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REC Ltd.

BSE: 532955 | NSE: RECLTD |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE020B01018 | SECTOR: Finance - Term Lending Institutions

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Annual Report

For Year :
2019 2018 2017 2016 2015 2014 2013 2012 2011

Director’s Report


The Shareholders,

The Directors have pleasure in presenting the Forty Ninth Annual Report together with the Audited Financial Statements of your Company for the financial year ended March 31, 2018.


1.1 The highlights of performance of the Company for the financial year 2017-18 were as under with comparative position of previous year’s performance:

                                                                                                           ( crore)


FY 2017-18

FY 2016-17

Loans Sanctioned






Subsidy under DDUGJY (including DDG) & Saubhagya



Total Recoveries (including interest)



Total Operating Income



Profit Before Tax



Profit After Tax



1.2    Financial Performance

The total operating income of your Company for the financial year 2017-18 was Rs.22,358.27 crore as compared to Rs.23,587.30 crore during the financial year 2016-17. The profit after tax for financial year 2017-18 was Rs.4,647 crore as compared to Rs.6,245.76 crore for the financial year 2016-17.

Gross Loan asset book of your Company as on March 31, 2018 was Rs.2,39,449.34 crore as compared to Rs.2,01,928.67 crore in the previous year. The outstanding borrowings as on March 31, 2018 was Rs.1,98,791.51 crore.

Earnings Per Share (EPS) for the financial year ended March 31, 2018 was Rs.23.53 per share of Rs.10/- each. Net worth of the Company as on March 31, 2018 has increased by 6% to Rs.35,491 crore from Rs.33,326 crore.

1.3    Dividend

The Board of Directors of your Company has recommended final dividend of Rs.1.75 per share for the financial year 2017-18, which is subject to approval of the Shareholders in the 49th Annual General Meeting. This is in addition to the interim dividend of Rs.7.40 per share for the financial year 2017-18, paid in February, 2018. The total dividend for the financial year 2017-18 will work out to Rs.9.15 per equity share, representing 91.50% of the paid-up share capital of the Company as against Rs.9.65 per share, representing 96.50% of the paid-up share capital of the Company in the previous year. The total dividend pay-out for the financial year 2017-18 will amount to Rs.1,807.05 crore (excluding dividend distribution tax).

1.4    Share Capital

As on March 31, 2018, the Authorized Share Capital of the Company was Rs.5,000 crore consisting of 500 crore equity shares of Rs.10/- each and the issued & paid up share capital of the Company was Rs.1,974.92 crore consisting of 197,49,18,000 equity shares of Rs.10/- each.

The President of India acting through Ministry of Power, Government of India divested/sold 1,08,25,689 equity shares i.e. 0.54%    of total paid up capital of the Company on November 23, 2017 through off market sale of shares under ‘Bharat 22 Exchange Traded Fund’. Accordingly, as on March 31, 2018, the President of India held 1,15,16,78,783 equity shares 1.e.    58.32% of the paid up equity share capital of the Company.

Further, during the financial year 2018-19, the President of India acting through Ministry of Power, Government of India divested/sold 64,73,244 equity shares i.e. 0.33% of total paid up capital of the Company on June 18, 2018 through off market sale of shares under ‘Bharat 22 Exchange Traded Fund’. Accordingly, as on date, the President of India holds 1,14,52,05,539 equity shares i.e. 57.99% of the paid up equity share capital of the Company.

1.5 Change of Name of the Company

Considering that ‘REC’has become a brand name and is recognized by public at large in India & abroad and to correctly display the remarkable presence of your Company in financing all segments of Indian Power Sector viz. generation, transmission, distribution, renewable energy, etc. and to remove the myth that the Company is mainly into the business of rural electrification, the Board of Directors of the Company in its meeting held on May 28, 2018, had proposed change of the name of the Company from “Rural Electrification Corporation Limited” to “REC Limited”, subject to the approval of shareholders and other approvals as may be required.

Further, Ministry of Power, Government of India vide letter dated August 9, 2018, has accorded approval for change of name of the Company to “REC Limited”.


The Company sanctioned loans worth Rs.1,07,534.05 crore during the financial year 2017-18, as against Rs.83,870.82 crore in the previous year. The state-wise and category-wise break-up of loans sanctioned during the financial year are given in Table-1 and Table-2, respectively. The cumulative sanctions upto March 31, 2018 made by your Company since its inception was Rs.8,72,884.10 crore, as detailed in Table-3.


A total sum of Rs.61,712.47 crore was disbursed during the financial year 2017-18 as against Rs.58,038.61 crore in the previous year. In addition to that, grant/subsidy of Rs.10,568.72 crore {Rs.9,028.09 crore (including Rs.262.60 crore under DDG) under DDUGJY and Rs.1,540.63 crore under Saubhagya scheme} provided by Government of India, was disbursed to the States/ Implementing Agencies. The cumulative amount disbursed since inception up to March 31, 2018 was Rs.4,49,289.49 crore excluding subsidy under Government programmes. The state-wise disbursements and repayment of loan by borrowers during the financial year 2017-18 together with cumulative figures and outstanding as on March 31, 2018 are given in Table-4.


4.1    The Company gives utmost priority to the timely realization of its dues towards principal, interest, etc. The amount due for recovery including interest for performing assets during the financial year 2017-18 was Rs.46,236 crore as compared to Rs.46,298 crore during the previous year. The Company recovered a total sum of Rs.45,566 crore towards performing assets during the financial year 2017-18 as against Rs.45,169 crore during the previous year. The Company achieved recovery rate of 98.55% for the financial year 2017-18. The overdues from defaulting borrowers pertaining to performing assets as on March 31, 2018 was Rs.1,762 crore. Further, an amount of Rs.785.13 crore has been recovered from non-performing assets during financial year 2017-18 as against Rs.1,578 crore recovered during financial year 2016-17.

4.2    During the year under review, RBI vide its circular dated February 12, 2018 has notified Revised Framework for Resolution of Stressed Assets, which per se was not applicable to REC, being an NBFC. However, as a matter of prudence, loans amounting to Rs.9,591 crore have been classified as Non-performing Assets (NPAs) during the year, in line with the above circular.

Accordingly, as on March 31, 2018, the Gross NPAs were Rs.17,128 crore (7.15% of Loan Assets) and the Net NPAs were Rs.13,612 crore (5.68% of Loan Assets). However, the Gross NPAs were Rs.7,537 crore (3.14% of Loan Assets) and the Net NPAs were Rs.4,980 crore (2.07% of Loan Assets), without considering the impact of the above RBI circular. Further, no doubtful loans have been rescheduled by the Company, during the financial year 2017-18.

The details of loans rescheduled during the financial year 2017-18 and their position as on March 31, 2018, are as under:

                                                                                       ( crore)


FY 2017-18

FY 2016-17

Standard Loans

No. of Borrowers




Amount Outstanding



Sub-Standard Loans

No. of Borrowers




Amount Outstanding




No. of Borrowers




Amount Outstanding




5.1 Summary of Financial Results

The summary of audited financial results of the Company for the financial year 2017-18 vis-a-vis 2016-17 is given as under:

                                                                                                                                                ( crore)




FY 2017-18

FY 2016-17

FY 2017-18

FY 2016-17

Revenue from Operations





Other Income





Total Income





Finance Costs





Other Operating Expenses





Provisions and Contingencies





Total Expenses





Profit Before Tax





Provision for Taxation





Profit After Tax





Add: Opening Balance of Surplus account





Less: Adjustment of MTM in respect of Interest Rate Swaps





Add: Other Adjustments during the year





Amount available for appropriation





Less : Appropriations


Transfer to Special Reserve u/s 36(1)(viii) of the Income Tax Act, 1961





Transfer to Reserve for Bad & Doubtful Debts u/s 36(1)(viia) of the Income Tax Act, 1961










Dividend Distribution Tax





Transfer to Debenture Redemption Reserve





Transfer to General Reserve





Surplus carried over to Balance Sheet





The figures of dividend and dividend distribution tax does not include the respective amounts pertaining to Final Dividend for the financial year 2017-18 (as detailed in para 1.3 above) considering that the Company is not required to make any provision in this regard in terms of Revised Accounting Standard 4.

5.2 Contribution to National Exchequer

During the financial year 2017-18, your Company contributed an amount of Rs.3,764.93 crore as compared to Rs.4,097.79 crore in the previous year to National Exchequer in the form of payment of Dividend to the Government of India against its shareholding in the Company, Dividend Distribution Tax, Direct Taxes, IGST & CGST and Service Tax paid including CENVAT credit, as detailed below:

                                                                                       ( crore)


FY 2017-18

FY 2016-17

Dividend paid to the Government of India



Dividend Distribution Tax



Direct Taxes






Service Tax paid including CENVAT credit






5.3 Ratio Analysis

A comparative statement of important ratios of the Company for the financial year 2017-18 vis-a-vis 2016-17 is as below:


FY 2017-18

FY 2016-17

Earnings Per Share (Rs.)



Return on Average Net Worth (%)



Book Value per Share (Rs.)



Debt Equity Ratio (times)



Price Earnings Ratio (times)*



Interest Coverage Ratio (times)



*PE Ratio has been calculated on the basis of Closing Price of equity share of REC at NSE as on March 28, 2018 & March 31, 2017, respectively.

5.4 Resource Mobilization

The Company mobilized Rs.51,164.89 crore from the market during the financial year 2017-18. This comprised of Rs.9,565.50 crore (includes Rs.1,469.23 crore towards Bonds Application money) by way of Capital Gain Tax Exemption Bonds and Rs.26,145 crore by way of Institutional Bonds. The Company also mobilized funds of Rs.15,454.39 crore equivalent to USD 2,293.37 million [USD 1,807.50 million from external commercial borrowing and USD 485.87 million from FCNR(B)] during the financial year 2017-18. Further, in addition to above, an amount of Rs.12,114.85 crore was also raised through Commercial Paper.

Further, for meeting Government of India’s funding requirement of DDUGJY Scheme, the Company, during the year, has also raised an aggregate amount of Rs.4,000 crore through Institutional Bonds on private placement basis. The repayment of principal and interest of these bonds shall be made by Government of India by making suitable budget provisions in the demand of Ministry of Power.

Disclosure of Green Bonds issued by REC

During the financial year 2017-18, REC became the first PSU to raise USD 450 million Green Bond for a tenor of ten years which witnessed a phenomenal response from investors across Asia and Europe with oversubscription of 6.7 times ($3.01 Billion offer for a book of $450 Million). These bonds are a step towards realization of the Hon’ble Prime Minister’s vision of harnessing green energy’s enormous potential in the country and to achieve the targeted capacity of 175 GW by 2022. The Green Bonds are listed on the International Securities Market (ISM) segment of London Stock Exchange and also on Singapore Stock Exchange.

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

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

REC has created a ‘Green Portfolio’which was managed through a well laid internal tracking system, updated on regular basis, to monitor, establish and account for the allocation of the proceeds for such Green Portfolio.

Management of Proceeds: Pending the full allocation to Eligible Green Projects, balance of the proceeds during intervening period were invested in instruments permitted as per the Green Bond Framework. The net proceeds from the Bonds amounting to Rs.2,894 crore were allocated against the following projects as on March 31, 2018:

                                                                                                                                                             ( crore)

Sl. No.


