The Directors have the pleasure in presenting the Forty First Annual Report togetherwith the Audited Accounts of the Company for the financial year ended 31st March, 2010.
1. PERFORMANCE HIGHLIGHTS
1.1 The highlights of performance of the Company for the year 2009-10 were as underwith comparison of previous year's performance:-
|Parameter ||2009-10 ||2008-09 |
| ||(Rs. in crore) ||(Rs. in crore) |
|Loans sanctioned ||45357.36* ||40745.84* |
|Disbursements (including subsidy under RGGVY) ||27127.14 ||22277.86 |
|Recoveries ||12496.12 ||9796.97 |
|Total Operating Income ||6549.76 ||4757.17 |
|Profit before tax ||2649.19 ||1920.11 |
|Profit after tax ||2001.42 ||1272.08 |
* Excluding subsidy under RGGVY.
1.2 Financial Performance
The total operating income of the company for the year increased by 38% to Rs. 6549.76crore from Rs. 4757.17 crore during the previous year. The profit before tax increased by38% to Rs.2649.19 crore from Rs. 1920.11 crore for the previous year and the profit aftertax increased by 57% to Rs. 2001.42 crore from Rs. 1272.08 crore for the previous year.
In addition to interim dividend of Rs.3.00 per share paid in January, 2010, yourDirectors are happy to recommend a final dividend of Rs.3.50 per share for the year2009-10. The total dividend for the year will work out to Rs. 6.50 per share as againstRs. 4.50 per share paid last year. The total dividend pay-out for the year will amount toRs.603.21 crore.
1. 4 Further Public Offering (FPO) of Shares
In February 2010 the Company made Further Public Offering (FPO) of 171,732,000 equityshares of face value of Rs. 10 each for cash at prices determined through the alternatebook-building method under Part D of Schedule XI of the Securities and Exchange Board ofIndia (Issue of Capital and Disclosure Requirements) Regulations, 2009. The Issuecomprised of a fresh issue of 128,799,000 equity shares by the company and an Offer forSale of 42,933,000 equity shares by the President of India, acting through Ministry ofPower, Government of India, as selling shareholder. The Shares were issued toNon-Institutional/ Retail Individual Investors at Rs. 203/- per equity shares, toemployees of the Company at Rs.193/- per equity shares and to QIB category includingmutual funds at Rs. 206/-& above as per bids submitted by them. The Issue got aphenomenal response and it was oversubscribed by 3.14 times. The total number ofapplications received were 57858. The fresh equity shares were allotted on 5thMarch 2010 and the total amount raised by the Company through FPO was Rs. 2647.53 crore.The proceeds of the fresh issue of equity shares have been utilized for the purpose of thebusiness of the Company as mentioned in the offer document. Trading in equity shares ofthe Company issued under FPO commenced on the National Stock Exchange of India Limited andBombay Stock Exchange Limited on 8th March 2010, and requisite Listing Feeshave been paid to each of these Stock Exchanges.
In the Post-FPO scenario, the shareholding of the Government of India has reduced from81.82% to 66.80% and the balance 33.20% is held by public.
1.5 Share Capital
The Issued and Paid up Share Capital increased from Rs. 858.66 crore to Rs.987.46 croreas on 31.03.2010 after FPO, against the Authorized Capital of Rs.1200 crore, and an amountof Rs.2499.18 crore (net of Issue expenses of Rs.19.55 crore) has been taken to SecurityPremium Account.
2. LOANS SANCTIONED
The Company sanctioned loans worth Rs.45357.36 crore during the year 2009-10, asagainst Rs.40745.84 crore in the previous year excluding subsidy under RGGVY. The stateand category-wise break-up of loans sanctioned during the year are given in enclosed Tables-1and 2 respectively. The cumulative amount of sanctions made since inception upto31.3.2010 was Rs.266775.59 crore including subsidy under RGGVY. The cumulative state-wiseposition of sanctions up to the end of 2009-10 is given in enclosed Table-3.
A total sum of Rs.27127.14 crore was disbursed during the year 2009-10 as against Rs.22277.86 crore in the previous year including subsidy under RGGVY. The cumulative amountdisbursed since inception upto 31.3.2010 was Rs.113533.13 crore excluding subsidy underRGGVY. The state-wise disbursements and repayment by borrowers during the year togetherwith cumulative figures and outstandings as on 31.3.2010 are given in enclosed Table-4.
4.1 The amount due for recovery during the year 2009-10 was Rs.12461.02 crore ascompared to Rs.9788.90 crore during the previous year. The overdues from defaultingborrowers were Rs.166.60 crore as on 31.3.2010. The Company recovered a total sum ofRs.12496.12 crore during the year 2009-10 against Rs. 9796.97 crore during the previousyear. The details are given below:
|Particulars ||Total |
| ||(Rs. in crore) |
|Overdues as on 1.4.2009 ||201.70 |
|Dues receivable during the year ||12461.02 |
|Received during the year ||12496.12 |
|Overdues as on 31.03.2010 ||166.60 |
4.2 Out of the overdues of Rs.166.60 crore as on 31.03.2010, a sum of Rs.30.32 crorestands recovered till 31.05.2010.
4.3 The company has also been making efforts to bring down Non-Performing Assets (NPAs)to Zero level. As on 31.03.2010 the Gross NPAs of the company stood at Rs.19.54 crore(i.e. 0.03% of Gross Loan Assets), as compared to Rs.68.89 crore (0.14% of Gross LoanAssets) as on 31.03.2009.
5. FINANCIAL REVIEW
5.1 A summary of Financial Results
The summary of financial results of the Company for the year ended 31stMarch, 2010 is given below:
| || || || |
(Rs. in crore)
| || |
|Particulars ||2009-10 ||2008-09 ||2009-10 ||2008-09 |
|Gross Income ||6707.60 ||4931.28 ||6747.63 ||4936.55 |
|Profit before tax ||2649.19 ||1920.11 ||2680.76 ||1922.36 |
|Depreciation ||2.16 ||1.36 ||2.18 ||1.37 |
|Provision for Income Tax & Deferred Tax ||647.77 ||648.03 ||658.51 ||648.83 |
|Net Profit / Profit after Tax ||2001.42 ||1272.08 ||2022.25 ||1273.53 |
|Appropriations : || || || || |
|Transfer to Special Reserve ||458.03 ||340.00 ||458.03 ||340.00 |
|Transfer to Reserve for Bad & Doubtful Debts ||107.60 ||80.00 ||107.60 ||80.00 |
|Interim Dividend ||257.60 ||171.73 ||257.60 ||171.73 |
|Dividend Tax on Interim Dividend ||43.77 ||29.19 ||43.77 ||29.19 |
|Proposed Final Dividend ||345.61 ||214.67 ||345.66 ||214.72 |
|Dividend Tax on proposed Final Dividend ||57.40 ||36.48 ||57.41 ||36.49 |
|Transfer to General Reserve ||500.00 ||255.00 ||500.75 ||256.00 |
|Balance carried forward ||557.17 ||145.01 ||577.20 ||145.40 |
5.2 Resource Mobilization
The Company mobilized Rs.24028.24 crore from the market during the year 2009-10. Thisincludes Rs.3055 crore by way of loan from commercial banks, Rs.3057.77 crore by way ofcapital gain tax exemption bonds, Rs.13529.50 crore by way of non-priority sector bonds,Rs.3150 crore through Commercial Paper(CP), Rs.630 crore by way of Short Term Loan fromCommercial Banks and Rs.605.97 crore by way of Official Development Assistance (ODA) loanfrom Kreditanstat fur Wiederaufbau (KfW), Germany & Japan International CooperationAgency (JICA),Japan. The domestic debt instruments of REC continued to enjoy"AAA" rating -the highest rating assigned by CRISIL, CARE, FITCH &ICRA-Credit Rating Agencies.
