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Directors Report of PTC India Financial Services Ltd.

Mar 31, 2017

Dear Shareholders,

The behalf of the Board of Directors, it is our pleasure to present the 11th Annual Report together with the Audited Financial Statements of PTC India Financial Services Limited (“the Company” or “PFS”) for the financial year ended March 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

13,518.81

11,869.29

Profit/(loss) before Interest, Depreciation & Tax (EBITDA)

11,767.53

10,658.47

Finance Charges

6,446.93

5,301.08

Depreciation and amortization

33.78

42.96

Provision for Income Tax (including for earlier years)

1,833.49

1,403.46

Net Profit/(Loss) After Tax

3,453.33

3,910.97

Profit/(Loss) brought forward from previous year

-

-

Amount transferred consequent to Scheme of Merger

-

-

Profit/(Loss) carried to Balance Sheet

3,453.33

3,910.97

*previous year figures have been regrouped/rearranged wherever necessary.

The operational and financial performance significantly improved during the year and was robust. The interest income for the FY 2016-17 increased by 21% to Rs.11,136.92 million as compared to Rs.9,214.08 million during 2015-16. The composition of total revenue witnessed a change during the year. The Company earned an amount of Rs.1,426.07 million during the year by way of profit on sale of investments as compared to Rs.2,069.28 million during FY2015-16. The profit from sale of investments accounted for about 11% of the total income as compared to 17% during the previous year. The share of interest income in the total income 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 FY2016-17 increased by about 22% to Rs.6,446.93 million as compared to Rs.5,301.08 million during 2015-16. The finance charges for FY2016-17 include amortization of foreign currency translation 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 overall yield on loan assets for FY2016-17 stood at 12.10%, whereas cost of borrowed funds reduced to 8.79% during FY2016-17 compared to 9.05% in FY2015-16. The return on net worth is about 18.69% during FY2016-17.

The profit before tax (PBT) for FY2016-17 stood at Rs.5,286.81 million compared to Rs.5,314.43 million during 2015-16. It may be mentioned that during FY2016-17, the company earned a profit of Rs.1,426.07 million by way of profit on sale of investments as compared to Rs.2,069.28 million during FY2015-16. The profit after tax (PAT) for FY2016-17 stood at Rs.3,453.33 million.

2. Summary of Operations and State of Company’s Affairs

The debt assistance sanctioned to various projects during 2016-17 increased by 58% and aggregated to Rs.102,970 million compared to Rs.65,283 million in 2015-16. The disbursements also maintained an upward trend during FY2016-17 and fund based disbursements increased by about 18%. However, the disbursements pattern saw a shift during the year as a result of increased action in the solar power based projects. These projects are opting for non-fund based disbursements in form of letter of comfort and are able to get suppliers credit for the imports made. The fund based disbursements increased by 18% to Rs.41,787 million during 2016-2017 compared to Rs.35,550 million during 2015-16 and the Non fund based disbursements aggregated to Rs.14,590 million during FY2016-17. The gross portfolio stood at Rs.123,420 million as at 31st March 2017 as compared to Rs.89,070 million as at the end of FY2015-16. The fund based portfolio stood at Rs.106,100 million as at 31st March 2017 as compared to Rs.86,340 million as at 31st March 2016 and the non fund based portfolio stood at Rs.17,320 million as at 31st March 2017 as against Rs.2,730 million as at 31st March 2016. The outstanding equity investments by the Company aggregated to another Rs.2,086 million as at the year end. The cumulative aggregate debt assistance sanctioned by the Company as at 31st March 2017 aggregated to Rs.205,100 million. The composition of the debt sanctioned by the Company is also witnessing a change with renewable projects comprising about 63% of the aggregate debt sanctioned by the Company as at 31st March 2017. The renewable projects accounted for about 78% of the total debt sanctioned during FY2016-17. The Company continues to explore and look for attractive opportunities in other areas for further diversification of its portfolio and has forayed into power transmission projects, energy efficiency projects, annuity based road project in 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 financial assistance sanctioned by PFS would help in capacity addition of close to 18,000 MW. PFS is constantly working with new as well as existing developers and is focused towards diversifying its portfolio. As at 31st March 2017, the renewable portfolio constitutes the highest proportion in the outstanding loan book at around 53%, thermal projects constitute about 23%.

The power sector is witnessing stress particularly in case of thermal projects. Several thermal projects in the country (both operational and under construction) are facing challenges related to fuel price and availability, power tariff, time and cost overruns alongwith 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, the non-performing loans portfolio stood at Rs.5,847 million and projects having aggregate loan outstanding of Rs.8,519 million faced delays in commencement of commercial operations and have been classified as Standard Restructured. The Company continues to regularly monitor the progress and operations of the assisted projects through its comprehensive project monitoring mechanism.

3. Industry Scenario

India’s power sector continues to be a critical enabler for economic growth and welfare. It is one of the most diversified power sector in the world and the sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and agricultural domestic waste. Electricity demand in the country has increased rapidly and is expected to rise further in the years to come. The sector is undergoing a significant change that is redefining the industry outlook. Sustained economic growth continues to drive electricity demand in India. The Government of India’s focus on attaining ‘Power for all’ has accelerated capacity addition in the country. At the same time, the competitive intensity is increasing at both the market and supply sides

The Government of India has identified power sector as a key sector of focus so as to promote sustained industrial growth. The sector has tremendous investment potential, thereby providing immense opportunities in power generation, distribution, transmission, and equipment. India has set an ambitious plan to add 175 GW of renewable energy generation capacity by 2022 and is being counted globally as a country leading investments in renewable energy.

4. Outlook

The Indian economy is under a transformational change led by the Union Government. The power sector has always been the lifeline of the economy and is one of the prime drivers of economic growth and social development. The development of power sector has been given due importance in the national planning and resource allocation process. The private participation in the sector is continuously increasing, thereby indicating confidence and support. The sector us receiving attention at the topmost level and and as a result of persistent efforts, Moody’s has upgraded the outlook for India’s power sector to stable from negative. The total installed capacity in the country crossed the 325 GW mark as at 31st March 2017. The renewable power sector saw record capacity additions during FY2017. The total generation capacity addition in respect of renewable projects aggregated to about 11 GW during FY2017 surpassing the capacity addition in thermal sector. The renewable capacity is poised to see further capacity additions in line with the Government’s vision of installed capacity of 175GW by 2022. In addition to renewable sector, other areas such as power transmission, roads and highways, ports etc. are also witnessing action. Infrastructure sector is the key driver for the economy and possesses the potential for propelling overall development of the country. The sector continues to enjoy focus from Government both in terms of policy related initiatives and development of infrastructure in the country. New projects are being undertaken and government is poised to ensure all round development of the infrastructure sector of the country.

PFS focuses on attractive opportunities across the infrastructure sector especially the renewable energy projects. The aggregate debt sanctioned by the Company has crossed Rs.20,000 crore mark and the portfolio has crossed Rs.12,000 crore mark as at 31st March 2017. 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 and constantly eyes opportunities in the sector. The Company expects the growth momentum to continue. The debt commitments and disbursements have been robust during the year, thereby maintaining the increasing trend. The trend of non-fund based disbursements has been increasingly witnessed during the year as solar projects are getting suppliers’ credit for the imports and are in turn opting for letter of comfort facility during such credit period. The Company continues to explore opportunities in other related infrastructure.

PFS believes that the development activities and the interest in the renewable area offers good potential and the Company continues to evaluate business proposals for these projects in line with the developments taking place in the sector and the initiatives undertaken at the government level.

The power and infrastructure sector is witnessing stress and several projects in the country (both operational and under construction) are facing challenges. The Company is continuously engaged in resolution of such loans and is working proactively with the consortium members. Regular lenders’ meetings are conducted, detailed feedback obtained from lenders’ independent engineers and financial advisors to see that project development activities may be continued unhindered. Discussions are held with promoters’ and other stakeholders to work out a financially viable solution. The Company also engages consultants / professional agencies for working out effective solution / resolution for such 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.23,918.88 million as at 31st March 2017 and the total Capital Funds aggregated to Rs.24,879.95 million as at that date. The percentage of aggregate risk weighted assets on balance sheet and risk adjusted value of off balance sheet items to net owned funds is 24.09% as at 31st March 2017. During the year, Company raised a sum of Rs.3,087.70 million by way of Preferential Allotment of equity shares to PTC India Limited, the Holding Company.

EPS of the Company for the year ended 31.03.2017 stands at Rs.5.86 per share in comparison to Rs.6.96 per share for the year ended 31.03.2016. It may be noted that during the year, the no. of shares and the paid up share capital of the Company increased and the Company earned an amount of Rs.1,426.07 million by way of profit on sale of investments as compared to Rs.2,069.28 million during FY2015-16 which had a bearing on the earnings per share for the year.

6. Reserves

Out of the profits earned during the financial year 2016-17, the Company has transferred an amount of Rs.690.67 million to Statutory Reserve in accordance with the requirements of Section 45-IC of the Reserve Bank of India Act, 1934. During 2016-17, the Company has also appropriated an amount of Rs.708.98 million to the reserve created under Section 36(i)(viii) of the Income Tax Act, 1961 in order to achieve tax efficiencies.

7. Dividend

Based on Company’s performance, the Board of Directors are pleased to recommend for your 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. The dividend on equity shares, if approved by the members at ensuing Annual General Meeting, would involve the cash outflow of Rs.1,159.56 million including dividend distribution tax amounting to Rs.196.13 million.

The dividend will be paid to the members whose names appear in the Register of Members as on a record date and in respect of shares held in dematerialized form whose names are furnished 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 of provisions of Companies Act, 2013. Further, at the end of the year, there were no unclaimed, 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% as on 31st March, 2016. No adverse material changes affecting the financial position of the Company have occurred during the financial year.

10. Material changes and commitments, if any, affecting the financial position of the Company

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which 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 occurred during the Financial Year.

11. Particulars of loans, guarantees and investments

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

12. Capital/ Finance

During the period under review, the Company has made the preferential allotment of 8,02,00,000 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 to Rs.6422.83 million comprising of 64,22,83,335 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 31st March 2017. The equity shares of the Company are listed on the National Stock Exchange of India 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 rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is given in Annexure - I in the prescribed Form MGT-9, which forms part of this report.

