On behalf of the Board of Directors it is our pleasure to present the 13th(thirteenth) Annual Report together with the Audited Financial Statements of PTC IndiaFinancial Services Limited ("the Company" or "PFS") for the financialyear ended 31st March 2019.
1. Financial Performance
The summarized standalone results of your Company are given in the table below.
| || ||(Rs. in millions) |
| ||FY201819 ||FY201718 |
|Total Income ||13365.12 ||11851.56 |
|Profit/(loss) before Finance Charges Depreciation & Tax (EBITDA) ||12280.38 ||5378.33 |
|Finance Charges ||9443.11 ||6850.01 |
|Depreciation and Amortization ||27.27 ||32.59 |
|Provision for Income Tax ||968.57 ||(501.92) |
|Net Profit/(Loss) After Tax ||1841.43 ||(1002.35) |
|Other Comprehensive Income (Net of Tax) ||(336.12) ||(1206.89) |
|Total Comprehensive Profit /(Loss) for the year ||1505.31 ||(2209.24) |
The financials for the FY 2018-19 has been prepared as per Ind AS and previous yearfinancials has also been recast. There are two main changes in accounting due to adoptionof Ind AS. First the accounting of fee income/ expense which are required to be recognizeover the tenure of the loan instead of upfront and second provision on loans are requiredto be calculated as per expected credit loss model instead of provision calculated as perRBI prudential norms.
In FY 201819 the total income has been increased by 12.77% from Rs. 11851.56million in year 201718 to Rs. 13365.12 million. In FY 201819 our borrowingscost has been increased in line with market trend by 37.85% to Rs. 9443.11 million ascompared to Rs. 6850.01 million during FY201718. The other expenses increased by46.22% to Rs. 326.84 million during FY201819 as compared to Rs. 223.52 million inFY201718 the significant increase is due to increase in amount spend on CSRactivities which has increased to Rs 91.64 million during the FY 201819 from Rs.8.09 million in FY 201718. Other income increased by 244.33% to Rs. 20.97 millionduring FY201819 compared to Rs. 6.09 million in FY201718. There is improvementin portfolio quality of the company and accordingly provision for Impairment on FinancialInstruments has been decreased to Rs. 605.83 million in FY 201819 from Rs. 6097.15million in FY 201718. Provision for diminution of equity investments is Rs. 320.39million in FY201819.
The year 201819 was challenging year due to liquidity issues for NBFCs in generaland increase in borrowing cost across the industry due to which the operationalperformance for the year has been affected with increased cost of borrowing. Inspite theinherent challenges in the industry with detoriation in portfolio quality across thecountry our company is been able to perform by maintaining the adequate liquidity as wellas continuous improvement of portfolio quality with reduction in NPA / Stress assets.
During FY 201819 PFS explored innovate ways of alternate finance and becomefirst NBFC to avail Partial Credit Enhancement (PCE) facility from State Bank of Indiawhich would support to raise bonds upto Rs.20000 million. The PCE facility would help thecompany to have better credit rating and thereby open new doors of having long termfinance at lower cost.
During the FY 201819 with the focused efforts of the management PFS Gross NPAhas reduced from Rs. 8383.79 million to Rs.8046.80 million and net NPA from Rs. 5192.66million to Rs. 4032.23 million as on 31st March 2019 Gross NPA as a % to gross advancesis 6.04% and Net NPA as a % to net advances is 3.12% as compared to 6.54% and 4.16%respectively for FY201718. PFS has resolved stress/ NPA loan accounts amounting toRs. 4962 million. The company is focusing its stuck money in stress assets to incomegenerating assets and our efforts may result in better profitability in coming quarters.Most of the NPA accounts belong to Thermal and Large Hydro project whereas the company isshifting its focus on other areas including renewable energy as a result of which thecompany exposure to thermal has been reduced to 14% as on 31st March 2019 in comparisonto 17% as at the beginning of the year.