Capacity (in MW)

Loan sanction date

Loan sanction Amount

Outstanding Amount on March 31, 2018







September 9, 2016






September 9, 2016




Karimnagar, Telangana


November 11, 2016




Chitradurga, Karnataka


January 27, 2016






Warangal, Telangana


November 11, 2016




Andhra Pradesh


February 24, 2016




Karimnagar, Telangana


November 11, 2016




Anantpur, Andhra Pradesh


February 9, 2015






September 21, 2016




Kadapa, Andhra Pradesh


April 12, 2017




Randa Reddy, Telangana


January 27, 2016






September 22, 2016




Medak, Telangana


November 26, 2015




Nizamabad, Telangana


November 11, 2016




Andhra Pradesh


February 24, 2016




Kadapa, Andhra Pradesh


April 12, 2017




Karimnagar, Telangana


November 11, 2016




Nirudanagar, Tamil Nadu


July 14, 2015




Chitradurga, Karnataka


April 17, 2017




Kadapa, Andhra Pradesh


April 12, 2017




Mansa and Sangrur, Punjab


May 21, 2016










Sangli, Maharashtra


February 24, 2015




Mandasaur, Madhya Pradesh


January 28, 2016




Tirpur, Tamil Nadu


June 6, 2012








Renewable Energy Obligation (RPO)




July 24, 2017






September 21, 2017














Cash Credit Facilities

The Company has an approved cash credit/WCDL/OD limit of Rs.9,590 crore for availment from various banks for its day-to-day operations.

5.5 Domestic and International Credit Rating Domestic

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


REC enjoys international credit rating of “Baa3” and “BBB-” respectively from Moody’s and FITCH, International Credit Rating Agencies.

5.6    Cost of Borrowing

The overall weighted average annualized interest rate of borrowing for the funds raised during the financial year 2017-18 was 6.17% p.a. and for the borrowings outstanding as on March 31, 2018 is 7.53% p.a. As a result, your Company was able to deliver debt financing at competitive rates.

5.7    Redemption and Pre-Payment

During the year, the Company repaid a sum of Rs.23,210.86 crore. This includes repayment amounting to Rs.10,813 crore to Institutional bondholders, Rs.5,337.78 crore worth of Capital Gain Tax Exemption Bonds, Rs.1.175 crore towards Infrastructure Bonds, Rs.6,720.78 crore of external commercial borrowings and Rs.338.12 crore of Official Development Assistance (ODA) loan. The Company has also redeemed long term loan of Rs.350 crore and Commercial Papers of Rs.9,100 crore.

5.8    Financial status at the close of the year

At the close of the financial year 2017-18, the total resources of your Company stood at Rs.2,46,484.46 crore. Out of this, Equity Share Capital contributed Rs.1,974.92 crore, Reserves and Surplus stood at Rs.33,515.59 crore, Loans from Financial Institutions, Commercial Banks and market borrowings through Bonds and Commercial Papers accounted for Rs.1,98,791.51 crore, Deferred Tax Liabilities of Rs.66.96 crore and other liabilities & provisions stood at Rs.12,135.48 crore. These funds were deployed as Long / Short Term Loans of Rs.2,35,933.05 crore (net of provisions of Rs.3,516.27 crore) fixed assets (net of depreciation) of Rs.247.88 crore (including Capital Work in progress), Investments of Rs.2,574.80 crore, Cash & Bank Balances of Rs.1,773.53 crore (includes Rs.1,469.23 crore towards Bonds Application money) and other assets of Rs.5,955.20 crore.

5.9    Policy Initiatives

The Company constantly reviews its policies/ procedures from time to time, to suitably align with market requirements and also with its corporate objectives and applicable statutory requirements. During the year, your Company has adopted / amended various policies and guidelines, such as policy for advancing Short Term Loans to private sector borrowers; updation of Appraisal Guidelines in respect of Private Sector Conventional & Renewable projects; rationalization of Post-COD interest rate and modification of interest rate reset period for Renewable Energy projects; Comprehensive Risk Management Policy along with project and other risk categorization frameworks; REC policy for investment of Short Term Surplus funds; Succession Planning for key positions; Modification of REC Long Term Investment Policy; New Grading Model and Exposure Norms for State Power Utilities; etc. The new/modified guidelines shall make the Company more competitive and provide a thrust for the business.

Despite growing competition in the market, the Company has been able to maintain healthy spreads, balancing its objectives of business growth and profitability during the year.


Transmission and Distribution (T&D) industry is poised at the cusp keeping in view the ongoing policy initiatives to make the sector reliable, healthy, affordable and capable of absorbing the envisaged future growth vis-a -vis capacity addition and reaching the last mile across the Country. The Policy framework has been able to increase the resolve of State Governments to provide reliable power supply to consumers and integration of upcoming Renewable Energy Sources with the Electricity grid.

The installed generation capacity of Central, State as well as Private utilities of the country is now a high of 344 GW, as on March 31, 2018, as per Central Electricity Authority. Further, enormous capacities are planned to be added through renewable sources of energy, with the ambitious goal of 175 GW by 2022. This itself seems fraught with many risks emanating from increasingly lower tariffs from each subsequent bidding, low cost financing tie-ups etc. However, the setting up of dedicated Solar Parks along with making available all major clearances like land, transmission connectivity, raising the Limit of Renewable Purchase Obligation (RPO) etc. by the respective Central / State Government agencies has mitigated these risks to a great extent. The above shall pose requirement for planning in line with upcoming renewable energy capacity developments and creation of infrastructure to ensure system availability with relatively shorter gestation period. Accordingly, dedicated Green Transmission Corridors are being planned along with strengthening / augmenting the transmission system to take care of such supply / loading pattern.

Transmission & Distribution system basically consists of Transmission lines (inter-state and intra-state), Sub-stations, Switching Stations, Transformers and Distribution lines etc. at various voltage levels. Distribution is the weakest but central part of the entire power value chain and most difficult to deal with due to various reasons. As the only interface between utilities and consumers, it is the cash register for the entire sector. Therefore, the ever-increasing demand for affordable, reliable and quality power by various classes of consumers makes Distribution Sector all the more challenging task to manage. Proper planning for further transmission and distribution system development in this light and that the energy from different sources, some of which may have a largely intermittent nature viz. energy from Renewable Sources - Solar, Wind, Tidal and biomass etc. has become even more pertinent.

Further, providing unconstrained inter-regional power transfer, open access availability and maintaining the grid discipline reliably are the primary requirements. The task of regulating and reliably maintaining it is taken care of by five RLDCs ; facilities.

As a part of Government of India plan to connect 2,50,000 Gram Panchayats (GP) in the country, BharatNet project has been taken up with the task of development and maintenance of the National Optical Fibre Network in States, namely Andhra Pradesh, Telangana, Himachal Pradesh, Jharkhand and Odisha.

Accordingly, the TRANSCOs and DISCOMs need to create the infrastructure and enhance their capital expenditure during forthcoming years to be able to provide reliable, robust & efficient system for transfer of power from generation facilities to sub-stations and up to the consumer end.

Smart technology interventions have been taken up for making the System sturdier such as implementing Synchrophasor Technology in its Wide Area Measurement System (WAMS) Project through installation of PMUs (Phasor Measurement Units) at different locations in all regions across the country for facilitating better visualization and situational awareness of the grid events such as grid robustness, oscillations, angle/voltage instability, system margin as well as decision support tools. The ultimate aim is to build a robust integrated grid network that will allow large transfers of power from one part of the country to another.

Your Company has always strived to play an active role in creation of new infrastructure and augmentation/strengthening of the existing network. Your Company encourages the DISCOMs to expedite various reform measures and to adopt best practices including modernization and automation of systems/smart grid, IT-enabled systems for metering and consumer services, other technology interventions in the distribution sector & helps them in improving their operational and financial performance. Since distribution is gateway for all the revenue coming into the power sector, it plays a pivotal role in development and sustainability of the power sector and overall development of the country.

Distribution sector today faces major challenges like high level of accumulated losses & depleted net worth. The two together have affected the financial health of the DISCOMs adversely over the years. High AT&C losses, limited capability to implement capital expenditure plans, delay in tariff order resulting in creation of regulatory assets, carrying cost of these regulatory assets, lack of tariff rationalisation leading to cross subsidy, open access issues, delay in release of subsidy by State Government, delayed revenue collection cycle, etc. have caused a dent in their cash flows. The overall performance of the State Distribution Utilities has been an issue of concern due to the above factors. In the environment where Utilities are facing difficulty to keep themselves afloat and meet the consumer expectations at the same time, your Company today finances entire gamut of Distribution Projects broadly with the objectives of System Improvement & Augmentation, loss reduction measures, IT-enabling, consumer satisfaction etc. Your Company is always ready to consider special dispensation/ requirements of DISCOMs based on the prudence/merit and sound appraisal mechanism. A dedicated Strategic Business Group has been set up in the Company for this purpose.

Your Company is playing a pivotal role in partnering with Ministry of Power, Government of India in all major initiatives and is committed to improve & turn around the Power Distribution sector in the country by its involvement in programmes like DDUGJY & SAUBHAGYA, NEF and other programmes viz. IPDS, Ujwal DISCOM Assurance Yojana, Financial Restructuring Plan (FRP), Smart Grid Task Force, etc. Your Company, in light of all these major interventions is optimistic that overall Distribution scenario would improve and turnaround in times to come when the impact and outcomes of the above programmes in conjunction with the reform measures taken up by the respective States start trickling in and transform the entire landscape of Distribution.

Increased demand of quality power to the end consumer needs a robust Transmission and Distribution Infrastructure. Therefore, there is a requirement for huge investment in the Transmission and Distribution sector for development of new infrastructure in line with new capacity addition to meet out additional demand and augmentation works including use of IT enabled systems to develop SMART grids.

Technological advancement in mobility including hybrid vehicles, electric vehicles, charging stations with incentivized support of Central Government is also expected to open an entirely new investment opportunity in the area.

6.1 Major reforms in Distribution Sector

Government of India, from time to time, has made all efforts to ensure the overall development of the Sector by way of Electricity Act, 2003 and various other policy measures such as National Tariff Policy, National Electricity Policy, Rural Electrification Policy, etc., to provide a comprehensive framework and also the blueprint for Power Sector reforms. The Green shoots of operational and financial performance are an indication that the Distribution sector is headed in the right direction. The process of un-bundling, corporatization, instituting regulatory commission etc., has already been completed in most of the States, thus increasing their accountability and also providing more autonomy to the DISCOMs. Further, to spruce up the operational efficiency, Distribution Franchisees have been engaged in particular areas by some DISCOMs on case to case basis. In the past decade, Government of India has launched programmes to extend the benefits to the ailing DISCOMs such as R-APDRP with an objective to strengthen the infrastructure and to reduce the losses, efforts for last mile connectivity and to release service connections to BPL, R-APDRP for undertaking improvements in urban pockets and to introduce IT enabling of distribution systems and recently DDUGJY and IPDS. Moreover, Ujwal DISCOM Assurance Yojana implemented by Government of India has come as an enabler for Operational and Financial Turnaround of DISCOMs which would in long run help them improve the quality & reliability of power supply. Further, NEF - an Interest Subsidy Scheme is also under implementation with objective to promote capital investment & expedite the reform process in Distribution sector. The financial outlay of DDUGJY and IPDS should provide considerable fillip to the pace of capital investments in distribution sector and strengthen the distribution backbone for absorbing the future growth pattern of electricity consumption both in rural and urban areas without putting additional strain on already stressed balance sheets of DISCOMs. REC is the Nodal Agency for implementation of DDUGJY & NEF scheme and is playing a key role in assisting the efforts of Government of India in implementation of UDAY also.

REC has been providing counterpart funding for a large number of R-APDRP projects which aim to reduce the Aggregate Technical and Commercial (AT&C) losses considerably in urban areas. Also, REC supports the funding requirement of the loan component under DDUGJY and IPDS programmes.

‘Power for All’document signed by all States reflects the commitment across length and breadth of the country to work towards achieving the very objective, which seemed impossible until recently. PFA document has enabled having projections of all the capital expenditure required by respective States in order to achieve 24x7 power for all, including the Generation (Conventional / Non-Conventional), Transmission, Distribution etc. and has thus brought forth the efforts required to achieve the same.

Your Company has been instrumental in development of ‘Power for All’web-portal and is engaged in assisting Ministry of Power (MoP) in this endeavor. Your Company is also supporting these efforts by partnering with respective State Utilities in terms of making available requisite financing as well as working with Central Government & State Governments to resolve issues, if any, for achievement of the objective.

