RURAL ELECTRIFICATION CORPORATION

POLICY STATEMENT
 Shall work towards fulfilling power sector

borrower s 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 ofices

MAJOR MILESTONES
YEAR 1969 1979 1998 1999 2005 2008 ACHIEVNMENTS 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 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
SHORT TERM 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