3,043.53)
Closing Balance of Retained Earnings and Other Comprehensive Income 3,085.17 5,036.27 3,347.20 5,226.53

Notes: Drawdown/Transfer from Reserves - Pursuant to statutory changes and utilization of reserves created for specific purposes, the Company has transferred the following amounts from different reserves to General Reserve during FY 2019-20:

1. Rs 1,367.27 crore from Debenture Redemption Reserve (DRR) pursuant to the Notification No. G.S.R. 574(E) dated August 16, 2019 issued by the Ministry of Corporate Affairs (MCA). Refer Note 24.5 of Standalone Financial Statements.

2. Rs 378.41 crore from Reserve for Bad & Doubtful Debts under Section 36(1)(viia)(c) of the Income Tax Act, 1961 on account of actual write-offs on loan asset.

5.2 Contribution to National Exchequer

During the financial year 2019-20, your Company contributed an amount of Rs 2,214.12 crore to the National Exchequer, as compared to Rs 2,624.44 crore in the previous year (excluding Dividend paid to the Government of India). Details are as under:-

(Rs in crore)

Particulars FY 2019-20 FY 2018-19
Dividend paid to the Government of India - 1,343.75
Dividend Distribution Tax 435.78 506.84
Direct Taxes 1,748.74 2,043.13
IGST and CGST 29.60 74.47
Total 2,214.12 3,968.19

5.3 Ratio Analysis

A comparative statement of significant ratios of the Company for the financial year 2019-20 vis-a-vis the previous financial year 2018-19, is as below:

Particulars FY 2019-20 FY 2018-19
Earnings Per Share (Rs) 24.74 29.18
Return on Average Net Worth (%) 14.09 17.31
Book Value per Share (Rs) 177.61 173.69
Debt Equity Ratio (times) 7.99 6.98
Price Earnings Ratio (times)* 3.59 5.24
Interest Coverage Ratio (times) 1.37 1.52

*PE Ratio is calculated based on the Closing Price of REC's Equity Share at NSE, as on March 31, 2020 and March 29, 2019 (as March 30-31, 2019 were holidays), respectively.

5.4 Resource Mobilization

During the financial year 2019-20, the Company mobilized Rs 84,358.12 crore from the market. This included Rs 9,725.00 crore by way of Term Loans from Banks, Rs 2,750.00 crore by way of Short-Term Loans from Banks, Rs 5,000.00 crore by way of Term Loan from National Small Saving Fund, Rs 6,159.32 crore by way of Capital Gains Tax Exemption Bonds and Rs 42,713.10 crore by way of Institutional Bonds. The Company also mobilized Rs 18,010.70 crore from External Commercial Borrowings during the year under review, equivalent to USD 2,551.95 million [USD 1,600.00 million from External Commercial Borrowings, USD 790.00 million from FCNR(B) and USD 161.95 million from Official Development Assistance (ODA) loans]. In addition to above, an amount of Rs 6,249.64 crore was also raised through Commercial Paper in the financial year 2019-20.

Further, for meeting the Government of India's funding requirement of DDUGJY and SAUBHAGYA schemes, the Company also raised an aggregate amount of Rs 3,782.30 crore during the financial year 2019-20, through Institutional Bonds issued on private placement basis. The repayment of principal and service of interest of these bonds shall be made by the Government of India through the Ministry of Power.

Disclosure of Green Bonds issued by REC

Towards realizing the Government of India's vision of harnessing green energy's enormous potential in the country and to achieve the targeted capacity of 175 GW by 2022, REC raised Green Bonds of USD 450 million in July 2017 for a tenor of ten years, which are listed on the International Securities Market (ISM) segment of the London Stock Exchange and also on the Singapore Stock Exchange.

Use of Proceeds: The proceeds have been utilized to finance Solar, Wind and Renewable Purchase Obligations, including refinancing of eligible projects as defined in the Green Bond framework of REC, contributing to positive environmental impact and also strengthening India's energy security by reducing fossil fuel dependency.

KPMG, India has provided its post-verification Independent Assurance Report based on the Green Bond framework of REC and the same has also been certified by the Climate Bonds Standard Board of Climate Bond Initiative on July 17, 2018.

In accordance with the Green Bond framework, REC has created a 'Green Portfolio' managed through a well laid internal tracking system, updated on regular basis, to monitor, establish and account for the allocation of the proceeds for such Green Portfolio. Managements of Proceeds: The net proceeds from the Bonds amounting to Rs 2,894 crore were allocated against the following projects as on March 31, 2020:-

(Amount Rs in crore)

Sl. No. Location Capacity (in MW) Loan sanction date Loan sanction amount Outstanding amount on March 31, 2020
Solar
1 Telangana 45 21.09.2016 269.50 245.09
2 Telangana 30 21.09.2016 179.62 162.73
3 Karimnagar, Telangana 15 11.11.2016 89.84 78.44
4 Chitradurga, Karnataka 10 27.01.2016 53.81 43.05
5 Warangal, Telangana 15 11.11.2016 89.84 78.66
6 Andhra Pradesh 500 24.02.2016 2,480.00 1,894.01
7 Karimnagar, Telangana 15 11.11.2016 89.84 78.41
Sl. No. Location Capacity (in MW) Loan sanction date Loan sanction amount Outstanding amount on March 31, 2020
8 Anantpur, Andhra Pradesh 5 09.02.2015 24.45 19.44
9 Telangana 30 21.09.2016 179.62 162.37
10 Kadapa, Andhra Pradesh 50 12.04.2017 277.50 253.84
11 Randa Reddy, Telangana 5 27.01.2016 26.90 23.37
12 Mansa, Punjab 50 22.09.2016 242.84 -
13 Medak, Telangana 7 26.11.2015 39.90 33.91
14 Nizamabad, Telangana 15 11.11.2016 89.84 78.11
15 Andhra Pradesh 23 24.02.2016 140.00 -
16 Karimnagar, Telangana 15 11.11.2016 89.84 78.43
17 Nirudanagar, Tamil Nadu 5 14.07.2015 26.13 20.14
18 Chitradurga, Karnataka 30 17.04.2017 150.39 134.55
19 Mansa and Sangrur, Punjab 50 21.05.2016 169.69 148.88
Sub-total (A) 4,709.55 3,533.43
Wind
1 Sangli, Maharashtra 10 24.02.2015 47.09 36.22
2 Mandasaur, Madhya Pradesh 20 28.01.2016 86.63 64.66
3 Tirpur, Tamil Nadu 6.8 06.06.2012 26.16 18.66
Sub-total (B) 159.88 119.54
Renewable Purchase Obligation (RPO)
1 Maharashtra RPO 24.07.2017 500.00 312.50
2 Maharashtra RPO 21.09.2017 1,000.00 200.00
Sub-total (C) 1,500.00 512.50
Grand Total (A+B+C) 6,369.43 4,165.47

REC is compliant with the requirements of its Green Bond framework, as per its continuing obligations to ensure that the amount raised through Green Bonds remains invested in the eligible projects, as per the Green Bond framework during the tenor of the bonds.

Cash Credit Facilities

The Company has an approved Cash Credit/WCDL/OD limit of Rs 10,020.00 crore for availment from various banks for its

day-to-day operations.

5.5 Domestic and International Credit Rating Domestic

The domestic debt instruments of REC continued to enjoy "AAA" rating, the highest rating assigned by CRISIL, CARE, India Ratings & Research and ICRA-Credit Rating Agencies.

International

REC enjoys international credit rating at par with sovereign ratings of "Baa3" and "BBB-" from international credit rating agencies viz. Moody's and FITCH respectively.

5.6 Cost of Borrowing

The overall weighted average annualized interest rate of borrowing raised during the financial year 2019-20 and for the borrowings outstanding as on March 31, 2020 excluding other finance charges is 6.70% and 7.32% respectively. As a result, your Company was able to deliver debt financing at competitive rates.

5.7 Redemption and Pre-Payment

During the year, the Company repaid a sum of Rs 42,605.58 crore. This includes repayment amounting to Rs 19,854.20 crore to Institutional Bond-holders, Rs 7,662.91 crore worth of Capital Gain Tax Exemption Bonds, Rs 74.97 crore towards Infrastructure Bonds, Rs 1,740.59 crore of External Commercial Borrowings, Rs 3,507.72 crore of FCNR loans and ^190.19 crore of Official Development Assistance (ODA) loan. The Company also redeemed long term loans from Banks of Rs 9,575.00 crore and Commercial Paper with face value of Rs 11,300.00 crore during the year.

5.8 Financial status at the close of the year

At the close of the financial year 2019-20, the total resources of your Company stood at Rs 3,46,487.59 crore. Out of this, Equity Share Capital contributed Rs 1,974.92 crore, other Equity including Reserves & Surplus stood at Rs 33,101.64 crore, Financial Liabilities including Borrowings and other Financial Liabilities accounted for ^3,11,228.91 crore, Non-Financial Liabilities including Provisions and other Non-Financial Liabilities stood at Rs 182.12 crore. These funds were deployed as Financial Assets including Long / Short Term Loans, Investments etc. of Rs 3,43,497.14 crore and Non-Financial Assets including Property, Plant & Equipment, Tax Assets etc. of Rs 2,990.45 crore.

5.9 Policy Initiatives

The Company constantly reviews its policies & procedures from time to time, to align with market requirements and changing statutory requirements and for the furtherance of its corporate objectives. During the year under review, your Company has adopted/amended various policies and guidelines including 'Code for Regulating, Monitoring and Reporting of Trading by Designated Persons & their Immediate Relatives and for Fair Disclosure', 'Policy for determining Material Subsidiaries', 'Policy on Materiality of Related Party Transactions & Dealing with Related Party Transactions' and 'Policy for Prevention of Frauds'. The Company has also adopted a policy for resolution of stressed assets; and additional guidelines for working capital loan to state power utilities.

6. PRESENT TRANSMISSION & DISTRIBUTION SCENARIO

Transmission and Distribution (T&D) industry is poised to witness a large-scale capacity addition and system augmentation, on account of the country's installed generation capacity being at a high of 370 GW (as on March 31, 2020) and enormous capacities planned in the renewable energy space. There is also a need to strengthen the technically old and aging distribution infrastructure. Establishment of Solar Parks poses the requirement to create infrastructure to ensure system availability with relatively shorter gestation period. The need of the hour is to install a state-of-the-art robust and reliable evacuation and distribution system, capable of handling higher loads. With the accomplishment of targeted household connections under the Government of India's flagship programme SAUBHAGYA and expected kickstart in rural economy, the demand is set to rise in the coming years. Therefore, to make the sector reliable, affordable and capable of absorbing envisaged future growth and to reach the last mile across the country, T&D segment shall be a prime focus area.

The policy framework has further supported the resolve of the State Governments to provide reliable power supply to consumers and integration of upcoming renewable energy sources with the electricity grid. To revitalize the distribution sector, the Government of India has undertaken several initiatives like Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Pradhan Mantri Sahaj Bjli Har Ghar Yojana (SAUBHAGYA), Ujwal DISCOM Assurance Yojana (UDAY), Integrated Power Development Scheme (IPDS), National Electricity Fund (NEF), Smart Grid Task Force etc., with the intent to improve and turn around the power distribution sector in the country.

Your Company, as the Nodal Agency to various schemes of the Ministry of Power, Government of India, plays a pivotal role in improving the state of the sector. Your Company has been playing an active role in creation of new infrastructure and augmentation/strengthening of the existing network. Your Company encourages DISCOMs to expedite various reform measures and to adopt best practices, including modernization and automation of systems/smart grid, IT-enabled systems for metering and consumer services, other technology interventions in the distribution sector, which helps them in improving their operational and financial performance.

Distribution has a crucial role to play in the development and sustainability of the power sector and overall socio-economic development of the country. Keeping in tune with the times where utilities are facing difficulty to keep themselves afloat and meet the consumer expectations at the same time, your Company finances entire gamut of distribution projects broadly with the objectives of system improvement and augmentation, loss reduction measures, IT based system implementation, consumer satisfaction etc.

6.1 Major reforms in Distribution Sector

The Government of India has taken various reform initiatives from time to time, to ensure the overall development of the Sector. The process of un-bundling, corporatization, instituting regulatory commission, etc., has already been completed in most of the States, thus increasing their accountability and also providing more autonomy to the DISCOMs.

In the past, various schemes / programmes were implemented to extend benefits to ailing DISCOMs, with an objective to strengthen infrastructure, reduce losses in urban pockets, introduce IT enablement and to provide last mile connectivity. Progressive interventions such as DDUGJY, IPDS and UDAY implemented by the Government of India has come as an enabler for operational and financial turnaround of DISCOMs. Further, NEF, an interest subsidy scheme, is also under implementation with the objective to promote capital investment and expedite reforms in distribution sector. REC is the Nodal Agency for implementation of DDUGJY, operationalization of SAUBHAGYA and NEF schemes; and is also playing a key role in supporting the efforts of the Government of India in implementation of UDAY

"24x7 Power For All" document signed by all States reflects the commitment to work towards achieving the very objective for providing electricity across the country. Your Company has been instrumental in development of Power For All web-portal and is engaged in assisting the Ministry of Power in this endeavour. Your Company is also partnering and working along with respective State Utilities, by making available the requisite financing, as well as working with the Central and State Governments to resolve issues in achievement of the objective.

