On behalf of the Board of Directors it is our pleasure to present the 10th AnnualReport together with the Audited Financial Statements of PTC India Financial ServicesLimited ("the Company" or "PFS") for the financial year endedMarch 31 2016.
1. Financial Performance
The summarized standalone results of your Company are given in the table below.
(Rs in millions)
| ||FY 2015-16 ||FY 2014-15 |
|Total Income ||11869.29 ||8019.07 |
|Profit/(loss) before Interest ||10658.47 ||6667.74 |
|Depreciation & Tax (EBITDA) || || |
|Finance Charges ||5301.08 ||4171.92 |
|Depreciation ||42.96 ||42.69 |
|Provision for Income Tax (including for earlier years) ||1403.46 ||844.37 |
|Net Profit/(Loss) After Tax ||3910.97 ||1608.76 |
|Profit/(Loss) brought forward from previous year ||- ||- |
|Amount transferred consequent to Scheme of Merger ||- ||- |
|Profit/(Loss) carried to Balance Sheet ||3910.97 ||1608.76 |
*previous year figures have been regrouped/rearranged wherever necessary. Theoperational and financial performance significantly improved during the year and was quietrobust. The interest income for the FY 2015-16 increased by 24% to Rs 9214.08 million ascompared to Rs 7416.15 million during 2014-15. The composition of total revenue witnesseda change during the year as the Company earned an amount of Rs 2069.28 million by way ofsale of certain investment which accounted for about 17% of total revenue. There was nosuch revenue during the previous year. The operational costs also increased during theyear. The finance costs for FY2015-16 increased by about 27% to Rs 5301.08 millioncompared to Rs 4171.92 million during 2014-15. The finance costs for FY2015-16 includeamortization of foreign currency translation aggregating to Rs 228.72 million compared toRs 162.60 million during 2014-15. The operational and financial parameters remainedhealthy during the year. The overall yield on loan assets for FY2015-16 stood at 13.07%whereas cost of borrowed funds reduced to 9.05% during FY2015-16 compared to 9.38% inFY2014-15. The overall return on networth improved to 25% during FY2015-16 from about 12%during FY2014-15. The profit before tax (PBT) for FY2015-16 increased by 117% to Rs5314.43 million compared to Rs 2453.13 million during 2014-15 and the profit after tax(PAT) for FY2015-16 increased by 143% to Rs 3910.97 million compared to Rs 1608.76million during 2014-15. The profit before tax excluding income from sale of investmentsduring FY2015-16 increased by about 32% to Rs 3245 million compared to Rs 2453 millionduring FY2014-15.
2. Summary of Operations and State of Companys Affairs
The debt assistance sanctioned to various projects during 2015-16 increased by 59% andaggregated to Rs 65283 million compared to Rs 41128 million 2014-15. The disbursementsalso remained robust during FY2015-16 and increased by 43% to Rs 35550 million comparedto Rs 24927 million during 2014-15. The gross loan book closed at Rs 86340 million as at31st March 2016 and the equity investments made by the Company aggregated to another Rs2004 million as on the said date. The cumulative aggregate debt assistance sanctioned bythe Company as at 31st March 2016 aggregated to Rs 183446 million whereas the neteffective sanction stood at Rs 150740 million as at 31st March 2016. The composition ofthe debt sanctioned by the Company is also witnessing a change with renewable projectscomprising about 75% of the amount sanctioned by Company during FY2015-16. The Companycontinues to explore and look for attractive opportunities in other areas for furtherdiversification of its portfolio and has forayed into power transmission projects energyefficiency projects annuity based road project in addition to private railway sidingsand development & operation of coal mines etc.
The financial assistance sanctioned by PFS would help in capacity addition of close to20500 MW. PFS is constantly working with new as well as existing developers and isfocused towards diversifying its portfolio. As at 31st March 2016 the renewable portfolioconstitutes the highest proportion in the outstanding loan book at around 44% thermalprojects constitute about 30%. The Company continues to regularly monitor the progress andoperations of the assisted projects through its comprehensive project monitoringmechanism.
