Your Directors have pleasure in presenting the Fifty Fifth Annual Report together with the Audited Financial Statements of your Company for the financial year ended on March 31,2024.

1. PERFORMANCE HIGHLIGHTS

1.1 Summary of performance

The highlights of performance of your Company for the fi nancial year 2023-24, with comparative position of previous year's performance, were as under:

(' in crore)

1.2    Financial performance

The Total Operating Income of your Company for the financial year 2023-24 was '47,146.30 crore as compared to '39,208.06 crore during the financial year 2022-23.

The Profit after Tax and Total Comprehensive Income for financial year 2023-24 was '14,019.21 crore and '15,063.48 crore respectively as compared to '11,054.64 crore and '10,083.60 crore for the financial year 2022-23.

Earnings Per Share (EPS) for the financial year ended March 31, 2024 was '53.11 per share of face value of '10/- each, as against EPS of '41.85 per share in the previous financial year. Net worth of the Company as on March 31, 2024 has increased to '68,783.15 crore, i.e. 19.25% higher than the Net Worth of '57,679.67 crore as on March 31,2023.

The Gross Loan Asset Book of your Company as on March 31, 2024 was '5,09,370.95 crore, as compared to '4,35,011.79 crore as on March 31, 2023. Further, the outstanding borrowings as on March 31,2024 were '4,37,943.59 crore.

1.3    Dividend

For the fi nancial year 2023-24, the Board of Directors of your Company has recommended a final dividend of '5.00/-per equity share of face value of '10/- each (50% of the paid up share capital), which is subject to approval of the shareholders in the 55^th Annual General Meeting scheduled to be held on August 20, 2024. The above dividend is in addition to 1^st Interim Dividend of '3/- per equity share (30% of the paid up share capital) paid on August 24, 2023, 2^nd Interim Dividend of '3.50/- per equity share (35% of the paid up share capital) paid on November 30, 2023 and 3^rd Interim Dividend of '4.50/- per equity share (45% of the paid up share capital paid on April 16, 2024).

The total dividend for the financial year 2023-24, including the final dividend, amounts to '16 per share of face value of

'10/- each, which is 160% of the paid-up share capital of the Company. For the last financial year 2022-23, the Company had paid a dividend of '12.60 per share of face value of '10/-each, which was 126% (post bonus) of the paid-up share capital of the Company.

The total dividend pay-out for the financial year 2023-24, including the final dividend, would work out to '4,213.16 crore. The dividend is paid in accordance with the Company's Dividend Distribution Policy, which is available at https://recindia.nic.in/policies

1.4    Share capital

As on March 31, 2024, the authorized share capital of the Company was '5,000 crore, consisting of 500 crore equity shares of '10/- each. The issued and paid-Up Share Capital of the Company was '2,633.22 crore, consisting of 2,63,32,24,000 equity shares of '10/- each. Power Finance Corporation Limited (PFC), a Government of India undertaking, held 52.63% of the paid-up equity share capital of the Company as on March 31,2024, comprising of 1,38,59,93,662 equity shares of '10/- each and the balance 47.37% paid-up equity share capital was held by public shareholders.

1.5    Policy initiatives

The Company regularly reviews, updates and strengthens its policy framework to enhance business value and meet statutory requirements and amendments.

During the financial year 2023-24, the Company focused on further enhancing its corporate governance framework. This involved amending the Policy on Criteria for Determining Materiality of Events or Information for disclosure to Stock Exchanges, specifying the process for refunding unclaimed amounts related to listed non-convertible securities and revising the IT outsourcing policy, among others. Further, various HR policies has also been updated/revised during the financial year.

To bolster its competitive position in the market, the Company has introduced and amended several business-oriented policies. Notable among these were the Policy for Issuance of Letter of Undertaking (LoU) for Renewable Energy Projects, Letter of Comfort policy for state & private sector, revisions in the REC's Refinancing Policy for Renewable Energy and Conventional Generation Projects. Additionally, a Policy for 'Incidental Charges' for non-compliance with

material terms and conditions or defaults in Loan Accounts was implemented.

2. FINANCIAL REVIEW

2.1 Summary of Financial Results

The summary of audited fi nancial results of the Company for the financial year 2023-24, vis-a-vis the previous financial year, is given as under:

(? in crore)

2.2    Contribution to National Exchequer

During the financial year 2023-24, the Company contributed an amount of '3,346.61 crore to the National Exchequer, which included '3,217.34 crore towards direct taxes and '129.27 crore towards Goods and Services Tax (GST). In the previous financial year, the total contribution to the National Exchequer was '2,805.76 crore.

2.3    Ratio analysis

A comparative statement of significant ratios of the Company for the financial year 2023-24 vis-a-vis the previous financial year, is given below:

*Net debt represent principal outstanding, less cash and cash equivalent available.

#PE Ratio is calculated based on closing price of RECs Equity Share at NSE, as on March 28,2024, (being last trading day) and as on March 31, 2023, respectively.

2.4 Resource mobilization

2.4.1    Total resource mobilization during the year

During the financial year 2023-24, the Company mobilized funds of '1,46,747 crore from the market. This included '36,961 crore from External Commercial Borrowings in different currencies, USD 2,487.06 million and JPY 2,41,657.05 million, '25,093 crore equivalent to USD 2,789.00 million and JPY 34,229 million from FCNR (B) loans, long and short rupee term loans from banks and financial institutions of '19,500 crore and '3,600 crore (including '100 crore short term loan rolled over for 1 year during fi nancial year 2023-24) respectively, '7,735 crore form commercial paper, '11,421 crore (includes pending allotment) from Capital Gains Tax Exemption Bonds and '42,437 crore (after adjustment of discount and premium) from Institutional Bonds.

2.4.2    Redemption and pre-payment

During the financial year 2023-24, the Company repaid a sum of '82,304.55 crore. This includes repayment amounting to '17,844 crore towards Institutional Bonds, '1,308.37 crore towards Tax-free Bonds, '6,651.31 crore towards Capital Gain Tax Exemption Bonds, '15,317.14 crore towards External Commercial Borrowings equivalent of USD 1,799.00 Million, '15,503.66 crore of FcNr loans equivalent of USD 1800 Million and Euro 69.77 million and '293.89 crore of ODA loans. The Company also repaid long term loans amounting to '23,136.17 crore to various banks and fi nancial institutions and short-term loans amounting to '2,250 crore (including '100 crore short term loan rolled over for 1 year during financial year 2023-24) and redeemed commercial paper amounting to '7,735 crore.

2.4.3    Cost of borrowing

The overall annualized cost of funds during fi nancial year 2023-24 was 7.13%.

Further, during the fi nancial year 2023-24, your company had raised funds of '39,066.39 crore (other than perpetual debt instruments) through listed bonds, at a cost of 7.60% p.a., which is 12 bps lower than the rates of similarly rated instruments issued by other CPSEs/entities (margin over Reuters).

2.4.4    Cash credit facilities

The Company has an approved cash credit / working capital demand loan / overdraft limit of '19,621 crore from various banks for its day-to-day operations, out of which '11,142 crore was availed as on March 31,2024.

2.4.5    Perpetual Debt Instruments

Your Company had raised Perpetual Debt Instruments (PDI) as follows:

As on March 31, 2024, the said instruments form 5.47% of the Tier-I capital of the Company. These PDI have no maturity and are callable only at the option of the Company after 10 years and relevant detailed disclosure on PDI is appearing in notes to accounts of the standalone financial statements forming part of this Annual Report.

2.4.6 Green Bonds issued by REC

In alignment with India's Climate action plan to increase the renewable energy capacity with an ultimate objective to reduce the carbon emissions and carbon intensity, REC raises funds through Green Bonds from time to time considering market conditions.

Annual Impact Reporting for Green Bonds - fi nancial year 2023-24

REC had raised following Green Bonds till financial year 2023-24:

REC raised USD 750 Million in April, 2023 for a tenor of five years through USD Green Bonds. These bonds are listed exclusively at IFSC Stock exchanges, i.e. India INX and NSE IFSC in GIFT City, Gandhinagar, Gujarat. The bond issuance was the fi rst Green Bond issuance by an Indian Company post India's G20 Presidency and the largest ever Green Bond Tranche by a South & South-East Asian issuer. The proceeds from these bonds are being utilized towards eligible green projects in accordance with REC's Green Finance Framework.

Further, in January 2024, REC had raised JPY 61.1 billion which was REC's eleventh venture into the international bond market and inaugural Yen Bond issuance. This was also the first Yen Green Bonds issuance by any Indian PSU. The bond was 5-year, 5.25-year and 10-year bonds. The same was largest ever Euro-Yen issuance in South & South East Asia and Largest Yen-denominated issuance from India. The transaction witnessed interest both from Japanese and international accounts with number of orders from each at 50%, international allocation being one of the highest for any other Indian Yen deal. These bonds are listed exclusively at IFSC Stock Exchanges i.e. India INX and NSE IFSC in GIFT City, Gandhinagar, Gujarat.

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

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

In accordance with the Green Bond framework, REC has created a 'Green Portfolio' managed through a well laid internal tracking system, updated on regular basis, to monitor, establish and account for the allocation of the proceeds for such Green Portfolio.

Managements of Proceeds: The net proceeds from the Green Bonds were allocated against the following projects as on March 31,2024:

A. USD 450 million Green Bond

B. USD 750 million Green Bond

C. JPY 61.10 billion Green Bond Project

Note: Loan amount sanction of '29,985.32 crore and '3,081.30 crore towards clean transport for Mumbai, Maharashtra and hybrid projects for Gadag, Karnataka has been partially utilised for disbursement from proceeds of USD 750 Million Bond and JPY 61.10 Billion Bond as detailed in table B and C.

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

2.4.7 International Cooperation & Development

REC has 6 lines of ODA (Offi cial Development Assistance) credit with KfW, Germany. Out of which, first four lines have been fully drawn. In FY 2021-22, REC had entered into fifth line of credit with KfW for availing ODA term loan of USD

169.5 Million under Indo-German Bilateral Partnership in accordance with the approval granted by Department of Economic Affairs, Ministry of Finance, Government of India for part financing of innovative Solar PV Technology based. Under this facility, total amount of USD 123.15 Million has been drawn till March 31,2024.

Further, in 2023, REC signed a Sixth line of credit with KfW for availing ODA term loan of 200 million Euro. This line of

credit under the Indo-Germanic Development Cooperation will be utilized to refinance investments in the distribution infrastructure of DISCOMs in alignment with the Revamped Distribution Sector Scheme (RDSS) of the Government of India. Under this facility, no amount has been drawn till March 31,2024.

Apart from the above, REC had two lines of ODA credit with JICA, Japan, under JICA-I & II ODA loans which have been fully repaid.

2.5 Domestic and International Credit Rating

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 throughout the financial year 2023-24. Further, REC enjoys international credit rating from international credit rating agencies Moody's, FITCH and Japan Credit Rating of "Baa3'; "BBB-"and"BBB+"respectively, which is at par with the sovereign rating of India. Further details of credit ratings are given in the corporate governance report annexed to this report.

2.6    Investments made during the financial year 2023-24

In terms of RBI's circular on High Quality Liquid Assets (HQLAs) during the fi nancial year 2023-24, Company has invested in State Government Securities (SGS) and Corporate Bonds.

Further, 58,82,025 no. of equity shares held in NHPC Limited and 3,47,429 no. of equity shares held in Housing and Urban Development Corporation Limited, respectively, were sold through stock exchange mechanism, at prevailing market price which was higher than its purchase price, thus resulting in cumulative gain of '52.51 crore. Other details of investments made by the Company are appearing in note no. 10 of the notes to accounts of the standalone financial statements.

2.7    Financial status at the close of the year

At the close of the financial year 2023-24, the total resources of your Company stood at '5,47,440.39 crore.

Out of this, equity share capital contributed '2,633.22 crore, instruments entirely equity in nature comprised '558.40 crore, other equity including Reserves & Surplus stood at '65,591.53 crore, fi nancial liabilities including borrowings and other financial liabilities accounted for '4,78,214.54 crore and non-financial liabilities including provisions stood at '442.70 crore.

These funds were deployed as financial assets including longterm and short-term loans, investments etc. of '5,43,917.60 crore and non-fi nancial assets including property, plant & equipment, tax assets etc. of '3,522.74 crore, besides asset classified as held for sale, amounting to '0.05 crore.