14. Directors and Key Managerial Personnel

In accordance with provisions of the Companies Act, 2013 and Articles of Association of the Company, Dr. Ashok Hdalia, MD & CEO of the Company shall retire by rotation at the ensuing 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 been specifically mentioned in the report on the Corporate Governance which is annexed with this 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 distribution policy. Accordingly, the policy was adopted to set out the parameters and circumstances that will be taken in to account by the Board while determining the distribution of dividend to its shareholder. The policy is enclosed as Annexure—II to the Board Report and is also available on Company’s website, at :http://www.ptcfinancial.com/upload/pdf/Dividend%20Distribution%20Policy-PFS.pdf

16. Details of Board meetings

Twelve Board Meetings were held during the financial year ended on 31st March, 2017 and gap between two meetings did not exceed one hundred twenty days, details of which are given below:

Sl.No.

Date of the meeting

No. of Directors attended the meeting

1

12th May, 2016

9

2

8 th 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 report on 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 in the 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 to the welfare of the communities in the society where it operates, through its Corporate Social Responsibility (“CSR”) initiatives.

The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board.

The objective of PFS’s CSR Policy is to consistently pursue the concept of integrated development of the society in an economically, socially and environmentally sustainable 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 shall undertake the CSR activities as specified under the Companies Act, 2013. The composition and other disclosures are mentioned in the corporate governance report which forms part of this report.

The report on CSR activities/initiatives is enclosed at Annexure 111 and is also available 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 and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. In compliance with requirements of Companies Act, 2013 & Listing Regulations, the Company has established a mechanism called ‘Whistle Blower Policy’ for employees to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Company’s code of conduct or ethics policy. ‘Whistleblowing’ is the confidential disclosure by an individual of any concern encountered in the workplace relating to a perceived wrongdoing. The policy has been framed to enforce controls so as to provide a system of detection, reporting, prevention 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 Chairman of the Audit Committee in exceptional cases. During the year under review, no complaint has been received.

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 with section 134(5) of the Companies Act, 2013, your Directors, to the best of their knowledge confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 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 adequate accounting records in accordance with the provisions of this Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(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 the Company and that such internal financial controls are adequate and are operating effectively.

(e) the directors had devised proper systems to ensure compliance with the provisions of 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 last Annual General Meeting of the Company as statutory auditors of the Company for FY 2016-17 by the shareholders and shall hold office upto the conclusion of the forthcoming Annual General Meeting.

The Auditors have audited the Accounts of the Company for the year ended 31st March 2017. Audited Financial Statements (both standalone and consolidated) comprising Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss and the cash flow Statement along with a summary of significant accounting policies & other explanatory information together with Auditor’s Report thereon are annexed to this report. The Auditors’ Report does not contain any qualification, reservation or adverse mark.

Further, the Auditors of the Company while performing their duties as such has not found any fraud which was required to be reported to the Board of Director or Central Government.

The Board of Directors has recommended the ratification of appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants as statutory auditors of the Company for FY 2017-18 to shareholders in the ensuing annual general meeting.

22. Secretarial audit

Pursuant to provisions of Section 204 of Companies Act, 2013 and rules mentioned thereto, the Board of Directors of the Company appointed M/s. Agarwal S. and Associates, Practicing Company Secretary, to conduct the Secretarial Audit of records and documents of the Company. The Secretarial Audit Report is enclosed as Annexure IV. The observations 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, 20l5 atleast half of the Board of Directors should comprise of Independent Directors. 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.”

PFS has initiated the process and same shall be complied in due course.

23. Related party transactions

During the financial year 2016-2017, the Company has not entered into any other related party transactions which attracts the provision of Section 188 of the Companies Act, 2013 and Securities and Exchange Board of India (Listing obligations and Disclosures Requirements) Regulations 2015. The details of transactions entered into with the Related Parties is given in schedule no. 29 of the Audited Accounts of the Company. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions as approved by the Board is available on the Company’s website at the link: http://ptcfinancial.com/statutory_policies/20l50629_Policy_materiality_of_Related_Party_Transactions.pdf

Further, all the transactions are made in the ordinary course of business and on arm’s length basis.

Information on transactions with related parties pursuant to section 134(3)(h) of the Act 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 important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A holistic assessment of manpower needs led to fresh recruitment at various level. A number of individual employee specific, group of employee specific and organisational wise programs that provide focused people attention are currently underway. Your Company’s thrust is on the development of talent internally through job enlargement, rotation and development.

25. Industrial Relations

Your Company has always maintained healthy, cordial and harmonious industrial relations at all levels. Despite of competition, the enthusiastic efforts of the employees have enabled 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. These are currently under holistic review with the help of CRISIL for enabling comprehensive integrated risk management system. The policies include -

- Risk Management Policy: - The risk management policy provides a framework for credit risk management as well as operational risk management. The framework for Credit risk management provides for identification and assessment of credit risk, assessment and management of portfolio credit risk, and risk monitoring and control. The issues relating to the establishment of exposure limits for various categories, for example, based on geographical regions, fuel specific, industry and rating are also covered. It also deals with rating models aiming at high quality, consistency and uniformity in the appraisal of proposals. The framework for operational risk management recognizes the need to understand the 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. It seeks to standardize the process of identifying new risks and designing appropriate controls for these risks, minimize losses and customer dissatisfaction due to possible failure in processes.

- Asset Liability Management Policy :- The objectives of Asset Liability Management Policy are to align market risk management with overall strategic objectives, articulate current interest rate view and determine pricing, mix and maturity profile of assets and liabilities. The asset liability management policy involves preparation and analysis of liquidity gap reports and ensuring preventive and corrective measures. It also addresses the interest rate risk by providing for duration gap analysis and control by providing limits to the gaps.

- Foreign Exchange Risk Management Policy: - The policy covers the management of foreign exchange risk related to existing and future foreign currency loans or any other foreign exchange risks derived from borrowing and lending. The objective of the policy is to serve as a guideline for transactions to be undertaken for hedging of foreign exchange related risks. It also provides guiding parameters within which the Asset Liability Management Committee can take decisions for managing the above mentioned risks.

- Interest Rate Policy: - Interest rate policy provides for risk based pricing of the debt financing by the Company. It provides the basis of pricing the debt and the manner in which it can be structured to manage credit risk, interest rate risk and liquidity risk, while remaining competitive.

- Policy for Investment of Surplus Funds: - The policy of investment of surplus funds i.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 finance equity as well as loans to power sector projects, the prime focus is to deploy surplus funds with a view to ensure that the capital is not eroded and that surplus funds earn optimal returns.

- Operational Risk Management Policy: - The operational risk management policy recognizes the need to understand the operational risks in general and those in specific activities of the Company. Operational risk management is not understood as a process of eliminating such risk but as a systematic approach to manage such risk. It seeks to standardize the process of identifying new risks and designing appropriate controls for these risks, minimize 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 October 2008 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 surrendered and 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 Independent Directors on the Board of your Company as on date of this report. In the opinion of the Board and based upon the declaration furnished by the said Independent Directors, they fulfill the conditions specified in section 149 of the Companies Act, 2013 and the Rules made thereunder Regulation 25 of Securities and Exchange Board of India (Listing obligations and Disclosures Requirements) Regulations 2015 about their status as Independent 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 your Company has constituted a ‘Nomination and Remuneration Committee’. The Committee’s role is to be supported by a policy for nomination of Directors and Senior Management Personnel including Key Managerial Personnel as also for remuneration of Directors, Key Managerial Personnel (KMP), Senior Management Personnel and other Employees. Further, a policy on Board Diversity is also to be adopted.

The Policy of the Company on Nomination and Remuneration & Board Diversity is attached herewith and marked as Annexure - VL

30. Formal Annual Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015.

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 fine balance between fixed and incentive pay. On the basis of Policy for Performance Evaluation of Independent Directors, a process of evaluation is being followed by the Board for its own performance and that of its Committees and individual Directors. The performance evaluation process and related tools are reviewed by the “Nomination & Remuneration Committee” on need basis, and the Committee may periodically seek independent external advice in relation to the process. The Committee may amend the Policy, if required, to ascertain its appropriateness as per the needs of the Company. The Policy may be amended by passing a resolution at a meeting of the Nomination & Remuneration Committee.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of Committees, effectiveness of Committee meetings, etc. The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors, performance of NonIndependent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of Executive Directors and Non-Executive Directors. The same was discussed in the Board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its Committees and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

31. Disclosure under the Sexual Harassment of Women at the work place (Prevention, Prohibition and Redressal) Act, 2013

A group level Internal Complaints Committee has been constituted to look into grievance/complaints of sexual harassment lodged by women employees as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Further, no complaints were received during the year and no complaint is pending on 31st March, 2017.

32. Internal financial controls and Internal Auditor

The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company.

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined by the Audit Committee. The Company has appointed M/s Grant Thornton India LLP as Internal Auditors of the Company. To maintain its objectivity and independence, the Internal Auditor reports to the Audit Committee. The Audit Committee has the responsibility for establishing the audit objectives and determines the nature, timing and extent of audit procedures as well as the locations where the work needs to be carried out.

The Internal Auditor monitors and evaluates the efficacy & adequacy of internal financial controls & internal control system in the Company that has been put in place to mitigate the risks faced by the organization and thereby achieve its business objective. 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 on ongoing process. Based on the findings and report of internal auditor, process owners undertake corrective action that may be required in their respective areas for further strengthening the controls and control environment. Significant audit observations and corrective actions thereon are presented to the Audit Committee. The internal auditors also independently carry out the design evaluation and testing of controls related to requirements of Internal Financial Controls. The evaluation of design effectiveness and testing of controls for various business activities, processes and 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, the Company has two associate companies namely M/s. R.S. India Wind Energy Private Limited and M/s. Varam Bio Energy Private Limited. The statement of company’s associate companies is given in Form AOC-1 as Annexure - V11.

The Policy for determining material subsidiaries as approved may be accessed on the Company’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 results, operations / performance and the future prospects of the Company form part of this Annual Report.

36. Business Responsibility Report

Pursuant to the Regulation 34 (2) (f) of the Listing Regulations, the Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective in the format as specified by the SEBI is given as Annexure- V111.