MoP has devised Integrated Rating System for all the State DISCOMs in the country which facilitates realistic assessment of performance based on key defining parameters. The rating methodology enables the DISCOMs analyze their strengths & weaknesses and facilitate a focused approach for improving upon their operational and financial performance. It also aids in adoption of consistent approach by Banks/FIs while considering funding proposals of Distribution Companies.

The introduction of Information & Communication Technology (ICT) in Power Distribution sector shall enable the power system to become “SMART” & Near-real-time information would allow Utilities to manage the entire system as an integrated framework, actively sensing and responding to changes in power demand, supply, costs, quality of power, etc. MoP is also working towards ensuring technological interventions through introduction of Smart Grid and has already extended financial assistance to several pilot projects. Further, to evolve a road map for implementation of smart grids in India, MoP has constituted India Smart Grid Task Force (ISGTF), an inter-ministerial group. 14 Nos. Smart Grid Pilot Projects had been approved by MoP with 50% Government of India funding to test various functionalities in Indian environment. The objectives of these Pilot projects cover - Power Quality Management (PQM), providing Advanced Metering Infrastructure (AMI), Outage Management (OM), Peak Load Management (PLM) and also DG (Distributed Generation) & Micro Grid functionalities. Various Projects have been undertaken for installation of smart meters in different cities under the National Smart Grid Mission (NSGM). Consumers equipped with smart and updated information would be able to manage their consumption pattern according to their requirement. On the other hand, meters having feature of real time communication with the Data Centre, would add to revenue as the power used earlier as theft would not go unnoticed. Further, utilities would be able to map the individual consumers data based on important parameters viz. time of the day, quality and quantum of consumption, nature of Load, Seasonal load pattern etc. for better Demand side management. The initiative would aid in moving towards a Smarter Grid.

These projects are under various stages of implementation in the country. The Government of India is promoting development of 100 smart cities, which shall further throw new financing opportunities in further adoption of technology and best practices in the Distribution segment.

The two pronged mission of Government of India of facilitating power to all and improving operational & financial performance of the utilities have already started showing results in terms of timely notification of tariffs by Regulator in many States, filing of MYT petitions, claiming of Return on Equity in the ARR, release of revenue subsidy by State Government, etc.

6.2 Ujwal DISCOM Assurance Yojana

Financially stressed DISCOMs were incapable of supplying adequate power at affordable rates, which has for long hampered the quality of life, overall economic growth and development in the country. Efforts towards 100% village electrification and then 100% household electrification, 24x7 power supply and clean energy cannot be achieved without undertaking adequate capacity building of DISCOMs. Moreover, the issues of frequent power outages need earnest resolution for meeting national priorities like “Make in India” and “Digital India”. Unresolved legacy issues with DISCOMs have however kept them trapped in vicious cycle with operational losses being funded by debt. Outstanding debt of DISCOMs had increased from about Rs.2.4 lakh crore at the end of 2011-12 to about Rs.4.3 lakh crore in 2014-15. To ensure permanent resolution of all these long standing as well as potential future issues, the highly ambitious initiative of Ministry of Power, Government of India through Ujwal DISCOM Assurance Yojana (UDAY), launched in November 2015, is a path breaking reform for realizing the Hon’ble Prime Minister’s vision of affordable and accessible 24x7 power for all.

UDAY scheme empowers DISCOMs with the opportunity to break even in the next 2-3 years, through initiatives viz.

(i) improving operational efficiencies of DISCOMs; (ii) reduction of cost of power; (iii) reduction in interest cost of DISCOMs; and (iv) enforcing financial discipline on DISCOMs through alignment with State finances. This is another decisive step furthering the landmark strides made in the Power sector over the past two years, with the sector witnessing a series of historic improvements across the entire value chain, from improved domestic fuel supply situation, to significant growth in generation capacity, to substantial improvement in transmission capacity/reliability and consumption.

The programme has already witnessed significant traction from various State Governments/DISCOMs and 32 States/UTs are now part of UDAY fold, with 16 States (Jharkhand, Chhattisgarh, Rajasthan, Uttar Pradesh, Punjab, Bihar, Haryana, Jammu & Kashmir, Andhra Pradesh, Madhya Pradesh, Maharashtra, Himachal Pradesh, Telangana, Assam, Tamil Nadu & Meghalaya) joining for comprehensive improvement and another 11 States & 5 UTs joining for operational turnaround. UDAY scheme is showing encouraging results as liabilities of DISCOMs of Rs.2.09 Lakh crore have been taken over by respective State Governments and additionally Rs.0.24 Lakh crore have been restructured/re-priced through issuance of bonds; thus cleaning the balance sheets of DISCOMs and enabling them to restart the capital expenditure cycle while also enabling financially viable operations of all power sector stakeholders i.e. DISCOMs, TRANSCOs, GENCOs, IPPs, Banks / FIs etc.

Your Company has been instrumental in development of UDAY Web Portal ( and UDAY Mobile App, which is a key enabler in achieving the major objectives outlined under the programme. Through Web Portal / Mobile App, all the details with respect to performance of DISCOMs are readily available vis-a-vis the planned trajectory under the scheme. Accordingly, any deviations in the performance get suitably highlighted for all stakeholders, thus enabling DISCOMs to take corrective actions and others to appropriately access their condition. Also, earlier the information about performance of DISCOMs used to be very outdated and with UDAY Web Portal & Mobile App now, the performance of latest quarter is available largely within a gap of 1 to 3 months.

UDAY, by encompassing all the key initiatives required to turnaround the sector, is a programme not just for strengthening of DISCOMs, but is keenly handling most of the current as well as impending issues of the entire power sector, by providing a central platform to participating States for taking up any and all of their concerns / issues with relevant stakeholders. Further, UDAY has undertaken to resolve coal rationalization issues & efficiency improvement of conventional generation segment through NTPC handholding etc., ensuring better RPO compliance to promote non-conventional generation and loss reduction of transmission segment as well. Your Company is assisting the Government of India to liaison with respective State Governments / Utilities to enable achievement of all the objectives envisaged under the programme.

With UDAY implementation, various participating States have in general witnessed the reduction in interest costs, power purchase costs and improvement in operational efficiencies, which has led to significant reduction in their AT&C losses and ACS-ARR gap as compared to their last year performance, thus enabling huge amount of savings on this account. It is expected that in upcoming years, the results of the initiative shall become more pronounced.

6.3    National Electricity Fund

REC is Nodal Agency for National Electricity Fund (NEF) - this is an interest subsidy scheme having provision of Rs.8,466 crore (against interest subsidy) to be provided over 14 years on loan disbursements amounting to Rs.25,000 crore, for distribution schemes sanctioned during 2 financial years viz. 2012-13 and 2013-14. Ministry of Power, Government of India provide interest subsidy on loans disbursed to the State Power Utilities, Distribution Companies both in public and private sector, to improve the infrastructure in Distribution Sector. The Scheme is reform linked and interest subsidy of 3% to 7% is payable to the DISCOMs on achievement of reform based parameters outlined in NEF Guidelines. During the financial year 2012-13 & 2013-14, NEF Steering Committee has already approved projects of Rs.25,000 crore to 25 DISCOMs in 15 States for taking benefits under NEF. The utilities from the states of Andhra Pradesh, Gujarat, Haryana, Karnataka, Madhya Pradesh, Punjab, Rajasthan, Telangana, Uttarakhand and West Bengal have already benefitted from the interest subsidy of Rs.84.92 crore, approved under the scheme, till March 31, 2018.

6.4    Urja Mitra

Urja Mitra is a distribution sector initiative of Ministry of Power, Government of India, being implemented through your Company’s subsidiary i.e. RECTPCL. Urja Mitra is first of its kind application which provides a central platform (web-portal as well as mobile app) for State Power Distribution utilities to disseminate Power Outage information to urban/rural power consumers across India through SMS/email/push notifications. Power Consumers across the nation shall have prior intimation of expected duration and cause of scheduled power outages and post fault intimation of unscheduled power outages duration. It also provides a platform to view real time power outages in any part of the country, lodge a complaint on power outages etc. Stakeholder connect is ensured by providing for vernacular mobile apps, which can be used by field staff to trigger power outage information/view ongoing outages/ take corrective action on outage complaints, etc.

As on June 30, 2018, data of around 16.30 crore Rural/Urban/Mixed feeder consumers of 51 DISCOMs already linked on web portal and application live in 46 DISCOMs with consumer base of approximately 14.10 crore. Further, 53.97 crore power outage SMS were sent to the consumers by June 30, 2018.

6.5    11 kV Rural Feeder Monitoring Scheme

11kV Rural Feeder Monitoring is a distribution sector initiative of Ministry of Power, Government of India, being implemented through your Company’s subsidiary i.e. RECTPCL. To get complete picture of the entire distribution network in the country and to ensure achievement of Rs.24x7 Power for All’, it has been felt essential to capture real time supply parameters of rural India and this can be achieved by monitoring the availability/quality of power supply in rural areas of the country by capturing actual distribution parameters i.e. Power supply, outages and conducting feeder wise Energy audit and AT&C losses calculation. In order to meet this objective, Rs.11kV Rural Feeder Monitoring Scheme’has been introduced. Under the scheme, rural feeders meter data shall be acquired through modem and shall be sent to National Power Portal (NPP) to make it available for use of all stakeholders. This scheme targets to develop a self-sustained independent web based automated system for approx.

1.2 Lakh rural and agricultural feeders across the country by acquiring various essential parameters of all the outgoing 11kV rural feeders & such 66/33 kV incoming feeders from where 11kV rural feeders are emanating and making the information available online for all on public portal on real time basis, for power supply monitoring, alerts, meter data analysis, information dissemination and energy audit.

The system would help in monitoring power supply, proper planning, decision support and taking corrective actions on the business activities in addition to transparently disseminating power supply status. It would further facilitate consolidation of various parameters downloaded from the meters installed on the feeders into a common database thus enabling generation of various MIS reports for analysis and action. As on June 30, 2018, almost 53,000 Nos. of Modems in different DISCOMs have been installed. This is in addition to the already integrated 29,000 Nos. of Rural Feeders to National Power Portal.


TARANG is a transmission sector initiative for its better monitoring, being run under guidance from Ministry of Power through your company’s subsidiary i.e. RECTPCL, which has developed ‘TARANG’- Transmission App for Real-Time Monitoring & Growth. TARANG is an informative medium to provide information regarding Pan-India progress of Transmission System which can be drilled down to month wise, agency wise, state wise, etc. The details of stalled/delayed projects is separately provided with reasons of delay so that all concerned stakeholders can take a corrective decision in time to drive benefits from the timely completion of the projects. TARANG monitors the progress of transmission system in the country, both Intra State and Inter State Transmission Projects through Tariff Based Competitive Bidding (TBCB) as well as Regulated Tariff Mechanism.

TARANG also shows the prospective upcoming Intra-State as well as Inter-State Projects along with NITs being floated by different Transmission Utilities Pan-India. Tarang provides advance information of upcoming transmission projects approved by Empowered Committee on Transmission helping bidders to gear up future transmission projects.


Your Company has been providing funding assistance for power generation, transmission & distribution projects including for the electrification of villages. Details of major financing activities during the financial year 2017-18 are as under:

7.1 Generation

During the financial year 2017-18, your Company sanctioned 83 Nos. of Generation/R&M loans including 6 Nos. of additional loan assistance with total financial outlay of Rs.53,223.55 crore including consortium financing with other financial institutions, as details mentioned below:

                                                 ( crore)


No. of Loans

Loan Amount

State Sector


Fresh Loan



Additional Loan



Private Sector


Additional loan






7.2 Renewable Energy

During the year, REC sanctioned loan assistance of Rs.7,034.24 crore to 28 Renewable Energy projects with installed generation capacity aggregating 704 MW, out of which 17 are new grid connected projects, 4 projects are under micro grid under decentralized distributed generation projects, 1 solar pump set project and 6 projects for meeting renewable purchase obligations to state DISCOMs.