An Integrated Rating System for all the State DISCOMs in the country has been put in place by the Ministry of Power, which provides realistic performance assessment based on key defining parameters. The rating methodology enables the DISCOMs to analyze their strengths and weaknesses and facilitates a focused approach for improving upon their operational and financial performance. It has also helped Banks/FIs in maintaining a consistent approach, while considering funding proposals of distribution companies.

Upgradation of technology and adoption of best practices by the distribution sector, to cater to the requirement of upcoming 100+ Smart Cities, would present new financing opportunities. The Government of India's facilitating power to all and improving operational & financial performance of the utilities has already started showing results in terms of timely notification of tariffs by Regulators in many States, filing of MYT petitions, claiming of return on equity in the ARR, release of revenue subsidy by State Government etc.

6.2 National Electricity Fund

REC is the Nodal Agency for operationalization of the National Electricity Fund (NEF), an interest subsidy scheme having provision of Rs 8,466 crore (against interest subsidy & other incidental expenses) to be provided over 14 years against interest paid on loan disbursements amounting to Rs 23,973 crore for distribution schemes sanctioned during two financial years viz. 2012-13 and 2013-14. Ministry of Power, Government of India provides interest subsidy on interest paid for loans availed by State Power Utilities / Distribution Companies both in public and private sector, to improve the infrastructure in Distribution Sector.

The Scheme is reform linked and interest subsidy of 3% to 7% is payable to the DISCOMs on achievement of reform-based parameters outlined in NEF Guidelines. Initially, NEF Steering Committee approved projects of Rs 25,000 crore which have now reduced to Rs 23,973 crore due to delisting of some non-starter projects, as per the decision of NEF Steering Committee. The utilities from the states of Andhra Pradesh, Chhattisgarh, Gujarat, Haryana, Karnataka, Maharashtra,

Madhya Pradesh, Punjab, Rajasthan, Telangana, Uttarakhand and West Bengal have already benefitted from the interest subsidy of Rs 249.70 crore, released under the scheme till March 31, 2020.

6.3 Deendayal Upadhyaya Gram Jyoti Yojana

REC is also the Nodal Agency for operationalization of Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY), the flagship scheme of Government of India covering all aspects of rural power distribution. All un-electrified villages/habitations, irrespective of population criteria, are covered for electrification in accordance with the Guidelines of the scheme. All erstwhile ongoing rural electrification schemes have been subsumed in DDUGJY In a landmark achievement, all remaining un-electrified census inhabited villages in the country stand electrified as on April 28, 2018.

DDUGJY facilitates towards achievement of '24x7 Power For All' in the rural areas of India, through the following project components:

a) Separation of agriculture and non-agriculture feeders facilitating continuous quality power supply to non-agricultural consumers and adequate power supply to agricultural consumers;

b) Strengthening and augmentation of sub-transmission & distribution infrastructure;

c) Micro-grid and Off-grid distribution network;

d) Metering of Distribution Transformers/Feeders/Consumers; and

e) Rural Electrification component (including the erstwhile RE projects).

Under the scheme 60% of the project cost (85% for special category States) is provided as grant by Government of India and additional grant up to 15% (5% for special category States) on achievement of prescribed milestones. In order to realize the objectives of the scheme, participation of all stakeholders, particularly public representatives, has been institutionalized through constitution of District Development Coordination and Monitoring Committee (DISHA) (the erstwhile District Electricity Committees) under the Chairmanship of the senior-most Member of Parliament. DISHA has been empowered to monitor and review implementation of DDUGJY.

The scheme has approved outlay of Rs 43,033 crore, including budgetary support of Rs 33,453 crore from Government of India. An amount of Rs 44,414 crore (including grant of Rs 27,750 crore) has been sanctioned by the Ministry of Power for DDUGJY in 33 States and Union Territories, against which Rs 27,606 crore (including grant of Rs 20,440 crore) has been released till March 31, 2020.

6.4 Prime Minister Development Package for Jammu & Kashmir 2015

The Prime Minister Development Package ("PMDP-2015") for the erstwhile Jammu & Kashmir State (now J&K and Ladakh Union Territories) was announced by the Hon'ble Prime Minister on November 27, 2015, with approved project cost of Rs 2,570.14 crore (90% grant from Government of India i.e., Rs 2,301.62 crore) for distribution strengthening works in rural and urban areas. The major works covered under the scheme are system strengthening, connecting unconnected households, replacing of barbed wire & worn-out poles, underground cables at tourist places, consumer metering, construction of 33/11 kV sub-stations at industrial areas and electrical infrastructure at religious shrines.

Out of above, ^1,157.73 crore (GoI grant Rs 1,041.96 crore) has been sanctioned for distribution strengthening works in rural areas. The fund shall be channelized through REC; and an amount of Rs 570.94 crore has been released so far.

6.5 SAUBHAGYA - Pradhan Mantri Sahaj Bijli Har Ghar Yojana

The Hon'ble Prime Minister launched Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA) on September 25, 2017, to achieve universal household electrification in every village and district of the country. The scheme outlay is Rs 16,320 crore, including Gross Budgetary Support of Rs 12,320 crore. REC is the Nodal Agency for operationalization of the scheme.

Universal Household Electrification requires creation of electricity access through last mile connectivity. Wherever grid connectivity is technically not feasible and financially unviable, electrification is resorted through Solar-based Off-Grid systems. The SAUBHAGYA scheme aims at providing:

a. Last mile connectivity and electricity connection to all un-electrified households in rural areas;

b. Last mile connectivity and electricity connection to all remaining economically poor un-electrified households in urban areas. Non-poor urban households are excluded from this scheme;

c. Solar Photovoltaic (SPV) based standalone system for un-electrified households located in remote and inaccessible villages/habitations, where grid extension is not feasible or cost effective.

Under the scheme, Rs 14,109 crore (including grant of Rs 9,093 crore) has been sanctioned by the Ministry of Power to 26 States/Union Territories, against which Rs 8,007 crore (including grant of Rs 4,946 crore) has been released till March 31,2020. Under the scheme, 2.76 crore households have been electrified till March 31, 2020.

6.6 Ujwal DISCOM Assurance Yojana

Financially stressed DISCOMs were not able to supply adequate power at affordable rates, which has for long hampered the quality of life, overall economic growth and development in the country. Efforts towards 100% village electrification and then 100% household electrification, 24x7 power supply and clean energy cannot be achieved without undertaking adequate capacity building of DISCOMs. Moreover, the issues of frequent power outages needed earnest resolution for meeting national priorities like "Make in India" and "Digital India". The unresolved legacy issues with DISCOMs had kept them trapped in a vicious cycle, with operational losses being funded by debt.

To ensure permanent resolution of these long standing as well as potential issues, the Ministry of Power, Government of India, launched the 'Ujwal DISCOM Assurance Yojana' (UDAY) in November 2015, a reform for realizing the Hon'ble Prime Minister's vision of affordable and accessible 24x7 Power For All. The UDAY scheme empowers DISCOMs with the opportunity to break even at the end of their respective MoU periods through following initiatives:

a. Improving operational efficiencies of DISCOMs;

b. Reduction of cost of power;

c. Reduction in interest cost of DISCOMs; and

d. Enforcing financial discipline on DISCOMs through alignment with State finances.

Your Company is assisting Government of India to liaise with respective State Governments/Utilities to enable achievement of objectives envisaged. The programme has already witnessed significant traction from various State Governments/DISCOMs and 32 State / Union Territories are now part of the UDAY fold. UDAY scheme is showing encouraging results as liabilities of DISCOMs of Rs 2.09 lakh crore are being taken over by the State Governments, and additionally Rs 0.24 lakh crore have been restructured / repriced through issuance of bonds; thus cleaning the balance sheets of DISCOMs and enabling them to restart the capital expenditure cycle while also enabling financially viable operations of all power sector stakeholders i.e., DISCOMs, TRANSCOs, GENCOs, IPPs, Banks / FIs, etc.

6.7 Urja Mitra

Urja Mitra is a distribution sector initiative and a first of its kind application being implemented by your Company's wholly owned subsidiary (REC Transmission Projects Company Limited), under the guidance of the Ministry of Power. Urja Mitra provides a Central Outage Management and Notification Platform for State Power Distribution utilities, to disseminate Power Outage information to urban / rural power consumers across India through SMS/email/push notifications. Power consumers across the nation get outage update through integrated Mobile Application for Android and iOS platforms. It also provides a platform to view real time power outages in any part of the country, and lodge complaints on power outages. As on June 2020, data of around 22.06 crore consumers of 52 DISCOMs of 29 States is uploaded into the application and 279.37 crore SMSes have been sent to the consumers.

6.8 11 kV Rural Feeder Monitoring Scheme

To get a complete picture of the entire distribution network in country and to ensure achievement of "24x7 Power For All" vision of the Government of India, it was felt essential to capture real time supply parameters of rural India and this could be achieved by monitoring the availability/quality of power supply in rural areas of the country recording actual distribution parameters i.e., power supply, outages and by conducting feeder wise energy audit and AT&C losses calculation. Towards this objective, the Ministry of Power had introduced "11 kV Rural Feeder Monitoring Scheme" under the Distribution Sector Reforms and has appointed your Company's wholly owned subsidiary (REC Transmission Projects Company Limited) as implementing agency for the same. Under the scheme, meter data of rural feeders is sent to central Meter Data Acquisition System (MDAS) for analysis and the same is then integrated with National Power Portal (NPP) to make it available for use of all stakeholders. This scheme targets to develop a self-sustained, independent, web based automated system for almost 1.1 lakh rural and agricultural feeders across country by acquiring various essential parameters of all the outgoing 11kV rural feeders and such 66/33 kV incoming feeders from where 11kV rural feeders are emanating and making the information available online for all stakeholders. As on June 2020, 79,000 modems have been installed and integrated with National Power Portal.

6.9 Tarang

Tarang (Transmission App for Real-Time Monitoring and Growth) is a transmission sector initiative, being run under the guidance of the Ministry of Power through your Company's wholly owned subsidiary (REC Transmission Projects Company Limited). It provides an informative medium regarding the Pan-India progress of Transmission System, which can be drilled down for analysis to month wise, agency wise, state wise information etc. The reasons of delay in case of stalled/ delayed projects is separately provided so that all concerned stakeholders can take timely corrective decision for project completion. Tarang monitors the progress of both Inter-State and Intra-State Transmission Projects being implemented through

Tariff Based Competitive Bidding (TBCB) as well as Regulated Tariff Mechanism. Tarang provides advance information of upcoming transmission projects approved by Empowered Committee on Transmission, aiding bidders to gear up for future transmission projects. In other words, it is a real time repository of Transmission System across the country.

7. FINANCING ACTIVITIES

Your Company has been providing funding assistance for power generation (including conventional & renewable energy), transmission & distribution projects including for the electrification of villages. Details of major financing activities during the financial year 2019-20 are as under:

7.1 Generation

During the financial year 2019-20, your Company sanctioned 84 nos. of Generation / R&M / other loans including 9 nos. of additional loans with total loan assistance of Rs 55,811.89 crore, including consortium financing with other financial institutions, as per details given below:-

(Rs in crore)

Particulars No. of Loans Loan amount
State Sector 82 50,734.18
Fresh Loan 74 42,208.04
Additional Loan 8 8,526.14
Private Sector 2 5,077.71
Fresh Loan 1 5,037.71
Additional Loan 1 40.00
Total 84 55,811.89

7.2 Renewable Energy

During the financial year 2019-20, your Company sanctioned 17 nos. of Renewable Energy projects with installed generation capacity aggregating to 1,754 MW, with total loan assistance of Rs 7,026.33 crore. Out of the same, 7 were solar photo-voltaic projects aggregating 917 MW, another 7 were wind energy projects aggregating 837 MW, 1 was procurement and installation of Turbine & Generator unit for a small hydro project, 1 was for DDG component of DDUGJY works and 1 loan was to a State DISCOM for meeting its renewable purchase obligations.

