Directors Report of REC Ltd.

Your Directors have pleasure in presenting the 57^th Annual Report together with the Audited Financial Statements of your Company for the
financial year ended on March 31,2026.

1. PERFORMANCE HIGHLIGHTS1.1 Summary of performance

The performance highlights of the Company for the financial year 2025-26, along with a comparative analysis of the previous year's
performance, are presented below:

The total dividend for the financial year 2025-26, including the
final dividend, amounts to ?18.55/- per equity share of face
value of ?10/- each, which is 185.50% of the paid-up share
capital. For the financial year 2024-25, the Company had paid
total dividend of ?18/- per equity share of face value of ?10/-
each, which was 180% of the paid-up share capital.

The total dividend pay-out for the financial year 2025-26,
including the proposed final dividend, would work out to
?4,884.63 crore. The dividend is paid in accordance with the
Company's Dividend Distribution Policy, which is available on
the website of the Company at https://recindia.com/policies.

1.4    Share capital

As on March 31, 2026, the authorised 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 31,2026, 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 2025-26, the Company has focused
on the introduction and revision of various policies which
inter-alia includes Policy on Treatment of Wilful Defaulters

2. FINANCIAL REVIEW2.1 Summary of Financial Results

The summary of audited financial results of the Company for the financial year 2025-26, vis-a-vis the previous financial year, is
given as follows:

2.2 Contribution to National Exchequer

During the financial year 2025-26, the Company had contributed an amount of ?3,983.01 crore to the National Exchequer, which
included ?3,708.13 crore towards Direct Taxes and ?274.88 crore towards Goods and Services Tax (GST). In the previous financial year,
the total contribution to the National Exchequer was ?4,341.42 crore.

2.3 Ratio analysis

A comparative statement of significant ratios of the Company
for the financial year 2025-26 vis-a-vis the previous financial
year, is given below:

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

#PE Ratio is calculated based on closing price of REC's Equity
Share at NSE, as on March 30,2026 and as on March 28, 2025,
respectively (being last trading day).

2.4 Resource mobilization2.4.1    Total resource mobilization during the financial year

During the financial year 2025-26, the Company has mobilized
funds of ?83,558.32 crore from the market. This included
?9,600.60 crore from External Commercial Borrowings (long
term) in different currencies i.e. USD 966.88 million and EURO
89.95 million, ?3,082.31 crore equivalent to USD 360.05
million from FCNR (Short term) loans, long and short rupee
term loans (more than 6 months) from banks and financial
institutions of ?27,697 crore and ?4,118 crore, respectively,
?3,000 crore from issuance of Commercial Paper, ?5,177.91
crore (net of refund and includes pending allotment as on
March 31,2026) from Capital Gains Tax Exemption Bonds and
?30,882.50 crore from Institutional Bonds.

2.4.2    Redemption and pre-payment

During the financial year 2025-26, the Company has repaid a
sum of ?80,442.82 crore. This includes repayment amounting
to ?19,571.70 crore towards Institutional Bonds, ?405.92
crores towards Tax-Free Bonds and ?5,312.07 crore towards
Capital Gain Tax Exemption Bonds, ?6,185.10 crore towards
External Commercial Borrowings equivalent of USD 611.84
million and JPY 10,519.00 million, ?39,699.03 crore of FCNR
loans equivalent of USD 4,318.74 million and JPY 34,228.99
million. The Company also repaid long term loans amounting
to ?7,669 crore to various banks and financial institutions and
short-term loans (more than 6 months) amounting to ?1,600
crore.

2.4.3    Cost of borrowing

The overall annualized cost of funds during the financial year
2025-26 was 7.34%.

Further, during the financial year 2025-26, the Company had
raised funds of ?30,882.50 crore through listed bonds, at a cost
of 6.80% p.a., which is 29 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 ?17,350 crore from various
banks for its day-to-day operations, out of which ?5,369 crore
was availed as on March 31,2026.

2.4.5 Perpetual Debt Instruments

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

As on March 31,2026, the said instruments form 6.55% 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 - financial year
2025-26

REC had raised the following Green Bonds till the financial year
2025-26:

Use of Proceeds: The proceeds have been utilized to finance
eligible green projects as defined in the REC's Green Finance
Framework, contributing to positive environmental impact
and also strengthening India's energy security by reducing
fossil fuel dependency.

In accordance with the Green Finance 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.

The post issuance certification of the eligible Green bonds by
Climate Bonds Standard Board is available on the website of REC.

Management of Proceeds: The net proceeds from the Green
Bonds were allocated against eligible projects and the details
of the same are given at Annexure-A to the Board's Report.

REC is complying 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 as per the Green Finance framework
during the tenor of bonds.

2.4.7 International Cooperation & Development

REC has seven lines of Official Development Assistance (ODA)
credit with KfW, Germany, out of which three lines have been
fully repaid and two have been fully drawn. The sixth line of
credit of USD 215.56 million is for refinancing investments
in Revamped Distribution Sector Scheme (RDSS) of the
Government of India, under which USD 114.63 million has
been drawn till March 31, 2026. Further, the seventh line of
credit of Euro 200 million is for renewable energy generation,
out of which Euro 89.95 million has been drawn till March 31,
2026.

Apart from the above, REC had two lines of ODA with JICA,
Japan 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 2025-26. There was no revision
in the ratings assigned to REC during the financial year
2025-26.

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 also given in the Corporate
Governance Report annexed to this report.

2.6    Investments made during the financial year

In terms of RBI's circular on High Quality Liquid Assets, the
Company has invested in State Government Securities and
Corporate Bonds during the financial year 2025-26.

Further, during the financial year 2025-26, REC has made
a strategic investment of ?2.58 crore in the units of NHAI
sponsored InvIT through its Initial Public Offering, in line
with the Company's objective of diversifying its investment
portfolio initiatives. Other details of investment made by
the Company are appearing in the Notes to Accounts of the
Standalone Financial Statements.

2.7    Financial status at the close of the financial year

At the end of the financial year 2025-26, the total resources of
the Company stood at ?6,39,076.31 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
?81,098.79 crore, financial liabilities including borrowings
and other financial liabilities accounted for ?5,53,849.53 crore
and non-financial liabilities including provisions stood at
?936.37 crore.

These funds were deployed as financial assets including
long-term and short-term loans, investments etc. of
?6,34,486.30 crore and non-financial assets including

property, plant & equipment, tax assets etc. of ?4,590 crore,
besides asset classified as held for sale, amounting to ?0.01
crore.

3.    LOANS SANCTIONED

During the financial year 2025-26, the Company has
sanctioned loans worth ?4,09,096.50 crore against
?3,37,179.37 crore in the previous financial year.

The loans sanctioned for the financial year 2025-26
includes ?1,28,876.43 crore towards Conventional
Generation projects (including coal purchase/mining),
?85,008.57 crore towards Renewable Energy projects
(including Large Hydro), ?1,45,727.17 crore towards T&D
projects including the loans under Revolving Bill Payment
Facility and Late Payment Surcharge, ?41,784.34 crore
towards Infrastructure & Logistics projects and ?7,700
crore towards Short Term & Medium Term Loans. Details of
Category-wise sanctions during the financial year 2025-26
are appearing subsequently in this report.

4.    DISBURSEMENTS

During the financial year 2025-26, the Company has
disbursed total sum of ?2,11,189.25 crore, as against
?1,91,184.67 crore in the previous financial year.

The disbursements for the financial year 2025-26 includes
?25,652.82 crore towards generation projects, ?28,896 crore
to wards renewable energy projects, ?74,319.16 crore to wards
T&D projects, ?4,250.28 crore towards Power Infrastructure
projects, ?3,534.42 crore towards Infrastructure & Logistics
projects, ?72,521.37 crore towards other loans including
short term and RBPF and ?2,015.20 crore of counter-part
funding under various schemes of the Government of India.

5.    RECOVERIES5.1    Recoveries during the financial year

The Company gives utmost priority to timely realization of
its dues towards principal, interest, etc. During the financial
year 2025-26, the amount due for recovery including interest
for Standard Assets (Stage I & II) was ?2,45,428.35 crore, as
compared to ?1,80,907.83 crore during the previous financial
year. The Company recovered a total sum of ?2,44,798.94
crore (against dues during the year) towards Standard Assets
(Stage I & II) during the financial year 2025-26, as against
?1,79,694.70 crore in the previous financial year. The Company
achieved recovery rate of 99.74% for the financial year
2025-26. The principal overdues from defaulting borrowers
pertaining to Standard Assets (Stage I & II) as on March 31,
2026 were ?231.12 crore. Further, an amount of ?1,485.77
crore has been recovered from Credit Impaired Assets
(Stage III) in the financial year 2025-26, as compared to
?4,462.47 crore recovered in the previous financial year.

5.2    Credit Impaired Assets

The 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, 2026 the Gross Credit Impaired Assets
(Stage III) were ?1,384.75 crore, which is 0.24% of Gross Loan
Assets and Net Credit Impaired Assets (Stage III) were ?677
crore, which is 0.12% 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 2025-26, REC has successfully resolved four
stressed power projects, as per the details given below:

Additionally, in accordance with Company's policy on technical
write off, five loan assets with total amount of ?1,397.58 crore
has been technically written off in respect of Ind-Barath Power
(Madras) Limited for ?416.21 crore, Jas Infrastructure Capital
Private Limited for ?33.24 crore, Konaseema Gas Power
Limited for ?219.10 crore, Lanco Vidarbha Thermal Power
Limited for ?479.03 crore and Shree Maheshwar Hydel Power
Corporation Limited for ?250 crore.

6. APPRAISAL SYSTEM FOR FINANCING6.1    Appraisal system for financing private sector projects

The Company has its own Guidelines for appraisal of private
sector projects. The appraisal of the promoter 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 on the basis of combined ratings of entity and
project. REC's interest rates and security structure are linked
to such integrated ratings assigned to private sector projects.

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

The Company has a well-defined policy and Guidelines for
grading of State power utilities (excluding State DISCOMs,
State Electricity Boards (SEBs) / Utilities with integrated
operations and Power Departments). For the purpose of
funding, the Company has classified the utilities/entities into
A++, A+, A, B & C categories.

The grading of State Transmission utilities and State trading
utilities are carried out, based on the evaluation of the utility's
performance against specific parameters, operational and
financial performance, regulatory compliances, annual financial
results etc. During the financial year 2025-26, the Company has
completed grading in respect of 25 utilities. Further, 2 utilities
were non-responsive, therefore, the same were not graded.

Further, the grading of State Generation / holding utilities
are carried out by PFC and adopted by REC. 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
external consultant, after approval of framework and rating
by the Ministry of Power, Government of India ("MoP").

6.3 Project Monitoring

Project monitoring is a key unique strength of REC's risk
management and credit oversight architecture. Based on
the increasing scale, technical complexity and sectoral
diversity of its loan portfolio, REC deploys a comprehensive
Project Monitoring Guideline methodology. This framework
ensures a disciplined mechanism for supervision across the
project lifecycle i.e. from the first loan drawdown to post¬
commissioning stability. Project Monitoring guidelines
facilitates mapping of milestone wise physical progress
against scheduled sanctioned timelines, early identification
of bottlenecks to prevent time and cost overruns and aligning
fund release with verified on-ground completion to prevent
capital diversion.

All the under-construction projects, which are funded by
REC mandatorily undergo for physical inspections, regularly
by REC officials. The intensity and frequency of these visits
are dynamically calibrated based on State/Private sector
and project category, total financial loan sanctioned and
disbursement status, stage of construction etc. Project
monitoring activities are overseen by a dedicated team at the
Corporate Office and is being carried out through Regional
Offices across the Country, in close coordination with the
concerned Operating Divisions. A dedicated web-based
platform enables not only visibility of the project status during
implementation but also early detection of emerging risks and
expeditious resolution of issues thereof by way of generating
suitable alerts.

To address the unique risks associated with private sector
exposure, REC integrates independent third-party validation
by engagement of Project Management Agencies (PMAs),
which undertakes periodic site inspections and submit
detailed reports on physical progress, supply chain constraints
and emerging credit risks. In addition, High-value and "Critical
Category" projects are escalated for periodic review by senior
management. This ensures that strategic interventions and
policy-level decisions are made expeditiously to resolve
complex project-specific challenges. The monitoring mandate
extends beyond the Commercial Operation Date (COD) by
way of tracking operational performance of the project after
commissioning too, to ensure long-term asset quality and
timely recovery of dues.

7. FINANCING ACTIVITIES DURING THE FINANCIAL YEAR

The Company has been providing financial 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 are as follows:

7.1 Generation

During the financial year 2025-26, the Company has
sanctioned 48 nos. of loans towards Generation Projects
(other than Hydro Projects) including implementation of

pollution control equipment, performance improvement,
coal mining projects, procurement of coal, R&M of thermal
projects etc. and sanctioned total loan assistance of
?1,28,876.43 crore, as per details given below:

7.2 Renewable Energy

During the financial year 2025-26, the Company has
sanctioned 58 nos. of loans to Renewable Energy Projects
(including large hydro projects and pumped storage projects)
with installed capacity aggregating to 13,353.62 MW, BESS,
Solar Park projects with total loan assistance of ?85,008.57
crore, as per details given below:

The above loans includes 5 Large Hydro Projects with
aggregate capacity of 2,240 MW, 27 Solar Energy Projects
with aggregate capacity of 4,348.62 MW, 9 Wind Energy
Projects with aggregate capacity of 500.90 MW, 12
Solar+Wind+BESS Hybrid Projects with aggregate capacity
of 5,314.10 MW, 1 Pumped Storage Project with aggregate
capacity of 950 MW, 3 Battery Energy Storage System and 1
Solar Park Infra Project.

7.3 Transmission & Distribution

During the financial year 2025-26, the Company has
sanctioned 364 nos. of loans to Transmission & Distribution
(T&D) schemes/projects involving a total loan assistance
of ?1,45,727.17 crore including RBPF, RDSS schemes of
Government of India.

Details of loans sanctioned under T&D category during the
financial year 2025-26 are given below:

7.4 Infrastructure & Logistics

During the financial year 2025-26, the Company has
sanctioned 7 nos. of loans to Infrastructure & Logistics projects
involving total loan assistance of ?41,784.34 crore in several
Infrastructure projects in areas such as development of Roads,
Metro, Airport, City Gas Distribution etc.

Details of Sector wise Infrastructure & Logistics loans
sanctioned during the financial year 2025-26 are given below:

7.5    Short / Medium Term Loans and other loan assistance

The Company has also sanctioned 11 nos. of Short
Term & Medium Loans aggregating to ?7,700 crore to
various power sector borrowers during the financial year
2025-26 for their short term, medium-term and working
capital requirements.

7.6    Financing activities in North Eastern States

During the financial year 2025-26, the total financial
assistance sanctioned by the Company in the North Eastern
States includes a sum of ?16,011.06 crore towards 12 projects.

8. PRESENT T&D SCENARIO AND OTHER REFORMS

As the Country's installed generation capacity is at a high
of 533 GW (as on March 31, 2026) 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
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.

The Company, as the nodal agency to various schemes of
the MoP, plays an active role in creating new infrastructure
and augmentation/strengthening of the existing network.
The 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 socio-economic 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 financial
and operational performance of the Distribution Companies
(DISCOMs). The policy framework of the Government to
support the 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 RDSS was launched in year 2021, for
supporting DISCOMs to undertake reforms and improve
performance in a time-bound manner.

For ensuring electrification of remaining un-electrified
households, the concerned proposals are also being
sanctioned under RDSS. The Government of India has
launched Pradhan Mantri Janjati Adivasi Nyaya Maha
Abhiyaan (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. MoP
utilizes the RDSS framework to electrify PVTG households,
aligning with the objectives of PM-JANMAN. Proposals for
electrification of households in the villages identified under
VVP (Vibrant Village Programme) are also being sanctioned
under RDSS. Further, by integrating DA-JGUA under RDSS, the
Government aims to ensure equitable access to electricity for
all ST communities.

To further accelerate our ambitious growth programs for
ensuring access to affordable, reliable and sustainable energy
supply for all, the MoP has brought in key reforms via Electricity
Amendment Rules, Rights of Consumer Rules, Enabling
Green Energy Open Access and subsidy Standard Operating
Procedure etc. These rules aim to implement essential policy
and regulatory changes in the distribution sector, enhancing
its financial viability, efficiency and customer focus.

The major reforms are brought through bringing amendments
to the following rules:

1)    Amendments to Electricity Rules, 2005

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

b.    Electricity (Amendment) Rules, 2023; covered aspects
like establishment of Consumer Grievance Redressal
Forum under section 42 of the Electricity Act, 2003,
appointment of Ombudsman by State Commission etc.

c.    Electricity (2^nd Amendment) Rules, 2023; covered
subsidy accounting & payment, framework for financial
sustainability guiding States on AT&C loss trajectories,
Promoting Renewable Energy Through Green Energy
Open Access etc.

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

e.    Electricity (Amendment) Rules, 2026; notified
amendments to Rule 3 of the Electricity Rules, 2005
relating to Captive Generating Plants to clarify ownership
provisions, simplify rules for group captive arrangements
and establish a clear verification mechanism.

2)    Amendments to Electricity (Rights of Consumers) Rules,
2020

a. Electricity (Rights of Consumers) Amendment Rules,

2021; defined gross metering, allowed net metering for
loads up to 500 kW and gross metering for prosumers etc.

b.    Electricity (Rights of Consumers) Amendment Rules,
2022; mandates 24x7 power supply in metro cities to
reduce use of DG sets, defines reliability indices and
provisions for online monitoring of reliability indices.

c.    Electricity (Rights of Consumers) Amendment Rules,
2023; covered provisions for reading of smart meters,
implementation of Time-of-Day Tariff for consumers,
timely intimation to consumers on change in tariff etc.

d.    Electricity (Rights of Consumers) Amendment Rules,
2024; revised timelines for new connections & testing
of meter, set rules for connections to RWA/societies and
amended the roof top solar installation requirements
and timelines.

3) Electricity (Promoting Renewable Energy Through
Green Energy Open Access) Rules, 2022 ("Rules") and its
amendments

The Rules has been notified facilitating easier access to
renewable energy, lowering the open access transaction
limit from 1 MW to 100 kW. These rules allow consumers
to buy green power via a national portal, encourage
captive consumption, provide a unified framework for RPO
compliance and green tariffs, allowed banking on monthly
basis with compensation to DISCOM, provide structure of
open access charges, provisions related to limit on increasing
of cross-subsidy surcharge and the removal of additional
surcharge etc.

8.2 Revamped Distribution Sector Scheme8.2.1 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.
However, the time period for implementation of the scheme
has been extended upto March'2028 (extended from the
earlier sunset of March 2026). REC, as nodal agency, 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.

