REC- 1-51.p65 - Rural Electrification Corporation Ltd.

RURAL ELECTRIFICATION CORPORATION LIMITED
renewal, to enable them perform their responsibilities in an effective manner. Based on the assessed needs and as means to satisfy them,
the Company sponsors its officers and staff to various training programmes, workshops etc. within the country and abroad. In addition,
training programmes are conducted in-house also, including in the Company’s CIRE at Hyderabad.
ERP BASED INTEGRATED INFORMATION SYSTEM
The Company has implemented an integrated Oracle based ERP system covering all major business functions. The ERP system was put
into operation on the Company’s Raising day i.e. 24.07.2009. It covers all important business areas of the Company like Central Accounting,
Project Appraisal and sanction, disbursement and management of Loan Accounts, Cash Management & Treasury functions, payroll and
purchases etc. This enables capturing of data and information at the point of origin across all offices of the Company and flow of the same
up to the appropriate level depending on the defined workflow hierarchy.
PRUDENTIAL EXPOSURE NORMS FOR LENDING
The Company believes in adopting prudent management and lending practices matching with other similar organisations. As a Government
owned Non-Banking Finance Company (NBFC), the Company is exempted from the applicability of the Prudential Norms prescribed by
RBI for other NBFCs. The Company has however formulated and adopted its own Prudential Norms with the approval of the Board. Based
on the requirement of RBI, as a Government-owned NBFC, the Company had submitted to RBI, with the approval of the Ministry of Power,
a Road Map for compliance with various elements of NBFC Regulations till the end of XII Plan. RBI has recently advised on 29 th June 2010
that it is agreeable to grant REC exemption from prudential exposure norms in respect of lending to Central and State entities in the power
sector till March 31, 2012 subject to certain reporting compliances and further review at the end of XI Plan. This has enabled the Company
to increase the lending capacity to Central and State power entities.
REGISTRATION AS IFC
RBI has, in its Circular dated 12 th February 2010, introduced a new category of NBFCs called “Infrastructure Finance Company” (IFC), to
include NBFCs which are engaged predominantly in Infrastructure financing, subject to fulfilling certain criteria. Such IFCs are inter alia
allowed to have additional exposure for lending purposes. As the Company fulfils all the criteria prescribed for IFC, it has recently applied
to RBI for registration as IFC to have the advantage of additional lending exposure.
CORPORATE GOVERNANCE
As a listed company, REC has been complying with the requirements of Corporate Governance as stipulated in the Listing Agreement and
also the provisions notified by the Department of Public Enterprises, Government of India in this regard. The Company has also obtained
a Certificate from the Joint Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as per Listing
Agreement.
CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY
The Board of Directors of the Company has laid down CSR Policy. As per the Policy, the Company envisages to remain a responsible
corporate entity mindful of its social responsibilities to all stakeholders. To start with, the Company has allocated an amount equivalent to
0.5% of Profit after Tax every year for implementation of programmes as per the CSR Policy of the Company.
MOU WITH MINISTRY OF POWER
The performance of the Company in terms of MOU signed with the Government of India in the Ministry of Power for the financial year
2008-09 has been rated as “Excellent”. This is the 16 th year in succession that REC has received “Excellent” rating since the year 1993-94
when the first MOU was signed with the Government. For the year 2009-2010 also, the performance of the Company is poised to receive
“Excellent” rating.
PATTERN OF SHAREHOLDING IN REC
It is a happy and welcoming trend that the Foreign Institutional Investors (FIIs) have been particularly showing significant interest to
invest in the Company’s Equity Shares from the time the Company first went public in February 2008 and even more after its Further
Public Offer (FPO) in February this year, by recognising the strong fundamentals of the Company and its potency for future growth. The
shareholding by FIIs, which was 7.68% of the paid-up capital of the Company, prior to FPO, has increased to a present level of around 20%
or more, and hence the Company has sought the approval of the Shareholders to increase the limit of shareholding by FII in REC from the
existing level of 24% to 35%.
AWARDS FOR EXCELLENCE, BEST HEALTH CREATOR & BEST MANAGEMENT
It is a matter of great honour to the Company that it received India Pride Award for “Excellence in Rural Electrification” and also Second
DSIJ PSU Award in the category of “The Best Wealth Creator”. One more feather in the cap was added when the Company was conferred
Gold Trophy of SCOPE Meritorious Award for the “Best Managed Financial Institution – 2008-09” from Smt. Pratibha Patil, Honorable
President of India.
LOOKING AHEAD
In the backdrop of XI Plan’s targeted investments in power infrastructure at Rs.10316 Billion, and the total amount estimated for funding
the growth during the XII Plan period at Rs.11,000 Billion based on CEA’s estimates for addition of 1,00,000 MW generation capacity
together with related transmission and distribution infrastructure, the power sector has enormous potential to attract colossal investments
in the coming years. The Company, on its part, will continue to harness all its energies and resources to capture optimal share of funding
business out of the above ambitious plans, and strive to sustain and maintain consistent growth rate and surge ahead to attain still greater
heights of performance, to match the expectations of all its stakeholders.
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