3.    LOANS SANCTIONED

During the financial year 2023-24, the company has sanctioned loans worth '3,58,816.34 crore as against '2,68,460.54 crore in the previous financial year.

The loans sanctioned for the financial year 2023-24 includes '67,112.15 crore towards Conventional Generation Projects (including coal purchase/mining), '1,36,516.17 crore towards Renewable Energy projects (including Large Hydro), '1,01,994.08 crore towards T&D projects including the loans under Revolving Bill Payment Facility and Late Payment Surcharge, '40,568.92 crore towards Infrastructure & Logistics projects (including E&M works) and '12,625.02 crore towards Short Term & Medium Term Loans. Details of category-wise sanctions during the year are appearing subsequently in this report.

4.    DISBURSEMENTS

During the financial year 2023-24, the Company disbursed total sum of '161,462.28 crore, as against '96,846.30 crore in the previous financial year.

The disbursements for financial year 2023-24 included '25,053.77 crore towards generation projects, '16,024.22

crore towards renewable energy projects, '47,582.22 crore towards T&D projects, '9,339.40 crore towards Power Infrastructure projects, '7,675.84 crore towards Infrastructure & Logistics projects, '55,589.51 crore towards other loans including short term and RBPF and '197.32 crore of counter-part funding under RDSS, DDUGJY (including DDG component) and SAUBHAGYA schemes of the Government of India.

5. RECOVERIES

5.1    Recoveries during the financial year

Your Company gives utmost priority to timely realization of its dues towards principal, interest, etc. During the financial year 2023-24, the amount due for recovery including interest for Standard Assets (Stage I & II) was '1,31,403.85 crore, as compared to '83,138.84 crore during the previous financial year. The Company recovered a total sum of '1,31,041.76 crore towards Standard Assets (Stage I & II) during the year, as against '82,910.87 crore in the previous financial year. The Company achieved recovery rate of 99.55% for the financial year 2023-24. The principal overdues from defaulting borrowers pertaining to Standard Assets (Stage I & II) as on March 31, 2024 were '237.17 crore. Further, an amount of '137.09 crore has been recovered from Credit Impaired Assets (Stage III) in the financial year 2023-24, as compared to '1,786.72 crore recovered in the previous financial year.

5.2    Credit Impaired Assets

Your Company's Credit Impaired Assets (Stage III) continue to be at low levels. The Company has created "Impairment Reserve" from its profits, which is higher than the minimum requirement specified under Income Recognition, Asset Classification and Provisioning (IRACP) Norms (including standard asset provisioning) issued by RBI.

As on March 31, 2024 the Gross Credit Impaired Assets (Stage III) were '13,810.33 crore, which is 2.71% of Gross Loan Assets; and Net Credit Impaired Assets (Stage III) were '4,356.52 crore, which is 0.86% of the Gross Loan Assets.

5.3    Stressed Asset Management

REC continuously works towards resolution of stressed assets, through various frameworks including RBI framework and resolution under Insolvency and Bankruptcy Code (IBC). REC has been able to contain its NPAs at minimum level, i.e. one of the lowest amongst peer Companies in power sector. During the financial year 2023-24, REC has successfully resolved and upgraded three stressed power projects, as per the details given below:

(' in crore)

6. APPRAISAL SYSTEM FOR FINANCING

6.1    Appraisal system for financing private sector projects

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

6.2    Grading of state power utilities, JVs, companies, entities etc.

Your Company has a well-defined policy and guidelines for grading of State power utilities (excluding State Discoms, State Electricity Boards / Utilities with integrated operations and Power Departments). The grading of State power utilities (generation, transmission, trading, holding company etc.) is carried out twice during a year, based on the evaluation of the utility's performance against specific parameters, operational and financial performance, regulatory compliances, annual financial results etc. With regard to State power distribution utilities (including SEBs / utilities with integrated operations and Power Departments), the Company adopts the final annual integrated ratings carried out by independent rating agencies, after approval of framework and rating by the Ministry of Power, Government of India. The rating framework for integrated rating of discoms have been reviewed and modified by external consultant.

For the purpose of funding, your Company has classified the utilities/entities into A++, A+, A, B & C categories. During the financial year 2023-24, your Company has completed grading in respect of 180 utilities (excluding State Government), out of which 21 utilities were graded as A++, 48 as A+, 45 as A,

31 as B and 28 utilities as C category. Further, 7 utilities were non-responsive, therefore not graded.

6.3 Project Monitoring

Project monitoring is an important activity for a large and diverse fi nancial institution like REC. Accordingly, REC has developed an elaborative and comprehensive projectmonitoring framework, which aims to ensure timely completion of projects, reduce risks and mitigate cost overruns in the projects.

The Project Monitoring Guidelines adopted by the Company cover a whole gamut of steps for the overall rigorous monitoring of under-construction as well as commissioned projects. The frequency of monitoring is finalised based on various factors like loan sector, type of project, construction stage, the size of loan and status of disbursement etc.

The overall project monitoring activities are overseen by a dedicated group at Corporate level. Project monitoring is carried out by our Regional Offi ces located across the country and also by the concerned Divisions at Corporate level. Additionally, to ensure efficient monitoring of private sector projects, independent Project Management Agencies (PMAs) are also being appointed. The important observations of the monitoring are taken up with the project developers for resolution on a regular basis.

A monthly MIS covering details of project monitoring carried out at various levels is shared with all concerned in REC.

7. FINANCING ACTIVITIES DURING THE YEAR

Your Company has been providing funding assistance for power generation (including conventional and renewable energy), transmission and distribution projects, Infrastructure and Logistics projects including for the electrification of villages and under the various schemes of the Government of India.

Details of major financing activities during the financial year under review were as follows:

7.1    Generation

During the financial year 2023-24, your company sanctioned 28 nos. of loans towards Generation Projects (other than Hydro Projects) including implementation of pollution control equipment, coal mining projects, procurement of coal etc. and sanctioned total loan assistance of '67,112.15 crore, as per details given below:

7.2    Renewable Energy

(' in crore)

During the financial year 2023-24, your company has sanctioned 82 nos. of Renewable Energy projects (including large hydro projects) with installed capacity aggregating to 17,465 MW, Solar Park, e-Mobility projects with total loan assistance of '1,36,516.17 crore, as per details given below:

The above loans includes 10 Large Hydro projects with

(' in crore)

aggregate capacity of 4,876 MW, 33 Solar Energy projects with aggregate capacity of 4,423 MW, 15 Wind Energy projects with aggregate capacity of 917 MW, 3 Solar+Wind Hybrid projects of 1,775 MW aggregate capacity with battery energy storage system, 5 Pumped Storage Project with aggregate capacity of 5,450 MW, 3 Small Hydro projects with aggregate capacity of 24 MW, 3 Solar Module Manufacturing Plants, 2 Wind Turbine Manufacturing Plants, 1 Solar Infra Park, 1 Compressed Biogas (CBG) production plant, 3 E-mobility projects for procurement of 5,750 electric Buses, 2 Green Ammonia projects and 1 R&M work for Hydro Project.

7.3 Transmission & Distribution

During the financial year 2023-24, your company has sanctioned 607 nos. of Transmission & Distribution (T&D) schemes/projects involving a total loan assistance of '1,01,944.08 crore including RDSS, LPS and RBPF schemes of Government of India.

Details of loans sanctioned under T&D category during the financial year 2023-24 are given below:

(' in crore)

7.4 Infrastructure & Logistics

During the financial year 2023-24, your Company has sanctioned 38 no. of Infrastructure & Logistics projects involving a total loan assistance '40,568.92 crore in several large-scale Infrastructure projects in areas such as development of Highways/Roads, Metro rail systems, Airports, Hospitals etc.

Details of Infrastructure & Logistics loans sanctioned during the financial year 2023-24 are given below:

(' in crore)

7.5    Short / Medium Term Loans and other loan assistance

Your company has also sanctioned 27 nos. of Short Term & Medium Term Loans aggregating to '12,625.02 crore to various power sector borrowers during the fi nancial year 2023-24 towards their short-term or medium-term fund requirement and working capital requirement etc.

7.6    Financing activities in North Eastern States

During the financial year 2023-24 the total financial assistance sanctioned by your company in the North Eastern States includes a sum of '4,919.29 crore towards 2 projects.

8.    PRESENT T&D SCENARIO AND OTHER REFORMS

As the Country's installed generation capacity is at a high of 442 GW (as on March 31, 2024) and there are huge capacities planned in the renewable and thermal space, the Transmission and Distribution (T&D) sector is poised to witness growth. There is also a need to modernize the transmission and distribution infrastructure. Need of the hour is to install a state-of-the-art robust and reliable evacuation and distribution system, capable of handling higher loads. Distribution remains the most critical link in the power sector value chain, reforms in the DISCOMs under the Government of India's flagship programme, such as Revamped Distribution Sector Scheme (RDSS) will improve their operational efficiencies and financial sustainability. Therefore, T&D segment shall play a significant role in making the sector reliable, affordable and capable of absorbing envisaged future growth.

Your Company, as the nodal agency to various schemes of the Ministry of Power, Government of India, plays an active role in creating new infrastructure and augmentation/

strengthening of the existing network. Your Company finances entire gamut of transmission and distribution projects, broadly with the objectives of system improvement and augmentation, loss reduction measures, IT based system implementation, consumer satisfaction, smart metering projects, working capital requirements of power utilities etc., thus playing a significant role in the development and sustainability of the power sector and overall socioeconomic progress of the country.

8.1 Major reforms in the Distribution Sector

The Government has implemented various schemes and programmes in the recent past, to improve the fi nancial and operational performance of distribution companies (discoms). The policy framework of Government to support distribution sector includes initiatives like Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA), Ujwal DISCOM Assurance Yojana (UDAY), Integrated Power Development Scheme (IPDS), National Electricity Fund (NEF), Liquidity Infusion Scheme (LIS), Late Payment Surcharge (LPS) etc., to name a few.

This has resulted in major infrastructure creation and bridging of supply side gaps in the distribution sector. The discoms need to focus on improving their operational efficiencies and financial sustainability, to meet the desired consumer service standards.

It is with this aim and the Government of India's commitment to provide 24x7 uninterrupted, quality, reliable and affordable power supply, that the reforms-based and results-linked Revamped Distribution Sector Scheme (RDSS) was launched in 2021, for supporting discoms to

undertake reforms and improve performance in a time-bound manner. Your company as the Nodal agency for this flagship scheme of Government of India, has been assigned 19 States/Union Territories for overseeing and monitoring of implementation of the scheme, namely Assam, Meghalaya, Arunachal Pradesh, Chhattisgarh, Jammu & Kashmir, Ladakh, Goa, Tamil Nadu, Karnataka, Bihar, Rajasthan, Uttar Pradesh, West Bengal, Andaman & Nicobar Islands, Sikkim, Mizoram, Manipur, Nagaland and Tripura. The remaining States / Union Territories have been assigned to PFC.

For ensuring electrification of remaining un-electrified households, the concerned proposals are also being sanctioned under RDSS. Government of India has recently launched the PM JANMAN scheme on November 15, 2023 which aims at the targeted development of 75 Particularly Vulnerable Tribal Groups (PVTG) residing in 18 States and the Union Territory of Andaman and Nicobar Islands. As part of this, electrification of PVTG and VVP habitations/ households are also being carried out under RDSS. Further, proposals for electrification of households in the villages identified under VVP (Vibrant Village Programme) are also being sanctioned under RDSS.

Your Company encourages discoms to expedite improvements and to adopt best practices, including modernization and automation of systems and smart grid, IT-enabled systems for metering and consumer services and other technological interventions of the distribution sector.

The Ministry of Power, Government of India has notified key reforms via Electricity Amendment rules, Rights of Consumer Rules, subsidy etc. which will bring about efli ciencies into the distribution sector and are also consumer centric. The major reforms are brought through bringing amendments to the following rules:

1)    Amendments to Electricity Rules, 2005

a)    Electricity (Amendment) Rules, 2022; prescribe implementation of formula and procedure for automatic pass through of Fuel and Power Procurement Adjustment Surcharge [FPPAS].

b)    Electricity (Amendment) Rules, 2023; covering aspects like establishment of a forum for redressal of grievances of consumers under section 42 of Act, appointment of Ombudsman by state commission etc.

c)    Electricity (Second Amendment) Rules, 2023; Notified covering subsidy accounting and payment, framework for fi nancial sustainability guiding states on AT&C loss trajectories, Promoting Renewable Energy Through Green Energy Open Access etc.

d)    Electricity (Amendment) Rules, 2024; Notifi ed covered charging of additional surcharge on Open Access consumers, cost reflective tariff etc.