The profit before tax (PBT) for FY 201819 stood at Rs. 2810.00 million comparedto loss of Rs. 1504.27 million during FY201718. The profit after tax (PAT) for FY201819 stood at Rs. 1841.43 million against a loss of Rs. 1002.35 million.
In FY 201819 inspite of challenging environment PFS not only addressed theliquidity issues efficiently but also reported growth in its portfolio growth of 4%. Thecompany continued to focus of new areas of sustainable finance with better yields andexplored upcoming areas like Electrical Vehicle Charging stations projects under NamamiGange HAM road projects etc. and committed to contribute for environment friendlyprojects. During FY 201819 PFS sanctioned new loans of Rs. 51239 million and madedisbursement of Rs.40852 million to various Infrastructure projects. During FY201819 PFS sanctioned Rs 23994 million to Solar projects Rs. 4504 million towind projects Rs. 22741 million to other projects including road transmissiondistribution and corporate loan.
For ensuring robust quality of portfolio PFS continues to strengthen credit appraisalprocess and risk management function PFS has further strengthened the project monitoringfunction and implemented early warning signal framework for early identification of stressin assisted projects and a special team has been set up to deal with and find resolutionof stressed assets.
2. Summary of Operations and State of Company's Affairs
The debt assistance sanctioned during FY201819 stands at Rs. 51239 million anddisbursement at Rs. 40852 million as compared to Rs 82500 million and Rs. 51032 millionduring 201718.
The gross portfolio stood at Rs. 142370 million as at 31st March 2019 as compared to R143120 million as at the end of FY201718. The fund based portfolio stood at `133210 million as at 31st March 2019 as compared to Rs. 128164 million as at 31st March2018 and the letter of comfort stood at Rs. 9156 million as at 31st March 2019 as againstRs. 14959 million as at 31st March 2018. The equity investments made by the Companyaggregated to another Rs. 2469 million as at the year end. The cumulative gross aggregatedebt assistance sanctioned by the Company as at 31st March 2019 aggregated to Rs. 374512million and net of cancellations/loan closure the cumulative debt sanctioned aggregatedto Rs. 215116 million.
The financial assistance sanctioned by PFS would help in capacity addition of about45000 MW of power projects majority of which are renewable / environmental friendlyprojects. PFS is constantly working with new as well as existing developers and is focusedtowards diversifying its portfolio to upcoming areas like Electrical Vehicle Chargingstations projects under Namami Gange etc.. As at 31st March 2019 the renewable portfoliocomprises the highest proportion in the outstanding loan book at around 59% thermalprojects constitute about 14%. PFS will continue to focus on reduction of its thermalexposure and in FY 201920 its exposure is expected to be in single digit. PFS isalso having exposure of 2% in hydro sector and 25% in other infra sectors as at March 312019 and more diversification would be seen to upcoming sectors in coming year.
The power sector is witnessing stress particularly in case of thermal projects. Severalthermal projects in the country (both operational and under construction) are facingchallenges related to fuel price and availability power tariff time and cost overrunsalongwith equity infusion by promoters specially in case of under construction projects.PFS has also faced challenges in respect of such projects. As at 31st March 2019 thenonperforming loans portfolio stood at Rs. 8047 million one thermal power projecthaving aggregate loan outstanding of Rs. 3284 million is under corrective action plan(SDR/OSDR) and projects having aggregate loan outstanding of Rs. 4092 million faceddelays in commencement of commercial operations and have been classified as StandardRestructured Assets. The Company continues to regularly monitor the progress andoperations of the assisted projects through its comprehensive project monitoringmechanism. The company is having Rs 110087 million of projects which are operational andcommissioned and consisting 82.64% of its total loan outstanding: projects of Rs. 66079million is having more than one year satisfactory conduct post their respectivecommissioning.