Out of new 17 grid connected projects, 7 solar photo-voltaic projects aggregating 235 MW, 3 SHP Project of 64 MW, 2 Wind projects of 352 MW and 5 Bagasse/Municipal Solid Waste to Energy projects of 53 MW have been sanctioned. The total cost of all the projects sanctioned during 2017-18 aggregates to Rs.9,453.42 crore. The sanctions and disbursement under renewable energy category recorded a growth over 300% vis-a-vis the previous year.

The disbursement achieved during the year was Rs.5,403.27 crore as detailed below:



FY 2017-18

FY 2016-17

Projects Sanctioned




Capacity of Sanctioned Projects




Cost of Projects

‘in crore



Loan Sanctioned



Loan Disbursed



7.3 Transmission & Distribution

Your Company continued to play an active role in the creation of new infrastructure and improvement of the existing ones under the transmission and distribution network in the country under its T&D portfolio. In line with the Government of India’s objective to provide power for all by creation of infrastructure and also to reduce the At&C losses, your Company has been financing schemes for expansion and strengthening of the transmission network and more importantly, modernizing the existing distribution system through new technologies.

During the financial year 2017-18, your Company sanctioned 734 Nos. of Transmission and Distribution schemes involving a total loan assistance of Rs.36,326.27 crore. This includes primary power evacuation schemes associated with generating plants, system improvement schemes, schemes for Procurement & Installation of equipment/materials like meters, transformers, conductors, tower material, cables, etc. Government approved schemes like DDUGJY & IPDS schemes and Infrastructure schemes for providing electricity access to various categories of consumers including Agriculture.

7.4    Short / Medium Term Loans and other Loan assistance

During the financial year 2017-18, your Company has also sanctioned 50 loan assistance of Rs.10,950 crore to various power utilities, in the form of short / medium term loans & other loan assistance, to meet their funds requirement of short/ medium term & working capital, etc.

7.5    Financing Activities in North Eastern States

During the financial year 2017-18, a total sum of Rs.368.01 crore was sanctioned and an amount of Rs.378.42 crore was disbursed against the various projects relating to Transmission & Distribution, Generation including Renewable projects, etc., in North Eastern states, as detailed in the attached tables.

7.6    Appraisal System for financing Private Sector Projects

REC has its own guidelines for appraisal of Private Sector Conventional & Renewable Power Generation Projects. The appraisal is carried out on the basis of the financial performance, creditworthiness, management proficiency & sectoral experience of the promoter entities. REC’s interest rates & security structure are linked to the grades assigned to the private sector projects.

7.7    Grading of State Power Utilities

The Company has well defined policy/guidelines for grading of State Power Utilities. The guidelines for grading of State Power Utilities (Generation/Transmission and Trading Utilities) are reviewed periodically in view of significant changes in the power sector. During the year, the State Grading Guidelines were reviewed and modified incorporating suitable parameters in line with the changing scenario.

For the purpose of funding, the Company has classified State Power Generation and Transmission utilities into A++, A+, B and C categories. The categorization (bi-annually) of State Power Generation and Transmission utilities is arrived based on the evaluation of utility’s performance against specific parameters covering operational & financial performance including regulatory environment, Audited Financial Statements, etc. With regard to State Power Distribution utilities (including SEBs/ utilities with integrated operations), the Company adopts Ministry of Power’s Integrated Ratings by aligning such ratings/ grading with REC standard categories of A+, A, B and C. The categorization enables your Company to determine credit exposure limits and interest rates to the state power utilities.

7.8 Investments made during the financial year 2017-18

The Company has subscribed to 3,47,429 fully paid equity shares of Housing & Urban Development Corporation Limited (HUDCO) under Initial Public Offer at a cost of Rs.60/- per equity share of face value of Rs.10/- each, with aggregate investment amounting to Rs.2.08 crore in May, 2017.


REC has three lines of ODA credit with KfW, Germany. All of them have been fully drawn as on March 31, 2018. KfW-I and KfW-II ODA loan are of EUR 70 million each (approx. Rs.454.02 crore & Rs.480.97 crore, respectively) and KfW-III is of EUR 100 million (approx. Rs.753.73 crore). Apart from above, REC has two lines of ODA credit with JICA, Japan. Both of them have also been fully drawn. Under JICA-I & II ODA loans, cumulative amount of JPY 16,949.38 million (approx. Rs.820.12 crore) and JPY 11,809.48 million (approx. Rs.640.64 crore) respectively, has been drawn as on March 31, 2018.


Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) is the flagship scheme of Government of India covering all aspects of rural power distribution. Under the scheme, 60% of the project cost (85% for special States) is provided as grant by Government of India and additional grant upto 15% (5% for special States) on achievement of prescribed milestones and all unelectrified villages/habitations irrespective of population criteria are covered for electrification in accordance with the guidelines of the Scheme. All erstwhile RE schemes have been subsumed in DDUGJY. REC is the Nodal agency for operationalization of DDUGJY.

Further, DDUGJY facilitates towards achievement of Rs.24x7 Power for All’in the country through the following project components:

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

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

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

d)    Metering of distribution transformers/feeders/consumers; and

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

In order to realize the objectives of the scheme, participation of all stakeholders particularly, public representatives has already been institutionalized through constitution of District Electricity Committees (now DISHA) under the Chairmanship of senior most Member of Parliament. DISHA is empowered to monitor and review the implementation of DDUGJY.

9.1 Village Electrification

India’s rural electrification programme passed through several stages of improvement with appropriate intervention at Government of India level. In spite of various programmes of Government of India, as on April 1, 2015; there were 18,452 villages which still remained un-electrified.

In the Independence Day address to the nation on August 15, 2015, Hon’ble Prime Minister pledged that all remaining Un-Electrified (UE) villages in the country would be electrified within 1,000 days with the help of States and local bodies. Accordingly, Ministry of Power had fast tracked electrification of all 18,452 villages on priority mode. As these remaining un-electrified villages are located in inaccessible areas (thickly forested, mountainous regions, etc.) involving tough terrain, inclement weather, areas facing Right of Way (RoW) issues, areas plagued by insurgency and Leftwing extremism, intensive monitoring mechanism strategized to get regular progress of each village. Towards this direction, entire process of village electrification was categorized into 12 milestones. Electrical engineers viz., ‘Gram Vidyut Abhiyantas (GVAs)’were deployed at Block/District level in order to shoulder this mission at field level. Further, a dedicated web-portal namely ‘GARV App’(, well acknowledged for its transparent and accountable mechanism was developed for meticulous monitoring of the progress of electrification of all un-electrified villages through an online system along with the milestones of village electrification progress.

The Salient features of GARV APP are real-time dashboard, paper-less working, capturing village-wise milestones, uploading photographs/Global Positioning System (GPS) coordinates, timely highlighting of implementation hurdles, if any, habitation wise infrastructure, allows offline data entry, tracking of delay in implementation of works, segregation of uninhabited villages, state-wise snapshots, adoption of villages/districts/states & view their respective customized dashboard and also feedback and suggestions from users.

During the course of village electrification process, States reported an additional 1,227 villages as un-electrified. Accordingly, REC made all concerted efforts in facilitation and made available adequate funds for village electrification. To those inaccessible difficult to approach villages, air lifting of material had been resorted through choppers of Indian Air Force to the States of Jammu & Kashmir and Arunachal Pradesh. Further, assistance of Railways had been availed for transporting voluminous materials to Arunachal Pradesh. To such remotest areas where neither of the options of sophisticated transportation was available, material were transported through manual head loading for days together.

With the above initiatives and collective efforts of States and other stakeholders, 16,859 villages have been electrified as on March 31, 2018. Further, April 28, 2018 had been made as a historic day in the Power Sector by achieving electrification of all un-electrified census inhabited villages in the country totaling to 18,374 villages excluding the 1,305 uninhabited villages.

9.2    Performance during financial year 2017-18:

a.    Sanction:

Under DDUGJY, Decentralized Distributed Generation (DDG) projects have also been sanctioned, for providing electricity access to the un-electrified villages/habitations where grid connectivity is neither technically feasible nor cost effective. During the financial year, an amount of Rs.17.05 crore (including capital subsidy of Rs.15.34 crore) was sanctioned for Manipur state.

b.    Fund release:

The subsidy of Government of India is channelized through REC and the matching contribution is infused by the respective State Govt. /Implementing Agencies through Loan or their own sources.

Under the scheme, grant/subsidy of Rs.9,028.09 crore (including Rs.262.60 crore under DDG) provided by Government of India and a loan of Rs.687.58 crore, was disbursed to the States/Implementing Agencies, by the Company, during the financial year 2017-18.

c.    Progress of electrification:

During the financial year, under DDUGJY, 3,736 un-electrified villages have been electrified and free electricity connections to 50.42 Lakh BPL households have been provided. Further, segregation of feeders and new 11 kV lines totaling to 1,01,054 Kms have been laid and 1,571 sub-stations (New & Augmentation) have been commissioned.

The State-wise details of sanctions, fund releases & progress of electrification during the financial year are given in Table- 5.

9.3    Cumulative Performance upto March 31, 2018:

Under DDUGJY, cumulatively up to March 31, 2018; 6,287 projects for Rs.1,08,496.85 crore have been sanctioned and a sum of Rs.59,075.87 crore (including Government of India grant of Rs.54,150.55 crore) have been disbursed to the Implementing agencies.

As regards physical progress, cumulatively upto March 31, 2018, 1,25,895 un-electrified villages have been electrified and free electricity connections to 305.10 Lakh BPL households have been provided. Further, 3,063 Sub-stations (including 1,979 Augmentation Sub-stations) have been commissioned and 21,811 cKm of 11 KV feeders have been segregated.

The State-wise details of cumulative sanction, fund release & achievements are furnished at Table- 6.

9.4 Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA)

Hon’ble Prime Minister launched Pradhan Mantri Sahaj Bijli Har Ghar Yojana - Saubhagya on September 25, 2017 to achieve Universal Household electrification in the country through electrification of all households in both rural and urban areas. Ministry of Power designated REC as the Nodal agency for operationalization of Saubhagya Scheme as well.

The capital outlay of Saubhagya Scheme is Rs.16,320 crore including Gross Budgetary Support of Rs.12,320 crore. Estimated 3.5 crore households in the country are targeted for electrification through creation access and last mile connectivity in rural and urban areas. Wherever Grid connectivity is technically not feasible and financially unviable, electrification is resorted through Solar based off-grid systems.

Major Initiatives taken by REC for successful completion of Saubhagya Schemes are as under:

-    Guidelines issued to all States/Power Utilities;

-    Dedicated Saubhagya web-portal developed for monitoring;

-    Gram Vidyut Abhiyantas (GVAs) have been deployed across the districts in States where major un-electrified households remain;

-    As on March 31, 2018, Government subsidy of Rs.1,540.63 crore released to States;

-    Nodal Officers at State level have been nominated; and

-    States have been asked to upload DPRs in web-portal and to freeze the un-electrified Household figures.

With the active support and cooperation of States/Power Utilities and other stakeholders, 40.45 Lakh households were electrified upto March 31, 2018, which have crossed the figure of 1.00 crore on August 5, 2018. Under the scheme, grant/ subsidy of Rs.1,540.63 crore provided by Government of India, was disbursed to the States/Implementing Agencies, by the Company, during the financial year 2017-18. The State-wise details of households electrified and subsidy disbursed under Saubhagya during the financial year 2017-18 are furnished at Table-7.


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

In line with the Three-Tier Quality Control Mechanism for ensuring proper quality of materials and works in implementation of RE component of DDUGJY XI & XII five-year plan schemes, REC Quality Monitors (RQM) under Tier-II have been appointed covering 413 projects in 25 states under XI plan (Phase-I&II) and 273 projects in 15 states under XII Plan. During the financial year 2017-18, RQMs have undertaken inspection of 75 villages under XI Plan Phase-I projects; 2,033 villages under XI Plan Phase-II projects and 9,194 villages under XII Plan Projects. Further, 405 Nos. of material inspections were carried out in XII Plan projects at manufacturer premises for ensuring quality of materials.

