REC Ltd Management Discussions

The management of the Company is pleased to present its report on the business environment & industry scenario, industry risks, opportunities and the Companys financial & operational performance during the financial year 2024-25.

BUSINESS ENVIRONMENT

Global Business Environment

The global economy is at a critical juncture. Signs of stabilization were emerging through much of 2024, after a prolonged and challenging period of unprecedented shocks. Inflation was down from multidecade highs, Labor markets normalized, with unemployment and vacancy rates returning to pre-pandemic levels. However, the landscape has changed as Governments around the world reorder policy priorities and uncertainties have climbed to new highs.

Major policy shifts are resetting the global trade system and giving rise to uncertainty that is once again testing the resilience of the global economy. Since February, 2025, the United States has announced multiple waves of tariffs against trading partners, some of which have invoked countermeasures. Markets first took the announcements mostly in stride, until the United States nearuniversal application of tariffs on April 2, 2025 which triggered historic drops in major equity indices and spikes in bond yields. The degree of the surge varies across countries, depending on exposures to protectionist measures through trade and financial linkages as well as broader geopolitical relationships. The swift escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a significant impact on global economic activity.

According to International Monetary Fund (IMF) World Economic Outlook report of April, 2025, Global growth is projected to fall from 3.3% in 2024 to 2.8% in 2025, before recovering to 3% in 2026. For advanced economies, growth is projected to drop from 1.8% in 2024 to 1.4% in 2025 and 1.5% in 2026. For emerging market and developing economies, growth is projected to drop from 4.3% in 2024 to 3.7% in 2025 and will increase to 3.9% in 2026.

IMF: World Economic Outlook Projections

Global Growth	Projections
	2024	2025	2026
World	3.3	2.8	3.0
1. Advanced Economies (AE)	1.8	1.4	1.5
US	2.8	1.8	1.7
EU Area	0.9	0.8	1.2
UK	1.1	1.1	1.4
Japan	0.1	0.6	0.6
2. Emerging Market and Developing Economies	4.3	3.7	3.9
India	6.5	6.2	6.3
China	5.0	4.0	4.0
Brazil	3.4	2.0	2.0
Sub-Saharan Africa	4.0	3.8	4.2
Middle East and Cental Asian	2.4	3.0	3.5

Global headline inflation is expected to decline to 4.3% in 2025 and to 3.6% in 2026. Inflation is projected to converge back to target earlier in advanced economies, reaching 2.2% in 2026, compared with emerging market and developing economies, for which it declines to 4.6% over the same time horizon. In particular, the effects of recently imposed tariffs on inflation across countries will depend on whether the tariffs are perceived to be temporary or permanent, the extent to which firms adjust margins to offset increased import costs and whether imports are invoiced in US dollars or local currency. Cross-Country implication will differ too.

Global economic growth is projected to remain weak at 3.2% for the next five years, falling short of the 2000-2019 average of 3.7%. A major factor in this sluggish outlook is demographics, with population aging expected to negatively impact productivity, labor force participation and overall growth.

The global electricity sector is undergoing a period of significant transformation, driven by surging demand and the rapid expansion of renewable energy sources. Reflecting this momentum, global electricity consumption is experiencing its most rapid growth in years, with demand projected to soar through 2027. Global electricity demand increased by 4.3% in 2024 and is forecasted to maintain a growth rate of nearly 4% annually through 2027. This translates to an unprecedented increase of 3,500 TWh in global electricity consumption over the next three years. This surge is attributed to several factors, including expanding industrial production, increased adoption of air conditioning, accelerating electrification across sectors and the growing energy demands of data centres worldwide.

Renewable energy sources are playing an increasingly dominant role in meeting this rising demand. In 2025, renewables are forecast to generate more than one-third of total electricity globally, surpassing coal for the first time. Overall, renewables are expected to meet approximately 95% of the growth in electricity demand, with solar PV and wind leading this expansion and displacing generation from fossil fuels. Concurrently, nuclear power generation is also on the rise, with output expected to reach a new high in 2025 and continue to grow in the coming years.

It is important to note that the sector faces challenges, particularly concerning the growing impact of extreme weather events. In 2024, storms, droughts and heatwaves caused widespread power disruptions, underscoring the critical need to enhance grid resilience. As both electricity supply and demand become increasingly influenced by weather patterns, building resilience to these impacts is paramount to ensuring energy security.

Indian Business Environment

India is poised to lead the global economy once again, with the IMF projecting it to remain the fastest growing major economy over the next two years. According to April, 2025, edition of the IMF World Economic Outlook report, Indias economy is expected to grow by 6.2% in 2025 and 6.3% in 2026, maintaining a solid lead over global and regional peers. Supported by strong fundamentals and strategic Government initiatives, the Country is well-positioned to navigate the challenges ahead and India continues to enhance its role as a key driver of global economic activity with reforms in infrastructure, innovation and financial inclusion.

Economic Growth and Outlook

According to the Reserve Bank of India (RBI), real GDP is grown at 6.5% in the financial year 2024-25, following a 9.2% growth rate in the previous year. For the financial year 2025-26, real GDP growth is projected at 6.5%, with quarterly projections for Q1 at 6.5%; Q2 at 6.7%; Q3 at 6.6% and Q4 at 6.3%. The prospects for the agriculture sector remain positive, driven by healthy reservoir levels and strong crop production. Manufacturing activity is showing signs of recovery and the services sector remains resilient. Factors such as sustained demand from rural areas, an expected revival in urban consumption, recovery in fixed capital formation aided by increased Government capital expenditure, higher capacity utilization and healthy corporate and bank balance sheets are expected to support growth. However, global trade disruptions continue to pose downside risks.

Inflation Trends

Headline inflation moderated during January-February, 2025, following a sharp correction in food inflation. The outlook for food inflation has turned positive, with uncertainties around rabi crops subsiding and second advance estimates pointing to record wheat production. CPI inflation for the financial year 2025-26 is projected at 4%, with Q1 at 3.6%; Q2 at 3.9%; Q3 at 3.8% and Q4 at 4.4%. Households perception of current inflation declined to 7.8% and inflation expectations for the next three months and one year ahead also decreased. Upside risks to the inflation trajectory remain, including concerns about global market uncertainties and adverse weather-related supply disruptions.

Adaptation towards Climate Change

India has been working diligently towards adapting to climate change while mitigating the risks from them. Indias climate actions for energy conservation have been on track as compared to other emerging market economies. Indias economy has become increasingly energy-efficient, with energy intensity reducing from 0.27 Mega Joules / ? in 2014-15 to 0.22 Mega Joules / ? in 2023-24. The major energy conservation programmes being implemented by the Government include Perform, Achieve and Trade (PAT) scheme for energy-intensive industries; standards and labelling scheme for appliances by the Bureau of Energy Efficiency (BEE); Unnat Jyoti by Affordable LEDs for All (UJALA) scheme and adoption of electric mobility.