The total cost of all the Renewable Energy projects sanctioned during financial year 2019-20 aggregates to Rs 10,383.80 crore, as detailed below:-

Particulars Unit FY 2019-20 FY 2018-19
Projects Sanctioned Nos. 17 36
Capacity of Sanctioned Projects MW 1,754 2,198
Cost of Projects Rs / crore 10,383.80 17,273.54
Loan Sanctioned by REC Rs / crore 7,026.33 11,875.20

7.3 Transmission & Distribution

During the financial year 2019-20, your Company sanctioned a total of 592 nos. of Transmission & Distribution schemes/ projects involving a total loan assistance of Rs 41,604.77 crore. This included 590 projects of the State Sector with total loan aggregating to Rs 40,324.15 crore, towards primary power evacuation schemes associated with generating plants, system improvement schemes, schemes for procurement & installation of equipment/material like meters, transformers, conductors, tower material, cables, etc. Further, it also included loan components under Government-approved schemes like DDUGJY, IPDS and SAUBHAGYA and infrastructure schemes for providing electricity access to various categories of consumers, including agricultural consumers. Further, there were 2 inter-state / intra-state transmission projects in Private Sector, with total loan amount of Rs 1,280.62 crore. Details of the same are given below:-

(Rs in crore)

Particulars No. of Loans Loan amount
State Sector 590 40,324.15
Transmission Loans 252 17,285.12
Distribution Loans 337 21,539.03
Short Term / Medium Term & Special Loans 1 1,500.00
Private Sector 2 1,280.62
Intra-state Transmission Projects 1 639.20
Inter-state Transmission Projects 1 641.42
Total 592 41,604.77

REC has sanctioned a few Green Energy Corridor transmission projects and more such projects are in the process of appraisal/approval. Further, in line with prevailing market conditions, REC has framed and modified its policies for project financing to attract more transmission projects.

7.4 Short Term / Medium Term Loans and other Loan assistance

In addition to the above, your Company has also sanctioned 34 nos. of Short Term, Medium Term and Other Loans aggregating to Rs 6,465 crore to various power utilities during the financial year 2019-20, towards their fund requirement for short term / medium term or for working capital etc.

7.5 Financing Activities in North Eastern States

During the financial year 2019-20, a total sum of Rs 5,855.49 crore was sanctioned towards various State sector and Private sector projects in North Eastern States. This included refinancing of a term loan of Rs 4,948.10 crore of consortium lenders in respect of 6x200 MW hydro power project of Teesta Urja Limited, Rs 492.24 crore sanctioned towards Renewable Energy projects and Rs 415.15 crore sanctioned towards Transmission & Distribution projects in the North Eastern States.

7.6 Appraisal System for Financing Private Sector Projects

REC has its own Guidelines for appraisal of private sector projects. The Promoter/Entity appraisal is carried out on the basis of the financial performance, credit-worthiness, management proficiency and sectoral experience of the promoter entities. The project appraisal is carried out on the basis of various technical parameters like statutory clearances, PPA, infrastructure etc. Thus, Integrated Rating of the project is arrived on the basis of combined ratings of the entity and the project. REC's interest rates and security structure are linked to the grades/integrated ratings assigned to private sector projects.

During the year, REC has initiated the process of limited review of the existing appraisal guidelines for private sector projects, in view of the changing market practices, regulatory environment, RBI policies etc. through a consultant, so as to strengthen the appraisal process.

7.7 Grading of State Power Utilities

Your Company has well defined policy/guidelines for grading of State Power Utilities. The grading of state power utilities (Generation/Transmission & Trading) is carried out twice during a year, based on the evaluation of the utility's performance against specific parameters, operational & financial performance, regulatory compliances, annual financial results etc. With regard to State Power Distribution utilities (including SEBs / utilities with integrated operations), your Company adopts the final annual integrated ratings carried out by Independent Rating Agencies (CARE/ICRA), after approval of framework/rating by the Ministry of Power, Government of India.

For the purpose of funding, your Company has classified State Power Generation, Transmission and Trading Utilities etc. into 'A++', 'A+', 'A', 'B' & 'C' categories. During the year, your Company has completed grading in respect of 131 utilities, out of which 31 utilities were graded as A++, 37 as A+, 42 as A, 18 as B and 3 utilities as C category. Your Company has also developed a model for State Grading on ERP platform.

7.8 Investments made during the financial year 2019-20

During the financial year 2019-20, the Company has subscribed to 7,16,10,000 Equity Shares of Rs 10/- each of its joint venture company viz. Energy Efficiency Services Limited (EESL), for a consideration of Rs 71.61 crore under the Rights Issue Offer of EESL. Subsequent to this, the shareholding of the Company in EESL has increased to 22.18% from 21.70%.

Further, pursuant to One Time Settlement arrangement executed on December 23, 2019 in respect of RattanIndia Power Limited, the Company has been allotted 9,25,68,105 Equity Shares of Rs 10/- each, 2,87,20,978 Redeemable Preference Shares of Rs 10/- each and 4,33,03,616 Optionally Convertible Cumulative Redeemable Preference Shares of Rs 10/- each, of the said company. Pursuant to a Resolution Plan approved by the Hon'ble National Company Law Tribunal (NCLT), Hyderabad Bench vide Order dated July 26, 2019 in respect of Lanco Teesta Hydro Power Limited, the Company has written off equity investment of Rs 102 crore in the said company (comprising of 10.20 crore Equity Shares of Rs 10/- each), due to extinguishment of such equity shares as per the said Order. Further, REC has sold 2,28,789 Equity Shares of Rs 1/- each of Indian Energy Exchange Limited (IEX) in the buyback offer of the said company.

8. INTERNATIONAL COOPERATION & DEVELOPMENT

REC has four lines of ODA (Official Development Assistance) credit with KfW, Germany, three of them have been fully drawn as on March 31, 2020. KfW-I and KfW-II ODA loans are of EUR 70 million each (approx. Rs 454.02 crore and Rs 480.97 crore respectively), KfW-III is of EUR 100 million (approx. Rs 753.73 crore). Out of the fourth line of credit from KfW of USD 228 million, USD 161.95 million (approx. Rs 1,157.38 crore) have been drawn as at March 31, 2020.

Apart from above, REC has two lines of ODA credit with JICA, Japan. Both of them have also been fully drawn. Under JICA-I & II ODA loans, cumulative amounts of JPY 16,949.38 million (approx. Rs 820.12 crore) and JPY 11,809.48 million (approx. Rs 640.64 crore) respectively have been drawn as on March 31, 2020.

9. PERFORMANCE & ACHIEVEMENTS OF GOVERNMENT PROGRAMMES DURING FINANCIAL YEAR 2019-20

9.1 Performance and achievement under all 3 GoI schemes i.e., DDUGJY, PMDP-2015 for J&K and SAUBHAGYA during financial year 2019-20.

a. Sanction: During the financial year 2019-20, an amount of Rs 143.97 crore has been sanctioned under DDUGJY to the States of Manipur, Mizoram and Nagaland.

b. Fund release: The subsidy of Government of India is channelized through REC and the matching contribution is infused by the respective State Government/Implementing Agencies through loan at their own. Government of India subsidy of Rs 6,475 crore has been released to States during financial year 2019-20.

c. Physical progress of creation of Infrastructure: During the financial year 2019-20, the following works have been completed:

i) Commissioning of sub-stations including augmentation: 1,729 nos.

ii) HT Lines feeder segregation (including new 11 kV lines): 1,97,019 cKm

iii) LT Lines: 4,61,875 cKm

iv) Commissioning of Distribution Transformers: 4,96,181 nos.

v) Installation of consumer meters: 45,53,651 nos.

vi) Metering of Distribution Transformer & Feeders: 14,589 nos.

d. Progress of electrification of households: During the financial year 2019-20, electrification of 13.92 lakh households was achieved under SAUBHAGYA.

9.2 Cumulative Performance upto March 31,2020

a. Sanction and Release: An amount of Rs 1,40,309 crore has been sanctioned and Government of India Grant of Rs 81,855.56 crore has been disbursed to the implementing agencies cumulatively upto March 31, 2020 under the above-mentioned Government programmes.

b. Physical progress of creation of Infrastructure: The following works have been completed cumulatively upto March 31, 2020 under the above-mentioned Government programmes since inception:

i) Commissioning of sub-stations including augmentation: 6,574 nos.

ii) HT Lines feeder segregation (including new 11 kV lines) : 8,01,764 cKm

iii) LT Lines: 12,59,560 cKm

iv) Commissioning of Distribution Transformers: 15,74,215 nos.

v) Installation of consumer meters: 1,40,04,143 nos.

vi) Metering of Distribution Transformer & Feeders: 1,85,438 nos.

c. Progress of electrification of households: With the efforts of States/project implementing agencies, electricity connections were provided to 2.63 crore households under SAUBHAGYA, DDUGJY and State Government schemes during the period from October 11, 2017 to March 31, 2019.

Further, on the request of 7 States (Assam, Chhattisgarh, Jharkhand, Karnataka, Manipur, Rajasthan and Uttar Pradesh), the Ministry of Power accorded time extension approval to electrify additional 19.09 lakh un-electrified households, which were unwilling earlier to get electrified and had expressed their willingness before March 2019. Out of the same, 13.92 lakh households were electrified during financial year 2019-20.

10. STANDARDIZATION, QUALITY CONTROL & MONITORING

Your Company has continually provided technical expertise in the distribution system to State Power Utilities. The technical specifications and construction standards issued by the Company are used extensively by the State Power Utilities. The Company, in order to promote new technologies, has been continuously supporting innovations using latest R&D in the field of power distribution.

In line with the Quality Control Mechanism of Government Programmes, REC Quality Monitors (RQM) have been appointed for carrying out field and material inspections for ensuring proper quality of materials and works during implementation of such schemes. During the financial year 2019-20, RQMs have undertaken field inspection of 33,609 villages and material inspection of 1,208 nos. at manufacturer premises, for ensuring quality of works.

REC has developed an online quality portal for digitization of quality inspections of National & REC Quality Monitors. The portal was launched on May 27, 2019.

REC has also developed mobile app "SAKSHYA" for uploading observations of RQM agencies and compliances by DISCOMs/PIAs. The mobile App became live on May 27, 2019.

11. RISK MANAGEMENT

The Company has a Comprehensive Risk Management Policy which covers the Credit Risk, Liquidity Risk, Operational Risk and Market Risk.

11.1 Risk Management Committee

The Company is having a Risk Management Committee (RMC) of its Directors and Senior Officials in place, for monitoring the integrated risks of the Company. The main function of the RMC is to monitor various risks and also to suggest action for mitigation of risk arising in the operation and other related matters of the Company. Further, as required under RBI norms, the Company has also appointed a Senior Official as the Chief Risk Officer (CRO).

The Company has identified its various risks and has taken appropriate steps to mitigate them. The brief description of the risks is as below:-

(i) Credit Risk

Credit risk is a risk inherent in the financing industry and involves the risk of loss arising from the diminution in credit quality of a borrower and the risk that the borrower will default on contractual repayments under a loan or an advance. To mitigate the same, the Company follows systematic institutional and project appraisal process to assess the credit risk. These processes include a detailed appraisal methodology, identification of risks and suitable structuring and credit risk mitigation measures. Further, on regular basis the projects risks are reviewed and categorized as High/Moderate/Low on the basis of different risk parameters and exposure of the project as per Project Risk Categorization Frameworks.

(ii) Operational Risk

The operational risk arises from inadequate or failed internal processes, people and systems or external events. The Company has an organization-wide risk categorization framework through which all the operational risks are measured and categorised as High/Moderate/Low. Further, the operational risks of the Company are studied in eight functional areas such as Business, Compliance, Finance, Human Resource, Information Technology, Legal, Operational and Strategic. The Company has implemented an organisation-wide Risk Register to identify, measure, monitor & mitigate operational risks across functions.

(iii) Liquidity Risk

Liquidity risk primarily arises due to the maturity mismatch associated with assets and liabilities of the Company. Liquidity risk involves the inability of the Company to fund increase in assets, manage unplanned changes in funding sources and to meet obligations when required.

(iv) Market Risk

Market risk of the Company is defined as the risk to the Company's earnings and capital due to changes in the market interest rate or prices of securities, foreign exchange, as well as volatilities of changes. Market Risk comprises of Interest Rate Risk, Liquidity Risk and Foreign Currency Risk.

11.2 ALCO Committee

The Company has constituted an Asset Liability Management Committee (ALCO) of its Directors & Senior Officials from the finance and operating divisions, to manage its market risk. The ALCO meets on regular intervals for monitoring risks related to interest rates, liquidity and currency rates.

Interest rate risk is the potential loss arising from fluctuations in market interest rates. In order to mitigate the interest rate risk, the Company periodically reviews its lending rates and the weighted average cost of borrowing, based on prevailing market rates.

Liquidity risk is the risk of potential inability to meet liabilities as they become due. REC faces liquidity risks, which could require it to raise funds or liquidate assets on unfavourable terms. This risk is managed through a mix of strategies including forward-looking resource mobilization based on projected disbursements and maturing obligations.

Foreign currency risk involves exchange rate movements that may adversely impact the value of foreign currency-denominated assets, liabilities and off-balance sheet arrangements. The Company manages foreign currency risk through various derivative instruments.