2)    Electricity (Rights of Consumers) Rules, 2020

a) Electricity (Rights of Consumers) Amendment Rules, 2023; Notified covering provisions for reading of smart meters, implementation of Time-of-Day Tariff for commercial and industrial consumers, timely intimation to consumers on change in tariff etc.

b) Electricity (Rights of Consumers) Amendment Rules, 2024; Notified focussing on reduced timelines for consumers application processing, testing of energy meters etc.

3) Electricity (Promoting Renewable Energy through Green Energy Open Access) Rules, 2022

Electricity (Promoting Renewable Energy through Green Energy Open Access) (Second Amendment) Rules, 2023; Notified specifying contracted demand or sanctioned load of a consumer.

8.2 Revamped Distribution Sector Scheme (RDSS)

8.2.1    Overview

REC and PFC are the nodal agencies for the reforms-based and results-linked Revamped Distribution Sector Scheme (RDSS) notified by the Government of India vide OM dated July 20, 2021, with an outlay of '3,03,758 crore and estimated Gross Budgetary Support (GBS) from the Central Government of '97,631 crore over a period of 5 years i.e. financial year 2021-22 to financial year 2025-26. REC, as nodal agency, has been assigned 19 States/Union Territories for overseeing and monitoring of implementation of the scheme.

All discoms and power departments of State/Union Territories, excluding private sector discoms, are eligible for financial assistance under this scheme. The scheme is optional to discoms and is to be implemented in urban and rural areas of all States/Union Territories (except private discoms). The scheme allows States to adopt customized reform measures and plan infrastructure works to meet specific needs of the State with the approval of the Government of India.

8.2.2    Objectives

The objectives of the scheme are:

1.    To improve the quality, reliability and affordability of power supply to consumers through a financially sustainable and operationally efl cient distribution sector;

2.    To reduce the AT&C losses to Pan-India levels of 12-15% by 2024-25; and

3.    To reduce the ACS-ARR gap to zero by 2024-25.

The state-wise targets for reduction of AT&C losses/ACS-ARR revenue gap each year will depend on their current levels of AT&C losses and ACS-ARR gap.

8.2.3    Components

Part A - Metering & Distribution Infrastructure Works: Component-I : Prepaid Smart Metering

Component-II : System Metering and upgradation of the Distribution Infrastructure

Component-III : Project Management

Part B - Training & Capacity Building and other enabling & supporting activities:

Including upgradation of human skills, process improvements, nodal agency fee, enabling components of Ministry of Power (communication plan, publicity, consumer

survey, consumer awareness and other associated measures such as third-party evaluation etc.), augmentation of Smart Grid Knowledge Centre (including AI, training and capacity building for personnel involved in execution of the scheme at field level), awards and recognitions etc.

Ongoing approved projects: Projects sanctioned under PMDP 2015 in the erstwhile State of Jammu & Kashmir have been subsumed in RDSS.

8.2.4    Funding Pattern

The release of funds under the scheme will be linked to achievement of results and reforms laid down under an evaluation framework, as under:

Part A - Metering & Distribution Infrastructure Works

Component-I : Prepaid Smart metering solutions, including at consumer, DT and feeder level including integration of existing infrastructure, will be funded through GBS as under:

    for discoms in "Other than notified Special Category States", a fixed amount of '900 per consumer meter or 15% of the cost per consumer meter worked out for the whole project, whichever is lower.

    for discoms in "notified Special Category States", a fixed amount of '1,350 per consumer meter or 22.5% of the cost per consumer meter worked out for the whole project, whichever is lower.

To incentivize deployment of prepaid Smart meters within the targeted timeline of December 2023, the Scheme provide incentives as under:

    for discoms in "Other than notified Special Category States", a fixed amount of '450 per consumer meter or @ 7.5% of the cost per consumer meter worked out for the whole project, whichever is lower;

    for discoms in "notified Special Category States", a fixed amount of '675 per consumer meter or 11.25% of the cost per consumer meter, worked out for the whole project, whichever is lower.

Component-II: Distribution Infrastructure works, including SCADA, DMS, AB cables, feeder segregation etc. maximum fi nancial assistance to be funded through GBS will be as under:

    for discoms in "Other than Special Category States", up to 60% of the approved project cost and

    for discoms in "Special Category States", up to 90% of the approved project cost.

Part B - Training & Capacity Building and other Enabling & Supporting Activities:

    100% of the approved project cost will be eligible for funding through GBS.

Ongoing approved projects: Projects sanctioned under PMDP 2015 subsumed in RDSS will be eligible to receive grant funds under RDSS in terms of extant guidelines and terms & conditions of sanction.

8.2.5    Promoting use of advanced technologies in power distribution sector

RDSS lays special emphasis on leveraging advanced technologies to analyse data generated through

Information Technology (IT) / Operational Technology (OT) devices, including system meters and prepaid smart meters to materialize the envisaged goal i.e. introducing advanced technologies like Artificial Intelligence (AI) / Machine Learning (ML) in power distribution by leveraging partnerships and consultations.

A competition named "POWERTHON" was launched by Hon'ble Union Cabinet Minister of Power and New & Renewable Energy with the key objective to create a forum for the participation ofTechnology Solution Providers (TSPs), start-ups, educational institutions, research institutes, equipment manufacturers, state power utilities and other state and central power sector entities for showcasing their technology driven solutions based on advanced emerging technologies like AI/ML, Blockchain etc. to solve the complex problems being faced in the power Distribution sector.

REC had partnered with Society for Innovation & Entrepreneurship, Indian Institute of Technology, Bombay (SINE IIT-Bombay) as the nodal incubator for implementation of the POWERTHON framework to identify key intervention areas, select TSPs through a competitive screening process, establishing governance mechanisms for the pilot projects and its scale-up.

Under this partnership, 275 applications were received from Technology Solution Providers (TSPs) offering solutions across 10 key problem/challenge areas. Subsequently post screening and selection processes 16 TSPs were selected for 17 pilot projects across various DISCOMs. 7 Nos. of TSPs were successfully executed and their pilots across areas like Consumer experience enhancement, AT&C loss reduction, Energy Theft detection, Demand & load forecasting and Vegetation Management. Out of these 5 Pilot projects were executed by start-ups and 2 pilot projects by Non-Start-ups. These successful pilots projects are spread across states.

Alongwith the aforementioned, some of the Technology Solution Providers (TSPs) under the programme are also empanelled by RECPDCL (a wholly owned subsidiary of REC) under key modules like Billing Effi ciency, Collection Efficiency, improvement in Technical losses and Demand & Load Forecasting.

8.3 National Electricity Fund (NEF)

REC is the nodal agency for operationalization of National Electricity Fund (NEF), an interest subsidy scheme having provision of '8,466 crore (against interest subsidy and other incidental expenses), to be provided over 14 years against interest paid on loan disbursements amounting to '23,973 crore for distribution schemes sanctioned during two fi nancial years viz. 2012-13 and 2013-14. The Ministry of Power, Government of India provides interest subsidy on interest paid for loans availed by State power utilities & distribution companies, both in public and private sector, to improve the infrastructure in the distribution sector. In this reform-linked scheme, an interest subsidy of 3% to 7% is payable to discoms, on achievement of reform-based parameters outlined in NEF Guidelines.

The utilities from the States of Andhra Pradesh, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Karnataka, Maharashtra, Madhya Pradesh, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttarakhand and West Bengal have already benefited from this scheme, with interest subsidy of '2,462.36 crore released till March 31, 2024.

8.4    Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY)

The Government of India's flagship programme, DDUGJY, for which REC is the nodal agency, has been completed in its sunset year financial year 2021-22 i.e. on March 31,2022. All un-electrified villages/habitations, irrespective of population criteria, have been covered for electrification in accordance with the Guidelines of the scheme. All erstwhile ongoing rural electrification (RE) schemes had been subsumed in DDUGJY. In a landmark achievement, all remaining un-electrified census inhabited villages in the country became electrified as on April 28, 2018.

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

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

b.    Strengthening and augmentation of sub-transmission and distribution infrastructure;

c.    Micro-grid and off-grid distribution network;

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

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

Under the scheme, 60% of the project cost (85% for special category States) was provided as grant by the Government of India and additional grant upto 15% (5% for special category States) was provided on achievement of prescribed milestones.

Projects amounting to '43,633.23 crore were executed under DDUGJY (New and Addl. HHs and DDG) in 33 States and Union Territories against which Government of India's grant of '26,745.00 crore has been released under the scheme till March 31, 2024.

8.4.1 Erstwhile RE projects, subsumed under DDUGJY

Projects amounting to '62,062.93 crore were executed under erstwhile RE projects (i.e. X^th Plan, XI^th Plan, XII^th Plan & DDG) subsumed under DDUGJY in 29 States including Union Territories, against which Government of India's grant of '54,627.31 crore has been released under the scheme till March 31,2024.

8.5    SAUBHAGYA - Pradhan Mantri Sahaj Bijli Har Ghar Yojana

Government of India's flagship programme, SAUBHAGYA (Pradhan Mantri Sahaj Bijli Har Ghar Yojana), for which REC is the nodal agency, has been completed. The SAUBHAGYA scheme aimed at providing:

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

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

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

Under the scheme, Projects amounting to '9,244.22 crore were executed in 26 States and Union Territories against which Government of India's grant of '6,330.35 crore has been released under the scheme till March 31,2024.

8.5.1 Additional infrastructure for enabling electrification of SAUBHAGYA households

Works amounting to '11,373.26 crore were executed in 26 States and Union Territories for creation of additional infrastructure under DDUGJY for SAUBHAGYA scheme, against which Government of India's grant of '7,566.49 crore has been released under the scheme till March 31, 2024.

8.6    Prime Minister Development Package (PMDP-2015)

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

Out of the above, project cost of '1,029.70 crore (Government of India's grant: '926.73 crore) and PMA grant of '5.15 crore has been sanctioned for distribution strengthening works in rural areas. Further, the Ministry of Power has sanctioned additional project cost of '527.55 crore, PMA charges of '2.65 crore and PIA charges of '28.44 crore for distribution strengthening projects in rural areas under PMDP-2015. The funds are being channelized through REC. Projects under PMDP-2015 in the erstwhile State of Jammu & Kashmir have been subsumed in RDSS as per extant guidelines and terms & conditions and are eligible to receive grant funds under RDSS.

Till March 31,2024, REC has released an amount of '831.63 crore grant under PMDP Rural since inception of PMDP. Further, REC has released '441.09 crore in PMDP Urban (including Smart metering) since July, 2022 after TSA (Treasury Single Account) was created for UT of J&K and Ladakh and REC was appointed as Nodal Agency for UT of J&K and Ladakh '266.65 crore has been released under PMDP Transmission since March 2024.

8.7    DISCOM Consumer Service Rating

An exercise was undertaken by REC for grading of DISCOMs across the country (public/private) in terms of consumer centric service and operational parameters. Scoring is spread across four broad parameters i.e. (i) Operational reliability, (ii) Connections and other services, (iii) Metering, Billing and Collection and (iv) Fault Rectification & Grievance Redressal. The 3^rd Edition of the Consumer Service Rating of DISCOMs report (financial year 2022-23) can be accessed at REC website:

https://recindia.nic.in/consumer-service-rating-of-discoms

8.8    Regulatory Parameters Report

During the year 2023-24, REC has published periodical reports capturing key regulatory parameters across

Generation, Transmission & Distribution segments in Power sector for the benefit of various stakeholders and assisting policy formulation. The published reports can be accessed at REC website https://recindia.nic.in/RegulatoryParameters.

8.9    Report on "The study of Organisational Structure & Recruitment process of DISCOMs"

MoP constituted a Task Force on August 11,2021 chaired by Additional Secretary (Power), to study the existing different organizational structures with a major emphasis on the role of effi cient organisation structure and proper manpower planning in DISCOMs for effective implementation of various reform measures introduced from time to time. Under the guidance of MoP, REC had undertaken a detailed study on the existing organizational structure, processes and recruitment cycle & key challenges faced by various DISCOMs with a major focus on Governance and human resource management aspects and developed a compendium of best practices and suggested standard guidance frameworks to address legacy structural and manpower challenges. The report on "The study of Organisational Structure & Recruitment process of DISCOMs' was circulated by MoP on March 20, 2023 to all states for implementation of the recommendations of the report in the state DISCOMs to strengthen them organizationally, to proactively handle the changing sector dynamics.