Cash Credit Facilities
For day to day operations, the Company also arranged cash credit limits to the tune ofRs. 1200 crore from various banks.
5.3 Sovereign rating
REC enjoys international credit rating equivalent to sovereign rating of India fromInternational Credit Rating Agencies Moody's and FITCH which is "Baa3" and"BBB-" respectively.
5.4 Cost of borrowing.
As per the Finance Act 2006, only REC and National Highway Authority of India (NHAI)were eligible to raise money through bonds issued under Section 54 EC of the Income TaxAct, 1961. This helped in keeping the cost of borrowing at a low level. The overallannualized average cost of funds was 7.31% during the year 2009-10. As a result REC isable to deliver debt financing at competitive rates.
5.5 Redemption and Pre-Payment
During the year, the Company repaid a sum of Rs. 15.32 crore to the Government ofIndia. It also redeemed a total sum of Rs.838.92 crore owed to non- priority/ prioritysector bond holders. In addition, Rs.7414.99 crore worth of Capital Gain Tax ExemptionBonds and Rs.13.46 crore of Infrastructure Bonds were also redeemed. The company alsoredeemed long term and short term loans from Banks of Rs.2624.62 crore and CommercialPaper of Rs.1995 crore.
5.6 Particulars regarding Conservation of Foreign Exchange Earnings & Outgo
The particulars regarding foreign exchange outgo during the year under review are givenin point 16 of Schedule 17 to the "Notes on the Accounts" forming part of theAnnual Accounts. No foreign exchange was earned during the year under review.
5.7 Financial status at the close of the year
At the close of the financial year 2009-10, the total resources of the Company stood atRs.67028.56 crore. Out of this sum, Equity Share Capital contributed Rs.987.46 crore,Reserve and Surplus stood at Rs.10092.87 crore, Loans from LIC, Commercial Banks andMarket Borrowings accounted for Rs.55948.23 crore. These funds were deployed as Long /Short Term Loans of Rs.66452.61 crore and Fixed Assets of Rs.89.91 crore (includingCapital Work in Progress), Investments of Rs.909.86 crore, Deferred Tax Asset of Rs.7.37crore and balance of Rs.(-) 431.19 crore in Net Current Assets.
During the year 2009-10 an amount of Rs.3068.39 lacs was written back to income asprovision for Bad & Doubtful Debts made in earlier years, which were no longerrequired due to realisation / upgradation of Loan Assets.
6. DIRECTORS' RESPONSIBILITY STATEMENT
With reference to Section 217 (2AA) of the Companies Act,1956, it is confirmed as under: -
(i) that in the preparation of the Yearly Accounts for the period ended 31.03.2010, theapplicable Accounting Standards had been followed and no material departures have beenmade from the same;
(ii) that such accounting policies have been selected and applied consistently andjudgements and estimates made that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;
(iii) that proper and sufficient care is taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956, forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(iv) that the annual accounts have been prepared on a going concern basis.
7. FINANCING ACTIVITIES
REC has been funding power generation, transmission & distribution projects besideselectrification of villages. Various initiatives in this regard are enumerated below:
During the year 2009-10, the Company sanctioned 26 nos. of generation / R&M loansincluding 5 nos. additional loan assistance with total financial outlay of Rs.24031.32crore, Since 2002-03 and upto 31.03.2010, REC has sanctioned financial assistance ofRs.103804 crore for R&M, thermal, wind and hydro generation projects. REC hasdisbursed Rs.8349 crore during 2009-10 against the on-going generation projects.
The sector wise break up of loans sanctioned including additional loan assistance is asbelow:
| ||No. of Loans ||Loan Amount |
| || ||(Rs. in crore) |
|STATE SECTOR || || |
|Fresh Loan ||9 ||12282.37 |
|Additional Loan ||4 || |
|PRIVATE SECTOR || || |
|Fresh Loan ||12 ||11749.95 |
|Additional loan ||1 || |
|Total : Fresh Loan+Additional Loan ||21+5=26 ||24031.32 |
7.2 Transmission & Distribution
REC continued to play an active role in creating new infrastructure and improving theexisting ones under the transmission and distribution network in the country under itsT&D portfolio. In line with the country's objective to provide power for all by theyear 2012 and also reduce the AT&C losses, REC has been financing schemes forexpansion and strengthening of the transmission network and more importantly, modernizingof the distribution system.
7.3 System Improvement & Bulk Loan
During the year 2009-10, a total of 289 system improvement schemes and bulk loanschemes were sanctioned involving a loan outlay of Rs.15421.64 crore. This included: (i)30 schemes involving a loan assistance of Rs. 1177.75 crore for financing investment inthe distribution system by way of installation of essential equipments like transformers,meters, capacitors etc. (ii) 29 schemes involving a loan assistance of Rs.1705.48 crorefor conversion of Low Voltage Distribution to High Voltage Distribution System (HVDS),(iii) 122 schemes for Rs.3466.33 crore for improving the distribution system, and (iv) 108schemes for Rs.9072.07 crore for improving the transmission network.
7.4 Pumpset energization
During the year, 240020 electric irrigation pumpsets were reported energized under RECfinanced schemes. 103 new schemes for a loan assistance of Rs.964.74 crore were sanctionedduring the year under this category. The state-wise details and cumulative position up to31.3.2010 are given in the enclosed Table-5
7.5 Activities in North Eastern (NE) States
A loan assistance of Rs.30.83 crore was disbursed to the NE states under T&Dprogramme during the year 2009-10 as compared to Rs.25 crore during the previous year. 1scheme for a loan assistance of Rs.32.54 crore was sanctioned to Nagaland during 2009-10under System Improvement category.
8. RAJIV GANDHI GRAMEEN VIDYUTIKARAN YOJANA (RGGVY)
Government of India, in April 2005, launched the scheme 'Rajiv Gandhi GrameenVidyutikaran Yojana (RGGVY)-Scheme of Rural Electricity Infrastructure and HouseholdElectrification' for the attainment of the National Common Minimum Programme (NCMP) goalof providing access to electricity to all households in 5 years. The scheme is beingimplemented through REC. Under the scheme 90% capital subsidy is being provided by Govt.of India for overall cost of the projects.