37. Particulars of Employees

A. The information pertaining to the remuneration and other details as required under Section 197 of Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a. The ratio of the remuneration of each director to the median remuneration of the employees 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 Officer, Chief 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 201617 in respect of accumulated leave to the credit

# excluding the impact of arrear of salary paid during FY 2015-16

c. The median remuneration of the employees has increased to Rs.17.16 lakhs during FY 2016-17 from Rs.14.08 lakhs during FY 2015-16.

d. 45 permanent employees are on the rolls of Company;

e. The average percentile increase in the salary of employees other than the managerial personnel is from Rs.18.18 lakhs in FY 2015-16 to Rs.19.44 lakhs in FY 2016-17, resulting in an increase of 6.93%. Whereas, the average percentile increase in the managerial remuneration is from Rs.77.23 lakhs in FY 2015-16 to Rs.86.38 lakhs in FY 2016-17 resulting in increase of 11.85% (excluding remuneration paid to Sh. Rajender Mohan Malla during FY 2015-16 for 1.5 months upto his superannuation with effect from 15th May 2015.

As per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, statement of particulars of employees is Annexed as Annexure - 1X.

Sl. No.

Name & Designation

Nature of Employement

Remuneration Received (amount in Rs.)

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

1

Dr. Ashok Haldia

Fixed Term

97,10,479

M.Com. Ph D, CA, CS, ICWA/ 37 years

13.08.2008

60 yrs 6 months

The Secretary in The Institute of Chartered Accountants of India

Nil

NA

2

Dr. Pawan Singh

Fixed Term

75,65,167

MBA, Ph D/ 34

years

01.02.2012

55 yrs 5

months

Dir-F in Indraprastha Power Generation Co Ltd, Pragati Power Corpn Ltd

Nil

NA

3

Vijay Singh Bisht

Regular

58,44,586

BE & MBA/ 30

years

01.08.2008

54 years

DGM in PFC

100

NA

4

Sitesh Kumar Sinha

Regular

54,89,024

B.E & PGDBM/ 19 years

22.03.2011

41 years 3 months

Design Engineer in Lahmeyer International (India) Pvt Ltd

Nil

NA

5

Gaurav Kaushik

Regular

45,29,467

B.Com & CA /13 years

01.06.2011

37 years

Manager in Lovelock & Lewes, Chartered Accountants

Nil

NA

6

Vishal Goyal

Regular

37,23,444

CS, LLB & MBA/ 13 years

25.02.2008

36 yrs 8 months

Company Secretary cum Fin. Manager in International Print -O- Pac Ltd.

Nil

NA

7

Rakesh Kalsi

Regular

35,81,091

BE & MBA/ 11

years

16.08.2010

36 years 4 months

Dy Manager in Feedback Ventures Pvt. Ltd.

Nil

NA

8

Devesh Singh

Regular

34,99,480

B.Com & MBA/ 12 years

03.10.2011

38 years

Manager in PTC India

Nil

NA

9

Saurabh Kaura

Regular

34,14,142

B.E & PGDISEM/

8 years 8 months

27.06.2011

32 years 5 months

Manager in InRhythm Energy Solutions

300

NA

10

Shray Kumar Shikhar

Regular

30,71,627

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 two lakh rupees if employed throughout the year or eight lakh and fifty thousand per month in 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 more than that of its managing director/ whole time director and holds by himself or though his/ 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, particulars relating 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.215.34 million) 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 or Tribunals 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 (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last AGM (i.e.28th September, 2016), with the Ministry of Corporate Affairs.

42. General

Your Directors state that no disclosure or reporting in respect of the following items as there were no transactions on these items during the year under review:

- Issue of equity shares with differential rights as to dividend, voting or otherwise;

- Issue of 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 receive any remuneration or commission from any of other Company.

43. Acknowledgement

The Board of Directors acknowledge with deep appreciation the cooperation received from its 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 India Limited (NSE), BSE Limited (BSE), PTC India Limited (PTC) and other stakeholders, International Finance Corporation (IFC), DEG, FMO and OeEB, 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 : 9th August 2017

Place : New Delhi


Mar 31, 2016

Dear Shareholders,

On behalf of the Board of Directors, it is our pleasure to present the 10th Annual Report together with the Audited Financial Statements of PTC India Financial Services Limited (“the Company" or “PFS”) for the financial year ended March 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

11,869.29

8,019.07

Profit/(loss) before Interest, Depreciation & Tax (EBITDA)

10,658.47

6,667.74

Finance Charges

5,301.08

4,171.92

Depreciation

42.96

42.69

Provision for Income Tax

1,403.46

844.37

(including for earlier years)

Net Profit/(Loss) After Tax

3,910.97

1,608.76

Profit/(Loss) brought forward from previous year

Amount transferred consequent to Scheme of Merger

Profit/(Loss) carried to Balance Sheet

3,910.97

1,608.76

^previous year figures have been regrouped/rearranged wherever necessary.

The operational and financial performance significantly improved during the year and was quiet robust. The interest income for the FY 2015-16 increased by 24% to Rs.9,214.08 million as compared to Rs.7,416.15 million during 2014-15. The composition of total revenue witnessed a change during the year as the Company earned an amount of Rs.2,069.28 million by way of sale of certain investment which accounted for about 17% of total revenue. There was no such revenue during the previous year.

The operational costs also increased during the year. The finance costs for FY2015-16 increased by about 27% to Rs.5,301.08 million compared to Rs.4,171.92 million during 2014-15. The finance costs for FY2015-16 include amortization of foreign currency translation aggregating to Rs.228.72 million compared to Rs.162.60 million during 2014-15. The operational and financial parameters remained healthy 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% in FY2014-15. The overall return on net worth improved to 25% during FY2015-16 from about 12% during FY2014-15.

The profit before tax (PBT) for FY2015-16 increased by 117% to Rs.5,314.43 million compared to Rs.2,453.13 million during 2014-15 and the profit after tax (PAT) for FY2015-16 increased by 143% to Rs.3,910.97 million compared to Rs.1,608.76 million during 2014-15. The profit before tax excluding income from sale of investments during FY2015-16 increased by about 32% to Rs.3,245 million compared to Rs.2,453 million during FY2014-15.

2. Summary of Operations and State of Company* s Affairs

The debt assistance sanctioned to various projects during 2015-16 increased by 59% and aggregated to Rs.65,283 million compared to Rs.41,128 million 2014-15. The disbursements also remained robust during FY2015-16 and increased by 43% to Rs.35,550 million compared to Rs.24,927 million during 2014-15. The gross loan book closed at Rs.86,340 million as at 31st March 2016 and the equity investments made by the Company aggregated to another Rs.2,004 million as on the said date. The cumulative aggregate debt assistance sanctioned by the Company as at 31st March 2016 aggregated to Rs.183,446 million whereas the net effective sanction stood at Rs.150,740 million as at 31st March 2016. The composition of the debt sanctioned by the Company is also witnessing a change with renewable projects comprising about 75% of the amount sanctioned by Company during FY2015-16. The Company continues to explore and look for attractive opportunities in other areas for further diversification of its portfolio and has forayed into power transmission projects, energy efficiency projects, annuity based road project in addition to private railway sidings, and development & operation of coal mines etc.

The financial assistance sanctioned by PFS would help in capacity addition of close to 20,500 MW. PFS is constantly working with new as well as existing developers and is focused towards diversifying its portfolio. As at 31st March 2016, the renewable portfolio constitutes the highest proportion in the outstanding loan book at around 44%, thermal projects constitute about 30%. The Company continues to regularly monitor the progress and operations of the assisted projects through its comprehensive project monitoring mechanism.

3. Industry Scenario

India’s power sector is at an inflection point, given the government’s conviction that electricity is a critical enabler for economic growth. The sector is transforming in terms of reliability and affordability and it is perceived to be an incredibly dynamic time in the power market. It is estimated that about 13% of the new power generation orders in the world are from India. India’s energy sector has turned around from an era of scarcity and faces a problem of plenty, making demand creation a key driver of government policy.

The government recognizes the need for private investment in the power sector and is planning to adopt progressive policies on renewable. India is being counted globally as a country leading investments in renewable energy. The country has 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 ranked better on ease of doing business in the renewable energy space. Significant investments are expected into the generation projects which would be backed by investments in transmission sector as well. The government is further working towards new policies for hydropower and electricity from biomass, biofuels and cogeneration. It is believed that an action plan is in the offing for a smoother and reliable integration of renewable energy with conventionally generated electricity carried by the national and state grids.

4. Outlook

The Indian economy is expected to go a transformational change led by the Union Government. The power sector is is considered to be lifeline of the Indian economy and is expected to play a critical role in this mega change backed by the Government’s commitment. The policy makers are taking multiple steps towards improving the overall situation. Government has launched a scheme called “Power for All” with an aim to ensure continuous and uninterrupted electricity supply to all households,

industries and commercial establishments by creating and improving necessary infrastructure. The total installed capacity in the country crossed the 300GW mark as at 31st March 2016. India’s power sector is one of the most diversified in the world with the sources of power generation ranging from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and agricultural and domestic waste.

India’s quest for green energy has crossed a major milestone, with renewable plants, mainly wind and solar, surpassing the capacity of large hydroelectricity projects, which were once the country’s biggest source of electricity. The total capacity of renewable energy projects overtook hydropower in the country’s total capacity. It is believed that India will turn a global player in the energy market during the next 25 years, exerting its influence on its various aspects, including renewable energy and energy efficiency. The energy use in the country has almost doubled since 2000.

The renewable 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 as regards creating jobs in the green energy sector. India’s investments in renewable energy sector increased to over USD 10 billion in 2015, when compared to around USD 8 billion in 2014. The investments have seen growth for the second consecutive year, as a result of the Indian government’s increased focus on renewable energy.

PFS focuses on attractive opportunities across the infrastructure sector especially the renewable energy projects. The total portfolio of the Company has crossed Rs.8600 crore mark. 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 constantly eyes opportunities in the sector and expects to continue with its growth momentum. The debt commitments and disbursements have been robust during the year, thereby maintaining the increasing trend. The Company continues to explore opportunities in other related infrastructure.

During the year, your Company collaborated with International Finance Corporation (IFC) to boost Financing for Renewable Energy Projects. PFS became the first institution in India, and the twenty-sixth globally, to sign IFC’s Master Cooperation Agreement. The collaboration will help standardize steps that lenders take when co-financing projects with IFC with the ultimate aim to make financing available in shorter time-frames and reduce financing costs for borrowers, enabling them to operationalize projects faster.