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. Further, the schemes of IPDS, DDUGJY,
PMDP-2015 for the UTs of Jammu & Kashmir have been also
subsumed under RDSS.

8.2.2    Objectives

The objectives of the scheme are:

1.    Improve the quality, reliability and affordability of power
supply to consumers through a financially sustainable
and operationally efficient distribution sector.

2.    Reduce the AT&C losses to Pan-India levels of 12-15%.

3.    Reduce the ACS-ARR gap to zero.

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: Metering

Under this part, Prepaid smart meters for consumers
& system metering at feeder and transformer levels,
supported by AMI, will be implemented under PPP (TOTEX
mode) to reduce losses and enable automated energy
measurement, accounting & auditing.

Component-II: Distribution Infrastructure Works
Under this component,

¦    DISCOMs may undertake loss reduction and system
strengthening works up to 66 kV. In areas without a
33 kV system, 110 kV works may be allowed with proper
justification and approval.

¦    EV charging infrastructure connectivity may be executed
by the consumer or DISCOM as per regulations. DISCOMs
can avail RDSS funding for their scope and for upstream
network augmentation.

¦    Disaster management and resilient works, as specified by
relevant authorities, are eligible for funding and may be
included as separate DPR components for approval.

Component-III: Project Management

¦    DISCOMs shall appoint one or more PMAs for project
formulation and management. PMAs may handle planning,
DPR preparation, tendering, monitoring, quality assurance,
inspection and evaluation activities.

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

¦    Focuses on skill development, process improvement,
awareness and supporting activities, including
communication, consumer outreach, evaluations, Smart
Grid Knowledge Centre augmentation and recognition
initiatives.

8.2.4    Funding Pattern

The funding pattern under RDSS is linked to achievement
of reforms and performance milestones. Under Part A,
prepaid smart metering is supported through GBS with
fixed per-meter assistance or a percentage of project cost
(whichever is lower), with higher support for special category
States and additional incentives for timely implementation.
Distribution infrastructure works receive up to 60% funding
(90% for special category States). Under Part B, training,
capacity building and related enabling activities are fully
funded, with 100% of the approved project cost eligible for
support.

8.2.5    Promoting use of advanced technologies in power
distribution sector:

The Government of India is focused on promoting the

adoption of advanced technology-based solutions in
the power distribution sector, with special emphasis on
encouraging Technology Solution Providers (TSPs), including
startups and entrepreneurs. The Government is promoting
advanced technology adoption in power distribution, with
focus on IT/OT systems, data-driven operations and support
to technology providers. Initiatives such as Powerthon and
the India Energy Stack (IES) aim to accelerate innovation and
digital transformation across the sector.

8.2.5.1    Powerthon

Powerthon promotes adoption of emerging technologies
by identifying, piloting and scaling innovative solutions for
DISCOMs. Phase I shortlisted select solutions, with leading
projects already scaled across utilities. Phase II (Powerthon 2.0)
expands support to startups with funding, mentorship and
pilot implementation across key areas, enhancing efficiency,
renewable integration and loss reduction.

8.2.5.2    India Energy Stack: Driving Digital Innovation in
the Power Sector

India Energy Stack (IES) is a national digital infrastructure
initiative to enable secure, interoperable and data-driven
integration across the power sector. It aims to improve
transparency, efficiency and innovation while supporting
renewable energy, EVs and distributed energy systems.
Progress includes development of architecture, stakeholder
engagement and pilot implementation through standardized
frameworks and accelerator programmes.

IES use cases and Focus:

Demonstration of IES Use Case

As part of the IES Accelerator, high-impact, citizen-centric use
cases were demonstrated to validate the applicability of IES
protocols in real operating environments:

Peer-to-Peer (P2P) Energy Exchange

At the India AI Impact Summit, an inter-DISCOM P2P energy
exchange was demonstrated, showcasing how IES protocols
enable rooftop solar prosumers to securely sell surplus power
to other consumers. This extends PM Surya Ghar from a
self-consumption model to a livelihood-oriented framework,
promoting market participation.

Energy Credentials Integrated with DigiLocker

A live demonstration at the Bharat Electricity Summit
showcased IES-enabled digital energy credentials integrated
with DigiLocker, enabling secure, paperless verification for
address proof and scheme eligibility.

Stakeholder Outreach and Ecosystem Building

REC has undertaken extensive outreach and awareness
initiatives across key national and international forums to
promote IES adoption. These efforts support the development
of a future-ready, digitally enabled power sector, enhancing
efficiency, innovation and inclusive access to energy services.

8.3 National Electricity Fund

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
financial year viz. 2012-13 and 2013-14. MoP, provides interest
subsidy on interest paid for loans availed by State power
utilities & distribution companies, both in the 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 the 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 ?2,864.48 crore released
till March 31,2026.

8.4    Prime Minister Development Package

Prime Minister Development Package (PMDP-2015) was
launched to strengthen distribution infrastructure in Jammu
& Kashmir and Ladakh with 90% Central grant support.
The scheme covers system strengthening, household
electrification, metering and infrastructure development.
REC has released ?2,559.31 crore till March 2026 and projects
under the scheme have been subsumed under RDSS and
remain eligible for funding.

8.5    Consumer Service Rating of DISCOMS

It is an annual exercise conducted by REC under the initiative of
the MoP for grading of DISCOMs across the country in terms of
consumer-centric service and operational parameters. Scoring
is spread across four broad parameters- Operational reliability,
Connections and other services, Metering, Billing & Collection
and Fault Rectification & Grievance Redressal. Grades are
determined based on the scores achieved by DISCOMs across
23 sub-parameters under these four broad parameters.
The 5^th Edition of the Consumer Service Rating of DISCOMS
report for financial year 2024-25 has been published on
March 20, 2026 by Hon'ble Union Minister (Power and
Housing & Urban Affairs) and Hon'ble Minister of State for
Power, witnessed participation from 66 DISCOMs nationwide.

8.6    Distribution Utilities Ranking

It is an annual exercise undertaken by REC under the initiative
of the MoP. The Distribution Utilities Ranking (DUR) provides
a multi-faceted assessment of DISCOM's performance and
brings out an all-inclusive ranking of DISCOMs. It assesses
DISCOM's performance across six critical parameters - Annual
Integrated Rating & Ranking of DISCOMs, Consumer Service
Ratings of DISCOMs, Renewable Purchase Obligations,
Communicable System Metering, Demand Side Response
and Resource Adequacy. DISCOMs are ranked based on the
combined score achieved by each DISCOM, computed as a
weighted average of scores across six parameters.

Further, to ensure fair comparison, the distribution utilities are
classified across three categories viz 'Urban Utilities', 'Special
Category State Utilities' and 'Distribution utilities (except
Urban & Special Category State utilities)'. The 2^nd Edition,
covering financial year 2024-25, witnessed participation from
66 DISCOMs nationwide.

REC published the first edition of DUR report for financial year
2023-24 in February 2025 and the second edition for financial
year 2024-25 has been published on March 20, 2026 by
Hon'ble Union Minister (Power and Housing & Urban Affairs)
and Hon'ble Minister of State (Power & Ministry of New and
Renewable Energy).

8.7    Key Regulatory Parameters of Power Utilities

REC publishes Key Regulatory Parameters (KRP) report quarterly
to provide insights that support policymaking, improve utility
performance and enhance sector efficiency. The report enables
comparison across DISCOMs, TRANSCOs and GENCOs using key
metrics from recent years. It covers analysis across States on
parameters such as tariffs, open access charges, Return on Equity,
regulatory compliance and rooftop solar implementation, with
quarterly updates since its launch in July 2021.

8.8    National Feeder Monitoring System

National Feeder Monitoring System (NFMS) is a
groundbreaking initiative of the Government of India,
led by REC Power Development and Consultancy Limited
(RECPDCL), a wholly owned subsidiary of REC for monitoring
Reliability of Power at National Level for 11 kV and above
outgoing distribution feeders. This is achieved by mechanism
of integration with Feeder Monitoring Systems (FMSs) of State
DISCOMs. With a target of 2.5 lakh feeders, as of March 31,
2026, 2.33 lakh feeders have been integrated into NFMS. This
major milestone has been achieved through collaborative
efforts of 73 DISCOMs across 33 States/UTs of India.

8.9    Implementation of Transmission projects:

REC's wholly-owned subsidiary, viz. REC Power Development
and Consultancy Limited (RECPDCL) is acting as Project
Implementation Agency (PIA) and Project Management
Agency (PMA) for various Transmission utilities across country.
RECPDCL is currently implementing 220 kV Extra high voltage
(EHV) Transmission lines (TL) as well as modern Gas Insulated
Substation in Nubra & Zanskar valley of Ladakh under PMDP-
15 on behalf of Ladakh Power Development Department
(LPDD). The said Transmission projects being executed in U.T.
Ladakh are strategic and prestigious in nature which will be
helpful in overall socio-economic development of Ladakh
region. The completion of these projects shall connect the
remotest regions of the country with the regional & national
grid which will also help in reducing dependency over DG
set and accordingly decrease the overall Carbon footprint in
Ladakh region.

8.10    Smart Prepaid Metering

RECPDCL, wholly-owned subsidiary of REC, is implementing
Advanced Metering Infrastructure (AMI) projects in multiple
states across the country in its capacity as the Project
Implementation Agency (PIA). Up to financial year 2025-26,
RECPDCL installed 3.53 lakh smart meters in Jammu Region
against the total scope of 7.63 lakh meters and 3.54 lakh smart
meters in Kashmir Region against the total scope of 7.28 lakh
meters in the UT of J&K under RDSS. In the State of Gujarat,
RECPDCL is acting as the PIA for four AMI projects across
two distribution utilities i.e. DGVCL & PGVCL under the RDSS
scheme with total scope of 98.56 lakh smart meters. Up to
financial year 2025-26, RECPDCL installed 11.25 lakh smart
meters (in DGVCL Ph-I&II Project) and 6.07 lakh smart meters
(in PGVCL Ph-I&II Project).

8.11    Renewable Energy and Sustainability Initiatives

During the financial year 2025-26, RECPDCL, wholly-owned
subsidiary of REC, strengthened its renewable energy
portfolio through key initiatives including empanelment by
Ministry of New and Renewable Energy (MNRE) as a Scheme
Implementation Partner (SIP) for rooftop solarisation of
government buildings under the PM Surya Ghar: Muft Bijli

Yojana. The Company also initiated process of empanelment as
an Accredited Carbon Verification Agency with the Bureau of
Energy Efficiency (BEE) also engaging with State Governments
and Union Territories to support the development solar,
floating solar, Battery Energy Storage etc. These efforts reflect
continued commitment to supporting India's clean energy
transition and sustainability goals.

8.12 PM Surya Ghar: Muft Bijli Yojana

The Government of India has approved the PM Surya Ghar:
Muft Bijli Yojana on February 29, 2024 to increase the share
of solar rooftop capacity and empower residential households
to generate their own electricity. The scheme has an outlay
of ?75,021 crore (including central financial assistance of
?65,700 crore) and is to be implemented till the financial year
2026-27. The administrative approval was granted to the
scheme vide Order No. 318/17/2024-Grid Connected Rooftop
dated March 16, 2024.

The scheme aims to install rooftop solar systems in 1 crore
residential households, providing free/low-cost electricity
of up to 300 units per month. It targets the generation
of 1,000 billion units of renewable electricity from the
installed capacity, which is expected to reduce carbon
dioxide equivalent emissions by 720 million tons over the 25
years lifespan of these rooftop solar projects. This initiative
supports India's commitment to its Nationally Determined
Contributions (NDCs) under the UNFCCC by aiming to achieve
30 GW of rooftop solar capacity in the residential sector by the
financial year 2026-27.

The scheme provides substantial subsidies, covering 60%
of benchmark cost of 2 kWp and 40% of benchmark cost of
additional kWp and being capped at 3 kWp.

• Progress as on March 31, 2026

As of March 31, 2026, a total of 68.81 lakh applications were
received under the PM Surya Ghar Muft Bijli Yojana. Out of
these, 33.64 lakh installations were completed (including RWA
households covering 6.51 lakh houses). The total installed
capacity reached 9.92 GW and Central Financial Assistance
(CFA) amounting to ?19,454.17 crore has been disbursed to
24.75 lakh beneficiaries.

Further, Roof Top Solar Scheme Phase II has been subsumed in
PM Surya Ghar Muft Bijli Yojana.

9. PERFORMANCE & ACHIEVEMENTS UNDER GOVERNMENT
PROGRAMMES

The performance and achievements under various
Government programmes during the financial year 2025-26
and cumulatively till March 31,2026, are given below:

9.1 Performance & achievement during financial year
2025-26 under RDSS and PMDP 2015:

a. Sanction and release: During financial year 2025-26, an
amount of ?872.55 crore (excluding PMA) was sanctioned
under RDSS against smart metering and loss reduction
works, including PMA charges in States assigned to REC
(nodal agency).

The subsidy of the Government of India is channelized
through REC and the matching contribution is infused
by the respective State Government or implementing
agencies, through loans from any financial institution or
from their own sources. During financial year 2025-26,
aggregate GBS funds amounting to ?8,448.98 crore have
been released to States/UTs and utilized by them. Further
?323.22 crore have been released to implementing
agencies towards PMDP 2015.

b. Physical progress achieved during financial year
2025-26:

Number of Smart Consumer Metering installed under
RDSS in financial year 2025-26: 1,58,02,026.

¦    Physical Progress of Loss Reduction Works under
RDSS till financial year 2025-26: 38.61%

9.2 Cumulative performance up to March 31, 2026

a.    Sanction and release: Under RDSS, an amount of
?1,60,369.51 crore was sanctioned to the States allocated
to REC (nodal agency) towards grid connectivity to villages,
sanction of new substation, segregation of balance
agricultural feeders, auxiliary items for smart metering,
additional household electrification (including PVTG &
DA-JGUA HH) and modernization works for Noida). Since
launch of the Scheme, ?21,634.14 crore of Government
of India grant funds have been disbursed by REC as nodal
agency to the implementing agencies under RDSS and
?2,559.31 crore under PMDP-2015 up to March 31, 2026.

b.    Physical progress under RDSS:

The following works have been completed cumulatively
upto March 31, 2026, under RDSS scheme (REC States)
since inception:

¦    Number of Smart Consumer Metering installed under
RDSS: 2,45,07,111

¦    Physical Progress of Loss Reduction Works under
RDSS till financial year 2025-26: 38.61%

10.    STANDARDIZATION, QUALITY CONTROL & MONITORING

REC provides comprehensive technical and operational
support to State power utilities through standardized
specifications, design parameters and construction practices
for distribution systems. As the nodal agency for RDSS in 19
States, REC plays a key role in ensuring quality and consistency
in project implementation.

Quality assurance is maintained through a robust monitoring
framework that includes third-party quality inspection by
TPQMAs, along with internal quality checks by DISCOMs.
These inspections cover pre-dispatch verification of critical
equipment, laboratory testing of material samples and field
inspections of works at different stages of execution.

Field Works Quality Inspections (FWQI) are conducted at 30%,
80% and 100% stages of project progress to ensure adherence
to standards and timely corrective actions. Material clearance
or rejection certifications are issued based on inspection
results. This structured approach ensures reliability, efficiency
& compliance across RDSS projects.

11.    RISK MANAGEMENT

The Company has an Integrated Risk Management Policy,
encompassing a spectrum of risks such as Credit Risk,
Operational Risk, Liquidity Risk and Market Risk. It diligently
identifies and addresses these risks through appropriate
measures.

Brief description of the key risks and their mitigation measures
as follows:

(i) Credit Risk: Credit risk is the inherent risk in the
financing industry and involves the risk of loss, arising
from the diminution in credit quality of a borrower and
the risk that the borrower will default on contractual
repayments under a loan or an advance.

To mitigate the same, the Company follows systematic
institutional and project appraisal process to assess
credit risk. These processes include a detailed appraisal
methodology, identification 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) meetings.

(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 defined
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, the 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 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, financial and risk management linked
decision making. In this regard, the Company has
formulated and implemented an ESG policy covering
the focus areas.

11.1    Information and Cyber Security Initiatives

The financial year 2025-26 marked a year of continued focus
on cybersecurity maturity, risk reduction and resilience. REC's
Data Centre and Disaster Recovery Centre were upgraded
and re-certified to latest standard ISO/IEC 27001:2022 (ISMS).
The certification reaffirms the resilience and security of REC's
critical business operations and systems.

REC has a well-established Business Continuity Plan (BCP)
and Disaster Recovery (DR) Plan for all critical business
operations, aligned with RBI and Government of India
guidelines.

In line with CERT-In and MeitY guidelines, REC has observed
National Cyber Security Awareness Month (NCSAM) in
October 2025. Initiatives under the theme "Cyber Jagrit
Bharat" strengthened organization-wide awareness and
cyber hygiene practices.

REC adheres to RBI's Information Technology Governance,
Risk, Controls and Assurance Practices, ensuring robust
cybersecurity framework. REC has also implemented a
proactive threat intelligence framework.

In compliance to RBI Master Directions, Vulnerability
Assessment and Penetration Testing (VAPT) were conducted
on a half-yearly basis to improve the organization's
cybersecurity by identifying and mitigating security
vulnerabilities. REC successfully conducted DR drills on a
half-yearly basis to ensure Business Continuity, that the
operations can be restored promptly.

REC's leadership in Cyber and Information Security was also
recognized by the following national awards:

¦    Shri K. Venugopal awarded CISO of the Year by Insight CXO
Award 2025.

¦    Cyber Defense & Resilience in Action - Silver Award 2025
under Cyber Security Leadership.

11.2    Risk Management Committee and Asset Liability
Management Committee

The Company has Risk Management Committee and Asset
Liability Management Committee in place. The composition
of these Committees and other related details as on March 31,
2026 are given in Corporate Governance Report at Annexure-
II of the Report.

12. RISK BASED INTERNAL AUDIT

The Company has a Board approved Risk Based Internal Audit
(RBIA) policy / manual in place since April 2022, which is aligned
with its overall risk management framework. It provides
assurance to the Board of Directors, Audit Committee and
Senior Management regarding the quality and effectiveness
of the Company's internal controls, risk management &
governance systems and processes. This is in accordance with
the RBI mandate requiring the implementation of the RBIA
framework by all non-deposit-taking NBFCs with an asset size
of ?5,000 crore and above.

The RBIA framework enables the Company to identify and
address risks based on their priority and the strategic direction
set by the Board. Key activities under this framework include
independent risk assessments of operations, identification of
the audit universe, development of a risk matrix, formulation
of the annual RBIA plan and execution of internal audits as per
the frequency defined in the RBIA policy.