8.10    Urja Mitra

Urja Mitra, an initiative implemented by your Company under the guidance of Ministry of Power, Government of India is fi rst of its kind application which provides a notifi cation platform for Central Outage Management for State power distribution utilities. The intent of the application is to share information with consumers about outages in rural and urban areas through SMS / Calls / push notifi cations on their mobile phones. It empowers registered consumer to access and view the outage information's for any Discoms / Power Department through a Mobile Application /Citizen dashboard on real time basis and also provides a platform to view real time power outages in any part of the country and lodge complaints on power outages.

As of financial year 2023-24, data of around 23.7 crore consumers from 53 Discoms have been uploaded on the Urja Mitra App and almost (~)705 crore SMSs have been sent to the consumers.

8.11    11 kV Rural Feeder Monitoring Scheme

Antecedent to the implementation of NFMS, RECPDCL has implemented 11 kV Rural Feeder Monitoring System with an objective to monitor quality and reliability parameters of Rural power supply at feeder level, to ensure achievement of "24x7 Power for All".

Under RFMS, it was envisaged to develop a web based automated system for monitoring of the rural, agricultural and mixed (agriculture rural) 11kV feeders by enabling feeders to share their data through installation of communication devices like Modem/DCUs. Concerned stakeholders are empowered with cognitive insights and useful MIS through the data acquired from numerous essential feeder meter parameters.

RFMS has strengthened all rural feeders across the country and has largely contributed towards drawing an inference of Reliability parameters for Rural India.

8.12    National Feeder Monitoring System (NFMS)

RECPDCL is spearheading the implementation of National Feeder Monitoring System (NFMS), which is a cloud based central IT platform designed to monitor the reliability and quality of power across all 33/22/11 kV outgoing distribution feeders nationwide. Linking this state-of-the-art application to the National Power Portal and employing machine-to-machine (M2M) data transmission methods ensures efficient and accurate data collection, minimizing errors associated with manual intervention. The emphasis on accurate and effective online recording of energy exchanges in the distribution system is crucial for minimizing operational errors that can occur due to human involvement. By leveraging technology to automate data collection and transmission, this initiative aims to enhance the reliability and efficiency of power distribution.

In addition to the above, the focus on providing a web-based analytical platform is noteworthy as it enables stakeholders to generate and view reports, as well as derive valuable insights from feeder data across various DISCOMs. This capability is essential for informed decision-making, allowing stakeholders to identify trends, anomalies and opportunities for optimization within the distribution network.

Covering approximately 2.5 lakh feeders across all DISCOMs in the country is an ambitious goal, but the integration of ~1 lakh feeders already demonstrates signifi cant progress as on March 31, 2024 with 29 DISCOMs and 15 states/UTs actively sending data to the system daily, the project is well underway in its mission to enhance monitoring, analysis and decision-making in the distribution sector.

This metamorphosis marks the beginning of the new era to spearhead new India towards realising its net-zero ambitions by integrating the strengths of the power distribution sector with digitally driven networked systems.

8.13    Smart Prepaid Metering

RECPDCL is implementing Advanced Metering Infrastructure (AMI) projects across the country as Project Implementation Agency (PIA). The Company has already installed 5.07 Lakh smart meters in UT of Jammu & Kashmir, Ladakh and Chandigarh.

The company is implementing projects for installation of approx. 5.5 lakh smart meters in Jammu and Kashmir and 0.60 lakh meters in Ladakh.

Under RDSS scheme, RECPDCL is implementing Smart metering project of 15 lakh Smart meter for UT of Jammu & Kashmir and 42 lakh Smart meter for Gujarat Discoms.

8.14    Implementation of Transmission projects:

RECPDCL is implementing 220 kV transmission lines project in Ladakh at an altitude of approx. 5,500 meters above mean sea level, which is India's highest transmission line. The project also includes construction of modern Gas Insulated Substation (GIS) in Nubra and Zanskar valley of Ladakh. These projects will connect Ladakh to uninterrupted grid power supply and help in socio-economic development of the region.

8.15    Rooftop Solar Scheme

With an objective to achieve 40 GW of Roof Top Solar (RTS) capacity in the country, the Government of India launched Rooftop Solar Programme Phase-II on March 8, 2019. The Programme envisaged installation of 4,000 MW of RTS capacity in the residential sector by providing Central Financial Assistance (CFA) and incentives to DISCOMs for achievement of additional RTS capacity in a year over and above the installed capacity of the previous year. A provision of total central financial support of '11,814 crore, including service charges to the implementing agencies, has been made under the programme, which was initially scheduled for completion by the year 2022 but later the Programme has been extended till March 31,2026.

As on November 30, 2023, 2,651.10 MW RTS capacity installed under subsidy scheme of Phase-II Programme. The cumulative RTS installed capacity in the country has increased from 1.8 GW as on March 31,2019 to 11.9 GW as on March 31, 2024.

To give this scheme a further impetus, Government has announced PM Surya Ghar Muft Bijli Yojana recently and the 'Rooftop Solar Programme Phase-II' has been subsumed into this scheme.

8.16    PM Surya Ghar Muft Bijli Yojana

The Union Cabinet, chaired by the Hon'ble Prime Minister has approved PM Surya Ghar Muft Bijli Yojana with a total outlay of '75,021 crore for installing rooftop solar and providing free electricity up to 300 units every month for One crore households. The Hon'ble Prime Minister had launched the scheme on February 13, 2024.

The scheme provides a CFA of 60% of system cost for 2 kW systems and 40% of additional system cost for systems between 2 to 3 kW capacity. The CFA will be capped at 3 kW. At current bench mark prices, the CFA for the scheme is as follows:

A national portal (https://pmsuryaghar.gov.in) has been developed for this purpose, through which, the households can apply for subsidy and will be able to select a suitable vendor for installing rooftop solar. Households will be able to access collateral-free low-interest loan products of around 7% at present for installation of residential RTS systems up to 3 kW.

The proposed scheme is estimated to have an addition of 30 GW of solar capacity through rooftop solar in the residential sector, generating 1000 BUs of electricity and resulting in reduction of 720 million tonnes of CO₂ equivalent emissions over the 25-year lifetime of rooftop systems.

9. PERFORMANCE & ACHIEVEMENTS UNDER GOVERNMENT PROGRAMMES

The performance and achievements under various Government programmes during financial year 2023-24 and cumulatively till March 31,2024, are given below:

9.1    Performance and achievement under RDSS, DDUGJY and PMDP-2015 during the financial year 2023-24:

a.    Sanction and release: During the financial year 2023-24, an amount of '5,275.36 crore (including PMA) was sanctioned under RDSS against smart metering and loss reduction works including PMA in the States assigned to REC (nodal agency).

The subsidy of Government of India is channelized through REC and the matching contribution is infused by the respective State Government or implementing agencies, through loan from any financial institution or from their own sources. During the financial year 202324, aggregate GBS funds amounting to '6,968.79 crore have been released to States/UTs and utilised by them, [comprising RDSS: '5,325.43 crore, DDUGJY (including additional infra): '1,013.26 crore; SAUBHAGYA: '27.81 crore, PMDP Rural: '88.97 crore, PMDP Urban (including Smart metering): '246.67 crore, PMDP Transmission: '266.65 crore].

b.    Physical progress under RDSS: 15,50,031 number of Smart meters installed under RDSS.

9.2    Cumulative performance upto March 31, 2024

a.    Sanction and release: Under RDSS, an amount of '1,42,797.62 crore (including PMA) was sanctioned to the States allocated to REC (nodal agency) towards smart metering and loss reduction (including Border Area, VVP, LT auxiliary, PVTG works, additional household electrification and modernization works for Varanasi).

Under DDUGJY including RE Projects and SAUBHAGYA schemes, an aggregate amount of '1,41,960.99 crore was sanctioned and on completion of the projects, aggregate executed cost arrived at '1,26,313.64 crore as on March 31,2024.

Under PMDP (Rural), an amount of '1,687.98 crore was sanctioned.

Since launch of the schemes, '1,02,703.53 crore of Government of India grant funds have been disbursed by REC as nodal agency to the implementing agencies up to March 31, 2024 [comprising RDSS (including PVTG): '5,924.68 crore; DDUGJY (including additional infrastructure): '88,909.13 crore; SAUBHAGYA: '6,330.35 crore, PMDP Rural: '831.63 crore, PMDP Urban (including Smart metering): '441.09 crore since July 2022, PMDP Transmission: '266.65 crore since March 2024.]

b.    Physical progress:

i) DDUGJY (including RE and Additional Infra)

The following works have been completed cumulatively till completion of DDUGJY (including RE and Additional Infra) scheme since inception:

    Commissioning of sub-stations including augmentation: 7,231 nos.

    Commissioning of Distribution transformers (including augmentation): 16,57,684 nos.

    11 kV lines (including Feeder Segregation): 8,02,181 cKm

    LT lines: 13,47,723 cKm

    33 kV/66 kV lines: 41,138 cKm

    Installation of consumer metering: 1,87,97,312 nos.

    Metering of DTRs and Feeders: 2,54,307 nos. ii) RDSS

The following works have been completed cumulatively upto March 31, 2024 under RDSS scheme (REC states) since inception:

    Number of Smart Consumer Metering installed under RDSS: 30,47,216

c. SAUBHAGYA: 2.86 crore households have been electrifi ed since launch of SAUBHAGYA scheme under various schemes i.e. SAUBHAGYA, DDUGJY, RE, PMDP and other State RE schemes.

10. STANDARDIZATION, QUALITY CONTROL & MONITORING

Your Company has regular handholding support and technical expertise in the distribution system, to State Power utilities for the implementation of Government schemes. The technical specifcations, guaranteed technical particulars (GTP), layout drawing, datasheet and construction standards issued by the Company are being used by the state power utilities along with their state practices.

The Company has been adopting new emerging technologies in the distribution sector such as prepaid smart meters, consumer and system metering, Advanced Metering Infrastructure (AMI), (head-end system, metering data management, billing software/system and communication technology), Supervisory Control and Data Acquisition (SCADA), Real-Time Data Acquisition System (RT-DAS), Distribution Management System (DMS), Information Technology/Operational Technology (IT/OT) related works including ERP software. State Power utilities are taking leverage of these new technologies for improving their operational efficiency and fnancial sustainability.

In line with the Quality Control Mechanism Guidelines of Government Programmes, REC Quality Monitors (RQMs) have been appointed for carrying out material and f eld works inspections for ensuring the quality of materials supplied at the site and f eld works during the implementation of such schemes. Impact evaluation of already implemented schemes i.e. Saubhagya & DDUGJY schemes are also being undertaken by third-party agencies viz. M/s RTI-UCLA & M/s E&Y respectively, in order to measure the direct & indirect impact of the scheme on general livelihood & growth of rural India.

Further, to ensure periodic monitoring & quality, Comprehensive Quality guidelines has been approved by Monitoring Committee in addition to the in-house quality checks and processes followed by the DISCOM. The Nodal Agency (REC/PFC) are supporting in carrying out concurrent inspection of the quality of works of RDSS through Third Party Quality Monitoring Agency (TPQMA) at all levels of work progress in DISCOM/Power Department, for example, PDI of Power transformers, Field Material Quality inspection and Testing (FMQIT), Field Works Quality Inspection (FWQI).

The Company has a Comprehensive Risk Management

Policy, encompassing a spectrum of risks such as Credit

Risk, Operational Risk, Liquidity Risk and Market Risk etc.

It diligently identifes and addresses these risks through

appropriate measures.

Brief description of the key risks and their mitigation

measures is given below:

(i)    Credit Risk: Credit risk is the inherent risk in the fnancing 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 credit risk. These processes include a detailed appraisal methodology, identifcation of risks and suitable structuring and credit risk mitigation measures. Further, a more granular project risk categorisation framework has been developed wherein individual project level risk assessment is being carried out and projects under 'High' or 'Moderate' risk category are deliberated in Risk Management Sub-Committee (RMSC) and Risk Management Committee (RMC).

(ii)    Operational Risk: Operational risk arises from inadequate or failed internal processes, people and systems or external events.