8.1 Electrification of villages and BPL Households
Initial approval was for implementation of Phase I of the scheme for capital subsidy ofRs.5000 crore during X-Plan period. 235 projects covering 180699 villages (68763un-electrified and 111936 electrified villages) with the total sanctioned project cost ofRs. 9733 crore were sanctioned for implementation by the Ministry of Power in X-Planperiod.
Further approval has been accorded for capital subsidy of Rs.28000 crore forcontinuation of the scheme in XI-Plan for attaining the goal of providing access toelectricity to all households, electrification of about 1.15 lakh un-electrified villagesand electricity connections to 2.34 crore BPL households. 338 projects covering 292767villages (49736 un-electrified and 243031 electrified villages) costing Rs. 16621 crorehave been sanctioned by Ministry of Power for implementation in XI-Plan.
The state-wise details of projects sanctioned in X-Plan and XI-Plan periods under RGGVYare furnished in the enclosed Table-6.
Under the scheme, it has been reported that works have been completed in 53370 villages(including 18374 un-electrified and 34996 electrified villages) and connections to 49.49Lakh rural households including 47.18 Lakh BPL households have been provided during2009-10.
Cumulatively, works in 190858 villages (78256 un-electrified and 112602 electrifiedvillages) have been completed and connections to 100.97 Lakh BPL households have beenreleased under the scheme up to 31.03.2010.
The state-wise details of Achievements of Electrification works in Un-electrifiedvillages & Release of free electricity connections to BPL households upto 2008-09,during 2009-10 and Cumulative Achievements upto 31.03.2010 are furnished in the enclosed Table-7.
9. RGGVY - DECENTRALISED DISTRIBUTED GENERATION (DDG)
RGGVY provides for DDG projects from conventional or renewable non-conventional sourcessuch as biomass, bio-gas, mini hydro, wind and solar etc. for villages where gridconnectivity is either not feasible or not cost effective.
DDG Systems are small power generation units near the load centers.
Ninety per cent capital subsidy would be provided under RGGVY towards overall cost ofthe DDG projects under the scheme, excluding the amount of state or local taxes, whichwill be borne by the concerned State/State Utility. 10% of the project cost would becontributed by states through own resources/loan from financial institutions.
A provision of Rs. 540 crore has been kept as subsidy for DDG projects under XI-Plan.
The Guidelines for DDG projects under RGGVY have been issued by Ministry of Power on12.01.2009. Many States have appointed implementing agencies for DDG projects and are inthe process of appointing consultants for preparation of DPRs for DDG projects.
10. CONTRIBUTION OF REC IN PROMOTION OF RENEWABLE/DDG PROJECTS
So far the Company has financed various Renewable Projects as per details given belowas on 31.03.2010:
Projects under Implementation and Projects Commissioned.
|Sl. No. ||Description ||Projects under Implementation ||Projects Commissioned ||TOTAL |
|(i) ||Value of Loan sanctioned (Rs. crore) ||1504.58 ||132.96 ||1637.54 |
|(ii) ||Disbursement made so far (Rs crore) ||267.73 ||126.10 ||393.83 |
|(iii) ||Value of Projects Sanctioned (Rs crore) ||2096.05 ||378.61 ||2474.66 |
|(iv) ||MW of Projects ||332.70 ||61.46 ||394.16 |
|(v) ||No. of Projects ||12 ||11 ||23 |
11. STANDARDISATION, QUALITY CONTROL & MONITORING
The Company has continually provided technical expertise in the distribution system toState Power Utilities. The technical specifications and construction standards issued bythe Company are used extensively by the State Power Utilities. The Company, in order topromote new technologies, has been continuously looking for innovations using latestR&D in the field of power distribution and has recently issued / updated technicalspecifications on Insulation Piercing Connectors for LT Aerial Bunched Cables of Voltageupto 1100 volts and Anchor (Dead end) and Suspension Assemblies for LT Aerial BunchedCables of working voltage upto and including 1100 volts.
In line with the Three-Tier Quality Control Mechanism for ensuring proper quality ofmaterials and works in implementation of RGGVY XI - Plan schemes, REC Quality Monitors(RQM) have been appointed during the financial year covering 332 projects in 24 states ofthe country. And these RQMs have undertaken 1245 Nos. of RGGVY project materialsinspections during the year under review for ensuring quality of equipments and an amountof Rs.1,35,27,230/- has been released to the RQMs.
12. ENERGY EFFICIENCY SERVICES LIMITED
REC along with three other PSUs namely Powergrid, NTPC, and PFC as partners has formeda Joint Venture Company by the name Energy Efficiency Services Limited (EESL). The totalequity requirement for EESL is Rs. 190 crore to be shared equally by the four PSUs. EESLshall take a lead in implementing energy efficiency projects, play a market creation rolein promoting usage of energy efficient appliances, promote the concept of Energy ServiceCompanies (ESCOs) and performance contracting, manage a partial risk guarantee fund toprovide risk mitigation to ESCOs etc, besides taking over the current commercial rolesbeing discharged by the Bureau of Energy Efficiency (BEE). Thus EESL is expected toimplement the recommendations under the National Mission for Enhanced Energy Efficiency(NMEEE) which is part of the National Action Plan for Climate Change (NAPCC). The businessplan of EESL envisages taking up projects in Energy Conservation and Building Codes,Agriculture Demand Side Management (DSM), Municipal DSM, Bachat Lamp Yojana, besidestaking up other functions.
13. INTERNATIONAL COOPERATION & DEVELOPMENT
13.1 Japan International Cooperation Agency (JICA)
(i) REC had entered into a loan agreement with JICA on 31.03.2006 for loan assistanceof 20.0629 Billion Japanese Yen (approx. Rs. 784 crore with an exchange rate of 100 yen =Rs. 38.01- As on 31.03.2006) under the Official Development Assistance (ODA) loan packagefor the Rural Electricity Distribution Backbone (REDB) Project of REC envisagingimplementation of 749 nos. 33/11 KV new substations and augmentation of 510 nos. ofsubstations. The project is being implemented in the states of Andhra Pradesh, Maharashtraand Madhya Pradesh. The project implementation is at advanced stages, and REC hasdisbursed a cumulative sum of Rs. 680.55 crore to the sub-borrowers as on 31.03.2010(Previous Year - Rs. 446.60 crore). Loan amount to the tune of 13.47 Billion JPY has beendrawn from JICA as on 31.03.2010 (Previous Year -9.38 Billion JPY). With the financialassistance provided by REC, JICA, 618 nos. of 33/11 KV new substations (Previous Year -405 nos.) and augmentation of 337 nos. of substations (Previous Year - 270 nos.) have beencompleted as on 31.03.2010.
(ii) REC entered into a second loan agreement with JICA on 10.03.2008 for ODA loan of20.902 Billion Japanese Yen (approx. Rs. 833 crore with an exchange rate of 100 yen = Rs.39.86 - As on 10.03.2008) for implementation of transmission system project in the stateof Haryana for strengthening intra-state transmission systems in the state. The projectimplementation is in progress, and REC has disbursed a cumulative sum of Rs. 249.39 croreto the sub-borrowers as on 31.03.2010 (Previous Year -Rs. 28.07 crore). Loan amount to thetune of 3.28 Billion JPY has been drawn from JICA as on 31.03.2010 (Previous Year - 0.55Billion JPY).