13.    PREFERRED CUSTOMER POLICY

As a part of business promotion strategy, a Preferred Customer
Policy was formulated in 2008 with the basic purpose
of offering enhanced level of services to the Company's
customers and to have a long term mutually beneficial
relationship with them. The policy lays down the eligibility
criteria which takes into account various factors such as
amount of loan outstanding, duration of loan relationship,
repayment track record of the borrower etc. for determining
preferred customers and sponsoring them for capacity
building domestic / international seminars and training
programmes organized by various external agencies, as well
as RECIPMT, Hyderabad.

During the financial year 2025-26, under the Preferred
Customer Policy Framework, a capacity-building initiative was
undertaken for State Utility borrowers as part of the customer
engagement strategy. Five domestic in-house training
programmes were conducted at premier national institutions,
namely IIM Bangalore, IIT Bombay, IIT Madras, IIT Kharagpur
and REC Institute of Power Management & Training (RECIPMT).

A total of 101 officials were trained over 303 man-days,
covering participants across all levels-including junior,
middle, senior and Board-level executives-from 13 States and
28 borrowing entities.

14.    INFORMATION TECHNOLOGY INITIATIVES

REC has witnessed notable advancements across multiple
areas through the adoption of innovative information
technology initiatives, contributing to enhanced efficiency,
security, and digital transformation, during the financial
year 2025-26. The Oracle ERP (E-Business Suite R12) was
enhanced with AI-enabled invoice processing and automated
bank book reconciliation, improving financial efficiency and
accuracy. The NIC e-Office platform, implemented in 2021
for paperless workflow and document management, was
upgraded to its latest version with enhanced security features.
Both the Primary Data Centre and Disaster Recovery Centre
were re-certified under ISO/IEC 27001:2022, reinforcing REC's
Information Security Management System, with periodic
live DR drills conducted successfully during the financial
year. On the digital transformation front, several in-house IT
systems were deployed, covering digitization of employee
administrative requests and digital CSR project monitoring.
REC's cybersecurity framework, backed by real-time log
monitoring and incident response mechanisms, remained
robust-with no cybersecurity incidents reported during
the financial year 2025-26. The IT Division also continued
conducting physical and virtual IT awareness and training
programmes to strengthen digital literacy and secure
computing practices across the organisation.

15.    REC INSTITUTE OF POWER MANAGEMENT AND TRAINING

REC Institute of Power Management and Training (RECIPMT)
established in the year 1979 at Hyderabad, is a premier training
and capacity-building institute under the aegis of REC. It has
played a vital role in addressing the training and development
needs of engineers and managers across the Indian power
sector. Over the last four decades, RECIPMT has trained a

total of 86,427 professionals, significantly contributing to
enhancing technical, operational and managerial capacities
across the sector. In addition to its national footprint, RECIPMT
has also been actively engaged in organising specialised
training programmes in partnership with the Ministry of
External Affairs (MEA), Government of India for executives
from power sector organizations around the world. Till the
financial year 2025-26, the institute has conducted 113
programmes, training 1,936 international executives from 102
Countries, thereby strengthening global cooperation in the
energy domain.

15.1    National Regular Programme

During the financial year 2025-26, under the National Regular
Programme (NRP), RECIPMT conducted classroom-based
training programmes that covered a wide array of technical
and managerial subjects. The programmes were designed
to address practical issues and enhance the technical
acumen of power sector professionals. Participants from
Punjab State Transmission Corporation Limited (PSTCL),
Karnataka Power Transmission Corporation Limited (KPTCL),
Jodhpur Vidyut Vitran Nigam Limited (JdVVNL), Maharashtra
State Electricity Distribution Company Limited (MSEDCL),
Bengaluru Electricity Supply Company Limited (BESCOM),
Northern Power Distribution Company of Telangana Limited
(TGNPDCL), Power Distribution Training Centre (PDTC),
Brihanmumbai Electricity Supply and Transport Undertaking
(BEST), Kerala State Electricity Board Limited (KSEBL) and
Odisha Power Transmission Corporation Limited (OPTCL)
were trained through these programmes in topics such as
"Design Construction and Quality Control of EHV Substations
and Lines", "Power Transformer: Testing, Commissioning,
Protection and Maintenance", "Distribution Loss Reduction,
Electricity Theft -Issues, Challenges and Remedial Measures",
"Energy Transmission Promotion of Green Energy and Best
Practices", "Underground cables selection, sizing, laying,
monitoring & fault detection" & "Protection Systems for EHV
Sub-Stations & Lines".

15.2    REC sponsored programmes

In furtherance of its objective of industry-wide knowledge
dissemination, RECIPMT also conducted several training
programmes for different power sector organisations

across the Country which were sponsored by REC. These
programmes aimed to foster awareness and capacity-building
among executives from power utilities across the Country.
During the financial year 2025-26, a total of 5,649 participants
were trained through these REC sponsored initiatives. Among
these, the Electrical Safety programme, which trained 1,895
participants, addressed one of the most critical concerns in
the sector i.e. safety in operations and infrastructure. Another
major initiative focused on Change Management, Leadership
and Team Building. This three-day classroom programme
trained 1,875 professionals from various GENCOs, TRANSCOs
and DISCOMs and covered essential aspects such as managing
resistance to change, communication skills, leadership
development, customer relations and conflict resolution.
Similarly, a dedicated programme on Best Practices in Power
Utilities, sponsored by REC, saw the participation of 1,879
executives and focused on improving operational efficiency
and replicating successful strategies across utilities.

15.3    In-House Training Programmes

Alongside these external engagements, RECIPMT also
conducted in-house training programmes exclusively for
employees of REC. During the financial year 2025-26, RECIPMT
conducted the training programme on "Enterprise Resource
Planning (ERP)" & "Advanced MS Excel and PowerPoint skills".
These in-house programmes were instrumental in enhancing
internal capabilities and aligning employee skills with
organizational goals.

15.4    Customized Training Programmes

RECIPMT continued its efforts in providing tailor-made
training solutions to address the specific needs of various
power sector entities. In the financial year 2025-26, multiple
customized classroom-based programmes were conducted
for 520 man-days covering a wide spectrum of technical
and managerial subjects. These programmes were designed
to address organization specific operational challenges
and to support their strategic objectives. Some of the key
programmes includes Earthing "Practices and Safety measures
in EHV Substation and Lines", "33/11 kV Substation Operation,
Safety & Audit", "Best Practices in Power Transmission Utilities",
& "Personality Development, Communication & Negotiation
Skills", all customized to suit the operational needs of the
respective organizations.

15.5 Summary of Training Achievements

During the financial year 2025-26, RECIPMT successfully
trained 5,888 participants through its various training
programmes, achieving a cumulative total of 17,876 training
man-days. These accomplishments reaffirm RECIPMT's pivotal
role in advancing the capabilities of the power sector through
sustained, high-quality training and development efforts.

16. HUMAN RESOURCE MANAGEMENT

Human Resources plays a pivotal role in fostering an engaged
and high-performing workforce, which is fundamental to the
sustained growth and success of the Company. At the core of
a thriving organization lies the ability to attract, develop and
retain top talent across diverse disciplines.

During the financial year 2025-26, the Company strengthened
its professional base by appointing 36 executives through
Direct Recruitment drives drawing talent across the Country. As
of March 31, 2026, the total manpower of the Company stood
at 591 employees, comprising 579 executives and 12 non¬
executives. In alignment with evolving employment dynamics,
the Human Resource Department continues to play a strategic
role in proactive manpower planning, workforce development
and organizational growth. REC's Human Resource Department
remains committed to adding value through targeted
recruitment initiatives, comprehensive induction programs
and strategic planning processes. These efforts are central
to building a future-ready workforce and ensuring that the
Company remains a preferred employer in the Renewable
energy, Power and Infrastructure sectors.

REC has institutionalized its Succession Planning and
Leadership Development framework through implementation
of the Succession Planning Policy which is duly approved by
the Board of Directors and the same is being duly followed.

16.1 Reservation in Employment

Reservation is provided to the members of the Scheduled
Castes (SC), Scheduled Tribes (ST) and Other Backward Classes
(OBC) 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 31,2026 are given below:

16.2 Training & Human Resource Development

The Human Resource Department plays a pivotal role in
motivating employees to perform at the highest possible
level and in nurturing an organisational culture characterised
by high morale and engagement. One of the primary ways in
which HR adds value to the Company is by encouraging and
enabling continuous training and development of employees
across all levels.

With this objective, structured training programmes were
imparted throughout the financial year to employees at
every level in the organisation. The Company's Training Policy
is designed to address present functional requirements as
well as future expectations of various departments, resource
needs and emerging opportunities and challenges faced by
the organisation. The policy focuses on forecasting training
requirements and building competencies aligned with the
Company's long term strategic goals.

To enhance business skills and professional competencies,
comprehensive learning and development opportunities
were provided to employees through a mix of domain specific,
managerial, behavioural and functional training programmes.
These initiatives aimed not only at improving individual
performance but also at fostering a deeper understanding of
professional responsibilities and sensitising employees to the

socio economic environment in which the Company operates.
In addition, training programmes focusing on spiritual
growth, health, wellness and attitudinal development were
conducted to support holistic employee development.

During the financial year 2025-26, a total of 550 employees
participated in various training programmes covering a wide
spectrum of topics, including Leadership, Management &
Behavioural Development, Corporate Governance, Women
Empowerment, Technology & Digital Transformation, Banking,
Finance, Risk & Audit, IT & Cyber Security, Energy, Infrastructure
& Power Sector, ESG, Sustainability & Climate Action, Legal,
Vigilance, Ethics & Statutory Compliance, Human Resource
Management, Administrative Effectiveness & Health, Wellness
& Lifestyle Management. These initiatives resulted in the
achievement of 2,783 training man days during the financial
year, including over 150 training man days through foreign
training programmes, benefiting 30 employees.

Further, all employees of the REC have been registered on the
iGOT Karmayogi portal. Employees successfully completed
mandatory and developmental courses on topics such as
Work Ethics, Code of Conduct, ESG Awareness, Preventive
Vigilance and Cyber Security, among others. Through
active participation on the portal, REC achieved over 4,000
training man days, significantly strengthening the culture
of continuous learning and self development across the
organisation.

16.3    Employee Welfare

The 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 the
well-being of employees. The Company has also extended
the creche / day care facility to foster a work-life balance for
employees to all across centers of Day Care/Creche service
provider in the NCR region. To facilitate recreation and
healthy life, Gymnasium is also available for employees in the
Corporate Office. Various Yoga programs, Health Talks and
Camps were organized for the employees on a regular basis,
for better well-being.

16.4    Sports activities

Employee engagement in Sports activities bring people and
nations together all 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,
the Company hosted an Inter-CPSU Carom Tournament at
Hyderabad, Telangana during the financial year 2025-26.
Further, the Company has also participated in various Inter
CPSU sports tournaments such as Chess, Cricket, Volleyball
etc., organized by various power sector CPSUs under the
aegis of Power Sports Control Board (PSCB). Further, all the
employees enthusiastically participated in various quizzes,
paper presentations and simulation competitions conducted
by reputed institutions during the financial year 2025-26.

16.5    Representation of Women Employees

Women empowerment is often talked about a lot and at REC
and society in general, should look at their initiatives again and
focus on creating measurable impact for women to reach the
top. REC has been endeavouring to provide opportunities to

women employees. As on March 31, 2026, the Company had
87 permanent women employees, which represent 14.70% of
the total work force. There is no discrimination of employees
based on gender. A Women Cell is operational in the Company
to look after welfare and all-round development of women
employees. International Women's Day was celebrated by
REC Women's Cell. To mark the celebration, the Company has
organized various team building activities, fun games and
interactive sessions for its female employees. Further, the
Company believes in gender equality and provides a safe and
conducive workspace for all its women employees.

16.6    Industrial Relations

Employer and Employees relations form foundation of all
organization and at REC the amiable relation prevail for
years. The Industrial Relations scenario in the Company
continued to be cordial and harmonious in the financial year
2025-26. 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, the Company has a Public Grievance
Redressal system for dealing with the grievances of the
Stakeholder at large. The Company has appointed a senior
official in this regard as the Chairman, Public Grievance
Committee, to ensure prompt redressal of grievances within
the stipulated time frame.

16.8    Chintan Shivir - Strategic Meeting

REC conducted a Chintan Shivir (Strategic Meeting) on January
15, 2026 with the objective of strengthening organisational
alignment, driving future-ready initiatives and fostering
meaningful employee engagement to support REC's growth
trajectory. The event served as a platform for structured
dialogue across all levels of the organisation, encouraging
collaborative deliberations on emerging challenges and
opportunities in the power sector. Participants were discussed
avenues for improving internal processes, enhancing
operational efficiency and identifying strategic priorities that
would further reinforce REC's position as a leading Power
Sector Services Enterprise. Chintan Shivir was designed
to ensure inclusive participation and the free exchange of
ideas. Further, the Shivir successfully harnessed the collective
expertise of employees and leadership, contributing valuable
inputs towards shaping REC's strategic roadmap for the future.

17. CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) initiatives of the
Company are aimed at supporting socially beneficial
projects 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
financial year 2025-26, CSR initiatives have been taken up in
the fields of sanitation and hygiene, promotion of healthcare
facilities, education, skill development, art & culture, 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 ("the
Act") and Companies (Corporate Social Responsibility Policy)
Rules, 2014 made thereunder, as amended; and is available at
https://recindia.com/our-csr-initiatives.

In line with the applicable provisions of the Act and Rules
made thereunder, the Board approved CSR budget of ?338.07
crore for the financial year 2025-26. Against the same, the
Company has spent ?174.36 crore during the financial year
and transferred ?163.71 crore in Unspent CSR account under
the Ongoing Projects as per Section 135(6) of the Act.

The detailed Annual Report on CSR Activities for the financial
year 2025-26, including details of impact assessment(s)
conducted across various projects is annexed to this Annual
Report which reflects the Company's commitment to
measurable and meaningful community impact.

18. VIGILANCE ACTIVITIES

REC constantly endeavors to optimize probity and integrity
among its 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, etc.

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

¦    In compliance with the instructions of Central Vigilance
Commission (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 observed "Vigilance Awareness Week 2025" from October
27, 2025 to November 2, 2025 with theme "Vigilance: Our
Shared Responsibility (tfdidi: s^i^l ai&i R^qiJl)" in

line with CVC Circular No. 04/08/2025 dated August 1, 2025.
During the campaign period, various interesting activities
and competitions were organised with the aim to spread
awareness among the employees. A variety of activities and
competitions, including Waste to Treasure (Collage Making)
competition, Author a Book competition, Quiz, Craft / Painting
Competition and Nukkad Natak, Rally / Walkathon etc. were
organized to foster ethical awareness among employees and
the public. Senior management emphasized the importance
of integrating the week's lessons into everyday routines,
thereby nurturing a culture of integrity.

All employees of the Company were administered Integrity
Pledge on October 27, 2025. Banners and Standees were
displayed at different locations at REC's Offices across India.
The message of "Vigilance: Our Shared Responsibility
(tfdioi:s^l^tai&i R^qiJl)" 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.

Author a Book Competition - Employees wrote insightful
pieces reflecting on the importance of Vigilance: Our shared
Responsibility. This activity encouraged deep introspection,
allowing participants to articulate their personal and
professional commitment to ethical conduct.

Waste to Treasure (Collage making) Competition -

Participants transformed waste materials into meaningful
collages, symbolizing how vigilance can turn challenges into
opportunities. The creativity displayed highlighted the idea
that integrity adds value even in unexpected ways.

Quiz Competition - The Quiz Competition featured an
engaging format that encouraged quick thinking and

teamwork. Participants, organized into dynamic teams,
competed in a spirited environment, displaying their extensive
knowledge of vigilance and the principles of ethical conduct.
The lively atmosphere added to the excitement, making it a
memorable event.

Craft Competition for Family Members - Family members,
including children were participated enthusiastically. Their
artworks ranged from vibrant landscapes symbolizing purity
to illustrations depicting honesty in everyday life, reinforcing
that vigilance is a value to be nurtured across generations.

Nukkad Natak - REC organised Nukkad Natak at Iffco Chowk
metro station, Gurugram and VSSUT College, Sambalpur
(Odisha) which featured powerful street plays that effectively
raised public awareness about Vigilance. The performances,
characterized by emotive dialogues and compelling
narratives, left a lasting impression on the audience, inspiring
them to embrace ethical values and shared responsibility in
their own lives.

Seminar/ Workshop - The Seminar/Workshop for Employees
covered a broad spectrum of topics, including Ethics &
Integrity, Investigation & Report, Conduct Rules & Framing
of Chargesheet, Financial Frauds - Prevention & Post Fraud
Measures, Conducting CTE type Intensive Examinations &
Suggested Checklist for Tender Process, Cyber Hygiene led by
in-house experts along with external faculties, these sessions
featured participative lectures and practical examples that
provided insightful discussions. Interactive elements allowed
employees to engage deeply with the content, ask pertinent
questions and gain a comprehensive understanding of the
subject matter.

Rally & Walkathon - Rally & Walkathons were conducted
with students and REC employees, DISCOM officials at Jaipur
(Rajasthan), Ranchi (Jharkhand) to create an awareness. The
energy and enthusiasm of the participants created a strong
visual message about collective responsibility in fighting
corruption.

The week concluded with an Award Distribution Ceremony
where CVO, REC recognized and honored the outstanding
contributions from participants across competitions. The
ceremony celebrated creativity, knowledge and commitment,
reinforcing the importance of vigilance in both professional
and personal spheres. This closing event highlighted the
culture of shared responsibility within the organization.

As on April 1, 2025, there was 1 complaint under process in
Vigilance Division. 13 more complaints were received during
the financial year 2025-26. Out of the total 14 complaints, 11
of complaints were resolved during the financial year and the
remaining 3 complaints are under review.

19. IMPLEMENTATION OF OFFICIAL LANGUAGE

To promote the use of Hindi language in official work,
continuous efforts have been made by the Company as per
the Annual Program issued by the Department of Official
Language, Ministry of Home Affairs, Government of India.

Official Language Implementation Committee(s) have been
constituted in REC offices to ensure effective implementation
of Official Language in compliance with the Official Language
Act, 1963 and Official Language Rules, 1976. Periodic
Meetings of the Committees were held to review progressive
use of Hindi during the financial year. Hindi Workshops were
organised at REC offices across the Country to give hands-on
exposure to various facets of use of Hindi in official work.

In compliance with the statutory requirements of the Official
Language Policy, REC has been actively advancing the use of
Hindi in its working.

The Second Sub-Committee of Committee of Parliament
on Official Language conducted inspections of Chennai,
Panchkula, Mumbai, Kolkata, Hyderabad (Regional Office)
& RECIPMT - Hyderabad and Raipur office of REC. These
inspections created awareness among the employees, driving
greater integration of Hindi in their official work. Further,
a team of officials of MoP reviewed the status of Official
Language implementation at REC Corporate Office and
Regional Offices of Guwahati, Bhopal, Bangalore, Chennai,
Jammu and Panchkula from time to time.