The operational risks of the Company are studied in all functional areas such as Business, Compliance, Finance, Human Resource, Cyber Security, Legal, Operational and Strategic. The Company has implemented a comprehensive Risk Register, through which all operational risks are measured and categorised as high, moderate or low and necessary steps are taken to manage these risks.

(iii)    Liquidity Risk: Stemming from maturity mismatch associated with assets and liabilities of the company, liquidity risk involves the potential inability to meet liabilities as they become due. Liquidity risk involves the inability of the Company to fund increase in assets, manage unplanned changes in funding sources and to meet obligations when required. The Company faces liquidity risks, which could require it to raise funds or liquidate assets on unfavourable terms. In order to mitigate the liquidity risk, there is a mix of strategies including forward looking resource mobilization based on project disbursements and maturing obligations.

(iv)    Market Risk: Market risk of the Company is def ned as the risk to Company's earnings and capital due to changes in the market dynamics, such as interest rate or prices of securities, foreign exchange fluctuations.

The Company has implemented various risk limits to mitigate the market risk. The Company has also constituted an Asset Liability Management Committee to monitor the components of market risk including interest rate risk, liquidity risk and forex risk.

(v)    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, your Company periodically reviews its lending rates and the weighted average cost of borrowing based on prevailing market rates.

(vi)    Forex 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 appropriate hedging strategies.

(vii)    Environmental, Social & Governance (ESG) Risks:

ESG risks emanates from environmental, social and governance factors that have an impact on the operations, financial performance and management of the Company. Owing to the rising climate concerns & impetus of governments in respective economies across the globe, ESG risks have attained great significance.

REC incorporates environmental impact considerations in its operational, fi nancial and risk management linked decision making. In this regard, the Company has formulated & implemented an ESG policy covering the focus areas.

11.1    Risk Management Committee

The Company has established a Risk Management Committee (RMC) comprising directors to oversee the integrated risks of the Company. As on March 31,2024, the RMC comprises of Chairman & Managing Director (CMD), Director (Projects), Director (Finance) and Two Independent Directors. Executive Directors of key divisions of the organization, are standing invitees to the meetings of RMC.

The primary role of the RMC is to monitor various risks and recommend mitigation actions concerning the Company's operations and related matters. Additionally, in compliance with RBI norms, the Company has appointed a Chief Risk Officer (CRO) who serves as the convener of the RMC, ensuring effective coordination and risk oversight.

11.2    Asset Liability Management Committee

To manage the market risk, the Company has constituted an Asset Liability Management Committee (ALCO) under the chairmanship of Chairman & Managing Director (CMD), which comprises of Director (Projects), Director (Finance), Executive Directors and HoDs from Finance and Operating Divisions as its members. The ALCO monitors risks related to interest rates, liquidity and currency rates.

12.    RISK BASED INTERNAL AUDIT

Your Company has a Board-approved Risk Based Internal Audit (RBIA) policy/manual since April, 2022, which links the Company's overall risk management framework and provides an assurance to the Board of Directors, Audit Committee and senior management, on the quality and effectiveness of the organization's internal controls, risk management and governance related systems and processes. This is in line with the RBI mandate of the RBIA framework for all non-deposit taking NBFCs with asset size of '5,000 crore and above. RBIA helps the Company to identify the risks and address them based on the risk priority and direction provided by the Board. The activities under RBIA framework include independent risk assessment of the operation/ activities, identification of audit universe, development of risk matrix, preparation of annual RBIA Plan and execution of internal audit as per the frequency defined in RBIA policy.

13.    PREFERRED CUSTOMER POLICY

As a part of business promotion strategy, a Preferred

14.9 Providing cyber security awareness training and Computing facility to Employees: Computer to Employee population ratio is 100%. IT Division also organizes and impart various information security programs through virtual trainings / wallpapers / SMS / emails / circulars.

15.    REC INSTITUTE OF POWER MANAGEMENT AND TRAINING

REC Institute of Power Management and Training (RECIPMT) is a premier power sector training institute under the aegis of REC. Established in 1979 at Hyderabad, the institute caters to the training and development needs of engineers and managers of power sector organizations. During the last four decades, RECIPMT has organized 3,357 training programmes and trained 74,256 engineers/managers from power utilities, including generation, transmission & distribution companies, electricity departments, rural electric cooperatives, electricity regulatory commissions, etc.

15.1    National Regular Programme (NRP)

Under the NRP training programme, RECIPMT successfully organized 20 programs in classroom mode on different topics such as, "Distribution Transformers-Operation & Maintenance for Failure Minimization", "O&M of EHV Substations, Lines and Quality Assurance", "Power Transformer-Testing, Commissioning, Protection & Maintenance", "Smart Metering Technologies for Distribution sector", "Distribution Loss Reduction-Pilferage of Electricity Issues, Challenges & Remedies", "Design Construction & Testing of Distribution Transmission Lines", "General Network Access (Open Access), Power Trading and Exchanges", "Best Practices in HR Management for Power Distribution Utilities", "Tariff Policy and Submission of ARRs- Regulatory Compliance", "Operation, Maintenance and Protection of Distribution Sub-stations and Lines", "RDS Scheme & Smart Metering Technologies - Effective Implementation for Sustainable DISCOM Operation", "Labour Laws and Labour Codes - Procedures in dealing with Court Cases", "Energy Transition, Promotion of Green Energy and Best", "Design, Construction and Quality Control of EHV Sub-Station and Lines", "Recent regulations in grid management and security issues", "Protection system in EHV sub-stations & lines", "Techno commercial improvements of Discoms - Issues & challenges", "Underground cables -selection, sizing, laying, monitoring & fault detection", "Power Purchase Agreements and intricacies in power management" & "Concept to commissioning of solar power plants - on grid and off grid". A total of 262 participants took part in these programmes.

15.2    MEA, GoI sponsored international training programmes under Indian Technical & Economic Cooperation (ITEC)

RECIPMT is also a partner training institute with Ministry of External Affairs, Government of India (MEA) for organizing training programmes for the executives of International power sector organizations. Since 2005 until now, RECIPMT has organized 113 training programmes and trained 1,936 executives from 102 countries. 97 Participants participated in these programmes during the financial year 2023-24 from other countries like Algeria, Azerbaijan, Bangladesh, Bhutan, Ecuador, Ethiopia, Gambia, Ghana, Malawi, Maldives, Mauritius, Mongolia, Morocco, Myanmar, Nepal, Nigeria, South Sudan, Syria, Sri Lanka, Tajikistan, Tanzania, Thailand, Togo, Tunisia, Vietnam and Zimbabwe.

15.3    REC sponsored programmes

In order to encourage training activities and bring in awareness among the executives of power utilities, the following training programmes were conducted by RECIPMT under the sponsorship of REC Limited during the financial year 2023-24 and a total of 4,892 participants participated with all India participation:

a.    REC sponsored training programmes on Electrical Safety

Safety being the major concern of power utilities in the country, REC sponsored 75 training programs on "Electrical Safety", under which 1,880 participants from different utilities were trained during the financial year 2023-24.

b.    REC sponsored webinars on Techno-Commercial Improvement of DISCOM

RECIPMT organized 60 batches of 2-day webinars on "Techno-Commercial Improvement of DISCOM's Performance", covering subjects such as AT&C Loss Reduction techniques, O&M issues-challenges, Electricity Act amendments, ACR-ARR Aspects, etc. Under the same, RECIPMT trained 1,505 participants of power sector companies i.e. from Gencos, Transcos and Discoms.

c.    REC sponsored programme on Best Practices in Power Utilities

REC has sponsored 60 batches of 3-day Classroom programme on "Best Practices in Power Utility" and trained 1,507 participants of Power Sector including Gencos, Transcos and Discoms.

15.4    REC executives (in-house) training programmes

During the financial year 2023-24, RECIPMT also organized 10 online webinars on "Awareness Programme on Vigilance Aspects, CDA Rules & Disciplinary procedures" and 7 classroom sessions for the employees of REC, which were attended by 334 employees. The topics covered were "Project Appraisal & Loan Documentation", "RDS Scheme & Smart Metering Technologies & Applications", "Enterprise Resource Planning (ERP)", "Finance for Non-Finance Executives", "Advanced Excel and MS Power point", "Purchase Procedure and Procurement through GeM" & "General Management".

15.5    Customized Programmes

During the fi nancial year 2023-24, RECIPMT has organised 5 Customized Classroom mode programme on different subjects such as "Power Purchase Agreement & Legalities" for BESCOM, "Power Transformer-Testing, Commissioning, Operation & Maintenance" for RVPNL, "Concept to Commissioning of Solar Power Project" for HPPCL, "Power Distribution Management" for PSPCL & "Procurement and Supply Chain Management" for KSEBL. A total of 146 participants were trained from these programmes.

15.6    Total Training Programmes organized during the financial year 2023-24

During the financial year 2023-24, RECIPMT conducted an aggregate of 243 training programmes, which were attended by 5,731 participants, with achievement of 17,093 training man-days in total.

HR plays a vital role in engaging professional workforce in the Company. Hiring and retaining talent is a foundation of high-performing company and is essential for growth of a company. In order to augment professionals from various disciplines in your Company, 125 executives were appointed through Direct Recruitment during the financial year 20232024. The total manpower of the Company as on March 31, 2024 was 513 which includes 485 executives and 28 non-executives. As proactive HR strategies to employment conditions, HR plays a stronger role in manpower planning and our HR team has been diligently adding value to various strategic planning and induction.

16.1 Reservation in Employment

Reservation is provided to the members of the Scheduled Castes, Scheduled Tribes and Other Backward Classes as per the directives issued by the Government of India regarding reservations in appointment and promotion to various posts. The group wise details of SC, ST and OBC employees as on March 31,2024 are given below:

16.2 Training & Human Resource Development

The Company motivates employees to perform at the highest level possible and maintain an organizational culture of high morale. A primary way HR adds value to a company is by persuading company leaders to train and

develop employees. With this intent Training were imparted to our employees at all levels during the financial year.

The Training and Human Resource Policy of the Company aims in contributing to the current view and future expectations of all departments, requirement of resources and forecasting training needs on emerging opportunities and threats concerning the Company. To refine the business skills and competencies required for better employee performance, all possible opportunities and skill development training is provided to all employees. Training is 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 for growth of spiritual, health and attitudinal change process was also imparted in order to equip the employees professionally.

During the financial year 2023-24, total 286 employees attended various training, leadership training, skill-development programs, workshops etc. These initiatives enabled the Company to achieve 1,211 training man-days during the whole year.

16.3    Employee Welfare

Company's ultimate goal should be to keep employees happy, healthy and productive. In order to provide improved health care facilities to the employees and their dependent family members, part-time services of doctors were engaged to provide onsite medical facilities. The Company has also been funding sports & recreation equipment to promote wellbeing of employees. The company has also extended creche / day care facility to foster a work-life balance for employees. To facilitate recreation and healthy life, Gymnasium is also available for employees in the premises. Various Yoga programs, Health Talks and Camps were organized for the employees on regular basis, for better well-being.

16.4    Sports activities

Employee engagement in Sporting activities bring people and nations together all the while inculcating feelings of oneness, harmony and tolerance. In an ideal scenario, one often looks for a perfect workplace. A place that provides a supportive setting and encourages a healthy work-life balance. Incorporating sports as an essential part of the office program can help in the quest of achieving that goal. With

this fortitude, REC hosted an Inter-CPSU Chess Tournament at Lucknow, Uttar Pradesh during the financial year 2023-24. Further, your Company also sponsored various Inter- CPSU sports tournaments such as, Table Tennis, Cricket, Volley Ball, Chess etc., organized by various power sector CPSUs under the aegis of Power Sports Control Board (PSCB). All employees were encouraged to participate in various quiz, paper presentations and simulation competitions conducted by reputed institutions during the financial year.

16.5 Representation of Women Employees

Women empowerment is discussed extensively and it is crucial for both, Company REC and society at large to reexamine their initiatives with a renewed focus on creating

tangible impacts that facilitate women's advancement to leadership positions. At REC, we have been committed to provide opportunities to female employees. As of March 31, 2024, the company employs 78 permanent women, constituting 15.2% of total workforce. We uphold a policy of non-discrimination based on gender. A dedicated Women's Cell operates within the company to oversee the welfare and holistic development of female employees. REC Women's Cell commemorated International Women's Day by organizing various activities, including team-building exercises, fun games and interactive sessions that saw enthusiastic participation from female employees. REC is steadfast in its belief in gender equality and strives to ensure a safe and supportive work environment for all women.