REC Quality Monitors (RQM) for DDUGJY New Projects were also appointed. During the financial year 2017-18, 1,229 Nos. of material inspections were carried out by RQMs under DDUGJY new projects at manufacturer premises for ensuring quality of materials.


As a Lending entity, the Company is exposed to various risks such as credit risk, operational risk, market risk, interest rate risk, liquidity risk and foreign currency risk. The Company is conscious of such risks and has put in place a comprehensive Risk Management Policy to address the same.

11.1 Risk Management Committee

The Company is having a Risk Management Committee (RMC) which is functioning under the chairmanship of Part-time Non Official Independent Director and it comprises of Director (Finance) and Director (Technical) as its members for monitoring the integrated risks of the Company.

The main function of RMC is to monitor various risks and also to suggest action for mitigation of risk arising in the operation and other related matters of the Company. The Company has identified its various risks and has taken various steps to mitigate them.

The brief description of the risks is as below:

(i)    Credit Risk:

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

(ii)    Operational Risk:

The operational risk arises from inadequate or failed internal processes, people and systems or external events. The Company has an Organization-wide risk categorization framework through which all the operational risks are measured and categorized as High/ Moderate/ Low. Further the operational Risks of the Company are studied in eight functional areas such as Business, Compliance, Finance, Human Resource, Information Technology, Legal, Operational and Strategic.

(iii)    Market Risk:

Market Risk comprises the Interest Rate Risk, Liquidity Risk and Foreign Currency Risk which is dealt by Asset Liability Management Policy and Hedging Policy.

11.2 ALCO Committee

To manage the market risks, the Company has constituted an Asset Liability Management Committee (ALCO) which is functioning under the chairmanship of CMD and comprises of Director (Finance), Director (Technical), Executive Directors and General Managers from Finance and Operating Divisions as its members.

ALCO monitors risks related to interest rates, liquidity and currency rates. The brief description of the risks is as below:

(i)    Interest Rate Risk:

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

(ii)    Liquidity Risk:

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

(iii)    Foreign Currency Risk:

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


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


(i)    Implementation of latest version of Business ERP: ERP is in place since July, 2009. REC has now initiated a process of migration of existing e-Business ERP (Oracle e-Biz suite) 11i (launched on July, 24 2009) to the latest version R12.2.7 and replacement of ERP hardware. The new ERP system will have:

-    Advanced features which will further facilitate automation of business operation of the Company;

-    Integration to other systems like e-Office, etc; and

-    GST and Ind-AS compliant.

Live operations in new upgraded version of Business ERP started since July, 2018.

(ii)    Implementation of e-Office across all Offices: Digital office solution has been implemented across all offices of the Company w.e.f. January, 2018. Training has been imparted to all users across all offices of the Company. As a continuous improvement, several additional features have been incorporated.

(iii)    Up-gradation of REC WAN Network with enhanced Bandwidth: Organization wide MPLS VPN network infrastructure (operational since 2008) along with Video Conferencing facility has been completely revamped with latest network devices, enhancement of Bandwidth, high availability features, etc., to meet the demanding requirement of operation.

(iv)    Implementation of IT Framework as per RBI Master Direction: REC has initiated steps to comply with Master Direction of IT Framework issued by RBI for NBFC sector. This activity is completed and now REC is compliant with IT framework as per RBI Master Directions since May, 2018.

(v)    Development of GST module and integration with Business ERP: With the new tax regime of GST, REC is GST compliant and integrated with GSP solution as per statutory requirement.

(vi)    Development of REC Corporate Intranet / Internet Website: REC Corporate Website & Intranet portal have been completely revamped to make it user friendly, interactive, dynamic & informative and accessible from mobile devices from public network in secured environment.

(vii)    Migration of entire existing REC network from IPv4 to IPv6: As per directive of Government of India (Ministry of Information Technology), REC has become IPv6 compliant in September, 2017. This activity has been completed and reported to the Ministry of Power.

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

(ix)    Promoting Government of India initiatives: REC facilitates and promotes the IT initiatives of Government of India like My Gov, e-Governance, DPE guidelines on digital mode of payments etc., within the Company.

(x)    Providing training and computing facility to Employees: Computer to Employee population ratio is 100%. IT Division also organizes and impart various training programmes on IT & IS to upgrade Computer skills of the employees of the Company.


REC-Institute of Power Management and Training (REC-IPMAT), earlier known as Central Institute for Rural Electrification was established at Hyderabad in 1979 under the aegis of Rural Electrification Corporation Limited to cater to the training and development needs of engineers and managers of Power Sector organizations. REC-IPMAT has conducted various programmes on the state-of-art subjects of Power Generation, Transmission, Distribution and Renewable energy sources and other related issues/topics.

14.1 National Training Programmes (NTP) under DDUGJY

REC/REC-IPMAT is the Nodal Agency for coordination and implementation of National Training Programmes for employees of C&D category, under DDUGJY, sponsored by Ministry of Power, Government of India. During the year 2017-18, as against the target of 25,000 employees of C&D category, 28,235 were trained. Since starting of the National Training Programmes in 2009, total 2,33,030 employees of C&D category were trained upto March 31, 2018.

REC-IPMAT on the request of power utilities has conducted 103 programmes for the employees of C&D category with 2,566 participants for HPSEBL, JdVVNL, SOUTHCO, JKPDD, TSNPDCL, Lakshadweep Electricity Department (LED), MPPaKVVCL, DVVNL & APDCL at various locations under its banner and 3 Nos. of Training of Trainers (ToT) programmes for LED, MPPaKVVCL and MeECL and trained 45 participants.

14.2    International Programmes

REC-IPMAT is empanelled by Ministry of External Affairs, Government of India to organise training programmes in the area of power sector under ITEC/SCAAP. During the year, REC-IPMAT has organized 9 International programmes with 174 participants, on the topics viz. Solar Power Generation - Grid Enabling (4 weeks); Rural Electrification and Power Management (8 weeks); Design, Erection, O&M of EHV Sub-Stations (4 weeks); Planning and Management of Power Transmission and Distribution System (8 weeks); Best Practices in Power Distribution (4 weeks); Management of Power Utilities using IT/ Automated Solutions (5 weeks); Certificate Course in Electric Power Management (12 Weeks) and Latest Trends in Thermal Power Generation (4 weeks).The participants from countries viz. Afghanistan, Bangladesh, Bhutan, Cambodia, Cameroon, Cote d’Ivoire, Egypt, Ethiopia, Gambia, Ghana, Guatemala, Haiti, Iran, Iraq, Kenya, Lebanon, Madagascar, Malawi, Mauritius, Nigeria, Oman, Peru, Philippines, Seychelles, South Sudan, Sri Lanka, Sudan, Suriname, Syria, Tanzania, Tunisia, Vietnam and Zimbabwe have attended the programmes.

14.3    Regular National Programmes

REC-IPMAT has organised 25 Regular T raining Programmes for the personnel of various Power Utilities on different topics such as Earthing Practices & Safety Measures in Electrical Installations; Power Transformer - Testing, Commissioning, Protection & Maintenance; Concept to Commissioning of Solar Power Plants; Latest Trends in O&M of Distribution Transformers; Power Trading & Exchange; Operation, Maintenance and Protection aspects of Distribution Sub-stations and Lines; Labour Laws - Workmen Compensation and Contract Labour Act-Procedures in dealing Court cases; Underground Cables - Design, Laying, Monitoring and Fault Detection; Technical Specifications and Construction Standards for Distribution System; Power Purchase Agreement; Gas Insulated Sub-stations; Tariff Policy and Submission of ARRs - Regulatory Compliance; Power System Protection; Open Access, Trading and Availability Based Tariff (ABT); Advanced Technologies in Metering, Billing and Collection; Zero-Breakdown in Power Transformers; Power Factor Improvement and Reactive Power Management; Distribution Loss Reduction - Issues, Challenges and Remedial Measures; Implementation of Goods & Service Tax (GST); Ind AS (IFRS) adoption in Power Sector; Competitive Bidding-Economical Procurement; Power Transmission Lines -Design, Construction & O&M, and Energy Management & Auditing. A total number of 318 participants attended the above programmes.

14.4    IPDS Programmes

REC-IPMAT as partner training institute organized IPDS programmes sponsored by Ministry of Power. During the year, 19 IPDS programmes were conducted for employees of A&B category, on the themes viz. Communication & Customer Relations; Efficiency Improvement Measures in Distribution System; Revenue Management & Distribution Loss Reduction and Best Practices in Distribution Operation & Management System. In total, 351 participants were trained under these programmes.

14.5    Customized Programmes

14 customised programmes were designed and organised, suitable to the utility requirements. The programmes conducted are on “Power Distribution Management” for JKPDD at REC-IPMAT campus and for the freshly recruited Junior Engineers of HPSEBL, at Dharamshala, Sundernagar & Shimla (8 batches). The programme on “Finance for Non-Finance Executives” for MPPTCL at Jabalpur and Safety Programme for MPPKVVCL at Indore. The 3 programmes on “Finance for Non-Finance Executives”, “Power Transformer-Testing, Commissioning, Protection & Maintenance” and “Power Management & Energy losses” for JBVNL at Ranchi. In total, 383 participants were trained under customized programmes.

14.6    In-house Training Programmes

REC-IPMAT also organised 3 in-house programmes for the employees of REC and 33 employees have taken part in these programmes. The topics covered are Solar Power - Design and Development; Smart Grid & Smart Meters and Managing Change in Power Sector for Senior CPMs/ CPMs.

14.7    Solar Energy Programmes

REC-IPMAT has been empanelled by National Institute of Solar Energy (NISE) as partner training institute for conduct of Solar Energy Programmes and organised 13 programmes on “Solar Roof Top” for Distribution Engineers of MSEDCL at various locations of Maharastra state including one ToT programme at REC-IPMAT Campus, Hyderabad. In total, 504 participants were trained under these programmes.

14.8 In all, during the financial year 2017-18, in addition to coordinating and monitoring the National Training Programmes for employees of C&D category, sponsored by Ministry of Power, Government of India, REC-IPMAT has conducted 189 programmes on various themes/subjects and trained 4,374 personnel with 21,639 man-days of training.


The Company has implemented Quality Management Systems as per ISO 9001:2008 standards in six major Divisions of Corporate Office and all Regional/Sub-Offices across the country for claims processing.


As on March 31, 2018, the Company’s total manpower was 528 employees, including 414 employees in the executive cadre and 114 employees in the non-executive cadre. The Company gives utmost importance to the capacity-building and well-being of its employees. During the year under review, the Company sponsored 190 of its employees to various training programmes/workshops within the country and abroad. The Industrial Relations continued to be on a cordial note in the Company. During the year, there was no loss of man-days on account of industrial unrest. Further, there are regular interactions and open-house sessions between the management and the employees, which helps in building an atmosphere of trust and cooperation, thereby leading to a motivated work force and consistent growth in organizational performance.

16.1 Reservation in Employment

The directives issued by the Government of India regarding reservations for SC/ST, etc. in appointment and promotion to various posts were complied with. The group wise details of SC and ST employees out of total strength as on March 31, 2018 are given below:


Number of Employees






FY 2017-18

FY 2016-17

FY 2017-18

FY 2016-17

FY 2017-18

FY 2016-17




































16.2 Training & Human Resource Development

As a measure of capacity building including overall development of employees and to ensure high delivery of performance, Training and HRD continued to receive priority during the financial year. Training and Human Resource Policy of the Company aims at sharpening business skills and competencies required for better employee performance and provides all possible opportunities and support to the employees to improve their performance and productivity. Training was also provided to promote better understanding of professional requirements as well as to sensitize employees to socio-economic environment in which business of the Company is carried out. Training which helped employees benefit in spiritual health and attitudinal change process was also imparted.