3. Net Owned Funds and Earnings Per Share (EPS)
The Net Owned Funds of the Company aggregated to Rs. 19319.50 million as at 31st March2019 and the total capital funds aggregated to Rs. 20665.51 million as at thatdate. The percentage of aggregate risk weighted assets on balance sheet and risk adjustedvalue of off balance sheet items to net owned funds is 21.92% as at 31st March 2019.
EPS of the Company for the year ended 31.03.2019 stands at Rs. 2.87 per share incomparison to Rs. (1.56) per share for the year ended 31.03.2018. In FY 201819 thereis turnaround in the financial performance of the company and the company reported PAT ofRs 1841.43 million as against loss of Rs. 1002.35 million in FY 201718. Thetrend in upward performance is expected to improve further with expected resolution ofsome stress / NPA assets in coming year with innovative structure of finance to upcomingareas and also with exploring alternative sources of long term finance at lower cost.
Out of the profits earned during the financial year 201819 the Company hastransferred an amount of Rs. 368.29 million to Statutory Reserve in accordance with therequirements of Section 45IC of the Reserve Bank of India Act 1934.
Based on Company's performance the Board of Directors are pleased to recommend foryour consideration and approval a dividend at the rate of 8% (which is higher thanearlier recommendation of 2% in last year) i.e. Rs. 0.80/ per equity share of Rs.10/ for the FY 20182019. The dividend on equity shares if approved by themembers at ensuing Annual General Meeting would involve the cash outflow of Rs. 619.45million including dividend distribution tax amounting to Rs. 105.62 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.
6. 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.
7. Capital adequacy ratio
The Capital Adequacy Ratio as on 31st March 2019 stood at 21.92% compared to 21.19% ason 31st March 2018. No adverse material changes affecting the financial position of theCompany have occurred during the financial year.
8. Material changes and commitments if any affecting the financial position ofthe Company
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 statements relates (i.e. 31st March 2019) and the date of the report.No adverse Material changes affecting the financial position of the Company have occurredduring the Financial Year.
9. Particulars of loans guarantees and investments under Section 186
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
10. Share Capital/ Finance
During the period under review no change has taken place with reagrd to capitalstructure of the Company. The paid up share capital of the Company as at 31st March 2019aggregates to Rs. 6422.83 million comprising of 642283335 equity shares of Rs.10/ each fully paid up. PTC India Limited holds 64.99% of the paid up share capitalof the Company as at 31st March 2019. The equity shares of the Company are listed on theNational Stock Exchange of India Limited (NSE) and BSE Limited (BSE).
11. Extract of Annual Return
As provided under section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 extract of annual return is givenin Annexure I in the prescribed Form MGT9 which forms part of thisreport.
12. Directors and Key Managerial Personnel
In accordance with provisions of the Companies Act 2013 and Articles of Association ofthe Company Shri Naveen Kumar (Whole Time Director) shall retire by rotation at theensuing Annual General Meeting and being eligible offfers himself for reappointment.
Details of changes in the composition of Board and appointment/ re-appointment duringthe period under review have been specifically mentioned in the report on the CorporateGovernance which is annexed with this report.
13. Dividend Distribution Policy
As per regulation 43A of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the top 500 listed companies shall formulate a dividend distributionpolicy. Accordingly the policy was adopted to set out the parameters and circumstancesthat will be taken in to account by the Board while determining the distribution ofdividend to its shareholder. The policy is enclosed as AnnexureII to theBoard Report and is also available on Company's website at :http://www.ptcfinancial.com/upload/pdf/Dividend%20Distribution%20 PolicyPFS.pdf
14. Details of Board meetings
Eleven Board Meetings were held during the financial year ended on 31st March 2019 andgap between two meetings did not exceed one hundred twenty days details of which aregiven below:
|Sl. No. ||Date of the meeting ||No. of Directors attended the meeting |
|1 ||12th May 2018 ||9 |
|2 ||25th June 2018 ||10 |
|3 ||12th August 2018 ||11 |
|4 ||29th August 2018 ||11 |
|5 ||19th September 2018 ||10 |
|6 ||3rd October 2018 ||10 |
|7 ||12th November 2018 ||10 |
|8 ||31st December 2018 ||10 |
|9 ||8th February 2019 ||8 |
|10 ||2nd March 2019 ||7 |
|11 ||17th March 2019 ||9 |
Further the attendance of each director is more specifically mentioned in the reporton the Corporate Governance which is annexed with this report.