16.6    Industrial Relations

Employer and Employees relations are foundation of the Company and at REC the amiable relation prevail for years. The Industrial Relations scenario in the Company continued to be cordial and harmonious in the fi nancial year 2023-24. 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.

16.7    Grievance Redressal

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 and provides a clear and transparent framework to address complaints.

Further, your company has a Public Grievance Redressal system for dealing with the grievances of the stakeholder at large. The Company has appointed a senior offi cial in this regard as the Chairman, Public Grievance Committee, to ensure prompt redressal of grievances within the stipulated time frame.

17. CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) initiatives of the Company are aimed at supporting socially beneficial projects so as to maximize outreach through a wide spectrum of beneficiaries and empower economically

and socially backward communities as a guiding principle, while giving priority to development issues of national concern. During the year, CSR initiatives have been taken up in the fi elds of sanitation and hygiene, promotion of healthcare facilities, education, skill development, women empowerment, environmental sustainability and rural infrastructural development in order to promote and facilitate inclusive social development.

The Company's Corporate Social Responsibility Policy is aligned with the provisions of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 made thereunder, as amended; and is available at https://recindia.nic.in/our-csr-initiatives & https://www.recfoundation.in/

In terms of guidelines issued by DPE for the financial year 2023-24, CPSEs are required to spend 60% of CSR budget on the theme of "Health & Nutrition", preferably in aspirational districts. The Company stepped-up its efforts to support social welfare activities in health and related thematic areas, in various aspirational districts spread across India, with emphasized on improving health services in the aspirational districts of Mamit (Mizoram), Kiphire (Nagaland) and Muzafarpur (Bihar).

In line with the applicable provisions of the Companies Act, 2013 and Rules made thereunder, the Board approved CSR budget of '249.86 crore for the financial year 2023-24. Against the same, the Company has spent '255.01 crore during the year (including excess spent of '7.70 crore carried forward from previous year).

The total expenditure was broadly channelized to the

following major projects:

    Procurement & installation of Medical Equipment in the District Hospital in Bilaspur, Chattisgarh.

    Distribution of aids & assistive devices to persons with disabilities in various Districts / States in the country.

    Procurement, operation and maintenance of Mobile Medical Units in various districts of across India for improving reach of primary health care services in far reaching areas.

    Extension of Department of Emergency Medicine and procurement & installation of medical equipment in Medical College in Rajasthan.

    Construction of multi-storeyed waiting lounge for patients and their attendants at All India Institute of Medical Sciences (AIIMS), New Delhi.

    Renovation and upgradation of Auditorium at Atal Bihari Vajpayee Institute of Medical Sciences & Dr. Ram Manohar Lohia Hospital, New Delhi.

    Providing free of cost medical support for surgeries of children diagnosed with Congenital Heart Disease hailing from economically weaker sections of society.

    Creating Role Model Schools to align with the New Education Policy in schools in 2 States and 2 Union Territories.

    Promotion of sports and identification of sporting talent pan India in the field of Athletics, Boxing and Badminton.

 Procurement and deployment of e-buses    for transportation of students in the campus of Maulana Azad National Institute of Technology, Bhopal.

    Promotion of REC-Integrity Club in schools pan India.

    Establishment of greenfield school in Haveri District, Karnataka.

    Construction of classrooms in Secondary & Higher Secondary Schools in Wardha District, Maharashtra.

 Providing educational support for children of ex-Servicemen, martyrs and their widows.

The detailed Annual Report on CSR activities for the financial

year 2023-24, including particulars of impact assessment(s)

carried out by the Company in respect of various CSR

projects, is annexed to this report.

18. VIGILANCE ACTIVITIES

REC constantly endeavors to optimize probity and integrity among employees and to promote transparency, fairness and accountability in all operational areas. REC's Vigilance division mainly aims at 'Preventive Vigilance' by reviewing the policies, rotation and transfers of employees holding sensitive posts, review of audit reports, review of projects, tenders and contracts awarded, inspections of regional offices, review of Annual Property Returns (APRs), etc.

In this regard, the following major activities are carried out:

    In compliance with the instructions of CVC/MoP, the matter of rotational transfers from the identified sensitive posts is constantly monitored.

    Sending prescribed periodical statistical returns to CVC and MoP on time.

    Regular review of audit reports i.e. Internal, Statutory and C&AG Audit Reports.

    Review of projects, tenders and contracts awarded. Wherever deviations are observed, the matter is taken up with the concerned divisions, which led to strengthening of appraisal system.

    Field inspections of regional offices, REC financed projects and scrutiny of APRs of executives.

    Thrust on use of IT systems and applications for loans, schemes, tenders, third party bills etc.

    It is ensured that major policies and information of the Company are available on REC's website.

18.1 Observance of Vigilance Awareness Week

REC Limited observed"Vigilance Awareness Week 2023" from

October 30, 2023 to November 5, 2023 with theme "Say No

to Corruption, Commit to the Nation" / "TJ

^ RfcT xiHRfct ^"inline with Central Vigilance Commission (CVC) Circular No. 06/08/23 dated August 2, 2023 and 08/09/23 dated September 11, 2023. During the week, various interesting activities and competitions were organised with the aim to spread awareness among the employees. The activities and competitions included Paragraph Writing competition, Quiz, Poster/Collage Making competition, Group Discussion, Slogan writing competitions, Poem Writing competitions, Marathon etc.

All employees of the Company were administered Integrity Pledge on October 30, 2023. Banners and Standees were displayed at different locations at REC's Offices across India. The message of fighting against corruption and focusing on Commitment to the Nation was widely inculcated.

An overwhelming participation was received from employees in all the activities. CMD and CVO of the Company called-forth the employees to assimilate the learnings of the week in their personality and to help fight against corruption.

Paragraph Writing Competition- The employees participated in the Paragraph Writing competition with a lot of enthusiasm and passion. They eloquently expressed their opinions, constructive ideas and views on achieving a corruption-free India.

Quiz Competition- The energetic participation of the employees in Quiz Competition was commendable. The participants were sometimes very quick with their answers while some questions left them clueless. The Quiz Master acknowledged correct answers with occasional rewards, enhancing the engaging atmosphere of the event.

Poster/ Collage Making- Employees created admirable posters and collages with their innovative ideas of reusing waste material. The art of cutting and pasting of papers, fabrics and other materials onto canvas to depict their views show-cased their hidden talents.

Poem Writing Competition- The participants participated with full dedication and positivity and conveyed their talents through poems which made the competition more interesting and fun.

Family Participation- Family members of employees were also encouraged to participate in various competitions. The entries showed the enthusiasm of the participance towards fighting corruption. The participation extended from little kids to elderly parents, which was extremely encouraging.

Seminar / Workshops- Workshop/Seminar on i) Procurement Guidelines, ii) Say No to Corruption, Commit to Nation, iii) Vigilance Aspects, iv) CDA Rules, v) Disciplinary procedures, vi) CTE Inspection and vii) Enterprise Resource Planning (ERP) were organised. The knowledge of the faculty and the art of delivering the lecture in effective and simple way was appreciated by all the employees. Practical examples covered in the lecture made it very interesting and enjoyable.

Marathon- 5 Km Marathon was conducted with students & hockey players of Smart Hockey Academy and REC employees at Shubhash Stadium Raipur, Chhattisgarh. The energy of the participants was commendable.

Nukkad Natak- REC organised 2 Nukkad nataks; one in the slum (semi-urban) area of Jahangirpuri, Delhi and another one Near Government Hospital Jahangirpuri with the aim to spread awareness among public at large.

Integrity Clubs - REC Limited is promoting Integrity Club in Schools to inculcate moral values into the minds of young children so that they grow up to become socially and morally responsible citizens of the country and also to develop them to fight against the menace of Corruption in India.

19.    IMPLEMENTATION OF OFFICIAL LANGUAGE

To promote the use of Hindi in official work, continuous efforts are being made by the Company in terms of the Annual Programme issued by the Department of Official Language, Ministry of Home Affairs, Government of India.

'Hindi Pakhwada' was organized at the REC Corporate Office from September 14 to September 29, 2023, wherein various competitions like Rajbhasha Hindi quiz, Hindi Slogan Lekhan, Hindi Bhashan, Hindi Kavya Paath and Hindi Nibandh Lekhan were organized. These competitions saw encouraging participation from employees. To motivate the employees to increase the use of Hindi in their day-to-day work, prizes were awarded to the winners of these competitions.'Hindi Pakhwada'was also organized in various Regional Offices of the Company including RECIPMT, during which hands-on exposure was provided to participants for carrying out official work in Hindi. Further, Hindi Workshops were also organized at REC offices to equip employees and to guide them for proper use of the Language.

During the financial year 2023-24, the Committee of Parliament on Official Language successfully conducted inspections at various Regional Offices of the Company viz., Vijayawada, Lucknow, Dehradun and Bengaluru. These inspection created a spirit of awareness amongst employees for enhanced adoption of Hindi in their official work. A team of officials of Ministry of Power also reviewed the progressive use of Hindi at REC Corporate Office on March 19,2024.

In the meeting of Hindi Advisory Committee of Ministry of Power held on August 17,2023, the then, Hon'ble Minister of Power, New and Renewable Energy conferred REC with the First prize for the year 2021-22 and consolation prize for the year 2022-23 for Official Language Implementation.

REC has been publishing a Hindi magazine 'Urjayan' containing interesting and useful articles as well as literary writings of its employees. To motivate the employees, the Company has adopted a policy to award prizes and incentives for these write-ups, articles, poems, etc. To motivate the employees for use of Official Language Hindi, a 'Kavi Sammelan', graced by Hindi poets, was organized on February 23,2024 at the REC Corporate Office.

Thought of the Day' in Hindi isalso being displayed through digital scrollers placed across Corporate Office premises. During the year, use of Hindi was also promoted through various social media platforms by the Company.

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

20.1 Conservation of Energy & Technology Absorption

Since your Company does not own any manufacturing facility, there are no significant particulars relating to conservation of energy and technology absorption.

REC Corporate Office Building located in Gurugram is designed and constructed by using energy efficient fagade to lower HVAC load requirement in the building thereby

conserving energy. Further, the energy efficient equipment's and LED lights are being used in the building to conserve energy.

In order to utilize alternate source of energy, 979 kWp solar plant has been installed at top of the building (supported by solar pergola structure) to cater REC office load requirement by using clean and renewable source of energy. The solar plant has generated 13.50 lakh units of electricity during the financial year 2023-24.

20.2 Foreign Exchange Earnings & Outgo

During the fi nancial year 2023-24, the Company had no foreign exchange earnings. Further, foreign exchange outflow aggregating to '21,307.57 crore was made during the year, on account of interest, principal repayment, finance charges and other expenses.

21. SUBSIDIARY COMPANIES

REC's wholly-owned subsidiary, viz., REC Power Development and Consultancy Limited [CIN U40101DL2007GOI165779], is engaged in the businesses of project implementation and consultancy services in power sector viz. implementation of

distribution system strengthening works, implementation of grid/off-grid solar (PV) projects, installation of smart meters, preparation of detailed project reports, third party inspections, pre-dispatch material inspections and acting as project management consultant / project management agency under some projects of State-funded schemes such as DDUGJY, IPDS etc.

Further, RECPDCL also acts as "Bid Process Coordinator" for selection of Transmission Service Providers through Tariff Based Competitive Bidding (TBCB) process, for independent inter-state and intra-state transmission projects assigned by the Ministry of Power and State Governments respectively from time to time.

In order to initiate development of each allocated independent inter-state / intra-state transmission project, RECPDCL incorporates a project-specific Special Purpose Vehicle (SPV) as its wholly-owned subsidiary, which also becomes the subsidiary of REC. After selection of the successful bidder in accordance with TBCB Guidelines, such subsidiaries are transferred by RECPDCL to the successful bidder, along with all assets and liabilities.