In order to equip the employees professionally, the Company sponsored 190 employees to various training programmes, workshops etc., within the country and abroad. In addition, four training programmes were conducted in-house which were attended by 71 employees. Taken together, these initiatives enabled the Company to achieve 723 training man days. Further, 17 Executives were deputed for programmes in countries like Germany, France, Japan, Morocco, Malaysia, Norway, USA, etc.

16.3    Employee Welfare

In order to provide improved health care facilities to the employees and their dependent family members, the Company has expanded the list of empanelled hospitals under Direct Payment Scheme by adding three hospitals. Further, part time services of four specialized doctors were engaged to provide onsite medical facilities to employees. The Company has also been funding sports & recreation equipment for use by employees and promote well- being of employees.

Sports Activities

During the financial year 2017-18, REC hosted an Inter-CPSU Cricket Tournament at New Delhi and also sponsored its employees for various Inter-CPSU sports tournaments such as Badminton, Table Tennis, Volley Ball, Kabaddi, Chess, etc., organized by various power sector CPSUs under the aegis of Power Sports Control Board (PSCB). Further, employees were encouraged to participate in various quizzes, paper presentations and simulation competitions conducted by reputed institutions.

16.4    Representation of Women Employees

As on March 31, 2018, the Company had 89 permanent women employees, which represent 16.86% of the total work force. There is no discrimination of employees on the basis of caste, creed and religion, etc. A Women Cell has been in operation in the Company to look after welfare and all round development of women employees. International Women’s Day was celebrated by REC Women’s Cell.

16.5    Industrial Relations

The Industrial Relations scenario in the Company continued to be cordial and harmonious in the financial year 2017-18. There was no loss of man days on account of industrial unrest. Regular interactions were held with REC Employees Union and REC Officers Association on issues of employee welfare. This has helped to build an atmosphere of trust and cooperation resulting in a motivated workforce and continued improvement in business performance. In compliance with the provisions of “The Rights of Persons with Disabilities Act, 2016”, Company has appointed the Executive Director (Admin. & Estate) as the Grievance Redressal Officer for the Persons with Disabilities (PwD).

16.6    Public Grievance Redressal Machinery

A Public Grievance Cell has been set up in REC for the purpose of redressing the grievances from the public in a time bound manner. The cell handles Centralized Public Grievance Redress and Monitoring System (CPGRAMS) portal which is a platform for the citizens for lodging their grievances. The CPGRAMS portal is developed and maintained by the Department of Administrative Reforms & Public Grievances (DARPG), Government of India.

Further, in compliance of RBI Guidelines, the Company has put in place a Grievance Redressal mechanism to resolve disputes between the company and its customers and appointed a senior official as the Grievance Redressal Officer. Further, in accordance with the guidelines issued by the Government of India, the Company has constituted a Grievance Redressal Committee to redress the grievances of employees


The Company has its ‘Corporate Social Responsibility & Sustainability Policy’aligned with the amended provisions of Companies Act, 2013, the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Guidelines for CSR and Sustainability for Central Public Sector Enterprises issued by Department of Public Enterprises. The copy of the ‘REC Corporate Social Responsibility & Sustainability Policy’is available on the website of the Company.

During the financial year 2017-18, the Corporate Social Responsibility and Sustainable Development (CSR & SD) initiatives of the Company were continued with a view to integrate REC’s business operations with social processes while recognizing the interests of its stakeholders. CSR & SD projects were linked with the principle of sustainable development. The strategic focus was aimed at CSR & SD initiative towards fulfilling the National Plan goals and objectives including Sustainable Development Goals ensuring gender sensitivity, skill enhancement, entrepreneurship and employment generation by co-creating value with local institutions/people.

While identifying such initiatives, the Company has adopted an integrated approach to address the community, societal and environmental concerns measured in terms of triple bottom line approach. During the year, the Company has undertaken various CSR initiatives in the fields of skill development programme, education, environmental sustainability, health care including for old age and persons with disabilities, drinking water and sanitation facilities, etc. The CSR strategy has been developed with action plan in project-based accountability approach. The CSR activities have been implemented in projectmode, with baseline survey, specified time-frame, identified milestones, periodic monitoring and impact assessment. Disbursement of allocated funds under CSR was linked with achievement of the milestones and deliverables. During the financial year 2017-18, financial assistance aggregating to Rs.167.24 crore was sanctioned for various projects under Corporate Social Responsibility and Rs.49.45 crore was disbursed. A detailed Report on Corporate Social Responsibility and Sustainability Activities is annexed to this Report.


REC constantly endeavors to optimize probity and integrity among employees and to promote transparency, fairness and accountability in all operational areas. Vigilance Division mainly aims at “Preventive Vigilance” by reviewing of policies, rotation/transfers of employees holding sensitive posts, review of Audit Reports, review of projects/tenders/contracts awarded, inspections of Regional Offices/State Offices, review of Annual Property Returns (APRs), etc. Streamlining of systems and procedures in matters relating to administrative, financial and human resources functions was also accorded priority. The thrust on leveraging of technology was continued, with the result that information relating to loans, schemes, tenders, third party bills, recruitment etc. are online as well as invigorated online vigilance clearance system. Further, it was ensured that information/policies like tenders, requisite forms, status of loan applications/third party payments, Fair Practices Code, Policy for Prevention of Fraud, CSR guidelines, Whistle Blower Policy, etc. are available on the website of the Company.

With effect from April, 2016, almost all tenders above Rs.2 lakh were processed through E-Procurement mode and E-Reverse Auction has also started in cases where estimated value of procurement is more than Rs.1 crore and lowest quoted price are more than 20% of estimated value. Regular/surprise inspections of field offices were carried out and employees were sensitized about the importance of Vigilance. Regular review meetings were taken up with operating Divisions on the existing systems and procedures to make these more transparent and accountable. Agreed List and List of Officers of Doubtful Integrity were finalized. Prescribed periodical statistical returns were also being sent to Central Vigilance Commission (CVC) and MoP on time.

Vigilance Awareness Week was observed from October 30, 2017 to November 4, 2017, where all employees were sensitized to ensure that REC’s CDA rules are followed scrupulously and highest standard of ethics and integrity are maintained by everyone at all times. During the week, REC has administered Integrity Pledge, conducted Just a Minute, Essay Writing, Painting and Slogan Writing Competitions for employees and their family members and organized one day workshop on “Financial Frauds: Investigation, Controls and Risk Management Strategy”. Banners/standees/posters were displayed at different locations of all offices of the Company across country as well as various schools and colleges. Inter-College Debate Competition was organized wherein 39 colleges have participated and Inter-School Debate Competition was organized among 18 Schools. Apart from these, all India level Inter School Poster Competition has also been organized. Further, REC has setup Integrity Clubs in 25 schools all over India, the first of its kind in India, to encourage children to collectively participate in fight against corruption.

The performance of Vigilance Division was reviewed periodically by CVC, Board of Directors and CMD, in addition to regular reviews undertaken by the CVO in accordance with the prescribed norms.


In compliance with the Official Language Act, 1963, Official Language Rules, 1976 and orders issued by the Government of India from time to time, efforts were continued during the year for increasing the progressive use of Hindi in official work. To ensure the implementation of Official Language effectively and to review the progress of implementation of the Official Language policy, Committees(s) are constituted in all offices. The Committees chalks out strategies to implement the constitutional provisions of the Official Language Policy of the Union with a view to achieve the targets prescribed in the Annual Programme issued by the Department of Official Language, Ministry of Home Affairs.

During the year, Hindi fortnight was organized in Corporate Office from September 1, 2017 to September 15, 2017, under which various competitions/activities like Hindi debate competition on the topic ‘Vision New India: Challenges and opportunities’and ‘India Business Quiz’were organized. The participation of employees in all the events/competitions was encouraging and cash prizes were also awarded to winners in different categories to encourage larger participation and to motivate employees to increase use of Hindi in their day to day working.

Further, to give hands-on exposure to participants in various facets of use of Hindi in discharge of their official duties and to impart practical knowledge about the Official Language Policy and related subjects, Hindi workshops were organised where a number of Executives/Non-Executives participated.

Inspections of different divisions and ROs/SOs were carried out by REC Rajbhasha Division to assess the progressive use of Hindi in official work. A team of officials of Ministry of Power also reviewed the status of Official Language implementation in REC Corporate Office.

Rajbhasha Division has come out with two editions (Half yearly) of In-house Hindi Journal ‘Urjayan’containing interesting and useful articles as well as literary writings of the employees. In order to motivate Hindi write ups, articles, poems, etc. for the magazine, the Company has a policy to award cash incentives to the participants.


20.1    Conservation of Energy

There are no significant particulars, relating to conservation of energy and technology absorption as your Company does not own any manufacturing facility. Further, the Registered Office of the Company is located at ‘SCOPE Complex’where all civil, electrical installation & maintenance is carried out by SCOPE. Effective monitoring, controlling & scheduling the operation of AC chilling units, elevators & by putting other energy efficient equipments, replacement of conventional light fittings, CFL, etc. with LED light fittings and maintaining power factor nearest to unity, SCOPE has saved around 10.31 lakh units consumption during the financial year 2017-18, resulting saving in terms of amount of around Rs.1.10 crore.

20.2    Foreign Exchange Earnings & Outgo

During the financial year 2017-18, an interest income of Rs.0.16 crore was earned on unutilised foreign currency. Further, the foreign exchange outflow aggregating Rs.553.87 crore was made during the financial year on account of foreign travelling, training expenses, interest, principal repayment, finance charges and other expenses.


Your Company has two Wholly Owned Subsidiaries, to focus on additional business of consultancy in the areas of distribution, transmission etc.:

i.    REC Power Distribution Company Limited (RECPDCL) (CIN: U40101DL2007GOI165779)

ii.    REC Transmission Projects Company Limited (RECTPCL) (CIN:U40101DL2007GOI157558)

In order to initiate development of each independent Interstate and Intrastate transmission project allocated by Ministry of Power, Government of India and State Governments, RECTPCL incorporates Project specific Special Purpose Vehicle (SPV) as Wholly Owned Subsidiary Company and after selection of successful bidder through a two stage Bidding process featuring separate Request for Qualification (RfQ) and Request for Proposal (RfP) in accordance with Tariff Based Competitive Bidding guidelines for transmission projects as notified by Ministry of Power, Government of India, the respective Project Specific SPV along with its all assets and liabilities is transferred to the selected bidder.

21.1 REC Power Distribution Company Limited

During the financial year 2017-18, the performance of RECPDCL has been consistent in its core business viz. Preparation of Detailed Project Reports (DPR), Third Party Inspection (TPI), Material Inspection & Project Management Consultancy (PMC) and Project Management Agency/Project Management Consultant under DDUGJY and IPDS.

At the end of the financial year 2017-18, RECPDCL has been working on about 80 on-going projects with project cost of Rs.83,237 crore and expected consultancy fee of Rs.1,032 crore, for 43 Nos. of DISCOMs/RE Cooperative Societies and other agencies/Government bodies, spread in 27 States and 4 Union Territories.

