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REC Ltd.

BSE: 532955 Sector: Financials
BSE 00:00 | 19 Jan 137.80 1.35






NSE 00:00 | 19 Jan 137.85 1.45






OPEN 136.35
VOLUME 224977
52-Week high 168.70
52-Week low 122.20
P/E 2.92
Mkt Cap.(Rs cr) 27,214
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 136.35
CLOSE 136.45
VOLUME 224977
52-Week high 168.70
52-Week low 122.20
P/E 2.92
Mkt Cap.(Rs cr) 27,214
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

REC Ltd. (RECLTD) - Director Report

Company director report


The Shareholders

Your Directors have pleasure in presenting the Fifty First Annual Report together withthe Audited Financial Statements of your Company for the financial year ended on March 312020.


1.1 Summary of Performance

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

(Rs in crore)
Parameter FY 2019-20 FY 2018-19
Loans Sanctioned 110907.99 115957.35
Disbursements 75666.95 72165.43
Subsidy under DDUGJY (including DDG) and SAUBHAGYA 6473.88 19662.13
Recoveries (including interest) 62559.74 55093.20
Total Operating Income 29791.06 25309.72
Profit Before Tax 6983.29 8100.50
Profit After Tax 4886.16 5763.72
Total Comprehensive Income 4336.37 5703.18

1.2 Financial Performance

The Total Operating Income of your Company for the financial year 2019-20 was Rs29791.06 crore as compared to Rs 25309.72 crore during the financial year 2018-19. TheProfit After Tax and Total Comprehensive Income for financial year 2019-20 was Rs 4886.16crore and Rs 4336.37 crore respectively as compared to Rs 5763.72 crore and Rs 5703.18crore for the financial year 2018-19.

Gross Loan Asset Book of your Company as on March 31 2020 was Rs 322424.68 crore ascompared to Rs 281209.68 crore in the previous year. The outstanding borrowings as onMarch 31 2020 were Rs 280115.85 crore. Earnings Per Share (EPS) for the financial yearended March 31 2020 was Rs 24.74 per share of Rs 10/- each. Net Worth of the Company ason March 31 2020 has increased to Rs 35076.56 crore i.e. an increase of 2.26% abovethe Net Worth of Rs 34302.94 crore as on March 31 2019.

1.3 Dividend

The Board of Directors of your Company declared an Interim Dividend of Rs 11.00 perequity 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. Furtherno final dividend for the financial year 2019-20 has been recommended by the Board.

Despite challenging business scenario the Company has consistently rewarded itsshareholders by way of dividend @ Rs 11.00 per equity share which is equivalent to theamount that was paid during the previous year. The total dividend pay-out for thefinancial year 2019-20 amounted to Rs 2172.41 crore (excluding dividend distributiontax).

The dividend is paid in accordance with the Company's Dividend Distribution Policywhich is available on the Company's website at Distribution Policv.pdf.

1.4 Share Capital

As on March 312020 the Authorized Share Capital of the Company was Rs 5000 croreconsisting of 500 crore Equity Shares of Rs 10/- each; and the Issued & Paid Up ShareCapital of the Company was Rs 1974.92 crore consisting of 1974918000 Equity Shares ofRs 10/- each. Further as on March 31 2020 52.63% of the paid-up equity share capital ofthe Company comprising of 1039495247 Equity Shares of Rs 10/- each was held by PowerFinance Corporation Limited a Government of India Undertaking; and the balance 47.37% ofthe paid-up equity share capital was held by public.


The Company sanctioned loans worth Rs 110907.99 crore during the financial year2019-20 as against Rs 115957.35 crore in the previous financial year. The sanctions forfinancial year 2019-20 included Rs 55811.89 crore towards Generation projects Rs7026.33 crore towards Renewable Energy projects Rs 41604.77 crore towards T&Dprojects and Rs 6465.00 crore towards Short Term Medium Term & Other Loans. Thecumulative sanctions upto March 31 2020 made by your Company since its inception were Rs1099749.45 crore.


A total sum of Rs 75666.95 crore was disbursed during the financial year 2019-20 asagainst Rs 72165.43 crore disbursed in the previous financial year. The disbursements forfinancial year 2019-20 included Rs 27490.87 crore towards Generation projects Rs5699.09 crore towards Renewable Energy projects Rs 30856.19 crore towards T&Dprojects Rs 6390.00 crore towards Short Term Medium Term & Other Loans and Rs5230.80 crore of counter-part funding under DDUGJY including DDG (DecentralizedDistributed Generation) and SAUBHAGYA schemes. Further an amount of Rs 6473.88 crorefrom the Government of India (i.e. subsidy of Rs 5733.62 crore under DDUGJY subsidy ofRs 44.13 crore under DDUGJY-DDG and subsidy of Rs 696.13 crore under SAUBHAGYA) was alsodisbursed. The cumulative amount disbursed since inception till March 312020 was Rs597121.87 crore excluding subsidy under DDUGJY-RE and DDG.


4.1 The Company gives utmost priority to the timely realization of its dues towardsprincipal interest etc. The amount due for recovery including interest for StandardAssets (Stage I & II) during the financial year 2019-20 was Rs 62340.60 crore(excluding Rs 1496.20 crore deferred as per the COVID-19 moratorium policy) as comparedto Rs 55155.10 crore during the previous financial year. The Company recovered a totalsum of Rs 61945.04 crore towards Standard Assets (Stage I & II) during the financialyear 2019-20 as against Rs 54502.06 crore during the previous financial year. TheCompany achieved recovery rate of 99.37% for the financial year 2019-20. The overdues fromdefaulting borrowers pertaining to Standard Assets (Stage I & II) as on March 31 2020was Rs 2887.29 crore (excluding Rs 1496.20 crore deferred as per the COVID-19 moratoriumpolicy). Further an amount of Rs 614.69 crore has been recovered during financial year2019-20 from Credit Impaired Assets (Stage III) as compared to Rs 591.14 crore recoveredduring financial year 2018-19.

4.2 Your Company's Credit Impaired Assets (Stage III) continue to be at low levels. Ason March 31 2020 the Gross Credit Impaired Assets (Stage III) were Rs 21255.55 crorewhich was 6.59% of the Gross Loan Assets; and the Net Credit Impaired Assets (Stage III)were Rs 10703.42 crore i.e. 3.32% of the Loan Assets.


5.1 Summary of Financial Results

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

(Rs in crore)




FY 2019-20 FY 2018-19 FY 2019-20 FY 2018-19
Revenue from Operations 29791.06 25309.72 29929.78 25399.02
Other Income 63.92 31.44 77.27 32.31
Total Income 29854.98 25341.16 30007.05 25431.33
Finance Costs 18997.05 15641.54 18991.30 15639.20
Net translation/transaction exchange loss 2357.90 521.19 2357.90 521.19
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



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 22871.69 17240.66 22986.21 17350.84
Share of Profit/Loss of Joint Venture accounted for using equity method 0 0 9.14 9.95
Profit Before Tax 6983.29 8100.50 7029.98 8090.44
Tax Expenses 2097.13 2336.78 2057.71 2349.06
Profit After Tax 4886.16 5763.72 4972.27 5741.38
Other Comprehensive Income for the period (549.79) (60.54) (553.85) (60.59)
Total Comprehensive Income 4336.37 5703.18 4418.42 5680.79
Add: Opening Balance of Retained Earnings and Other Comprehensive Income 5036.27 5304.75 5226.53 5536.07
Amount available for appropriation 9372.64 11007.93 9644.95 11216.86
Less: Appropriations
Special Reserve created u/s 36(1)(viii) of the Income Tax Act 1961 (1522.32) (1323.59) (1522.32) (1323.59)
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) (1153.00) (978.00) (1153.00)
Debenture Redemption Reserve (49.15) (196.59) (49.15) (196.59)
Impairment Reserve (793.29) - (793.29) -
Sub-total - Appropriations (3679.28) (2946.80) (3679.28) (2946.80)
Less: Dividend Payments to Owners (including related taxes)
Dividend (2172.41) (2518.02) (2172.41) (2518.02)
Dividend Distribution Tax (435.78) (506.84) (446.06) (525.51)
Sub-total - Dividend Payments to Owners (including related taxes) (2608.19) (3024.86) (2618.47) (3043.53)
Closing Balance of Retained Earnings and Other Comprehensive Income 3085.17 5036.27 3347.20 5226.53

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

1. Rs 1367.27 crore from Debenture Redemption Reserve (DRR) pursuant to theNotification No. G.S.R. 574(E) dated August 16 2019 issued by the Ministry of CorporateAffairs (MCA). Refer Note 24.5 of Standalone Financial Statements.