13.2 Indo-German Bilateral Cooperation Programme
(i) REC entered into a loan agreement with KfW on 08.08.2006 for ODA loan of 70 MillionEuro (approx. Rs. 418 crore with an exchange rate of 1 Euro = Rs. 59.74 - As on08.08.2006) for implementation of High Voltage Distribution System (HVDS) Project underKfW- Energy Efficiency Programme-I in the Chittoor and Kadapa Districts in the state ofAndhra Pradesh. The project is nearing completion and REC has disbursed a cumulative sumof Rs. 448.43 crore to the sub-borrowers as on 31.03.2010 (Previous Year - Rs. 224.57crore). Loan amount to the tune of 67.84 Million Euro has been drawn from KfW as on31.03.2010 (Previous Year - 35.28 Million Euro).
(ii) REC entered into a second loan agreement with KfW on
16.03.2009 for ODA loan of 70 million Euro (approx. Rs. 466.13 crore with an exchangerate of 1 Euro = Rs. 66.59 - As on 16.03.2009) for implementation of Energy Efficiency andReliability Project in the state of Haryana. KfW has engaged international consultant toassist UHBVN in preparation of Detailed Project Reports and Bid documents. The procurementactivities have commenced and the drawal of funds from KfW in respect of this loan isexpected to commence in the financial year 2010-11.
(iii) During the annual bilateral consultation between Government of India &Government of Germany, KfW has committed a third line of credit to REC to the tune of Euro100 Million for financing Renewable Energy & Energy Efficiency Projects. The loanagreement is expected to be signed during financial year 2010-11.
13.3. Asian Development Bank (ADB)
ADB has approved a line of credit amounting to US $ 225 million to REC on 27.11.2008 tofinance transmission and distribution networks in rural sector. Further negotiations withADB for availing the loan are under progress.
13.4 Agency Francaise De Development (AFD)
REC's proposal for financing Energy Efficiency Project (HVDS & Pumpset Replacement)in the state of Rajasthan has been recommended by Ministry of Power, Government of Indiato Ministry of Finance for consideration under Official Development Assistance from AFD,France, under Indo French Co-operation, for financial assistance to the tune of Euro 80million. Further negotiations with AFD are expected to fructify during financial year2010-11.
13.5. Clean Development Mechanism (CDM)
The four nos. of Project Design Documents (PDDs) on HVDS Project of APSPDCL financed byREC under REC-KfW Energy Efficiency Programme-I, which received Host Country Approval fromMoEF in January 2009 for availing carbon credits under CDM, are under validation by theUNFCC accredited validators. This activity has been undertaken as a pilot project for CDMin Distribution Sector with the assistance of KfW, Germany.
14. ERP BASED INTEGRATED INFORMATION SYSTEM
14.1 REC has put the on-going ERP project into operation on its raising day i.e.24.07.2009. The launching Go-Live was done by Shri Sushilkumar Shinde, Hon'ble Minister ofPower, in the presence of Shri Bharatsinh Solanki, Hon'ble Minister of State for Power,Shri H.S. Brahma, Secretary, Ministry of Power and Shri P. Uma Shankar, CMD, REC.
14.2 ERP covers all important business areas of REC like Central Accounting, ProjectAppraisal and sanction, disbursement and management of Loan Accounts, Cash Management& Treasury functions, payroll and purchases etc. This enables capturing of data andinformation at the point of origin across all offices of REC and flow of the same upto theappropriate level depending on the defined workflow hierarchy.
14.3 An internal assessment estimate has shown that the average time of disbursement ofclaims to power utilities has reduced from 12.2 days to 1.46 days after implementation ofERP.
14.4 As a part of ERP implementation, a corporate-wide secured IT infrastructure withState-of-art Tier-3 Centralized Data Centre and an MPLS based VPN network (WAN Connectingall offices of REC) has been created. The ERP project has also been audited by 3rdparty viz. Pricewaterhouse Coopers.
14.5 Corporate Intranet has been further revamped for more features and information,and faster dissemination of information within REC. The spread of computerization has alsoincreased during the financial year.
14.6 With the implementation of ERP, more desks have been provided with ComputerSystems. The present population of desktop systems against total employees stands around90% (excluding class IV employees)
15. CENTRAL INSTITUTE FOR RURAL ELECTRIFICATION (CIRE)
15.1 CIRE was established at Hyderabad in 1979 under the aegis of REC to cater to thetraining and development needs of engineers and managers of Power and Energy Sector andother organizations concerned with Power and Energy. CIRE conducts regular trainingprogrammes on various aspects of Generation, Transmission and Distribution for Nationaland International Power Sector Executives.
15.2 Franchising of Distribution Management throughout the country in RGGVY villages isa mandatory requirement. In this connection, Ministry of Power, Govt. of India has chosenCIRE as a Nodal Agency for coordination and monitoring of "National FranchiseeTraining Programme". Under this programme, it is proposed to train 40,000Franchisees. CIRE has entered into MOUs with 41 Power Utilities/Institutes for organizingthe programmes by them. This training activity will continue upto 2011-12. During the year2009-10, 257 Franchisee Programmes with 9,349 participants were conducted by variousutilities wherein CIRE was also involved in conducting programmes at the location of PowerUtilities.
15.3 CIRE was also given by the Ministry of Power, Government of India the mandate asNodal Agency to implement "National Training Programme for C&D Employees."The supporting staff in technical, non-technical areas working in distribution sector, whoare the first interface with the consumers were to be provided training and skilldevelopment to effectively deliver their responsibilities and improve the customersatisfaction. Under this programme, 75,000 C&D employees in the country will betrained during the period of XI Five Year Plan. 45 Power Utilities/Institutes have enteredinto MOUs for organizing programmes by them. During the year 2009-10, 691 C&DProgrammes with 17,873 participants were conducted by various utilities.
15.4 Six International Training Prograrmmes under ITEC/ SCAAP, sponsored by Ministry ofExternal Affairs, Govt. of India were also conducted. 97 participants from variouscountries, such as Afghanisthan, Philippines, Myanmar, Bangladesh, Zimbabwe, Ivory Coast,Zambia, Tajikistan, Thailand, Mauritius, Tanzania, Nigeria, Sudan, Iraq, Egypt, Senegal,Mali, Georgia, Guyana, Syria, Indonesia, Kenya, Malawi, Uzbekistan, Papua New Guinea,Ukrain, Mozambique, Oman, Iran, etc., took part in the following programmes :-
(i) Modern Practices in Generation and Transmission Systems
(ii) Innovative Technologies in Transmission & Distribution Systems
(iii) Planning & Financial Management of Power Projects
(iv) Modernization of Power Distribution
(v) Decentralised Distributed Generation & Rural Power Distribution Management
(vi) Financial Management & Accounting Systems for Power Companies
The programmes were of 4/8 weeks duration.