Resilience and Future Outlook

The Indian economy demonstrates resilience amidst global uncertainties. The Monetary Policy Committee (MPC) on June 6, 2025 decided to reduce the policy repo rate by 50 basis points to 5.50%, reflecting a focus on supporting growth while remaining vigilant on inflation. Indias external sector remains robust, with resilient services exports and stable foreign exchange reserves. The RBI emphasizes its commitment to maintaining macro-economic and financial stability through agile and decisive policy measures.

INDUSTRY STRUCTURE AND DEVELOPMENT

Industry Overview

Aided by rising demand and a focus on energy transition, Indias Power Sector demonstrated significant activity. Key indicators included a 5% rise in total power generation during the financial year 2024-25, reaching 1,830 Billion Units (BU). Non-fossil sources played a larger role, with their generation growing 12% YoY and their share climbing to 25% of the total mix. Infrastructure also expanded, with about 33 GW added (including a record 30 GW in Renewables), bringing total installed capacity to 475 GW by March, 2025. This growth increased the non-fossil capacity share from 45% to 48%. The period also saw peak electricity demand meet a new record of 250 GW, signifying robust overall sector growth.

Industry-Structure

Generation

As on March 31, 2025, the installed power generating capacity in the Country was 475 GW comprising of 106 GW in the Central Sector, 112 GW in the State Sector and 257 GW in the Private Sector. In terms of generation capacity by type, the conventional thermal / fossil capacity was 247 GW, Hydro 48 GW, Nuclear 8 GW and Renewables ex Hydro comprised 172 GW. The Plant Load Factor (PLF) for thermal power plants across the Country improved to 69.47% against 69.07% over last year. Central sector thermal stations achieved a PLF of 75.09%, whereas state sector and IPP sector achieved PLF of 64.81% and 67.47%, respectively.

Indias total electricity generation reached 1,830 BU in the financial year 2024-25, marking a 5% increase over the previous year. While thermal generation (including coal, lignite and gas) saw modest growth of 3% YoY, its contribution to the overall generation mix decreased by 1%. Conversely, the share of non-fossil fuel sources rose by 1% to account for 25% of the total electricity generated. This shift was driven by strong growth across all non-fossil segments: nuclear generation surged by 19%, large hydro (including imports from Bhutan) increased by 11% and other renewables (excluding large hydro) grew by a significant 13%. Looking ahead, the Central Electricity Authority (CEA) has set a generation target of 1,725 BU for the financial year 2025-26, specifically from thermal, nuclear and large hydro sources combined.

Underscoring a consistent pattern of growth, Indias peak electricity demand met climbed to a new all-time high of 250 GW in May, 2024, exceeding the prior record of 240 GW set in September, 2023. As per mid-term review of 20th Electric Power Survey, the All India Peak Demand of the Country is expected to be 277 GW in the financial year 2025-26. The Country is confident to meet this projected demand with optimal usage of existing and under construction capacities. Increasing total electricity generation and new highs in peak demand correlate strongly with the healthy performance of the Indian economy.

Coal

The Government of India has implemented several initiatives, including Commercial Coal Mining, streamlining regulations, allowing captive mines to sell a portion of their production and Mission Coking Coal, etc. to enhance domestic coal production and reduce imports. These efforts have also led to an encouraging 5% YoY growth in Countrys domestic coal production during the financial year 2024-25, as the domestic coal production reached record yearly production of 1,048 MT. Production from Commercial & Captive and other entities also saw a remarkable surge, reaching 198 MT, 28% increase from 154 MT recorded in the previous year. Coal dispatch has crossed the One BT milestone, with total dispatch reaching 1,025 MT in the financial year 2024-25, up by 5% from 973 MT in the financial year 2023-24. Out of the total dispatched coal, 843 MT (i.e. 82%) has been dispatched to the Power Sector Utilities alone.

Indias coal sector plays a pivotal role in supporting its rapidly growing economy, with coal serving as a primary energy source for critical industries like power generation, steel production and cement manufacturing etc. However, the Country faces a significant challenge in meeting its domestic coal demand, especially for coking coal and high-grade thermal coal, which are in short supply within the Countrys reserves. As a result, coal imports have been vital to meet the needs of key sectors, including steel production.

The Ministry of Coal has been implementing strategic measures to strengthen domestic production and ensure a secure coal supply, aligning with Indias goals of reducing coal imports and enhancing energy security. By prioritizing domestic coal output, the Government aims to march ahead towards Viksit Bharat goal by building a self-reliant, sustainable energy framework that supports long-term economic growth.

Renewable Energy Sources

India achieved historic growth in its Renewable Energy (RE) capacity during the financial year 2024-25, adding a record 30 GW. This brought the total installed RE capacity to approximately 220 GW by the end of the financial year. This strong performance signifies steady progress towards Indias ambitious target of 500 GW of non-fossil fuel-based capacity by 2030, a key commitment under its Panchamrit goals.

Solar energy spearheaded this expansion, contributing 24 GW of the new capacity in the financial year 2024-25, a substantial increase from the 15 GW added the previous year. This pushed total installed solar capacity to 106 GW (comprising 81 GW ground-mounted, 17 GW rooftop, 3 GW in hybrid projects and 5 GW off-grid), reflecting continued growth across both utility-scale and distributed solar segments.

Wind energy also demonstrated sustained progress, adding 4 GW of new capacity during the year (up from 3 GW previously), bringing its total cumulative installed capacity to 50 GW. Alongside these, Large Hydro capacity reached 48 GW (increasing by 0.8 GW), Small Hydro stood at 5 GW and Bio Power (including waste-to- energy) accounted for 12 GW. Collectively, these advancements contributed to reaching a total Renewable Energy capacity (potentially including large hydro based on reported figures) of around 220 GW by the end of the financial year 2024-25.

Transmission & Distribution

Transmission

Transmission infrastructure is fundamental to Indias power delivery system, connecting geographically dispersed generation sources to millions of consumers. This crucial network facilitates the bulk transfer of power through the Inter-State Transmission System (ISTS), managed primarily by the Central Transmission Utility (CTU) and distributes it within states via Intra-State Transmission Systems (InSTS) operated by State Transmission Utilities (STUs). To meet Indias growing energy demands, effectively integrate large-scale renewable energy projects and ensure equitable power distribution across all regions, commensurate strengthening of the intra-state grid is essential.