2. Rs 378.41 crore from Reserve for Bad & Doubtful Debts under Section36(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 2214.12crore to the National Exchequer as compared to Rs 2624.44 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 - 1343.75
Dividend Distribution Tax 435.78 506.84
Direct Taxes 1748.74 2043.13
IGST and CGST 29.60 74.47
Total 2214.12 3968.19

5.3 Ratio Analysis

A comparative statement of significant ratios of the Company for the financial year2019-20 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 onMarch 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 84358.12 crore from themarket. This included Rs 9725.00 crore by way of Term Loans from Banks Rs 2750.00 croreby way of Short-Term Loans from Banks Rs 5000.00 crore by way of Term Loan from NationalSmall Saving Fund Rs 6159.32 crore by way of Capital Gains Tax Exemption Bonds and Rs42713.10 crore by way of Institutional Bonds. The Company also mobilized Rs 18010.70crore from External Commercial Borrowings during the year under review equivalent to USD2551.95 million [USD 1600.00 million from External Commercial Borrowings USD 790.00million from FCNR(B) and USD 161.95 million from Official Development Assistance (ODA)loans]. In addition to above an amount of Rs 6249.64 crore was also raised throughCommercial Paper in the financial year 2019-20.

Further for meeting the Government of India's funding requirement of DDUGJY andSAUBHAGYA schemes the Company also raised an aggregate amount of Rs 3782.30 crore duringthe 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 theGovernment 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'senormous potential in the country and to achieve the targeted capacity of 175 GW by 2022REC raised Green Bonds of USD 450 million in July 2017 for a tenor of ten years which arelisted on the International Securities Market (ISM) segment of the London Stock Exchangeand also on the Singapore Stock Exchange.

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

KPMG India has provided its post-verification Independent Assurance Report based onthe Green Bond framework of REC and the same has also been certified by the Climate BondsStandard 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 tomonitor establish and account for the allocation of the proceeds for such GreenPortfolio. Managements of Proceeds: The net proceeds from the Bonds amounting to Rs 2894crore 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
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 2480.00 1894.01
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) 4709.55 3533.43
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 1000.00 200.00
Sub-total (C) 1500.00 512.50
Grand Total (A+B+C) 6369.43 4165.47

REC is compliant with the requirements of its Green Bond framework as per itscontinuing obligations to ensure that the amount raised through Green Bonds remainsinvested in the eligible projects as per the Green Bond framework during the tenor of thebonds.

Cash Credit Facilities

The Company has an approved Cash Credit/WCDL/OD limit of Rs 10020.00 crore foravailment 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 thehighest rating assigned by CRISIL CARE India Ratings & Research and ICRA-CreditRating Agencies.


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 thefinancial year 2019-20 and for the borrowings outstanding as on March 31 2020 excludingother finance charges is 6.70% and 7.32% respectively. As a result your Company was ableto deliver debt financing at competitive rates.

5.7 Redemption and Pre-Payment

During the year the Company repaid a sum of Rs 42605.58 crore. This includesrepayment amounting to Rs 19854.20 crore to Institutional Bond-holders Rs 7662.91 croreworth of Capital Gain Tax Exemption Bonds Rs 74.97 crore towards Infrastructure Bonds Rs1740.59 crore of External Commercial Borrowings Rs 3507.72 crore of FCNR loans and^190.19 crore of Official Development Assistance (ODA) loan. The Company also redeemedlong term loans from Banks of Rs 9575.00 crore and Commercial Paper with face value of Rs11300.00 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 stoodat Rs 346487.59 crore. Out of this Equity Share Capital contributed Rs 1974.92 croreother Equity including Reserves & Surplus stood at Rs 33101.64 crore FinancialLiabilities including Borrowings and other Financial Liabilities accounted for^311228.91 crore Non-Financial Liabilities including Provisions and other Non-FinancialLiabilities stood at Rs 182.12 crore. These funds were deployed as Financial Assetsincluding Long / Short Term Loans Investments etc. of Rs 343497.14 crore andNon-Financial Assets including Property Plant & Equipment Tax Assets etc. of Rs2990.45 crore.

5.9 Policy Initiatives

The Company constantly reviews its policies & procedures from time to time toalign with market requirements and changing statutory requirements and for the furtheranceof its corporate objectives. During the year under review your Company hasadopted/amended various policies and guidelines including 'Code for Regulating Monitoringand Reporting of Trading by Designated Persons & their Immediate Relatives and forFair Disclosure' 'Policy for determining Material Subsidiaries' 'Policy on Materialityof Related Party Transactions & Dealing with Related Party Transactions' and 'Policyfor Prevention of Frauds'. The Company has also adopted a policy for resolution ofstressed assets; and additional guidelines for working capital loan to state powerutilities.


Transmission and Distribution (T&D) industry is poised to witness a large-scalecapacity addition and system augmentation on account of the country's installedgeneration capacity being at a high of 370 GW (as on March 31 2020) and enormouscapacities planned in the renewable energy space. There is also a need to strengthen thetechnically old and aging distribution infrastructure. Establishment of Solar Parks posesthe requirement to create infrastructure to ensure system availability with relativelyshorter gestation period. The need of the hour is to install a state-of-the-art robust andreliable evacuation and distribution system capable of handling higher loads. With theaccomplishment of targeted household connections under the Government of India's flagshipprogramme SAUBHAGYA and expected kickstart in rural economy the demand is set to rise inthe coming years. Therefore to make the sector reliable affordable and capable ofabsorbing envisaged future growth and to reach the last mile across the country T&Dsegment shall be a prime focus area.

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

Your Company as the Nodal Agency to various schemes of the Ministry of PowerGovernment of India plays a pivotal role in improving the state of the sector. YourCompany has been playing an active role in creation of new infrastructure andaugmentation/strengthening of the existing network. Your Company encourages DISCOMs toexpedite various reform measures and to adopt best practices including modernization andautomation of systems/smart grid IT-enabled systems for metering and consumer servicesother technology interventions in the distribution sector which helps them in improvingtheir operational and financial performance.

Distribution has a crucial role to play in the development and sustainability of thepower sector and overall socio-economic development of the country. Keeping in tune withthe times where utilities are facing difficulty to keep themselves afloat and meet theconsumer expectations at the same time your Company finances entire gamut of distributionprojects broadly with the objectives of system improvement and augmentation lossreduction 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 toensure the overall development of the Sector. The process of un-bundling corporatizationinstituting regulatory commission etc. has already been completed in most of the Statesthus increasing their accountability and also providing more autonomy to the DISCOMs.

In the past various schemes / programmes were implemented to extend benefits to ailingDISCOMs with an objective to strengthen infrastructure reduce losses in urban pocketsintroduce IT enablement and to provide last mile connectivity. Progressive interventionssuch as DDUGJY IPDS and UDAY implemented by the Government of India has come as anenabler for operational and financial turnaround of DISCOMs. Further NEF an interestsubsidy scheme is also under implementation with the objective to promote capitalinvestment and expedite reforms in distribution sector. REC is the Nodal Agency forimplementation of DDUGJY operationalization of SAUBHAGYA and NEF schemes; and is alsoplaying a key role in supporting the efforts of the Government of India in implementationof UDAY

"24x7 Power For All" document signed by all States reflects the commitment towork 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 isengaged in assisting the Ministry of Power in this endeavour. Your Company is alsopartnering and working along with respective State Utilities by making available therequisite financing as well as working with the Central and State Governments to resolveissues in achievement of the objective.

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

Upgradation of technology and adoption of best practices by the distribution sector tocater to the requirement of upcoming 100+ Smart Cities would present new financingopportunities. The Government of India's facilitating power to all and improvingoperational & financial performance of the utilities has already started showingresults in terms of timely notification of tariffs by Regulators in many States filing ofMYT petitions claiming of return on equity in the ARR release of revenue subsidy byState 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 8466 crore (against interest subsidy& other incidental expenses) to be provided over 14 years against interest paid onloan disbursements amounting to Rs 23973 crore for distribution schemes sanctioned duringtwo financial years viz. 2012-13 and 2013-14. Ministry of Power Government of Indiaprovides interest subsidy on interest paid for loans availed by State Power Utilities /Distribution Companies both in public and private sector to improve the infrastructure inDistribution Sector.

The Scheme is reform linked and interest subsidy of 3% to 7% is payable to the DISCOMson achievement of reform-based parameters outlined in NEF Guidelines. Initially NEFSteering Committee approved projects of Rs 25000 crore which have now reduced to Rs23973 crore due to delisting of some non-starter projects as per the decision of NEFSteering Committee. The utilities from the states of Andhra Pradesh ChhattisgarhGujarat Haryana Karnataka Maharashtra

Madhya Pradesh Punjab Rajasthan Telangana Uttarakhand and West Bengal have alreadybenefitted from the interest subsidy of Rs 249.70 crore released under the scheme tillMarch 31 2020.