12. PREFERRED CUSTOMER POLICY

As a part of business promotion strategy, a Preferred Customer Policy was formulated in 2008 with the basic purpose of offering enhanced level of services to the Company's customers and to have a long term mutually beneficial relationship with them. The Policy lays down the eligibility criterion, which takes into account various factors such as amount of loan outstanding, duration of loan relationship, repayment track record of the borrower etc. for determining preferred customers and sponsoring them for capacity building, domestic or international seminars and training programmes organized by various external agencies, as well as by RECIPMT, REC's in-house training institute at Hyderabad.

13. INFORMATION TECHNOLOGY INITIATIVES

(i) Implementation of latest version of ERP running in REC: REC has revamped the existing e-Business ERP (Oracle e-Biz suite 11i) in operation since 2009, to the latest version R12.2.7; and migrated the ERP hardware to private cloud environment at REC Datacenter. The new ERP supports GST and latest Accounting Standards (Ind-AS) and has advanced features, which has facilitated further automation of business operations of the Company. The ERP system is continuously improved with new features to further automate business processes.

(ii) The Electronic Office System (E-office): The E-office solution with automated workflow and electronic document management features has brought in major transformation in the working of the organization, improved efficiency & transparency and has served as a green initiative towards lesser paper consumption. The system is being improved continuously by adding new features.

(iii) Augmentation of the Network infrastructure of the Company: Organization-wide MPLS VPN network infrastructure facility has been completely revamped with latest network and security devices, enhanced bandwidth and high availability features to meet the demanding requirement of operations. The secured VPN network has facilitated users to connect to REC Network from remote locations, and access business applications for seamless operations without disruptions.

(iv) Revamping of Video Conferencing infrastructure: The Video Conferencing infrastructure of REC has been revamped to facilitate meetings/discussions across all offices of the Company for faster decision making and to save cost and time on travelling. The VC faclity is also used for meetings with the Ministry of Power and with other Ministries, Board & Committee Meetings and other business & review meetings.

(v) Primary Data Centre (PDC) and Disaster Recovery Center (DRC): Both PDC and DRC of REC are ISO/IEC 27001:2013 certified and also comply to National Cyber Security Policy of the Government of India. REC has also implemented Data Leakage & Prevention (DLP) system at DC & DRC for preventing sharing of confidential and critical information outside the corporate network.

(vi) Implementation of IT Framework as per RBI Master Direction: REC has implemented the IT Security Directives of RBI as per its Master Direction regarding IT Framework issued for NBFC sector.

(vii) On-Line Performance Management System: An online Performance Management System has been developed to digitize the appraisal process and to facilitate employees to submit their performance appraisal on-line. REC has also deployed a number of in-house developed systems as part of its IT initiatives, towards achieving better e-governance.

(viii) Towards transparency in procurement: All procurement of goods and services of value above Rs 2 lakh is being done on-line through an E-procurement system. The system complies with e-Reverse Auction norms prescribed as per CVC Guidelines and REC Procurement Guidelines. Procurement of goods and services is also done from Government e-Marketplace (GeM) portal. The existing Bill Tracking System has been revamped and integrated with ERP system to track movement and timely processing of bills and payment to vendors.

(ix) Implementation of Centralized Printing Solution: Towards greener initiative and lesser paper consumption, Centralized Printing Solution has been implemented in Corporate office at desks where bulk printing is done.

(x) Promoting Government of India initiatives: REC facilitates and promotes the IT initiatives of the Government of India like MyGov, e-Governance, DPE Guidelines on digital mode of payments etc., within the organization.

(xi) Providing training and computing facility to Employees: Computer to Employee population ratio in REC is 100%. IT Division also organizes and imparts various training programmes to upgrade computer skills of the employees.

14. REC INSTITUTE OF POWER MANAGEMENT AND TRAINING

REC Institute of Power Management and Training (RECIPMT) (formerly Central Institute for Rural Electrification) was established at Hyderabad in 1979 under the aegis of REC, to cater to the training and development needs of engineers and managers of Power Sector organizations. RECIPMT, which is accredited by the Central Electricity Authority (CEA), is dedicatedly working for human resource development of the Power Sector for more than four decades.

14.1 Training Activities during FY 2019-20

During the financial year 2019-20, RECIPMT has organized 132 programmes and workshops on various themes & subjects, with topics ranging from Technical, Management, Finance & Accounts, HR, Information Technology to Energy Conservation relating to Power Generation, Transmission, Distribution and Renewable Energy sector. In all, RECIPMT has trained 3,109 personnel in total, thereby achieving an aggregate of 11,993 man-days of training in the year under review.

14.2 Workshop on SAKSHYA Portal and Orientation

RECIPMT has been entrusted with the training of Power DISCOM Engineers, Turnkey Contractors, Programme Implementing Agencies and Quality Monitors on Online Quality Portal "SAKSHYA" developed under DDUGJY / SAUBHAGYA schemes, to bring awareness about online reporting of information of the quality aspects, standards, construction practices etc. related to implementation of household electrification and power distribution in rural areas.

During the year, RECIPMT organized a workshop on "SAKSHYA" portal for Senior Executives; and also orientation trainings regarding the "SAKSHYA" portal at DISCOM headquarters across the country, for a total of 1,341 participants.

14.3 Training Programmes on "Behavioral Skills"

RECIPMT has been entrusted with the capacity building of executives of A&B cadre of various Power Utilities by conducting training programmes on "Behavioral Skills". The programmes were sponsored by REC for improvement of the power sector. Total 50 batches were conducted during the year as on-site programmes across the country, with participation of 1,191 executives.

14.4 International Training Programmes under ITEC Scheme of MEA

RECIPMT is empanelled by the Ministry of External Affairs, Government of India (MEA) to organize training programmes in the area of power sector under Indian Technical and Economic Cooperation (ITEC). During the year, RECIPMT organized 7 International programmes with 144 participants in total, on the topics of Certificate Course in Power Distribution Management (6 weeks); Concept to Commissioning of Solar Power Plants (6 weeks); Design, Erection, Operation, Maintenance and Protection of EHV Sub-stations (6 weeks); Planning and Management of Power Transmission and Distribution System (6 weeks); Emerging Trends in Rural Electrification and Power Management (6 weeks); Certificate Course in Electric Power Management (5 Weeks); and Planning, Operation and Maintenance of Power Generation Plants (6 Weeks). Participants from various countries viz. Afghanistan, Azerbaijan, Angola, Algeria, Bangladesh, Bhutan, Brunei, Botswana, Cambodia, Ethiopia, Ecuador, Democratic Republic of the Congo, Gambia, Guinea, Ghana, Honduras, Kenya, Lebanon, Myanmar, Mozambique, Mongolia, Mauritius, Nigeria, Samoa, South Sudan, Seychelles, Sudan, Swaziland, Sierra Leone, Tanzania, Tajikistan, Uzbekistan, Vietnam, Zimbabwe, etc. attended these programmes.

During the COVID-19 pandemic, RECIPMT extended the facilities of boarding, lodging, security and sanitization in its campus, to take care of the stranded international participants till their evacuation.

14.5 Regular Training Programmes

RECIPMT organised 8 Regular Training Programmes for the personnel of various Power Utilities on different topics, such as Pilferage of Electricity - Issues, Challenges and Remedial Measures, Concept to Commissioning of Solar Power Plants and Grid Enabling, Power System Protection and Distribution Loss Reduction - Issues, Challenges and Remedial Measures, Distribution Transformers Operation, Maintenance and Failure Minimizations, Power Transformer - Testing, Commissioning, Protection & Maintenance, GST - Recent Changes, Developments & Challenges and Labour Laws - Employees Compensation and Contract Labour Act - Procedures in dealing with Court Cases. A total number of 71 participants attended the above programmes.

14.6 Customized Programmes

RECIPMT organized 9 customized programmes during the year, designed specifically to suit the requirements of the utility. The programmes included Maintenance of Sub-station, Testing, Predictive Maintenance, Earthing, Safety, Rules and Regulations, IS (3 batches), Condition Monitoring and Life Cycle Management Practices for EHV Sub-stations (1 batch), Protection of Transmission System (Lines & Sub-station) including Relay Coordination and Bus-Bar Protection (2 batches) and Network Congestion Management and Regulatory Issues (1 batch) for MSETCL at RECIPMT campus; and 2 batches of on-site training to MPPKVVCL, Indore on Efficiency Improvement Measures in Power Distribution and Best Practices in Power Distribution Management. In total, 221 participants were trained under these customized programmes.

14.7 In-house Training Programmes

RECIPMT also organized 3 in-house training programmes for employees of REC and 67 employees took part in this programme. The topics covered were Concept to Commissioning of Solar Power Plants including O&M; Managing Change in Power Sector; and Procurement Guidelines & Use of GeM Portal.

14.8 Special Programmes

RECIPMT also organized 2 special programmes for power sector personnel including employees of REC, on Project Management of Power Distribution System and Capability Development for Senior Management of REC - Managing Change in Power Sector, which were attended by 54 executives.

14.9 Collaboration Programme with RENAC, Germany

RECIPMT also organized a two-day sponsored programme on Sustainable Power System Planning with Co-Benefits Renewable Energy for India, in collaboration with RENAC - The Renewable Academy AG, Germany. A total of 20 participants attended the said programme.

15. ISO 9001:2015 QUALITY ASSURANCE CERTIFICATION

The Company has implemented Quality Management Systems as per ISO 9001:2015 standards in six major divisions of the Corporate Office and 18 Regional Offices / Sub-Offices across the country for claims processing.

16. HUMAN RESOURCE MANAGEMENT

In order to professionalize the Executive strength of REC and also to infuse fresh blood, 37 executives were appointed during the financial year 2019-20 through Campus Recruitment. The total manpower of the Company as on March 31, 2020 was 468 employees, which included 385 Executives and 83 Non-Executives.

16.1 Reservation in Employment

The Directives issued by the Government of India regarding reservations for SC/ST etc. in appointment and promotion to various posts were complied with. The group wise details of SC and ST employees out of the total strength as on March 31, 2020 are given below:

Group

Number of Employees

Total

SC

ST

FY 2019-20 FY 2018-19 FY 2019-20 FY 2018-19 FY 2019-20 FY 2018-19
A 385 346 43 34 17 13
B 36 75 05 12 0 2
C 47 66 16 18 1 1
Total 468 487 64 64 18 16

Note: Group C includes employees under erstwhile D category, now merged in terms of DoPT OMs.

16.2 Training & Human Resource Development

As a measure of capacity building including up-gradation of employees' skill sets and to ensure high delivery of performance, Training and HRD continued to receive priority during the financial year under review. Training and Human Resource Policy of the Company aims at sharpening business skills and competencies required for better employee performance and provides all possible opportunities and support to the employees to improve their performance and productivity. Training was also provided to promote better understanding of professional requirements, as well as to sensitize the employees about the socio-economic environment in which the Company operates. Training was also imparted on spiritual, health and attitudinal change process benefiting the employees.

During the year under review, the Company sponsored 342 employees to various training programmes, workshops etc. within the country and abroad. Taken together, these initiatives enabled the Company to achieve 2,402 training man-days. Further, 19 Executives were deputed for programmes abroad.

16.3 Employee Welfare

In order to provide improved health care facilities to the employees and their dependent family members, part-time services of doctors were engaged to provide on-site medical facilities. The Company has also been funding sports & recreation equipment for use by employees, to promote their overall well-being.

Sports Activities

During the financial year 2019-20, REC hosted the Inter-CPSU Badminton Tournament at New Delhi and also sponsored its employees for various Inter-CPSU Sports Tournaments such as Table Tennis, Cricket, Volley Ball, Chess etc., organized by various power sector CPSUs under the aegis of Power Sports Control Board (PSCB). Further, employees were encouraged to participate in various quizzes, paper presentations and simulation competitions conducted by reputed institutions.

16.4 Representation of Women Employees

As on March 31, 2020, the Company had 80 permanent women employees, representing 17.09% of the total work force. There is no discrimination of employees on the basis of gender. A Women's Cell has been in operation in the Company to look after welfare and all-round development of women employees. International Women's Day was celebrated by REC Women's Cell.

16.5 Industrial Relations

The Industrial Relations scenario in the Company continued to be cordial and harmonious in the financial year 2019-20. There was no loss of man days on account of industrial unrest. Regular interactions were held with REC Employees Union and REC Officers Association on issues of employee welfare. This has helped to build an atmosphere of trust and cooperation resulting in a motivated workforce and continued improvement in business performance. Wage revision of non-executives has been implemented effective from January 1, 2017.

16.6 Public Grievance Redressal

Your Company has a Public Grievance Redressal system in place, for dealing with the grievances of the public at large. The Company has appointed a senior official as the Nodal Officer in this regard, to ensure prompt redressal of grievances within the stipulated time frame.

17. CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABLE DEVELOPMENT

The Company has its Corporate Social Responsibility & Sustainability Policy aligned with the provisions of the Companies Act, 2013, the Companies (Corporate Social Responsibility Policy) Rules, 2014 and the Guidelines for CSR and Sustainability for Central Public Sector Enterprises issued by the Department of Public Enterprises. The said policy is available on the website of the Company at https://www.recindia.nic.in/uploads/files/CSR-Policv-Wef1lQ717-UpldDt300518.pdf.