During the financial year 2023-24, RECPDCL has transferred 9 project specific SPVs to the successful bidders, namely:

As on March 31, 2024, RECPDCL had the following project-specific SPVs for various inter-state / intra-state transmission projects:

1)    Chandil Transmission Limited

2)    Dumka Transmission Limited

3)    Mandar Transmission Limited

4)    Koderma Transmission Limited

5)    Luhri Power Transmission Limited

6)    Khavda II- D Transmission Limited#

7)    Meerut Shamli Power Transmission Limited*

8)    NERES XVI Power Transmission Limited*

9)    Rajasthan Part I Power Transmission Limited

10)    Rajasthan IV A Power Transmission Limited

11)    Rajasthan IV C Power Transmission Limited

12)    Rajasthan IV E Power Transmission Limited

13)    Rajasthan IV H1 Power Transmission Limited

14)    Shongtong Power Transmission Limited

15)    Kallam Transco Limited*

16)    Khavda IVA Power Transmission Limited

17)    Khavda IV C Power Transmission Limited

18)    Khavda IV-E2 Power Transmission Limited*

19)    Khavda V-A Power Transmission Limited

20)    Tumkur-II REZ Power Transmission Limited

21)    NERGS-I Power Transmission Limited

22)    Jalpura Khurja Power Transmission Limited*

23)    Kankani Power Transmission Limited

24)    ERES-XXXIX Power Transmission Limited

Note: SPVs as referred at Sl. No. 9 to 24 were incorporated during the financial year 2023-24.

*    Kallam Transco Limited & Jalpura Khurja Power Transmission Limited were transferred on April 5,2024 and Meerut Shamli Power Transmission Limited was transferred on April 6,2024. Further, NERES XVI Power Transmission Limited and Khavda IV-E2 Power Transmission Limited were transferd on May30,2024.

#    Khvda II-D Transmission Limited has been struck off on July 6, 2024 from the Registrar of Companies.

Further, after the end of fi nancial year 2023-24, new SPVs have been incorporated as wholly-owned subsidiaries of RECPDCL and REC, namely:

1.    Bhadla-III Power Transmission Limited

2.    Bikaner A Power Transmission Limited

3.    Bikaner B Power Transmission Limited

During the f nancial year 2023-24, RECPDCL recorded an income of '390.64 crore, as compared to income of '307.26 crore in the previous f nancial year. The Proft After Tax for the f nancial year 2023-24 was '149.64 crore, as against '139.79 crore in the previous f nancial year. Further, the Net Worth of RECPDCL as on March 31,2024 was '567.17 crore, as against the Net Worth of '440.93 crore as on March 31,2023.

22.    GIFT CITY

The Company is in the process of incorporation of a Wholly Owned Subsidiary (WOS) Company of REC Limited for dealing in permissible activities as a Finance Company in International Financial Service Centre (IFSC), Gujarat International Finance Tec-City ("GIFT"), Gandhinagar, Gujarat.

Further, the Company has received "No Objection Certifcate" on May 3, 2024 from the Reserve Bank of India (RBI) for setting up such Wholly Owned Subsidiary in GIFT City, Gujarat.

23.    JOINT VENTURE & ASSOCIATE COMPANY

During the fnancial year 2023-24, Company does not have any Joint Venture & Associate Company, apart from investments, as detailed in the fnancial statements, forming part of this Annual Report. Further, in terms of the agreement execute amongst the Joint Venture partners i.e. NTPC Limited, REC Limited, Power Finance Corporation Limited and Power Grid Corporation of India Limited, EESL ceased to be a jointly controlled entity under Ind-AS framework.

25. DIRECTORS, KMP & POLICY FRAMEWORK RELATED THERETO

Being a Government Company within the meaning of Section 2(45) of the Companies Act, 2013 and in terms of Article 91 of the Articles of Association of the Company, all Directors on the Board of REC are nominated / appointed / reappointed by the President of India acting through the administrative ministry i.e. Ministry of Power, Government of India (MoP).

The nomination / appointment / reappointment of Directors on the Board of the Company and their eligibility criteria, qualifications, experience and selection procedure etc., is also subject to the prescribed norms of Department of Personnel & Training (DoPT), Department of Public Enterprises (DPE), Public Enterprises Selection Board (PESB) etc., as applicable from time to time, the compliance of which is taken care at the end of the administrative ministry.

Further, being a CPSE, the remuneration of Functional Directors, Key Managerial Personnel and other employees of the Company including Senior Management Personnel, is determined as per the extant guidelines on pay, perquisites, allowances etc. issued by the Department of Public Enterprises (DPE) and/or Government of India from time to time. Non-executive Directors (including Independent Directors) are paid sitting fees for attending the meetings of Board or Committees thereof, which is well within the applicable provisions of the Companies Act, 2013. The Government Nominee Director is not entitled to receive any sitting fees from the Company, as per norms of the Government of India.

The Company has adopted a policy on diversity and skills of the board, criteria for appointing senior management personnel and remuneration to directors, KMPs and other employees, which can be accessed at https://recindia.nic.in/disclosures-under-regulation-46-of-sebi

Further, being a NBFC, inter-alia, the appointment of Directors in REC is also subject to due diligence by the Nomination & Remuneration Committee (NRC), as per the Company's policy on fit & proper criteria of Directors, which can be accessed at https://recindia.nic.in/disclosures-under-regulation-46-of-sebi

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 (Projects) and Company Secretary as Key Managerial Personnel (KMPs) of the Company.

Being a Government Company, the role of CEO is being performed by CMD and the role of CFO is performed by Director (Finance) of the Company.

Changes in Directors & KMP during & after the year are brought out below:

25.1 CMD and Whole-time Directors

1.    Shri Ajoy Choudhury (DIN: 06629871), who held the post of Director (Finance), REC Limited has superannuated from the services of the Company on January 31, 2024 and accordingly, has ceased to be a Director and Key Managerial Personnel of REC Limited with effect from February 1,2024.

2.    Pursuant to MoP order dated January 31,2024, Shri Vivek Kumar Dewangan, CMD had been entrusted with the

additional charge of the post of Director (Finance) w.e.f. February 1, 2024 or till the appointment of a regular incumbent to the post of Director (Finance), or until further orders, whichever is earlier.

3. Pursuant to MoP letter dated May 14, 2024 read with resolution passed by the Board dated May 31 2024, Shri Harsh Baweja, (DIN: 09769272), has been appointed as Director (Finance) (Additional Director) on the Board w.e.f. May 14, 2024 till the date of superannuation i.e. January 31, 2026, or until further orders, whichever is earlier. Further, he has also been appointed as Chief Financial Officer w.e.f. May 14, 2024.

25.2    Nominee Directors

1.    Pursuant to MoP letter dated July 11, 2023 read with resolution passed by the Board dated July 17, 2023 Shri Manoj Sharma, (DiN: 06822395), Director (Commercial) of PFC has been appointed as Nominee Director of PFC on the Board of REC in place of Smt. Parminder Chopra (DIN: 08530587) w.e.f. July 11,2023.

2.    Pursuant to MoP office order dated August 21, 2023 read with resolution passed by the Board dated August 23, 2023, Shri Shashank Misra, (DIN: 08364288) Joint Secretary, MoP, has been appointed as the Government Nominee Director in REC w.e.f. August 21, 2023, vice Shri Piyush Singh (DIN: 07492389), former Government Nominee Director.

25.3    Director(s) retiring and seeking appointment / reappointment at the ensuing AGM

In accordance with the provisions of the Companies Act, 2013 and Article 91 (iv) of the Articles of Association of the Company, Shri Manoj Sharma, PFC Nominee Director shall retire by rotation at the 55^th AGM of the Company and being eligible, offers himself for re-appointment. Further, pursuant to Regulation 17(1C) of SEBI Listing Regulations, the appointment of Shri Harsh Baweja as Director (Finance) is also being submitted to the shareholders for approval. The Board recommends their re-appointment/appointment.

Brief resume and other particulars of Shri Manoj Sharma and Shri Harsh Baweja are annexed to the Notice of AGM forming part of this Annual Report.

25.4    Company Secretary

Shri J.S. Amitabh is Company Secretary of the Company.

26. EVALUATION OF BOARD OF DIRECTORS/INDEPENDENT DIRECTORS

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

However, the Ministry of Corporate Affairs vide its notification dated June 5, 2015 has inter-alia exempted Government companies from the above requirement, in case the Directors are evaluated by the Ministry or Department of the Central Government which is administratively in charge of the company, as per its own evaluation methodology. Further, MCA vide notifi cation dated July 5, 2017, also prescribed that the provisions relating to review of performance

of Independent Directors and evaluation mechanism prescribed in Schedule IV of the Companies Act, 2013, is not applicable to Government Companies.

Accordingly, being a Government company, REC is inter-alia exempted in terms of the above notifi cations, as the evaluation of performance of all members of the Board of the Company is being done by the administrative ministry i.e. the Ministry of Power and/or by the Department of Public Enterprises (DPE). It is understood that during the f nancial year 2023-24, the performance evaluation of NonExecutive Directors of the Company was carried out by the administrative ministry, as per their internal guidelines.

Further, your Company also enters into Memorandum of Understanding (MoU) with its holding company, PFC, under the framework prescribed in MoU Guidelines issued by DPE. The MoU demarcates key performance parameters for the Company fnalized in consultation with the Ministry of Power, Government of India and the performance of the Company is evaluated vis-a-vis the MoU parameters.

27.    DIRECTORS' RESPONSIBILITY STATEMENT

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

(i)    in the preparation of the annual accounts for the year ended March 31, 2024, the applicable Accounting Standards have been followed and no material departures have been made from the same;

(ii)    such accounting policies have been selected and applied consistently (except for the adoption of newly effective Indian Accounting Standards as disclosed in the Notes to Accounts to the Financial Statements) and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the fnancial year and of the proft 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 fnancial controls have been laid to be followed by the Company and such internal fnancial controls were adequate and operating effectively;

(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.

28.    MoU RATING & AWARDS

The performance of the Company in terms of MoU signed under the guidelines of the DPE, Government of India for the fnancial year 2023-24 is expected to be rated as "Excellent", subject to f nal evaluation by DPE. For the f nancial year 2022-23, the company has been rated "Excellent".

During the fnancial year, REC has been:

 Conferred with the Dun & Bradstreet Award-2023 for 'Best Central PSU' - Financial Services category.

    Felicitated with prestigious Golden Peacock Awards instituted by the Institute of Directors (IOD) in Risk Management category.

    Honoured with XIII-PSE Excellence Award by Indian Chamber of Commerce in Operational Performance Excellence, CSR and Corporate Governance category.

    Accolated with the ICAI Award for Excellence in Financial Reporting 2022-23.

    Honoured with the prestigious SCOPE Excellence Award in Special Institutional Category (Digitalization) from Hon'ble Vice President of India.

    Conferred with the Best Green Bond - Corporate Award at the Asset Triple A Awards for Sustainable Finance.

    Secured place in coveted Morgan Stanley Capital International (MSCI) Global Standard Index with effect from September 1,2023.

    Felicitated with Mahatma Awards 2023 for excellence in its CSR initiatives.

    Awarded frst prize among power PSUs for implementing official language.

    Honoured with'Issuer of the Year'award at the 6^th National Summit for corporate bond market by Assocham.

    Conferred with Golden Award by GeM in 'highest value single bid procurements in fnancial year 2022-23'.

    Presented with the Innovative Technology Development Award at IIT Madras CSR Summit: 'Building India 2047:Technology for Better Tomorrow'.

Apart from above, Shri Vivek Kumar Dewangan, CMD, REC has been conferred with the prestigious 'Most Sustainable Maharatna Leader' Award at World Sustainability Congress held in Mauritius.

29.    'THINK GREEN, GO GREEN' INITIATIVE

The Companies Act, 2013 permits companies to send documents like Notice of Annual General Meeting, Annual Report etc. through electronic means to its members at their registered email addresses. As a responsible corporate citizen, the Company has actively supported the implementation of 'Green Initiative' of the Ministry of Corporate Affairs (MCA) and effected electronic delivery of Notices and Annual Reports to shareholders, whose email ids are registered. The intimation of dividend (interim/ fnal) is also being sent electronically to such shareholders. Further, pursuant to Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014, the Company is providing e-voting facility to all members to enable them to cast their votes electronically in respect of resolutions set forth in the Notice of Annual General Meeting (AGM). The Company is conducting the AGM through video conferencing / other audio-visual means. Members can refer to the detailed instructions for e-voting and electronic participation in the AGM, as provided in the Notice of AGM. Members, who have

not registered their e-mail addresses so far, are requested to register their e-mail addresses with the Registrar and Share Transfer Agent (R&TA) of the Company or their respective Depository Participant (DP) and take part in the green initiative.