3. Industry Scenario
Indias power sector is at an inflection point given the governmentsconviction that electricity is a critical enabler for economic growth. The sector istransforming in terms of reliability and affordability and it is perceived to be anincredibly dynamic time in the power market. It is estimated that about 13% of the newpower generation orders in the world are from India. Indias energy sector has turnedaround from an era of scarcity and faces a problem of plenty making demand creation a keydriver of government policy. The government recognises the need for private investment inthe power sector and is planning to adopt progressive policies on renewables. India isbeing counted globally as a country leading investments in renewable energy. The countryhas set an ambitious plan to add 175 GW of renewable energy generation capacity by 2022.There have been notable policy reforms in the renewable energy and country is rankedbetter on ease of doing business in the renewable energy space. Significant investmentsare expected into the generation projects which would be backed by investments intransmission sector as well. The government is further working towards new policies forhydropower and electricity from biomass biofuels and cogeneration. It is believed that anaction plan is in the offing for a smoother and reliable integration of renewable energywith conventionally generated electricity carried by the national and state grids.
The Indian economy is expected to go a transformational change led by the UnionGovernment. The power sector is is considered to be lifeline of the Indian economy and isexpected to play a critical role in this mega change backed by the Governmentscommitment. The policy makers are taking multiple steps towards improving the overallsituation. Government has launched a scheme called "Power for All" with an aimto ensure continuous and uninterrupted electricity supply to all households industriesand commercial establishments by creating and improving necessary infrastructure. Thetotal installed capacity in the country crossed the 300GW mark as at 31st March 2016.Indias power sector is one of the most diversified in the world with the sources ofpower generation ranging from conventional sources such as coal lignite natural gasoil hydro and nuclear power to viable non-conventional sources such as wind solar andagricultural and domestic waste.
Indias quest for green energy has crossed a major milestone with renewableplants mainly wind and solar surpassing the capacity of large hydroelectricity projectswhich were once the countrys biggest source of electricity. The total capacity ofrenewable energy projects overtook hydropower in the countrys total capacity. It isbelieved that India will turn a global player in the energy market during the next 25years exerting its influence on its various aspects including renewable energy andenergy efficiency. The energy use in the country has almost doubled since 2000. Therenewable energy development in 2015 across the globe had a strong Indian flavour to it.India is ranked among the top five nations in new investments and in the top four asregards creating jobs in the green energy sector. Indias investments in renewableenergy sector increased to over USD 10 billion in 2015 when compared to around USD 8billion in 2014. The investments have seen growth for the second consecutive year as aresult of the Indian governments increased focus on renewable energy. PFS focuses onattractive opportunities across the infrastructure sector especially the renewable energyprojects. The total portfolio of the Company has crossed Rs 8600 crore mark. The powersector holds tremendous investment potential and requires huge investment. PFS is devotedto meet the challenges to take advantages of the potential opportunities. The Companyconstantly eyes opportunities in the sector and expects to continue with its growthmomentum. The debt commitments and disbursements have been robust during the year therebymaintaining the increasing trend. The Company continues to explore opportunities in otherrelated infrastructure.
During the year your Company collaborated with International Finance Corporation (IFC)to boost Financing for Renewable Energy Projects. PFS became the first institution inIndia and the twenty-sixth globally to sign IFCs Master Cooperation Agreement. Thecollaboration will help standardize steps that lenders take when co-financing projectswith IFC with the ultimate aim to make financing available in shorter time-frames andreduce financing costs for borrowers enabling them to operationalize projects faster.
PFS is also working towards lowering its cost of borrowings and is in discussions withvarious multi lateral/bilateral financing institutions for arranging funds at competitivecosts / terms. The Company diversified its resource base and issued bonds which weresubscribed by International Finance Corporation and FMO Dutch Development Bank. TheCompany arranged borrowings domestically at competitive rates during the year therebyreducing its overall cost of borrowings.
PFS is focused on attractive opportunities across the infrastructure sector. The totaldebt assistance sanctioned has already crossed Rs 15000 crore mark and the outstandingloan book has shown further growth during FY 2015-16. The disbursements have been robustduring the financial year. PFS continues to focus its energies on lending outside coalbased power projects for infrastructure facilities such as power transmission coalmining private railway sidings etc and will continue to evaluate niche opportunitiesacross energy value chain.