PFS is also working towards lowering its cost of borrowings and is in discussions with various multi lateral/bilateral financing institutions for arranging funds at competitive costs / terms. The Company diversified its resource base and issued bonds which were subscribed by International Finance Corporation and FMO, Dutch Development Bank. The Company arranged borrowings domestically at competitive rates during the year , thereby reducing its overall cost of borrowings.

PFS is focused on attractive opportunities across the infrastructure sector. The total debt assistance sanctioned has already crossed Rs.15,000 crore mark and the outstanding loan book has shown further growth during FY 2015-16. The disbursements have been robust during the financial year. PFS continues to focus its energies on lending outside coal based power projects for infrastructure facilities such as power transmission, coal mining, private railway sidings etc and will continue to evaluate niche opportunities across energy value chain.

The Indian power sector is one of the most diversified sector with sources of power ranging from both conventional such as coal, lignite, natural gas, oil, hydro and nuclear power to non-conventional such as wind, solar, and agricultural and domestic waste. The sector is undergoing significant changes that have the potential to redefine the industry. The renewable power capacity addition is seeing unprecedented growth. Power sector is considered to be the crucial enabler for economic growth and the renewable sector promises significant growth and development amidst tremendous investment potential. The Government of India is also committed to provide everyone with access to electricity and has identified power sector as a key sector of focus so as to promote sustained industrial growth.

The development activities and the interest in the renewable area offers good potential to PFS. PFS continue to evaluate business proposals for these projects in line with the developments taking place in the sector and the initiatives undertaken at the government 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 on balance 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 in comparison to Rs.2.86 per share for the year ended 31.03.2015.

6. Reserves

Out of the profits earned during the financial year 2015-16, the Company has transferred an amount of Rs.782.19 million to Statutory Reserve in accordance with the requirements of Section 45-IC of the Reserve Bank of India Act, 1934. During 2015-16, the Company has also appropriated an amount of Rs.583.03 million to the reserve created under Section 36(i)(viii) of the Income Tax Act, 1961 in order to achieve tax efficiencies.

7. Dividend

Based on Company’s performance, the Board of Directors are pleased to recommend for the approval of the members a dividend at the rate of 12% (which is higher by 20% from the last year) i.e. Rs.1.20/- per equity share of Rs.10/- for the FY 2015-2016. The dividend on equity shares, if approved by the members, would involve the cash outflow of Rs.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 Members as on a record date and in respect of shares held in dematerialized form whose names are furnished 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 of provisions of Companies Act, 2013. Further, at the end of the year, there were no unclaimed, 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% as on 31st March, 2015. No adverse material changes affecting the financial position of the Company have occurred during the financial year.

10. Material changes and commitments, if any, affecting the financial position of the Company

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which 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 occurred during the financial year.

11. Particulars of loans, guarantees and investments

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

12. Capital/ Finance

During the period under review, no change has taken place with regard to capital structure of the Company.

The paid up share capital of the Company as at 31st March 2016 aggregates to Rs.5,620.83 million comprising of 562,083,335 equity shares of Rs.10 each fully paid up. PTC India Limited continues to hold 60% of the paid up capital of the Company as at 31st March 2016. 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’) and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is given in Annexure - 1 in the prescribed Form MGT-9, which forms part of this report.

15. Directors and Key Managerial Personnel

In accordance with provisions of the Companies Act, 2013 and Articles of Association of the Company, Shri Ajit Kumar (DIN: 06518591) Director would retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.

Dr. Uddesh Kumar Kohli and Shri Ramarao Muralidharan Coimbatore have ceased to be Directors 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 & Chief Executive Officer of the Company w.e.f. 15th May, 2015 on attainment of age of superannuation. On the recommendation of the Nomination and Remuneration Committee, the Board has appointed Dr. Ashok Haldia as the Managing Director & Chief Executive Officer of the Company w.e.f. 7th July, 2015.

Mrs. Pravin Tripathi and Shri Harbans Lal Bajaj have been appointed as an Additional Director (Independent) on 15th October, 2015 and 30th June, 2016 respectively.

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual directors which include criteria for performance evaluation of the non-executive and executive directors. The overall effectiveness of the Board is measured on the basis of the ratings obtained by each Director and accordingly the Board decides the Appointments, Re-appointments and Removal of the non-performing Directors 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 fine balance between fixed and incentive pay. On the basis of Policy for Performance Evaluation of Independent Directors, a process of evaluation is being followed by the Board for its own performance and that of its Committees and individual Directors. The performance evaluation process and related tools are reviewed by the “Nomination & Remuneration Committee” on need basis, and the Committee may periodically seek independent external advice in relation to the process. The Committee may amend the Policy, if required, to ascertain its appropriateness as per the needs of the Company. The Policy may be amended by passing a resolution at a meeting of the Nomination & Remuneration Committee.

13. SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 (Listing Regulations)

The Securities and Exchange Board of India (SEBI), on September 2, 2015, issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the aim to consolidate and streamline the provisions of the Listing Regulations for different segments of capital markets to ensure better enforceability. The said regulations were effective December 1, 2015. Accordingly, PFS has executed the amended Listing Agreement with 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, 2016 and gap between two meetings did not exceed one hundred twenty days, details of which are given 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 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 and other disclosures are mentioned in the 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 to the welfare of the communities in the society where it operates, through its Corporate Social Responsibility (“CSR”) initiatives.

The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board.

The objective of PFS’s CSR Policy is to consistently pursue the concept of integrated development of the society in an economically, socially and environmentally sustainable 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 shall undertake the CSR activities as specified under the Companies Act, 2013.

The composition and other disclosures are mentioned in the corporate governance report which forms part of this report.

The CSR policy is available at the link: http: //www. ptc financial .co m/uplo ad/pdf/ corporate social_ responsibility_policy.pdf

The report 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 and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. In compliance with requirements of Companies Act, 2013 & Listing Regulations, the Company has established a mechanism called ‘Whistle Blower Policy’ for employees to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Company’s code of conduct or ethics policy. ‘Whistleblowing’ is the confidential disclosure by an individual of any concern encountered in the workplace relating to a perceived wrongdoing. The policy has been framed to enforce controls so as to provide a system of detection, reporting, prevention 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 Chairman of the Audit Committee in exceptional cases. During the year 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 sub-section (3) of Section 134 read with section 134(5) of the Companies Act, 2013, your Directors, to the best of their knowledge confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 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 adequate accounting records in accordance with the provisions of this Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(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 the Company and that such internal financial controls are adequate and are operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of 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 statutory auditors of the Company for FY 2015-16 by the shareholders and shall hold office up to the conclusion of the forthcoming Annual General Meeting.

The Auditors have audited the Accounts of the Company for the year ended 31st March 2016. Audited Financial Statements comprising Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the cash flow Statement along with a summary of significant accounting policies & other explanatory information together with Auditor’s Report thereon are annexed to this report. The Auditors’ Report does not contain any qualification, reservation or adverse mark.

The Board of Directors has recommended the ratification of appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants as statutory auditors of the Company for FY 2016-17 to shareholders in the ensuing Annual General Meeting.

20. Secretarial audit

Pursuant to provisions of Section 204 of Companies Act, 2013 and rules mentioned thereto, the Board of Directors of the Company appointed M/s. Agarwal S. and Associates, Practicing Company Secretary, to conduct the Secretarial Audit of records and documents of the Company. The Secretarial Audit Report is enclosed as Annexure 3. The Secretarial Audit Report 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 '' ... crores to M/s. PTC Energy Limited (Group Company) for which the approval of the Audit Committee and the Board of the Company as per provisions of Section 188 of Companies act, 2013 read with rules mentioned thereto and SEBI Listing Regulations 2015 has been received. Apart from this, the Company has not entered into any other related party transactions which attract the provision of Section 188 of the Companies Act, 2013. The details of transactions entered into with the Related Parties is given in schedule no. 29 of the Audited Accounts of the Company. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions as approved by the Board is available 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’s length basis.

Information on transactions with related parties pursuant to section 134(3)

(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure - 4 in 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 important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A holistic assessment of manpower needs led to fresh recruitment at various level. A number of individual employee specific, group of employee specific and organizational wise programs that provide focused people attention are currently underway. Your Company’s thrust is on the development of talent internally through job enlargement, rotation and development.

23. Risk Management Policy

PFS has put in place a comprehensive policy framework for management of risks. These are currently under holistic review with the help of CRISIL for enabling comprehensive integrated risk management system. The policies include -

- Risk Management Policy: - The risk management policy provides a framework for credit risk management as well as operational risk management. The framework for Credit risk management provides for identification and assessment of credit risk, assessment and management of portfolio credit risk, and risk monitoring and control. The issues relating to the establishment of exposure limits for various categories, for example, based on geographical regions, fuel specific, industry and rating are also covered. It also deals with rating models aiming at high quality, consistency and uniformity in the appraisal of proposals. The framework for operational risk management recognizes the need to understand the 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. It seeks to standardize the process of identifying new risks and designing appropriate controls for these risks, minimize losses and customer dissatisfaction due to possible failure in processes.

- Asset Liability Management Policy :- The objectives of Asset Liability Management Policy are to align market risk management with overall strategic objectives, articulate current interest rate view and determine pricing, mix and maturity profile of assets and liabilities. The asset liability management policy involves preparation and analysis of liquidity gap reports and ensuring preventive and corrective measures. It also addresses the interest rate risk by providing for duration gap analysis and control by providing limits to the gaps.

- Foreign Exchange Risk Management Policy: - The policy covers the management of foreign exchange risk related to existing and future foreign currency loans or any other foreign exchange risks derived from borrowing and lending. The objective of the policy is to serve as a guideline for transactions to be undertaken for hedging of foreign exchange related risks. It also provides guiding parameters within which the Asset Liability Management Committee can take decisions for managing the above mentioned risks.

- Interest Rate Policy: - Interest rate policy provides for risk based pricing of the debt financing by the Company. It provides the basis of pricing the debt and the manner in which it can be structured to manage credit risk, interest rate risk and liquidity risk, while remaining competitive.

- Policy for Investment of Surplus Funds: - The policy of investment of surplus funds i.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 finance equity as well as loans to power sector projects, the prime focus is to deploy surplus funds with a view to ensure that the capital is not eroded and that surplus funds earn optimal returns.