The current status of the Indian transmission is highlighted here:

Transmission status as on March 31, 2025	HVDC			EHV AC			Total
	? 800 kV	? 500 kV	? 320 kV	765 kV	400 kV	230/220 kV
Lines added in financial year 2024-25 (in cKM)	Nil	Nil	Nil	2,158	2,954	3,718	8,830
Total Line Length at the end of financial year 2024-25 (in cKM)	9,655	9,432	288	56,955	2,06,792	2,11,252	4,94,374
Transformation capacity added in financial year 2024-25 (in MVA)	Nil	Nil	Nil	21,000	40,540	24,893	86,433
Total Transformation capacity at the end of financial year 2024-25 (in MVA)	18,000	13,500	2,000	3,15,700	4,98,473	4,89,840	13,37,513

Indias transmission network saw continued expansion in the financial year 2024-25. While the addition of transmission lines (8,830 cKM) decreased by approximately 33% as compared to the previous financial year, the addition of transformation capacity significantly increased by 22% YoY, reaching 86,433 MVA. As of March 31, 2025, the nations cumulative transmission infrastructure comprised 4,94,374 cKM of trasmission lines and 13,37,513 MVA of transformation capacity.

Looking ahead, CEA with the aim of transmitting of 500 GW of Renewable Energy installed capacity by the year 2030 and over 600 GW of Renewable Energy installed capacity by the year 2032, prepared the detailed Nation Electricity Plan (Transmission) in consultation with various Stakeholders.

As per the National Electricity Plan, over 1,91,000 cKM of transmission lines and 1,270 GVA of transformation capacity is planned to be added during the ten years period from 2022-23 to 2031-32 (at 220 kV and above voltage level). In addition, 33 GW of HVDC bi-pole links are also planned. The inter-regional transmission capacity is planned to increase to 143 GW by the year 2027 and further to 168 GW by the year 2032, from the present level of 119 GW. The plan has also taken into consideration the requirement of storage systems viz. 47 GW of Battery Energy Storage Systems and 31 GW of Pumped Storage Plants to be developed along with Renewable Energy. Transmission system has also been planned for delivery of power to the Green Hydrogen / Green Ammonia Manufacturing hubs at coastal locations like Mundra, Kandla, Gopalpur, Paradeep, Tuticorin, Vizag, Mangalore etc.

The transmission plan highlights new technology options in transmission sector like Hybrid Sub-stations, Monopole Structures, Insulated Cross Arms, Dynamic Line Rating, High Performance Conductors and Upgradation of maximum operating voltage to 1,200 kV AC as well as skill development in Transmission Sector. With several transmission schemes under construction, several transmission schemes under bidding and several other transmission schemes in pipeline, the transmission plan provides visibility to the investors of the massive investment opportunity of over Rs. 9,15,000 crore in Transmission Sector till the year 2032.

Distribution

Power distribution is the final and most crucial link in the electricity supply value chain which is directly connected to the consumers. Over the years, Indias power distribution sector has witnessed remarkable improvement in terms of quality of electricity supplied, increase in number of hours of supply of electricity and also towards improving the infrastructure for supply of electricity. Performance improvement of power distribution sector is one of the top priorities of the Ministry of Power (MoP). Power distribution sector has received great attention from the MoP in the last decade and various reforms measures/ rules have been notified for improving financial viability of distribution utilities (DISCOMs). Some of the key initiatives of MoP, for power distribution sector include Integrated Power Development Scheme (IPDS, 2014) which introduced IT and ERP systems in DISCOMs, Ujjwal DISCOM Assurance Yojana (UDAY, 2015) which provided for gradual takeover of DISCOMs debt by State Governments, Revamped Distribution Sector Scheme (RDSS, 2021) which targets nationwide deployment of prepaid smart meters along with other performance improvement measures, Electricity (Right of Consumers) Rules 2020, Electricity Late Payment Surcharge and Related Matters (LPS Rules) 2022, Green Open Access Rules 2022, Electricity Distribution (Accounts and Additional

Disclosure) Rules 2024, Standard Operating Procedures for subsidy accounting, pass-through of fuel costs, resource adequacy, time-of- day tariffs and the list goes on.

As all these reform measures were largely aimed at improving the financial health of DISCOMs, which eventually lead to a reduction in outstanding dues to Power Generating Companies (GENCOs). The outstanding dues of DISCOMs to GENCOs have declined from Rs. 1,39,947 crore as on June 3, 2022 to Rs. 22,209 crore as on April 1, 2025 which is expected to add to the overall health of the power sector. Late Payment Surcharge Rules drove reduction in payables to generation and transmission companies. Days Receivable reduced from 118 days in the financial year 2022-23 to 115 days in the financial year 2023-24. AT&C losses during the financial year 2023-24 grew from 15.3% to 16.3%, driven by 1.2% points decrease in collection efficiency, Billing Efficiency improved to 86.9% in the financial year 2023-24 from 86.8% in the financial year 2022-23 and Collection Efficiency remained high at 97.3%.

Realizing the importance of the requirement of Distribution infrastructure for meeting the load up to 2030, CEA in consultation with distribution utilities prepared the Distribution Perspective Plan upto the financial year 2029-30, based on the information received from the DISCOMs. This Plan has included the DISCOM wise and All India level Distribution infrastructure planned by DISCOMs to meet the projected demand by the financial year 2029-30. The details of the new technologies available for introduction of Smart Distribution and a chapter on Capacity Building for distribution utilities have been included for guidance of the distribution utilities. The DPP has also included AT&C loss Reduction trajectory till the year 2030 for 71 DISCOMs nationwide.

It has been estimated that funds requirement for Distribution Infrastructure upgradation during the period 2022-2027 would be Rs. 4.28 lakh crore, out of which Rs. 1.89 lakh crore will be available with the DISCOMs from various sources including RDSS. An additional Rs. 2.86 lakh crore investment is further estimated to be required for the period 2027-30.

Power Sector Policy Environment

India has demonstrated a firm commitment towards achieving the ambitious energy transition goals announced by the Prime Minister at COP26. These goals include a target to achieve 500 GW of renewable energy and a 50% share from renewable sources by 2030. The Government has also pledged to achieve net-zero emissions by 2070, which reflects its determination to promote sustainable development and reduce the Countrys carbon footprint. A major focus was laid on capturing emerging energy transition trends - from Renewables to Hydrogen and even Smart Metering.

Further, the recent Union Budget 2025-26 helps carry forward the momentum in the energy transition of the Country by pushing the nuclear sector forward by announcing the Nuclear Energy Mission for Viksit Bharat which includes the following:

• Amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act to be taken up.

• Nuclear Energy Mission for research & development of Small Modular Reactors (SMR) with an outlay of Rs. 20,000 crore to be set up, 5 indigenously developed SMRs to be operational by 2033.

Government has taken many initiatives to foster the growth of Countrys renewable energy sector and to fuel the clean energy transition which includes the following:

• Government of India ("GoI") has initiated the Production Linked Incentive (PLI) Scheme with a budget outlay of Rs. 24,000 crore to boast the domestic manufacturing of High Efficiency Solar PV Modules. In a strong push towards Atmanirbhar, Indias solar module manufacturing capacity nearly doubled from 38 GW in March, 2024 to 74 GW in March, 2025, while solar PV cell manufacturing capacity tripled from 9 GW to 25 GW. Additionally, the Countrys first ingot-wafer manufacturing facility (2 GW) commenced production in the financial year 2025.