The Indian power sector is one of the most diversified sector with sources of powerranging from both conventional such as coal lignite natural gas oil hydro and nuclearpower to non-conventional such as wind solar and agricultural and domestic waste. Thesector is undergoing significant changes that have the potential to redefine the industry.The renewable power capacity addition is seeing unprecedented growth. Power sector isconsidered to be the crucial enabler for economic growth and the renewable sector promisessignificant growth and development amidst tremendous investment potential. The Governmentof India is also committed to provide everyone with access to electricity and hasidentified power sector as a key sector of focus so as to promote sustained industrialgrowth. The development activities and the interest in the renewable area offers goodpotential to PFS. PFS continue to evaluate business proposals for these projects in linewith the developments taking place in the sector and the initiatives undertaken at thegovernment level. The Company continues to partner with credible players in the industry.
5. Net Owned Funds and Earnings Per Share (EPS)
The net owned funds of the Company as a percentage of aggregate risk weighted assets onbalance sheet and risk adjusted value of off balance sheet items is 21.77%.
EPS of the Company for the year ended 31.03.2016 stands at Rs 6.96 per share incomparison to Rs 2.86 per share for the year ended 31.03.2015.
Out of the profits earned during the financial year 2015-16 the Company hastransferred an amount of Rs 782.19 million to Statutory Reserve in accordance with therequirements of Section 45-IC of the Reserve Bank of India Act 1934. During 2015-16 theCompany has also appropriated an amount of Rs 583.03 million to the reserve created underSection 36(i)(viii) of the Income Tax Act 1961 in order to achieve tax efficiencies.
Based on Companys performance the Board of Directors are pleased to recommendfor the approval of the members a dividend at the rate of 12% (which is higher by 20% fromthe last year) i.e. Rs 1.20/- per equity share of Rs 10/- for the FY 2015-2016. Thedividend on equity shares if approved by the members would involve the cash outflow ofRs 813.86 million including dividend tax amounting to Rs 139.36 million.
The dividend will be paid to the members whose names appear in the Register of Membersas on a record date and in respect of shares held in dematerialized form whose names arefurnished by National Securities Depositories Limited and Central Depository (India)Limited as beneficial owners as on record date.
8. Fixed Deposits/Public Deposits
Your Company has not accepted any deposits during the year from public in terms ofprovisions of Companies Act 2013. Further at the end of the year there were nounclaimed unpaid or overdue deposits.
9. Capital adequacy ratio
The Capital adequacy ratio as on 31st March 2016 stood at 21.77% compared to 23.71% ason 31st March 2015. No adverse material changes affecting the financial position of theCompany have occurred during the financial year.
10. Material changes and commitments if any affecting the financial position of theCompany
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statement relate (i.e. 31st March 2016) and the date of the report.No adverse Material changes affecting the financial position of the Company have occurredduring the financial year.
11. Particulars of loans guarantees and investments
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
12. Capital/ Finance
During the period under review no change has taken place with regard to capitalstructure of the Company.
The paid up share capital of the Company as at 31st March 2016 aggregates to Rs5620.83 million comprising of 562083335 equity shares of Rs 10 each fully paid up. PTCIndia Limited continues to hold 60% of the paid up capital of the Company as at 31st March2016. The shares of the Company are listed on the National Stock Exchange Limited (NSE)and BSE Limited.
14. Extract of Annual Return
As provided under section 92(3) of the Companies Act 2013 (the Act) andrule 12(1) of the Companies (Management and Administration) Rules 2014 extract of annualreturn is given in Annexure 1 in the prescribed Form MGT-9 which forms part ofthis report.
15. Directors and Key Managerial Personnel
In accordance with provisions of the Companies Act 2013 and Articles of Association ofthe Company Shri Ajit Kumar (DIN: 06518591) Director would retire by rotation at theensuing Annual General Meeting and being eligible has offered himself for re-appointment.Dr. Uddesh Kumar Kohli and Shri Ramarao Muralidharan Coimbatore have ceased to beDirectors w.e.f 31st March 2016 on the completion of their tenure.
Further Ms. Shubhalakshmi Panse had resigned as the Director of the Company w.e.f.11th May 2015. Shri. Rajender Mohan Malla ceased to be Managing Director & ChiefExecutive Officer of the Company w.e.f. 15th May 2015 on attainment of age ofsuperannuation. On the recommendation of the Nomination and Remuneration Committee theBoard has appointed Dr. Ashok Haldia as the Managing Director & Chief ExecutiveOfficer of the Company w.e.f. 7th July 2015.