Major assignments/on-going projects

The major assignments/on-going projects undertaken by RECPDCL during the financial year 2017-18 includes -

(i)    PMA/PMC work under DDUGJY and IPDS for the 25 DISCOMs and 5 Co-Operative Societies in 16 States on Pan India basis;

(ii)    PIA work in J&K region under IPDS/R-APDRP Part-B/PMDP scheme for urban electrification works and also as PMA for Urban and Rural Electrification works under DDUGJY/PMDP schemes;

(iii)    PMC & AMC work of EESL LED street light project in Chandigarh, Chhattisgarh, Punjab & Jharkhand and AMC work of EESL LED street light project in Rajasthan & Tripura;

(iv)    Preparation of DPRs under 24x7 Power for All & Survey in 4 DISCOMs of Uttar Pradesh covering all 75 districts;

(v)    PMA for designing of Power Management Software tool for Haryana Power Purchase Center and to provide Operation Support for a period of 3 years after Go-Live of software and PMA works for turnkey execution of deposit work of 66kV line for Chandigarh Electricity Department;

(vi)    PIA work for turnkey execution of AMI and SCADA for Smart Grid Pilot Project in Chandigarh for Chandigarh Electricity Department (CED);

(vii)    Management & Technical Consultancy Services for all 5 DISCOMs of Uttar Pradesh for conducting Energy Audit of all feeders of UPPCL;

(viii)    Preparation of Cost Data Book and Asset verification of Capex of 2 DISCOMs (BRPL & BYPL) for Delhi Electricity Regulatory Commission (DERC); and

(ix)    PMA/PMC for electrification of Un-electrified Off Grid villages in the state of Jammu & Kashmir and Arunachal Pradesh. Financial Performance

During the financial year 2017-18, RECPDCL has achieved a total revenue of Rs.207.03 crore against Rs.191.57 crore in the previous year and the Profit After Tax of Rs.36.80 crore as against Rs.40.33 crore in the previous year.

As on March 31, 2018, the Net Worth of the Company has increased by 14.08% to Rs.180.07 crore as compared to Rs.157.84 crore in the previous year. For the financial year 2017-18, the Board of Directors of the company has recommended a dividend of Rs.2,210/- (Rupees Two Thousand Two Hundred Ten only) per equity share (on the face value of Rs.10/- each) subject to the approval of Shareholders in the ensuing Annual General Meeting of the company.

21.2 REC Transmission Projects Company Limited

During the financial year 2017-18, four project specific SPVs have been incorporated viz. Chandil Transmission Limited, Dumka Transmission Limited, Mandar Transmission Limited and Koderma Transmission Limited in respect of Transmission System Strengthening in Jharkhand State (Package 1 to 4) with aggregate estimated cost of Rs.4,605 crore allocated to the Company by Government of Jharkhand to work as Bid Process coordinator for selecting of successful Bidder(s). Further, a project specific SPV viz. Jawaharpur Firozabad Transmission Limited has been incorporated on August 20, 2018 in respect of Transmission Project allocated by UP Power Transmission Corporation Limited.

After completion of bidding process, the following project specific SPV has been transferred to the successful bidder during the financial year 2017-18:-

Sl. No.

Name of Transmission Project

Name of Project Specific SPV

Name of Selected Bidder

Date of Transfer of project specific SPV


Eastern Region Strengthening Scheme - XXI (ERSS-XXI)

ERSS XXI Transmission Limited

M/s Power Grid Corporation of India Limited

January 12, 2018


New WR-NR 765 kV Interregional corridor

WR - NR Power Transmission Limited

M/s Power Grid Corporation of India Limited

March 27, 2018

As on March 31, 2018 the status of following Inter-state and Intra-state transmission projects is as under:-

Sl. No.

Name of Transmission Project

Name of Project Specific SPV

Date of Incorporation of SPV

Status as on date


Transmission system for Phase-I Generation Projects in Arunachal Pradesh

Dinchang Transmission Limited

December 2, 2015

Project on hold as per instruction of CEA & Empowered Committee on transmission.


Evacuation of power from 3 x 660 MW Ghatampur Thermal Project

Ghatampur Transmission Limited

December 2, 2016

SPV transferred on June 19, 2018 to Adani Transmission Limited.


Transmission System Strengthening in Jharkhand State (Package-1)

Chandil Transmission Limited

March 14, 2018

The Bidding process is expected to complete during the financial year 2018-19.


Transmission System Strengthening in Jharkhand State (Package-2)

Dumka Transmission Limited

March 23, 2018


Transmission System Strengthening in Jharkhand State (Package-3)

Mandar Transmission Limited

March 26, 2018


Transmission System Strengthening in Jharkhand State (Package-4)


Transmission Limited

March 19, 2018

Besides the above, during the financial year 2017-18, RECTPCL has also bagged the following assignments:

1.    Bid Process Coordinator work for KSEB Transmission works;

2.    Preparation of DPR for feeder separation work of MSEDCL;

3.    Bid process coordinator & PMC services for design, supply, erection, testing & commissioning of 220 kV GIS S/s & Transmission work of Saligaon by GED.

Financial Performance

During the financial year ended March 31, 2018, RECTPCL has recorded an income of Rs.53.30 crore as compared to Rs.52.38 crore in the previous financial year. The Profit before tax and Profit after tax for the financial year 2017-18 is Rs.47.22 crore and Rs.35.29 crore, respectively. The Net worth of the Company as on March 31, 2018 was Rs.176.54 crore against initial Capital of Rs.0.05 crore injected by Rural Electrification Corporation Limited (holding company) in the year 2007. Further, the Board of Directors of the company have recommended a dividend of Rs.7,058/- per equity share i.e. 70,580% on the paid up equity share of Rs.10/- each for the financial year 2017-18, subject to approval of shareholders in the ensuing Annual General Meeting.

Scheme of Arrangement for amalgamation of RECTPCL with RECPDCL

In order to have better operational efficiency and to reap the benefits of higher capital base & pooled resources, it was proposed to merge two unlisted wholly owned subsidiary companies of Rural Electrification Corporation Limited i.e. RECPDCL and RECTPCL into one single entity.

Accordingly, as per provisions of the Companies Act, 2013 and Rules made thereunder and after the approval of Board of Directors, shareholders, creditors of respective companies and approval of holding company i.e. REC, an application was filed with the Ministry of Corporate Affairs (MCA) on March 27, 2018, by both subsidiary companies for sanction of Scheme of Arrangement for amalgamation of RECTPCL (Transferor Company) with RECPDCL (Transferee Company) and the approval of the same is awaited.


REC, along with three other PSUs, namely Power Grid Corporation of India Limited, NTPC Limited and Power Finance Corporation Limited as partners, has formed a Joint Venture Company by the name Energy Efficiency Services Limited (EESL) on December 10, 2009. EESL is a Super Energy Service Company (ESCO). It acts as the resource center for capacity building for State Distribution Companies (DISCOMs), Energy Regulatory Commissions (ERCs), State Development Authorities (SDAs), upcoming ESCOs, financial institutions, etc. REC has contributed Rs.146.50 crore (being 31.71% of paid-up capital of EESL) upto March 31, 2018. However, after infusion of additional equity by other promoters, as on date, REC holds 21.70% of the paid up share capital of the Company.

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

Currently, EESL is implementing world’s largest non-subsidy based LED lighting programme: Unnat Jyoti by Affordable LED for ALL (UJALA) Programme for distribution of LED bulbs, LED tube lights and Energy Efficient fans to domestic consumers, world’s largest street light replacement programme: Street Lighting National Programme (SLNP) to replace conventional street lights with smart and energy efficient LED street lights in municipalities, National E-Mobility Programme to provide electric vehicles for Government entities on lease/outright purchase basis to replace the existing petrol and diesel vehicles taken on lease by various Government organizations, world’s largest Agricultural Demand Side Management programme: AgDSM Programme for replacement of inefficient Agricultural Pump sets in agriculture sector, Building Energy Efficiency Programme (BEEP) to retrofit energy efficient appliances in buildings to make them energy efficient, Smart Meter National Programme (SMNP) to replace conventional meters with smart meters, Municipal Energy Efficiency Programme (MEEP) under AMRUT for implementation of energy efficient pump sets in public water works and sewage systems after approval of the ULB/ State Government, Solar Programme for implementing solar roof top and decentralized small solar power plant, Atal Jyoti Yojna (AJAY) for installation of solar LED street lights in rural, semi-urban areas which don’t enjoy adequate coverage of power, Solar Urja Lamps (SoUL) for distribution of solar study lamps to school going children.

The performance of EESL during the year has improved and the financial performance of the company is on the growth path. The turnover of the company has grown from Rs.5 crore in financial year 2012-13 to Rs.1,411 crore in the financial year 2017-18. During the financial year, Profit Before Tax (PBT) is Rs.61.50 crore and the Profit After Tax (PAT) is Rs.39.46 crore.


Pursuant to Section 129 of the Companies Act, 2013 and Accounting Standard-21 & Accounting Standard-27, the Company has prepared Consolidated Financial Statements including that of its Subsidiary Companies i.e. RECTPCL & RECPDCL (Audited) and Joint Venture Company i.e. EESL (Un-audited), which shall be laid before the ensuing 49th Annual General Meeting along with the Standalone Financial Statements of the Company. However, those wholly owned subsidiary companies which are incorporated by RECTPCL & are subsidiary of REC in terms of provisions of Section 2(87) of Companies Act, 2013, for the purpose of subsequent disposal have not been consolidated in the financial statements of the Company.

Pursuant to sub-section (3) of Section 129 of the Act, a statement containing the salient features of the financial statements of subsidiaries and joint venture in Form AOC-1 forms part of this Annual Report.

The Audited Financial Statements including the consolidated financial statements and audited accounts of subsidiaries of the Company are available on the website of the Company at Further, these documents will be kept for inspection by any member or trustee of the holder of any debentures at the Registered Office of the Company. The Company will also make available copy thereof upon specific request by any member of the Company interested in obtaining the same.


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

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

During the financial year 2017-18, Shri Arun Singh (DIN: 00891728), Independent Director of REC, resigned from the Board of the Company due to personal reasons and ceased to be a Director w.e.f. March 8, 2018.

In terms of order dated May 17, 2012 issued by the Ministry of Power, Government of India, Shri Ajeet Kumar Agarwal (DIN: 02231613) had assumed charge as Director (Finance) of the Company with effect from August 1, 2012 and his tenure of five years came to an end on July 31, 2017. However, Ministry of Power vide its order dated July 19, 2017, extended his tenure as Director (Finance) of the Company from August 1, 2017 to May 31, 2020 i.e. the date of his superannuation, or until further orders, whichever is earlier.

The Ministry of Power, Government of India vide its Order No. 20/6/2017-Coord. dated July 17, 2018, has appointed Dr. Bhagvat Kisanrao Karad (DIN: 00998839) as Non-official Independent Director on the Board of REC for a period of three years from the date of notification of his appointment or till further orders, whichever is earlier.

Further, in line with the statutory requirements, all the Independent Directors have given the requisite declaration that they meet the criteria of independence and none of the Directors are related inter-se.

In accordance with the provisions of the Companies Act, 2013 and Article 91 (iv) of the Articles of Association of the Company, Shri Sanjeev Kumar Gupta (DIN: 03464342), Director (Technical) shall retire by rotation at the 49th Annual General Meeting of the Company and being eligible, offers himself for re-appointment. The Board of Directors recommends his re-appointment as a Director. His brief resume is annexed to the Notice of the AGM.


As per the statutory provisions, a listed company is required to disclose in its Board’s Report, a statement indicating the manner in which formal annual evaluation of the performance of the Board, its Committees and individual Directors has been made and the criteria for performance evaluation of Independent Directors, as laid down by Nomination and Remuneration Committee.

However, Ministry of Corporate Affairs vide its notification dated June 5, 2015 has inter-alia exempted the Government Companies from the above requirement in case the Directors are evaluated by the Ministry or Department of the Central Government which is administratively in charge of the Company, as per its own evaluation methodology. Further, MCA vide Notification dated July 5, 2017, also prescribed that the provisions relating to review of performance of Independent Directors and evaluation mechanism, prescribed in Schedule IV of the Companies Act, 2013, is not applicable to Government Companies.

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

Further, your Company also enters into Memorandum of Understanding (MoU) with Ministry of Power, Government of India each year, demarcating key performance parameters for the Company and the performance of the Company is evaluated vis-a-vis MoU parameters.


The performance of the Company in terms of MoU signed with the Ministry of Power, Government of India for the financial year 2016-17 has been rated as “Excellent”. This is the 24th year in succession that REC has received “Excellent” rating since the year 1993-94 when the first MoU was signed with the Government. The rating for financial year 2017-18 is still awaited.