• The Union Cabinet approved the Viability Gap Funding (VGF) Scheme for Battery Energy Storage Systems (BESS) in September, 2023, to support the development of BESS. As per the Scheme, VGF support will be provided for BESS approved during 2023-26. With the decline in battery prices, the scheme capacity has been increased from 4,000 MWh to 13,200 MWh while staying within the approved budgetary allocation of Rs. 3,760 crore. Further, the Government has lunched the VGF scheme phase-2 in June, 2025 to support for 30 GWh of new standalone BESS system.

• Government has put in place Renewable Purchase Obligation targets for the DISCOMs, wherein progressive targets are in place i.e. 29.91% in the financial year 2025 to 43.33% by the financial year 2030.

• GoI has established Green Energy Corridors to develop intrastate transmission systems for renewable energy projects. Financial Assistance is being given to support transmission infrastructure setup in ten RE rich states for RE power evacuation. Currently, inter-regional transmission capacity stands at 112 GW, set to expand to 144 GW by the year 2027 for seamless renewable energy evacuation and transfer to any part of the Country.

• Government has initiated schemes like PM-KUSUM, Rooftop Solar Programme to boast Countrys decentralized generation from solar power.

• To establish India as a global hub for green hydrogen production, GoI has launched National Green Hydrogen Mission with an outlay of Rs. 19,744 crore.

Through these schemes and policies, the GoI has fostered a conducive environment for the growth of the clean energy sectors.

Revamped Distribution Sector Scheme

The Central Government has approved a Revamped Distribution Sector Scheme (RDSS), a Reforms-based and Results-linked Scheme with an outlay of Rs. 3,03,758 crore over a period of five years from the financial year 2021-22 to the financial year 2025-26 with the objective to improve the quality, reliability and affordability of power supply to consumers through a financially sustainable and operationally efficient distribution sector. DISCOMs/Power Departments would be able to access funds under the Scheme for Pre-paid Smart Metering, System Metering and Distribution infrastructure works for loss reduction and modernization. The objectives of the scheme are:

a. To improve the quality, reliability and affordability of power supply to consumers through a financially sustainable and operationally efficient Distribution Sector.

b. To reduce the AT&C losses to pan-India levels of 12-15% by the financial year 2024-25.

c. To reduce the ACS-ARR gap to zero by the financial year 2024-25.

The Scheme provides for annual appraisal of the DISCOM performance against predefined and agreed upon performance trajectories including AT&C losses, ACS-ARR gaps, infrastructure upgrade performance, consumer services, hours of supply, corporate governance, etc. DISCOMs have to score a minimum of 60% of marks and clear a minimum bar in respect to certain parameters to be able to be eligible for funding against the Scheme in that year. Implementation of the Scheme would lead to consumer empowerment by way of prepaid Smart Metering to be implemented in Public-Private-Partnership (PPP) mode and leveraging Artificial Intelligence to analyse data generated through Information Technology and Operational Technology (IT/ OT) devices including System Meters, prepaid Smart meters to prepare system generated energy accounting reports every month to enable DISCOMs to take informed decisions on loss reduction, demand forecasting, Time of Day (ToD) tariff, Renewable Energy (RE) Integration and for other predictive analysis.

RDSS lays special emphasis on leveraging advanced technologies to analyze data generated through IT/OT devices, including system meters and prepaid smart meters, to materialize the envisaged goal i.e. introducing advanced technologies like AI/ML (Artificial Intelligence and Machine Learning) in power distribution, by leveraging partnerships and consultations.

PM Surya Ghar Muft Bijli Yojana

The Union Cabinet, chaired by the Honble Prime Minister of India has approved PM Surya Ghar Muft Bijli Yojana with a total outlay of Rs. 75,021 crore for installing rooftop solar and providing free electricity up to 300 units every month for one crore households. The Prime Minister had launched the scheme on February 13, 2024.

The scheme provides a Central Financial Assistance (CFA) of 60% of system cost for 2 kW systems and 40% of additional system cost for systems between 2 to 3 kW capacity. The CFA will be capped at 3 kW. At current benchmark prices, this will mean Rs. 30,000 subsidy for 1 kW system, Rs. 0,000 for 2 kW systems and Rs. 78,000 for 3 kW systems or higher. The Subsidy for special category states is higher than normal state, being Rs. 33,000/kWp for first 2 kWp of RTS capacity and Rs. 19,800/kWp with additional RTS capacity of 1 kWp.

A national portal (https://pmsurvaghar.gov.in) has been developed for this purpose, through which, the households can apply for subsidy and will be able to select a suitable vendor for installing rooftop solar. Households will be able to access collateralfree low- interest loan products for installation of residential RTS systems.

The proposed scheme is estimated to have an addition of 30 GW of solar capacity through rooftop solar in the residential sector, generating 1,000 BUs of electricity and resulting in reduction of 720 million tonnes of CO2 equivalent emissions over the 25-year lifetime of rooftop systems.

The PM Surya Ghar Muft Bijli Yojana witnessed impressive progress, benefiting over 11.05 lakh households by March 31, 2025. Under the scheme, Rs. 5,437.21 crore has been disbursed as CFA significantly promoting the adoption of rooftop solar.

Under the"Model Solar Village"component of the scheme, the focus is on establishing one Model Solar Village per district throughout India. This initiative aims to promote solar energy adoption and empower village communities to achieve energy self-reliance. An allocation of Rs. 800 crore has been designated for this component, with Rs. 1 crore provided to each selected Model Solar Village.

National Green Hydrogen Mission

The Union Cabinet had earlier (in January, 2023) approved the National Green Hydrogen Mission with an allocation of Rs. 19,744 crore, aimed at producing 5 million ton of green hydrogen annually by the year 2030, with the intended objectives of making India a leading producer and supplier of Green Hydrogen in the world. The Mission outlay includes, Rs. 17,490 crore for the Strategic Interventions for Green Hydrogen Transition Programme (SIGHT), Rs. 1,466 crore for pilot projects, Rs. 400 crore for R&D and Rs. 388 crore towards other Mission components.

Indias Green Hydrogen sector also saw significant developments. Incentives worth Rs. 2,220 crore were awarded for 1,500 MW per annum of electrolyser manufacturing, while an additional Rs. 2,239 crore was allocated for 4,50,000 Tons-Per-Annum (TPA) of Green Hydrogen production. Under the National Green Hydrogen Mission, seven pilot projects were funded with Rs. 454 crore for decarbonizing the steel sector. Additionally, five pilot projects in the transport sector, with Rs. 208 crore in funding, will introduce 37 hydrogen- fuelled vehicles and nine hydrogen refuelling stations.

Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-KUSUM)

Launched in March 2019, the PM-KUSUM Scheme supports farmers by offering financial assistance for installing solar-powered irrigation systems, including solar pumps and grid-connected solar power plants. By shifting to solar energy, the scheme also helps to reduce carbon emissions and improve energy access in rural agricultural areas. Under the Scheme, Central Government subsidy upto 30% or 50% of the total cost is given for the installation of standalone solar pumps and for the solarization of existing grid- connected agricultural pumps. The Scheme consists of three components:

• Component-A: 10,000 MW of Decentralized Ground Mounted Grid Connected Solar Power Plants.

• Component-B: Installation of 14 lakh standalone Solar Powered Agriculture Pumps.

• Component-C: Solarization of 35 lakh existing Grid-connected Agriculture Pumps.

As on March 31, 2025, under the PM-KUSUM scheme, grid- connected solar power plants of 563 MW capacity have been installed and 7.71 lakh standalone agriculture pumps have been solarized and another 3.33 lakh agriculture pumps has been solarised under Feeder Level Solarisation.

The PM-KUSUM Scheme witnessed a record progress. In Component B, 4.4 lakh pumps were installed in the financial year 2024-25, a 4.2- fold increase over the previous financial year. In Component C, 2.6 lakh pumps were solarized, 25 times more than in the financial year 2024-25. The total number of solar pumps installed/solarized under the scheme has now exceeded 10 lakh. Financial expenditure for PM-KUSUM surged to Rs. 2,680 crore, a 268% increase from the previous year.

Carbon Credit Trading Scheme

Towards Indias commitment on emission intensity reduction, GoI

has already notified The Carbon Credit Trading Scheme, 2023 (CCTS) in June, 2023 and laid the foundation for the Indian Carbon Market (ICM) by establishing the institutional framework, including the National Steering Committee for Indian Carbon Market (NSCICM). In December, 2023, the scheme was amended to introduce the Offset Mechanism enabling participation from non-obligated entities through voluntary climate mitigation projects.

BEE under MoP has been designated as the scheme administrator and made responsible for identifying sectors, developing targets, issuing carbon credits, developing market stability mechanisms and accrediting verification agencies.

The Government in July, 2024 has notified the Detailed Procedure for Compliance Mechanism under CCTS and mandated Nine energy-intensive sectors, including Aluminium, Cement, Steel, Paper, Chlor-Alkali, Fertiliser, Refinery, Petrochemical and Textile, for inclusion under the compliance mechanism of the CCTS.

Moving the journey of carbon market forward, the GoI has now approved the Detailed Procedure for the Offset Mechanism and eight different methodologies under Offset Mechanism including methodologies for renewable energy (including Hydro and Pumped storage), green hydrogen production, industrial energy efficiency, landfill methane recovery and mangrove afforestation & reforestation. This marks a major step forward in the operationalization of the Offset Mechanism under ICM.

The Offset Mechanism will encourage voluntary participation by entities for developing projects that reduce, remove or avoid Green House Gas (GHG) emissions. This mechanism will enable our Country to tap climate change mitigation from sectors not covered under the compliance mechanism and can incentivize actions in such sectors.

Major Prospects of Indian Infrastructure

The infrastructure sector plays a pivotal role in driving Indias economic growth and overall development. As the Country continues its path towards becoming a global economic powerhouse, the need for robust infrastructure becomes increasingly apparent. The recent Union Budget of 2025-26 helps carry forward the momentum in the energy transition of the Country by pushing the nuclear sector forward by following announcements:

• Shipbuilding: The Shipbuilding Financial Assistance Policy to be revamped and Large ships above a specified size to be included in the infrastructure harmonized master list.

• Maritime Development Fund: A Maritime Development Fund with a corpus of Rs. 25,000 crore to be set up, with up to 49% contribution by the Government and the balance from ports and private sector.

• UDAN - Regional Connectivity Scheme: A modified UDAN scheme announced to enhance regional connectivity to 120 new destinations and carry 4 crore passengers in the next 10 years and also to support helipads and smaller airports in hilly, North-East region districts.

• Urban Challenge Fund: An Urban Challenge Fund of Rs. 1 lakh crore announced to implement the proposals for Cities as Growth Hubs, Creative Redevelopment of Cities and Water and Sanitation, allocation of Rs. 10,000 crore proposed for the financial year 2025-26.

Driving a major transformation, Indias infrastructure is key to the "Make in India" initiative. The Government is spearheading projects like Bharatmala, Sagarmala, Smart Cities Mission and PM Gati Shakti to enhance transportation, logistics and urban facilities, creating an efficient and sustainable India. This ambition is showcased through engineering marvels such as the Atal Tunnel, Chenab Bridge, Statue of Unity and Zojila Tunnel, alongside new freight corridors, airports and renewable energy grids. This integrated approach is fostering investment, employment and innovation, solidifying Indias position as a global manufacturing and logistics hub.

National Industrial Corridor Development Programme (NICDP):

It is an initiative to develop world-class industrial infrastructure and promote planned urbanization across India. By integrating smart technologies and multi-modal connectivity, the program aims to create globally competitive manufacturing hubs, fostering economic growth and employment. These industrial corridors are being developed in collaboration with State Governments for efficient planning.

• In August 2024, the Cabinet Committee on Economic Affairs approved 12 new industrial areas across 10 states under NICDP, with an investment of Rs. 28,602 crore.

• These industrial nodes, planned along six major corridors, will strengthen Indias manufacturing ecosystem and boost its global competitiveness.

PM Gati Shakti National Master Plan: Launched in 2021 to support Make in India, this digital platform coordinates 16 ministries for world-class infrastructure, using geospatial mapping to improve logistics and reduce project delays; all projects over Rs. 500 crore are reviewed by the Network Planning Group.

• As of March 13, 2025, 115 National Highway and road projects (approximately 13,500 km, Rs. .38 lakh crore investment) have been evaluated under this initiative, leading to more efficient infrastructure development.

Bharatmala Pariyojana: Approved in 2017, the scheme is enhancing Indias infrastructure by addressing critical gaps with economic corridors and expressways, supporting "Make in India" by improving logistics and connectivity for industrial growth.

• By February 28, 2025, 26,425 km of projects were awarded (of 34,800 km planned) and 19,826 km were constructed, with a total expenditure of Rs. 4,92,562 crore.

• Up to February, 2025, 6,669 km of high-speed greenfield corridors were awarded and 4,610 km were completed.

National Highway Network: Indias National Highway network has undergone a remarkable transformation over the past decade, driven by higher budget allocations and accelerated construction. The network has expanded from 91,287 km in 2014 to 1,46,145 km in 2024, marking a 60% increase. This expansion has significantly improved connectivity, reduced travel time and boosted economic activities across the Country.