6.3 Deendayal Upadhyaya Gram Jyoti Yojana

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

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

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

b) Strengthening and augmentation of sub-transmission & distributioninfrastructure;

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 providedas grant by Government of India and additional grant up to 15% (5% for special categoryStates) on achievement of prescribed milestones. In order to realize the objectives of thescheme participation of all stakeholders particularly public representatives has beeninstitutionalized through constitution of District Development Coordination and MonitoringCommittee (DISHA) (the erstwhile District Electricity Committees) under the Chairmanshipof the senior-most Member of Parliament. DISHA has been empowered to monitor and reviewimplementation of DDUGJY.

The scheme has approved outlay of Rs 43033 crore including budgetary support of Rs33453 crore from Government of India. An amount of Rs 44414 crore (including grant of Rs27750 crore) has been sanctioned by the Ministry of Power for DDUGJY in 33 States andUnion Territories against which Rs 27606 crore (including grant of Rs 20440 crore) hasbeen 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 theHon'ble Prime Minister on November 27 2015 with approved project cost of Rs 2570.14crore (90% grant from Government of India i.e. Rs 2301.62 crore) for distributionstrengthening works in rural and urban areas. The major works covered under the scheme aresystem strengthening connecting unconnected households replacing of barbed wire &worn-out poles underground cables at tourist places consumer metering construction of33/11 kV sub-stations at industrial areas and electrical infrastructure at religiousshrines.

Out of above ^1157.73 crore (GoI grant Rs 1041.96 crore) has been sanctioned fordistribution strengthening works in rural areas. The fund shall be channelized throughREC; 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 everyvillage and district of the country. The scheme outlay is Rs 16320 crore including GrossBudgetary Support of Rs 12320 crore. REC is the Nodal Agency for operationalization ofthe scheme.

Universal Household Electrification requires creation of electricity access throughlast mile connectivity. Wherever grid connectivity is technically not feasible andfinancially 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 householdsin rural areas;

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

c. Solar Photovoltaic (SPV) based standalone system for un-electrified householdslocated in remote and inaccessible villages/habitations where grid extension is notfeasible or cost effective.

Under the scheme Rs 14109 crore (including grant of Rs 9093 crore) has beensanctioned by the Ministry of Power to 26 States/Union Territories against which Rs 8007crore (including grant of Rs 4946 crore) has been released till March 312020. Under thescheme 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 affordablerates which has for long hampered the quality of life overall economic growth anddevelopment in the country. Efforts towards 100% village electrification and then 100%household electrification 24x7 power supply and clean energy cannot be achieved withoutundertaking adequate capacity building of DISCOMs. Moreover the issues of frequent poweroutages needed earnest resolution for meeting national priorities like "Make inIndia" and "Digital India". The unresolved legacy issues with DISCOMs hadkept 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 theMinistry 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 ofaffordable and accessible 24x7 Power For All. The UDAY scheme empowers DISCOMs with theopportunity to break even at the end of their respective MoU periods through followinginitiatives:

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 StateGovernments/Utilities to enable achievement of objectives envisaged. The programme hasalready witnessed significant traction from various State Governments/DISCOMs and 32 State/ Union Territories are now part of the UDAY fold. UDAY scheme is showing encouragingresults as liabilities of DISCOMs of Rs 2.09 lakh crore are being taken over by the StateGovernments and additionally Rs 0.24 lakh crore have been restructured / repriced throughissuance of bonds; thus cleaning the balance sheets of DISCOMs and enabling them torestart the capital expenditure cycle while also enabling financially viable operations ofall 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 applicationbeing implemented by your Company's wholly owned subsidiary (REC Transmission ProjectsCompany Limited) under the guidance of the Ministry of Power. Urja Mitra provides aCentral Outage Management and Notification Platform for State Power Distributionutilities to disseminate Power Outage information to urban / rural power consumers acrossIndia through SMS/email/push notifications. Power consumers across the nation get outageupdate through integrated Mobile Application for Android and iOS platforms. It alsoprovides a platform to view real time power outages in any part of the country and lodgecomplaints on power outages. As on June 2020 data of around 22.06 crore consumers of 52DISCOMs of 29 States is uploaded into the application and 279.37 crore SMSes have beensent 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 ensureachievement of "24x7 Power For All" vision of the Government of India it wasfelt essential to capture real time supply parameters of rural India and this could beachieved by monitoring the availability/quality of power supply in rural areas of thecountry recording actual distribution parameters i.e. power supply outages and byconducting feeder wise energy audit and AT&C losses calculation. Towards thisobjective the Ministry of Power had introduced "11 kV Rural Feeder MonitoringScheme" under the Distribution Sector Reforms and has appointed your Company's whollyowned subsidiary (REC Transmission Projects Company Limited) as implementing agency forthe same. Under the scheme meter data of rural feeders is sent to central Meter DataAcquisition System (MDAS) for analysis and the same is then integrated with National PowerPortal (NPP) to make it available for use of all stakeholders. This scheme targets todevelop a self-sustained independent web based automated system for almost 1.1 lakhrural and agricultural feeders across country by acquiring various essential parameters ofall the outgoing 11kV rural feeders and such 66/33 kV incoming feeders from where 11kVrural feeders are emanating and making the information available online for allstakeholders. As on June 2020 79000 modems have been installed and integrated withNational Power Portal.

6.9 Tarang

Tarang (Transmission App for Real-Time Monitoring and Growth) is a transmission sectorinitiative being run under the guidance of the Ministry of Power through your Company'swholly owned subsidiary (REC Transmission Projects Company Limited). It provides aninformative medium regarding the Pan-India progress of Transmission System which can bedrilled down for analysis to month wise agency wise state wise information etc. Thereasons of delay in case of stalled/ delayed projects is separately provided so that allconcerned stakeholders can take timely corrective decision for project completion. Tarangmonitors the progress of both Inter-State and Intra-State Transmission Projects beingimplemented through

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


Your Company has been providing funding assistance for power generation (includingconventional & renewable energy) transmission & distribution projects includingfor the electrification of villages. Details of major financing activities during thefinancial 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 ofRs 55811.89 crore including consortium financing with other financial institutions asper details given below:-

(Rs in crore)

Particulars No. of Loans Loan amount
State Sector 82 50734.18
Fresh Loan 74 42208.04
Additional Loan 8 8526.14
Private Sector 2 5077.71
Fresh Loan 1 5037.71
Additional Loan 1 40.00
Total 84 55811.89

7.2 Renewable Energy

During the financial year 2019-20 your Company sanctioned 17 nos. of Renewable Energyprojects with installed generation capacity aggregating to 1754 MW with total loanassistance of Rs 7026.33 crore. Out of the same 7 were solar photo-voltaic projectsaggregating 917 MW another 7 were wind energy projects aggregating 837 MW 1 wasprocurement and installation of Turbine & Generator unit for a small hydro project 1was for DDG component of DDUGJY works and 1 loan was to a State DISCOM for meeting itsrenewable purchase obligations.

The total cost of all the Renewable Energy projects sanctioned during financial year2019-20 aggregates to Rs 10383.80 crore as detailed below:-

Particulars Unit FY 2019-20 FY 2018-19
Projects Sanctioned Nos. 17 36
Capacity of Sanctioned Projects MW 1754 2198
Cost of Projects Rs / crore 10383.80 17273.54
Loan Sanctioned by REC Rs / crore 7026.33 11875.20

7.3 Transmission & Distribution

During the financial year 2019-20 your Company sanctioned a total of 592 nos. ofTransmission & Distribution schemes/ projects involving a total loan assistance of Rs41604.77 crore. This included 590 projects of the State Sector with total loanaggregating to Rs 40324.15 crore towards primary power evacuation schemes associatedwith generating plants system improvement schemes schemes for procurement &installation of equipment/material like meters transformers conductors tower materialcables etc. Further it also included loan components under Government-approved schemeslike DDUGJY IPDS and SAUBHAGYA and infrastructure schemes for providing electricityaccess to various categories of consumers including agricultural consumers. Furtherthere were 2 inter-state / intra-state transmission projects in Private Sector with totalloan amount of Rs 1280.62 crore. Details of the same are given below:-

(Rs in crore)

Particulars No. of Loans Loan amount
State Sector 590 40324.15
Transmission Loans 252 17285.12
Distribution Loans 337 21539.03
Short Term / Medium Term & Special Loans 1 1500.00
Private Sector 2 1280.62
Intra-state Transmission Projects 1 639.20
Inter-state Transmission Projects 1 641.42
Total 592 41604.77

REC has sanctioned a few Green Energy Corridor transmission projects and more suchprojects are in the process of appraisal/approval. Further in line with prevailing marketconditions REC has framed and modified its policies for project financing to attract moretransmission 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 TermMedium Term and Other Loans aggregating to Rs 6465 crore to various power utilitiesduring the financial year 2019-20 towards their fund requirement for short term / mediumterm or for working capital etc.