Mrs. Pravin Tripathi and Shri Harbans Lal Bajaj have been appointed as an AdditionalDirector (Independent) on 15th October 2015 and 30th June 2016 respectively.
The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual directors which include criteria for performanceevaluation of the non-executive and executive directors. The overall effectiveness of theBoard is measured on the basis of the ratings obtained by each Director and accordinglythe Board decides the Appointments Re-appointments and Removal of the non-performingDirectors of the Company. The Company pays performance linked remuneration to its WTDs/MD. It is ensured that the remuneration is determined in a way that there exists a finebalance between fixed and incentive pay. On the basis of Policy for Performance Evaluationof Independent Directors a process of evaluation is being followed by the Board for itsown performance and that of its Committees and individual Directors. The performanceevaluation process and related tools are reviewed by the "Nomination &Remuneration Committee" on need basis and the Committee may periodically seekindependent external advice in relation to the process. The Committee may amend thePolicy if required to ascertain its appropriateness as per the needs of the Company. ThePolicy may be amended by passing a resolution at a meeting of the Nomination &Remuneration Committee.
13. SEBI (Listing Obligations And Disclosure Requirements) Regulations 2015 (ListingRegulations)
The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 with the aim toconsolidate and streamline the provisions of the Listing Regulations for differentsegments of capital markets to ensure better enforceability. The said regulations wereeffective December 1 2015. Accordingly PFS has executed the amended Listing Agreementwith National Stock Exchange of India Limited (NSE) and BSE Limited.
14. Details of Board meetings
Ten Board Meetings were held during the financial year ended on 31st March 2016and gap between two meetings did not exceed one hundred twenty days details of which aregiven below:
|Date of the meeting ||No. of Directors attended the meeting |
|15th May 2015 ||10 |
|25th May 2015 ||9 |
|07th July 2015 ||10 |
|08th August 2015 ||9 |
|16th September 2015 ||10 |
|09th November 2015 ||11 |
|26th December 2015 ||11 |
|22nd January 2016 ||11 |
|08th February 2016 ||11 |
|16th March 2016 ||11 |
15. Committees of Board
The Companys Board has the following Committees:
1) Audit Committee
2) Nomination and Remuneration Committee
3) Asset Liability Management Committee
4) Risk Management Committee
5) Stakeholders Relationship Committee
6) Corporate Social Responsibility Committee
7) Committee of Directors for Bond issuance
8) Investment Committee
The details of the Committees and other disclosures are mentioned in the corporategovernance report which forms part of this report.
16. Corporate Social Responsibility
As a good corporate citizen the Company is committed to ensuring its contribution tothe welfare of the communities in the society where it operates through its CorporateSocial Responsibility ("CSR") initiatives. The Corporate Social ResponsibilityCommittee has formulated and recommended to the Board a Corporate Social ResponsibilityPolicy (CSR Policy) indicating the activities to be undertaken by the Company which hasbeen approved by the Board.
The objective of PFSs CSR Policy is to consistently pursue the concept ofintegrated development of the society in an economically socially and environmentallysustainable manner and at the same time recognize the interests of all its stakeholders.
To attain its CSR objectives in a professional and integrated manner PFS shallundertake the CSR activities as specified under the Companies Act 2013.
The composition and other disclosures are mentioned in the corporate governance reportwhich forms part of this report.
The CSR policy is available at the link:http://www.ptcfinancial.com/upload/pdf/corporate_social_ responsibility_policy.pdf Thereport on CSR activities/initiatives is enclosed at Annexure 2.
17. Vigil mechanism
The Company believes in the conduct of the affairs of its constituents in a fair andtransparent manner by adopting highest standards of professionalism honesty integrityand ethical behavior. In compliance with requirements of Companies Act 2013 & ListingRegulations the Company has established a mechanism called Whistle BlowerPolicy for employees to report to the management instances of unethical behavioractual or suspected fraud or violation of the Companys code of conduct or ethicspolicy. Whistleblowing is the confidential disclosure by an individual of anyconcern encountered in the workplace relating to a perceived wrongdoing. The policy hasbeen framed to enforce controls so as to provide a system of detection reportingprevention and appropriate dealing of issues relating to fraud unethical behavior etc.The policy provides for adequate safeguards against victimization of director(s) /employee(s) who avail of the mechanism and also provides for direct access to the Chairmanof the Audit Committee in exceptional cases. During the year under review no complainthas been received.
