On behalf of the Board of Directors it is our pleasure to present the 11thAnnual Report together with the Audited Financial Statements of PTC India FinancialServices Limited ("the Company" or "PFS") for the financial year endedMarch 31 2017.
1. Financial Performance
The summarized standalone results of your Company are given in the table below.
| || ||(Rs in millions) |
| ||FY2016-17 ||FY2015-16 |
|Total Income ||13518.81 ||11869.29 |
|Profit/(loss) before Interest ||11767.53 ||10658.47 |
|Depreciation & Tax (EBITDA) || || |
|Finance Charges ||6446.93 ||5301.08 |
|Depreciation and amortization ||33.78 ||42.96 |
|Provision for Income Tax (including for earlier years) ||1833.49 ||1403.46 |
|Net Profit/(Loss) After Tax ||3453.33 ||3910.97 |
|Profit/(Loss) brought forward from previous year ||- ||- |
|Amount transferred consequent to Scheme of Merger ||- ||- |
|Profit/(Loss) carried to Balance Sheet ||3453.33 ||3910.97 |
*previous year figures have been regrouped/rearranged wherever necessary. Theoperational and financial performance significantly improved during the year and wasrobust. The interest income for the FY 2016-17 increased by 21% to Rs 11136.92 million ascompared to Rs 9214.08 million during 2015-16. The composition of total revenue witnesseda change during the year. The Company earned an amount of Rs 1426.07 million during theyear by way of profit on sale of investments as compared to Rs 2069.28 million duringFY2015-16. The profit from sale of investments accounted for about 11% of the total incomeas compared to 17% during the previous year. The share of interest income in the totalincome increased to 82% during FY2016-17 as compared to 78% during FY2015-16.
The operational costs also increased during the year. The finance charges for FY2016-17increased by about 22% to Rs 6446.93 million as compared to Rs 5301.08 million during2015-16. The finance charges for FY2016-17 include amortization of foreign currencytranslation aggregating to Rs 144.08 million compared to Rs 228.72 million during 2015-16.The operational and financial parameters remained healthy during the year. The overallyield on loan assets for FY2016-17 stood at 12.10% whereas cost of borrowed funds reducedto 8.79% during FY2016-17 compared to 9.05% in FY2015-16. The return on net worth is about18.69% during FY2016-17.
The profit before tax (PBT) for FY2016-17 stood at Rs 5286.81 million compared to Rs5314.43 million during 2015-16. It may be mentioned that during FY2016-17 the companyearned a profit of Rs 1426.07 million by way of profit on sale of investments as comparedto Rs 2069.28 million during FY2015-16. The profit after tax (PAT) for FY2016-17 stood atRs 3453.33 million.
2. Summary of Operations and State of Company's Affairs
The debt assistance sanctioned to various projects during 2016-17 increased by 58% andaggregated to Rs 102970 million compared to Rs 65283 million in 2015-16. Thedisbursements also maintained an upward trend during FY2016-17 and fund baseddisbursements increased by about 18%. However the disbursements pattern saw a shiftduring the year as a result of increased action in the solar power based projects. Theseprojects are opting for non-fund based disbursements in form of letter of comfort and areable to get suppliers credit for the imports made. The fund based disbursements increasedby 18% to Rs 41787 million during 2016-2017 compared to Rs 35550 million during 2015-16and the Non fund based disbursements aggregated to Rs 14590 million during FY2016-17. Thegross portfolio stood at Rs 123420 million as at 31st March 2017 as compared to Rs 89070million as at the end of FY2015-16. The fund based portfolio stood at Rs 106100 millionas at 31st March 2017 as compared to Rs 86340 million as at 31st March 2016 and the nonfund based portfolio stood at Rs 17320 million as at 31st March 2017 as against Rs 2730million as at 31st March 2016. The outstanding equity investments by the Companyaggregated to another Rs 2086 million as at the year end. The cumulative aggregate debtassistance sanctioned by the Company as at 31st March 2017 aggregated to Rs 205100million. The composition of the debt sanctioned by the Company is also witnessing a changewith renewable projects comprising about 63% of the aggregate debt sanctioned by theCompany as at 31st March 2017. The renewable projects accounted for about 78% of the totaldebt sanctioned during FY2016-17. The Company continues to explore and look for attractiveopportunities in other areas for further diversification of its portfolio and has forayedinto power transmission projects energy efficiency projects annuity based road projectin addition to private railway sidings and development & operation of coal mines etc.These constitute about 21% of the total sanction made during FY2016-17. The financialassistance sanctioned by PFS would help in capacity addition of close to 18000 MW. PFS isconstantly working with new as well as existing developers and is focused towardsdiversifying its portfolio. As at 31st March 2017 the renewable portfolio constitutes thehighest proportion in the outstanding loan book at around 53% thermal projects constituteabout 23%.