15. Committees of Board
The Company's 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
9) IT Strategy Committee
The details of the Committees their meetings and other disclosures are mentioned inthe corporate governance 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 Responsibility Committee has formulated and recommended to theBoard a Corporate Social Responsibility Policy (CSR Policy) indicating the activities tobe undertaken by the Company which has been approved by the Board. The composition of theCorporate Social Responsibility Committee has been specifically mentioned in the report ofCorporate Governance Section which is annexed with this report.
The objective of PFS's CSR Policy is to consistently pursue the concept of integrateddevelopment of the society in an economically socially and environmentally sustainablemanner 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 compositionand other disclosures are mentioned in the corporate governance report which forms part ofthis report.
The report on CSR activities/initiatives is enclosed at Annexure III and isalso available at website of the Company at http://www.ptcfinancial.com/upload/pdf/corporate_social_responsibility_policy.pdf
17. Vigil mechanism/Whistle Blower Policy
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 &Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("LODR" or "SEBI Listing Regulations") the Companyhas established a mechanism called Whistle Blower Policy' for employees to report tothe management instances of unethical behavior actual or suspected fraud or violation ofthe Company's code of conduct or ethics policy. Whistleblowing' is the confidentialdisclosure by an individual of any concern encountered in the workplace relating to aperceived wrongdoing. The policy has been framed to enforce controls so as to provide asystem of detection reporting prevention and appropriate dealing of issues relating tofraud unethical behavior etc. The policy provides for adequate safeguards againstvictimization of director(s) / employee(s) who avail of the mechanism and also providesfor direct access to the Chairman of the Audit Committee in exceptional cases. During theyear under review no complaint has 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 subsection (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 for the year ended March 31 2019 theapplicable accounting standards had been followed along with proper explanation relatingto 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 endedMarch 31 2019 and of the 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 ratified in the lastAnnual General Meeting of the Company as statutory auditors of the Company for FY201819 by the shareholders and shall hold office upto the conclusion of theforthcoming Annual General Meeting.
The auditors have audited the Accounts of the Company for the year ended 31st March2019. Audited Financial Statements (both standalone and consolidated) comprising BalanceSheet as at 31st March 2019 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year ended and a summary of significant accounting policies & other explanatoryinformation together with Auditor's Report thereon are annexed to this report. TheAuditors' Report does not contain any qualification reservation or adverse mark.
Further the auditors of the Company while performing their duties as such has notfound any fraud which was required to be reported to the Board of Director or CentralGovernment.