During the financial year 2017-18, the Company has been conferred with the ‘Certificate of Recognition for Excellence in Corporate Governance’by the Institute of Company Secretaries of India (ICSI), at the Rs.17th ICSI National Awards for Excellence in Corporate Governance’, in recognition of its continuous efforts and innovative practices in promoting good corporate governance.

Further, REC has also received the Governance Now 5th PSU Award, 2017, CBIP Award for Best Power Financing Company and “SCOPE Award for Excellence and Outstanding Contribution to the Public Sector Management” for the year 2016-17 under Special Institutional Category, Digitalization, during the year under review.


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, 2018, the applicable Accounting Standards have been followed and no material departures have been made from the same;

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

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

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

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

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


The Companies Act, 2013 permits companies to send documents like Notice of Annual General Meeting, Annual Report and other documents through electronic means to its members at their registered email addresses, besides sending the same in physical form.

As a responsible Corporate Citizen, the Company has actively supported the implementation of ‘Green Initiative’of Ministry of Corporate Affairs (MCA) and effected electronic delivery of Notices and Annual Reports since 2010-11 to those share holders whose email ids were already registered with the respective Depository Participants (DPs) and who have not opted for receiving such documents in physical form. The intimation of dividends (interim/final) is also being sent electronically to those shareholders whose email ids are registered.

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

It is reiterated that upon receipt of requisition from the member including the members who have exercised the option of electronic delivery of these documents, every member of the Company is entitled to receive free of cost, a copy of the Balance Sheet of the Company and all other documents required by law to be attached thereto, including the Statement of Profit and Loss and Auditors’Report, etc.

Further, pursuant to Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014, the Company is providing e-voting facility to all members to enable them to cast their votes electronically in respect of resolutions set forth in the Notice of Annual General Meeting (AGM). The detailed instructions for e-voting are provided in the Notice of AGM.

The Company has also sent reminder letters to such shareholders, whose folios do not have or are having incomplete details with regard to PAN and Bank particulars, requesting them to furnish their PAN and Bank details to the Company for updation. A specimen letter and proforma for updation of PAN, Bank and contact details, forms part of this Annual Report and is also available on the website of the Company.


REC organized various cleanliness programmes during the “Swachh Bharat Pakhwada” from September 15, 2017 to October 2, 2017 at Corporate Office of the Company. During the cleanliness programmes, banners & posters were fixed in and around office premises to spread awareness among employees and general public. All employees of REC participated with great enthusiasm and zeal & undertook special cleanliness drive of their respective office premises, toilets, stairs, lifts & other surrounding areas. REC organized 10 Nukkad Nataks in different locations across Delhi to spread awareness about hygiene & sanitation and waste management by encouraging people to participate in ‘Swachhta Hi Seva’campaign. Old and unwanted records were weeded out as per Record Retention Schedule. In this process official papers, magazines, periodicals, draft reports, etc. were disposed off. A new paper-less software has also been developed for completely discontinuing the use of paper for official work. Cleanliness is continuous process and it will continue in REC.


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

The status of RTI applications and appeals during the financial year 2017-18 is as follows:

Sl. No.




Applications received



Applications disposed off



Applications disposed off subsequently



Appeals received by First Appellate Authority, REC



Appeals disposed off by First Appellate Authority, REC



Second Appeal notice received from Central Information Commission (CIC)



Second Appeal disposed off by Central Information Commission (CIC)



REC encourages participation by Micro, Small and Medium Enterprises (MSMEs) including Micro and Small Enterprises owned by SC/ST and for the guidelines for MSMEs as defined in the purchase procedure, is being followed in the Company.

REC being financial institution, is not executing any project. Hence, only procurement of office equipment like computers, printers and petty purchase i.e. consumables & stationery items, other miscellaneous items & services, etc. from market are being made. Accordingly, the Company has requested the Ministry of Micro, Small & Medium Enterprises, to grant exemption to REC from compliance of MSE procurement target of 20%, including minimum of 4% from MSEs owned by SC/ST Entrepreneurs. However, during the financial year 2017-18, procurement amounting to Rs.1.64 crore were made from MSEs.

REC Public Procurement Policy for MSME is available on the website of the Company.


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

During the financial year 2017-18, the Company did not receive any complaint of sexual harassment.


Pursuant to Section 92(3) of Companies Act, 2013 read with Rule 12(1) of Companies (Management and Administration) Rules, 2014, an extract of Annual Return in Form MGT-9, is annexed to this report.


In compliance of the provisions of the Companies Act, 2013, the particulars of contracts or arrangements entered into by the Company with its related parties are disclosed in Form AOC-2, annexed to this report.


M/s G.S. Mathur & Co., Chartered Accountants (Firm Reg. No.: 008744N), New Delhi and M/s A.R. & Co., Chartered Accountants (Firm Reg. No.: 002744C), New Delhi, were appointed as Statutory Auditors of your Company for the financial year 2017-18 by the Comptroller and Auditor General (C&AG) of India. The Statutory Auditors have audited the Financial Statements of the Company for the financial year ended March 31, 2018.

Further, the Comptroller and Auditor General (C&AG) of India, in exercise of powers conferred under Section 139 of the Companies Act, 2013 has appointed M/s G.S. Mathur & Co., Chartered Accountants (Firm Reg. No.: 008744N) and M/s A.R. & Co., Chartered Accountants (Firm Reg. No. :002744C), New Delhi as the Statutory Auditors of the Company for the financial year 2018-19 and the Statutory Auditors have also accepted their appointment. Approval of the Members of the Company will be obtained in ensuing Annual General Meeting, to authorize the Board of Directors of the Company, to fix the remuneration of Auditors for the financial year 2018-19.


M/s Chandrasekaran Associates, Practicing Company Secretaries (Certificate of Practice No.3850), New Delhi were appointed as Secretarial Auditors of the Company for carrying out Secretarial Audit for the financial year 2017-18. In terms of Section 204 of the Companies Act, 2013 and Rules made thereunder, they have issued Secretarial Audit Report for the financial year 2017-18 and the same is annexed to this Report.

35.1 Management’s Comments on the Auditors’Report

Though, auditors have not given any qualifications, reservations, adverse remarks or disclaimers in their report on standalone and consolidated financial statements of the Company but they have made certain observations on further strengthening of the internal financial controls. Accordingly, the auditor observations and Management Reply to the observations of the Statutory Auditors is as under:

Observation of Statutory Auditors

Management’s Reply

Annexure to the Independent Auditors’Report referred under ‘Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)’of Independent Auditors’Report on Standalone Financial Statements (Annexure-C) & Consolidated Financial Statements (Annexure-A)

In our opinion, the Company has, in all material aspects, an adequate internal financial controls system, except (i) improvement in ERP system relating to determination of non-performing assets, revalidation of the sanctions of loans and recording of non-entertaining/rejection/disposal of applications of the loans, (ii) strengthening of procedures for monitoring of utilization of funds disbursed to the borrowers, (iii) procedure for processing of the claims of service providers, (iv) rotation of duties amongst staff as per HR Policy to be implemented in letter and spirit, over financial reporting.

Continuous efforts are being made to further strengthen the internal control in the said areas.

The Secretarial Auditors of the Company have given an unqualified report for the financial year 2017-18. However, they have one observation relating to composition of Board of Directors. The Management’s Reply to the observation is as under:

Observation of Secretarial Auditors

Management’s Reply

During the period under review the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above, including the provisions of Section 149 of the Companies Act, 2013 and read with regulation 17 of SEBI (Listing Obligation & Disclosure Requirements), Regulation, 2015, with respect to the composition of Board of Directors till March 7, 2018. Thereafter, vacancy of One Independent Director exists in the Company.

During the financial year 2017-18, the composition of Board of Directors was in compliance with all the applicable provisions till March 7, 2018. However, Shri Arun Singh, Independent Director of the Company, resigned from the Board due to personal reasons and ceased to be a Director w.e.f. March 8, 2018.

Further, Ministry of Power vide its Order dated July 17, 2018 has appointed Dr. Bhagvat Kisanrao Karad as Part Time Non Official Independent Director on the Board of REC.

Accordingly, after the above appointment, the composition of Board of the Company is in compliance with the provisions of the Companies Act 2013, SEBI (LODR) Regulations, 2015 and DPE Guidelines on Corporate Governance for CPSEs.


The Comptroller and Auditor General (C&AG) of India, vide letter dated August 2, 2018 has given ‘Nil’Comments on the Audited Financial Statements of the Company for the year ended March 31, 2018 under Section 143 (6) (a) of the Companies Act, 2013. The Comments of C&AG for the financial year 2017-18, have been placed along with the report of Statutory Auditors of the Company elsewhere in this Annual Report.


In compliance to the requirements of SEBI (LODR) Regulations, 2015, the details of Debenture Trustees appointed by the Company, for different series of Bonds issued by the Company, from time to time, is annexed to this report.


a)    There was no change in the nature of business of the Company during the financial year 2017-18.

b)    The Company has not accepted any public deposits during the financial year 2017-18.

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

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

e)    Information on composition, terms of reference and number of meetings of the Board & its Committees held during the year, establishment of vigil mechanism/whistle blower policy and web-links for familiarization/training policy of Directors, Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions and Policy for determining Material Subsidiaries, Compensation to Key Managerial Personnel, Sitting fees to Independent Directors, etc. have been provided in the Report on Corporate Governance, prepared in compliance of provisions of SEBI (LODR) Regulations, 2015, which forms part of the Annual Report.

f)    Pursuant to Section 186(11) of the Companies Act, 2013, loans made, guarantees given or securities provided by a company engaged in the business of financing of companies or of providing infrastructural facilities in the ordinary course of its business are not applicable to the Company, hence no disclosure is required to be made. Further, the details of investments are given at Note No.8 of Notes to Accounts to Standalone Financial Statements.

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

h)    There are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of the financial year i.e. March 31, 2018 and the date of this report.

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

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

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


The construction of REC state of art office building at Sector-29, Gurugram is being executed in full swing. RCC works of this G+5 storey building is almost completed except auditorium roof. Services work like installation of HVAC duct, firefighting pipe, electrical work, installation of fresh air & ventilation fans, flooring and block masonry work are almost completed in all three basements. Interior work and allied services works in superstructure are also taken up in parallel to civil works. Fagade glass envelope and roof top solar pergola structure works are also in progress. Efforts are being made to complete the building by December, 2018.

During the financial year 2017-18, the building project has been declared winner in two categories (i) Integrated Water Management and (ii) Energy Management by GRIHA Council (Authority giving green building certification) during 9th GRIHA Summit, which will further help REC in achieving GRIHA 5 Star rating on completion of project.


Information required to be furnished as per the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 and other applicable statutory provisions is annexed to this report as under:



Management Discussion & Analysis Report


Report on Corporate Governance


Auditor’s Certificate on Corporate Governance


Business Responsibility Report


Secretarial Audit Report


Annual Report on CSR Activities


Extract of Annual Return


Particulars of Contracts or Arrangements with Related Parties


Details of Debenture Trustees appointed by the Company for different series of Bonds



The Directors are grateful to the Government of India particularly the Ministry of Power, Ministry of Finance, NITI Aayog, DIPAM, DPE and the Reserve Bank of India for their continued co-operation, support and guidance in effective management of the Company’s affairs and resources.

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

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

The Directors also thank M/s G.S.Mathur & Co. and M/s A.R & Co., Statutory Auditors, M/s Chandrasekaran Associates, Secretarial Auditors and the Comptroller & Auditor General of India for their valued contribution.

The Directors also sincerely appreciate and thank all the employees of the Company for their valuable contribution and dedicated efforts in steering the Company to excellent performance for yet another year in succession.

                                                                                          For and on behalf of the Board of Directors

                                                                                                                                           P V Ramesh

                                                                                                          Chairman and Managing Director

                                                                                                                                     (DIN: 02836069)

Place: New Delhi

Date : August 23, 2018

Director’s Report