- Operational Risk Management Policy: - The operational risk management policy recognizes the need to understand the operational risks in general, and those in specific activities of the Company. Operational risk management is not understood as a process of eliminating such risk but as a systematic approach to manage such risk. It seeks to standardize the process of identifying new risks and designing appropriate controls for these risks, minimize losses and customer dissatisfaction due to possible failure in processes.

24. Employees’ Stock Option Scheme

Shareholders’ approval of the scheme was obtained at the Annual General Meeting held on 27th October 2008 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 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. Pravin Tripathi and Shri Harbans Lal Bajaj are independent Directors on the Board of your Company as on date of this report. Mrs. Pravin Tripathi and Shri Harbans Lal Bajaj have been appointed as an Additional Director (Independent) on 15th October, 2015 and 30th June, 2016 respectively whose appointment is to be regularized in the ensuing Annual General Meeting of the Company. In the opinion of the Board and as confirmed by these Directors, they fulfill the conditions specified in section 149 of the Companies Act, 2013 and the Rules made there under about their status as Independent Directors of the Company.

26. Companies policy on appointment and remuneration of Senior Management and KMPs

As per the requirements of the Companies Act 2013, the Board of Directors of your Company has constituted a Nomination and Remuneration Committee. The Committee’s role is to be supported by a policy for nomination of Directors and Senior Management Personnel including Key Managerial Personnel as also for remuneration of Directors, Key Managerial Personnel (KMP), Senior Management Personnel and other Employees. Further, a policy on Board Diversity is also to be adopted.

The Policy of the Company on Nomination and Remuneration & 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 performance, Board Committees and individual Directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of Committees, effectiveness of Committee meetings, etc. The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors, performance of Non Independent Directors, performance of the Board as a Whole and performance of the Chairman was evaluated, taking into account the views of Executive Directors and Non-Executive Directors. The same was discussed in the Board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its Committees and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

28. Disclosure under the Sexual Harassment of Women at the work place (Prevention, Prohibition and Redressal) Act, 2013

A group level Internal Complaints Committee has been constituted to look into grievance/complaints of sexual harassment lodged by women employees as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Further, no complaints were received during the year and no complaint is pending on 31st March, 2016.

29. Internal financial controls and Internal Auditor

The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company.

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined by the Audit Committee. The Company has appointed M/s Grant Thornton as the Internal Auditor of the Company (earlier M/s. Raj Har Gopal & Co. Chartered Accountants, were the Internal Auditors of the Company). To maintain its objectivity and independence, the Internal Auditor reports to the Audit Committee. The Audit Committee has the responsibility for establishing the audit objectives and determines the nature, timing and extent of audit procedures as well as the locations where the work needs to be carried out.

The Internal Auditor monitors and evaluates the efficacy & adequacy of internal financial controls & internal control system in the Company to mitigate the risks faced by the organization and thereby achieve its business objective. 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

Based on the report of internal auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee. The Company also engaged M/s. KPMG, Chartered Accountants for independent design evaluation and testing of controls related to requirements of Internal Financial Controls. The evaluation of design effectiveness and testing of controls for various business activities, processes and sub processes 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 Company had a subsidiary namely PFS Capital Advisors Limited, which was strcuk off under the fast track exit mode as prescribed by Ministry or Corporate Affairs vide their order dated 11th January, 2016.

The Policy for determining material subsidiaries as approved may be accessed on the Company’s website at the link:http://www.ptcfinancial.com/ upload/pdf/20150629_Policy_on_determining_Material_Subsidiaries.pdf

The Company has two Associates Company namely M/s. Varam Bio Energy Pvt. Ltd. and M/s. R S India Wind Energy Pvt. Ltd..

32. Management Discussion and Analysis

Management Discussion and Analysis comprising an overview of the financial results, operations / performance and the future prospects of the Company form part of this Annual Report.

33. Particulars of Employees

The information required under section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a. The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year 2015-16; (Rs.in Lacs)

Name of Director

Director’s

Remuneration

Median Remuneration of employees

Ratio

Shri Rajender* Mohan Malla

29.68

15.79

2.09 times

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 as Managing Director & Chief Executive Officer w.e.f. 7th July, 2015

b. the percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, 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 as Managing 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 year resulting in comparatively lower overall %age increase in

FY 2015-16.

d. The median remuneration of the employees has reduced during the year

e. 43 permanent employees are on the rolls of company;

f. The Average remuneration decreased from Rs.24.11 lakhs in FY 2014 15 to Rs.21.93 Lakhs in FY 2015-16 i.e. (9.04%). Profit After Tax for the 2015-16 increased to Rs.39,109.70 lakhs from Rs.16,087.61 lakhs during year 2014-15, thus recording a growth of about 143% during the current financial year.

g. The Average increase in remuneration of Key Managerial Personnel decreased from Rs.60.63 lac to Rs.54.44 lakhs i.e (10.21%). This is due to superannuation of Mr RM Malla, former 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 March, 2015.

IPO Share Price in March 2011 was Rs.28 whereas the closing price per Share was Rs.33.90 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 managerial personnel is from Rs.19.76 to Rs.18.45, resulting in decrease of (6.60%). Whereas, the average percentile decrease in the managerial remuneration is from Rs.60.06 to Rs.55.87 resulting in decrease of (6.98%).

j. Comparison of the remuneration of the Key Managerial Personnel against the performance 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 Operating profit, performance in containing Net NPA over Total Assets, Cost to Income ratio, growth in Net worth, performance in terms of Sanction & Disbursal, Market Capitalization, Innovation/ New Initiative etc.

l. In terms of provision of section 197 (12) of the Companies Act, 2013 review with Rule 5(12) of the Companies (Appointment and Remuneration of Manergial Personnel) Rule, 2014, no employees of the Company employed throught out the year who was in receipt of remuneration of rupees one crore and two lacs or more in a year further, during the year under review, there was no employee of the Company employed for a part of the year who was in 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 the company.

As per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) 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 to conservation 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.146.63 million) in foreign exchange during the year ended 31st March 2016. This includes interest on external commercial borrowings amounting to Rs.148.07 million (previous year Rs.143.73 million).

36. Significant and material orders

There were no significant or material orders passed by Regulators or Courts or Tribunals which impacts the going concern status and Company’s future operations. .

37. Transfer of Amounts to Investor Education and Protection Fund

Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last AGM (i.e. 24th September, 2015), with the Ministry of Corporate Affairs.

38. General

Your Directors state that no disclosure or reporting in respect of the following items as there were no transactions on these items during the year under review:

^ Issue of equity shares with differential rights as to dividend, voting or otherwise.

^ Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

^ Neither Managing Director nor the Whole time Directors of the Company receive any remuneration or commission from any of other Company.

39. Acknowledgement

The Board of Directors acknowledge with deep appreciation the cooperation received from Ministry of Power, Ministry of Finance, Reserve Bank of India, SEBI, NSE, BSE, PTC India Limited and other stakeholders, International Finance Corporation (IFC), DEG, FMO and OeEB, 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


Mar 31, 2014

Dear Shareholders

The Directors have pleasure in presenting you the Eighth Annual Report together with the audited accounts of your Company for the Financial Year 2013-14.

OVERVIEW

Power or electricity is one of the most critical components of infrastructure and one of the prime drivers of economic growth and social development. India is the fifth largest producer and consumer of electricity in the world after US, China, Japan and Russia. The Indian power sector is one of the most diversified in the world. Sources for power generation range from commercial sources such as coal, lignite, natural gas, oil, hydro and nuclear power to other viable non- conventional sources such as wind, solar and agriculture and domestic waste.

The demand for electricity in the country has been growing at a rapid rate and is expected to grow further in the years to come. Indian Power Sector recorded a capacity addition of about 20,000 MW during FY 2013-14 taking the total installed power generation capacity in the country to about 243,000 MW as at 31st March 2014. The government''s policy measures aimed at improving fuel availability and the financial health of state utilities have helped revive the power sector. It is felt that Indian government''s FY13 and FY14 policy measures towards solving two key issues - fuel risk and poor financial health of state power utilities are yielding positive results.

The investment climate is very positive in the power sector. Due to policy liberalization, the sector has witnessed higher investment flows than envisaged. The Power Ministry has set a target for adding about 76,000 MW of electricity generation capacity in the 12th Plan (2012-17) and about 93,000 MW in the 13th Plan (2017-2022).

The new government''s resolve to pursue economic reforms is set to catalyse the power sector''s revival. The stimulation is also seeing an increase in the number of foreign companies interested in participating in the Indian projects. The focus on solving the coal impasse by increasing coal production and assuring coal supply to power plants makes the government''s priorities clear. The increased allocation to power in the plan outlay is crucial for sustained growth recovery. The investors have welcomed the move to extend the 10-year tax holiday and the proposed restoration of ''accelerated depreciation'' which is expected to go a long way in encouraging investments into the sector. Comprehensive measures for enhancing domestic coal production, more washeries to improve the quality of delivered coal and rationalization of coal linkages are all expected to yield positive results.

India is blessed with an abundance of sunlight, water and biomass and the government is committed to increasingly tap this potential for generation of electricity. The composition of renewable power in the country''s installed generation capacity is expected to increase going forward since renewable energy sources and technologies have potential to provide solutions to the long- standing energy problems. India is increasingly adopting responsible renewable energy techniques and taking positive steps towards carbon emissions, cleaning the air and ensuring a more sustainable future. The Indian government has proposed to construct four giant solar energy plants, with a capacity of 1,000MW each, as part of its efforts to accelerate the solar energy program and the Union budget has allocated a sum of Rs. 10,000 million for the solar power sector, a move that is expected to boost energy generation from renewable sources. PFS focuses on attractive opportunities across the infrastructure sector.

PTC India Financial Services Limited (PFS) is a systematically important non- deposit taking non-banking finance company registered with Reserve Bank of India (RBI) and set-up to devote itself mainly for providing financial solutions to projects in the energy value chain. The Company has also been accorded the status of Infrastructure Finance Company (IFC) by the RBI in August 2010. The operational and financial performance of the Company during FY 2013-14 has maintained a robust growth momentum.

FINANCIAL RESULTS

During the year 2013-14, your Company has recorded a total revenue of Rs. 5,461.63 million.