7.5 Financing Activities in North Eastern States

During the financial year 2019-20 a total sum of Rs 5855.49 crore was sanctionedtowards various State sector and Private sector projects in North Eastern States. Thisincluded refinancing of a term loan of Rs 4948.10 crore of consortium lenders in respectof 6x200 MW hydro power project of Teesta Urja Limited Rs 492.24 crore sanctioned towardsRenewable 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. ThePromoter/Entity appraisal is carried out on the basis of the financial performancecredit-worthiness management proficiency and sectoral experience of the promoterentities. The project appraisal is carried out on the basis of various technicalparameters like statutory clearances PPA infrastructure etc. Thus Integrated Rating ofthe 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 ratingsassigned to private sector projects.

During the year REC has initiated the process of limited review of the existingappraisal guidelines for private sector projects in view of the changing marketpractices regulatory environment RBI policies etc. through a consultant so as tostrengthen 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 carriedout twice during a year based on the evaluation of the utility's performance againstspecific parameters operational & financial performance regulatory compliancesannual financial results etc. With regard to State Power Distribution utilities (includingSEBs / utilities with integrated operations) your Company adopts the final annualintegrated ratings carried out by Independent Rating Agencies (CARE/ICRA) after approvalof framework/rating by the Ministry of Power Government of India.

For the purpose of funding your Company has classified State Power GenerationTransmission 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 ofwhich 31 utilities were graded as A++ 37 as A+ 42 as A 18 as B and 3 utilities as Ccategory. 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 71610000 EquityShares of Rs 10/- each of its joint venture company viz. Energy Efficiency ServicesLimited (EESL) for a consideration of Rs 71.61 crore under the Rights Issue Offer ofEESL. 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 inrespect of RattanIndia Power Limited the Company has been allotted 92568105 EquityShares of Rs 10/- each 28720978 Redeemable Preference Shares of Rs 10/- each and43303616 Optionally Convertible Cumulative Redeemable Preference Shares of Rs 10/-each of the said company. Pursuant to a Resolution Plan approved by the Hon'ble NationalCompany Law Tribunal (NCLT) Hyderabad Bench vide Order dated July 26 2019 in respect ofLanco Teesta Hydro Power Limited the Company has written off equity investment of Rs 102crore in the said company (comprising of 10.20 crore Equity Shares of Rs 10/- each) dueto extinguishment of such equity shares as per the said Order. Further REC has sold228789 Equity Shares of Rs 1/- each of Indian Energy Exchange Limited (IEX) in thebuyback offer of the said company.


REC has four lines of ODA (Official Development Assistance) credit with KfW Germanythree of them have been fully drawn as on March 31 2020. KfW-I and KfW-II ODA loans areof EUR 70 million each (approx. Rs 454.02 crore and Rs 480.97 crore respectively) KfW-IIIis of EUR 100 million (approx. Rs 753.73 crore). Out of the fourth line of credit from KfWof USD 228 million USD 161.95 million (approx. Rs 1157.38 crore) have been drawn as atMarch 31 2020.

Apart from above REC has two lines of ODA credit with JICA Japan. Both of them havealso been fully drawn. Under JICA-I & II ODA loans cumulative amounts of JPY16949.38 million (approx. Rs 820.12 crore) and JPY 11809.48 million (approx. Rs 640.64crore) respectively have been drawn as on March 31 2020.


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

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

b. Fund release: The subsidy of Government of India is channelized through REC and thematching contribution is infused by the respective State Government/Implementing Agenciesthrough loan at their own. Government of India subsidy of Rs 6475 crore has been releasedto States during financial year 2019-20.

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

i) Commissioning of sub-stations including augmentation: 1729 nos.

ii) HT Lines feeder segregation (including new 11 kV lines): 197019 cKm

iii) LT Lines: 461875 cKm

iv) Commissioning of Distribution Transformers: 496181 nos.

v) Installation of consumer meters: 4553651 nos.

vi) Metering of Distribution Transformer & Feeders: 14589 nos.

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

9.2 Cumulative Performance upto March 312020

a. Sanction and Release: An amount of Rs 140309 crore has been sanctioned andGovernment of India Grant of Rs 81855.56 crore has been disbursed to the implementingagencies cumulatively upto March 31 2020 under the above-mentioned Government programmes.

b. Physical progress of creation of Infrastructure: The following works have beencompleted cumulatively upto March 31 2020 under the above-mentioned Government programmessince inception:

i) Commissioning of sub-stations including augmentation: 6574 nos.

ii) HT Lines feeder segregation (including new 11 kV lines) : 801764 cKm

iii) LT Lines: 1259560 cKm

iv) Commissioning of Distribution Transformers: 1574215 nos.

v) Installation of consumer meters: 14004143 nos.

vi) Metering of Distribution Transformer & Feeders: 185438 nos.

c. Progress of electrification of households: With the efforts of States/projectimplementing agencies electricity connections were provided to 2.63 crore householdsunder SAUBHAGYA DDUGJY and State Government schemes during the period from October 112017 to March 31 2019.

Further on the request of 7 States (Assam Chhattisgarh Jharkhand KarnatakaManipur Rajasthan and Uttar Pradesh) the Ministry of Power accorded time extensionapproval to electrify additional 19.09 lakh un-electrified households which wereunwilling earlier to get electrified and had expressed their willingness before March2019. Out of the same 13.92 lakh households were electrified during financial year2019-20.


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

In line with the Quality Control Mechanism of Government Programmes REC QualityMonitors (RQM) have been appointed for carrying out field and material inspections forensuring proper quality of materials and works during implementation of such schemes.During the financial year 2019-20 RQMs have undertaken field inspection of 33609villages and material inspection of 1208 nos. at manufacturer premises for ensuringquality of works.

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

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


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

11.1 Risk Management Committee

The Company is having a Risk Management Committee (RMC) of its Directors and SeniorOfficials in place for monitoring the integrated risks of the Company. The main functionof the RMC is to monitor various risks and also to suggest action for mitigation of riskarising in the operation and other related matters of the Company. Further as requiredunder RBI norms the Company has also appointed a Senior Official as the Chief RiskOfficer (CRO).

The Company has identified its various risks and has taken appropriate steps tomitigate 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 lossarising from the diminution in credit quality of a borrower and the risk that the borrowerwill default on contractual repayments under a loan or an advance. To mitigate the samethe Company follows systematic institutional and project appraisal process to assess thecredit risk. These processes include a detailed appraisal methodology identification ofrisks and suitable structuring and credit risk mitigation measures. Further on regularbasis the projects risks are reviewed and categorized as High/Moderate/Low on the basis ofdifferent risk parameters and exposure of the project as per Project Risk CategorizationFrameworks.

(ii) Operational Risk

The operational risk arises from inadequate or failed internal processes people andsystems or external events. The Company has an organization-wide risk categorizationframework through which all the operational risks are measured and categorised asHigh/Moderate/Low. Further the operational risks of the Company are studied in eightfunctional areas such as Business Compliance Finance Human Resource InformationTechnology Legal Operational and Strategic. The Company has implemented anorganisation-wide Risk Register to identify measure monitor & mitigate operationalrisks across functions.

(iii) Liquidity Risk

Liquidity risk primarily arises due to the maturity mismatch associated with assets andliabilities of the Company. Liquidity risk involves the inability of the Company to fundincrease in assets manage unplanned changes in funding sources and to meet obligationswhen required.

(iv) Market Risk

Market risk of the Company is defined as the risk to the Company's earnings and capitaldue to changes in the market interest rate or prices of securities foreign exchange aswell as volatilities of changes. Market Risk comprises of Interest Rate Risk LiquidityRisk and Foreign Currency Risk.

11.2 ALCO Committee

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

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

Liquidity risk is the risk of potential inability to meet liabilities as they becomedue. REC faces liquidity risks which could require it to raise funds or liquidate assetson unfavourable terms. This risk is managed through a mix of strategies includingforward-looking resource mobilization based on projected disbursements and maturingobligations.

Foreign currency risk involves exchange rate movements that may adversely impact thevalue of foreign currency-denominated assets liabilities and off-balance sheetarrangements. The Company manages foreign currency risk through various derivativeinstruments.


As a part of business promotion strategy a Preferred Customer Policy was formulated in2008 with the basic purpose of offering enhanced level of services to the Company'scustomers and to have a long term mutually beneficial relationship with them. The Policylays down the eligibility criterion which takes into account various factors such asamount of loan outstanding duration of loan relationship repayment track record of theborrower etc. for determining preferred customers and sponsoring them for capacitybuilding domestic or international seminars and training programmes organized by variousexternal agencies as well as by RECIPMT REC's in-house training institute at Hyderabad.