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 is also faced with challenges in respect of such projects. As at 31st March 2017 thenon-performing loans portfolio stood at Rs 5847 million and projects having aggregateloan outstanding of Rs 8519 million faced delays in commencement of commercial operationsand have been classified as Standard Restructured. The Company continues to regularlymonitor the progress and operations of the assisted projects through its comprehensiveproject monitoring mechanism.
3. Industry Scenario
India's power sector continues to be a critical enabler for economic growth andwelfare. It is one of the most diversified power sector in the world and the sources ofpower generation range from conventional sources such as coal lignite natural gas oilhydro and nuclear power to viable non-conventional sources such as wind solar andagricultural domestic waste. Electricity demand in the country has increased rapidly andis expected to rise further in the years to come. The sector is undergoing a significantchange that is redefining the industry outlook. Sustained economic growth continues todrive electricity demand in India. The Government of India's focus on attainingPower for all' has accelerated capacity addition in the country. At the same timethe competitive intensity is increasing at both the market and supply sides The Governmentof India has identified power sector as a key sector of focus so as to promote sustainedindustrial growth. The sector has tremendous investment potential thereby providingimmense opportunities in power generation distribution transmission and equipment.India has set an ambitious plan to add 175 GW of renewable energy generation capacity by2022 and is being counted globally as a country leading investments in renewable energy.
The Indian economy is under a transformational change led by the Union Government. Thepower sector has always been the lifeline of the economy and is one of the prime driversof economic growth and social development. The development of power sector has been givendue importance in the national planning and resource allocation process. The privateparticipation in the sector is continuously increasing thereby indicating confidence andsupport. The sector us receiving attention at the topmost level and and as a result ofpersistent efforts Moody's has upgraded the outlook for India's power sector to stablefrom negative. The total installed capacity in the country crossed the 325 GW mark as at31st March 2017. The renewable power sector saw record capacity additionsduring FY2017. The total generation capacity addition in respect of renewable projectsaggregated to about 11 GW during FY2017 surpassing the capacity addition in thermalsector. The renewable capacity is poised to see further capacity additions in line withthe Government's vision of installed capacity of 175GW by 2022. In addition to renewablesector other areas such as power transmission roads and highways ports etc. are alsowitnessing action. Infrastructure sector is the key driver for the economy and possessesthe potential for propelling overall development of the country. The sector continues toenjoy focus from Government both in terms of policy related initiatives and development ofinfrastructure in the country. New projects are being undertaken and government is poisedto ensure all round development of the infrastructure sector of the country.
PFS focuses on attractive opportunities across the infrastructure sector especially therenewable energy projects. The aggregate debt sanctioned by the Company has crossed Rs20000 crore mark and the portfolio has crossed Rs 12000 crore mark as at 31st March2017. The power sector holds tremendous investment potential and requires huge investment.PFS is devoted to meet the challenges to take advantages of the potential opportunities.The Company is is focused on attractive opportunities across the infrastructure sector andconstantly eyes opportunities in the sector. The Company expects the growth momentum tocontinue. The debt commitments and disbursements have been robust during the year therebymaintaining the increasing trend. The trend of non-fund based disbursements has beenincreasingly witnessed during the year as solar projects are getting suppliers' credit forthe imports and are in turn opting for letter of comfort facility during such creditperiod. The Company continues to explore opportunities in other related infrastructure.PFS believes that the development activities and the interest in the renewable area offersgood potential and the Company continues to evaluate business proposals for these projectsin line with the developments taking place in the sector and the initiatives undertaken atthe government level.