The Whistle Blower policy is available at http://www.ptcfinancial.com/upload/pdf/whistle_blower_policy.pdf
18. Directors Responsibility Statement
Pursuant to the requirement clause (c) of sub-section (3) of Section 134 read withsection 134(5) of the Companies Act 2013 your Directors to the best of their knowledgeconfirm that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
19. Statutory Auditors their Report and Notes to Financial Statements
M/s. Deloitte Haskins & Sells Chartered Accountants were appointed as statutoryauditors of the Company for FY 2015-16 by the shareholders and shall hold office upto theconclusion of the forthcoming Annual General Meeting.
The Auditors have audited the Accounts of the Company for the year ended 31st March2016. Audited Financial Statements comprising Balance Sheet as at 31st March 2016 theStatement of Profit and Loss and the cash flow Statement along with a summary ofsignificant accounting policies & other explanatory information together withAuditors Report thereon are annexed to this report. The Auditors Report doesnot contain any qualification reservation or adverse mark.
The Board of Directors has recommended the ratification of appointment of M/s. DeloitteHaskins & Sells Chartered Accountants as statutory auditors of the Company for FY2016-17 to shareholders in the ensuing Annual General Meeting.
20. Secretarial audit
Pursuant to provisions of Section 204 of Companies Act 2013 and rules mentionedthereto the Board of Directors of the Company appointed M/s. Agarwal S. and AssociatesPracticing Company Secretary to conduct the Secretarial Audit of records and documents ofthe Company. The Secretarial Audit Report is enclosed as Annexure 3. The Secretarial AuditReport does not contain any qualification reservation or adverse remark.
21. Related party transactions
During the financial year 2015-2016 the Company has given the term debt facility of Rs
crores to M/s. PTC Energy Limited (Group Company) for which the approval of theAudit Committee and the Board of the Company as per provisions of Section 188 of Companiesact 2013 read with rules mentioned thereto and SEBI Listing Regulations 2015 has beenreceived. Apart from this the Company has not entered into any other related partytransactions which attract the provision of Section 188 of the Companies Act 2013. Thedetails of transactions entered into with the Related Parties is given in schedule no. 29of the Audited Accounts of the Company. During the year the Company had not entered intoany contract/ arrangement/ transaction with related parties which could be consideredmaterial in accordance with the policy of the Company on materiality of related partytransactions. The Policy on Materiality of Related Party Transactions and Dealing withRelated Party Transactions as approved by the Board is available on the Companyswebsite at the linkhttp://ptcfinancial.com/statutory_policies/20150629_Policy_materiality_of_Related_Party_Transactions.pdf Further all the transactions are made in the ordinarycourse of business and on arms length basis.
Information on transactions with related parties pursuant to section 134(3) (h) of theAct read with rule 8(2) of the Companies (Accounts) Rules 2014 are given in Annexure - 4in Form AOC-2 and the same forms part of this report.
22. Human Resources
Your Company treats its "human resources" as one of its most importantassets. Your Company continuously invests in attraction retention and development oftalent on an ongoing basis. A holistic assessment of manpower needs led to freshrecruitment at various level. A number of individual employee specific group of employeespecific and organisational wise programes that provide focused people attention arecurrently underway. Your Companys thrust is on the development of talent internallythrough job enlargement rotation and development.
23. Risk Management Policy
PFS has put in place a comprehensive policy framework for management of risks. Theseare currently under holistic review with the help of CRISIL for enabling comprehensiveintegrated risk management system. The policies include
- Risk Management Policy: - The risk management policy provides a framework forcredit risk management as well as operational risk management. The framework for Creditrisk management provides for identification and assessment of credit risk assessment andmanagement of portfolio credit risk and risk monitoring and control. The issues relatingto the establishment of exposure limits for various categories for example based ongeographical regions fuel specific industry and rating are also covered. It also dealswith rating models aiming at high quality consistency and uniformity in the appraisal ofproposals. The framework for operational risk management recognizes the need to understandthe operational risks in general and those in specific activities of the Company.Operational risk management is understood as a systematic approach to manage such risk. Itseeks to standardize the process of identifying new risks and designing appropriatecontrols for these risks minimize losses and customer dissatisfaction due to possiblefailure in processes.