In observance of Hindi Diwas 2025, Hindi Pakhwada was
organized at the REC Corporate Office from September 14, 2025
to September 28, 2025 wherein various competitions like Hindi
Noting-Drafting, Nibandh Lekhan, Rajbhasha Quiz, Kavita path/
Geet Gayan, Antyakshari and Ashu Bhashan were organized to
motivate employees. More than 350 participants took part in
the competitions, showcasing remarkable enthusiasm towards
Hindi. To encourage them further, prizes were awarded to
winners in different categories. Hindi Pakhwada was also
organized in all Regional/State Offices of the Company. A Hindi
Kavi Sammelan was organized on October 9, 2025 at Corporate
Office, promoting the spirit of awareness towards the use of
Rajbhasha Hindi among the employees of REC.

REC Corporate Office was conferred with the 'Rajbhasha
Gaurav Samman' in the meeting of Town Official Language
Implementation Committee (TOLIC), Ministry of Home Affairs,
Gurugram, held on January 27, 2026. Additionally, 'Urjayan' in
house Hindi magazine of REC, was conferred with the third
prize in this meeting.

'Thought of the Day' message in Hindi have been displayed
through digital scrollers placed across the Office premises.
During the financial year 2025-26, 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 the 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 using energy efficient equipment
in order to conserve energy. Efficient Double Glass Unit (DGU)
fagade has been used as building envelope to lower HVAC
load requirement in the building. Further, LED lights along
with Light Management System has been implemented to
enhance the energy conservation. REC commitment towards
energy conservation & sustainable building design has been
acknowledged by GRIHA Council by conferring highest green
rating i.e. GRIHA-5 Star rating to REC Office building Gurugram.

In order to utilize alternate source of energy, 979 kWp solar
plant has been installed at top of the building (supported on
solar pergola structure) to cater REC office load requirement
by using clean and renewable source of energy. The solar
plant has generated 12.95 lakh units of electricity during
the financial year 2025-26. Further, Roof Top Solar of total
capacity 54kWp has been installed in three Regional Offices

at Panchkula, Vadodara and Lucknow and ?9.41 lakh has been
invested for installation of Variable Frequency Drive (VFD)
on Cooling tower fans for energy conservation during the
financial year 2025-26.

20.2 Foreign Exchange Earnings & Outgo

During the financial year 2025-26, the Company had no
foreign exchange earnings. Further, foreign exchange outgo
aggregating to ?52,708.54 crore was made during the financial
year 2025-26, on account of interest, principal repayment,
finance charges and other incidental expenses.

21. SUBSIDIARY COMPANIES

REC's wholly-owned subsidiary, viz. REC Power
Development and Consultancy Limited (RECPDCL)
[CIN U40101DL2007GOI165779], is engaged in the business
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. 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
MoP 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 2025-26, RECPDCL has transferred
9 project-specific SPVs to the successful bidders, as detailed
below:

As on March 31,2026, RECPDCL had the following project-specific
SPVs for various inter-state / intra-state transmission projects:

Note: SPVs as referred at Sl. No. 9 to 28 were incorporated during
the financial year2025-26.

During the financial year2025-26, Rajgarh III Power Transmission
Limited, project specific SPV has been struck off on January 20,
2026 by the Registrar of Companies.

Further, after the end of financial year 2025-26 and till June
30, 2026, three new SPVs have been incorporated as wholly-
owned subsidiaries of RECPDCL and REC.

During the financial year 2025-26, RECPDCL recorded an
income of ?501 crore compared to income of ?551.57 crore in
the previous financial year. The Profit After Tax for the financial
year 2025-26 was ?78.95 crore against ?261.65 crore in the
previous financial year. Further, the Net Worth of RECPDCL
as on March 31, 2026 was at ?764.10 crore, as against
?738.19 crore as on March 31,2025.

22. JOINT VENTURE & ASSOCIATE COMPANY

During the financial year 2025-26, the Company does
not have any Joint Venture & Associate Company, apart
from investments, as detailed in the Financial Statements,
forming part of this Annual Report. Further, in terms of the

agreement executed amongst the Joint Venture partners

i.e. NTPC Limited, REC, PFC and Power Grid Corporation of
India Limited, Energy Efficiency Services Limited ceased to be
a jointly controlled entity of REC under Ind-AS framework.

23.    CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Section 129 of the Act and Rules made
thereunder and Indian Accounting Standards, the Company
has prepared the Consolidated Ind-AS Financial Statements
for the financial year 2025-26, that include its wholly owned
subsidiary Company i.e. RECPDCL. The same shall also be laid
before the ensuing 57^th Annual General Meeting along with
the Standalone Financial Statements of the Company for
adoption.

Pursuant to Section 129(3) of the Act, a statement containing
the salient features of the Financial Statements of subsidiaries/
associates and joint ventures in Form AOC-1, forms part of this
Annual Report. The Financial Statements of SPV companies of
RECPDCL, are not consolidated with the Financial Statements
of REC, as such subsidiaries are transferred by RECPDCL to
the successful bidder, along with all assets and liabilities in
accordance with TBCB Guidelines and therefore, interest in
such SPV companies is accounted for as per Ind-AS 105.

The Audited Ind-AS Financial Statements including the
Consolidated Ind-AS Financial Statements and Audited
Accounts of subsidiaries of the Company are available on
the website of the Company i.e. www.recindia.com. Further,
these documents would be kept open for inspection through
electronic mode by any member or any trustee for debenture
holders. The Company would also make available copy thereof
through e-mail upon specific request by any member of the
Company.

24.    DIRECTORS, KMP & POLICY FRAMEWORK RELATED
THERETO

Being a Government Company within the meaning of Section
2(45) of the Act and in terms of Article 91 of the Articles of
Association ("AOA") 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. 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), 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 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 Act. 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.com/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 and
Remuneration Committee (NRC), as per the Company's policy
on Fit & Proper criteria of Directors, which can be accessed at
https://recindia.com/disclosures-under-regulation-46-of-sebi.

As per the provisions of the Act and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015
(Listing Regulations), the Board of Directors of the Company
has designated the Chairman & Managing Director, Director
(Finance), Director (Projects), Company Secretary and ED
(Finance-Bonds) as Key Managerial Personnel (KMPs) of the
Company.

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

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

24.1 CMD and Whole-time Directors

1.    Pursuant to a communication dated April 18, 2025 issued
by the Appointments Committee of the Cabinet (ACC)
read with MoP Order dated April 21, 2025, Shri Jitendra
Srivastava (DIN: 06817799), has been appointed as
Chairman & Managing Director and KMP on the Board of
REC w.e.f. April 22, 2025. Consequently, Smt. Parminder
Chopra, CMD, PFC, having additional charge of CMD,
ceased to be CMD & KMP of REC w.e.f. April 22, 2025.

2.    Shri Vijay Kumar Singh (DIN: 02772733), who has held
the post of Director (Projects), REC, has superannuated
from the services of the Company on June 30, 2025 and
accordingly, ceased to be the Director and KMP of REC
w.e.f. July 1,2025.

3.    Pursuant to MoP Order dated June 27, 2025, Shri Jitendra
Srivastava (DIN: 06817799), CMD has been assigned
additional charge of the post of Director (Projects) for
the period of 3 months w.e.f. July 1, 2025 or until the
appointment of a regular incumbent to the post of
Director (Projects) or until further orders, whichever is
earlier.

4.    Pursuant to MoP Order dated October 3, 2025,
Shri Thangarajan Subash Chandira Bosh (DIN: 02772316)
has been appointed as Director (Projects) of REC w.e.f.
October 3, 2025.

5.    Shri Harsh Baweja (DIN: 09769272), who has held the
post of Director (Finance) & CFO, REC, has superannuated
from the services of the Company on January 31, 2026
and accordingly, ceased to be the Director and KMP of
REC w.e.f. February 1,2026.

6.    Pursuant to MoP Order dated January 16, 2026,
Shri Jitendra Srivastava (DIN: 06817799), CMD has been
assigned additional charge of the post of Director
(Finance) for the period of 3 months w.e.f. February 1,
2026 or until the appointment of a regular incumbent
to the post of Director (Finance) or until further orders,
whichever is earlier.

7.    Pursuant to MoP Order dated April 2, 2026,
Shri Rajesh Kumar (DIN: 06941428), has been appointed
as Director (Finance) of REC for a period of five years
w.e.f. the date of assumption of charge of the post
i.e. April 2, 2026 or until further orders, whichever is
earlier. Consequently, the additional charge of Director

(Finance) assigned to Shri Jitendra Srivastava, has ceased
to exist. Furthermore, Board of Directors has appointed
Shri Rajesh Kumar, Director (Finance) as CFO & KMP w.e.f.
April 2, 2026.

24.2    Independent and Nominee Directors

1.    Pursuant to MoP Order dated April 17, 2025 read
with corrigendum dated May 21, 2025, Dr. Gambheer
Singh (DIN: 02003319) and Dr. Durgesh Nandini
(DIN: 09398540), have been appointed as Part-time Non¬
Official Independent Directors (Additional Directors) of
REC w.e.f. April 17, 2025 for a period of one year from
the date of notification of their re-appointment, or until
further orders, whichever is earlier. Further, Dr. Gambheer
Singh and Dr. Durgesh Nandini (DIN: 09398540),
Part-time Non-Official Independent Directors of the
Company, have completed their tenure on April 16, 2026
and accordingly, had ceased to be the Independent
Directors of REC w.e.f. April 17, 2026.

2.    Shri Narayanan Thirupathy (DIN: 10063245), Part-time
Non-Official Independent Director of the Company has
completed his three years tenure on March 2, 2026 and
accordingly, has ceased to be the Independent Director
of REC w.e.f. March 3, 2026.

3.    Shri Manoj Sharma (DIN: 06822395), PFC Nominee
Director has superannuated from services of PFC on
March 31,2026. Accordingly, he ceased to be Nominee
Director of PFC on the Board of REC w.e.f. April 1,2026.

4.    Pursuant to MoP letter dated April 6, 2026, Shri Rajiv
Ranjan Jha (DIN:03523954), Director (Projects), PFC,
has been appointed as Nominee Director of PFC on the
Board of REC w.e.f. April 6, 2026. He superannuated from
services of PFC on April 30, 2026. Accordingly, ceased to
be Nominee Director of PFC on the Board of REC w.e.f.
May 1,2026.

5.    Pursuant to MoP letter dated May 6, 2026, Shri Rajesh
Kumar Agarwal (DIN: 09699001), Director (Finance), PFC,
has been appointed as Nominee Director of PFC on the
Board of REC w.e.f. May 1,2026.

6.    Pursuant to MoP Order dated June 22, 2026, Dr. Anil
Kumar Gupta (DIN: 00442146) and Dr. K. Ghayathri Devi
(DIN: 07584524) have been appointed as Part-time Non
Official Independent Directors (Additional Directors) of
REC w.e.f. June 22, 2026 for a period of three months
from the date of notification of their appointment, or
until further orders, whichever is earlier.

7.    Pursuant to MoP Order dated July 20, 2026, Smt. Poonam
Chauhan (DIN: 11842802) has been appointed as Part¬
time Non Official Independent Director (Additional
Director) of REC w.e.f. July 21, 2026 for a period of three
years with effect from the date of notification of her
appointment, or until further orders, whichever is earlier.

24.3    Key Managerial Personnel

Pursuant to the resolution passed by the Board of Directors
at its meeting held on October 26, 2024, the Executive
Director (Finance-Bonds) was designated as a Key Managerial
Personnel (KMP) of the Company. During the financial year
2025-26, Shri Rajesh Kumar has held the position of Executive
Director (Finance-Bonds), following his appointment as
Director (Finance) of REC, Shri Mohan Lal Kumawat has
assumed the role of Executive Director (Finance-Bonds) w.e.f.
April 9, 2026.

Further, during the financial year 2025-26, Shri Dinesh Garg
was appointed as Company Secretary & Compliance Officer
in place of Shri J.S. Amitabh, who superannuated from the
service of the Company and accordingly ceased to hold the
position w.e.f. December 1,2025.

24.4    Director(s) retiring and seeking appointment /
re-appointment at the ensuing AGM

In accordance with the provisions of the Act and Article 91(iv)
of the Articles of Association of the Company, Shri Shashank
Misra, Government Nominee Director, is liable to retire by
rotation at the ensuing 57^th AGM of the Company and, being
eligible, has offered himself for re-appointment. The Board
recommends his re-appointment.

Further, pursuant to Regulation 17(1 C) of the Listing
Regulations, the appointment(s) of Shri Thangarajan Subash
Chandira Bosh as Director (Projects), Shri Rajesh Kumar as
Director (Finance), Shri Rajesh Kumar Agarwal as PFC Nominee
Director, Dr. Anil Kumar Gupta, Dr. K. Ghayathri Devi and
Smt. Poonam Chauhan as Part-time Non-official Independent
Directors are being placed before the shareholders for their
approval at the ensuing 57^th AGM. The Board recommends
their appointment(s).

Brief resume and other particulars of Shri Shashank Misra,
Shri Thangarajan Subash Chandira Bosh, Shri Rajesh Kumar,
Shri Rajesh Kumar Agarwal, Dr. Anil Kumar Gupta, Dr. K.
Ghayathri Devi and Smt. Poonam Chauhan are annexed to the
Notice of AGM forming part of this Annual Report.

24.5    Company Secretary & Compliance Officer

Shri Dinesh Garg is Company Secretary & Compliance Officer
of the Company w.e.f. December 1,2025.

25. 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 NRC.

However, the Ministry of Corporate Affairs ("MCA") 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 notification dated July 5, 2017, also prescribed that the
provisions relating to review of performance of Independent
Directors and evaluation mechanism prescribed in Schedule IV
of the Act, is not applicable to Government companies.

Accordingly, being a Government Company, REC is
inter-alia exempted in terms of the above notifications, as the
evaluation of performance of all members of the Board of the
Company is being done by the administrative ministry i.e. the
MoP and/or by the DPE. During the financial year 2025-26,
the performance evaluation of Non-Executive Directors of the
Company was carried out by the administrative ministry, as
per their internal guidelines.

Further, the Company also enters into Memorandum of
Understanding (MoU) with its holding Company, i.e. PFC,
under the framework prescribed in MoU Guidelines issued by
DPE. The MoU demarcates key performance parameters for

the Company finalized in consultation with the MoP and the
performance of the Company is evaluated vis-a-vis the MoU
parameters.

26.    DIRECTORS' RESPONSIBILITY STATEMENT

With reference to Section 134(5) of the Act, it is confirmed that:

(i)    in the preparation of the annual accounts for the year
ended March 31, 2026, 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 financial year and of the
profit of the Company for that period;

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

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

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

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

27.    ACHIEVEMENTS UNDER MEMORANDUM OF
UNDERSTANDING (MOU)

The Memorandum of Understanding (MoU) serves as a key
policy initiative through which the Government of India
undertakes regular performance evaluations of CPSEs
through DPE, fostering a culture of continuous improvement
and enhancing the performance levels of the CPSEs.

The MoU guidelines applicable for the financial
year 2025-26 is placed at DPE's website i.e.
https://www.dpe.gov.in/static/uploads/2025/07.pdf. The
below calculations have been presented on consolidated
basis as per MoU guidelines of DPE. The key achievements for
financial year 2025-26 are as under:

To facilitate faster realization of receivables, REC and its
subsidiary i.e. RECPDCL has onboarded all operational
Trade Receivables Discounting System (TReDS) platforms
to facilitate timely invoice discounting for Micro and Small
Enterprises (MSEs). The dates of onboarding of REC and
RECPDCL are provided below:

During the financial year 2025-26, the Company on a
consolidated basis has procured total own goods & services
amounting to ?76.87 crore, excluding procurement in
its capacity as Program Implementing Agency (PIA) for
Government programmes. Out of the total own
procurement stated above, the procurement of
?49.51 crore (64.41%) was made from Micro and Small
Enterprises including MSEs owned by SC/ST and women
entrepreneurs. Out of which, the procurement from
SC/ST-owned MSEs amounted to ?0.89 crore (1.16%) and
procurement from women-owned MSEs amounted to
?3.92 crore (5.10%). All the procurement data for the financial
year 2025-26 has been updated on monthly basis on the
Sambandh Portal. Further, REC has made all the payments of
MSEs within the prescribed timeline of 45 days.

Further, on consolidated basis, the Company undertook
procurement of ?68.66 crore (95.59%) through GeM, out of
total own procurement of Goods & Services worth ?71.83 crore
(excluding DGR-sponsored/security services procurement
worth ?5.04 crore).

During the financial year 2025-26, REC has strengthened
employee wellness initiatives, achieving the targets set by
the Administrative Ministry. REC organized 7 General Health
Check-up Camps against the target of 5, conducted 5 health
awareness sessions against the target of 5, facilitated visits of
doctors & yoga sessions on all working days, as per the target.

REC has implemented both phases of the Prime Minister
Internship Scheme in a timely and compliant manner, in
accordance with the directions received from the concerned
Ministries.

For the purpose of DPE MoU compliance parameters for
financial year 2025-26, Company has complied with the:
(a) DPE guidelines on CSR expenditure; (b) Provisions of the
Companies Act, 2013 and Listing Regulations on Corporate
Governance covering: (i) Composition of Board of Directors
and its committees'; (ii) Holding Board and Committees'
Meetings; (iii) Related Party Transactions; (iv) Disclosures
and Transparency; (c) onboarding of CPSE on all operational
TReDS platforms; (d) timely payments to MSE vendors as
prescribed in the MSMED Act; (e) Procurement of goods
and services (as a % of total procurement) from MSEs
overall & Women owned MSEs; (f) steps and initiatives taken
for Health & Safety improvement of Human Resources in
CPSEs; (g) targets under the PM Internship Scheme of MCA;
(h) Leadership Development Plan; and (i) Surplus non-core
assets (land & building) monetization plan.

'Except non-availability of the requisite number of
Independent Directors on the Board, Audit and Nomination &
Remuneration Committee, as referred in this report. Further, it
is beyond the control of the Company to appoint Independent
Directors on the Board on its own.

28.    'THINK GREEN, GO GREEN' INITIATIVE

The Company, in line with the provisions of the Act, sends
Notice of the AGM and Annual Reports to shareholders
through electronic means at their registered email addresses.
As part of MCA's 'Green Initiative', the Company has adopted
electronic communication for such documents, including
dividend intimations (interim/final). Further, pursuant to
Section 108 of the Act read with Rule 20 of the Companies
(Management and Administration) Rules, 2014, the Company
provides e-voting facilities to shareholders for resolutions
set out in the AGM Notice. The 57^th AGM is being conducted
through video conferencing or other audio-visual means
and detailed instructions for e-voting and participation are
provided in the Notice of AGM. Shareholders who have not
registered their email addresses are requested to do so with
the Company's RTA or their respective DP to participate in the
Green Initiative.