Sagarmala: Launched in 2015, the Sagarmala Programme supports "Make in India" by fostering port-led development. It leverages Indias coastline and waterways to reduce logistics costs, boosting manufacturing and exports. Key areas include improving port infrastructure, connectivity and creating coastal economic zones. Initiatives like Ro-Pax ferries and skill development further strengthen a self-reliant maritime ecosystem, aiding Indias goal of becoming a global manufacturing hub.

As of March 19, 2025, the Sagarmala Programme has identified 839 projects worth Rs. 5.79 lakh crore, completing 272 projects valued at Rs. 1.41 lakh crore to enhance port connectivity and coastal infrastructure for improved maritime trade efficiency.

Railways: Indias rail infrastructure is rapidly advancing, with Vande Bharat trains and metro expansion boosting connectivity and urban mobility under the "Make in India" initiative.

Vande Bharat: Launched in 2019, 136 Vande Bharat trains are now operational across India as of March 18, 2025, demonstrating indigenous engineering capability. These semi-high-speed trains offer premium amenities, advanced safety and reduced travel times. Additionally, the Vande Bharat Sleeper Train Set successfully completed trials on the Mumbai-Ahmedabad route on January 15, 2025, promising enhanced long-distance travel.

Amrit Bharat Station Scheme: It is a long-term plan to modernize Indian railway stations, focusing on continuous development to enhance passenger amenities, multimodal connectivity and overall infrastructure, transforming them into modern transit hubs. As of March 12, 2025, 1,337 stations are identified for upgrade, ensuring improved accessibility, facilities and travel experience.

Metro: Indias Metro Rail system has significantly transformed urban transport, expanding from 248 km in 2014 to 1,011 km by March 2025, now covering over 20 cities. Additionally, the introduction of the Regional Rapid Transit System (RRTS), exemplified by Indias first Namo Bharat train on the Delhi-Meerut corridor, further enhances regional connectivity.

Aviation: Indias aviation sector has experienced unprecedented growth, becoming the third-largest domestic market globally. This expansion is evident through several key milestones: operational airports increased from 74 in 2014 to 159 by March 2025, significantly boosting regional connectivity. A new record was set on November 17, 2024, with domestic air passenger traffic surpassing 5 lakh in a single day.

Indias journey towards becoming a developed nation by 2047 hinges significantly on improving its infrastructure, a cornerstone for fostering liveable, climate-resilient and inclusive cities that drive economic growth.

OPPORTUNITIES AND STRENGTHS Opportunities

• REC plays a key role in implementation of flagship schemes of GoI and financing Indias power sector.

• Rising energy demand in a fast-growing economy augurs well for future business growth.

• Significant investments are required as per the generation capacity expansion planning report by CEA. Installed generation capacity by end of financial year 2027 is projected to be 610 GW requiring investments of Rs. 14.54 lakh crore during the period 2022-27. In further by financial year 2032, the installed capacity is expected to be 900 GW which corresponds to additional fund requirement of Rs. 19.06 lakh crore during the period 2027-32.

• Counter-part funding in schemes like RDSS.

• MoP has permitted REC to lend to infrastructure & logistics sector also subject to certain limits. This opens up another large universe of financing avenues for REC.

Strengths

• REC holds a strategic position, given RECs role in financing power sector & implementing policies and flagship programs of the GoI.

• Strong financial position and well capitalized.

• REC has a diversified asset portfolio with no single borrower with more than 10% asset portfolio.

• REC has an experienced talent pool and required skill sets for business.

• Strong relationship & network with stakeholders in Central & State Government.

THREATS, RISKS AND CONCERNS

• Competition from other banks and financial institutions in power, infrastructure and logistics sector may require lending at fine rates resulting in flat margins.

• Evolving regulatory provisions poses concern.

SEGMENT-WISE OR PRODUCT - WISE PERFORMANCE

REC is a leading Non-Banking Financial Company categorized as Infrastructure Finance Company by the RBI, servicing the financing needs of entire power sector value chain.

During the financial year 2024-25, the Company sanctioned total loan assistance of Rs. 3,37,179 crore towards various projects and schemes. The same includes Rs. 89,632 crore towards conventional generation projects, Rs. 1,05,259 crore towards renewable energy projects (including Large Hydro), Rs. 85,040 crore towards T&D projects, Rs. 43,239 crore towards Infrastructure & Logistics projects and Rs. 14,009 crore towards other loans such as short-term loans and medium-term loans etc.

During the financial year 2024-25, the Company disbursed total loans of Rs. 1,91,185 crore, which included Rs. 27,478 crore towards generation projects, Rs. 26,186 crore towards renewable energy (including Hydro) projects, Rs. 1,07,841 crore towards T&D projects, Rs. 18,621 crore towards Infrastructure & Logistics projects and Rs. 11,059 crore towards other loans such as short-term loans and medium-term loans etc.

OUTLOOK

India remains the worlds fastest-growing major economy, driving a continuous rise in power demand. To meet this, capacity addition across conventional, renewable, transmission and distribution sectors is crucial. While renewables are expected to dominate new generation, thermal power remains vital in the near term, with hydro and nuclear sectors poised to be key drivers in Indias longterm energy transition.

Generation

Considering the energy transition goals of the Country and also the growing energy demand to sustain Countrys growth momentum, CEA has estimated in its National Electricity Plan (Generation), 2022-32 that the installed capacity is likely to reach 900 GW by the year 2032, comprising of 284 GW of thermal capacity, 20 GW nuclear capacity and 596 GW RE capacity including Hydro. Moreover, Peak demand of the county is ever growing and likely to reach 366 GW by the year 2032 from current level of 250 GW.

In order to meet this estimated electricity demand to ensure uninterrupted power supply for the nations growth the following capacities are under construction and the balance capacities are likely to be implemented at the later stages:

• Thermal Capacity: 34,560 MW of Thermal Capacity is under construction

• Hydro Power Capacity: Presently 25 number of hydroelectric projects (above 25 MW) totalling to 13,037.5 MW are under construction

• Nuclear: The Government has initiated steps to increase nuclear power capacity from the current 8,180 MW to 22,480 MW by the financial year 2031-32. This expansion includes the construction and commissioning of ten reactors, totalling 8,000 MW, across Gujarat, Rajasthan, Tamil Nadu, Haryana, Karnataka and Madhya Pradesh. Additionally, pre-project activities for ten more reactors have commenced, with plans for progressive completion by the financial year 2031-32. The Government has set an ambitious target of 100 GW nuclear power capacity by the year 2047, positioning nuclear energy as a major pillar in Indias energy mix.

• Renewable Energy: India has 169 GW of renewable energy projects under implementation and 65 GW already tendered. This includes 65 GW from emerging solutions such as hybrid systems, Round-The-Clock (RTC) power, peaking power and thermal + RE bundling projects.

All these indicates a positive momentum of the power sector and also indicates considerable investment requirement in generation segment in Indian Power sector.