During the financial year 2019-20, the Company pursued Corporate Social Responsibility and Sustainable Development initiatives to fund and support socially beneficial projects as a guiding principle, giving priority to issues of foremost concern in the national development agenda, and to reach a wide spectrum of beneficiaries with a view to empower economically and socially backward communities. CSR initiatives have been carried out by REC in the fields of sanitation and hygiene, promotion of healthcare facilities, skill development, women empowerment, environmental sustainability and rural infrastructural development, to facilitate inclusive social development.

DPE has issued guidelines to CPSEs to spend 60% of their CSR budget on thematic areas of Healthcare, Nutrition and School Education for the year 2019-20, preferably in aspirational districts. The Company increased its efforts in a big way to support welfare work across aspirational districts given to the Company, in the above thematic areas. The Company committed to projects aimed at transforming school education and improving health services in the aspirational districts of Gajapati in Odisha, Mamit in Mizoram, Kiphire in Nagaland, Muzzafarpur in Bihar, Udham Singh Nagar in Uttarakhand, Chandel in Manipur and West Sikkim in Sikkim.

For the financial year 2019-20, the Board had approved CSR budget of Rs 156.68 crore, in line with the provisions of the Companies Act, 2013. Further, as per DPE Guidelines, the CSR Budget is non-lapsable and any unspent amount is carried forward to the next year, for utilization towards the purpose for which it was allocated. Accordingly, the total amount to be spent in the financial year amounted to Rs 399.85 crore (i.e. Rs 156.68 crore for financial year 2019-20 and Rs 243.17 crore carried forward from previous years). Out of the same, a total amount of Rs 258.40 crore was spent and the Company sanctioned financial assistance aggregating to Rs 281.62 crore for various CSR projects during the financial year 2019-20.

Further, the Company has contributed CSR assistance of Rs 150 crore to the Prime Minister's Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund to deal with the situation caused due to COVID-19 pandemic during the financial years 2019-20 and 2020-21. The Company also allotted Rs 10 crore for providing food/ration, utility packets etc. to laborers/needy persons and also for providing medical equipment to health care workers in various locations of India affected by the COVID-19 pandemic.

18. VIGILANCE ACTIVITIES

REC constantly endeavors to optimize probity and integrity among employees and to promote transparency, fairness and accountability in all operational areas. REC Vigilance Division mainly aims at "Preventive Vigilance" by reviewing policies, rotation/transfers of employees holding sensitive posts, review of Audit Reports, review of projects/tenders/contracts awarded, inspections of Regional Offices, review of Annual Property Returns (APRs) etc.

In compliance with the instructions of Central Vigilance Commission (CVC)/Ministry of Power (MoP), the matter of rotational transfers from the identified sensitive posts is constantly being pursued. Further, prescribed periodical statistical returns were also sent to CVC and MoP on time. Regular review of Audit Reports, i.e., Internal, Statutory and C&AG Audit Reports, were done. Review of projects/tenders/contracts awarded was carried out and wherever deviations were observed, the matter was taken up with concerned divisions, which led to strengthening of appraisal system/guidelines. Field inspections of Regional Offices and scrutiny of APRs were done.

The thrust on leveraging of technology continued, with the result that information relating to loans, schemes, tenders, third party bills etc. are available online. During the year, HR policies like recruitment process, lien policy and promotions within REC were examined and subjective & non-transparent clauses were brought to the notice of the management. Revised Recruitment Policy has been notified on September 19, 2019. Further, REC's Conduct Rules were brought in line with the conduct rules recommended by the DPE.

A Vigilance Monitoring System has been developed for timely detection and reducing the occurrence of lapses, which covers various functionalities of the organization like Procurement and Contracts, Bill Tracking, Loans, Assets and employee payments (medical and travel). Issues related to Loans to Independent Power Producers (IPPs) were examined in light of C&AG observations and it was observed that certain issues related to evaluation of EPC contractor and its experience, adequacy of Performance Guarantee, monitoring of LE/LFA reports and diversion of funds, etc. need to be addressed in revised guidelines. Accordingly, an advisory was issued. It was ensured that information/policies like tenders, requisite forms, status of loan applications/third party payments, Fair Practices Code, Policy for Prevention of Frauds, CSR Guidelines, Whistle Blower Policy etc. are available on REC's website.

Almost all tenders above Rs 2 lakh were processed through E-Procurement mode. E-Reverse Auction is also done, in cases where estimated value of procurement and quoted prices exceed certain parameters.

During the financial year 2019-20, there was only one vigilance case pending, which was minor in nature; and the same was disposed off during the year.

Observance of Vigilance Awareness Week

This year, your Company observed 'Vigilance Awareness Month' instead of just a week. As a part of the vigilance awareness programme, intra-school crayon painting and paragraph writing competitions were organized in schools and inter-college Nukkad Natak competitions were organized at colleges of Delhi. Various activities like quiz, story-telling, painting, selfie and collage-making were also organized for REC's employees and their family members. Further, Seminars on Consumer Awareness & RTI were also organized at various Regional Offices of REC. To strengthen integrity within the corporate culture, young executives were exposed to a session on self-evaluation & team building through outbound experiential learning session. REC continued its endeavour to groom young school children into vigilant citizens through "Integrity Clubs", which are now in 32 schools all over India. Apart from this, activities were also organized at various Regional Offices and subsidiaries of REC.

19. IMPLEMENTATION OF OFFICIAL LANGUAGE

To uphold the Official Language Policy of the Government, REC consistently strived to meet the mandate given in the Annual Programme 2019-20 issued by the Department of Official Language, Ministry of Home Affairs, Government of India. Official Language Implementation Committees are constituted in our Company to ensure implementation of the Official Language effectively; and in order to ensure compliance of the Official Language Act, 1963 and Official Language Rules, 1976, continuous efforts are being taken.

The Committee of Parliament on Official Language successfully conducted inspection of REC State Office Vadodara on February 28, 2020. A team of officials of Ministry of Power also reviewed the status of Official Language implementation in

REC Corporate Office on January 14, 2020. These inspections have inculcated a spirit of awareness among the employees to increase use of Hindi in their official work.

Hindi Pakhwara was organized at Corporate Office and also at Regional and State Offices of the Company from September 14, 2019 to September 28, 2019. During this period, various competitions were organized at Corporate Office. The employees actively participated in all events and competitions. Prizes were also awarded to winners in different categories to encourage larger participation and motivate employees to increase use of Hindi in their day-to-day working.

Hindi Workshops were organized in all REC Offices to impart the participants a hands-on exposure in various facets of use of Hindi. REC State Office Shimla bagged 1st prize from concerned Town Official Language Implementation Committee (TOLIC) for excellent work in Hindi.

Two-days All India Conference on Rajbhasha was organized at Thiruvananthapuram during April 25-26, 2019 for the Nodal Hindi Officers. This year, an Inter-PSU Hindi debate competition was also organized by Regional Office Jaipur under the aegis of TOLIC (PSUs) at Jaipur.

Your Company has been publishing Hindi Journal 'Urjayan' containing interesting and useful articles as well as literary writings of employees. In order to motivate employees to write articles, poems etc. in Hindi for the magazine, the Company has adopted a policy to award cash incentives to the contributors.

20. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO.

20.1 Conservation of Energy

Since your Company does not own any manufacturing facility, there are no significant particulars relating to conservation of energy and technology absorption. The Registered Office of the Company is located in 'SCOPE Complex' at New Delhi, where all civil, electrical installation and maintenance is carried out by SCOPE (Standing Conference of Public Enterprises). With effective monitoring, controlling and scheduling of the operation of AC chilling units / elevators, by putting other energy efficient equipments, making provision of additional 100 KW Solar Power Plant at terrace and also by putting movement/occupancy sensor as well as maintaining power factor nearest to unity, SCOPE has saved around 2.06 lakh units of power consumption during the financial year 2019-20 over the previous year, resulting in saving of around Rs 26.94 lakh.

20.2 Foreign Exchange Earnings & Outgo

During the financial year 2019-20, the Company had no foreign exchange earnings. Further, foreign exchange outflow aggregating Rs 7,078.40 crore was made during the financial year, on account of interest, principal repayment, finance charges, foreign travelling, training expenses, architectural services and other expenses.

21. SUBSIDIARY COMPANIES

Your Company has two wholly owned subsidiaries, namely, REC Power Distribution Company Limited (RECPDCL) [CIN: U40101DL2007GOI165779] and REC Transmission Projects Company Limited (RECTPCL) [CIN:U40101DL2007GOI157558] to focus on additional business of consultancy in the areas of distribution, transmission etc.

21.1 REC Power Distribution Company Limited

RECPDCL is engaged in the businesses of project implementation and consultancy services in power sector viz. implementation of distribution system strengthening works, implementation of grid/off-grid solar (PV) projects, implementation of smart meters, preparation of detailed project reports, third party inspections, pre-dispatch material inspections and acting as project management consultant / project management agency under some projects of State-funded schemes such as DDUGJY, IPDS etc. As on March 31, 2020, RECPDCL was working on about 100 on-going projects spread over 57 DISCOMs/power departments/co-operative societies in 26 States and 4 Union Territories, with total estimated consultancy fee of Rs 993.82 crore.

During the financial year 2019-20, RECPDCL achieved total revenue of Rs 143.01 crore, against the previous year's revenue of Rs 159.77 crore; and Profit After Tax of Rs 12.47 crore against the previous year's Profit After Tax of Rs 26.34 crore. As on March 31, 2020, the Net Worth of RECPDCL was Rs 168.20 crore, as compared to Rs 155.73 crore as on March 31, 2019. Earnings Per Share (EPS) for the financial year ended on March 31, 2020 was Rs 2,495/-, as against Rs 5,268/- in the previous year. The Board of Directors of RECPDCL has recommended a dividend of Rs 1,685/- per equity share of face value of Rs 10/-each for financial year 2019-20, aggregating to Rs 8.43 crore, which is subject to approval of its shareholders in their forthcoming Annual General Meeting.

21.2 REC Transmission Projects Company Limited

RECTPCL acts as the "Bid Process Coordinator" for selection of Transmission Service Providers through Tariff Based Competitive Bidding (TBCB) process, for independent inter-state and intra-state transmission projects assigned by the Ministry of Power and State Governments from time to time. In order to initiate development of each independent inter-state / intra-state transmission project, RECTPCL incorporates a project specific Special Purpose Vehicle (SPV) as its wholly owned subsidiary. After selection of the successful bidder in accordance with the TBCB Guidelines, such subsidiary is transferred by RECTPCL to the successful bidder, along with all assets & liabilities.

During the financial year 2019-20, RECTPCL transferred 8 (eight) project specific SPV companies (comprising of 6 inter-state projects and 2 intra-state projects) to the selected bidder(s), as per details given below:

Sl. No. Name of the project specific SPV (as transferred) and the associated transmission project Name of Selected Bidder Date of transfer of the SPV
1 Khetri Transco Limited [CIN: U40100DL2019GOI347127] Transmission system associated with LTA application from Rajasthan SEZ (Part-C). Power Grid Corporation of India Limited August 29, 2019
2 Bhind Guna Transmission Limited [CIN: U40300DL2018GOI338734] Intra-State Transmission work associated with construction 400 kV sub-station near Guna (District Guna) construction of 220 kV S/s near Bhind (District Bhind). Power Grid Corporation of India Limited September 11, 2019
3 Udupi Kasargode Transmission Limited [CIN: U40100DL2018GOI342365] Transmission system for 400 kV Udupi (UPCL)-Kasargode D/C line. Sterlite Grid 14 Limited September 12, 2019
4 Ajmer Phagi Transco Limited [CIN: U40101DL2019GOI347423] Construction of Ajmer (PG)-Phagi 765 kV D/C line along with associated bays for Rajasthan SEZ. Power Grid Corporation of India Limited October 3, 2019
5 WRSS XXI (A) Transco Limited [CIN: U40107DL2019GOI347713] Western Region Strengthening Scheme-21 (WRSS-21) Part-A -Transmission System Strengthening for relieving overloadings observed in Gujarat Intra-State System due to RE Injections in Bhuj PS. Adani Transmission Limited October 14, 2019
6 Lakadia Banaskantha Transco Limited [CIN: U40107DL2019GOI347428] Transmission System associated with RE generations at Bhuj-II, Dwarka & Lakadia. Adani Transmission Limited November 13, 2019
7 Jam Khambaliya Transco Limited [CIN: U40105DL2019GOI347089] Jam Khambaliya Pooling Station and Interconnection of Jam Khambaliya Pooling Station for providing connectivity to RE Projects (1500 MW) in Dwarka (Gujarat) and Installation of 400/220 Kv ICT along with associated bays at M/s CGPL Switchyard. Adani Transmission Limited November 13, 2019
8 Rampur Sambhal Transco Limited [CIN: U40101DL2019GOI349484] Construction of 765/400/220kV GIS Sub-station, Rampur and 400/220/132kV GIS Sub-station, Sambhal with associated Transmission Lines. Power Grid Corporation of India Limited December 12, 2019

RECTPCL is also acting as Bid Process Coordinator for Intra-State transmission projects viz. Transmission System Strengthening in Jharkhand State (Package-1 to 4), for which it had incorporated 4 SPV companies viz. Chandil Transmission Limited [CIN: U40108DL2018GOI330905], Koderma Transmission Limited [CIN: U40300DL2018GOI331192], Dumka Transmission Limited [CIN: U40300DL2018GOI331490] and Mandar Transmission Limited [CIN: U40101DL2018GOI331526]. The bidding process of these projects is expected to conclude during the financial year 2020-21.