Driving Sustainability with Electric Vehicles

REC has procured Electric Vehicles (EVs) as part of its
commitment to promoting sustainable and clean energy
solutions. This initiative aligns with the Company's vision
of reducing carbon emissions and fostering a greener
environment. The adoption of EVs not only contributes to
environmental sustainability but also enhances operational
efficiency and reduces long-term costs.

Green Practices in Everyday Operations

Routine tree plantation drives across communities.

¦    Partnerships with agencies for recycling and safe waste
disposal.

¦    Adoption of zero-plastic usage in boardrooms with glass
bottles.

¦    Sanitary pad vending machines at Corporate Office,
reinforcing our commitment to women's health and
hygiene.

29.    COMMITMENT TO SWACHHTA

REC has undertaken a wide range of activities to promote
cleanliness and awareness under campaigns like Swachhta
Pakhwada, Swachhta Action Plan and Swachhta Hi Seva:

¦    Donation drives of cleaning material to orphanages and
centers for the specially- abled.

¦    Five-day plough clean-up drive at Garhibazidpur Lake,
Gurugram in association with NGO Say Earth.

¦    Special Cleanliness drive and beautification of public
places across pan India through our corporate office and
regional offices, year-round maintenance.

Employee engagement through Swachhta Quiz, "Best out
of Waste" competition and drawing contests for employees'
children.

¦    Distribution of eco-friendly kits to Free Pathshala.

¦    Waste-to-art installations at corporate offices and other
public places by corporate office and regional offices.

¦    Installation of dustbins at various public places.

¦    Health and hygiene camps at old age homes and for Safai
Mitras.

¦    Workshops and seminars on water rejuvenation, energy
efficiency and consumption choices and Swachhta: Our
Collective Responsibility.

¦    Organized Nukkad Nataks at various public places to
spread awareness on cleanliness by corporate office and
regional offices.

¦    Organized awareness camps on Government schemes for
Safai Mitras.

30. 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 Officer. 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,
2025 to March 31,2026:

Further, in compliance of the Guidelines under RTI Act, which
provides 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.

31. ADOPTION OF GOVERNMENT E-MARKETPLACE (GEM)
AND E-PROCUREMENT.

REC has mandated procurement of common-use goods and
services through the Government e-Marketplace (GeM) across

its offices, wherever such items are available on the portal, in
line with Government of India guidelines and with a view to
promoting transparency, efficiency and ease of procurement.
During the financial year 2025-26, on a standalone basis, the
Company achieved more than 95% procurement through
GeM, excluding contracts awarded in its capacity as Program
Implementing Agency (PIA) for Government programmes and
Security service contracts awarded in accordance with the
Guidelines of the Directorate General Resettlement (DGR) for
engagement of Ex-Servicemen.

Public Procurement Policy for Micro and Small
Enterprises (MSEs):

Procurement at REC is undertaken in compliance with the
Public Procurement Policy for Micro and Small Enterprises
(MSEs) Order, 2012 and subsequent amendments thereto. In
accordance with the policy, the annual procurement plan is
hosted on the Company's website for the benefit of MSEs. REC
encourages wider participation of Micro and Small Enterprises
in its procurement processes and endeavors to procure at
least 25% of its annual procurement from MSEs, including the
prescribed sub-targets for SC/ST-owned and women-owned
MSEs. Eligible MSEs are extended policy-linked benefits
such as exemption from Earnest Money Deposit, free tender
documents and purchase preference wherever applicable.
The Company also supports procurement of items reserved
for exclusive sourcing from MSEs and promotes vendor
inclusivity through Vendor Development Programmes (VDPs).

REC ensures timely release of payments to MSE vendors within
the stipulated contractual period of not more than 45 days.
To facilitate faster realization of receivables, the Company is
registered on all five RBI-approved TReDS platforms, namely
Mlxchange, InvoiceMart, Receivables Exchange of India
Limited (RXIL), DTX TReDS Platform and C2FO Factoring
Solutions Pvt. Ltd. (C2TReDS). Payments are processed through
TReDS wherever invoices are routed through the online bill
discounting mechanism. As per the MSME Samadhaan Portal,
no case relating to MSE payments were pending against REC
during the financial year 2025-26.

REC has continued to strengthen vendor outreach and
capacity-building initiatives during the financial year. The
Company has conducted two VDPs through online sessions
with participation from stakeholders including NSIC (SC/
ST Hub), GeM, TReDS platforms and ESG experts. The
programmes were well received by participating vendors.

During the financial year 2025-26, on a standalone basis, the
Company has awarded contracts amounting to ?75.53 crore
excluding contracts amounting to ?35.60 crore awarded
in its capacity as Program Implementing Agency (PIA) for
Government programmes. Out of the eligible procurement
stated above, the contracts amounting to ?48.19 crore
were awarded to Micro and Small Enterprises including
MSEs owned by SC/ST and women entrepreneurs, thereby
exceeding the prescribed target of 25%. Out of which
the procurement from SC/ST-owned MSEs amounted to
?0.73 crore and procurement from women-owned MSEs was
amounted to ?3.68 crore. Approximately 447 MSEs including
SC/ST-owned and women-owned enterprises were benefited
during the financial year.

32. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF
WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND
REDRESSAL) ACT, 2013 ("POSH Act") .

In line with the provisions of 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 women
employees and provides a healthy and congenial atmosphere
to work. The Committee is headed by a Senior Woman Officer
of the Company and includes a member from NGO as one of
its members. Anti sexual harassment stance of the Company
is also outlined in REC (Conduct, Discipline and Appeal) Rules.

In line with the provisions of the POSH Act, the disclosure
regarding complaints under the said Act during the financial
year 2025-26, is as follows:

33.    ANNUAL RETURN

The Annual Return of the Company for the financial year
2024-25 filed with the MCA and the draft Annual Return for
the financial year 2025-26, are available on the website of the
Company athttps://www.recindia.com/annual-returns.

After filing of the Annual Return for the financial year 2025-26
with MCA, the same will be uploaded on the website of the
Company on the same weblink.

34.    PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH
RELATED PARTIES

The particulars of Related Party Transactions required to
be disclosed in Form AOC-2 for the financial year 2025-26 is
annexed to this report.

35.    AUDITORS35.1    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 financial year 2025-26
by the Comptroller & Auditor General (C&AG) of India. The
Statutory Auditors have audited the Financial Statements of
the Company for the financial year ended March 31,2026.

Further, the appointment of the Statutory Auditors for the
financial year 2026-27 is yet to be made by the C&AG of
India. Approval of the shareholders of the Company will be
obtained in 57^th AGM, to authorize the Board of Directors of
the Company, to fix the remuneration of Statutory Auditors
for the financial year 2026-27, as may be appointed by C&AG
of India.

35.2    Secretarial Auditors

M/s. Agarwal S. & Associates, Company Secretaries were
appointed as Secretarial Auditors for carrying out Secretarial
Audit of the Company for a term of five years starting from
financial year 2025-26. In terms of Section 204 of the Act and
Rules made thereunder, they have issued Secretarial Audit
Report for the financial year 2025-26 and the same is annexed
to this Report.

35.3 Management's comments on the Auditor's Report(s)

The Statutory Auditors have audited the standalone and
consolidated Financial Statements of the Company for
financial year 2025-26 and have given their report without
any qualification, 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
Auditor is as follows:

36.    COMMENTS OF C&AG OF INDIA

The C&AG vide letter(s) dated July 3, 2026 have given 'Nil'
comments on the Audited Financial Statements of the
Company for the financial year ended March 31, 2026 under
Section 143(6) of the Act.

The comments of C&AG for the financial year 2025-26 have
been annexed along with the report of Statutory Auditors of
the Company in this Annual Report.

37.    DEBENTURETRUSTEES

In compliance with Listing Regulations, 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.

38.    RESTRUCTURING OF REC LIMITED (REC) AND POWER
FINANCE CORPORATION LIMITED (PFC)

A proposal to restructure REC and PFC was announced in
the Union Budget on February 1, 2026 with the objective of
achieving scale and improving efficiency among Public Sector
NBFCs. The Board of Directors of REC and PFC in their Board
Meetings held on June 28, 2026 have approved the Scheme
of Merger of REC (Transferor Company) into PFC (Transferee
Company) and their respective shareholders and creditors,
under Sections 230 to 232 and other applicable provisions of
the Act.

The Scheme is conditional upon and subject to, inter-alia
receipt of all requisite approvals and consents required under
applicable law including, approvals from the respective
shareholders and creditors of both the companies and all
relevant regulatory and governmental authorities. As per
scheme of merger, the Merged Entity would continue to
qualify as a 'Government Company' under the Companies Act,
2013 and the Government of India continue to retain majority
voting rights and control in the merged entity (directly or
indirectly). Further, merger related documents are available
on the website of the Company which can be accessed at
https://recindia.com/scheme-of-merger.

39.    STATUTORY AND OTHERS DISCLOSURES

a)    There was no change in the nature of business of the
Company during the financial year 2025-26.

b)    The Company has not accepted any public deposits
during the financial year 2025-26 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. Further, for details
relating to merger of the Company with PFC, please refer
para 38 of this report.

d)    The Company maintains an adequate system of Internal
Control, including appropriate monitoring procedures
to ensure accurate and timely financial reporting of
transactions, operational efficiency and compliance
with statutory laws, regulations and Company policies.
For details, please refer to the 'Management Discussion
& 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 financial 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 Listing Regulations 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 Act, 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. 11 of the Notes to Accounts of the
standalone Financial Statements.

g)    The provisions of Section 197 of the Act and the Rules
made thereunder, relating to managerial remuneration,
are not applicable to Government Companies;
accordingly, no disclosure is required in this regard.

h)    There are no material changes and commitments
affecting the financial position of the Company, which
has occurred between the end of the financial year i.e.
March 31, 2026 and the date of this report, except the
information furnished under para 38 above.

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, 2017 prescribed
by the Central Government under Section 148 of the Act.
Accordingly, cost accounts and records are not required
to be maintained by the Company.

l)    During the financial 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. MoP.
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 Act, 2013.

o)    The Company has adequate internal financial controls
with reference to the Financial Statements.

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

q)    During the financial year 2025-26, 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.

r)    The Company has complied the provisions of Maternity
Benefits Act, 1961.

s)    The Reserve Bank of India vide its letter dated
May 3, 2024, has accorded "No-Objection Certificate" to
set up Wholly Owned Subsidiary Company of REC for
dealing in permissible activities as a Finance Company
in International Financial Service Centre (IFSC), Gujarat
International Finance Tec-City ("GIFT"), Gandhinagar,
Gujarat. The Company is yet to receive the requisite
approval of the MoP, Government of India to incorporate
the proposed entity.

t)    REC meets all mandatory requirements on Disclosures
and Transparency, which are in its ambit, as prescribed
under the Companies Act, 2013, Listing Regulations, DPE
Guidelines on Corporate Governance and Secretarial
Standards issued by the ICSI, except as detailed in this
report. Further, as required under above statutory
provisions, all returns, reports and disclosures were filed
within the stipulated time.

40. ANNEXURES TO BOARD'S REPORT

In terms of the provisions of Listing Regulations and
other applicable statutory provisions, separate sections
containing Management Discussion & Analysis Report,
Report on Corporate Governance, Business Responsibility &
Sustainability Report, are enclosed to this Board's Report.

Various statutory reports, information, certificates etc., in
terms of the Act, Listing Regulations, 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 places on record its sincere appreciation
for the valuable guidance and continued support extended by
the Ministry of Power, Ministry of New and Renewable Energy,
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 and 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. The
Board also expresses its deep gratitude to Power Finance
Corporation Limited, the Holding Company, for its steadfast
support and cooperation.

The Board of Directors expresses their heartfelt gratitude to
all shareholders, investors, lenders and bondholders for their
continued trust and unwavering confidence in the Company.
The Board also acknowledges with deep appreciation the
trust reposed by its customers and borrowers, including State
Governments, State Electricity Boards, State Power Utilities
and Independent Power Producers, whose support remains
integral to the Company's sustained growth and success.

The Board of Directors places on record its sincere appreciation
for the dedicated support and valuable contributions of the
Statutory Auditors, Secretarial Auditors and other professionals
associated with the Company. The Board also expresses its
deepest gratitude to the employees and other staff for their
unwavering commitment, relentless efforts and pursuit of
excellence, which continue to drive the Company's success.

Your Directors have pleasure in presenting the 56^th Annual Report together with the Audited Financial Statements of your Company for the financial year ended on March 31,2025.

1. PERFORMANCE HIGHLIGHTS1.1 Summary of performance

The highlights of performance of your Company for the financial year 2024-25, with comparative position of previous year's performance, were as under:

1.2    Financial performance

The Total Operating Income of your Company for the financial year 2024-25 was ?55,911.12 crore as compared to ?47,146.30 crore during the financial year 2023-24.

The Profit after Tax and Total Comprehensive Income for financial year 2024-25 was ?15,713.21 crore and ?14,196.41 crore, respectively as compared to ?14,019.21 crore and ?15,063.48 crore for the financial year 2023-24.

Earnings Per Share (EPS) for the financial year ended March 31, 2025 was ?59.55 per share of face value ?10/- each, as against EPS of ?53.11 per share in the previous financial year. Net Worth of the Company as on March 31,2025 has increased to ?77,637.97 crore, i.e. 12.87% higher than the Net Worth of ?68,783.15 crore as on March 31,2024.

The Gross Loan Asset Book of your Company as on March 31, 2025 was ?5,66,883.29 crore, as compared to ?5,09,370.95 crore as on March 31, 2024. Further, the outstanding borrowings as on March 31,2025 were ?4,88,258.51 crore.

1.3    Dividend

For the financial year 2024-25, the Board of Directors of your Company has recommended a final dividend of ?2.60/- per equity share of face value of ?10/- each (26% of the paid-up share capital), which is subject to approval of the shareholders in the 56^th Annual General Meeting (AGM) scheduled to be held on August 27, 2025. The above dividend is in addition to 1^st Interim Dividend of ?3.50/- per equity share (35% of the paid up share capital) paid on August 23, 2024, 2^nd Interim Dividend of ?4.00/- per equity share (40% of the paid up share capital) paid on November 22, 2024, 3^rd Interim Dividend of ?4.30/- per equity share (43% of the paid up share capital) paid on March 6, 2025 and 4^th Interim Dividend of ?3.60/- per equity share (36% of the paid up share capital) paid on April 16, 2025.

The total dividend for the financial year 2024-25, including the final dividend, amounts to ?18/- per share of face value of ?10/- each, which is 180% of the paid-up share capital. For the last financial year 2023-24, the Company had paid a dividend of ?16/- per share of face value of ?10/- each, which was 160% of the paid-up share capital.

The total dividend pay-out for the financial year 2024-25, including the final dividend, would work out to ?4,739.80 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, 2025, 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 31,2025, 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 2024-25, the Company has focused on introducing and amending various policies. The Company has introduced various policies which inter-alia includes Data Privacy Policy, Stakeholder Engagement Policy, Policy on Responsible Advocacy with Public and Regulatory Bodies, Human Rights Policy, Sustainable Procurement Policy, Policy for Resolution of Stressed Assets, Financing of Non-power

Infrastructure & Logistics Projects, Policy for Concentration Norms, Project Appraisal Guidelines for Financing Road Sector Projects, Occupational Health and Safety Policy, Policy on Coal Mining Projects and External Credit Rating Policy of Private Sector Borrowers. Further, the Company has also made revision / modification in various policies which inter-alia includes REC ESG Policy, Long Term Investment (LTI)

Policy, Special term loan Policy to State Sector Utilities, Policy on 'Diversity and skills of the Board, criteria for appointing Senior Management Personnel and Remuneration to Directors, KMPs and other employees' of the Company and Integrated Risk Management (IRM) Policy along with Business Continuity Plans (BCPs) for HR and Admin & Estate.

 

2.2    Contribution to National Exchequer

During the financial year 2024-25, the Company contributed an amount of ?4,341.42 crore to the National Exchequer, which included ?4,182.56 crore towards Direct Taxes and ?158.86 crore towards Goods and Services Tax (GST). In the previous financial year, the total contribution to the National Exchequer was ?3,346.61 crore.

2.3    Ratio analysis

A comparative statement of significant ratios of the Company for the financial year 2024-25 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 REC's Equity Share at NSE, as on March 28, 2025 and as on March 28, 2024, respectively (being last trading day).

2.4 Resource mobilization2.4.1    Total resource mobilization during the financial year

During the financial year 2024-25, the Company mobilized funds of ?1,42,203.99 crore from the market. This included ?32,147.07 crore from External Commercial Borrowings in different currencies, USD 2,374.10 million and JPY 2,21,559.11 million, ?42,410.17 crore equivalent to USD 4,818.74 million and JPY 34,228.99 million from FCNR (B) loans, long and short rupee term loans (more than 6 months) from banks and financial institutions of ?2,900 crore and ?1,600 crore, respectively, ?7,634.75 crore (net of refund and includes pending allotment as on March 31,2025) from Capital Gains Tax Exemption Bonds and ?55,512 crore (after adjustment of discount and premium) from Institutional Bonds.

2.4.2    Redemption and pre-payment

During the financial year 2024-25, the Company repaid a sum of ?88,259.87 crore. This includes repayment amounting to ?24,258 crore towards Institutional Bonds, ?6,157.82 crore towards Capital Gain Tax Exemption Bonds, ?12,456.09 crore towards External Commercial Borrowings equivalent of USD 1,425 million and SGD 72.08 million, ?25,357.43 crore of FCNR loans equivalent of USD 2,789 million and JPY 34,228.99 million and ?248.53 crore of Official Development Assistance (ODA) loans equivalent of USD 24 million and Euro 5.26 million. The Company also repaid long term loans amounting to ?17,182 crore to various banks and financial institutions and short-term loans (more than 6 months) amounting to ?2,600 crore.

2.4.3    Cost of borrowing

The overall annualized cost of funds during the financial year 2024-25 was 7.11%.

Further, during the financial year 2024-25, your Company had raised funds of ?55,831 crore (other than perpetual debt instruments) {considering Zero Coupon Bond at the face

value of ?5,000 crore} through listed bonds, at a cost of 7.31% p.a., which is 19 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 ?14,608 crore from various banks for its day-to-day operations, out of which ?2,170.42 crore was availed as on March 31,2025.