The power and infrastructure sector is witnessing stress and several projects in thecountry (both operational and under construction) are facing challenges. The Company iscontinuously engaged in resolution of such loans and is working proactively with theconsortium members. Regular lenders' meetings are conducted detailed feedback obtainedfrom lenders' independent engineers and financial advisors to see that project developmentactivities may be continued unhindered. Discussions are held with promoters' and otherstakeholders to work out a financially viable solution. The Company also engagesconsultants / professional agencies for working out effective solution / resolution forsuch cases. 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 aggregated to Rs 23918.88 million as at 31st March2017 and the total Capital Funds aggregated to Rs 24879.95 million as at that date. Thepercentage of aggregate risk weighted assets on balance sheet and risk adjusted value ofoff balance sheet items to net owned funds is 24.09% as at 31st March 2017. During theyear Company raised a sum of Rs 3087.70 million by way of Preferential Allotment ofequity shares to PTC India Limited the Holding Company. EPS of the Company for the yearended 31.03.2017 stands at Rs 5.86 per share in comparison to Rs 6.96 per share for theyear ended 31.03.2016. It may be noted that during the year the no. of shares and thepaid up share capital of the Company increased and the Company earned an amount of Rs1426.07 million by way of profit on sale of investments as compared to Rs 2069.28million during FY2015-16 which had a bearing on the earnings per share for the year.
Out of the profits earned during the financial year 2016-17 the Company hastransferred an amount of Rs 690.67 million to Statutory Reserve in accordance with therequirements of Section 45-IC of the Reserve Bank of India Act 1934. During 2016-17 theCompany has also appropriated an amount of Rs 708.98 million to the reserve created underSection 36(i) (viii) of the Income Tax Act 1961 in order to achieve tax efficiencies.
Based on Company's performance the Board of Directors are pleased to recommend foryour consideration and approval a dividend at the rate of 15% (which is higher by 25%from the last year) i.e. Rs 1.50/- per equity share of Rs 10/- for the FY 2016-2017. Thedividend on equity shares if approved by the members at ensuing Annual General Meetingwould involve the cash outflow of Rs 1159.56 million including dividend distribution taxamounting to Rs 196.13 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 2017 stood at 24.09% compared to 21.77% ason 31st March 2016. 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 statements relates (i.e. March 31 2017) 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 the Company has made the preferential allotment of80200000 equity shares to PTC India Limited (Promoter Company) on a price of Rs 38.50/- per share (including security premium of Rs 28.50/- per share).
The paid up share capital of the Company as at 31st March 2017 aggregates toRs 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 capital of the Company as at 31stMarch 2017. The equity shares of the Company are listed on the National Stock Exchange ofIndia Limited (NSE) and BSE Limited (BSE).
13. Extract of Annual Return
As provided under section 92(3) of the Companies Act 2013 (the Act') and rule12(1) of the Companies (Management and Administration) Rules 2014 extract of annualreturn is given in Annexure I in the prescribed Form MGT-9 which forms partof this report.
14. Directors and Key Managerial Personnel
In accordance with provisions of the Companies Act 2013 and Articles of Association ofthe Company Dr. Ashok Hdalia MD & CEO of the Company shall retire by rotation at theensuing Annual General Meeting and being eligible has offered himself for re-appointment.
Details of changes in the composition of Board during the period under review has beenspecifically mentioned in the report on the Corporate Governance which is annexed withthis report.
15. 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 Policy-PFS.pdf
16. Details of Board meetings
Twelve Board Meetings were held during the financial year ended on 31st March 2017 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 2016 ||9 |
|2 ||8th July 2016 ||10 |
|3 ||12th August 2016 ||9 |
|4 ||26th September 2016 ||9 |
|5 ||30th September 2016 ||9 |
|6 ||19th October 2016 ||9 |
|7 ||8th November 2016 ||10 |
|8 ||27th December 2016 ||7 |
|9 ||30th January 2017 ||8 |
|10 ||13th February 2017 ||6 |
|11 ||16th March 2017 ||8 |
|12 ||31st March 2017 ||8 |
Further the attendance of each director is more specifically mentioned in the reporton the Corporate Governance which is annexed with this report.
17. 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
The details of the Committees their meetings and other disclosures are mentioned inthe corporate governance report which forms part of this report.
18. 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 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 is alsoavailable at website of the Company at http://www.ptcfinancial.com/upload/pdf/corporate_social_responsibility_policy.pdf
19. 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 Blower Policy'for employees to report to the management instances of unethical behavior actual orsuspected fraud or violation of the Company's code of conduct or ethics policy.Whistleblowing' is the confidential disclosure by an individual of any concernencountered in the workplace relating to a perceived wrongdoing. The policy has beenframed to enforce controls so as to provide a system of detection reporting preventionand appropriate dealing of issues relating to fraud unethical behavior etc. The policyprovides for adequate safeguards against victimization of director(s) / employee(s) whoavail of the mechanism and also provides for direct access to the Chairman of the AuditCommittee in exceptional cases. During the year under review no complaint has beenreceived.