Further, after March 31,2020, RECTPCL has incorporated the following project specific SPVs as its wholly owned subsidiaries, for the inter-state / intra-state transmission projects indicated below, in which it is acting as Bid Process Coordinator:-

Sl. No. Name of the transmission project Name of the SPV company Date of incorporation
1 Transmission system for evacuation of power from RE projects in Osmanabad area (1 GW) in Maharashtra Kallam Transmission Limited [CIN: U40106DL2020G0I364104] May 28, 2020
2 Transmission scheme for Solar Energy Zone in Gadag (2500 MW) in Karnataka-Part A Gadag Transmission Limited [CIN: U40100DL2020G0I364213] June 2, 2020
3 Transmission system strengthening for evacuation of power from solar energy zones in Rajasthan (8.1 GW) under Phase II -Part B Fatehgarh Bhadla Transco Limited [CIN: U40108DL2020G0I364227] June 2, 2020
4 Transmission system for evacuation of power from RE projects in Rajgarh (2500 MW) SEZ in Madhya Pradesh Rajgarh Transmission Limited [CIN: U40106DL2020G0I364436] June 6, 2020
5 Transmission scheme for Solar Energy Zone in Bidar (2500 MW), Karnataka Bidar Transmission Limited [CIN: U40106DL2020G0I364498] June 8, 2020
6 Transmission system strengthening scheme for evacuation of power from solar energy zones in Rajasthan (8.1 GW) under Phase-II-Part C Sikar New Transmission Limited [CIN: U40106DL2020G0I364672] June 11,2020
7 Transmission system strengthening scheme for evacuation of power from Solar Energy Zones in Rajasthan (8.1 GW) under Phase II-Part A Ramgarh New Transmission Limited [CIN: U40300DL2020G0I365214] June 26, 2020
8 Development of intra-state transmission work in M.P. through tariff based competitive bidding: Package-I MP Power Transmission Package-I Limited [CIN: U40108DL2020G0I367417] August 4, 2020
9 Development of intra-state transmission work in M.P. through tariff based competitive bidding: Package-II MP Power Transmission Package-II Limited [CIN: U40100DL2020G0I368275] August 20, 2020

Further, Dinchang Transmission Limited (CIN U40300DL2015GOI288066), a project specific SPV and wholly owned subsidiary of RECTPCL incorporated on December 2, 2015, for the project viz. Transmission System for Phase-1 Generation Projects in Arunachal Pradesh, has filed an application for strike off of its name with the Registrar of Companies under Section 248 of the Companies Act, 2013, since the said project has been de-notified pursuant to gazette dated February 1, 2019 and consent of the Ministry of Power dated March 31, 2020.

RECTPCL has also developed online web platform and mobile apps for better transparency & accountability under the guidance of the Ministry of Power, such as Urja Mitra, TARANG (Transmission App for Real Time Monitoring and Growth), 11 kV Rural Feeder Monitoring Scheme etc., and handled various other assignments on behalf of its clients.

During the financial year 2019-20, RECTPCL recorded income of Rs 79.16 crore, as compared to Rs 40.45 crore in the previous financial year. The Profit Before Tax and Profit After Tax for the financial year 2019-20 was Rs 70.55 crore and Rs 54.44 crore, respectively. The Net Worth of RECTPCL as on March 31, 2020 was Rs 112.60 crore, as against the Net Worth of Rs 118.44 crore as on March 31, 2019. RECTPCL had declared an Interim Dividend of ^10,000/- per equity share on its paid-up equity shares of Rs 10/- each for the financial year 2019-20, aggregating to Rs 50 crore, which was paid in the month of March 2020.

21.3 Amalgamation of RECTPCL with RECPDCL

In order to have a strong & focused base, better synergies in operations, greater ability to access different market segments and to reap the benefits of higher capital base & pooled resources, it is proposed to merge two unlisted wholly owned subsidiary companies of REC viz. RECPDCL and RECTPCL, into one single entity.

Accordingly, as per the provisions of the Companies Act, 2013 and Rules made thereunder and after obtaining requisite approvals of the Ministry of Power, the Board of Directors, shareholders & creditors of the respective companies and approval of REC, an application has been filed with the Ministry of Corporate Affairs (MCA) on August 14, 2020 for sanction of Scheme of Arrangement for Amalgamation of RECTPCL (transferor company) with RECPDCL (transferee company); and approval of the same is awaited.

22. DETAILS OF JOINT VENTURE AND ASSOCIATE COMPANY

REC, along with three other PSUs, namely Power Grid Corporation of India Limited, NTPC Limited and Power Finance Corporation Limited, has formed a Joint Venture Company i.e., Energy Efficiency Services Limited (EESL) [CIN: U40200DL2009PLC196789] on December 10, 2009. EESL is a Super Energy Service Company (ESCO) and acts as a resource center for capacity building for State DISCOMs, Energy Regulatory Commissions, State Development Authorities, upcoming ESCOs, financial institutions, etc. Upto March 31, 2020, REC has contributed ^218.10 crore (22.18%) towards the paid up equity share capital of EESL.

EESL is formed to create & sustain market access of energy efficient technologies particularly in the public facilities like municipalities, buildings, agriculture, industry, etc. and to implement several schemes of Bureau of Energy Efficiency, Ministry of Power, MNRE, Government of India. EESL is also leading the market-related activities of the National Mission for Enhanced Energy Efficiency (NMEEE), one of the 8 national missions under National Action Plan on Climate Change. EESL is implementing world's largest energy efficiency portfolio; and its energy efficient appliances and technologies have saved India over 40 billion kWh of estimated energy annually.

Currently, EESL is implementing the world's largest non-subsidy based LED lighting programme viz. Unnat Jyoti by Affordable LED for ALL (UJALA) for distribution of LED bulbs, LED tube lights and energy efficient fans to domestic consumers, world's largest street light replacement programme viz. Street Lighting National Programme (SLNP) to replace conventional street lights with smart and energy efficient LED street lights in municipalities, National E-Mobility Programme to provide electric vehicles for Government entities/organisations on lease/outright purchase basis to replace the existing petrol and diesel vehicles, world's largest Agricultural Demand Side Management (AgDSM) programme for replacement of inefficient agricultural pump sets in agriculture sector, Building Energy Efficiency Programme (BEEP) to retrofit energy efficient appliances in buildings to make them energy efficient, Smart Meter National Programme (SMNP) to replace conventional meters with smart meters, Municipal Energy Efficiency Programme (MEEP) under AMRUT for implementation of energy efficient pump sets in public water works and sewage systems after approval of the ULB/State Government, Solar Programme for implementing solar roof-top and decentralized small solar power plant, Atal Jyoti Yojana (AJAY) for installation of solar LED street lights in rural, semi-urban areas which don't enjoy adequate coverage of power, Solar Study Lamps (SoUL) for distribution of solar study lamps to school going children and also has developed Super-Efficient Air Conditioning Programme for providing super-efficient air conditioners to customers at affordable prices. EESL has been awarded as "Best Company (Public Sector) Award" by the Forbes India Leadership Awards (FILA), 2018. The performance of EESL during the year has improved and its financial performance is on the growth path. Based on provisional financials of EESL for financial year 2019-20, its turnover for the year was Rs 1,934.07 crore (standalone). Further, the Profit Before Tax and Profit After Tax for the financial year 2019-20 were Rs 27.22 crore and Rs 44.92 crore respectively.

23. CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Section 129 of the Companies Act, 2013 & Rules made thereunder and Indian Accounting Standards, the Company has prepared the Consolidated Ind-AS Financial Statements for the financial year 2019-20, that include its subsidiary companies i.e., RECPDCL and RECTPCL (Audited) and Joint Venture Company i.e. EESL (Un-audited), which shall also be laid before the ensuing 51st Annual General Meeting, along with the Standalone Financial Statements of the Company. Pursuant to Section 129(3) of the Act, a statement containing the salient features of the financial statements of Subsidiaries/Associates and Joint Ventures in Form AOC-1 forms part of this Annual Report. The financial statements of Special Purpose Vehicle (SPV) companies incorporated by the wholly owned subsidiary viz. REC Transmission Projects Company Limited (RECTPCL), as its wholly owned subsidiaries, are not consolidated with the financial statements of REC. The Audited Ind-AS Financial Statements including the Consolidated Ind-AS Financial Statements and Audited Accounts of Subsidiaries of the Company are available on the website of the Company i.e., www.recindia.nic.in. Further, these documents will be kept for inspection through electronic mode by any member or trustee of the holder of any debentures. The Company will also make available copy thereof through e-mail upon specific request by any member of the Company interested in obtaining the same.

24. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Being a Government Company, the power of appointment of Directors on the Board of the Company is vested with the President of India acting through the Ministry of Power (MoP), Government of India. The remuneration of Directors and employees of the Company is fixed as per extant Guidelines issued by the Department of Public Enterprises (DPE), from time to time. Further, the Part-time Non-official Independent Directors are paid sitting fees, as decided by the Board of Directors from time to time (within the limits prescribed under the Companies Act, 2013) for attending the meetings of Board and Committees thereof. As per the norms of Government of India, the Government Nominee Director is not entitled to receive any remuneration/sitting fee from the Company. The details of remuneration/sitting fees paid to Directors are given in 'Report on Corporate Governance' annexed to this Report.

As per the provisions of the Companies Act, 2013, the Board of Directors of the Company has designated the Chairman & Managing Director (CMD), Director (Finance), Director (Technical) and Company Secretary as Key Managerial Personnel (KMPs) of the Company. The role of CEO and CFO is being performed by the CMD and Director (Finance) of the Company, respectively.

In terms of Clause 5.1 of the Share Purchase Agreement entered by the President of India, acting through the Ministry of Power, Government of India with Power Finance Corporation Limited (PFC), and in terms of the Ministry of Power's letter no. 27-46/1/2018-RE dated June 6, 2019, Shri Praveen Kumar Singh (DIN 03548218) was appointed as Nominee Director of PFC on the Board of the Company, with effect from June 18, 2019.

Further, the Ministry of Power, vide Office Order No. 46/8/2015-RE (E-227696) dated September 2, 2019 had appointed Shri Mritunjay Kumar Narayan (DIN 03426753), Joint Secretary, Ministry of Power, as Government Nominee Director on the Board of the Company, with immediate effect and until further orders, vice Dr. Arun Kumar Verma, Joint Secretary, who was earlier nominated on the Board of REC vide the Ministry's Office Order No. 46/8/2015-RE dated October 6, 2015. Accordingly, Dr. Arun Kumar Verma (DIN 02190047) has ceased to be Director of REC w.e.f. September 2, 2019.

The Ministry of Power, vide its Order No. 20/6/2017 Coord. dated November 22, 2018, had re-appointed Shri A. Krishna Kumar (DIN 00871792) and Prof. T T Ram Mohan (DIN 00008651) as Part-time Non-official Independent Directors on the Board of the Company for a period of one year from the date of completion of their earlier tenure (i.e., November 13, 2018). The said extended tenure got completed on November 12, 2019 and accordingly, Shri A. Krishna Kumar and Prof. T. T. Ram Mohan ceased to be Directors of REC w.e.f. November 13, 2019.

The Ministry of Power, vide its Order No. 46/2/2010-RE (Vol.-II) (Part IV) dated February 8, 2017, had appointed Smt. Asha Swarup (DIN 00090902) as Part-time Non-official Independent Director on the Board of the Company, for a period of three years. The said tenure of three years got completed on February 7, 2020 and accordingly, Smt. Asha Swarup ceased to be a Director of REC w.e.f. February 8, 2020.

Further, the Ministry of Power, vide its Order No. 20/6/2017-Coord. dated July 17, 2018, had appointed Dr. B.K. Karad (DIN 00998839) as Part-time Non-official Independent Director on the Board of the Company, for a period of three years. However, Dr. Karad resigned from the Board of REC on March 11, 2020 owing to personal reasons. Further, in term of Clause 7B of Schedule III (Part-A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Dr. Karad confirmed that there are no material reasons for tendering his resignation before the conclusion of tenure, other than the reasons mentioned in resignation letter.