15.5 CIRE also conducted two programmes with 71 participants under the sponsorship ofKfW, Germany on "High Voltage Distribution System (HVDS).
15.6 In addition, 10 Customised Programmes on Pilferage of Electricity - Technical& Legal Remedies, Best Practices in Distribution Loss Reduction, Customer Management& Information Systems in Power Sector, Best Practices in Distribution Systems O &M, Finance for Non-finance Executives, Energy Audit, Accounting & Load Management,were also conducted. 353 Officers took part in these programmes.
15.7 CIRE also conducted three R-APDRP programmes sponsored by Ministry of Power/PFCfor the executives of power utilities and 79 participants attended the programmes.
15.8 CIRE also conducted Three programmes with 48 participants on Finance forNon-Finance Executives, Human Resource Management in Power Sector, and Strategic FinancialManagement for Power Sector in collaboration with the Institute of Public Enterprise(IPE), a reputed business school located in Hyderabad, and availed the services of thebest faculty resources of the Institute for the benefit of the participants.
15.9 CIRE also conducted 32 programmes with 968 participants under Distribution ReformsUpgrades and Management (DRUM), with financial assistance of USAID. The topics coveredincluded Best Practices in Distribution Loss Reduction, Best Practices in DistributionSystem Operation & Maintenance, Change Management in Power Distribution, DistributionEfficiency and Demand Side Management, Training of Trainers (TOT) covering topics of RuralElectricity Distribution Franchising, Communication Skills, Employees Motivation &Morale Development, Financial Management of Distribution Business, Electrical SafetyProcedures, Accident Prevention and Disaster Management.
15.10 Ten Regular/Open Programmes were organised with 171 participants on topics suchas Pilferage of Electricity -Technical & Legal Remedies, Power Purchase Agreement,Energy Audit, Accounting and Load Management, Specifications, Standards & ConstructionPractices in Distribution System, Power & Distribution Transformers for EfficientOperation, New Developments in Metering, Billing & Collection, Power Sector Accountingwith reference to ESAAR & GAAP, Change Management in Power Sector, Power FactorImprovement - Reactive Power Compensation and Safety Management in Power Sector.
15.11 Nine In-house Training Programmes with 134 participants were organised for theemployees of REC to upgrade their knowledge and skills on various topics.
15.12 In all, during the year 2009-10, CIRE conducted 80 programmes and trained 2139participants as per details given below:
|Sl. No. ||Programme ||No. of Programmes ||No. of Participants |
|1 ||Regular Programmes ||10 ||171 |
|2 ||Programmes with IPE ||3 ||48 |
|3 ||DRUM Programmes ||32 ||968 |
|4 ||National Franchisee Training Programmes organised by CIRE ||5 ||218 |
|5 ||International Programmes ||6 ||97 |
|6 ||Sponsored/Customised Programmes ||12 ||424 |
|7 ||R-APDRP Programmes ||3 ||79 |
|8 ||In-house Programmes ||9 ||134 |
| ||Total ||80 ||2139 |
16. RISK MANAGEMENT
16.1 Asset Liabiliy Management
The Company has a Risk Management Policy which covers inter alia Asset LiabilityManagement and Derivative Instruments. An Asset Liability Management Committee (ALCO) iscurrently functioning under the leadership of CMD, REC and it comprises of one IndependentDirector, Director (Finance), Director (Technical), Executive Director (Finance) andGeneral Managers in Finance, Generation and T&D Division. ALCO monitors risk relatedto liquidity, interest rates and currency rates. The liquidity risk is being monitoredwith the help of liquidity gap analysis and the Committee manages the liquidity riskthrough a mix of strategies, like a forward looking resource raising program based onprojected disbursement and maturity obligations. The interest rate risk is monitoredthrough interest rate sensitivity analysis and managed through review of lending rates andcost of borrowings and the terms of lending and borrowing.
16.2 Foreign Currency Risk Management
The Company manages foreign currency risk associated with exchange rate and interestrate risk through various derivative instruments. As on 31st March 2010 thetotal foreign currency liabilities outstanding are JPY 40.32 billion and Euro 64.16million which are fully hedged.
17. ISO 9001:2000 QUALITY ASSURANCE CERTIFICATION
REC has implemented Quality Management Systems as per ISO 9001:2000 standards in sixmajor Divisions of Corporate Office and all Project Offices across the country, (exceptthe newly formed Ranchi Project Office).
18. HUMAN RESOURCES MANAGEMENT
In order to professionalize the Executive strength of REC and also to infuse freshblood, 09 Executives were appointed in REC through open advertisement and 16 Executivesthrough campus recruitment during the period 01-04-2009 to 31-03-2010.
The total manpower at the close of the financial year 200910 i.e. on 31-03-2010 was 673which include 370 executives and 303 Non-executives.
18.1 Scheduled Caste/Scheduled Tribe Reservations
The directives issued by the Government regarding reservations for SC/ST in appointmentand promotion to various posts were complied with. The group wise details of SC and STemployees out of the total strength as on 3103-2010 are given below:
|Group ||Total No. of employees ||SC ||ST |
|A ||332(316) ||30(25) ||9(6) |
|B ||153(148) ||19(22) ||3(4) |
|C ||87(112) ||17(19) ||0(1) |
|D ||101(105) ||31(31) ||3(4) |
|Grand Total: ||673(681) ||97(97) ||15(15) |
(Figures in bracket give the corresponding position in the previous year)
18.2 Training & Human Resource Development
As a means of equipping employees with a range of skills including their renewal, toenable them perform their responsibilities, Training and HRD continued to receive a placeof priority during the year. Based on the assessed needs and as means to satisfy them, thecompany sponsored 95 employees to various training programmes, workshop etc. within thecountry and abroad. In addition, 18 training programmes were conducted in-house, whichwere attended by 479 employees including seven programmes conducted at CIRE, Hyderabadexclusively for REC employees. In order to enable them develop global exposure, severalofficers were sent to attend various programmes abroad viz. Japan, Geneva, Bangladesh etc.Taken together, these initiatives enabled the company to significantly out-perform MOUtargets. As against the target of 1300 man-days, REC achieved a figure of 2342 for theyear.
18.3 Staff Welfare
In order to provide better medical facilities to the employees / their dependent familymembers at Corporate Office and Zonal/Project Offices (including CIRE, Hyderabad), theCompany has expanded the list of empanelled Hospitals covering 26 more Hospitals under the"Direct Payment" Scheme.
18.4 Women Cell
REC's Women Cell celebrated the International Women's Day on Monday, the 8thMarch, 2010.
18.5 Industrial Relations
The Industrial Relations continued to be healthy, cordial and harmonious. The processof consultation with the REC Employees and REC Officers' Association on important issuesgoverning employees benefits and welfare etc. continued and on majority of the issues,consensus could be achieved which is a reflection of the atmosphere of mutual trust andharmonious relations that prevail in the Company. Motivated employees worked in team spritand excelled the previous year's records.