M/s Deloitte Haskins & Sells was appointed as Statutory Auditors for the FY200910 for the first time and since then they were reappointed as statutoryauditor till current FY i.e. 201819. As per section 139(2) of the Companies Act2013 company has to rotate their statutory auditors once their auditor served the officeas an auditors for a period of 10 years. M/s. Deloitte Haskins & Sells has beencompleted 10 years as auditor therefore the Board of Directors has recommended theappointment of M/s. MSKA & Associates Chartered Accountants as Statutory Auditors ofthe Company for a period of 5 (five) years w.e.f. FY 201920 to shareholders in theensuing 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 IV. Theobservations set out in Secretarial Audit report and its reply of the same is asunder:
|Observation by Secretarial Auditor ||Reply by the Company |
|During the period under review the Company has complied with the provisions of the Acts Rules Regulations Guidelines Standards etc. mentioned above subject to the following observations. || |
|1. The composition of the Board of the Company was not in compliance as per proviso to Regulation 17 (1) (b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 for the period from 01st April 2018 to 18th September 2018. ||The same was complied on 18th September 2018 on superannuation of Dr. Ashok Haldia (then MD&CEO). It is also to be mentioned that no penalty was imposed by SEBI/ Stock Exchanges in this regard. |
|We further report that the Board of Directors of the Company shall be duly constituted in terms of Regulation 17 (1) (b) of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations 2015 i.e. atleast half of the Board of Directors should comprise of Independent Directors as on 31st March 2019. The Company was also compliant in terms of provisions under Section 149 (4) of the Companies Act 2013 as out of 9 Board of Directors there were 4 Independent Directors on the Board of Company. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. || |
21. Related party transactions
During the financial year 20182019 the Company has not entered into any otherrelated party transactions which attracts the provision of Section 188 of the CompaniesAct 2013 and SEBI Listing Regulations. The details of transactions entered into with therelated parties is given in note no. 40 of the audited accounts of the Company. During theyear the Company had not entered into any contract/ arrangement/ transaction with relatedparties which could be considered material in accordance with the policy of the Company onmateriality of related party transactions. The Policy on Materiality of Related PartyTransactions and Dealing with Related Party Transactions as approved by the Board isavailable on the Company's website at the link:
Further all the transactions are made in the ordinary course of business and on arm'slength 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 V in Form AOC2 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 organizational wise programs that provide focused people attention arecurrently underway. Your Company's thrust is on the development of talent internallythrough job enlargement rotation and development.
Your Company thrust on development of all levels of the employee has helped yourorganization achieve employee's loyalty and attachment to the Company. There is a hugeopportunity for all of us to learn practice and perform. Though the expectation from theemployees are realistic each employee get to work on challenging assignments and achance to learn innovate and perform. Handholding guidance & mentoring has a specialplace for a young team and organization. Sharing of knowledge and learning from theexperience of seniors has helped us grow steadily.
Your Company focus on human resource development is at all levels of organizationincluding nonexecutive and support staff. The human resource development is criticalto implementation of organizational strategy and to make organization humble andresponsive to the customers need. Employees are encouraged to participate and be part ofthe organizational growth and development strategy. Lateral entry at different levelskeeps the organization vibrant.
23. Industrial Relations
Your Company has always maintained healthy cordial and harmonious industrial relationsat all levels. Despite of competition the enthusiastic efforts of the employees haveenabled the Company to grow at a steady pace.
24. Risk Management Policy
PFS has put in place a comprehensive policy framework for management of risks whichincludes the followings:
Risk Management Policy: The Risk Management Framework of PFS encompassescredit risk market risk as well as operational risk management. The Risk ManagementPolicy evolved under the guidance of Risk Management Committee and duly approved by Boardof Directors is refined periodically based on emerging market trends and own experience.The Risk Management Committee is headed by Independent Director.
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.
Interest Rate Policy: Interest rate policy provides for risk basedpricing of the debt financing by the Company. It provides the basis of pricing the debtand the manner in which it can be structured to manage credit risk interest rate risk andliquidity risk while remaining competitive.
Operational Risk Management Policy: The operational risk managementpolicy recognizes the need to understand the operational risks in general and those inspecific activities of the Company. Operational risk management is not understood as aprocess of eliminating such risk but 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.
25. Employees' Stock Option Scheme
The Shareholders' approval was obtained at the Annual General Meeting held on 27thOctober 2008 for introduction of Employee Stock Option Plan at PTC India FinancialServices Limited. All the ESOPs made under the Employees' Stock Option Scheme2008have been surrendered and as on date no claim is outstanding.
26. Declaration given by independent directors
Mrs. Pravin Tripathi Shri Kamlesh Shivji Vikamsey Shri Santosh Balachandran Nayar andShri Harbans Lal Bajaj were the Independent Directors on the Board of your Company as on31st March 2019. In the opinion of the Board and based upon the declaration furnished bythe Independent Directors fulfills the conditions specified in section 149 of theCompanies Act 2013 and the rules made thereunder and Regulation 16(1)(b) of SEBI ListingRegulations. In terms of Regulation 25(8 & 9) of SEBI Listing Regulations they haveconfirmed that they are not aware of any circumstance or situation which exists or may bereasonably anticipated that could impair or impact their ability to discharge theirduties. Based on the declarations received from the Independent Directors the Board ofDirectors has confirmed that they meet the criteria of independence as mentioned underRegulation 16(1)(b) of the SEBI Listing Regulations and that they are independent of themanagement.