Due to the cessation of office of Independent Directors of the Company, including Woman Independent Director, as stated above, the composition of the Board was not in conformity with the provisions of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and DPE Guidelines on Corporate Governance for CPSEs, 2010 for part of the year. The Company has already requested the Ministry of Power, Government of India, i.e., the appointing authority, to expedite the appointment of the requisite number of Independent Directors, including Woman Independent Director on the Board of the Company, to enable compliance with the applicable statutory provisions.

During the year under review, the tenure of Shri Ajeet Kumar Agarwal (DIN 02231613), Director (Finance) and Chairman & Managing Director (in additional charge), was extended upto May 31, 2020, i.e., the date of his superannuation. Subsequently, Shri Agarwal superannuated from the services of the Company on May 31, 2020 and ceased to be a Director of REC w.e.f. June 1, 2020.

Further, the Ministry of Power vide Order no. 46/9/2011-RE [228164] dated April 21, 2020, has appointed Shri Ajoy Choudhury (DIN 06629871) as Director (Finance) of the Company w.e.f. June 1,2020, till the date of his superannuation i.e. January 31, 2024 or until further orders. Shri Ajoy Choudhury was formerly Executive Director (Finance) in the Company.

Further, the Ministry of Power vide Order No. 46/2/2019-RE (247264) dated June 12, 2020 read with Order of even no. dated July 21, 2020, has assigned the additional charge of Chairman & Managing Director of the Company to Shri Sanjeev Kumar Gupta (DIN 03464342), Director (Technical), for a period of three months with effect from June 1, 2020 or till the appoinment of a regular incumbent or until further orders, whichever is the earliest. Pursuant to the same, Shri Sanjeev Kumar Gupta has taken over the additional charge of Chairman & Managing Director of the Company.

The Company Secretary & Compliance Officer of the Company is Shri J.S. Amitabh, Executive Director & Company Secretary.

In line with the statutory requirements, all the Independent Directors had given their requisite declaration during their tenure, that they meet the prescribed criteria of independence and none of the Directors are related inter-se.

The Board places on record its deep appreciation for the valuable services rendered by Shri Ajeet Kumar Agarwal, Dr. Arun Kumar Verma, Shri A. Krishna Kumar, Prof. T.T. Ram Mohan, Smt. Asha Swarup and Dr. B.K. Karad, during their tenure in the Company.

In accordance with the provisions of the Companies Act, 2013 and Article 91 (iv) of the Articles of Association of the Company, Shri Sanjeev Kumar Gupta, Director (Technical) shall retire by rotation at the ensuing 51st Annual General Meeting of the Company and being eligible, offers himself for re-appointment. The Board of Directors recommends his re-appointment till the completion of his tenure as Director in REC. His brief resume is annexed to the Notice of the AGM.

25. EVALUATION OF BOARD OF DIRECTORS / INDEPENDENT DIRECTORS

As per the statutory provisions, a listed company is required to disclose in its Board's Report, a statement indicating the manner in which formal annual evaluation of the performance of the Board, its Committees and individual Directors has been made and the criteria for performance evaluation of its Independent Directors, as laid down by the Nomination and Remuneration Committee. However, Ministry of Corporate Affairs vide its notification dated June 5, 2015 has, inter-alia, exempted Government Companies from the above requirement, in case the Directors are evaluated by the Ministry or Department of the Central Government which is administratively in charge of the Company, as per its own evaluation methodology. Further, MCA vide Notification dated July 5, 2017, also prescribed that the provisions relating to review of performance of Independent Directors and evaluation mechanism prescribed in Schedule IV of the Companies Act, 2013, is not applicable to Government Companies.

Accordingly, being a Government company, REC is exempted in terms of the above notifications, as the evaluation of performance of all members of the Board of the Company is being done by the Administrative Ministry i.e., the Ministry of Power and the Department of Public Enterprises (DPE).

During the financial year 2019-20, the performance evaluation of the Non-Executive / Independent Directors of the Company was carried out by the Department of Public Enterprises (DPE) / Administrative Ministry, as per their internal guidelines. Further, your Company also enters into Memorandum of Understanding (MoU) with its holding company under the framework prescribed in MoU Guidelines issued by DPE, demarcating key performance parameters for the Company, finalized in consultation with the Ministry of Power, Government of India; and the performance of the Company is evaluated vis-a-vis the MoU parameters.

26. DIRECTORS' RESPONSIBILITY STATEMENT

With reference to Section 134(5) of the Companies Act, 2013, it is confirmed that:

(i) in the preparation of the annual accounts for the year ended March 31, 2020, the applicable Accounting Standards have been followed and no material departures have been made from the same;

(ii) such accounting policies have been selected and applied consistently (except for the adoption of newly effective Indian Accounting Standards as disclosed in the Notes to Accounts to the Financial Statements) and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) proper and sufficient care is taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis;

(v) internal financial controls have been laid to be followed by the Company and such internal financial controls were adequate and operating effectively; and

(vi) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

27. MoU RATING AND AWARDS

The performance of the Company in terms of the Memorandum of Understanding (MoU) signed with the Ministry of Power, Government of India for the financial year 2018-19 has been rated as "Excellent". During the financial year 2019-20, REC received various prestigious awards and recognitions, including "ICAI Award for Excellence in Financial Reporting for FY 2018-19" from the Institute of Chartered Accountants of India in the 'Public Sector Entities' category; and "PSE Excellence Award, 2018' for excellence in Corporate Governance by the Indian Chamber of Commerce (ICC), as runner up in the Navratna & Maharatna category. Further, REC received three awards in the SCOPE Corporate Communication Excellence Awards 2019, namely, first prize for "Best House Journal (English)", second prize for "Best Corporate Communications-Internal" and third prize for "Effective use of Digital Media". REC was also presented the "Swachh Bharat Puraskar" by the Ministry of Jal Shakti, Government of India.

28. ‘THINK GREEN, GO GREEN' INITIATIVE

The Companies Act, 2013 permits companies to send documents like Notice of Annual General Meeting, Annual Report and other documents through electronic means to its members at their registered email addresses. As a responsible Corporate Citizen, the Company has actively supported the implementation of 'Green Initiative' of the Ministry of Corporate Affairs (MCA) and effected electronic delivery of Notices and Annual Reports to shareholders, whose email IDs are registered. The intimation of dividend (interim/final) is also being sent electronically to such shareholders.

Further, pursuant to Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014, the Company is providing e-voting facility to all members to enable them to cast their votes electronically in respect of resolutions set forth in the Notice of Annual General Meeting (AGM). The Company will also be conducting the AGM this year through Video Conferencing / Other Audio Visual Means. Members can refer to the detailed instructions for e-voting and electronic participation in the AGM, as provided in the Notice of the AGM.

Members, who have not registered their e-mail addresses so far, are requested to register their e-mail address with the Registrar and Share Transfer Agent (R&TA) of the Company/Depository Participant (DP) of the respective member and take part in the Green Initiative of the Company.

29. SWACHH BHARAT ABHIYAN

REC conducted various programmes under the "Swachhta Pakhwada - 2019" organized during May 16, 2019 to May 31, 2019. Banners and posters were fixed in and around office premises to spread awareness among employees and general public. All officers of the Company took the Swachhta pledge and special cleanliness drive was undertaken in all office locations. REC also organized drawing competitions at its Chennai, Kolkata and Thiruvanthapuram offices; and a Swachhta Talk and debate on "Kya Swachhta Abhiyan Ne Jan Aandolan Ka Roop Le Liya Hai" at its Corporate Office. Nukkad Nataks were also organized to create awareness in slum areas of Delhi & NCR. All employees of REC participated with great enthusiasm and zeal in these programmes. Further, REC also completed construction of a 5-seated Toilet Complex during the year, at Baraichcha Bir Dham, District Jaunpur (Uttar Pradesh), adopted by REC under the Swachh TirthsthalAbhiyan.

Swachhta hi Seva

During September 11, 2019 to October 2, 2019, REC also observed a three week programme Swachhta Hi Seva, to create awareness about harmful effect of single use plastic in daily life. Drawing competitions and lectures were organized in 30 schools, for creating awareness among students and staff about harmful effects of plastic waste and single use plastic. Around 10,000 jute bags were also distributed among students and officials to encourage them to stop using single use plastic.

On October 2, 2019, a Shramdaan activity was carried out by the employees of REC led by the senior management, under which public area was cleaned and around 500 kg of plastic waste was collected, segregated and sent for recycling.

30. RIGHT TO INFORMATION ACT, 2005

Your Company has taken the necessary steps for implementation of "Right to Information Act, 2005" (RTI) in the Company and an independent RTI Cell is functioning for coordinating the work relating to receipt of applications & appeals and furnishing the information and disposal of appeals. RTI Handbook, both in English and Hindi, has been placed on REC website.

The status of RTI applications and appeals received during the financial year 2019-20 was as under:

Sl. No. Particulars Nos.
1 Applications received 372
2 Applications disposed-off 370
3 Applications disposed-off subsequently 02
4 First Appeals received by Appellate Authority, REC 14
5 First Appeals disposed-off by Appellate Authority, REC 14
6 Second Appeals received from Central Information Commission 01
7 Second Appeals disposed-off by Central Information Commission 01

31. REPORTING UNDER PUBLIC PROCUREMENT POLICY FOR MICRO & SMALL ENTERPRISES (MSEs) ORDER, 2012

The Guidelines for MSMEs, as defined in the purchase procedure, are being followed in the Company. As an endeavor to foster the Government's ambitious initiatives for the promotion of MSME sector and in order to surpass the prescribed public procurement norms, revised with effect from November 2018, REC has already made it mandatory to procure 100% of certain common use goods/services valuing upto Rs 10 lakh from MSME Vendors and also to allow price preference upto 50% to MSEs, out of which 20% is reserved for SC/ST and women entrepreneurs. Thus, REC encourages participation of Micro, Small and Medium Enterprises (MSMEs), including enterprises owned by SC/ST and women entrepreneurs.

Further, REC is already registered at GeM (Government e-Marketplace), Sambandh and Samadhan portals; and all Regional Offices / Sub-offices / Subsidiaries / Training Centre (RECIPMT) of the Company are effectively using the same. During the financial year, there has not been any non-payment complaint and/or any grievance by MSME vendors/suppliers against REC on the Government of India's MSME Samadhan portal. REC got itself registered on TReDS and is poised to let its presence felt on this ambitious forum for Bill Discounting by MSME Vendors. Moreover, REC has recently made it compulsory for all its Pan-India offices to have 100% procurement of common goods & services through GeM portal. Further, in order to make this endeavor successful, REC also conducted a comprehensive GeM procurement training program having specially featured sessions from faculty from GeM, with hands on training. The same was overwhelmingly attended and well appreciated by all the participants.

Being a non-banking financial institution, REC is not into execution of projects. The Company's procurement needs are mainly office equipment like computers, printers, consumable stationery and other miscellaneous items and services etc., which are mostly bought from MSME vendors. During the financial year 2019-20, procurment amounting to Rs 3.14 crore were made from MSEs. During the financial year 2019-20, REC not only achieved but exceeded the achievement of its MoU targets set by the Government of India for procurement from MSMEs, including from women entrepreneurs. REC's Public Procurement Policy for MSMEs is included in all the tenders hosted on the website of the Company and on the CPPP portal. The same is also being critically examined and monitored regularly, on quarterly and annual basis, by the Independent External Monitor (IEM) appointed by CVC. The IEM has appreciated the efforts and achievements of REC for various compliances and found that all procurement activities are in order.

32. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

In line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, an 'Internal Complaints Committee' has been constituted in the Company for redressal of complaint(s) against sexual harassment of women employees. The Committee is headed by a senior woman official of the Company and includes representative from an NGO as one of its members. Anti-sexual harassment stance of the Company is also outlined in rEc (Conduct, Discipline and Appeal) Rules.

During the financial year 2019-20, the Company did not receive any complaint of sexual harassment.

33. ANNUAL RETURN

The Annual Return of REC for FY 2018-19 is available on the link https://www.recindia.nic.in/annual-returns and the Extract of Annual Return of REC for FY 2019-20 is available on the link https://www.recindia.nic.in/uploads/files/14-extract-of-annual- return-fy-19-20.pdf.

34. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of Related Party Transactions required to be disclosed in Form AOC-2 for the financial year 2019-20 were 'Nil'.

35. AUDITORS

Statutory Auditors

M/s S.K. Mittal & Co., Chartered Accountants, New Delhi (Firm Registration No.: 001135N) and M/s O.P Bagla & Co. LLP, Chartered Accountants, New Delhi (Firm Registration No.: 000018N/N500091) were appointed as Statutory Auditors of your Company for the financial year 2019-20 by the Comptroller & Auditor General (C&AG) of India. The Statutory Auditors have audited the Financial Statements of the Company for the financial year ended March 31, 2020.