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

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

(iii) Augmentation of the Network infrastructure of the Company: Organization-wide MPLSVPN network infrastructure facility has been completely revamped with latest network andsecurity devices enhanced bandwidth and high availability features to meet the demandingrequirement of operations. The secured VPN network has facilitated users to connect to RECNetwork from remote locations and access business applications for seamless operationswithout disruptions.

(iv) Revamping of Video Conferencing infrastructure: The Video Conferencinginfrastructure of REC has been revamped to facilitate meetings/discussions across alloffices 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 otherMinistries Board & Committee Meetings and other business & review meetings.

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

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

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

(viii) Towards transparency in procurement: All procurement of goods and services ofvalue above Rs 2 lakh is being done on-line through an E-procurement system. The systemcomplies with e-Reverse Auction norms prescribed as per CVC Guidelines and REC ProcurementGuidelines. 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 ERPsystem to track movement and timely processing of bills and payment to vendors.

(ix) Implementation of Centralized Printing Solution: Towards greener initiative andlesser paper consumption Centralized Printing Solution has been implemented in Corporateoffice at desks where bulk printing is done.

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

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


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

14.1 Training Activities during FY 2019-20

During the financial year 2019-20 RECIPMT has organized 132 programmes and workshopson various themes & subjects with topics ranging from Technical Management Finance& Accounts HR Information Technology to Energy Conservation relating to PowerGeneration Transmission Distribution and Renewable Energy sector. In all RECIPMT hastrained 3109 personnel in total thereby achieving an aggregate of 11993 man-days oftraining in the year under review.

14.2 Workshop on SAKSHYA Portal and Orientation

RECIPMT has been entrusted with the training of Power DISCOM Engineers TurnkeyContractors Programme Implementing Agencies and Quality Monitors on Online Quality Portal"SAKSHYA" developed under DDUGJY / SAUBHAGYA schemes to bring awareness aboutonline reporting of information of the quality aspects standards construction practicesetc. related to implementation of household electrification and power distribution inrural areas.

During the year RECIPMT organized a workshop on "SAKSHYA" portal for SeniorExecutives; and also orientation trainings regarding the "SAKSHYA" portal atDISCOM headquarters across the country for a total of 1341 participants.

14.3 Training Programmes on "Behavioral Skills"

RECIPMT has been entrusted with the capacity building of executives of A&B cadre ofvarious Power Utilities by conducting training programmes on "BehavioralSkills". 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 countrywith participation of 1191 executives.

14.4 International Training Programmes under ITEC Scheme of MEA

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

During the COVID-19 pandemic RECIPMT extended the facilities of boarding lodgingsecurity and sanitization in its campus to take care of the stranded internationalparticipants till their evacuation.

14.5 Regular Training Programmes

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

14.6 Customized Programmes

RECIPMT organized 9 customized programmes during the year designed specifically tosuit the requirements of the utility. The programmes included Maintenance of Sub-stationTesting 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 Coordinationand 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 MPPKVVCLIndore on Efficiency Improvement Measures in Power Distribution and Best Practices inPower Distribution Management. In total 221 participants were trained under thesecustomized programmes.

14.7 In-house Training Programmes

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

14.8 Special Programmes

RECIPMT also organized 2 special programmes for power sector personnel includingemployees of REC on Project Management of Power Distribution System and CapabilityDevelopment for Senior Management of REC - Managing Change in Power Sector which wereattended by 54 executives.

14.9 Collaboration Programme with RENAC Germany

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


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


In order to professionalize the Executive strength of REC and also to infuse freshblood 37 executives were appointed during the financial year 2019-20 through CampusRecruitment. The total manpower of the Company as on March 31 2020 was 468 employeeswhich 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 appointment and promotion to various posts were complied with. The group wise detailsof SC and ST employees out of the total strength as on March 31 2020 are given below:


Number of Employees




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 ofDoPT OMs.

16.2 Training & Human Resource Development

As a measure of capacity building including up-gradation of employees' skill sets andto ensure high delivery of performance Training and HRD continued to receive priorityduring the financial year under review. Training and Human Resource Policy of the Companyaims at sharpening business skills and competencies required for better employeeperformance and provides all possible opportunities and support to the employees toimprove their performance and productivity. Training was also provided to promote betterunderstanding of professional requirements as well as to sensitize the employees aboutthe socio-economic environment in which the Company operates. Training was also impartedon spiritual health and attitudinal change process benefiting the employees.

During the year under review the Company sponsored 342 employees to various trainingprogrammes workshops etc. within the country and abroad. Taken together theseinitiatives enabled the Company to achieve 2402 training man-days. Further 19 Executiveswere deputed for programmes abroad.

16.3 Employee Welfare

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

Sports Activities

During the financial year 2019-20 REC hosted the Inter-CPSU Badminton Tournament atNew Delhi and also sponsored its employees for various Inter-CPSU Sports Tournaments suchas Table Tennis Cricket Volley Ball Chess etc. organized by various power sector CPSUsunder the aegis of Power Sports Control Board (PSCB). Further employees were encouragedto participate in various quizzes paper presentations and simulation competitionsconducted 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. AWomen's Cell has been in operation in the Company to look after welfare and all-rounddevelopment of women employees. International Women's Day was celebrated by REC Women'sCell.

16.5 Industrial Relations

The Industrial Relations scenario in the Company continued to be cordial and harmoniousin the financial year 2019-20. There was no loss of man days on account of industrialunrest. Regular interactions were held with REC Employees Union and REC OfficersAssociation on issues of employee welfare. This has helped to build an atmosphere of trustand cooperation resulting in a motivated workforce and continued improvement in businessperformance. Wage revision of non-executives has been implemented effective from January1 2017.

16.6 Public Grievance Redressal

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


The Company has its Corporate Social Responsibility & Sustainability Policy alignedwith the provisions of the Companies Act 2013 the Companies (Corporate SocialResponsibility Policy) Rules 2014 and the Guidelines for CSR and Sustainability forCentral Public Sector Enterprises issued by the Department of Public Enterprises. The saidpolicy is available on the website of the Company at

During the financial year 2019-20 the Company pursued Corporate Social Responsibilityand Sustainable Development initiatives to fund and support socially beneficial projectsas a guiding principle giving priority to issues of foremost concern in the nationaldevelopment agenda and to reach a wide spectrum of beneficiaries with a view to empowereconomically and socially backward communities. CSR initiatives have been carried out byREC in the fields of sanitation and hygiene promotion of healthcare facilities skilldevelopment women empowerment environmental sustainability and rural infrastructuraldevelopment to facilitate inclusive social development.

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

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

Further the Company has contributed CSR assistance of Rs 150 crore to the PrimeMinister's Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund to dealwith the situation caused due to COVID-19 pandemic during the financial years 2019-20 and2020-21. The Company also allotted Rs 10 crore for providing food/ration utility packetsetc. to laborers/needy persons and also for providing medical equipment to health careworkers in various locations of India affected by the COVID-19 pandemic.


REC constantly endeavors to optimize probity and integrity among employees and topromote transparency fairness and accountability in all operational areas. REC VigilanceDivision mainly aims at "Preventive Vigilance" by reviewing policiesrotation/transfers of employees holding sensitive posts review of Audit Reports reviewof projects/tenders/contracts awarded inspections of Regional Offices review of AnnualProperty Returns (APRs) etc.

In compliance with the instructions of Central Vigilance Commission (CVC)/Ministry ofPower (MoP) the matter of rotational transfers from the identified sensitive posts isconstantly being pursued. Further prescribed periodical statistical returns were alsosent to CVC and MoP on time. Regular review of Audit Reports i.e. Internal Statutoryand C&AG Audit Reports were done. Review of projects/tenders/contracts awarded wascarried out and wherever deviations were observed the matter was taken up with concerneddivisions which led to strengthening of appraisal system/guidelines. Field inspections ofRegional Offices and scrutiny of APRs were done.

The thrust on leveraging of technology continued with the result that informationrelating to loans schemes tenders third party bills etc. are available online. Duringthe year HR policies like recruitment process lien policy and promotions within REC wereexamined and subjective & non-transparent clauses were brought to the notice of themanagement. Revised Recruitment Policy has been notified on September 19 2019. FurtherREC'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 theoccurrence of lapses which covers various functionalities of the organization likeProcurement and Contracts Bill Tracking Loans Assets and employee payments (medical andtravel). Issues related to Loans to Independent Power Producers (IPPs) were examined inlight of C&AG observations and it was observed that certain issues related toevaluation of EPC contractor and its experience adequacy of Performance Guaranteemonitoring of LE/LFA reports and diversion of funds etc. need to be addressed in revisedguidelines. Accordingly an advisory was issued. It was ensured that information/policieslike tenders requisite forms status of loan applications/third party payments FairPractices Code Policy for Prevention of Frauds CSR Guidelines Whistle Blower Policyetc. are available on REC's website.