The highlights of the financial results are as under

(Rs. in millions) Particulars 2013-14 2012-13

Income 5,461.63 2,865.22

Expenditure 2,612.77 1,312.33

Profit before tax 2,848.85 1,552.89

Tax expense 771.66 511.32

Profit after tax 2,077.19 1,041.57

Transfer to statutory reserve 415.44 208.31

Transfer to special reserve (in terms of 325.00 200.00 Sec.36(1)(viii)of Income Tax Act, 1961

The operational performance was quiet robust and the interest income increased to Rs.4,199.99 million during 2013-14, thereby recording an increase of 67% compared to Rs.2,513.16 million during 2012-13. In line with the same, the borrowings also increased leading to increase in the finance costs which increased to Rs.2,209.55 million during 2013-14 compared to Rs.1,066.17 million during 2012-13. Finance costs include amortization of foreign currency translation which increased to Rs.1,257.04 million in 2013-14 compared to Rs.544.40 million during 2012-13. The Company made a profit of Rs.821.69 million during the year by divesting its equity stake in one of the company. The profit before tax (PBT) stood at Rs.2,848.85 million during 2013-14 as compared to Rs.1,552.89 million during 2012-13, thus recording a growth of 83% whereas profit after tax nearly doubled to Rs.2,077.19 million during 2013- 14 as compared to Rs.1,041.57 million during 2012-13.

OPERATIONAL PERFORMANCE

The debt assistance sanctioned to various projects during 2013-14 aggregated to Rs.25,202 million compared to Rs.40,271 million in 2012-13. However, the disbursements were quite robust at Rs.30,706 million during 2013-14 compared to about Rs.13,000 million during 2012-13. The loan book stood at Rs.49,744 million as at 31st March 2014 whereas the equity investments stood at Rs.3,054 million as on the said date. The cumulative aggregate debt assistance sanctioned as at 31st March 2014 stands at Rs.103,030 million.

The financial assistance sanctioned by PFS would help capacity creation of more than 30,000 MW. The Company continues to diversify its portfolio and as a result, the composition of renewable projects in the outstanding loan book stands at around 35%, thermal projects constitute about 33%. It is worthwhile to mention that renewable portfolio constitutes a maximum portion of PFS'' loan book. The company has also forayed into financing infrastructure facilities like private railway sidings and development & operation of coal mines and power transmission projects. The Company continues to regularly monitor the progress and operations of the assisted projects through its comprehensive project monitoring mechanism.

DIVIDEND

The Board of Directors of the Company have recommended a dividend @ 10% i.e. Re.1.00 per equity share of Rs.10/- each for the financial year 2013-14.

SHARE CAPITAL

The paid up share capital of the Company as at 31st March 2014 aggregates to Rs.5,620.83 million comprising of 562,083,335 equity shares of Rs.10 each fully paid up. PTC India Limited continues to hold 60% of the paid up capital of the Company as at 31st March 2014. The shares of the Company are listed on the National Stock Exchange and Bombay Stock Exchange.

RESERVES

Out of the profits earned during the financial year 2013-14, the Company has transferred an amount of Rs.415.44 million to Statutory Reserve in accordance with the requirements of Section 45-IC of the Reserve Bank of India Act, 1934. During 2013-14, the Company has also appropriated an amount of Rs.325 million to a reserve created under Section 36(1)(viii) of the Income Tax Act, 1961 in order to achieve tax efficiencies.

RESOURCE MOBILIZATION

The growth in loan assets brings in the challenge of arranging funds at optimal cost and maintaining spread. In order to meet the growing requirement for business operations, and to continuously optimise its borrowing cost, the Company has:

(i) arranged term loans aggregating to around Rs.23,083 million from various banks and financial institutions at competitive rates.

(ii) received funding from IREDA aggregating to Rs.180 million under the "National Clean Energy Fund" (NCEF) to IREDA for on-lending to one solar project being executed in Punjab.

The total borrowings of the Company stood at Rs.38,951 million as at 31st March 2014 compared to Rs.15,868 million as at 31st March 2013. The continuous and persistent efforts made by the Company have enabled it to maintain its overall cost of borrowed funds at about 9.07% for the year and borrow from various banks at their base rates.

The Company raised external commercial borrowings (ECB) aggregating to USD 26 million and USD 50 million from Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG) and International Finance Corporation (IFC) respectively and has successfully implemented the Environmental and Social Management System (ESMS) as per the new IFC Performance Standards 2012.

PFS has entered into derivative transactions to hedge against the currency risk and interest rate risk on outstanding ECBs, using option structures and such transactions are not for trading or speculative purposes. There are no foreign currency exposures that are not hedged by a derivative instrument or otherwise. PFS has outstanding foreign currency borrowings of USD 74.55 million (Previous Year USD 76.00 million), against which the Company has taken call spread options to hedge the currency risk on principal repayments and cap spread options to hedge the interest rate risk on interest payments.

REALISATION

The Company gives utmost priority to the realization of the amounts due towards principal and interest. During 2013-14, PFS recovered principle amount of Rs.3,922 million, and interest of Rs.4,118 million. The Company has NIL Net NPAs as at 31st March 2014. During the year 2013-14, the Company has created a provision for contingencies on standard assets amounting to Rs.165.62 million in accordance with the requirements of Reserve Bank of India vide RBI Circular No. DNBS.PD.CC.No.207/ 03.02.002 /2010-11 dated 17th January, 2011. Though the RBI stipulates the provision equivalent to 0.25%, the Company creates a provision equivalent to 0.50% of the standard assets.

CREDIT RATINGS

During the year ended 31st March 2014, CRISIL has assigned its highest rating "CRISIL A1 " (pronounced CRISIL A one plus) rating to the proposed Short Term Debt Programme (including Commercial Paper) and "CRISIL A " rating to the proposed Non-Convertible Debentures of PFS.

The other long term borrowings of the Company have been rated [ICRA] A by ICRA and Non-Convertible Debentures have been rated [ICRA] A by ICRA, CARE A by CARE and BWR AA by Brickworks.

HUMAN RESOURCE

Human Resources is critical to rapid growth of your Company. Broadening and deepening the human skills and conducive HR practices have been core to the HR initiatives. The human resource policies of the Company help in attracting and retaining the best talent in the industry. Other HRD initiatives include employee welfare measures, in-house and out-station training programmes in leading institutes and promoting participative management.

DIRECTORS'' RESPONSIBILITY STATEMENT

In pursuance of Section-217 (2AA) of the Companies Act, 1956, the Directors make the following statement:

(i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed by PFS along with proper explanation relating to material departures;

(ii) The Directors have selected such Accounting policies, and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the FY 2013-14 and of the profit of the Company for that period;

(iii) Proper and sufficient care has been taken by the Directors for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

(iv) The Annual Accounts have been prepared on a going concern basis.

NON-ACCEPTANCE OF PUBLIC DEPOSIT

PFS is a Non - Deposit Taking Systemically Important Non Banking Finance Company. It has not accepted any public deposit during FY 2013-14.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO ETC.

Since PFS is engaged in investment and lending activities, particulars relating to conservation of energy and technology absorption are not applicable to it.

The Company has incurred expenditure of Rs.153.07 million (previous year Rs.140.18 million) in foreign exchange during the year ended 31st March, 2014. This includes interest in external commercial borrowings amounting to Rs.150.76 million (previous year Rs.127.39 million).

PARTICULARS OF EMPLOYEES

During the financial year ended on 31st March, 2014, no employee was employed for full or part of the year and who was in receipt of remuneration from PFS of more than Rs. 6.00 million per annum or Rs.0.5 million per month, in aggregate.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants were appointed as statutory auditors of the Company for FY 2013-14 by the shareholders and shall hold office upto the conclusion of the forthcoming Annual General Meeting.

The Auditors have audited the Accounts of the Company for the year ended 31st March 2014. Audited Accounts together with the Auditor''s Report thereon are annexed to this report.

The Board of Directors has recommended the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants as statutory auditors of the Company in term of Section 139 of the Companies Act, 2013, subject to the approval by shareholders in the ensuing annual general meeting.

CORPORATE GOVERNANCE

A detailed report on Corporate Governance and Management Discussion & Analysis report, pursuant to the requirement of Clause 49 of the Listing Agreement forms part of the Annual Report. A certificate obtained from the Statutory Auditor of the Company, confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to the Report on Corporate Governance.

ACKNOWLEDGEMENT

The Board of Directors acknowledge with deep appreciation the cooperation received from Ministry of Power, Ministry of Finance, Reserve Bank of India, SEBI, NSE, BSE, PTC India Limited and other stakeholders, International Finance Corporation (IFC), DEG, various Banks, Consortium Partners and Officials of the Company.

For and on behalf of the Board of Directors

Sd/- Date : 1st August, 2014 Deepak Amitabh Place: New Delhi Chairman (DIN: 016061535)


Mar 31, 2013

Dear Shareholders

The Directors have pleasure in presenting you the seventh annual Report together with the audited accounts of your Company for the Financial Year 2012-13.

OVERVIEW

Power sector in india has recorded capacity addition of about 23,466 MW during FY 2012-13 taking the total installed power generation capacity in the country to about 223,343 MW as at 31st March 2013. The installed generation capacity in India is fifth largest in the world and the energy-mix comprises both non-renewable (coal, lignite, petroleum and natural gas) and renewable energy sources (wind, solar, small hydro, biomass, cogeneration bagasse etc). The policy landscape in india has progressively evolved and has led to changes in the power sector, especially in terms of competition, private sector involvement and focus on green energy over the last decade, commencing with the passing of the Electricity Act 2003. However, the power generation has been largely dominated by coal based generation.

The indian power sector has achieved a lot over the last decade in the areas of policy reforms, private sector participation in generation and transmission, new manufacturing technology and capabilities, but there is still much to achieve and a number of challenges to overcome before the opportunities can be leveraged. india aims to add 88,000 MW by the end of the 12th Five- Year Plan, of which almost three-fifths of capacity is expected to be built by private companies. The huge capacity addition plan also offers opportunity for developing evacuation capacities and supply related OEMs like conductor manufacturing, insulator manufacturing, tower fabrication and EPC.

