RURAL ELECTRIFICATION CORPORATION

POLICY STATEMENT
Shall work towards fulfilling power sector

borrowers requirement Mobilize funds from various sector at lowest possible cost Continually improve the performance of quality management systems Built quality work culture at all levels

INTRODUCTION
Incorporated in 1969 Strategic player in financing entire power

infrastructure Plays an integral role in implementing the rural electrification strategy of GoI Became a public financial institution in 1992 and a Non Banking Finance Company (NBFC) in 1998 Network of 18 Zonal and Project offices

MAJOR MILESTONES
YEAR ACHIEVNMENTS

1969
1979 1998 1999 2005

Incorporation of the company

CIRE set up in Hyderabad Launch of Kutir Jyoti and Jal Dhara programs for rural electrification Received AAA rating from CRSIL in relation to long term domestic borrowings Profit before tax crossed 10,000 million Paid 2345 million as dividend to GoI

2008

Listed equity shares on stock market

 Highest domestic credit rating from domestic credit rating agencies

Rated excellent by Government of INDIA since

1993
Accorded the coveted NAVRATAN status by GoI

in 2008
Won Gold trophy for best managed bank,

financial institution or insurance company in 2008-09

OPERATING RESULTS FOR THE LAST 5 FINANCIAL YEARS

PARTICULA RS
Sanctions

UNIT S
R./Cr.

2005-06
18771 8007 9062 830 638 4198

2006-07
32923 13733 9438 1006 660 4013

2007-08
60768 16304 8377 1312 860 5368

2008-09
40746 17158 15457 1920 1272 6190

2009-10
45358 21132 26678 2649 2001 11080

Disbursemen R./Cr. t Resource Mobilization Profit before Tax Profit after Tax Net Worth R./Cr. R./Cr. R./Cr. R./Cr.

PRODUCTS AND SERVICES OF THE COMPANY

PRODUCTS

SHORTTERM LOANS
To provide finance to the Power Utilities and State Governments to meet their working capital requirement for different purposes

LONG TERM LOAN

Generally sanctioned with respect to specific power related project at project inception or as bulk loan as procurement of equipment

 BRIDGE LOANS

For borrowers who have been sanctioned financial assistance from the company, have received sanction letter but are awaiting clearance
EQUIPMENT LEASING

To fund purchase of major capital equipment and machinery for infrastructure projects

SERVICES
Financing power projects Project village electrification

Project intensive electrification Project Dalit Basti

Debt refinancing Aims to facilitate reduction of the cost of borrowings of State Power Utilities by repaying their high cost term loans

RISKS FACED BY THE COMPANY

Credit risks

Involves the risk arising from diminution in credit quality of a borrower and that the borrower will default on repayment of loan/advances
Market risks

Potential risks arising from changes in market rates and market prices which include fluctuations in INTREST RATES

 Liquidity risks

Companies potential inability to meet the liabilities as they become due and could require them to raise funds or liquidate assert on unfavorable terms
Operational Risks

Risks arising from inadequate or failed internal processes,people,systems or external events; strong systems and procedure required

CONCLUSION
Engaged in financing and promotion of

transmission, distribution and generation projects Assist client in formulating,implenment a broad array of power projects and finance those projects Occupies key position on GoI plans for growth of Indian power sector

RECOMMENDATIONS
Is uniquely positioned to access and appraise

borrowers in Indian power sector Has experienced management team with sector expertise Financial position is strong and business is profitable Hence REC is one of the important financial institution which will prove good for the purpose for which it is created