Asset Liability Management Policy :- The objectives of Asset LiabilityManagement Policy are to align market risk management with overall strategic objectivesarticulate current interest rate view and determine pricing mix and maturity profile ofassets and liabilities. The asset liability management policy involves preparation andanalysis of liquidity gap reports and ensuring preventive and corrective measures. It alsoaddresses the interest rate risk by providing for duration gap analysis and control byproviding limits to the gaps.
Foreign Exchange Risk Management Policy: - The policy covers the management offoreign exchange risk related to existing and future foreign currency loans or any otherforeign exchange risks derived from borrowing and lending. The objective of the policy isto serve as a guideline for transactions to be undertaken for hedging of foreign exchangerelated risks. It also provides guiding parameters within which the Asset LiabilityManagement Committee can take decisions for managing the above mentioned risks.
Interest Rate Policy: - Interest rate policy provides for risk based pricing ofthe debt financing by the Company. It provides the basis of pricing the debt and themanner in which it can be structured to manage credit risk interest rate risk andliquidity risk while remaining competitive.
Policy for Investment of Surplus Funds: - The policy of investment of surplusfunds i.e. treasury policy provides the framework for managing investment of surplusfunds. Realizing that the purpose of mobilization of resources in the Company is tofinance equity as well as loans to power sector projects the prime focus is to deploysurplus funds with a view to ensure that the capital is not eroded and that surplus fundsearn optimal returns.
Operational Risk Management Policy: - The operational risk management policyrecognizes the need to understand the operational risks in general and those in specificactivities of the Company. Operational risk management is not understood as a process ofeliminating such risk but as a systematic approach to manage such risk. It seeks tostandardize the process of identifying new risks and designing appropriate controls forthese risks minimize losses and customer dissatisfaction due to possible failure inprocesses.
24. Employees Stock Option Scheme
Shareholders approval of the scheme was obtained at the Annual General Meetingheld on 27th October 2008 for introduction of Employee Stock Option Plan at PTC IndiaFinancial Services Ltd. All the ESOPs made under the Employees Stock OptionScheme-2008 have been surrendered and as on date no claim is outstanding.
25. Declaration given by independent directors
Shri Surinder Singh Kohli Shri Ved Kumar Jain Shri Surender Kumar Tuteja Mrs. PravinTripathi and Shri Harbans Lal Bajaj are independent Directors on the Board of your Companyas on date of this report.
Mrs. Pravin Tripathi and Shri Harbans Lal Bajaj have been appointed as an AdditionalDirector (Independent) on 15th October 2015 and 30th June 2016 respectively whoseappointment is to be regularized in the ensuing Annual General Meeting of the Company. Inthe opinion of the Board and as confirmed by these Directors they fulfill the conditionsspecified in section 149 of the Companies Act 2013 and the Rules made thereunder abouttheir status as Independent Directors of the Company.
26. Companys policy on appointment and remuneration of Senior Management and KMPs
As per the requirements of the Companies Act 2013 the Board of Directors of yourCompany has constituted a Nomination and Remuneration Committee. The Committees roleis to be supported by a policy for nomination of Directors and Senior Management Personnelincluding Key Managerial Personnel as also for remuneration of Directors Key ManagerialPersonnel (KMP) Senior Management Personnel and other Employees. Further a policy onBoard Diversity is also to be adopted. The Policy of the Company on Nomination andRemuneration & Board Diversity is attached herewith and marked as Annexure 5.
27. Board Evaluation
The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and individual Directors pursuant to the provisions of the Companies Act2013 and the corporate governance requirements as prescribed by Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015. Theperformance of the Board was evaluated by the Board after seeking inputs from all theDirectors on the basis of the criteria such as the Board composition and structureeffectiveness of Board processes information and functioning etc. The performance of theCommittees was evaluated by the Board after seeking inputs from the Committee members onthe basis of the criteria such as the composition of Committees effectiveness ofCommittee meetings etc. The Board and the Nomination and Remuneration Committee reviewedthe performance of the individual Directors on the basis of the criteria such as thecontribution of the individual Director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.
In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the Board as a Whole and performance of the Chairman wasevaluated taking into account the views of Executive Directors and Non-ExecutiveDirectors. The same was discussed in the Board meeting that followed the meeting of theIndependent Directors at which the performance of the Board its Committees andindividual Directors was also discussed. Performance evaluation of Independent Directorswas done by the entire Board excluding the Independent Director being evaluated.