The Whistle Blower policy is available at http://www.ptcfinancial.com/upload/pdf/whistle_blower_policy.pdf
20. 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.
(e) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
21. 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 FY 2016-17by the shareholders and shall hold office upto the conclusion of the forthcoming AnnualGeneral Meeting.
The Auditors have audited the Accounts of the Company for the year ended 31st March2017. Audited Financial Statements (both standalone and consolidated) comprising BalanceSheet as at 31st March 2017 the Statement of Profit and Loss and the cash flow Statementalong with 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.
The Board of Directors has recommended the ratification of appointment of M/s. DeloitteHaskins & Sells Chartered Accountants as statutory auditors of the Company for FY2017-18 to shareholders in the ensuing annual general meeting.
22. 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 as under:-
|Observation by Secretarial Auditor ||Reply by the Company |
|"We further report that the Board of Directors of the Company is not duly constituted in terms of Regulation 17 (1) (b) of the Securities Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations 2015 atleast half of the Board of Directors should comprise of Independent Directors. ||PFS has initiated the process and same shall be complied in due course. |
|However the Company was compliant in terms of provisions under Section 149 (4) of the Companies Act 2013 as out of 8 Board of Directors there were 3 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." || |
23. Related party transactions
During the financial year 2016-2017 the Company has not entered into any other relatedparty transactions which attracts the provision of Section 188 of the Companies Act 2013and Securities and Exchange Board of India (Listing obligations and DisclosuresRequirements) Regulations 2015. The details of transactions entered into with the RelatedParties is given in schedule no. 29 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:http://ptcfinancial.com/statutory_policies/20150629_Policy_materiality_of_Related_Party_Transactions.pdf
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 AOC-2 and the same forms part of this report.
24. 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 programs that provide focused people attention arecurrently underway. Your Company's thrust is on the development of talent internallythrough job enlargement rotation and development.
25. 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.
26. 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 for credit risk management as well asoperational risk management. The framework for Credit risk management provides foridentification and assessment of credit risk assessment and management of portfoliocredit risk and risk monitoring and control. The issues relating to the establishment ofexposure limits for various categories for example based on geographical regions fuelspecific industry and rating are also covered. It also deals with rating models aiming athigh quality consistency and uniformity in the appraisal of proposals. The framework foroperational risk management recognizes the need to understand the operational risks ingeneral and those in specific activities of the Company. Operational risk management isunderstood as a systematic approach to manage such risk. It seeks to standardize theprocess of identifying new risks and designing appropriate controls for these risksminimize losses and customer dissatisfaction due to possible failure in processes.
Asset Liability Management Policy :- The objectives of Asset Liability ManagementPolicy are to align market risk management with overall strategic objectives articulatecurrent interest rate view and determine pricing mix and maturity profile of assets andliabilities. The asset liability management policy involves preparation and analysis ofliquidity gap reports and ensuring preventive and corrective measures. It also addressesthe interest rate risk by providing for duration gap analysis and control by providinglimits to the gaps.
Foreign Exchange Risk Management Policy: - The policy covers the management of foreignexchange risk related to existing and future foreign currency loans or any other foreignexchange risks derived from borrowing and lending. The objective of the policy is to serveas a guideline for transactions to be undertaken for hedging of foreign exchange relatedrisks. It also provides guiding parameters within which the Asset Liability ManagementCommittee can take decisions for managing the above mentioned risks.
Interest Rate Policy: - Interest rate policy provides for risk based pricing of thedebt financing by the Company. It provides the basis of pricing the debt and the manner inwhich it can be structured to manage credit risk interest rate risk and liquidity riskwhile remaining competitive.
Policy for Investment of Surplus Funds: - The policy of investment of surplus fundsi.e. treasury policy provides the framework for managing investment of surplus funds.Realizing that the purpose of mobilization of resources in the Company is to financeequity as well as loans to power sector projects the prime focus is to deploy surplusfunds with a view to ensure that the capital is not eroded and that surplus funds earnoptimal returns.
Operational Risk Management Policy: - The operational risk management policy recognizesthe need to understand the operational risks in general and those in specific activitiesof the Company. Operational risk management is not understood as a process of eliminatingsuch risk but as a systematic approach to manage such risk. It seeks to standardize theprocess of identifying new risks and designing appropriate controls for these risksminimize losses and customer dissatisfaction due to possible failure in processes.