Further, the C&AG, in exercise of powers conferred under Section 139 of the Companies Act, 2013, has appointed M/s S.K. Mittal & Co., Chartered Accountants, New Delhi (Firm Registration No. : 001135N) and M/s O.P. Bagla & Co. LLP, Chartered Accountants, New Delhi (Firm Registration No. :000018N/N500091) as the Statutory Auditors of the Company for the financial year 2020-21 and the Statutory Auditors have accepted their appointment. Approval of the Members of the Company will be obtained in the ensuing Annual General Meeting, to authorize the Board of Directors of the Company to fix remuneration of the Auditors for the financial year 2020-21.

Secretarial Auditors

M/s Chandrasekaran Associates, Practicing Company Secretaries (Certificate of Practice No.715), New Delhi, were appointed as Secretarial Auditors for carrying out Secretarial Audit of the Company for the financial year 2019-20. In terms of Section 204 of the Companies Act, 2013 and Rules made thereunder, they have issued Secretarial Audit Report for the financial year 2019-20 and the same is annexed to this Report.

35.1 Management's Comments on the Auditors' Report

The Statutory Auditors have audited the standalone and consolidated financial statements of the Company for financial year 2019-20 and have given their report without any qualification, reservation, adverse remark or disclaimer. The Auditors' Report(s) are annexed with this Annual Report.

The Secretarial Auditors of the Company have given an unqualified report for the financial year 2019-20. However, they have certain observations relating to composition of the Board and its Committees. The Management's Reply to the observations of the Secretarial Auditors are submitted, as under:

Observation of Secretarial Auditors Management's Reply
1 The Company was not in compliance with provisions of Section 149 of the Companies Act, read with Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect to the appointment of requisite number of Independent Directors (from November 13, 2019 to March 31, 2020) including a Woman Director since February 8, 2020. REC is a Government Company and as per provisions of Article 91 of Articles of Association of the Company, the power of appointment of Directors on the Board of the Company is vested with the President of India, acting through the Ministry of Power, Government of India.
During the financial year 2019-20, the composition of Board of Directors and Committees thereof were in compliance with all the applicable provisions, except for the period from November 13, 2019 to March 31, 2020, due to vacancy of Independent Directors including a Woman Director since February 8, 2020, on the Board of the Company.
2 The Company has not complied with provision of Section 177 and 178 of the Companies Act, 2013 read with Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with respect to Composition of the Audit Committee and Nomination and Remuneration Committee since February 8, 2020 and November 13, 2019, respectively. The Company has requested the Administrative Ministry i.e. Ministry of Power for appointing requisite number of Independent & Woman Directors on the Board of the Company and the request of REC is under active consideration at the Ministry of Power.
3 The Company has not complied with provision of Section 135 of the Companies Act, 2013 with respect to Composition of Corporate Social Responsibility Committee since February 8, 2020, as no Independent Director was member of the Committee. Once, the requisite number of Independent & Woman Directors are appointed by the Ministry of Power, the Company will be in compliance with all the applicable statutory provisions.

36. COMMENTS OF C&AG OF INDIA

The Comptroller & Auditor General (C&AG) of India, vide letter dated August 6, 2020 has given 'Nil' Comments on the Audited Financial Statements of the Company for the year ended March 31, 2020 under Section 143(6)(a) of the Companies Act, 2013. The Comments of C&AG for the financial year 2019-20 have been placed along with the report of Statutory Auditors of the Company in this Annual Report.

37. DEBENTURE TRUSTEES

In compliance with the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the details of Debenture Trustees appointed by the Company for different series of Bonds issued from time to time, is annexed to this Report.

38. STATUTORY DISCLOSURES

a) There was no change in the nature of business of the Company during the financial year 2019-20.

b) The Company has not accepted any public deposits during the financial year 2019-20 and the Board of Directors of the Company has passed requisite resolution in this regard, in compliance of RBI Guidelines.

c) No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future.

d) The Company maintains an adequate system of Internal Control, including suitable monitoring procedures to ensure accurate and timely financial reporting of various transactions, efficiency of operations and compliance with statutory laws, regulations and Company policies. For details, please refer to the 'Management Discussion and Analysis Report' annexed to this Report.

e) Information on composition, terms of reference and number of meetings of the Board & its Committees held during the year, establishment of Vigil Mechanism/Whistle Blower Policy and web-links for familiarization/training policy of Directors, Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions, Policy for determining Material Subsidiaries, Compensation to Key Managerial Personnel, Sitting fees to Independent Directors and IEPF etc. have been provided in the 'Report on Corporate Governance', prepared in compliance with the provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, as amended from time to time, which forms part of this Annual Report.

f) Pursuant to Section 186(11) of the Companies Act, 2013, loans made, guarantees given or securities provided by a company engaged in the business of financing of companies or of providing infrastructural facilities in the ordinary course of its business are not applicable to the Company, hence no disclosure is required to be made. Further, the details of investments are given at Note No. 10 of the Notes to Accounts of the Standalone Financial Statements.

g) Since the provisions of Section 197 of the Companies Act, 2013 and Rules made thereunder related to Managerial Remuneration are not applicable to Government Companies, therefore no disclosure is required to be made.

h) There are no material changes and commitments affecting the financial position of the Company, which has occurred between the end of the financial year i.e. March 31, 2020 and the date of this Report.

i) The Company has not issued any stock options to the Directors or any employee of the Company.

j) The details related to vigilance cases, replies to audit objections and RTI matters, etc. are duly incorporated in this Report, as required vide OM dated January 24, 2018 of the Ministry of Parliamentary Affairs, Government of India.

k) The Central Government has not prescribed the maintenance of cost records for the products/services of the Company under the Companies (Cost Records and Audit) Rules, 2014 read with the Companies (Cost Records and Audit) Amendment Rules, 2014 prescribed by the Central Government under Section 148 of the Companies Act, 2013. Accordingly, Cost Accounts and Records are not required to be maintained by the Company.

l) During the year under review, the statutory auditors / secretarial auditors have not reported to the Audit Committee, any instances of fraud committed against the Company by its officers or employees.

m) The Company is compliant with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

n) No new Independent Directors were appointed on the Board of Directors of the Company during the financial year 2019-20, requiring disclosure to be made under Rule 8(5)(iiia) of the Companies (Accounts) Rules, 2014.

o) The Company has adequate internal financial controls with reference to the Financial Statements.

39. IMPACT OF COVID-19 ON THE COMPANY'S BUSINESS

In March 2020, the outbreak of COVID-19 was declared as a pandemic by the World Health Organization. The pandemic has caused a significant decline and volatility in the global financial markets and also in economic activities in India. Your Company is closely watching the situation and taking prompt actions for continuity of business operations in an optimized manner. Pursuant to the notifications issued by the RBI, REC has put in place a policy framework for its borrowers, to avail maximum six months of moratorium w.e.f. March 1, 2020 in respect of payment of principal and/or interest (including additional interest/ further interest/ charges, wherever applicable). Further, under the 'Atmanirbhar Bharat' package of the Government of India, REC has disbursed Special Long-Term Transition Loans to DISCOMs for making payment to generators, as they were facing severe cash crunch owing to the pandemic. These loans provided much needed relief to the power sector by injecting liquidity.

40. STATUS OF CONSTRUCTION OF REC CORPORATE OFFICE BUILDING AT GURUGRAM, HARYANA

The construction of REC's state-of-the-art office building at City Centre, Sector-29, Gurugram is being executed in full swing. The design of the proposed building is conceived by architect M/s CWA (selected through Global Design Architectural Competition), to achieve GRIHA 5 Star rated Net Positive building having special features like fair finish white concrete surfaces, raised flooring, radiant cooling for slabs to reduce power consumption of air conditioning, IBMS, automated sensor controlled lighting, bio-climatic glass fagade with motorized blinds, Solar PV plant at rooftop pergola structure, auditorium and other latest technological features.

The Project Management Consultant of the project is Telecommunications Consultants

India Limited (a Government of India enterprise). Further, the contractors on board for execution of the project are JMC Project (India) Limited, Artizen Interiors, Hi-Tech Audio System Private Limited, Hannu Marketing Private Limited and Wohr Parking Systems Private Limited, besides 6 consultants/sub consultants working on the project. Giving utmost importance to the project, REC has appointed Indian Institute of Technology, Delhi for vetting of the structural design of the building.

Till March 2020, RCC structure, glass fagade envelop (except auditorium) and external peripheral road within the premises was completed; and interior finishes, balance exterior development works etc. were progressing in full swing. The project is at an advanced stage of completion, which has been delayed due to the outbreak of the COVID-19 pandemic.

REC 'World Headquarter Building' project was awarded with three prestigious awards by GRIHA Council, Green Rating for Integrated Habitat Assessment for (i) Passive Architecture Design, during 8th GRIHA Summit (ii) Integrated Water Management and (iii) Energy Management, during the 9th GRIHA Summit, which will further help REC's project in achieving GRIHA 5 Star rating.

41. INTEGRATED REPORT

An 'Integrated Report' of the Company as per SEBI Circular dated February 6, 2017 for the financial year 2019-20 is prepared and annexed to this Report.

42. STATUTORY AND OTHER INFORMATION REQUIREMENTS

Information required to be furnished as per the Companies Act, 2013, SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, DPE Guidelines on Corporate Governance for CPSEs, 2010 and other applicable statutory provisions is annexed to this report as under:

Particulars Annexure
Management Discussion & Analysis Report I
Report on Corporate Governance II
Business Responsibility Report III
Integrated Report IV
Secretarial Audit Report V
Auditor's Certificate on Corporate Governance VI
Annual Report on CSR Activities VII
Details of Debenture Trustees appointed for different series of Bonds VIII

43. ACKNOWLEDGEMENTS

The Directors are grateful to the Government of India, particularly the Ministry of Power, Ministry of Finance, Ministry of Corporate Affairs, NITI Aayog, DIPAM, Department of Public Enterprises and the Reserve Bank of India, for their co-operation, support and guidance in effective management of the Company's affairs and resources.

The Directors thank the State Governments, State Electricity Boards, State Power Utilities and other Borrowers, for their continued trust in the Company.

The Directors also place on record their sincere appreciation for the support and goodwill of the esteemed shareholders, investors in REC Bonds, domestic and overseas Banks, Life Insurance Corporation of India, KfW of Germany and JICA of Japan in the fund raising programmes of the Company.

The Directors also thank M/s S.K. Mittal & Co. and M/s O.P Bagla & Co. LLP, Statutory Auditors, M/s Chandrasekaran Associates, Secretarial Auditors, Comptroller & Auditor General of India and other professionals associated with the Company, for their valued contribution.

Lastly, the Directors sincerely appreciate and thank all employees of the Company, for their continued and dedicated efforts towards progress of the Company into yet another year of excellent performance.

For and on behalf of the Board of Directors

Sanjeev Kumar Gupta
Chairman & Managing Director and Director (Technical)
(DIN: 03464342)
Place : New Delhi
Date : August 31,2020

   

REC Ltd Company Background

SANJAY MALHOTRASANJAY MALHOTRA
Incorporation Year1969
Registered OfficeCore-4 SCOPE Complex,7 Lodi Road
New Delhi,New Delhi-110003
Telephone91-11-24365161,Managing Director
Fax91-11-24360644
Company SecretaryJ S Amitabh
AuditorS K Mittal & Co/O P Bagla & Co LLP
Face Value10
Market Lot1
ListingBSE,MSEI ,NSE,
RegistrarKFin Techologies Pvt Ltd
Karvy Selenium Tow-B,31&32 Financial Dist,Nanakramguda ,Hyderabad-500032

REC Ltd Company Management

Director NameDirector DesignationYear
J S Amitabh Company Secretary 2021
PRAVEEN KUMAR SINGH Nominee 2021
AJOY CHOUDHURY Director (Finance) 2021
Tanmay Kumar Nominee (Govt) 2021
SANJAY MALHOTRA CMD & Director (Technical) 2021

REC Ltd Listing Information

Listing Information
BSE_500
BSE_100
BSE_200
BSEDOLLEX
BSE_PSU
CNX500
BSEMID
CNXMIDCAP
CNXMID50
CNX_PSE
CNX200
CNXFINANCE
CNXDIVIDEN
BSECARBONE
BSEINFRA
BSECPSE
NFT100EQWT
BSEALLCAP
BSEFINANCE
NFTMIDLQ15
SENSNEXT50
BSEBHARA22
ESG100
MID150
LMI250
MSL400
BSEEVI
NFTYLM250
NFTYMC150
NFTYMSC400
NFTYFS2550
NF500M5025

REC Ltd Finished Product

Product NameUnit Installed
Capacity
Production
Quantity
Sales
Quantity
Sales
Value
Interest Rs.00029664.75
Dividend Rs.00089.04
fee income Rs.00038.95
Fees Rs.0006.38
prepayment premium Rs.0000
Lease Revenue Rs.0000
Profit on Sale of Investments Rs.0000
Swapping Premium Rs.0000
Agency Charges Rs.0000

Contact us Contact us