28. Disclosure under the Sexual Harassment of Women at the work place (PreventionProhibition and Redressal) Act 2013
A group level Internal Complaints Committee has been constituted to look intogrievance/complaints of sexual harassment lodged by women employees as per SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.Further no complaints were received during the year and no complaint is pending on 31stMarch 2016.
29. Internal financial controls and Internal Auditor
The internal financial controls with reference to the Financial Statements arecommensurate with the size and nature of business of the Company. The Company has anInternal Control System commensurate with the size scale and complexity of itsoperations. The scope and authority of the Internal Audit function is defined by the AuditCommittee. The Company has appointed M/s Grant Thornton as the Internal Auditor of theCompany (earlier M/s. Raj Har Gopal & Co. Chartered Accountants were the InternalAuditors of the Company). To maintain its objectivity and independence the InternalAuditor reports to the Audit Committee. The Audit Committee has the responsibility forestablishing the audit objectives and determines the nature timing and extent of auditprocedures as well as the locations where the work needs to be carried out.
The Internal Auditor monitors and evaluates the efficacy & adequacy of internalfinancial controls & internal control system in the Company to mitigate the risksfaced by the organization and thereby achieve its business objective. Broadly theobjectives of the project assigned are:-
Review the adequacy and effectiveness of the transaction controls;
Review the operation of the Control Supervisory Mechanisms;
Recommend improvements in processes management;
Review the compliance with operating systems accounting procedures and policies
Based on the report of internal auditor process owners undertake corrective action intheir respective areas and thereby strengthen the controls. Significant audit observationsand corrective actions thereon are presented to the Audit Committee. The Company alsoengaged M/s. KPMG Chartered Accountants for independent design evaluation and testing ofcontrols related to requirements of Internal Financial Controls. The evaluation of designeffectiveness and testing of controls for various business activities processes and subprocesses was carried out and found satisfactory.
30. Cost Auditors
Cost Audit is not applicable to the Company.
31. Holding Subsidiaries Associates and Joint Ventures
Your Company continues to be the Subsidiary of PTC India Limited. Further the Companyhad a subsidiary namely PFS Capital Advisors Limited which was strcuk off under the fasttrack exit mode as prescribed by Ministry or Corporate Affairs vide their order dated 11thJanuary 2016. The Policy for determining material subsidiaries as approved may beaccessed on the Companys website at the link:http://www.ptcfinancial.com/upload/pdf/20150629_Policy_on_determining_Material_Subsidiaries.pdf The Company has twoAssociates Company namely M/s. Varam Bio Energy Pvt. Ltd. and M/s. R S India Wind EnergyPvt. Ltd..
32. Management Discussion and Analysis
Management Discussion and Analysis comprising an overview of the financial resultsoperations / performance and the future prospects of the Company form part of this AnnualReport.
33. Particulars of Employees
The information required under section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are given below: a. The ratio of the remuneration of each director to the medianremuneration of the employees of the company for the financial year 2015-16; (Rs in lacs)
|Name of Director ||Directors Remuneration ||Median Remuneration of employees ||Ratio |
|Shri Rajender* ||29.68 ||15.79 ||2.09 times |
|Mohan Malla || || || |
|Dr. Ashok Haldia# ||83.00 ||15.79 ||5.83 times |
|Dr Pawan Singh ||71.46 ||15.79 ||5.02 times |
* ceased to be the member on 15th May 2015 due to superannuation. # appointed asManaging Director & Chief Executive Officer w.e.f. 7th July 2015 b. the percentageincrease in remuneration of each director Chief Financial Officer Chief ExecutiveOfficer Company Secretary or Manager if any in the financial year;
|Name ||%age Increase |
|Shri Rajender Mohan Malla ||* |
|Dr. Ashok Haldia# ||13.17 |
|Dr Pawan Singh$ ||2.86 |
|Vishal Goyal ||8.76 |
* ceased to be the member on 15th May 2015 due to superannuation. # appointed asManaging Director & Chief Executive Officer w.e.f. 7th July 2015
$ Salary arrears paid in previous year i.e. FY 2014-15 in respect of earlier yearresulting in comparatively lower overall %age increase in FY 2015-16. d. The medianremuneration of the employees has reduced during the year e. 43 permanent employees are onthe rolls of company;
f. The Average remuneration decreased from Rs 24.11 lakhs in FY 2014-15 to Rs 21.93Lakhs in FY 2015-16 i.e. (9.04%). Profit After Tax for the 2015-16 increased to Rs39109.70 lakhs from Rs 16087.61 lakhs during year 2014-15 thus recording a growth ofabout 143% during the current financial year.