2.4.5    Perpetual Debt Instruments

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

As on March 31,2025, the said instruments form 7.10% 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 - financial year 2024-25

REC had raised following Green Bonds till the financial year 2024-25:

With an aim of contributing towards a greener future for the nation and the world, REC raised USD 500 million in month of September, 2024 for a tenor of five years through Green Bonds

off its USD 10 billion Global Medium Term Note Programme. The proceeds from these bonds are utilized towards eligible green projects in accordance with REC's Green Finance Framework with a second-party opinion from Sustainable Fitch. Global Green Growth Institute (GGGI) provided technical support for the issuance and affirmed that REC's Green Finance Framework aligns with international standards. 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 eligible green projects as defined in the REC's Green Finance Framework, contributing to positive environmental impact and also strengthening India's energy security by reducing fossil fuel dependency.

In accordance with the Green Finance 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.

The post issuance certification of the eligible Green bonds by Climate Bonds Standard Board is available on the website of REC.

Management of Proceeds: The net proceeds from the Green Bonds were allocated against eligible projects and the details of the same are given at Annexure A to the Board's Report.

REC is complying 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 as per the Green Finance framework during the tenor of bonds.

2.4.7 International Cooperation & Development

REC has 7 lines of Official Development Assistance credit with KfW, Germany. Out of which, first five lines have been fully drawn. In the financial year 2023-24, REC signed a Sixth line of credit with KfW for availing ODA term loan of USD 215.56 million. This line of credit under the Indo-Germanic Development Cooperation is being utilized to re-finance investments in the distribution infrastructure of DISCOMs in alignment with the Revamped Distribution Sector Scheme (RDSS) of the Government of India. Under this facility, total amount of USD 72.75 million has been drawn till March 31, 2025.

Further, in the financial year 2024-25, REC signed a Seventh 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 re-finance investments in the field of renewable energy production, with a particular focus on projects with innovative elements. Under this facility, no amount has been drawn till March 31,2025.

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, ICRA and India Ratings & Research (Credit Rating Agencies), throughout the financial year 2024-25. There was no revision in the ratings assigned to REC during the financial year 2024-25.

Further, REC enjoys international credit rating from international credit rating agencies i.e. Moody's, FITCH and Japan Credit Rating of "Baa3", "BBB-" and "BBB+", respectively, which is at par with the sovereign rating of India.

2.6    Investments made during the financial year 2024-25

In terms of RBI's circular on High Quality Liquid Assets, the Company has invested in State Government Securities and Corporate Bonds during the financial year 2024-25. Other details of investment made by the Company are appearing in Note no. 11 of the Notes to Accounts of the Standalone Financial Statements.

2.7    Financial status at the close of the financial year

At the close of the financial year 2024-25, the total resources of your Company stood at ?6,13,555.48 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 ?74,446.35 crore, financial liabilities including borrowings and other financial liabilities accounted for ?5,35,518.57 crore and non-financial liabilities including provisions stood at ?398.94 crore.

These funds were deployed as financial assets including longterm and short-term loans, investments etc. of ?6,09,517.39 crore and non-financial assets including property, plant & equipment, tax assets etc. of ?4,038.08 crore, besides asset classified as held for sale, amounting to ?0.01 crore.

3.    LOANS SANCTIONED

During the financial year 2024-25, the Company has sanctioned loans worth ?3,37,179.37 crore as against ?3,58,816.34 crore in the previous financial year.

The loans sanctioned for the financial year 2024-25 includes ?89,631.59 crore towards Conventional Generation Projects (including coal purchase / mining), ?1,05,258.87 crore towards Renewable Energy projects (including Large Hydro), ?85,040.47 crore towards T&D projects including loans under Revolving Bill Payment Facility (RBPF) and Late Payment Surcharge (LPS), ?43,239.44 crore towards Infrastructure & Logistics projects and ?14,009 crore towards Short Term & Medium Term Loans. Details of category-wise sanctions during the financial year are appearing subsequently in this report.

4.    DISBURSEMENTS

During the financial year 2024-25, the Company disbursed total sum of ?1,91,184.67 crore, as against ?1,61,462.28 crore in the previous financial year.

The disbursements for the financial year 2024-25 included ?27,478.44 crore towards generation projects, ?26,186.43 crore towards renewable energy projects, ?38,405.35 crore towards T&D projects, ?7,848.58 crore towards Power Infrastructure projects, ?10,772.32 crore towards Infrastructure & Logistics projects, ?78,846.66 crore towards other loans including short term and RBPF and ?1,646.89 crore of counter-part funding under various Schemes of the Government of India.

5.    RECOVERIES5.1 Recoveries during the financial year

Your Company gives utmost priority to timely realization of its dues towards principal, interest, etc. During the financial year 2024-25, the amount due for recovery including interest for Standard Assets (Stage I & II) was ?1,80,907.83 crore, as compared to ?1,31,403.85 crore during the previous financial year. The Company recovered a total sum of ?1,79,694.70 crore towards Standard Assets (Stage I & II) during the financial year, as against ?1,31,041.76 crore in the previous financial

year. The Company achieved recovery rate of 99.33% for the financial year 2024-25. The principal overdues from defaulting borrowers pertaining to Standard Assets (Stage I & II) as on March 31, 2025 were ?864.33 crore. Further, an amount of ?4,462.47 crore has been recovered from Credit Impaired Assets (Stage III) in the financial year 2024-25, as compared to ?137.09 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 31,2025 the Gross Credit Impaired Assets (Stage III) were ?7,652.65 crore, which is 1.35% of Gross Loan Assets and Net Credit Impaired Assets (Stage III) were ?2,163.17 crore, which is 0.38% 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 2024-25, REC has successfully resolved five stressed power projects, as per the details given below:

6. APPRAISAL SYSTEM FOR FINANCING6.1 Appraisal system for financing private sector projects

Your Company has its own Guidelines for appraisal of private sector projects. The appraisal of the promoter 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 on the basis of combined ratings of entity and project. REC's interest rates and security structure are linked to such 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 (SEBs) / Utilities with integrated operations and Power Departments). For the purpose of funding, your Company has classified the utilities/entities into A++, A+, A, B & C categories.

The grading of State Transmission utilities and State trading utilities are carried out, based on the evaluation of the utility's performance against specific parameters, operational and financial performance, regulatory compliances, annual financial results etc. During the financial year 2024-25, the Company has completed grading in respect of 23 utilities. Further, 3 utilities were non-responsive, therefore, the same were not graded.

Further, the grading of State Generation / holding utilities are carried out by PFC and adopted by REC. 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 external consultant, after approval of framework and rating by the Ministry of Power, Government of India ("MoP"). The rating framework for integrated rating of DISCOMs have been reviewed and modified by external consultant.

6.3    Project Monitoring

For a large and varied financial institution like REC, keeping a close watch on projects is crucial. REC has established comprehensive project monitoring Guidelines that encompass wide range of procedures for indepth overseeing of both under-construction and commissioned projects. These Guidelines enables systematic monitoring and tracking of project implementation, proactive identification of potential risks necessitating intervention to mitigate time and cost overruns. The periodicity of monitoring activities is determined based upon 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 Regional Offices located across the Country and by the concerned Divisions at Corporate level. Additionally, to ensure efficient monitoring of private sector projects, independent Project Management Agencies (PMAs) are also appointed. PMAs submits periodic reports capturing physical progress, any major issues etc. thus ensuring efficient monitoring. The important observations of monitoring are taken up with the project developers for resolution on a regular basis.

During the financial year 2024-25, a dedicated REC digital platform has also been developed to enable the Company's management to review the progress of projects under implementation. This digital platform also generates a monthly MIS covering details of project monitoring carried out at different levels.

7. FINANCING ACTIVITIES DURING THE FINANCIAL YEAR

Your Company has been providing financial 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 2024-25, your Company has sanctioned 72 nos. of loans towards Generation Projects (other than Hydro Projects) including implementation of pollution control equipment, performance improvement, coal mining projects, procurement of coal, R&M of thermal projects etc. and sanctioned total loan assistance of ?89,631.59 crore, as per details given below:

7.2 Renewable Energy

During the financial year 2024-25, your Company has sanctioned 92 nos. of Renewable Energy Projects (including Large Hydro projects and pumped storage projects) with installed capacity aggregating to 16,743.20 MW, Solar Park projects with total loan assiatance of ?1,05,258.87 crore, as per details given below:

7.4 Infrastructure & Logistics

During the financial year 2024-25, your Company has sanctioned 9 nos. of Infrastructure & Logistics projects involving a total loan assistance of ?43,239.44 crore in several large-scale Infrastructure projects in areas such as development of Highways / Roads, Ports and City Gas Distribution etc.

Details of Infrastructure & Logistics loans sanctioned during the financial year 2024-25 are given below:

7.5    Short / Medium Term Loans and other loan assistance

Your Company has also sanctioned 28 nos. of Short Term & Medium Term Loans aggregating to ?14,009 crore to various power sector borrowers during the financial year 2024-25 for their short term, medium-term and working capital requirements.

7.6    Financing activities in North Eastern States

During the financial year 2024-25, the total financial assistance sanctioned by your Company in the North Eastern States includes a sum of ?6,198.44 crore towards 6 projects.

8.    PRESENT T&D SCENARIO AND OTHER REFORMS

As the Country's installed generation capacity is at a high of 475 GW (as on March 31, 2025) 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 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 MoP, 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 socio-economic 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 financial and operational performance of distribution companies (DISCOMs). The policy framework of Government of India 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

RDSS was launched in 2021, for supporting DISCOMs to undertake reforms and improve performance in a time-bound manner. Your Company being Nodal agency for this flagship scheme of Government of India and 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 launched the PM-JANMAN scheme on November 15, 2023, which aims at the targeted development of 75 Particularly Vulnerable Tribal Groups (PVTGs) residing in 18 States and the Union Territory of Andaman and Nicobar Islands. The MoP utilizes the RDSS framework to electrify PVTGs households, aligning with the objectives of PM-JANMAN. Also, proposals for electrification of households in the villages identified under VVP (Vibrant Village Programme) are also being sanctioned under RDSS. Further, by integrating DA-JGUA under RDSS, the Government aims to ensure equitable access to electricity for all ST communities.

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.

To further accelerate our ambitious growth programs for ensuring access to affordable, reliable and sustainable energy supply for all, the MoP has brought in key reforms via Electricity Amendment Rules, Rights of Consumer Rules, Enabling Green Energy Open Access and subsidy Standard Operating Procedure etc. These rules aim to implement essential policy and regulatory changes in the distribution sector, enhancing its financial viability, efficiency and customer focus.

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.

b.    Electricity (Amendment) Rules, 2023; covering aspects like establishment of a forum for redressal of grievances of consumers under Section 42 of Electricity Act, 2003, appointment of Ombudsman by State Commission etc.

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

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

2.    Electricity (Rights of Consumers) Rules, 2020:

a.    Electricity (Rights of Consumer) Amendment Rules, 2021; Notified various provisions to focus on prosumers by amending the definition of three key terms in relation to Rooftop Solar System, viz. gross-metering, net-billing or net feed-in and net-metering.

b.    Electricity (Rights of Consumer) Amendment Rules, 2022: Notified the provisions to curb the increasing pollution levels (particularly in the metros and cities with a population of >1,00,000) for the supply of 24x7 uninterrupted power to the consumers and reduce dependency on Diesel Generator Sets.

c.    Electricity (Rights of Consumers) Amendment Rules, 2023; Notified provisions enabling remote reading of smart meters, implementation of Time-of-Day Tariff for

commercial & industrial consumers having maximum demand >10 kW latest by April 1,2024 and for other consumers except agricultural consumers latest by April 1,2025.

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

3. Electricity (Promoting Renewable Energy through Green Energy Open Access) Rules, 2022 and its subsequent amendments:

Notified with an aim to provide affordable, reliable and sustainable green energy to all. Enabling provisions of these rules allowed commercial, industrial, captive and DISCOM consumers to purchase green energy, with eligibility for those with a contracted demand of 100 kW or above and no-load limitation for captive consumers. Allowed banking on monthly basis, with compensation to DISCOM.

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 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. The remaining States / Union Territories have been assigned to PFC.

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 efficient distribution sector;

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

3.    To reduce the ACS-ARR gap to zero by the financial year 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: Metering

¦    Under this component, Prepaid Smart metering for consumers and System metering at Feeder and Distribution Transformer level with communicating feature along with associated Advanced Metering Infrastructure (AMI) will be done in TOTEX mode through PPP, to facilitate reduction of Distribution losses and enable automatic measurement of energy flows and energy accounting as well as auditing.

Component-II: Distribution Infrastructure Works

¦    Under the Distribution Infrastructure Works component, DISCOM can take up works related to loss reduction and system strengthening of 66 kV level and below will be eligible under this component. In areas, where 33 kV system does not exist, 110 kV shall be permitted subject to suitable justification to be provided by the concerned DISCOM(s) in the DPR, for inclusion of such works clearly indicating its benefits including improvement in quality and reliability of power supply to the consumers. Further, sanction of such works shall be subject to satisfaction of the nodal agencies and the monitoring committee with respect to justification provided by the DISCOM(s).

¦    Works relating to providing connectivity to the Public Charging Infrastructure for EVs are to be normally carried out by either the consumer (here the Public Charging 8 Infrastructure owner) or the respective DISCOM as per the provisions of the Supply Code of the respective SERC / JERC. For the works against the DISCOMs responsibility, the DISCOM can leverage funding from the RDSS under 'Part A - Distribution Infrastructure' Further, DISCOMs can also leverage funding under the scheme for the general upstream network augmentation necessitated due to the upcoming charging infrastructure in various areas.

¦    Works specified in the Disaster Management Plan for Power Sector issued by Central Electricity Authority in January 2021 and its future amendments, if any and the Disaster Resilient Works specified by National Disaster Management Authority (NDMA) will be allowed for financial assistance under the scheme. Such works may be included by the DISCOMs as separate component in the DPR to be considered for sanction along with the DPR for loss reduction or with DPR for Modernization and System Augmentation.

Component-III: Project Management

¦    One or more Project Management Agency (PMA) shall be appointed by each DISCOM for project formulation and project management, based on their requirement to cover different phases of the project. The scope of PMA may include preparation of plan, DPR, tender documents, awarding, monitoring, quality assurance, material inspection, results evaluation or any other related works. (excluding signing of Joint Measurement Certificate).

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

¦    Focussing on upgradation of human skills, process improvements, nodal agency fee, enabling components of MoP (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: Schemes of IPDS, DDUGJY along with PMDP 2015 for the erstwhile State of Jammu & Kashmir are being subsumed in this scheme to be implemented as per their extant Guidelines and under their existing terms & conditions. No new projects will be sanctioned under these schemes, but projects already sanctioned under IPDS & DDUGJY will be eligible to receive funds up to March 31, 2022 under this scheme. However, projects sanctioned for Ayodhya, Uttar Pradesh under IPDS and also projects sanctioned under PMDP 2015 will get funds till March 31,2025.

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 follows:

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

financial 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 IPDS, DDUGJY along with 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

The Government of India is committed for developing advanced technology-based solutions in the distribution sector and promoting Technology Solution Providers (TSPs) including startups, entrepreneurs focused in this domain. The RDSS also lays special emphasis on leveraging advanced technologies to analyze data generated through Information Technology (IT) / Operational Technology (OT) devices including system meters and prepaid smart meters.

Subsequently, two pronged strategy was formulated for leveraging the existing network of established TSPs & incubators to test and scale up the used cases at DISCOMs and to establish a forum for continuous innovation in the power distribution sector. For the former part of strategy, a competition "Powerthon-2022" was launched on February 7, 2022, with an objective to identify and select the TSPs with readily available solutions based on advanced technologies like AI / ML, Blockchain, IoT, VR/AR etc. to solve the complex problems of the DISCOMs. In this competition, 275 applications were received across 10 problem areas, of which 37 TSPs were selected for Proof of Concept (PoC) stage and 33 successfully completed it. Subsequently, 7 TSPs successfully executed the

Pilot projects after that and further 3 TSPs have been identified for a large scaleup across select DISCOMs, with solution of each of the 3 TSPs being implemented in 2 DISCOMs.

Progressing forward, the framework for the Phase-2 of Powerthon i.e. "Powerthon-2024" has been conceptualized for establishing a stepping-stone for continuous innovation in the power distribution sector. The Phase-2 will provide essential support to TSPs who have readily available solutions, idea / concept by offering resources, mentorship and networking opportunities to nurture these ideas into viable, market-ready technological solutions. The framework for Powerthon-2024 have been approved in the 43^rd Meeting of the Monitoring Committee of RDSS held under the Chairmanship of Secretary (Power) on November 11,2024.

8.3    National Electricity Fund

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 financial years viz. 2012-13 and 2013-14. The MoP provides interest subsidy on interest paid for loans availed by State power utilities & distribution companies, both in the 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 the 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 ?2,668.31 crore released till March 31,2025.

8.4    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 4^th Edition of the Consumer Service Rating of DISCOMs report (financial year 2023-24) can be accessed at REC website: https://recindia.nic.in/uploads/files/co-usri-crsd-report-fy-23-24-dt240225.pdf

8.5    Distribution Utilities Ranking

The MoP has introduced various reforms and policies, along with practices to oversee electricity services across the Country. The Consumer Services Rating of DISCOMs (CSRDs) and the Annual Integrated Rating and Ranking (AIRR) exercises, conducted by REC and PFC respectively, are among the initiatives designed to evaluate the operational and financial performance of DISCOMs. These reports offer a transparent and objective assessment of how effectively DISCOMs are delivering services to consumers, complying with key policy & regulatory standards and performing financially. While the two exercises already include some crucial performance indicators, there are additional metrics that are necessary for a thorough evaluation of DISCOMs. Accordingly, to address the need a methodology "Distribution Utilities Ranking" was formulated by the MoP in consultation with various stakeholders to bring out comprehensive evaluation based all-inclusive ranking. This ranking model covers 6 broad aspects viz. IR Report, CSRDs Report, RPO achievement, communicable system metering, Demand side response and Resource adequacy.

The MoP has entrusted REC with the task of conducting the Distribution Utilities Ranking exercise and publishing the results annually by January end. The first edition of the report has been launched on February 20, 2025. The same can be accessed at https://recindia.nic.in/distribution-utilities-ranking

8.6    National Feeder Monitoring System

REC Power Development and Consultancy Limited (RECPDCL), Subsidiary of REC is spearheading the implementation of National Feeder Monitoring System (NFMS), which is a cloud based central IT platform designed to monitor reliability and quality of power across all 33/22/11kV outgoing distribution feeders from the Power Distribution sub-stations nationwide. The technology entails state-of-the-art Machine-to-Machine (M2M) data transmission method leading to 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 the possible operational errors that may 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 above, 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 Power Utilities. This capability is essential for informed decision-making, allowing stakeholders to identify trends, anomalies and opportunities for optimization within the distribution network. Covering approximately 2.50 lakh feeders across all Power Utilities in the Country is an ambitious goal, but the integration of

2.06 lakh feeders already demonstrates significant progress. With 68 Power Utilities and 30 states actively sending data to

 

Progress as on March 31, 2025

As of March 31, 2025, a total of 48.8 lakh applications were received under the PM Surya Ghar Muft Bijli Yojna. Out of these, 11.05 lakh installations were completed (including RWA households covering 2.5 lakh houses). The total installed capacity reached 3.3 GW and CFA amounting to ?5,437.21 crore has been disbursed.