18.6 Public Grievance Redressal Machinery
In accordance with the guidelines issued by the Govt. of India, the Company hasconstituted a Grievance Redressal Committee to redress the grievances of officers andstaff. The scope of the Committee has further been enlarged to cover Public Grievancealso. One day during a week has been fixed as meeting day to attend the grievances by theHeads of Divisions at Corporate Office as well as Zonal / Project Offices.
18.7 Sports Activities
REC sponsored its Team to the Inter-CPSU Table Tennis / Chess / Carrom- Tournamentsorganised by various CPSUs of Power Sector under the aegis of Power Sports Control Board(PSCB).
19. PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956.
The requsite information for the Financial Year 2009-10 or part thereof is given below:
| || || || || ||(Figures in Rupees) |
|Sl. ||Name ||Salary & Allowances ||Other Perks/ Benefits ||Performance Linked Incentive/ Ex-Gratia ||Total |
|1. ||Shri P. Uma Shankar, CMD ||22,07,758 ||3,90,716 ||25,000 ||26,23,474 |
|2. ||Shri H.D. Khunteta, Director (Finance) ||27,70,562 ||1,92,862 ||3,10,151 ||32,73,575 |
|3. ||Shri Guljit Kapur, Director (Technical) ||20,35,531 ||1,66,909 ||2,03,702 ||24,06,142 |
|4. ||Shri Rama Raman, Executive Director ||18,47,581 ||6,73,694 ||2,71,022 ||27,92,297 |
|5. ||Shri R. Anbalagan, Chief Manager ||22,85,499 ||9,53,502 ||6,96,964 ||39,35,965 |
20. VIGILANCE ACTIVITIES
20.1 The Vigilance Division headed by the Chief Vigilance Officer (of the rank ofFunctional Director) constantly endeavoured to emphasize on "PreventiveVigilance" so as to improve upon systems and procedures and leaving minimum scope fordiscretion. It also ensured to enforce discipline in exercising power in a judicious wayin matters relating to administrative and financial functions.
20.2 The Vigilance set up in REC consisting of one CVO, one AGM and three Managers /Sr. Officer, though small, has been an effective managerial tool in enhancing theperformance of the Corporation by way of pursuation with functional Divisions tosystematize /document the policies/procedures. Presently, there is no CBI case against anyemployee of the Corporation. Two disciplinary cases and two complaints are pending.
20.3 The Vigilance Awareness Week 2009 was organized during 3-7 November, 2009. Variousprogrammes/lectures were arranged in all offices of REC with a view to create awarenessabout preventive measures through system improvement and use of information technology.
20.4 In compliance with the instructions of CVC, the sensitive posts in the Corporationhave been identified and informed to CVC. HR Deptt. has been advised to rotate theofficers working on these posts for a long time.
20.5 Information with a vigilance angle was scrutinized carefully. As a measure forpreventive vigilance, policies/ procedures etc. relating to various divisions werereviewed and suggestions were given for improvement. Vigilance Division initiated measuresto streamline and strengthen office systems and procedures. All important circulars as andwhen received from CVC and circulars issued by Vigilance Division from time to time areregularly placed on REC intranet for information of all the Zonal Offices, ProjectOffices/Central Institute for Rural Electrification.
20.6 Agreed lists were finalized in respect of all Zonal Offices/ ProjectOffices/Central Institute of Rural Electrification in addition to its Corporate Office atDelhi after close interaction with local branches of CBI except in case of Mumbai.Prescribed periodical statistical returns were sent to CVC and MOP on time.
20.7 As a surveillance measure, inspections were carried out by the officers ofVigilance Division in various Zonal/ Project Offices. More than 95% Annual PropertyReturns of the employees were subjected to systematic scrutiny and clarifications weresought wherever necessary. Phase I of computerization of Annual Property Returns has beencompleted in which employees will continue to submit APRs in hard copy to HR Division andthen HR Division will feed the data in the software.
20.8 Performance of Vigilance Division was reviewed regularly by the CVC, Board ofDirectors of REC and CMD, REC in addition to constant reviews undertaken by the CVO, RECin accordance with the prescribed norms.
21. IMPLEMENTATION OF OFFICIAL LANGUAGE
21.1 In compliance with the directives of Department of Official Languages, strenuousefforts were made to achieve Annual Programme 2009-10. During the year, usage of Hindi hasincreased in day to day working of REC. In order to encourage employees, all theincentives schemes introduced by the Government of India have been implemented in REC.
21.2 (i) The Corporation organised nine Hindi competitions separately for GeneralManagers/Executive Directors, Middle level Managers and Non-Executives as well as Sulekhcompetition for Class IV employees during Hindi Pakhwara from 16.9.2009 to 30.9.2009.
(ii) A Noting/Drafting competition was also organized on 16.9.2009 under the aegis ofNARAKAS (Upkram) Delhi.
(iii) A Prize Distribution Function was organised on 20.11.2009. Winners of thesecompetitions were awarded prizes by Shri P.Uma Shankar, CMD, REC, Dr. P.C.Tandan, SeniorReader and Shri Saraswat Mohan Manishi, Famous Poet.
(iv) Mr. Manishi and other wellknown Hindi Poets enthralled the audience with theirpoetic talents and presentations at a function organised by REC.
(v) Cash Prizes and Certificates were given to encourage employees for doing theirOriginal Work in Hindi.
21.3 Four quarterly review meetings of Official Language Implementation Committee wereheld during the year under the Chairmanship of CMD, in which detailed discussions wereheld to review the progress and suggest measures to overcome any difficulties in order toachieve the targets.
21.4 Six periodical inspections were carried out to assess the progressive use of Hindiin various divisions of Corporate Office and suggestions were given to improve theshortcomings. During the year, seven Project Offices were also inspected. Ministry ofPower's officials have also been associated during inspection in some Project Offices. TheOfficers of Ministry of Power as well as Department of Official Language (RajbhashaVibhag) inspected REC's progress of Hindi work at Corporate Office on 21.10.2009 and28.1.2010. The progress of Hindi at Corporate office was also reviewed by Ministry ofPower in their Official Language Implementation Committee meeting held on 13.8.2009.
21.5 The Corporation has been honoured with RAJBHASHA SHRI SAMMAN by BharatiyaRajbhasha Vikas Sansthan, Dehradun. Zonal office, Panchkula has been awarded second prizeby NARAKAS, Chandigarh for doing excellent work in Hindi for the year 2008-09.
21.6 In order to increase the use of Hindi by all in official work, 8 Hindi workshopswere organized in Corporate Office in which 111 officers/employees participated.
21.7 A meeting on the topic of "Shabdavali Nirman related to Power Sector"was also organized by the Corporation in its premises under the aegis of Ministry of Powerfrom 16th to 18th November, 2009.
21.8 Maintenance of required ratio in purchase of Hindi & English books for Librarywas ensured and the library has been equipped with a large number of Hindi literary books,magazines & reference publications.