27. Company's 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 Committee'srole is to be supported by a policy "Nomination and Remuneration & BoardDiversity"
The Policy of the Company on Nomination and Remuneration & Board Diversity isattached herewith and marked as Annexure VI.
28. Formal Annual 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 SEBI Listing Regulations.
The Company pays performance linked remuneration to its WTDs/MD. It is ensured that theremuneration is determined in a way that there exists a fine balance between fixed andincentive pay. On the basis of Policy for Performance Evaluation of Independent Directorsa process of evaluation is being followed by the Board for its own performance and that ofits Committees and individual Directors.
The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors 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 are viewed the performance of the individual Directorson the basis of the criteria such as the contribution of the individual Director to theBoard and committee meetings like preparedness on the issues to be discussed meaningfuland constructive contribution and inputs in meetings etc. In addition the Chairman wasalso evaluated on the key aspects of his role.
In a separate meeting of Independent Directors performance of NonIndependentDirectors performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the views of Executive Directors and NonExecutiveDirectors.
29. Disclosure under the Sexual Harassment of Women at the work place (PreventionProhibition and Redressal) Act 2013
A Committee has been constituted to look into grievance/complaints of sexual harassmentlodged by employees as per Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. Further no complaints were received during the yearand no complaint is pending on 31st March 2019.
30. 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 an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined by the Audit Committee. The Company has appointed M/s Grant Thornton India LLP asInternal Auditors of the Company. To maintain its objectivity and independence theInternal Auditor reports to the Audit Committee. The Audit Committee has theresponsibility for establishing the audit objectives and determines the nature timing andextent of audit procedures as well as the locations where the work needs to be carriedout.
The Internal Auditor monitors and evaluates the efficacy & adequacy of internalfinancial controls & internal control system in the Company that has been put in placeto mitigate the risks faced by the organization and thereby achieves its businessobjective. Broadly the objectives 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
The internal control and compliance is an ongoing process. Based on the findingsand report of internal auditor process owners undertake corrective action that may berequired in their respective areas for further strengthening the controls and controlenvironment. Significant audit observations and corrective actions thereon are presentedto the Audit Committee. The internal auditors also independently carry out the designevaluation and testing of controls related to requirements of Internal Financial Controls.The evaluation of design effectiveness and testing of controls for various businessactivities processes and sub processes was carried out and found satisfactory.
31. Cost Auditors
Cost Audit is not applicable to the Company.
32. Details of Holding Subsidiaries Associates and Joint Ventures
Your Company continues to be the subsidiary of PTC India Limited (PTC). Further theCompany has two associate companies namely M/s. R.S. India Wind Energy Private Limited andM/s. Varam Bio Energy Private Limited. The statement of performance and financial positionof each of the associate companies is given in Form AOC1 as Annexure VII.
The Policy for determining material subsidiaries as approved may be accessed on theCompany's website following link:
33. Corporate Governance Report
The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by Securities and Exchange Boardof India (SEBI'). A separate report on Corporate Governance along with Certificatefrom M/s. Deloitte Haskins and Sell Statutory Auditors on compliance with the conditionsof Corporate Governance as stipulated under SEBI Listing Regulations is provided as partof this Annual Report.
34. Management Discussion and Analysis
The Management Discussion and Analysis comprising an overview of the financial resultsoperations / performance and the future prospects of the Company form part of this AnnualReport.