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

During the financial year 2019-20 there was only one vigilance case pending which wasminor 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. Asa part of the vigilance awareness programme intra-school crayon painting and paragraphwriting competitions were organized in schools and inter-college Nukkad Natak competitionswere organized at colleges of Delhi. Various activities like quiz story-tellingpainting selfie and collage-making were also organized for REC's employees and theirfamily members. Further Seminars on Consumer Awareness & RTI were also organized atvarious Regional Offices of REC. To strengthen integrity within the corporate cultureyoung executives were exposed to a session on self-evaluation & team building throughoutbound experiential learning session. REC continued its endeavour to groom young schoolchildren into vigilant citizens through "Integrity Clubs" which are now in 32schools all over India. Apart from this activities were also organized at variousRegional Offices and subsidiaries of REC.


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

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

REC Corporate Office on January 14 2020. These inspections have inculcated a spirit ofawareness 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 Officesof the Company from September 14 2019 to September 28 2019. During this period variouscompetitions were organized at Corporate Office. The employees actively participated inall events and competitions. Prizes were also awarded to winners in different categoriesto encourage larger participation and motivate employees to increase use of Hindi in theirday-to-day working.

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

Two-days All India Conference on Rajbhasha was organized at Thiruvananthapuram duringApril 25-26 2019 for the Nodal Hindi Officers. This year an Inter-PSU Hindi debatecompetition 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 anduseful articles as well as literary writings of employees. In order to motivate employeesto write articles poems etc. in Hindi for the magazine the Company has adopted a policyto award cash incentives to the contributors.


20.1 Conservation of Energy

Since your Company does not own any manufacturing facility there are no significantparticulars relating to conservation of energy and technology absorption. The RegisteredOffice of the Company is located in 'SCOPE Complex' at New Delhi where all civilelectrical installation and maintenance is carried out by SCOPE (Standing Conference ofPublic Enterprises). With effective monitoring controlling and scheduling of theoperation of AC chilling units / elevators by putting other energy efficient equipmentsmaking provision of additional 100 KW Solar Power Plant at terrace and also by puttingmovement/occupancy sensor as well as maintaining power factor nearest to unity SCOPE hassaved around 2.06 lakh units of power consumption during the financial year 2019-20 overthe 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 7078.40 crore was made during thefinancial year on account of interest principal repayment finance charges foreigntravelling training expenses architectural services and other expenses.


Your Company has two wholly owned subsidiaries namely REC Power Distribution CompanyLimited (RECPDCL) [CIN: U40101DL2007GOI165779] and REC Transmission Projects CompanyLimited (RECTPCL) [CIN:U40101DL2007GOI157558] to focus on additional business ofconsultancy 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 servicesin power sector viz. implementation of distribution system strengthening worksimplementation of grid/off-grid solar (PV) projects implementation of smart meterspreparation of detailed project reports third party inspections pre-dispatch materialinspections and acting as project management consultant / project management agency undersome projects of State-funded schemes such as DDUGJY IPDS etc. As on March 31 2020RECPDCL was working on about 100 on-going projects spread over 57 DISCOMs/powerdepartments/co-operative societies in 26 States and 4 Union Territories with totalestimated consultancy fee of Rs 993.82 crore.

During the financial year 2019-20 RECPDCL achieved total revenue of Rs 143.01 croreagainst the previous year's revenue of Rs 159.77 crore; and Profit After Tax of Rs 12.47crore against the previous year's Profit After Tax of Rs 26.34 crore. As on March 312020 the Net Worth of RECPDCL was Rs 168.20 crore as compared to Rs 155.73 crore as onMarch 31 2019. Earnings Per Share (EPS) for the financial year ended on March 31 2020was Rs 2495/- as against Rs 5268/- in the previous year. The Board of Directors ofRECPDCL has recommended a dividend of Rs 1685/- per equity share of face value of Rs10/-each for financial year 2019-20 aggregating to Rs 8.43 crore which is subject toapproval 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 TransmissionService Providers through Tariff Based Competitive Bidding (TBCB) process for independentinter-state and intra-state transmission projects assigned by the Ministry of Power andState Governments from time to time. In order to initiate development of each independentinter-state / intra-state transmission project RECTPCL incorporates a project specificSpecial Purpose Vehicle (SPV) as its wholly owned subsidiary. After selection of thesuccessful bidder in accordance with the TBCB Guidelines such subsidiary is transferredby RECTPCL to the successful bidder along with all assets & liabilities.

During the financial year 2019-20 RECTPCL transferred 8 (eight) project specific SPVcompanies (comprising of 6 inter-state projects and 2 intra-state projects) to theselected 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 projectsviz. Transmission System Strengthening in Jharkhand State (Package-1 to 4) for which ithad incorporated 4 SPV companies viz. Chandil Transmission Limited [CIN:U40108DL2018GOI330905] Koderma Transmission Limited [CIN: U40300DL2018GOI331192] DumkaTransmission Limited [CIN: U40300DL2018GOI331490] and Mandar Transmission Limited [CIN:U40101DL2018GOI331526]. The bidding process of these projects is expected to concludeduring the financial year 2020-21.

Further after March 312020 RECTPCL has incorporated the following project specificSPVs as its wholly owned subsidiaries for the inter-state / intra-state transmissionprojects 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 112020
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 specificSPV and wholly owned subsidiary of RECTPCL incorporated on December 2 2015 for theproject viz. Transmission System for Phase-1 Generation Projects in Arunachal Pradesh hasfiled an application for strike off of its name with the Registrar of Companies underSection 248 of the Companies Act 2013 since the said project has been de-notifiedpursuant to gazette dated February 1 2019 and consent of the Ministry of Power datedMarch 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 MitraTARANG (Transmission App for Real Time Monitoring and Growth) 11 kV Rural FeederMonitoring 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 ascompared to Rs 40.45 crore in the previous financial year. The Profit Before Tax andProfit After Tax for the financial year 2019-20 was Rs 70.55 crore and Rs 54.44 crorerespectively. The Net Worth of RECTPCL as on March 31 2020 was Rs 112.60 crore asagainst the Net Worth of Rs 118.44 crore as on March 31 2019. RECTPCL had declared anInterim Dividend of ^10000/- 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 themonth of March 2020.

21.3 Amalgamation of RECTPCL with RECPDCL

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

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


REC along with three other PSUs namely Power Grid Corporation of India Limited NTPCLimited and Power Finance Corporation Limited has formed a Joint Venture Company i.e.Energy Efficiency Services Limited (EESL) [CIN: U40200DL2009PLC196789] on December 102009. EESL is a Super Energy Service Company (ESCO) and acts as a resource center forcapacity building for State DISCOMs Energy Regulatory Commissions State DevelopmentAuthorities upcoming ESCOs financial institutions etc. Upto March 31 2020 REC hascontributed ^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 technologiesparticularly in the public facilities like municipalities buildings agricultureindustry etc. and to implement several schemes of Bureau of Energy Efficiency Ministryof Power MNRE Government of India. EESL is also leading the market-related activities ofthe National Mission for Enhanced Energy Efficiency (NMEEE) one of the 8 nationalmissions under National Action Plan on Climate Change. EESL is implementing world'slargest energy efficiency portfolio; and its energy efficient appliances and technologieshave saved India over 40 billion kWh of estimated energy annually.

Currently EESL is implementing the world's largest non-subsidy based LED lightingprogramme viz. Unnat Jyoti by Affordable LED for ALL (UJALA) for distribution of LEDbulbs LED tube lights and energy efficient fans to domestic consumers world's largeststreet light replacement programme viz. Street Lighting National Programme (SLNP) toreplace conventional street lights with smart and energy efficient LED street lights inmunicipalities National E-Mobility Programme to provide electric vehicles for Governmententities/organisations on lease/outright purchase basis to replace the existing petrol anddiesel vehicles world's largest Agricultural Demand Side Management (AgDSM) programme forreplacement of inefficient agricultural pump sets in agriculture sector Building EnergyEfficiency Programme (BEEP) to retrofit energy efficient appliances in buildings to makethem energy efficient Smart Meter National Programme (SMNP) to replace conventionalmeters with smart meters Municipal Energy Efficiency Programme (MEEP) under AMRUT forimplementation of energy efficient pump sets in public water works and sewage systemsafter approval of the ULB/State Government Solar Programme for implementing solarroof-top and decentralized small solar power plant Atal Jyoti Yojana (AJAY) forinstallation of solar LED street lights in rural semi-urban areas which don't enjoyadequate coverage of power Solar Study Lamps (SoUL) for distribution of solar study lampsto school going children and also has developed Super-Efficient Air Conditioning Programmefor providing super-efficient air conditioners to customers at affordable prices. EESL hasbeen awarded as "Best Company (Public Sector) Award" by the Forbes IndiaLeadership Awards (FILA) 2018. The performance of EESL during the year has improved andits financial performance is on the growth path. Based on provisional financials of EESLfor financial year 2019-20 its turnover for the year was Rs 1934.07 crore (standalone).Further the Profit Before Tax and Profit After Tax for the financial year 2019-20 were Rs27.22 crore and Rs 44.92 crore respectively.