21.9 REC's website is available both in Hindi and English and is being updated fromtime to time. Billingual working facilities have been made available on all computers. Allpublications, reports, memoranda, press releases, MOUs, tenders, annual report etc. wereissued bilingually. To give impetus to the correspondence in Hindi, standard formats havealso been made available on Intranet. Seven books of CIRE's Training material weretranslated into Hindi and made available for the benefit of trainees.
22 . MOU WITH MINISTRY OF POWER
The performance of REC in terms of Memorandum of Understanding signed with theGovernment of India in the Ministry of Power for the financial year 2008-09 has been ratedas "Excellent". This is the 16th year in succession that REC hasreceived "Excellent" rating since the year 1993-94 when the first MOU was signedwith the Government. For the Fiscal 2010 also, the performance of the Company is poised toreceive "Excellent" rating.
23. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY
Following is the CSR Policy as approved by the Board of Directors of REC in May, 2008.
"To remain a responsible corporate entity mindful of its social responsibilitiesto all stakeholders including consumers, shareholders, employees, local community andsociety at large."
The details of the policy are posted on the REC's website i.e. www.recindia.nic.in.
23.1 CSR Activities
For the second year in a row, REC set aside a sum equivalent to 0.25 % of Profit afterTax (PAT) of previous fiscal, i.e Rs. 318 Lakh as allocation towards CSR activities forfiscal 2010. A separate society by the name "REC Foundation" has beenconstituted to take up the CSR work in a strategic and exclusive manner. A number ofproposals are in various stages including a project to support children who are/have beenvictims of communal disruption across the country. Called "Project Assist" thisproject is being implemented by the National Foundation for Communal Harmony (NFCH). Inanother initiative, REC sponsored construction of a Training Centre for physicallyhandicapped persons, to provide vocational training to them. The project is beingimplemented by Amar Seva Sangam, Chennai. In another project, REC has contributed threevehicles for distribution of food under the mid-day meal program for children ofgovernment schools.
24. BOARD OF DIRECTORS
Government of India, Ministry of Power, has appointed Dr. J. M. Phatak, IAS (MH:78), asChairman and Managing Director (CMD) of the Company with effect from the afternoon of 15thJune, 2010 and Shri P.Uma Shankar has relinquished charge as CMD, REC w.e.f. 15thJune, 2010 (forenoon).
In accordance with the provisions of Articles 82 (4) of the Articles of Association ofthe Company, two Independent Directors i.e. Shri V.N. Dhoot and Dr. Devi Singh shallretire by rotation at the ensuing Annual General Meeting of the company and, beingeligible, offer themselves for re-appointment.
25. SUBSIDIARY COMPANIES
Your Company has formed five subsidiary companies for undertaking specific businessactivities. The names of these companies, dates of their formation and the percentage ofownership interest in these Companies are as follows:-
|Sl. No. ||Name of Subsidiary Company ||Date of Formation ||Percentage of ownership interest |
|1. ||REC Transmission Projects Company Limited (RECTPCL) (a wholly owned subsidiary of REC) ||08.01.2007 ||100% |
|2. ||North Karanpura Transmission Company Limited (NKTCL)* (a wholly owned subsidiary of RECTPCL) ||23.04.2007 ||100% |
|3. ||Talcher II Transmission Company Limited (TTCL)* (a wholly owned subsidiary of RECTPCL) ||01.05.2007 ||100% |
|4. ||REC Power Distribution Company Limited (RECPDCL) (a wholly owned subsidiary of REC) ||12.07.2007 ||100% |
|5. ||Raichur Sholapur Transmission Company Limited (RSTCL) (a wholly owned subsidiary of RECTPCL) ||19.11.2009 ||100% |
*NKTCL and TTCL have been transferred to M/s Reliance Power Transmission Limited on20.05.2010 and 27.04.2010 respectively.
25.1 REC Transmission Projects Company Ltd. (RECTPCL)
RECTPCL had issued Letters of Intent on 18.12.2009 to successful bidder i.e. M/s.Reliance Power Transmission Ltd. for transfer of North Karanpura Transmission Company Ltd.(NKTCL) and Talcher-II Transmission Company Ltd. (TTCL). These two subsidiary companies /SPVs viz. TTCL and NKTCL were handed over to M/s. Reliance Power Transmission Limited on27.4.2010 and 20.05.2010 respectively.
RECTPCL has taken up the task of selection of developer for the third transmissionproject i.e. 765 KV S/C Line-I Raichur-Sholapur Transmission System entrusted to REC.Technical Consultants and Bid Process Consultants have already been appointed to assistRECTPCL in this process. Global Invitation for submission of response to Request forQualification (RfQ) was issued on 26.2.2010. Response to RfQ was opened on 26.4.2010. 35bidders have submitted their response, which are under evaluation.
25.2 Financial Performance during 2009-10
The summary of Financial Operations in respect of REC Transmission Projects CompanyLimited (RECTPCL) is appended below :
|Particulars ||For the year ended 31.3.2010 (Rs.) ||For the year ended 31.3.2009 (Rs.) |
|Total Income ||300,034,552 ||- |
|Total Expenditure ||22,542,251 ||21,297,234 |
|Less: Expenses allocated to the three wholly owned subsidiaries - || || |
|(a) North Karanpura Transmission Company Limited (NKTCL) ||10,199,137 ||12,114,371 |
|(b) Talcher II Transmission Company Limited (TTCL) ||9,154,380 ||9,182,863 |
|(c) Raichur Sholapur Transmission Company limited (RSTCL) ||3,124,417 || |
|(d) Unallocated absorbed by Company ||64,317 || |
|Profit Before Tax ||299,970,235 ||- |
|Provision for Tax ||101,959,883 ||- |
|Profit after Tax carried to Balance Sheet ||198,010,352 || |
Since the three subsidiaries of RECTPCL, namely NKTCL, TTCL and RSTCL were yet tocommence its commercial operations, no Profit & Loss Account was prepared for thosesubsidiaries for the financial year ended 31st March, 2010. In place thereof, aStatement of Incidental Expenditure during Construction Period was prepared.
The total expenditure of Rs.1,02,89,726/-, Rs.92,11,685/- and Rs.31,06,104/- wasincurred during the year ended 31st March, 2010 for NKTCL, TTCL and RSTCLrespectively which has been shown under Capital Work in Progress of the subsidiaries.
25.3 REC Power Distribution Company Limited (RECPDCL).
During the year 2009-10, RECPDCL secured orders from 4 Discoms namely MSEDCL, WBSEDCL,BESCOM, and Electricity Department of Manipur for third party inspections of 24755villages in 30 districts of 4 states which will accrue Rs.21 crore gross income to thecompany. The company has established its material inspections wing to inspect materialunder RGGVY & FRP works at manufacturers' facilities. The company has also taken newinitiatives by empanelling 16 business associates / agencies for taking projects in ITimplementation and consultancy.
During the year ended 31st March, 2010, third party inspection of about15000 villages and 990 feeders were completed by the company. In addition to this,material inspections of more than 45000 Distribution Transformers were completed.