The Government has approved debt restructuring plan for beleaguered state electricity boards, however, it is still felt that strong political will is necessary to achieve meaningful reforms in the power sector. The debt restructuring for the sEBs is dependent upon important conditions such as tariff revisions, reduction in AT&C losses. The implications of the re-structuring are far- reaching. It is expected to improve the financial health of boards, which in turn will ensure timely payments to utilities, and utilities in turn will be able to re-deploy funds into new projects, and the provision to increase tariffs will benefit the sector. Banks will again begin to lend to power projects.

PTC India Financial Services Limited (PFS) is a systematically important non-deposit taking non banking finance company registered with Reserve Bank of India (RBI) and set-up to devote itself exclusively for providing financial solutions to projects in the energy value chain. The Company was accorded the status of Infrastructure Finance Company (IFC) by the RBI in August 2010. The operational and financial performance of the Company during FY 2012-13 has maintained rather growth momentum.

FINANCIAL RESULTS

During the year 2012-13, your Company has recorded a total revenue of Rs.2,865.22 million.

The highlights of the financial results are as under

(Rs. in millions)

Particulars 2012-13 2011-12

income 2,865.22 3,071.99*

Expenditure 1,312.33 1,055.58

Profit before tax 1,552.89 2,016.41

Tax expense 511.32 475.99

Profit after tax 1,041.57 1,540.43

Transfer to statutory reserve 208.31 308.09

Transfer to special reserve (in terms of Sec.36(i) 200.00 - (viii) of Income Tax Act, 1961

*includes Rs. Nil during FY 2012-13 (Rs.1,272.43 million during FY 2011-12) being profit on sale of equity investments.

The operational performance was quiet robust and the interest income increased to Rs.2,513.16 million during 2012-13, thereby recording an increase of 89% compared to Rs.1,329.54 million during 2011-12. in line with the same, the borrowings increased leading to increase in the finance costs. However, compared to the increase in interest income, the finance costs recorded an increase of 47% only during 2012-13 and increased to Rs.1,011.73 million compared to Rs.686.12 million during 2011-12. The Company had made a profit of Rs.1272.43 million being profit on disinvestment of its stake in two companies viz., ind-Barath PowerGencom Limited and indian Energy Exchange Limited during 2011-12. However, no divestments were made during 2012-13. Hence, profit before tax (PBT) stood at Rs.1,552.89 million during 2012-13 as compared to Rs.2,016.41 million in 2011-12, thus recording a decline of 23%. Excluding, the profit on sale of equity investments aggregating to Rs.1272.43 million in 2011-12, the profit before tax increased by 109%. Profit after tax (PAT) stood at Rs.1,041.57 million during 2012-13 compared to Rs.1,540.43 million during 2010-11.

OPERATIONAL PERFORMANCE

The debt assistance sanctioned to various projects during 2012-13 aggregated to Rs. 40,271 million compared to Rs.36,923 million in 2011-12. The disbursement of debt during 2012-13 was quite robust at Rs.13,000.71 million compared to Rs.6,241.75 million in 2011-12. The disbursements in equity investments aggregated to Rs.102.64 million during 2012-13 compared to Rs.224.62 million in 2011-12. The aggregate debt assistance sanctioned as at 31st March 2013 stands at almost Rs.100,000 million.

The financial assistance sanctioned by PFS so far would help capacity creation of more than 30,000 MW. The Company continues to diversify its portfolio and as a result, the composition of renewable projects in the total debt sanctioned has increased to 25% as at 31st March 2013 compared to 13% as at 31st March 2012. The debt assistance to renewable projects constitutes about 40% of the total loan assets as at 31st March 2013 compared to 21% a year ago. The company has also forayed into financing infrastructure facilities like private railway sidings, and development & operation of coal mines and power transmission projects. The Company continues to regularly monitor the progress and operations of the assisted projects through its comprehensive project monitoring mechanism.

DIVIDEND

The Board of Directors of the Company have recommended a dividend @ 4% i.e. Rs.0.40 per equity share of Rs.10/- each for the financial year 2012-13.

SHARE CAPITAL

The paid up share capital of the Company as at 31st March 2013 aggregates to Rs.5,620.83 million comprising of 562,083,335 equity shares of Rs.10 each fully paid up. PTC india Limited continues to hold 60% of the paid up capital of the Company as at 31st March, 2012. The shares of the Company are listed on National Stock Exchange and on Bombay Stock Exchange.

RESERVES

Out of the profits earned during the financial year 2012-13, the Company has transferred an amount of Rs. 208.31 million to statutory Reserve in accordance with the requirements of section 45-iC of the Reserve Bank of india Act, 1934. During 2012-13, the Company has also appropriated an amount of Rs. 200 million to a reserve created under Section 36(i)(viii) of the Income Tax Act, 1961 in order to achieve tax efficiencies.

RESOURCE MOBILIZATION

The growth in loan book brings in the challenge of arranging funds at optimal cost and maintaining spread. in order to meet the growing requirement for business operations, and to continuously optimise its borrowing cost, the Company has:

(i) executed external commercial borrowing (ECB) agreement with International Finance Corporation (IFC) for borrowing of Rs. 1,620 million equivalent of uSD 30 million. The drawdown of same is expected during 2013-14. The Company has already availed ECB funds to the extent of USD 76 million till 31st March, 2013 out of the ECB agreements executed in earlier years. The new ECB facility from IFC has been arranged on fully hedged basis at fixed interest rate, thus providing a cushion against the future volatility in currency and exchange rates.

(ii) arranged term loans aggregating to Rs.13,000 million from various banks at competitive rates.

The total borrowings of the Company stood at Rs.15,868.15 million as at 31st March 2013 compared to Rs.7,602.61 million as at 31st March 2012. The continuous and persistent efforts made by the Company have enabled it to reduce its overall cost of funds to 8.31% during 2012- 13 compared to 10.13% in 2011-12. The reduction has been achieved despite the no significant changes in the interest rate scenario in the economy during the entire financial year 2012-13.

The Company had raised an aggregate amount of Rs.2,016.91 million by way of secured long term tax saving infrastructure bonds during 2010-11 and 2011-12. The same has been fully utilized for business purposes as mentioned in the respective information memorandum for the issue.

REALISATION

The Company gives utmost priority to the realization of the amounts due towards principal and interest. During 2012-13, PFS recovered principle amount of Rs. 2,812.65 million, and interest of Rs. 2340.17 million. The Company has NIL NPAs as at 31st March 2013. During the year 2012-13, the Company has created a provision for contingencies on standard assets amounting to Rs.51.64 million in accordance with the requirements of Reserve Bank of India vide RBI Circular No. DNBS.PD.CC.No.207/ 03.02.002 /2010-11 dated 17th January, 2011. Though the RBI stipulates the provision equivalent to 0.25%, the Company creates a provision equivalent to 0.50% of the standard assets.

CREDIT RATINGS

During the year ended 31st March 2013, the long term bank borrowings of the Company have been rated [ICRA] A by ICRA and Non Convertible Debentures have been rated [ICRA] A by ICRA, CARE A by CARE and BWR AA by Brickwork.

HUMAN RESOURCE

Human Resources is critical to rapid growth of your Company. Broadening and deepening the human skills and conducive HR practices have been core to the HR initiatives. Apart from the campus recruitments being made from the reputed institutions, direct recruitments have been made for specialised positions. The human resource policies of the Company help in attracting and retaining the best talent in the industry. Other HRD initiatives include employee welfare measures, in-house and out-station training programmes in leading institutes and promoting participative management.

DIRECTORS'' RESPONSIBILITY STATEMENT

In pursuance of Section 217 (2AA) of the Companies Act, 1956, the Directors make the following statement:

(i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed by PFS along with proper explanation relating to material departures;

(ii) The Directors have selected such Accounting policies, and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the FY 2012-13 and of the profit of the Company for that period;

(iii) Proper and sufficient care has been taken by the Directors for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

(iv) The Annual Accounts have been prepared on a going concern basis.

NON-ACCEPTANCE OF PUBLIC DEPOSIT

PFS is a Non - Deposit Taking Systemically Important Non Banking Finance Company. It has not accepted any public deposit during FY 2012-13.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO ETC.

Since PFS is engaged in investment and lending activities, particulars relating to conservation of energy and technology absorption are not applicable to it.

The Company has incurred expenditure of Rs.140.18 million (previous year Rs. 67.68 million) in foreign currency during the year ended 31st March, 2013. These included payment of Rs. 12.21 million as charges/fee for raising ECB.

PARTICULARS OF EMPLOYEES

During the Financial Year ended on 31st March, 2013, no employee was employed for full or part of the year and who was in receipt of remuneration from PFS of more than Rs. 6.00 million per annum or Rs.0.5 million per month, in aggregate.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants were appointed as Statutory Auditors of the Company for FY 2012-13 by the shareholders and shall hold office upto the conclusion of the forthcoming Annual General Meeting.

The Auditors have audited the Accounts of the Company for the year ended 31st March 2013. Audited Accounts together with the Auditor''s Report thereon are annexed to this report.

The Board of Directors has recommended the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants as statutory auditors of the Company for FY 2013-14 subject to the approval by shareholders in the ensuing annual general meeting.

CORPORATE GOVERNANCE

A detailed report on Corporate Governance and Management Discussion & Analysis report, pursuant to the requirement of Clause 49 of the Listing Agreement forms part of the Annual Report. A certificate obtained from the Statutory Auditor of the Company, confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to the Report on Corporate Governance.

ACKNOWLEDGEMENT

The Board of Directors acknowledge with deep appreciation the cooperation received from Ministry of Power, Ministry of Finance, Reserve Bank of India, SEBI, NSE, BSE, PTC India Limited and other stakeholders, International Finance Corporation (IFC), DEG, various Banks, Consortium Partners and Officials of the Company.

For and on behalf of the Board of Directors

Sd/-

Place : New Delhi Deepak Amitabh

Date : 27th June, 2013 Chairman

DIN : 01061535


Mar 31, 2012

Dear Shareholders

The Directors have pleasure in presenting you the sixth Annual Report together with the audited accounts of your Company for the financial year 2011-12.