Pursuant to Section 129 of the Companies Act 2013 & Rules made thereunder andIndian Accounting Standards the Company has prepared the Consolidated Ind-AS FinancialStatements 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) whichshall also be laid before the ensuing 51st Annual General Meeting along with theStandalone Financial Statements of the Company. Pursuant to Section 129(3) of the Act astatement containing the salient features of the financial statements ofSubsidiaries/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 thewholly owned subsidiary viz. REC Transmission Projects Company Limited (RECTPCL) as itswholly owned subsidiaries are not consolidated with the financial statements of REC. TheAudited Ind-AS Financial Statements including the Consolidated Ind-AS Financial Statementsand Audited Accounts of Subsidiaries of the Company are available on the website of theCompany i.e. Further these documents will be kept for inspectionthrough electronic mode by any member or trustee of the holder of any debentures. TheCompany will also make available copy thereof through e-mail upon specific request by anymember of the Company interested in obtaining the same.


Being a Government Company the power of appointment of Directors on the Board of theCompany 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 fixedas per extant Guidelines issued by the Department of Public Enterprises (DPE) from timeto time. Further the Part-time Non-official Independent Directors are paid sitting feesas decided by the Board of Directors from time to time (within the limits prescribed underthe Companies Act 2013) for attending the meetings of Board and Committees thereof. Asper the norms of Government of India the Government Nominee Director is not entitled toreceive any remuneration/sitting fee from the Company. The details of remuneration/sittingfees paid to Directors are given in 'Report on Corporate Governance' annexed to thisReport.

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

In terms of Clause 5.1 of the Share Purchase Agreement entered by the President ofIndia acting through the Ministry of Power Government of India with Power FinanceCorporation 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 appointedas 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) datedSeptember 2 2019 had appointed Shri Mritunjay Kumar Narayan (DIN 03426753) JointSecretary Ministry of Power as Government Nominee Director on the Board of the Companywith immediate effect and until further orders vice Dr. Arun Kumar Verma JointSecretary who was earlier nominated on the Board of REC vide the Ministry's Office OrderNo. 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 hadre-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 periodof 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 132019.

The Ministry of Power vide its Order No. 46/2/2010-RE (Vol.-II) (Part IV) datedFebruary 8 2017 had appointed Smt. Asha Swarup (DIN 00090902) as Part-time Non-officialIndependent Director on the Board of the Company for a period of three years. The saidtenure of three years got completed on February 7 2020 and accordingly Smt. Asha Swarupceased 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 172018 had appointed Dr. B.K. Karad (DIN 00998839) as Part-time Non-official IndependentDirector on the Board of the Company for a period of three years. However Dr. Karadresigned from the Board of REC on March 11 2020 owing to personal reasons. Further interm of Clause 7B of Schedule III (Part-A) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Dr. Karad confirmed that there are no material reasonsfor tendering his resignation before the conclusion of tenure other than the reasonsmentioned in resignation letter.

Due to the cessation of office of Independent Directors of the Company including WomanIndependent Director as stated above the composition of the Board was not in conformitywith the provisions of the Companies Act 2013 SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and DPE Guidelines on Corporate Governance for CPSEs 2010for part of the year. The Company has already requested the Ministry of Power Governmentof India i.e. the appointing authority to expedite the appointment of the requisitenumber of Independent Directors including Woman Independent Director on the Board of theCompany 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) wasextended upto May 31 2020 i.e. the date of his superannuation. Subsequently ShriAgarwal superannuated from the services of the Company on May 31 2020 and ceased to be aDirector of REC w.e.f. June 1 2020.

Further the Ministry of Power vide Order no. 46/9/2011-RE [228164] dated April 212020 has appointed Shri Ajoy Choudhury (DIN 06629871) as Director (Finance) of theCompany w.e.f. June 12020 till the date of his superannuation i.e. January 31 2024 oruntil further orders. Shri Ajoy Choudhury was formerly Executive Director (Finance) in theCompany.

Further the Ministry of Power vide Order No. 46/2/2019-RE (247264) dated June 12 2020read with Order of even no. dated July 21 2020 has assigned the additional charge ofChairman & Managing Director of the Company to Shri Sanjeev Kumar Gupta (DIN03464342) Director (Technical) for a period of three months with effect from June 12020 or till the appoinment of a regular incumbent or until further orders whichever isthe earliest. Pursuant to the same Shri Sanjeev Kumar Gupta has taken over the additionalcharge of Chairman & Managing Director of the Company.

The Company Secretary & Compliance Officer of the Company is Shri J.S. AmitabhExecutive Director & Company Secretary.

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

The Board places on record its deep appreciation for the valuable services rendered byShri Ajeet Kumar Agarwal Dr. Arun Kumar Verma Shri A. Krishna Kumar Prof. T.T. RamMohan 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 theArticles 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 andbeing eligible offers himself for re-appointment. The Board of Directors recommends hisre-appointment till the completion of his tenure as Director in REC. His brief resume isannexed to the Notice of the AGM.


As per the statutory provisions a listed company is required to disclose in itsBoard's Report a statement indicating the manner in which formal annual evaluation of theperformance of the Board its Committees and individual Directors has been made and thecriteria for performance evaluation of its Independent Directors as laid down by theNomination and Remuneration Committee. However Ministry of Corporate Affairs vide itsnotification dated June 5 2015 has inter-alia exempted Government Companies from theabove requirement in case the Directors are evaluated by the Ministry or Department ofthe Central Government which is administratively in charge of the Company as per its ownevaluation methodology. Further MCA vide Notification dated July 5 2017 also prescribedthat the provisions relating to review of performance of Independent Directors andevaluation mechanism prescribed in Schedule IV of the Companies Act 2013 is notapplicable to Government Companies.

Accordingly being a Government company REC is exempted in terms of the abovenotifications as the evaluation of performance of all members of the Board of the Companyis being done by the Administrative Ministry i.e. the Ministry of Power and theDepartment 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 PublicEnterprises (DPE) / Administrative Ministry as per their internal guidelines. Furtheryour Company also enters into Memorandum of Understanding (MoU) with its holding companyunder the framework prescribed in MoU Guidelines issued by DPE demarcating keyperformance parameters for the Company finalized in consultation with the Ministry ofPower Government of India; and the performance of the Company is evaluated vis-a-vis theMoU parameters.


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 theapplicable Accounting Standards have been followed and no material departures have beenmade from the same;

(ii) such accounting policies have been selected and applied consistently (except forthe adoption of newly effective Indian Accounting Standards as disclosed in the Notes toAccounts to the Financial Statements) and judgments and estimates made that are reasonableand prudent so as to give a true and fair view of the state of affairs of the Company atthe 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 accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets 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 suchinternal financial controls were adequate and operating effectively; and

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


The performance of the Company in terms of the Memorandum of Understanding (MoU) signedwith the Ministry of Power Government of India for the financial year 2018-19 has beenrated as "Excellent". During the financial year 2019-20 REC received variousprestigious awards and recognitions including "ICAI Award for Excellence inFinancial Reporting for FY 2018-19" from the Institute of Chartered Accountants ofIndia in the 'Public Sector Entities' category; and "PSE Excellence Award 2018' forexcellence in Corporate Governance by the Indian Chamber of Commerce (ICC) as runner upin the Navratna & Maharatna category. Further REC received three awards in the SCOPECorporate Communication Excellence Awards 2019 namely first prize for "Best HouseJournal (English)" second prize for "Best CorporateCommunications-Internal" and third prize for "Effective use of DigitalMedia". REC was also presented the "Swachh Bharat Puraskar" by the Ministryof Jal Shakti Government of India.


The Companies Act 2013 permits companies to send documents like Notice of AnnualGeneral Meeting Annual Report and other documents through electronic means to its membersat their registered email addresses. As a responsible Corporate Citizen the Company hasactively supported the implementation of 'Green Initiative' of the Ministry of CorporateAffairs (MCA) and effected electronic delivery of Notices and Annual Reports toshareholders 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 theCompanies (Management and Administration) Rules 2014 the Company is providing e-votingfacility to all members to enable them to cast their votes electronically in respect ofresolutions set forth in the Notice of Annual General Meeting (AGM). The Company will alsobe conducting the AGM this year through Video Conferencing / Other Audio Visual Means.Members can refer to the detailed instructions for e-voting and electronic participationin the AGM as provided in the Notice of the AGM.