Transmission & Distribution

Comprehensive transmission planning and execution to evacuate power from renewable-rich regions to the rest of the nation is also in progress. As per CEAs estimate, Rs. 4.25 lakh crore is expected to be required for augmentation of additional transmission infrastructure in the Country during the period of 2022-27. Distribution sector is also expected to witness a substantial uplift in the coming days with improved infrastructure, financial health and AT&C loss trajectory. CEA has also estimated a fund requirement of Rs. 4.28 lakh crore for Distribution Infrastructure upgradation during the period of 20222027.

New & Clean Energy segment

Energy Storage: Utility-scale energy storage and pumped hydro storage projects are likely to play an important role in enhancing the flexibility of the system. CEA has estimated that about 14 GW of Pumped hydro and 41 GW of BESS projects are likely to be added by the year 2030.

Pumped Hydro plants are vital for the energy transition, as they allow excess electricity generated during off-peak hours to be stored in the form of water in elevated reservoirs. This stored energy can be used back during non-solar hours peak demand periods, ensuring a reliable, consistent and flexible power supply.

In addition to the installed Pumped hydro storage capacity of 4.7 GW, at present 8 projects of 10 GW is under construction and DPR has been concurred for 3 projects of around 3 GW. In addition to this, 49 projects of 66 GW are under survey and investigation.

MoU RATING AND AWARDS

The Memorandum of Understanding (MoU) serves as a key policy instrument through which the GoI undertakes regular performance evaluation of CPSEs, fostering a culture of continuous improvement.

The performance of the Company in terms of MoU signed under the Guidelines of the Department of Public Enterprises (DPE), for the financial year 2024-25 is likely to be "Excellent" subject to final evaluation by DPE. For the financial year 2023-24, REC has been rated as "Excellent" owing to its excellent financial and operational performances.

During the financial year, REC has been conferred with various awards and accolades for its stellar performance across various parameters such as Financial, Operational, Governance, Sustainability, CSR, etc.

ENVIRONMENT, SOCIAL AND GOVERNANCE

RECs Environmental Social and Governance (ESG) strategy is embedded in our value-creation roadmap and enterprise risk architecture, governed by a Board-approved ESG Policy Framework. A phased, data-driven programme-encompassing gap analysis, global benchmarking, science-based target setting and quarterly oversight by the Boards Risk Management Committee anchors disciplined execution and measurable outcomes.

Environment

In line with Indias Panchamrit commitments and the Nationally Determined Contributions (NDCs), REC is actively working to decarbonise its operations and expand its green financing footprint. A baseline assessment of Scope 1 and 2 GHG emissions was completed in the financial year 2023-24, establishing the foundation for targeted emissions reduction initiatives. As part of this initiative, REC, along with its subsidiary REC Power Development and Consultancy Limited, is developing a 1 MWp captive solar power facility in addition to the existing 979 KWp rooftop solar plant at RECs Corporate Office. This initiative is expected to significantly reduce electricity related emissions, which currently account for approximately 85% of our overall operational carbon footprint. Additionally, the Company has secured approval from Dakshin Haryana Bijli Vitran Nigam Limited (DHBVNL) to procure 100% renewable electricity for RECs Corporate Headquarters, marking a significant step towards reducing grid-related carbon emissions. Further, energy efficiency improvements include an automated lighting and building energy management system that optimises energy use based on occupancy. These efforts are complemented by our phased fleet electrification strategy, with 76% of our official vehicles now electric, supported by on-site charging stations.

RECs commitment to environmental stewardship extends through its financing operations, where we have witnessed a 63% YoY growth in renewable energy disbursements and a 49% increase in our renewable energy loan portfolio. These efforts have contributed to the avoidance of approximately 6.1 million tonnes of CO2 emissions in financial year 2024-25, based on the globally recognized PCAF methodology. These achievements not only position REC as a leader in Indias clean energy transition but also highlight our strategic role in decarbonizing the nations energy sector.

Social

Social sustainability remains integral to RECs strategy, focusing on empowering individuals and communities while fostering inclusivity. We engage with stakeholders-employees, customers, vendors and the broader community with a strong emphasis on fairness, transparency and collaboration. Our social initiatives include the implementation of a comprehensive Occupational Health and Safety (OHS) Policy aligned with ISO 45001 standards, as well as training programs through the REC Institute of Power Management and Training RECIPMT, delivering 18,935 man-days of education on health, human rights and Diversity, Equity & Inclusion. Furthermore, REC has expanded its in-house wellness infrastructure, offering on-site gym, yoga sessions, dietician and access to medical practitioners, ensuring that employee well-being is prioritised. In terms of stakeholder engagement, REC has institutionalised a multi-channel feedback mechanism to ensure transparency and enhance service delivery. Additionally, REC has upheld consumer rights with zero unresolved grievances and zero data breaches, demonstrating its commitment to responsible service.

Governance

Governance excellence remains at the core of RECs operations, with a firm commitment to ethical standards and robust risk management. REC diligently focuses on accurate, transparent and timely disclosure of all material information to key stakeholders. ESG criteria have been fully integrated into our loan appraisal system, vendor prequalification processes and procurement evaluations. This ensures that both environmental and social impacts are considered at every level of decision-making. Our governance advancements have been recognized externally, with REC receiving the prestigious Golden Peacock Award 2024 for excellence in Corporate Governance. This recognition highlights RECs dedication to integrity, transparency and sustainable practices.

Looking forward

REC is focused on scaling its green investments, with particular emphasis on emerging sectors such as distributed solar energy, green hydrogen and energy storage. Operationally, we are committed to achieving net-zero emissions, supported by renewable energy procurement, fleet electrification and energy-efficient infrastructure upgrades. We are also driving social equity through targeted employee engagement, gender parity initiatives and community-focused CSR programs that align with national development goals. To further enhance governance, REC plans to implement digital oversight tools for improved compliance monitoring, reinforcing our commitment to ethics-first leadership and efficient governance practices.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company maintains an adequate system of internal controls in commensuration with size, scale and complexity of its operations, including suitable monitoring procedures to ensure accurate and timely financial reporting of various transactions, efficiency of operations and compliance with applicable laws, regulations, Guidelines and Companys policies. Suitable delegation of powers and Guidelines for accounting have been issued for uniform compliance. REC also has in ERP solution and NIC e-office system, to ensure IT based operations with minimum manual interventions. In order to ensure that adequate checks and balances are in place and internal control systems remain effective, the Company conducts regular and exhaustive internal audits of its various divisions and offices, either through the in-house Internal Audit Division or external professional audit firms.

Further, review audits of Regional and State Offices are carried out by the in-house Internal Audit Team during the year following the audit conducted by external professional firms. The internal audit covers all major operational areas of the Company, including identified critical and risk areas, as per the Annual Internal Audit Programme. Significant audit findings are periodically reviewed by the Audit Committee, in accordance with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Further, the Company has implemented a Board-approved Risk- Based Internal Audit (RBIA) framework, which includes independent risk assessments, identification of the audit universe, development of a risk matrix, preparation of an annual RBIA Plan and execution of internal audits as per the frequency defined in the policy.