In line with the initiative to promote use of Electric Vehicles (EVs), REC has already started the process of complete migration on e-mobility from fossil fuel vehicles. Electric vehicles are environment friendly and also helping to reduce carbon emissions for ensuring the green sustainable environment.

30.    COMMITMENT TO SWACHHTA

REC has undertaken activities for creating awareness on Swachhta, like installation of dustbins at various public places, plantation drive nearby office premises, interactive session on waste management and cleanliness for employees, special cleanliness drive at public utilities by Regional Office's/State Offices, special cleanliness drive and fumigation in slum area near by corporate office premises and organizing best out of waste competitions in schools, under the Swachhta Action Plan.

31.    RIGHT TO INFORMATION ACT, 2005

The purpose of the Right to Information Act, 2005 ('RTI Act') is to enable the citizens to seek information from the public authorities and to ensure transparency and accountability in their functioning. An RTI Cell is in existence in the Company to deal with applications received under the RTI Act. The Company has designated a Public Information Officer (PIO) to respond to the RTI applications and a First Appellate Authority (RTI) to adjudicate on RTI First Appeals for effective implementation of the RTI Act. The RTI Cell also comprises of an Assistant Public Information Offi cer. The entire functioning of the RTI Cell and implementation of the RTI Act in REC is observed by the Transparency Officer.

REC is also associated with the online RTI Portal of Government of India, Department of Personnel & Training https://rtionline.gov.in/ which enables citizens of India, to file RTI applications/first appeals online along with a payment gateway. Below is the information pertaining to the number of applications and appeals received by the RTI Cell, during the period of April 1,2023 to March 31,2024:

Further, REC has placed the requisite information on its website, in compliance with the requirements specified by Department of Personnel & Training (DoPT). Further, in compliance of the said guidelines, which provide for annual audit of suo-moto disclosures by a third party, third-party audit of RTI Disclosures has been carried out and the report is posted on REC's website.

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

The Guidelines for MSEs, as defined in the purchase procedure, are being followed by the Company. As an endeavor to foster the Government's ambitious initiatives for the promotion of MSME sector and in order to surpass the prescribed public procurement norms, revised with effect from November 2018, REC has already made it mandatory to procure 100% of certain common use goods and services valuing upto '10 lakh from Women and SC/ST MSE vendors and also to allow purchase preference upto 25% of the tendered value to MSEs, out of which 4% is reserved for MSEs owned by SC/ST and 3% is reserve MSEs owned by women entrepreneurs for all cases where L, vendor is other than MSE vendors by allowing MSE vendors for price matching with L₁ if MSE bidders have quoted price within the band of L₁+15%, wherever splitting is feasible. If splitting is not feasible, 100% of tender quantity will be given to MSEs as per MSE Purchase preference policy. Further, REC is registered on GeM (Government e-Marketplace), Sambandh, Samadhan and TReDS (Trade Receivables Discounting System) portals of the Government of India (GoI) and all offi ces of REC, including regional offi ces, are effectively using the same. Various relaxations are also being provided to MSEs like

a) Issue of Tender Forms/Sets free of cost b) Exemption from payment of Earnest Money Deposit, Prior-Turnover and Prior-Experience in procurement activities (on select basis), etc.

During the financial year 2023-24, total procurement made by the Company was '152.97 crore and REC not only achieved, but exceeded its targets set by the Government in MoU. The procurement from GeM portal was '145.66 crore (achieved more than the target of 95%) and procurement from MSEs was '56.84 crore (achieved more than the target of 25%), out of which procurement from SC/ST was '2.74 crore and procurement from women entrepreneurs was '1.20 crore. The procurements from SC, ST and women entrepreneurs, highly depends on the participation in tender process or meet tender requirements and L₁ price by such vendors, on which REC has no control. It is also noteworthy, that there were no complaint against REC regarding delay in payments or any other grievance by any MSME vendor, on GoI's Samadhan portal during the year. Further, 1,238 nos. of procurements have been made from MSEs during financial year 2023-24 out of which 238 nos. of procurements from Women MSEs and 42 nos. of procurements from SC/ST MSEs have been made.

Your company has made it compulsory for all its Pan-India offices to procure 100% common use goods and services mandatorily through Gem and has conducted a comprehensive GeM procurement training programme for its employees, having specially featured sessions of faculty from GeM conducted through RECIPMT. Further, workshop on public procurement by Advisor (Procurement Policy), DoE was also conducted.The same were attended and praised

overwhelmingly by the participants. REC has also conducted its annual Vendor Development Programme (VDP) through online session, which was attended by various vendors.

All tenders of REC are issued in full compliance of GoI's 'Make in India' directions, as applicable. Further, as per GoI's directives, such compliance is being monitored by the Board of Directors; and on a case-to-case basis by the SubCommittee to ensure compliance of Government of India directives on 'Make in India', for tenders valuing '250 crore or above.

REC's Public Procurement Policy for MSEs and Make in India is included in all the tenders duly published on the website of the Company and on the CPPP (Central Public Procurement Portal). The same is also being examined and monitored on quarterly and annual basis by the Independent External Monitor (IEM) appointed by CVC. The IEM has found that all procurement activities are in order and has appreciated the efforts and achievements of REC.

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

In line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (PoSH Act), an 'Internal Complaints Committee' has been constituted in the Company for redressal of complaint(s) against sexual harassment of women employees. The Committee aims at sensitizing employees and provide a healthy and congenial atmosphere to work. The cell is headed by a senior woman offi cer of the Company and includes a member from NGO as one of its members. Antisexual harassment stance of the Company is also outlined in REC (Conduct, Discipline and Appeal) Rules.

During the fi nancial year 2023-24, the Company did not receive any complaint of sexual harassment.

34.    ANNUAL RETURN

The Annual Return of the Company for the fnancial year 2022-23 fled with the Ministry of Corporate Affairs and the draft Annual Return for the f nancial year 2023-24, are available on the website of the Company at https://www.recindia.nic.in/annual-returns.

After fling of the Annual Return for fnancial year 2023-24 with MCA, the same will be uploaded on the website at the same weblink.

35.    PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of Related Party Transactions required to be disclosed in Form AOC-2 for the f nancial year 2023-24 is annexed to this report.

36.    AUDITORS

36.1 Statutory Auditors

M/s Kailash Chand Jain & Co. , Chartered Accountants, New Delhi (Firm Registration No.: 112318W) and M/s SCV & Co. LLP., Chartered Accountants, New Delhi (Firm Registration No.: 000235N/N500089) were appointed as Statutory Auditors of your Company for the f nancial year 2023-24

by the Comptroller & Auditor General (C&AG) of India. The Statutory Auditors have audited the Financial Statements of the Company for the fnancial year ended March 31,2024.

Further, the appointment of the Statutory Auditors for the fnancial year 2024-25 is yet to be made by the Comptroller & Auditor General (C&AG) of India. 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 fx the remuneration of Statutory Auditors for the fnancial year 2024-25, as may be appointed by the C&AG.

36.2    Secretarial Auditors

M/s Agarwal S. & Associates, Company Secretaries, Delhi (Certifcate of Practice no. 5910), were appointed as Secretarial Auditors for carrying out Secretarial Audit of the Company for the fnancial year 2023-24. In terms of Section 204 of the Companies Act, 2013 and Rules made thereunder, they have issued Secretarial Audit Report for the f nancial year 2023-24 and the same is annexed to this Report.

36.3    Management's comments on the Auditors' Report(s)

The Statutory Auditors have audited the standalone and consolidated f nancial statements of the Company for the fnancial year 2023-24 and have given their report without any qualifcation, reservation, adverse remark or disclaimer. The Auditors' Report(s) are forming part of this Annual Report.

The management's reply to the observations of the Secretarial Auditors is as follows:

37.    COMMENTS OF C&AG OF INDIA

The Comptroller & Auditor General (C&AG) of India, vide letter(s) dated July 26, 2024 have given 'Nil' comments on the Audited Financial Statements of the Company for the financial year ended March 31,2024 under Section 143(6)(a) of the Companies Act, 2013.

The comments of C&AG for the financial year 2023-24 have been annexed along with the report of Statutory Auditors of the Company in this Annual Report.

38.    DEBENTURE TRUSTEES

In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a list containing the details of Debenture Trustees appointed by the Company for different series of its bonds / debentures issued from time to time, is annexed to this Report.

39.    STATUTORY DISCLOSURES

a)    There was no change in the nature of business of the Company during the financial year 2023-24.

b)    The Company has not accepted any public deposits during the financial year 2023-24 and the Board of Directors of the Company has passed requisite resolution in this regard, in compliance of RBI Guidelines.

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

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

e)    Information on composition, terms of reference and number of meetings of the Board and its Committees held during the year, establishment of Vigil Mechanism/ Whistle Blower Policy and web-links for familiarization programmes of Directors, Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions, Policy for determining Material Subsidiaries, compensation to Key Managerial Personnel, sitting fees to Directors and details regarding IEPF etc. have been provided in the 'Report on Corporate Governance', prepared in compliance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and DPE Guidelines on Corporate Governance, 2010, as amended from time to time, which forms part of this Annual Report.

f)    Pursuant to Section 186(11) of the Companies Act, 2013, loans made, guarantees given, securities provided or investment made 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, details of investments are appearing at note no. 10 of the Notes to Accounts of the standalone financial statements.

g)    The provisions of Section 197 of the Companies Act, 2013 and Rules made thereunder relating to managerial

remuneration are not applicable to Government companies, therefore no disclosure is required to be made.

h)    There are no material changes and commitments affecting the fi nancial position of the Company, which has occurred between the end of the financial year i.e. March 31,2024 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., as applicable, are duly incorporated in this report, as required vide OM dated January 24, 2018 of the Ministry of Parliamentary Affairs, Government of India.

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

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

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

n)    The Independent Directors of the Company are nominated / appointed by the President of India acting through the administrative ministry, i.e. Ministry of Power. Accordingly, the appointing authority considers the integrity, expertise and experience of the individual to be nominated / appointed. In the opinion of the Board, the Independent Directors of the Company are persons of integrity and possess the relevant expertise, proficiency and experience to contribute effectively to the Company. Further, the Company has received declaration from Independent Directors of the Company pursuant to the requirement of Section 149(6) of the Companies Act, 2013.

o)    The Company has adequate internal fi nancial controls with reference to the financial statements.

p)    There is neither any pending IBC (Insolvency & Bankruptcy Code) proceeding against REC, nor have we received any notice for initiation of any IBC proceedings against the Company.

q)    During the fi nancial year 2023-24, no event has taken place that give rise to reporting of details w.r.t. difference between amount of the valuation done at the time of onetime settlement and valuation done while taking loan from the Banks or Financial Institutions.

40. ANNEXURES TO BOARD'S REPORT

In terms of the provisions of SEBI (Listing Obligations

and Disclosure requirements Regulations), 2015 and

other applicable statutory provisions, separate sections containing Management Discussion & Analysis Report, Report on Corporate Governance, Business Responsibility & Sustainability Report, Integrated Report are enclosed to this Board's Report.

Various statutory reports, information, certifi cates etc., in terms of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, DPE Guidelines on Corporate Governance for CPSEs, 2010 and other applicable statutory provisions, are enclosed to the Board's Report as under:

41. ACKNOWLEDGEMENTS

The Board of Directors sincerely express their appreciation to the Ministry of Power, Ministry of Finance, Ministry of Corporate Affairs, NITI Aayog, Department of Investment and Public Asset Management, Department of Public Enterprises, Reserve Bank of India, Securities & Exchange Board of India, National Stock Exchange of India Limited, BSE Limited, National Securities Depository Limited, Central Depository Services (India) Limited and the Comptroller & Auditor General of India for their invaluable guidance and support. Gratitude is also extended to Power Finance Corporation Limited, the holding company, for their unwavering support.

The Board of Directors extend their heartfelt thanks to all shareholders, investors, lenders and bondholders for their unwavering confdence in the Company. The Board of Directors also acknowledge and appreciate the trust placed in the Company by all customers and borrowers, including State Governments, State Electricity Boards, State Power Utilities and Independent Power Producers.

The Board of Directors are appreciative of the dedication and support provided by the Statutory Auditors, Secretarial Auditors and other professionals associated with the Company. Last but not the least, the Board of Directors express their deep gratitude to the employees and staf for their tireless commitment to excellence.

For and on behalf of the Board of Directors Vivek Kumar Dewangan

Place: Gurugram    Chairman & Managing Director

Date : July 27, 2024    DIN: 01377212