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


REC conducted various programmes under the "Swachhta Pakhwada - 2019"organized during May 16 2019 to May 31 2019. Banners and posters were fixed in andaround office premises to spread awareness among employees and general public. Allofficers of the Company took the Swachhta pledge and special cleanliness drive wasundertaken in all office locations. REC also organized drawing competitions at itsChennai Kolkata and Thiruvanthapuram offices; and a Swachhta Talk and debate on "KyaSwachhta Abhiyan Ne Jan Aandolan Ka Roop Le Liya Hai" at its Corporate Office. NukkadNataks were also organized to create awareness in slum areas of Delhi & NCR. Allemployees of REC participated with great enthusiasm and zeal in these programmes. FurtherREC also completed construction of a 5-seated Toilet Complex during the year atBaraichcha Bir Dham District Jaunpur (Uttar Pradesh) adopted by REC under the SwachhTirthsthalAbhiyan.

Swachhta hi Seva

During September 11 2019 to October 2 2019 REC also observed a three week programmeSwachhta Hi Seva to create awareness about harmful effect of single use plastic in dailylife. Drawing competitions and lectures were organized in 30 schools for creatingawareness among students and staff about harmful effects of plastic waste and single useplastic. Around 10000 jute bags were also distributed among students and officials toencourage them to stop using single use plastic.

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


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

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


The Guidelines for MSMEs as defined in the purchase procedure are being followed inthe Company. As an endeavor to foster the Government's ambitious initiatives for thepromotion of MSME sector and in order to surpass the prescribed public procurement normsrevised 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 toallow price preference upto 50% to MSEs out of which 20% is reserved for SC/ST and womenentrepreneurs. 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 andSamadhan portals; and all Regional Offices / Sub-offices / Subsidiaries / Training Centre(RECIPMT) of the Company are effectively using the same. During the financial year therehas not been any non-payment complaint and/or any grievance by MSME vendors/suppliersagainst REC on the Government of India's MSME Samadhan portal. REC got itself registeredon TReDS and is poised to let its presence felt on this ambitious forum for BillDiscounting by MSME Vendors. Moreover REC has recently made it compulsory for all itsPan-India offices to have 100% procurement of common goods & services through GeMportal. Further in order to make this endeavor successful REC also conducted acomprehensive GeM procurement training program having specially featured sessions fromfaculty from GeM with hands on training. The same was overwhelmingly attended and wellappreciated by all the participants.

Being a non-banking financial institution REC is not into execution of projects. TheCompany's procurement needs are mainly office equipment like computers printersconsumable stationery and other miscellaneous items and services etc. which are mostlybought from MSME vendors. During the financial year 2019-20 procurment amounting to Rs3.14 crore were made from MSEs. During the financial year 2019-20 REC not only achievedbut exceeded the achievement of its MoU targets set by the Government of India forprocurement from MSMEs including from women entrepreneurs. REC's Public ProcurementPolicy for MSMEs is included in all the tenders hosted on the website of the Company andon the CPPP portal. The same is also being critically examined and monitored regularly onquarterly 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 andfound that all procurement activities are in order.


In line with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 an 'Internal Complaints Committee' has beenconstituted in the Company for redressal of complaint(s) against sexual harassment ofwomen employees. The Committee is headed by a senior woman official of the Company andincludes representative from an NGO as one of its members. Anti-sexual harassment stanceof 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 sexualharassment.


The Annual Return of REC for FY 2018-19 is available on the link and the Extract of Annual Return of REC for FY2019-20 is available on the link return-fy-19-20.pdf.


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


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 (FirmRegistration No.: 000018N/N500091) were appointed as Statutory Auditors of your Companyfor the financial year 2019-20 by the Comptroller & Auditor General (C&AG) ofIndia. The Statutory Auditors have audited the Financial Statements of the Company for thefinancial year ended March 31 2020.

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

Secretarial Auditors

M/s Chandrasekaran Associates Practicing Company Secretaries (Certificate of PracticeNo.715) New Delhi were appointed as Secretarial Auditors for carrying out SecretarialAudit of the Company for the financial year 2019-20. In terms of Section 204 of theCompanies Act 2013 and Rules made thereunder they have issued Secretarial Audit Reportfor 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 financialstatements of the Company for financial year 2019-20 and have given their report withoutany qualification reservation adverse remark or disclaimer. The Auditors' Report(s) areannexed with this Annual Report.

The Secretarial Auditors of the Company have given an unqualified report for thefinancial year 2019-20. However they have certain observations relating to composition ofthe Board and its Committees. The Management's Reply to the observations of theSecretarial 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.


The Comptroller & Auditor General (C&AG) of India vide letter dated August 62020 has given 'Nil' Comments on the Audited Financial Statements of the Company for theyear ended March 31 2020 under Section 143(6)(a) of the Companies Act 2013. The Commentsof C&AG for the financial year 2019-20 have been placed along with the report ofStatutory Auditors of the Company in this Annual Report.


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


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

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

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

d) The Company maintains an adequate system of Internal Control including suitablemonitoring procedures to ensure accurate and timely financial reporting of varioustransactions efficiency of operations and compliance with statutory laws regulations andCompany policies. For details please refer to the 'Management Discussion and AnalysisReport' 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 BlowerPolicy and web-links for familiarization/training policy of Directors Policy onMateriality of Related Party Transactions and Dealing with Related Party TransactionsPolicy for determining Material Subsidiaries Compensation to Key Managerial PersonnelSitting fees to Independent Directors and IEPF etc. have been provided in the 'Report onCorporate Governance' prepared in compliance with the provisions of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 as amended from time totime which forms part of this Annual Report.

f) Pursuant to Section 186(11) of the Companies Act 2013 loans made guarantees givenor securities provided by a company engaged in the business of financing of companies orof providing infrastructural facilities in the ordinary course of its business are notapplicable to the Company hence no disclosure is required to be made. Further thedetails of investments are given at Note No. 10 of the Notes to Accounts of the StandaloneFinancial Statements.

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

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

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

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

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

l) During the year under review the statutory auditors / secretarial auditors have notreported to the Audit Committee any instances of fraud committed against the Company byits officers or employees.

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

n) No new Independent Directors were appointed on the Board of Directors of the Companyduring 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 FinancialStatements.


In March 2020 the outbreak of COVID-19 was declared as a pandemic by the World HealthOrganization. The pandemic has caused a significant decline and volatility in the globalfinancial markets and also in economic activities in India. Your Company is closelywatching the situation and taking prompt actions for continuity of business operations inan optimized manner. Pursuant to the notifications issued by the RBI REC has put in placea 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 additionalinterest/ further interest/ charges wherever applicable). Further under the 'AtmanirbharBharat' package of the Government of India REC has disbursed Special Long-Term TransitionLoans to DISCOMs for making payment to generators as they were facing severe cash crunchowing to the pandemic. These loans provided much needed relief to the power sector byinjecting liquidity.


The construction of REC's state-of-the-art office building at City Centre Sector-29Gurugram is being executed in full swing. The design of the proposed building is conceivedby architect M/s CWA (selected through Global Design Architectural Competition) toachieve GRIHA 5 Star rated Net Positive building having special features like fair finishwhite concrete surfaces raised flooring radiant cooling for slabs to reduce powerconsumption of air conditioning IBMS automated sensor controlled lighting bio-climaticglass fagade with motorized blinds Solar PV plant at rooftop pergola structureauditorium 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 forexecution of the project are JMC Project (India) Limited Artizen Interiors Hi-Tech AudioSystem Private Limited Hannu Marketing Private Limited and Wohr Parking Systems PrivateLimited besides 6 consultants/sub consultants working on the project. Giving utmostimportance to the project REC has appointed Indian Institute of Technology Delhi forvetting of the structural design of the building.

Till March 2020 RCC structure glass fagade envelop (except auditorium) and externalperipheral road within the premises was completed; and interior finishes balance exteriordevelopment works etc. were progressing in full swing. The project is at an advanced stageof 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 byGRIHA Council Green Rating for Integrated Habitat Assessment for (i) Passive ArchitectureDesign during 8th GRIHA Summit (ii) Integrated Water Management and (iii) EnergyManagement during the 9th GRIHA Summit which will further help REC's project inachieving GRIHA 5 Star rating.


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


Information required to be furnished as per the Companies Act 2013 SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 DPE Guidelines on CorporateGovernance for CPSEs 2010 and other applicable statutory provisions is annexed to thisreport 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


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

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

The Directors also place on record their sincere appreciation for the support andgoodwill of the esteemed shareholders investors in REC Bonds domestic and overseasBanks Life Insurance Corporation of India KfW of Germany and JICA of Japan in the fundraising programmes of the Company.

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

Lastly the Directors sincerely appreciate and thank all employees of the Company fortheir continued and dedicated efforts towards progress of the Company into yet anotheryear 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 312020