35. Business Responsibility Report
Pursuant to the Regulation 34(2)(f) of the SEBI Listing Regulations the BusinessResponsibility Report describing the initiatives taken by the Company from anenvironmental social and governance perspective in the format as specified by the SEBI isgiven as Annexure VIII.
36. Particulars of Employees
A. The information pertaining to the remuneration and other details as required underSection 197 of Companies Act 2013 read with rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are given below: a. The ratio of theremuneration of each director to the median remuneration of the employees of the companyfor the financial year 201819; (Rs in millions)
|Name of Director ||Director's Remuneration ||Median Remuneration of employees ||Ratio |
|Dr. Ashok Haldia* ||9.89 ||19.26 ||5.13 times |
|Dr Pawan Singh ||8.50 ||19.26 ||4.41 times |
|Naveen Kumar# ||6.55 ||19.26 ||3.40 times |
* Has superannuated on 18.09.2018
# Joined PFS on 25.09.2017 during the FY 201718 b. The percentage increasein remuneration of each director Chief Financial Officer Chief Executive OfficerCompany Secretary or Manager if any in the financial year;
|Name ||% age Increase |
|Dr. Ashok Haldia* ||5.66% |
|Dr Pawan Singh ||12.12% |
|Naveen Kumar# ||113.63% |
|Sanjay Rustagi ||10.76% |
|Vishal Goyal ||9.17% |
* Has superannuated on 18.09.2018
# Joined PFS on 25.09.2017 during the FY 201718
c. The median remuneration of the employees has increased to Rs.19.26 lakhs duringFY201819 from Rs.16.27 lakhs during FY 201718.
d. 47 permanent employees are on the rolls of company as at 31st March 2019;
e. The average remuneration increased to Rs 25.41 lakhs in FY 201819 from Rs.20.40 lakhs in FY 201718.
f. The average remuneration of Key Managerial Personnel increased to Rs.67.99 lakhs inFY201819 from Rs. 66.68 lakhs in FY201718. This is due to midyearjoining of Shri Naveen Kumar on 25th September 2017.
g. As per Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 statement of particulars of employees is annexed as AnnexureIX.
B. Particulars of Top 10 employees in terms of remuneration
|Sl. No. ||Name & Designation ||Nature of Employement ||Remuneration Received (amount in Rs) ||Qualification and Experience ||Date of Commencement of Employment in the Company ||Age ||Last Employment ||% of Quantity of shares held in the Company ||If relative of any director or manager name of such director or manager |
|1 ||Dr Ashok Haldia* ||Fixed Term ||9886460 ||M.Com. Ph D CA CS ICWA/ 39 years ||13.08.2008 ||62 yrs 7 months ||The Secretary in The Institute of Chartered Accountants of India ||Nil ||NA |
|2 ||Dr Pawan Singh ||Fixed Term ||8501536 ||MBA Ph D/ 36 years ||01.02.2012 ||57 yrs 6 months ||DirF in PTC India Financial Services Limited ||Nil ||NA |
|3 ||Vijay Singh Bisht ||Regular ||6791278 ||BE & MBA/ 34 years ||01.08.2008 ||56 years 1 month ||DGM in PFC ||Nil ||NA |
|4 ||Naveen Kumar ||Fixed Term ||6546212 ||BSc (Engg); MBA; LLB/ 38 years ||25.09.2017 ||59 years 9 months ||Executive Director (Projects) in Power Finance Corporation Limited ||Nil ||NA |
|5 ||Sitesh Kumar Sinha ||Regular ||6210131 ||B.E & PGDBM/ 21 years ||22.03.2011 ||43 years 3 months ||"Design Engineer in Lahmeyer International (India) Pvt Ltd ||Nil ||NA |
|6 ||Sanjay Rustagi ||Regular ||4552490 ||B.Com (Hons.) CA & CWA/20 years 7 months ||24.06.2016 ||44 yrs 6 months ||AVP in GE Capital Services India ||Nil ||NA |
|7 ||Vishal Goyal ||Regular ||4508878 ||CS LLB & MBA/ 15 years ||01.08.2008 ||38 yrs 8 months ||Co Secy cum Fin Manager in International PrintOPac Ltd ||Nil ||NA |
|8 ||Devesh Singh ||Regular ||4277516 ||B.Com Dip in Business Finance & MBA/ 14 years ||03.10.2011 ||40 years 2 months ||Manager in PTC India Ltd. ||Nil ||NA |
|9 ||Shray Shikhar ||Regular ||3712297 ||BE & MBA/ 14 years ||15.10.2015 ||38 years 11 months ||Senior Associate Sembcorp Green Infra Ltd ||Nil ||NA |
|10 ||Rohit Gupta ||Regular ||3524436 ||B.Com & MBA/ 12 years ||01.04.2010 ||34 years 4 months ||Junior Manager PTC India Ltd ||Nil ||NA |
* Superannuated on 18.09.2018
C. No employees who was in receipt of remuneration of not less than one crore andtwo lakh rupees if employed throughout the year or eight lakh and fifty thousand per monthin case employed for part of the year.