Further, Roof Top Solar Scheme Phase II has been subsumed in PM Surya Ghar Muft Bijli Yojna.

9.    PERFORMANCE & ACHIEVEMENTS UNDER GOVERNMENT PROGRAMMES

The performance and achievements under various Government programmes during the financial year 2024-25 and cumulatively till March 31,2025, are given below:

9.1    Performance and achievement during the financial year 2024-25 under RDSS and PMDP-2015:

a.    Sanction and release: During the financial year 202425, an amount of ?16,573.62 crore (including PMA) was sanctioned under RDSS against smart metering and loss reduction works including PMA charges in the States allocated 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 2024-25, aggregate GBS funds amounting to ?7,948 crore have been released to States / UTs and utilised by them, including ?630.81 crore towards PMDP-2015.

b.    Physical progress achieved during the financial year 2024-25:

¦    Number of Smart Consumer Metering installed under RDSS: 71,55,054.

¦    Physical progress of Loss Reduction Works under RDSS: 29.57%.

9.2    Cumulative performance up to March 31, 2025

a.    Sanction and release: Under RDSS, an amount of ?1,59,371.24 crore (including PMA) was sanctioned to the States allocated to REC (nodal agency) towards grid connectivity to villages, sanction of new substation, segregation of balance agricultural feeders, auxiliary items for smart metering, additional household electrification (including PVTG & DA-JGUA HH) and modernization works for Noida.

Since launch of the Scheme, ?15,355.34 crore of Government of India grant funds have been disbursed by REC as nodal agency to the implementing agencies up to March 31, 2025 (including PMDP-2015: ?2,170.18 crore).

b.    Physical progress under RDSS

The following works have been completed cumulatively upto March 31,2025 under RDSS since inception:

¦    Number of Smart Consumer Metering installed under RDSS: 87,05,085.

Further, DDUGJY & SAUBHAGYA Scheme stands closed on March 31,2022 and hereafter no change in funds or physical progress under these schemes.

10.    STANDARDIZATION, QUALITY CONTROL & MONITORING

Your Company excels in the distribution system domain, offering robust support to State Power utilities in implementing Government schemes. The technical specifications Guaranteed Technical Particulars (GTP), layout drawings, data sheets and construction standards for distribution system equipment issued by the Company are utilized by state power utilities, supported by their State-specific practices.

Your Company is the nodal agency in 19 States for RDSS to

improve the quality, reliability and affordability of power supply to consumers by strengthening the distribution sector. Adhering to the comprehensive quality Guidelines issued for this scheme, the Nodal Agency i.e. REC conducts concurrent inspections of RDSS quality works through a Third-Party Quality Monitoring Agencies (TPQMAs), in addition to the in-house quality checks and processes followed by the DISCOMs. Concurrent quality inspections by TPQMAs include Pre-dispatch inspections for Power Transformers, Field Material Quality inspections wherein random samples are picked up from site stores and tests are conducted at NABL accredited laboratories and Field Works Quality Inspections (FWQI) for verifications of works in three stages in the field. Subsequently, material clearance certificate / material rejection certificates of supplied lots of major materials were issued to DISCOMs / PDs for major materials. Pre Dispatch Inspection (PDI) of Power Transformers were also conducted. As per RDSS Guidelines, three stages of FWQI are to be conducted at 30%, 80% and 100% of physical progress corresponding to financial progress. FWQI calls for Stage-1 (30%) have been raised for eligible districts.

11. RISK MANAGEMENT

The Company has an Integrated Risk Management Policy, encompassing a spectrum of risks such as Credit Risk, Operational Risk, Liquidity Risk and Market Risk. It diligently identifies and addresses these risks through appropriate measures.

Brief description of the key risks and their mitigation measures as follows:

(i) Credit Risk: Credit risk is the inherent risk in the financing industry and involves the risk of loss, arising from the diminution in credit quality of a borrower and the risk that the borrower will default on contractual repayments under a loan or an advance.

To mitigate the same, the Company follows systematic institutional and project appraisal process to assess credit risk. These processes include a detailed appraisal methodology, identification of risks and suitable structuring and credit risk mitigation measures. Further, in addition to regular overall monitoring by the bussiness units, a more granular project risk categorisation framework has been developed wherein project level risk assessment is being carried out for the selected projects and projects under 'High' or 'Moderate' risk category are deliberated in Risk Management Sub-Committee (RMSC) and Risk Management Committee meetings.

(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 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 defined 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 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, financial and risk management linked decision making. In this regard, the Company has

formulated and implemented an ESG policy covering the focus areas.

Information and Cyber Security Initiatives

The financial year 2024-25 has marked significant progress in Cyber Security with the establishment of a robust cybersecurity framework. The REC holds ISO 27001:2013 certification and a Surveillance Audit has been successfully conducted by BSI. It is currently being upgraded to ISO 27001:2022 version.

Multiple awareness sessions have been organized for employees, both internally and with external cybersecurity experts, focussing on emerging cyber threats and prevention techniques to maintain data security. REC successfully concluded the National Cyber Security Awareness Month (NCSAM) in October, 2024 by organizing various events and activities for all employees with a theme of "Secure Our World".

Vulnerability Assessment and Penetration Testing (VAPT) were conducted on a half-yearly basis to improve the organization's cybersecurity posture by identifying and mitigating security vulnerabilities. REC successfully conducted DR drills on a half-yearly basis to ensure that the operations can be restored efficiently and effectively.

Social engineering exercises were conducted for all employees simulating real-world scenarios, aiming to enhance employee awareness and to safeguard from cyber risks.

11.1 Risk Management Committee

The Company has established a Risk Management Committee (RMC) comprising directors to oversee the integrated risks of the Company. 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 for the RMC, ensuring effective coordination and risk oversight.

11.2 Asset Liability Management Committee

In pursuance to RBI Guidelines on Asset Liability Management (ALM) system for NBFCs, the Company has constituted an Asset Liability Management Committee (ALCO). ALCO is headed by the Chairman and Managing Director (CMD), with members including Director (Projects), Director (Finance), Executive Directors (EDs) / HoDs from the finance and operating divisions of the Company & CRO of the Company. The ALCO monitors risks related to interest rates, liquidity and currency rates.

12.    RISK BASED INTERNAL AUDIT

The Company has a Board approved Risk Based Internal Audit (RBIA) policy / manual in place since April 2022, which is aligned with its overall risk management framework. It provides assurance to the Board of Directors, Audit Committee and Senior Management regarding the quality and effectiveness of the Company's internal controls, risk management & governance systems and processes. This is in accordance with the RBI mandate requiring the implementation of the RBIA framework by all non-deposit-taking NBFCs with an asset size of ?5,000 crore and above.

The RBIA framework enables the Company to identify and address risks based on their priority and the strategic direction set by the Board. Key activities under this framework include independent risk assessments of operations, identification of the audit universe, development of a risk matrix, formulation of the annual RBIA plan and execution of internal audits as per the frequency defined in the RBIA policy.

13.    PREFERRED CUSTOMER POLICY

As a part of business promotion strategy, a Preferred Customer Policy was formulated in 2008 with the basic purpose of offering enhanced level of services to the Company's customers and to have a long term mutually beneficial relationship with them. The policy lays down the eligibility criteria which takes into account various factors such as amount of loan outstanding, duration of loan relationship, repayment track record of the borrower etc. for determining preferred customers and sponsoring them for capacity building domestic / international seminars and training programmes organized by various external agencies, as well as REC Institute of Power Management and Training (RECIPMT), Hyderabad.

14.    INFORMATION TECHNOLOGY INITIATIVES

REC has significantly enhanced its IT infrastructure to support operational efficiency, security and digital transformation. The ERP system has been upgraded from Oracle e-Biz Suite 11i to R12 and migrated to a private cloud at REC's Data Centre and it supports GST, Ind-AS and advanced automation features, with continuous improvements to meet evolving needs.

The NIC e-office solution has streamlined workflows and document management, fostering efficiency, transparency and a paperless environment, in the Company. A new Microsoft 365 email solution, integrated with AI assistant Copilot, Teams, SharePoint and OneDrive, ensures secure, reliable communication with 99.9% uptime. Network infrastructure has been revamped with MPLS VPN and modern security devices, enabling seamless remote access to critical applications like ERP and e-office. Both the Primary Data Centre (PDC) and Disaster Recovery Centre (DRC) are ISO / IEC 27001:2013 certified and comply with India's National Cyber Security Policy.

REC adheres to RBI's IT Framework for NBFCs, ensuring robust IT security. In-house digital initiatives, including Single-Sign-On for portals and centralized scanning for digitization,

aligned with e-governance and green goals. Advanced cybersecurity solutions enable real-time threat monitoring and response, while comprehensive IT training and a 100% computer-to-employee ratio empower the workforce. These initiatives collectively position REC as a leader in leveraging technology for operational excellence and compliance.

15. REC INSTITUTE OF POWER MANAGEMENT AND TRAINING

RECIPMT established in 1979 at Hyderabad, is a premier training and capacity-building institute under the aegis of REC. It has played a vital role in addressing the training and development needs of engineers and managers across the Indian power sector. Over the last four decades, RECIPMT has trained a total of 80,424 professionals, significantly contributing to enhancing technical, operational and managerial capacities across the sector. In addition to its national footprint, RECIPMT has also been actively engaged in organising specialised training programmes in partnership with the Ministry of External Affairs (MEA), Government of India for executives from power sector organizations around the world. Till the financial year 2024-25, the institute has conducted 113 programmes, training 1,936 international executives from 102 Countries, thereby strengthening global cooperation in the energy domain.

15.1    National Regular Programme (NRP)

During the financial year 2024-25, under National Regular Programme (NRP), RECIPMT conducted classroom-based training programmes that covered a wide array of technical and managerial subjects. The programmes were designed to address practical issues and enhance the technical acumen of power sector professionals. A total of 326 participants were trained through these programmes, which included topics such as tariff policy and regulatory compliance, RDS scheme and smart metering for sustainable DISCOM operations, labour laws and procedures related to court cases and underground cable systems including selection, sizing, laying, monitoring and fault detection. Additionally, other critical areas such as power transformer testing, commissioning, protection and maintenance, energy transition and green energy promotion, HR best practices in power utilities, power trading and energy exchanges, solar power plant development and high-voltage (EHV) substation operations were also covered.

15.2    REC sponsored programmes

In furtherance of its objective of industry-wide knowledge dissemination, RECIPMT also conducted several training programmes for different power sector organisations across the Country which were sponsored by REC. These programmes aimed to foster awareness and capacity-building among executives from power utilities across the Country. During the financial year 2024-25, a total of 5,282 participants were trained through these REC sponsored initiatives. Among these, the Electrical Safety programme, which trained 1,885 participants, addressed one of the most critical concerns in the sector i.e. safety in operations and infrastructure. Another major initiative focused on Change Management, Leadership and Team Building. This three-day classroom programme trained 1,504 professionals from various GENCOs, TRANSCOs and DISCOMs and covered essential aspects such as managing resistance to change, communication skills, leadership development, customer relations and conflict resolution. Similarly, a dedicated programme on Best Practices in Power Utilities, sponsored by REC, saw the participation of 1,893 executives and focused on improving operational efficiency and replicating successful strategies across utilities.

15.3    In-House Training Programmes

Alongside these external engagements, RECIPMT also conducted in-house training programmes exclusively for employees of REC. During the year, 259 employees were trained on diverse topics that included finance for nonfinance executives, procurement procedures and GeM-based e-procurement, Enterprise Resource Planning (ERP), general management, technical insights for non-technical executives, advanced MS Excel and PowerPoint skills, financing infrastructure projects and smart distribution systems. These in-house programmes were instrumental in enhancing internal capabilities and aligning employee skills with organizational goals.

15.4    Customized Training Programmes

RECIPMT continued its efforts in providing tailor-made training solutions to address the specific needs of various power sector entities. In the financial year 2024-25, the institute organized multiple customized classroom-based programmes covering a wide spectrum of technical and managerial subjects. These programmes were designed to address organization-specific operational challenges and to support their strategic objectives. Some of the key programmes included Indian Accounting Standards and GST for HPPCL, protection systems and HR practices for APEPDCL, condition monitoring and lifecycle management and transformer protection for MSETCL, as well as energy audits and technical loss reduction for APEDCL. Other topics covered included EHV substation earthing and safety practices and underground cable design and fault detection, all customized to suit the operational needs of the respective organizations.

15.5    Summary of Training Achievements

In total, during the financial year 2024-25, RECIPMT successfully trained 6,168 participants through its various training programmes, achieving a cumulative total of 18,935 training man-days. These accomplishments reaffirm RECIPMT's pivotal role in advancing the capabilities of the power sector through sustained, high-quality training and development efforts.

16. HUMAN RESOURCE MANAGEMENT

Human Resources (HR) plays a pivotal role in fostering an engaged and high-performing workforce, which is fundamental to the sustained growth and success of the Company. At the core of a thriving organization lies the ability to attract, develop and retain top talent across diverse disciplines.

During the financial year 2024-25, the Company strengthened its professional base by appointing 94 executives through Direct Recruitment drives drawing talent across the Country. As of March 31, 2025, the total manpower of the Company stood at 575 employees, comprising 556 executives and 19 non-executives.

In alignment with evolving employment dynamics, the HR department continues to play a strategic role in proactive manpower planning, workforce development and organizational growth. REC's HR team remains committed to adding value through targeted recruitment initiatives, comprehensive induction programs and strategic planning processes. These efforts are central to building a future-ready workforce and ensuring that the Company remains a preferred employer in the Renewable energy, Power and Infrastructure sectors.

16.1 Reservation in Employment

Reservation is provided to the members of the Scheduled Castes (SC), Scheduled Tribes (ST) and Other Backward Classes (OBC) 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 31,2025 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 was imparted to 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, the requirement of resources and forecasting training needs on emerging opportunities and threats concerning the organization. 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 a better understanding of professional requirements as well as to sensitize employees to the socio-economic environment in which the business of the Company operates. Training for growth of spiritual, health and attitudinal change process was also imparted in order to equip the employees professionally. During the financial year a total of 416 employees attended various trainings on topics such as Leadership, Corporate Governance, changing landscapes of Power Sector, Renewable Energy, Green Finance, Artificial Intelligence, Women Empowerment, Diversity and inclusion, Change Management, ISO 31000 Risk Management, KYC, Financing of Infra projects, technical programs, skill-development programs, career development, foreign trainings, workshops etc. These initiatives enabled the Company to achieve 2,346 training man-days during the year.

Training on topics such as Human Rights, Policies of the Company Business Ethics, CDA Rules, Preventive Vigilance, ESG Principles, Awareness on PoSH Act, 2013, etc. were also imparted to all employees of the Company.

16.3    Employee Welfare

The 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 the well-being of employees. The Company has also extended the creche / day care facility to foster a work-life balance for employees to all across centers of Day Care/Creche service provider in the NCR region. To facilitate recreation and healthy life, Gymnasium is also available for employees in the Corporate Office. Various Yoga programs, Health Talks and Camps were organized for the employees on a regular basis, for better well-being.

16.4    Sports activities

Employee engagement in Sports activities bring people and nations together all 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, the Company hosted an Inter-CPSU Table Tennis Tournament at Lucknow, Uttar Pradesh during the financial year 202425. Further, the Company has also sponsored various Inter-CPSU sports tournaments such as Chess, Cricket, Volley-Ball etc., organized by various power sector CPSUs under the aegis of Power Sports Control Board (PSCB). Further, all the employees enthusiastically participated 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 often talked about a lot and at your organization and society in general, should look at their initiatives again and focus on creating measurable impact for women to reach the top. REC has been endeavouring to provide opportunities to women employees. As on March 31, 2025, the Company had 83 permanent women employees, which represent 14.43% of the total work force. There is no discrimination of employees based on gender. A Women Cell is operational in the Company to look after welfare and all-round development of women employees. International Women's Day was celebrated by REC Women's Cell. To mark the celebration, the Company has organized various teambuilding activities, fun games and interactive sessions for its

female employees. Further, the Company believes in gender equality and provides a safe and conducive workspace for all its women employees.

16.6    Industrial Relations

Employer and Employees relations form foundation of organization and at REC the amiable relation prevail for years. The Industrial Relations scenario in the Company continued to be cordial and harmonious in the financial year 2024-25. 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, the Company has a Public Grievance Redressal system for dealing with the grievances of the Stakeholder at large. The Company has appointed a senior official 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 financial year 2024-25, CSR initiatives have been taken up in the fields 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

("the Act") 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 accordance with the Guidelines issued by the Department of Public Enterprises (DPE) for financial year 2024-25, which mandate that 60% of the CSR budget be allocated towards the themes of "Health & Nutrition and the PM Internship Scheme," particularly in aspirational districts, REC significantly scaled up its interventions in these focus areas. The Company made targeted investments in healthcare infrastructure in assigned aspirational district.

In line with the applicable provisions of the Act and Rules made thereunder, the Board has approved CSR budget of ?288.48 crore for the financial year 2024-25. Against the same, the Company has spent ?294.01 crore during the financial year 2024-25 (including excess spent of ?5.15 crore carried forward from previous financial year).

The detailed Annual Report on CSR Activities for financial year 2024-25, including details of impact assessment(s) conducted across various projects is annexed to this Annual Report which reflects the Company's commitment to measurable and meaningful community impact.

18. VIGILANCE ACTIVITIES

REC constantly endeavors to optimize probity and integrity among its 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, etc.

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

¦    In compliance with the instructions of Central Vigilance Commission (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 observed "Vigilance Awareness Week 2024" from October 28, 2024 to November 3, 2024 with theme "Culture of Integrity for Nation's Prosperity (ic;Pi“ci dh    l

1“V dh if)" in line with CVC Circular dated August 1,2024. During the campaign period, various interesting activities and competitions were organised with the aim to spread awareness among the employees. A variety of activities and competitions, including Paragraph Writing, Quiz, Painting

Competition, Nukkad Natak and Walkathon etc. were organized to foster ethical awareness among employees and the public. Senior management emphasized the importance of integrating the week's lessons into everyday routines, thereby nurturing a culture of integrity.