g. The Average increase in remuneration of Key Managerial Personnel decreased from Rs60.63 lac to Rs 54.44 lakhs i.e (10.21%). This is due to superannuation of Mr RM Mallaformer MD & CEO w.e.f 15.05.2015
h. Price earnings ratio is 4.87 as at 31st March 2016 and 19.32 as at 31st March2015. IPO Share Price in March 2011 was Rs 28 whereas the closing price per Share was Rs33.90 as at March 31st 2016 and was Rs 55.25 as at 31st March 2015
i. The average percentile decrease in the salary of employees other than the managerialpersonnel is from Rs 19.76 to Rs 18.45 resulting in decrease of (6.60%). Whereas theaverage percentile decrease in the managerial remuneration is from Rs 60.06 to Rs 55.87resulting in decrease of (6.98%).
j. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company
|Name ||FY 14-15 ||FY 15-16 ||% age Increase |
|Shri Rajender Mohan Malla ||68.81 ||29.68 ||* |
|Dr. Ashok Haldia# ||73.33 ||83.00 ||13.18 |
|Dr Pawan Singh ||69.47 ||71.46 ||2.86 |
|Vishal Goyal ||30.92 ||33.63 ||8.78 |
*superannuated on 15.05.2015
# appointed as Managing Director & Chief Executive Officer w.e.f. 7th July 2015
k. The Key parameters for variable component are dependent on growth of Operatingprofit performance in containing Net NPA over Total Assets Cost to Income ratio growthin Net worth performance in terms of Sanction & Disbursal Market CapitalizationInnovation/ New Initiative etc.
l. In terms of provision of section 197 (12) of the Companies Act 2013 review withRule 5(12) of the Companies (Appointment and Remuneration of Manergial Personnel) Rule2014 no employees of the Company employed throught out the year who was in receipt ofremuneration of rupees one crore and two lacs or more in a year further during the yearunder review there was no employee of the Company employed for a part of the year who wasin receipt of remuneration of rupees eight lacs and fifty thousand or more per month.
m. It is affirmed that the remuneration is as per the remuneration policy of thecompany.
As per Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 statement of particulars of employees is Annexed as Annexure 6.
34. Details of conservation of energy technology absorption
Since PFS is engaged in investment and lending activities particulars relating toconservation of energy and technology absorption are not applicable to it.
35. Foreign Exchange earnings & outgo
The Company has incurred expenditure of Rs 215.34 million (previous year Rs 146.63million) in foreign exchange during the year ended 31st March 2016. This includes intereston external commercial borrowings amounting to Rs 148.07 million (previous year Rs 143.73million).
36. Significant and material orders
There were no significant or material orders passed by Regulators or Courts orTribunals which impacts the going concern status and Companys future operations. .
37. Transfer of Amounts to Investor Education and Protection Fund
Pursuant to the provisions of the Investor Education Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has already filed the necessary form and uploaded the details of unpaid andunclaimed amounts lying with the Company as on the date of last AGM (i.e. 24th September2015) with the Ministry of Corporate Affairs.
Your Directors state that no disclosure or reporting in respect of the following itemsas there were no transactions on these items during the year under review:
Issue of equity shares with differential rights as to dividend voting orotherwise.
Issue of shares (including sweat equity shares) to employees of the Companyunder any scheme.
Neither Managing Director nor the Whole time Directors of the Company receiveany remuneration or commission from any of other Company.
The Board of Directors acknowledge with deep appreciation the cooperation received fromMinistry of Power Ministry of Finance Reserve Bank of India SEBI NSE BSE PTC IndiaLimited and other stakeholders International Finance Corporation (IFC) DEG FMO andOeEB various Banks Consortium Partners and Officials of the Company.
| ||For and on behalf of the Board |
| ||PTC India Financial Services Limited |
| ||Sd/- |
| ||Deepak Amitabh |
| ||Chairman |
| ||DIN: 01061535 |
|Date : 12th August 2016 || |
|Place : New Delhi || |