D. It is affirmed that:
I. The remuneration is as per the remuneration policy of the Company; and
II. There was no employee in the Company who was in receipt of the remuneration morethan that of its managing director/ whole time director and holds by himself or thoughhis/ her relatives not less than two percent of equity shares.
37. Details of conservation of energy technology absorption
Since PFS is engaged in business of investment and lending activities particularsrelating to conservation of energy and technology absorption are not applicable to it.
38. Foreign Exchange earnings & outgo
The Company has incurred expenditure of Rs. 277.09 million (previous year Rs. 267.18million) in foreign exchange during the financial year ended 31st March 2019.
39. Significant and material orders
There were no significant or material orders passed by Regulators or Courts orTribunals which impacts the going concern status and Company's future operations.
40. Transfer of Amounts to Investor Education and Protection Fund (IEPF)
Pursuant to the provisions of the Investor Education and Protection Fund (AccountingAudit Transfer and Refund) Rules 2016 the Company has already filed the necessary formand uploaded the details of unpaid and unclaimed amounts lying with the Company as on thedate of last AGM (i.e. 20th September 2018) 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; and
Neither Managing Director nor the Whole time Directors of the Company receiveany remuneration or commission from any of other Company.
No change in the nature of the business of the Company happened during thefinancial year under review.
42. Compliance with Applicable Secretarial Standards
During the period under review the Company has complied with the provisions of theSS1(Secretarial Standard on meeting of the Board of Directors) & SS2(Secretarial Standard on General Meeting) issued by the Institute of Company Secretariesof India and approved by the Central Government under Section 118 of the Companies Act2013.
The Board of Directors acknowledge with deep appreciation the cooperation received fromits Directors Ministry of Power (MoP) Ministry of Finance (MoF) Reserve Bank of India(RBI) Securities and Exchange Board of India (SEBI) National Stock Exchange of IndiaLimited (NSE) BSE Limited (BSE) PTC India Limited (PTC) and other stakeholdersInternational Finance Corporation (IFC) DEG FMO and OeEB various Banks/FIs Consortiumpartners and Officials of the Company.
The Board also acknowledge with deep appreciation the cooperation received from itsDirectors who retire as Director during the year.
The Board also conveys its gratitude to the shareholders credit rating agencies forthe continued trust and confidence reposed by them in the Company. Your Directors wouldalso like to convey their gratitude to the clients and customers for their unwaveringtrust and support.
The Company is also thankful to the Statutory Auditor Internal Auditor and SecretarialAuditor for their constructive suggestions and cooperation. We would also like toplace on record our appreciation for the untiring efforts and contributions made by theemployees to ensure all round performance of your Company.
| ||For and on behalf of the Board |
| ||PTC India Financial Services Limited |
| ||Sd/ |
| ||Deepak Amitabh |
|Date: 1st August 2019 ||Chairman |
|Place: New Delhi ||DIN: 01061535 |