27. Employees' Stock Option Scheme
Shareholders' approval was obtained at the Annual General Meeting held on 27th October2008 for introduction of Employee Stock Option Plan at PTC India Financial Services Ltd.All the ESOPs made under the Employees' Stock Option Scheme-2008 have been surrenderedand as on date no claim is outstanding.
28. Declaration given by independent directors
Mr. Ved Kumar Jain Mrs. Pravin Tripathi and Mr. Harbans Lal Bajaj are IndependentDirectors on the Board of your Company as on date of this report. In the opinion of theBoard and based upon the declaration furnished by the said Independent Directors theyfulfill the conditions specified in section 149 of the Companies Act 2013 and the Rulesmade thereunder Regulation 25 of Securities and Exchange Board of India (Listingobligations and Disclosures Requirements) Regulations 2015 about their status asIndependent Directors of the Company.
29. 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 for nomination of Directors and Senior ManagementPersonnel including Key Managerial Personnel as also for remuneration of Directors KeyManagerial Personnel (KMP) Senior Management Personnel and other Employees. Further apolicy on Board Diversity is also to be adopted. The Policy of the Company on Nominationand Remuneration & Board Diversity is attached herewith and marked as Annexure VI.
30. 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 Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015. TheCompany 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 evaluation process and relatedtools are reviewed by the "Nomination & Remuneration Committee" on needbasis and the Committee may periodically seek independent external advice in relation tothe process. The Committee may amend the Policy if required to ascertain itsappropriateness as per the needs of the Company. The Policy may be amended by passing aresolution at a meeting of the Nomination & Remuneration Committee.
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 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.
31. 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 2017.
32. 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 India LLP as Internal Auditors ofthe Company. To maintain its objectivity and independence the Internal Auditor reports tothe Audit Committee. The Audit Committee has the responsibility for establishing the auditobjectives and determines the nature timing and extent of audit procedures as well as thelocations 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 that has been put in placeto mitigate the risks faced by the organization and thereby achieve 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 Theinternal control and compliance is on ongoing process. Based on the findings and report ofinternal auditor process owners undertake corrective action that may be required in theirrespective areas for further strengthening the controls and control environment.Significant audit observations and corrective actions thereon are presented to the AuditCommittee. The internal auditors also independently carry out the design evaluation andtesting of controls related to requirements of Internal Financial Controls. The evaluationof design effectiveness and testing of controls for various business activities processesand sub processes was carried out and found satisfactory.
33. Cost Auditors
Cost Audit is not applicable to the Company.
34. 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 company's associate companies isgiven in Form AOC-1 as Annexure VII.
The Policy for determining material subsidiaries as approved may be accessed on theCompany's website following link:link:http://www.ptcfinancial.com/upload/pdf/20150629_Policy_on_determining_Material_Subsidiaries.pdf
35. 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.
36. Business Responsibility Report
Pursuant to the Regulation 34(2)(f) of the 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.
37. 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 the remuneration of each director to the median remuneration of theemployees of the company for the financial year 2016-17; (Rs in Lacs)
|Name of Director ||Director's Remuneration ||Median Remuneration of employees ||Ratio |
|Dr. Ashok Haldia ||97.10 ||17.16 ||5.66 times |
|Dr Pawan Singh ||75.65 ||17.16 ||4.41 times |
b. the percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year;
|Name ||%age Increase |
|Dr. Ashok Haldia* ||11.00% |
|Dr Pawan Singh# ||11.00% |
|Vishal Goyal ||10.70% |
* excluding the impact of leave encashment made during FY 2016-17 in respect ofaccumulated leave to the credit # excluding the impact of arrear of salary paid during FY2015-16 c. The median remuneration of the employees has increased to Rs 17.16 lakhs duringFY 2016-17 from Rs 14.08 lakhs during FY 2015-16. d. 45 permanent employees are on therolls of Company; e. The average percentile increase in the salary of employees other thanthe managerial personnel is from Rs 18.18 lakhs in FY 2015-16 to Rs 19.44 lakhs in FY2016-17 resulting in an increase of 6.93%. Whereas the average percentile increase inthe managerial remuneration is from Rs 77.23 lakhs in FY 2015-16 to Rs 86.38 lakhs in FY2016-17 resulting in increase of 11.85% (excluding remuneration paid to Sh. Rajender MohanMalla during FY 2015-16 for 1.5 months upto his superannuation with effect from 15thMay 2015.