25.4 Financial Performance during 2009-10
During the year ended 31st March, 2010, RECPDCL has been able to generate anIncome of Rs. 10.01 crore and Profit before Tax & Profit after Tax is Rs. 1.57 crore& Rs. 1.03 crore respectively. It is worthwhile to mention that turnover of thecompany has doubled this year and net worth reached to Rs.4.18 crore against initialcapital injected by REC of Rs.0.05 crore. For the year 2008-09, the company had declared adividend @ 100% on par value and for the year 2009-10 also, the Board of Directors haveproposed a dividend @ 100%.
26. DETAILS OF UNCLAIMED SHARES
The Company went for a maiden public offer of 15,61,20,000 equity shares in February,2008, which comprised fresh issue of 7,80,60,000 equity shares by the Company and an offerfor sale of another equal number of shares by the President of India.
Further, the Company went for a Follow on Public Offer of 17,17,32,000 equity shares inFebruary, 2010 which comprised fresh issue of 12,87,99,000 equity shares by the Companyand offer for sale of 4,29,33,000 by the President of India.
The details of unclaimed shares as on 31st March, 2010 is given as under :
|Sl. No. ||Particulars ||No. of cases ||No. of shares involved |
| ||IPO - 1.4.2009 to 31.3.2010 || || |
|1. ||Aggregate number of shareholders and the outstanding unclaimed shares as on 1.4.2009 ||659 ||56019 |
|2. ||No. of shareholders who approached for transfer of unclaimed shares during the year. ||242 ||21509 |
|3. ||Number of shareholders to whom unclaimed share were transferred. ||242 ||21509 |
|4. ||Aggregate number of shareholders and the outstanding unclaimed shares as on 31.3.2010. ||417 ||34510 |
|Sl. No. ||Particulars ||No. of cases ||No. of shares involved |
| ||FPO - 6.3.2010 to 31.3.2010 || || |
|1. ||Aggregate number of shareholders and the outstanding unclaimed shares as on 6.3.2010 ||205 ||50790 |
|2. ||No. of shareholders who approached for transfer of unclaimed shares during the year. ||119 ||32370 |
|3. ||Number of shareholders to whom unclaimed share were transferred. ||119 ||32370 |
|4. ||Aggregate number of shareholders and the outstanding unclaimed shares as on 31.3.2010. ||86 ||18420 |
27. FINANCIAL STATEMENTS / DOCUMENTS UNDER SECTION 212 OF THE COMPANIES ACT, 1956.
On an application made by the Company, the Ministry of Corporate Affairs, Government ofIndia, vide its letter dated 18.5.2010 has granted exemption to your Company fromattaching the financial statements of its subsidiary companies for the financial year2009-10, pursuant to Section 212(8) of the Companies Act, 1956. Accordingly, copies of thebalance sheet, profit and loss account and reports of the board of directors and auditorsof the subsidiaries have not been attached with the balance sheet of the Company. However,these documents will be made available upon request by any member of the Companyinterested in obtaining the same. As directed by the Central Government, the financialdata of the subsidiaries has been furnished in the Notes on consolidated financialstatements, which forms part of the Annual Report. The annual accounts of the Companyincluding that of subsidiaries will be kept for inspection by any member. Further pursuantto Accounting Standard-21 (AS-21) prescribed under the Companies (Accounting Standard)Rules, 2006, Consolidated Financial Statements presented by the Company include financialinformation about its subsidiaries.
28. STATUTORY AND OTHER INFORMATION REQUIREMENTS
Information required to be furnished as per the Companies Act, 1956, Listing Agreementwith Stock Exchanges, Government guidelines etc. is annexed to this report as under
|Particulars ||Annexure |
|Management Discussion & Analysis Report ||I |
|Company's Report on Compliance with Corporate Governance ||II |
|Certificate on Corporate Governance issued by the Joint Statutory Auditors of the Company ||III |
|Statement pursuant to Section 212 (1) (e) of the Companies Act, 1956 relating to subsidiary companies. ||IV |
29. STATUTORY AUDITORS
M/s K.G. Somani & Co., Chartered Accountants, New Delhi and M/s Bansal & Co.,Chartered Accountants, New Delhi, were appointed as Joint Statutory Auditors of yourCompany for the financial year 2009-10 by the Comptroller and Auditor General of India (C& AG). The Joint Statutory Auditors have audited the Accounts of the Company for theyear ended 31st March, 2010 and they have not made any qualifications in theirReport on the Audited Accounts. Following documents are annexed to this Report:
a) Auditors' Report on the Audited Accounts of the Company for the year ended 31stMarch 2010;
b) Auditors' Report on the Consolidated Financial Statements of the Company and itsSubsidiaries;
c) Non-Banking Financial Companies Auditors' Report.
d) Audited Accounts and Cash Flow Statement of the Company for the year ended 31stMarch 2010;
e) Annexure to be enclosed with the audited Balance Sheet for NBFC Companies asprescribed by RBI;
f) Audited consolidated Financial Statements of the Company for the year ended 31stMarch 2010;
30. COMMENTS OF C&AG OF INDIA
Comments of the Comptroller and Auditor General of India dated 09.07.2010 on theAccounts of the Company for the year ended 31st March, 2010 is enclosed. Itis reported therein that on the basis of audit, nothing significant has come to theirknowledge which would give rise to any comment upon or supplement to Statutory Auditors'Report under Section 619(4) of the Companies Act, 1956.
31. RIGHT TO INFORMATION ACT, 2005
Necessary action has been taken by the Corporation towards implementation of Right ToInformation (RTI) Act, 2005 in REC. An independent RTI Cell has been created to ensurecompliance of the provisions of the RTI Act and attending to the requests for information.REC website has been updated and contains information on all the 17 items as requiredunder Clause 4.1(b) of RTI Act, 2005.
RTI MACHINERY IN REC
(A) Asstt. Public Information Officer
Shri Vinay Kumar Kesarwani,
(B) Public Information Officer
Executive Director & Company Secretary
(C) Appellate Authority
Shri Kamal Dayani,
The Directors are grateful to the Government of India particularly the Ministries ofPower & Finance, the Planning Commission and the Reserve Bank of India for theircontinued co-operation, support and guidance in effective management of Company's affairsand resources.
The Directors thank the State Governments, State Electricity Boards, State PowerUtilities and other Borrowers for their continued interest and trust in the Company.
The Directors also place on record their sincere appreciation for the continued supportand goodwill of the esteemed Investors in REC Bonds, Banks, Life Insurance Corporation,KfW of Germany, JICA of Japan and Asian Development Bank (ADB) in the fund raisingprogrammes of the Company.
The Directors also thank the Joint Statutory Auditors M/s K.G. Somani & Co. and M/sBansal & Co., and the Comptroller & Auditor General of India for their valuedcooperation.
The Directors also sincerely appreciate and thank the employees of the Company at alllevels for their valuable contribution and dedicated efforts in steering the Company toexcellent performance for yet another year in succession.
For and on behalf of the Board of Directors
|New Delhi ||(Dr. J.M. Phatak) |
|July 22, 2010 ||Chairman & Managing Director |