FINANCIAL & OPERATIONAL PERFORMANCE

The Company achieved impressive performance during the financial year 2024-25. The operating income of the Company on a standalone basis was Rs. 55,911.12 crore, which was 18.59% higher than last year (i.e. Rs. 47,146.3 crore). The Profit Before Tax for the financial year 2024-25 was Rs. 19,859.78 crore, which was 11.69% higher than last year (i.e. Rs. 17,780.64 crore). Net Profit for the financial year 2024-25 stood at Rs. 15,713.21 crore, which was 12.08% higher than last year (i.e. Rs. 14,019.21 crore). The Net Worth as on March 31,2025, stood at Rs. 77,637.97 crore, which was 12.87% higher than last year (i.e. Rs. 8,783.15 crore).

The Company gives utmost priority to timely realization of its dues towards principal, interest, etc. During the financial year 2024-25, the Company recovered Rs. 1,79,694.70 crore, against the total sum of Rs. 1,80,907.83 crore due for recovery, including interest for Standard Assets (Stage I & II), thereby achieving a recovery rate of 99.33%.

The financial statements of the Company are prepared in accordance with the Indian Accounting Standards prescribed under section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, as amended, from time to time.

KEY FINANCIAL RATIOS:

The details of changes in key financial ratios applicable and specific to the Company, are given herein below:

Particulars	FY 2024-25	FY 2023-24
Interest Coverage ratio (times)	1.58	1.59
Debt Equity ratio (times)	6.29	6.37
Operating Profit Margin (%)	35.40	37.57
Net Profit Margin (%)	28.07	29.69
Gross Credit Impaired Assets (Stage-III) (%)	1.35	2.71
Net Credit Impaired Assets (Stage-III) (%)	0.38	0.86
Return on Net Worth (PAT/Average Net Worth) (%)	21.46	22.17

There was no significant change in the key financial ratios for the financial year 2024-25 vis-a-vis the last financial year 2023-24.

HUMAN RESOURCES / INDUSTRIAL RELATIONS

As on March 31, 2025, total manpower of the Company was 575 employees, which includes 556 executives and 19 non-executives. The industrial relations scenario continued to be on a cordial and harmonious note. During the financial year 2024-25, there was no loss of man-days on account of industrial unrest.

Employee training and development continued to receive key focus. During the financial year 2024-25, total 416 employees of the Company attended various training programmes, workshops, webinars etc., achieving 2,346 training man-days in total.

In order to equip the employees professionally, 68 executives were deputed for training programmes abroad.

CORPORATE SOCIAL RESPONSIBILITY

RECs Corporate Social Responsibility initiatives are pursued with a key focus on addressing community based, societal and environmental concerns. REC undertakes its CSR activities through REC Foundation, a registered Society under the Societies Registration Act, 1860. REC Foundation is governed by Governing Body comprising of nominated officials of REC.

During the financial year 2024-25, the Board approved a CSR budget of Rs. 288.48 crore, towards various new CSR initiatives in the fields of health care (including for elderly and persons with special abilities), safe drinking water and sanitation facilities, employment enhancing vocational skills, education, environmental sustainability, rural development projects etc. The implementation of CSR projects is done in project mode with clear objectives, baseline survey, implementation plan, specific timelines, identified milestones, monitoring of progress and impact assessment. During the year, the Company exceeded the allocated budget, spending a total of Rs. 294.01 crore (including excess spent of Rs. 5.15 crore from previous financial year) across multiple thematic areas. Notable contributions includes Rs. 50 crore to the PM CARES Fund, Rs. 35 crore to the Clean Ganga Fund and Rs. 31 crore to the Swachh Bharat Kosh.

RISK MANAGEMENT FRAMEWORK

The Company has an Integrated Risk Management Policy approved by the Board, covering credit risk, operational risk, liquidity risk and market risk. The Company has constituted a Risk Management Committee, the main functions of which are to identify and monitor various risks of the organization and to suggest actions for mitigation of the same. Further, the Company has a Chief Risk Officer (CRO), as per the requirement of RBI norms.

The risks faced by REC have been categorized and are being monitored systematically. Credit risk is an inherent risk of the financing industry. It involves risk of loss arising from the diminution in credit quality of the borrower and the risk of the borrower defaulting on contractual repayments under a loan or an advance. Operational risk, on the other hand, arises from inadequate or failed internal processes, people and systems or external events. Liquidity risk is the risk of potential inability to meet the liabilities as they become due and the inability to fund increase in assets, manage unplanned changes in the funding sources and to meet obligations when required. Market risk is defined as the risk to the Companys earnings and capital due to changes in the interest rates or prices of securities, foreign exchange changes as well as volatilities of changes. ESG risk is due to environmental, social and governance factors on Companys operations, financial performance and management.

In order to mitigate credit risk, the Company follows entity appraisal and project appraisal processes, which include detailed appraisal methodology, identification of risks, suitable structuring and mitigation. The operational risks are measured and categorized as High, Moderate or Low, through a comprehensive risk register covering all functional areas, namely business, compliance, finance, human resource, information technology, legal, operational etc. The Company manages its liquidity risk through a mix of strategies, including forward-looking resource mobilization based on projected disbursements and maturing obligations. The Integrated Risk Management Policy of the Company covers Asset Liability Management and Hedging Policy. To mitigate the relevant ESG risks, the Company has formulated & implemented an ESG policy covering the focus areas inter-alia including climate change strategy, corporate governance etc. The Companys Integrated Risk Management policy set up to guide its risk management operations and functions, the Risk Appetite Framework has been developed to establish what the company considers as acceptable risk in the pursuit of its business strategy and objectives. The Risk Appetite Statement is defined as a set of written risk objectives and risk limits/thresholds both quantified & non-quantified which captures comprehensive material risks of the company.

BUSINESS STRATEGY

REC continues to fund Indias capacity addition across all power infrastructure segments-conventional and renewable including generation, transmission and distribution, as well as related areas like coal block linkages, pollution control (e.g., FGD installation), super-critical thermal plants, solar & wind power, green hydrogen and ammonia.

With Indias increasing economic growth and infrastructure spending, REC is also focusing on financing non-power infrastructure and logistics sub-sectors, such as airports, metro rail, roads and highways, multi-modal logistics parks, ports and healthcare infrastructure.

REC will continue to seek cost-effective funding from domestic and international sources to provide competitive financing products. REC utmost priority will be on maintaining exceptional loan asset quality as it grows its loan portfolio.

	For and on behalf of the Board of Directors
	Jitendra Srivastava
	Chairman & Managing Director and
Place: Gurugram	Director (Projects) (Additional Charge)
Date: July 25, 2025	DIN:06817799