As per Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 statement of particulars of employees is Annexed as Annexure IX.
B. Particulars of Top 10 employees in terms of remuneration
|Sl. No. ||Name & Designation ||Nature of Employement ||Remuneration Received ||Qualification and Experience ||Date of Commencement of Employment in the Compamny ||Age Last Employment ||Number of shares held in the Company ||If relative of any director or manager name of such director or manager |
| || || || || || || || || |
| || || ||(amount in Rs ) || || || || || |
| || || || || || || || || |
| || || || || || || || || |
|1 ||Dr. Ashok Haldia ||Fixed Term ||9710479 ||M.Com. Ph D CA CS ICWA/ 37 years ||13.08.2008 ||60 yrs 6 The Secretary in The Institute months of Chartered Accountants of India ||Nil ||NA |
| || || || || || || || || |
| || || || || || || || || |
|2 ||Dr. Pawan Singh ||Fixed Term ||7565167 ||MBA Ph D/ 34 years ||01.02.2012 ||55 yrs 5 Dir-F in Indraprastha Power months Generation Co Ltd Pragati Power Corpn Ltd ||Nil ||NA |
| || || || || || || || || |
| || || || || || || || || |
|3 ||Vijay Singh Bisht ||Regular ||5844586 ||BE & MBA/ 30 years ||01.08.2008 ||54 years DGM in PFC ||100 ||NA |
| || || || || || || || || |
|4 ||Sitesh Kumar Sinha ||Regular ||5489024 ||B.E & PGDBM/ 19 years ||22.03.2011 ||41 years Design Engineer in Lahmeyer 3 months International (India) Pvt Ltd ||Nil ||NA |
| || || || || || || || || |
|5 ||Gaurav Kaushik ||Regular ||4529467 ||B.Com & CA /13 years ||01.06.2011 ||37 years Manager in Lovelock & Lewes Chartered Accountants ||Nil ||NA |
| || || || || || || || || |
|6 ||Vishal Goyal ||Regular ||3723444 ||CS LLB & MBA/ 13 years ||25.02.2008 ||36 yrs 8 Company Secretary cum Fin. months Manager in International Print -O- Pac Ltd. ||Nil ||NA |
| || || || || || || || || |
| || || || || || || || || |
|7 ||Rakesh Kalsi ||Regular ||3581091 ||BE & MBA/ 11 years ||16.08.2010 ||36 years Dy Manager in Feedback 4 months Ventures Pvt. Ltd. ||Nil ||NA |
| || || || || || || || || |
|8 ||Devesh Singh ||Regular ||3499480 ||B.Com & MBA/ 12 years ||03.10.2011 ||38 years Manager in PTC India ||Nil ||NA |
| || || || || || || || || |
|9 ||Saurabh Kaura ||Regular ||3414142 ||B.E & PGDISEM/ 8 years 8 months ||27.06.2011 ||32 years Manager in InRhythm Energy 5 months Solutions ||300 ||NA |
| || || || || || || || || |
|10 ||Shray Kumar Shikhar ||Regular ||3071627 ||BE & PGDBM/ 14 years 8 months ||15.10.2015 ||37 years Manager in Sembcorp Green Infra ||Nil ||NA |
| || || || || || || || || |
C. No employees who was in receipt of remuneration of not less than one crore and twolakh rupees if employed throughout the year or eight lakh and fifty thousand per month incase 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.
38. 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.
39. Foreign Exchange earnings & outgo
The Company has incurred expenditure of Rs 217.93 million (previous year Rs 215.34million) in foreign exchange during the financial year ended 31st March 2017.This includes interest on external commercial borrowings amounting to Rs 211.12 million(previous year Rs 148.07 million).
40. 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. .
41. 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.28th September 2016) with the Ministry of CorporateAffairs.
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 ofequity shares with differential rights as to dividend voting or otherwise; Issueof shares (including sweat equity shares) to employees of the Company under any scheme;and 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 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 ConsortiumPartners and Officials of the Company.
| ||For and on behalf of the Board |
| ||PTC India Financial Services Limited |
| ||Sd/- |
| ||Deepak Amitabh |
| ||Chairman |
| ||DIN: 01061535 |
|Date : 9th August 2017 || |
|Place : New Delhi || |