All employees of the Company were administered Integrity Pledge on October 28, 2024. Banners and Standees were displayed at different locations at REC's Offices across India. The message of "Culture of Integrity for Nation's Prosperity (IRfsT dh ILf l 1“V dh if)" 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.

¦    The employees shared perspectives on integrity in Paragraph Writing Competition, reflecting on ethical practices and articulating thoughts eloquently, highlighting commitment to honesty and accountability.

¦    Participants showcased creativity in Rangoli Making Competition, crafting unique rangolis depicting the essence of integrity.

¦    Quiz Competition's engaging format fostered quick thinking and teamwork, with teams showcasing knowledge of vigilance and ethical conduct in a lively, memorable atmosphere.

¦    Painting Competition welcomed family members of all ages, with artworks from vibrant landscapes symbolizing purity to illustrations emphasizing honesty and ethical behavior.

¦    Nukkad Natak (Street Play) at IFFCO Chowk metro station, Gurugram, raised public awareness on integrity through emotive dialogues and compelling narratives, inspiring ethical values.

¦    Seminars/Workshops covered procurement, ethics, systems, cyber hygiene, automated systems and CDA rules, led by in-house and external experts with interactive lectures and practical examples.

¦    Marathon & Walkathons in Raipur, Kolkata and Jammu & Kashmir with students, athletes and REC employees promoted awareness with commendable participant energy.

¦    REC promotes Integrity Clubs in schools to instill moral values in children, fostering socially responsible citizens and combating corruption in India.

Further, as on April 1, 2024, there was 1 complaint under process in Vigilance Division. 17 more complaints were received during the financial year 2024-25. Out of the total 18 complaints, 17 complaints were resolved during the financial year and the remaining 1 complaint is under review.

19. IMPLEMENTATION OF OFFICIAL LANGUAGE

To promote the use of Hindi language 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.

Official Language Implementation Committee(s) have been constituted in REC offices to ensure effective implementation of Official Language in compliance with the Official Language Act, 1963 and Official Language Rules, 1976. Meetings of the Committees were held to review progressive use of Hindi during the financial year. Hindi Workshops were organised at

REC offices across the Country to give hands-on exposure to various facets of use of Hindi in official work.

An All India Rajbhasha Conference was organized at REC Corporate Offfice on August 3, 2024 under the aegies of MoP, wherein participants from different Power CPSEs across the Country attended the event. Further, two day All India Rajbhasha Conference was also organized on October 16 & 17, 2024 at Varanasi, where Nodal Hindi officers of Corporate office and Regional offices of REC participated.

Hindi Pakhwada was organized at REC Corporate Office from September 14, 2024 to September 28, 2024 wherein various competitions like Hindi Bhashan, Hindi NotingDrafting, Antyakshari and Nibandh Lekhan were organized to motivate employees. The participation of employees in all the competitions were overwhelming and prizes were awarded to winners in different categories. Hindi Pakhwada was organized in all Regional/State offices of the Company also. Hindi Kavi Sammelan was also organized on October 4, 2024 at Corporate Office to inculcate a spirit of awareness towards the use of Rajbhasha Hindi among the employees of REC.

During the financial year 2024-25, the Committee of Parliament on Official Language conducted inspections at various Regional Offices of the Company viz., Bhubaneshwar, Guwahati, Chennai and Panchkula. These inspections created a spirit of awareness amongst employees for enhanced adoption of Hindi in their official work. Further, a team of officials of MoP reviewed the status of Official Language implementation at REC Regional Offices of Jaipur, Lucknow and Thiruvananthapuram on May 16, 2024, April 26, 2024 and January 10, 2025, respectively.

'Urjayan' a Hindi magazine of REC was conferred with the 1^st prize in the meeting of Town Official Language Implementation Committee of Rajbhasha Vibhag, Ministry of Home Affairs, Gurugram held on December 20, 2024.

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

 

Centre funded schemes such as DDUGJY, IPDS etc. and is also leading the implementation of the National Feeder Monitoring System (NFMS), this advanced cloud-based IT platform is designed to monitor the reliability and quality of power across all 33/22/11 kV outgoing distribution feeders of Power Distribution Sub-stations nationwide. By integrating this cutting-edge application with the National Power Portal and using Machine-to-Machine (M2M) data transmission methods, NFMS ensures efficient and accurate data collection, significantly reducing errors associated with manual processes. 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.

Note: SPVs as referred at Sl. No. 8 to 12 were incorporated during the financial year 2024-25.

*WRNES Talegaon Power Transmission Limited has been transferred to the successful bidder on May 30,2025.

During the financial year 2024-25, Khavda II-D Transmission Limited, project specific SPV has been struck off on July 6, 2024 from the Registrar of Companies.

Further, after the end of financial year 2024-25 and till July 24, 2025, 12 new SPVs have been incorporated as wholly-owned subsidiaries of RECPDCL and REC.

During the financial year 2024-25, RECPDCL recorded an income of ?551.57 crore highest ever in any of the financial years with 41% growth compared to income of ?390.64 crore in the previous financial year. The Profit After Tax for the financial year 2024-25 was a notable ?261.65 crore with 75% growth, as against ?149.64 crore in the previous financial year. Further, the Net Worth of RECPDCL as on March 31, 2025 was a landmark at ?738.19 crore, as against ?567.17 crore as on March 31, 2024.

22.    GIFT CITY

The Company is in the process of incorporation of a Wholly Owned Subsidiary Company of REC for dealing in permissible activities as a Finance Company in International Financial Service Centre (IFSC) at Gujarat International Finance Tec-City, Gandhinagar, Gujarat. The Finance Company will be deemed as a non-resident entity under extant FEMA Regulations and will be governed by unified regulator i.e. International Financial Services Centres Authority.

The Reserve Bank of India vide its letter dated May 3, 2024, has accorded "No-Objection Certificate" to set up the proposed entity. The Company is yet to receive the requisite approval of the MoP to incorporate the proposed entity.

23.    JOINT VENTURE & ASSOCIATE COMPANY

During the financial year 2024-25, the Company does not have any Joint Venture & Associate Company, apart from investments, as detailed in the financial statements, forming part of this Annual Report. Further, in terms of the agreement executed amongst the Joint Venture partners i.e. NTPC Limited, REC, PFC and Power Grid Corporation of India Limited, EESL ceased to be a jointly controlled entity of REC under Ind-AS framework.

24.    CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Section 129 of the Act and Rules made thereunder and Indian Accounting Standards, the Company has prepared the Consolidated Ind-AS Financial Statements for the financial year 2024-25, that include its wholly owned subsidiary company i.e. RECPDCL. The same shall also be laid before the ensuing 56^th AGM along with the Standalone Financial Statements of the Company for adoption.

Pursuant to Section 129(3) of the Act, a statement containing the salient features of the Financial Statements of subsidiaries/ associates and joint ventures in Form AOC-1, forms part of this Annual Report. The Financial Statements of SPV companies of RECPDCL, are not consolidated with the Financial Statements of REC, as such subsidiaries are transferred by RECPDCL to the successful bidder, along with all assets and liabilities in accordance with TBCB Guidelines and therefore, interest in such SPV companies is accounted for as per Ind-AS 105.

The Audited Ind-AS Financial Statements including the Consolidated Ind-AS Financial Statements and Audited Accounts of subsidiaries of the Company are available on the website of the Company i.e. www.recindia.nic.in. Further, these documents would be kept open for inspection through electronic mode by any member or any trustee for debenture holders. The Company would also make available copy thereof through e-mail upon specific request by any member of the Company.

25.    DIRECTORS, KMP & POLICY FRAMEWORK RELATED THERETO

Being a Government Company within the meaning of Section 2(45) of the Act and in terms of Article 91 of the Articles of Association ("AOA") of the Company, all Directors on the Board of REC are nominated / appointed / reappointed by the

 

CMD, PFC ceased to be CMD & KMP of REC w.e.f. April 22, 2025.

5.    Shri Vijay Kumar Singh (DIN: 02772733), who held the post of Director (Projects), REC, has superannuated from the services of the Company on June 30, 2025 and accordingly, ceased to be the Director and KMP of REC w.e.f. July 1,2025.

6.    Pursuant to MoP order dated June 27, 2025, Shri Jitendra Srivastava, IAS (DIN: 06817799), CMD has been assigned additional charge of the post of Director (Projects) for the period of 3 months w.e.f. July 1, 2025 or until the appointment of a regular incumbent to the post of Director (Projects) or until further orders, whichever is earlier.

25.2    Independent Directors

1.    Dr. Gambheer Singh (DIN: 02003319) and Shri Manoj Manohar Pande (DIN: 09388430), Part-time Non-Official Independent Directors of the Company have completed their tenure on November 14, 2024 and accordingly, were ceased to be the Independent Directors of REC w.e.f. November 15, 2024.

2.    Dr. Durgesh Nandini (DIN: 09398540), Part-time NonOfficial Independent Director of the Company has completed her tenure on December 26, 2024 and accordingly, she has ceased to be the Independent Director of REC w.e.f. December 27, 2024.

3.    Pursuant to MoP Order dated April 17, 2025 read with corrigendum dated May 21, 2025, Dr. Gambheer Singh (DIN: 02003319) and Dr. Durgesh Nandini (DIN: 09398540), have been appointed again as Part-time NonOfficial Independent Directors (Additional Directors) of REC w.e.f. April 17, 2025 for a period of one year from the date of notification of their appointment or until further orders, whichever is earlier.

25.3    Key Managerial Personnel

Pursuant to resolution passed by the Board of Directors in the meeting held on October 26, 2024, Executive Director (Finance-Bonds) presently, Shri Rajesh Kumar, has been designated as KMP of the Company w.e.f. October 26, 2024.

25.4    Director(s) retiring and seeking appointment / re-appointment at the ensuing AGM

In accordance with the provisions of the Act and Article 91 (iv) of the Articles of Association of the Company, Shri Shashank Misra, Government Nominee Director shall retire by rotation at the ensuing 56^th AGM of the Company and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

Further, pursuant to Regulation 17(1C) of Listing Regulations, the appointment of Shri Jitendra Srivastava, IAS as Chairman and Managing Director, Dr. Gambheer Singh and Dr. Durgesh Nandini as Part-time Non-Official Independent Directors are also being placed before the shareholders in the ensuing AGM for their approval. The Board recommends their appointment.

Brief resume and other particulars of Shri Shashank Misra, Shri Jitendra Srivastava, IAS, Dr. Gambheer Singh and Dr. Durgesh Nandini are annexed to the Notice of AGM forming part of this Annual Report.

25.5    Company Secretary & Compliance Officer

Shri J.S. Amitabh is Company Secretary & Compliance Officer 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 ("NRC").

However, the Ministry of Corporate Affairs ("MCA") 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 notification dated July 5, 2017, also prescribed that the provisions relating to review of performance of Independent Directors and evaluation mechanism as prescribed in Schedule IV of the Act, is not applicable to Government companies.

Accordingly, being a Government Company, REC is inter-alia exempted in terms of the above notifications, as the evaluation of performance of all members of the Board of the Company is being done by the administrative ministry i.e. MoP and / or by the DPE. During the financial year 2024-25, the performance evaluation of Non-Executive 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 finalized in consultation with the MoP 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 Act, it is confirmed that:

(i)    in the preparation of the annual accounts for the year ended March 31, 2025, 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 financial year and of the profit of the Company for that period;

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

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

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

(vi)    the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws

and that such systems were adequate and operating effectively.

28. ACHIEVEMENTS UNDER MEMORANDUM OF UNDERSTANDING (MOU) FOR FY 2024-25

The Memorandum of Understanding (MoU) serves as a key policy initiative through which the Government of India through DPE undertakes regular performance evaluations of CPSEs, fostering a culture of continuous improvement and enhancing the performance levels of the CPSEs. Your Company has achieved "Excellent" Rating for the financial year 2023-24 and for the financial year 2024-25, "Excellent" rating is expected, subject to final evaluation by DPE. The consolidated MoU Guidelines for the financial year 2024-25 is placed at DPE's website at https://dpe.gov.in/en/consolidated-mou-Guidelines-year-2024-25. The below calculation has been presented on consolidated basis as per MoU Guidelines of DPE. The key achievements against the targets of MoU 2024-25 are as under:

 

(Management and Administration) Rules, 2014, the Company is providing e-voting facility to all shareholders to enable them to cast their votes electronically in respect of resolutions set forth in the Notice of AGM. The Company is conducting the AGM through video conferencing / other audio-visual means. Shareholders can refer to the detailed instructions for e-voting and electronic participation in the AGM, as provided in the Notice of AGM. Shareholders, 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 (RTA) of the Company or their respective Depository Participant (DP) and take part in the green initiative.

REC has procured Electric vehicles as part of continued commitment towards sustainable and clean energy adoption. This aligns with the vision of reducing carbon emissions and contribution in greener environment. These EVs have significantly lower operational costs and enhanced energy efficiency.

REC routinely conducts tree plantation drives and has partnered with agencies for recycling and disposing of all wastes. Board room has been furnished with glass bottles to adopt zero plastic usage. Women's health and hygiene has always been priority at REC. In a move towards improving the well-being of REC's women staff, 3 Sanitary Pad Vending Machines have been installed in our corporate office.

30. COMMITMENT TO SWACHHTA

REC has undertaken various activities for creating awareness on Swachhta by executing various activities like drive for donation of cleaning material to orphanage or special abled centers, installation of dustbins at public places, health and hygiene camp at old age home, installation of wall of kindness, workshop or seminar on waste management for employees, special cleaning drive at public places and organized Nukkad Natak at public place for awareness on cleanliness under campaigns Swachhta Pakhwada Swachhta Action Plan & Swachhta Hi Seva.

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 Officer. 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, DoPT i.e. 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 1,2024 to March 31,2025:

Further, REC has placed the requisite information on its website, in compliance with the requirements specified by DoPT. Further, in compliance of the said Guidelines, which provides 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.

Government of India has notified Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012 to support marketing of products produced and services rendered by them. However, the policy rests upon core principle of competitiveness, adhering to sound procurement practices and execution of supplies in accordance with a system which is fair, equitable, transparent, competitive and cost effective. In compliance to the policy, Annual procurement plan is uploaded on REC's website for the benefit of MSEs and monthly procurement details on MSME 'Sambandh' Portal are being regularly updated.

The benefits to MSEs like exemption from tender fees and Earnest Money Deposit, Purchase preference i.e. MSEs quoting price within price band L1 + 15%, when L1 is from someone other than MSE, shall be allowed to supply at least 25% of tendered value at L1 subject to lowering of price by MSEs to L1, wherever splitting is feasible.

As per Gazette Notification (S.O. 5670(E) dated November 9, 2018), it is mandatory for all Central Government Ministries / Departments / CPSUs to procure at least 25% of their annual procurement from MSEs including 4% from MSEs owned by SC / ST entrepreneur and 3% from MSEs owned by women entrepreneur.

As per Ministry of MSME clarification issued vide OM dated March 25, 2022 for revised FAQ on Public Procurement Policy for MSEs Order 2012, it has been clarified that out of 25% target of annual procurement from MSEs (not in the specific tender), a sub-target of 4% of annual procurement from MSEs is earmarked for procurement from MSEs owned by SC / ST entrepreneurs and 3% of annual procurement from MSEs is earmarked for procurement from MSEs owned by women entrepreneur. However, in event of failure of such MSEs to participate in tender process or meet tender requirements and L1 price, 4% sub-target for procurement earmarked for MSEs owned by SC / ST entrepreneurs and 3% earmarked to women entrepreneur will also be met from other MSEs.

During the financial year 2024-25, total procurement awarded by the Company was ?99.62 crore, excluding the contract awarded as PIA (Program Implementing Agency) for Government Programs of ?28.03 crore, contract with non-available in GeM (GAR id) of ?19.33 crore and contract related to price discovery through GeM and empanelment of vendors was ?0.79 crore. The total contract awarded excluding the above sub-category from GeM portal was ?97.58 crore (achieved more than the target of 95%) and procurement from MSEs (including MSEs owned by SC / ST and women entrepreneurs) was ?43.73 crore (achieved more than the target of 25%), out of which MSEs owned by SC / ST entrepreneur was ?0.52 crore and MSEs owned by women entrepreneur was ?3.71 crore. During the financial year, 1,301 contracts awarded to MSEs out of which 17 belonged to SC / ST category and 246 were owned by women entrepreneur. 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 buyer has no control.

The Company has made it compulsory for all its Pan-India offices to have 100% procurement of common use Goods and Services available on Government e-marketplace (GeM) are required to be procured mandatorily through GeM. REC has also conducted two Vendor Development Programme through online session which were attended by various

34.    ANNUAL RETURN

The Annual Return of the Company for the financial year 2023-24 filed with the MCA and the draft Annual Return for the financial year 2024-25, are available on the website of the Company at https://www.recindia.nic.in/annual-returns.

After filing of the Annual Return for the financial year 2024-25 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 as required to be disclosed in Form AOC-2 for the financial year 2024-25 is annexed to this report.

36.    AUDITORS36.1 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 financial year 2024-25

 

37.    COMMENTS OF C&AG OF INDIA

The C&AG vide letter(s) dated July 25, 2025 have given 'Nil' comments on the Audited Financial Statements of the Company for the financial year ended March 31, 2025 under Section 143(6) of the Act.

The comments of C&AG for the financial year 2024-25 have been annexed along with the report of Statutory Auditors of the Company in this Annual Report.

38.    DEBENTURE TRUSTEES

In compliance with Listing Regulations, 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 2024-25.

b)    The Company has not accepted any public deposits during the financial year 2024-25 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 financial 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 Listing Regulations 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 Act, 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. 11 of the Notes to Accounts of the Standalone Financial Statements.

g)    The provisions of Section 197 of the Act and Rules made thereunder relating to managerial remuneration are not applicable to the Government companies, therefore, no disclosure is required to be made.

h)    There are no material changes and commitments affecting the financial position of the Company, which

 

has occurred between the end of the financial year i.e. March 31,2025 and the date of this report.

i)    The Company has not issued any stock options to the Directors or any employees 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, 2017 prescribed by the Central Government under Section 148 of the Act. Accordingly, cost accounts and records are not required to be maintained by the Company.

l)    During the financial 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. MoP. 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 Act.

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

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

q)    During the financial year 2024-25, 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.

r)    The Company has complied the provisions of Maternity Benefits Act, 1961.

In terms of the provisions of Listing Regulations and other applicable statutory provisions, separate sections containing Management Discussion & Analysis Report, Report on Corporate Governance, Business Responsibility & Sustainability Report, are enclosed to this Board's Report.

Various statutory reports, information, certificates etc., in terms of the Act, Listing Regulations, 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 New and Renewable Energy, 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 and 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 confidence 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 staff for their tireless commitment to excellence.