OVERVIEW

Power Sector in India has recorded capacity addition of about 26,251 MW during FY 2011-12 taking the total installed power generation capacity in the country to about 199,877 MW as at 31st March, 2012. The installed capacity addition during the 11th Five Year Plan 2007-12 was about 55,000 MW and the Government has set a target of 90,000 MW capacity addition during the 12th Five Year Plan 2012-17. India's energy-mix comprises both non-renewable (coal, lignite, petroleum and natural gas) and renewable energy sources (wind, solar, small hydro, biomass, cogeneration bagasse etc). Though the sector is currently constrained by shortage of fuel, implementation risks, logistical arrangements, banks' increasing exposure to distribution companies, these constraints are expected to overcome in short to medium term. The planned capacity addition during the 12th Five Year Plan, which will not only lead to setting up of power plants but also stimulate investments in other areas such as transmission lines, distribution networks, setting up of more EPC contractors, investment in logistics for movement of heavy machinery, transportation network for fuel etc, presents us with enormous opportunities of providing assistance in the sector and it is estimated that power sector would require capital investment in excess of Rs. 11 trillion during the ensuing plan.

PTC India Financial Services Limited (PFS) is a Systemically Important Non- Deposit Taking Non Banking Finance Company registered with Reserve Bank of India (RBI) and set-up to devote itself exclusively for providing financial solutions to projects in the energy value chain. The Company was accorded the status of Infrastructure Finance Company (IFC) by the RBI in August 2010. The operational and financial performance of the Company during FY 2011-12 has maintained rather exceeded growth momentum.

FINANCIAL RESULTS

During the year 2011-12, the Company has recorded a total revenue of Rs. 3,071.99 million, an increase of 182% over the previous year's revenue of Rs. 1,088.52 million.

The highlights of the financial results are as under (Rs. in million)

Particulars 2011-12 2010-11

Income 3,071.99 1,088.52

Expenditure 1,055.58 574.21

Profit before tax 2,016.41 514.31

Tax expense 475.99 144.04

Profit after tax 1,540.42 370.27

Transfer to statutory reserve 308.09 74.10

During the year, the Company has disinvested its equity stake in two companies viz., Ind-Barath Power Gencom Limited and Indian Energy Exchange Limited which resulted in a profit of Rs. 1,272.43 million compared to a profit of Rs. 123.66 million on similar divestments during the previous year.

The profit before tax (PBT) has increased to Rs. 2,016.41 million during 2011-12 as compared to Rs. 514.31 million in 2010-11, thus recording a significant growth of 292%. Profit after tax (PAT) increased by 316% to Rs. 1,540.42 million from Rs. 370.27 million during 2010-11.

OPERATIONAL PERFORMANCE

The amount of loan sanctioned during 2011-12 aggregated to Rs. 36,923 million compared to Rs. 17,030 million in 2010-11. The level of disbursement of debt was Rs. 6,241.75 million during the year compared to Rs. 6,236.64 million during the previous year. A large portion of equity of PFS was already committed and disbursed in the equity investments as at the beginning of the year 2011-12. As a result, the amount of disbursement of equity during the year was lower at Rs. 224.62 million. Effective commitments for debt as at 31st March, 2012 were Rs. 58,364 million compared to Rs. 33,649 million as at 31st March, 2011.

The number of new projects for which financial assistance was sanctioned during the year was 28 taking the total number of sanctioned projects till 31st March, 2012 to 90. The financial assistance sanctioned by PFS so far would help capacity creation of more than 24,000 MW. Fuel wise assisted projects during the year comprised of 11 coal-based thermal projects, 5 wind-based projects, 4 solar-based projects, 3 hydro-based project and 1 biomass-based project.

Most of the assisted projects have progressed well compared with the schedule of implementation. 3 coal-based thermal projects, 2 wind-based projects and 2 solar-based projects have achieved commercial operations during the year 2011-12. Through a comprehensive project monitoring mechanism, PFS continuously monitors status of implementation of assisted projects on a regular basis.

DIVIDEND

The Directors of the Company have not recommended dividend for the financial year ended 31st March, 2012.

SHARE CAPITAL

The paid up share capital of the Company as at 31st March, 2012 aggregates to Rs. 5,620.83 million comprising of 562,083,335 equity shares of Rs. 10 each fully paid up. PTC India Limited continues to hold 60% of the paid up capital of the Company as at 31st March, 2012. The shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange.

RESERVES

Out of the profits earned during the financial year 2011-12, the Company has transferred an amount of Rs. 308.09 million to Statutory Reserve in accordance with the requirements of Section 45-IC of the Reserve Bank of India Act, 1934.

RESOURCE MOBILIZATION

In order to meet the growing requirement of funds for the business operations, and to continuously optimise the borrowing cost, the Company has:

(i) raised an amount of Rs. 1,596.05 million during FY 2011-12 through secured long term tax saving Infrastructure Bonds eligible for tax benefit under Section- 80CCF of the Income Tax Act, 1961.

(ii) executed external commercial borrowing (ECB) agreement during the year with International Finance Corporation (IFC) for borrowing upto USD 50 million. The Company has availed ECB funds to the extent of USD 26 million till 31st March, 2012 out of the ECB agreement with DEG executed during financial year 2010-11 and the ECB facility from IFC shall be utilized during the ensuing financial year which would help us to lower the cost of borrowings.

The total borrowings of the Company stood at Rs. 7,602.61 million as at 31st March, 2012 as compared to Rs. 5,698.75 million as at 31st March 2011. The Company has made continuous and persistent efforts which have enabled it to reduce its cost of funds to 10.13% in financial year 2011-12 from 10.47% in financial year 2010-11. The reduction has been achieved despite the rising interest rate scenario in the economy during the entire financial year 2011-12. The ECB drawdown during 2012-13 will further help in lowering the cost of funds of the Company.

Out of the total proceeds from issue of secured long term tax saving infrastructure bonds aggregating to Rs. 1,596.05 million during FY 2011-12, the Company utilized a sum of Rs. 1,187.77 million for business purposes as mentioned in the information memorandum for the issue. The balance amount of Rs. 408.28 million as at 31st March, 2012 is held in current accounts and fixed deposits with scheduled banks.

REALISATION

The Company gives utmost priority to the realization of the amounts due towards principal and interest. During the year, PFS recovered loans of Rs. 617.3 million, and realized interest of Rs. 1,258.2 million on both short- term and long-term loans. The Company has all accounts as standard during the year and has not made any provision on Loan Assets (non performing) in its financial statements upto the year ended 31st March, 2012 other than the Statutory Reserve as mandated by the Reserve Bank of India. During the year 2011-12 the Company has created a provision for contingencies on standard assets amounting to Rs. 46.30 million in accordance with the requirements of Reserve Bank of India vide RBI Circular No. DNBS.PD.CC.No.207/ 03.02.002 /2010-11 dated 17th January, 2011. Though the RBI stipulates the provision equivalent to 0.25%, the Board of Directors of the Company has decided to create a provision equivalent to 0.50% of the standard assets.

CREDIT RATINGS

During the year ended 31st March, 2012, the long term bank borrowings of the Company have been rated [ICRA] A by ICRA and Non Convertible Debentures have been rated [ICRA] A by ICRA, CARE A by CARE and BWR AA by Brickwork. The Company's commercial paper programme has been awarded the rating of A1 by ICRA.

HUMAN RESOURCE

Human Resources becomes critical to the rapid growth of your Company. Broadening and deepening the human skills and conducive HR practices have been core to the HR initiatives. Apart from the campus recruitments being made from the reputed institutions, direct recruitments have been made for specialised positions. The human resource policies of the Company help in attracting and retaining the best talent in the industry. Other HRD initiatives taken include employee welfare measures, in-house and out- station training programmes and promoting participative management.

DIRECTORS' RESPONSIBILITY STATEMENT

In pursuance of Section 217 (2AA) of the Companies Act, 1956, the Directors make the following statement:

(i) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed by PFS along with proper explanation relating to material departures;

(ii) The Directors have selected such Accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2011-12 and of the profit of the Company for that period;

(iii) Proper and sufficient care has been taken by the Directors for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

(iv) The Annual Accounts have been prepared on a going concern basis.

NON-ACCEPTANCE OF PUBLIC DEPOSIT

PFS is a Systemically Important Non - Deposit Taking Non Banking Finance Company. It has not accepted any public deposits during financial year 2011-12.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO ETC.

Since PFS is engaged in investment and lending activities, particulars relating to conservation of energy and technology absorption are not applicable to it.

The Company has incurred expenditure of Rs. 67.68 million (previous year Rs. 22.59 million) in foreign exchange during the year ended 31st March, 2012. These included payment of Rs. 41.90 million as charges/fee for raising ECB.

PARTICULARS OF EMPLOYEES

During the Financial Year ended on 31st March, 2012, no employee was employed for full or part of the year and who was in receipt of remuneration from PFS of more than Rs. 6.00 million per annum or Rs. 0.5 million per month, in aggregate.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants were appointed as Statutory Auditors of the Company for financial year 2011-12 by the shareholders and shall hold office upto the conclusion of the forthcoming Annual General Meeting.

The Auditors have audited the Accounts of the Company for the year ended 31st March, 2012. Audited Accounts together with the Auditor's Report thereon are annexed to this report.

CORPORATE GOVERNANCE

A detailed report on Corporate Governance and Management Discussion & Analysis report, pursuant to the requirement of Clause 49 of the Listing Agreement forms part of the Annual Report. A certificate obtained from the Statutory Auditor of the Company confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to the Report on Corporate Governance.

ACKNOWLEDGEMENT

The Board of Directors acknowledge with deep appreciation the co-operation received from Ministry of Power, Ministry of Finance, Reserve Bank of India, SEBI, NSE, BSE, PTC India Limited and other stakeholders, International Finance Corporation (IFC), DEG, various Banks, Consortium Partners and Officials of the Company.

For and on behalf of the Board of Directors

Sd/-

T.N. Thakur

Date : 30th July, 2012 Chairman & Managing Director

Place: New Delhi DIN : 00024322


Mar 31, 2010

The Directors have pleasure in presenting the Fourth Annual Report together with audited accounts of your company for the financial year ending 31st March, 2010.

Overview

1. PTC India Financial Services Limited (PFS) is a systematically important non- deposit taking NBFC registered with Reserve Bank of India (RBI), exclusively engaged in providing financing solutions to projects in the energy value chain. An impressive all-round growth reflected in financial and operational performance during the year 2009-10 has provided a strong base to a newly set-up and fast evolving institution. Significantly improved performance during the year is also marked by a large number of initiatives taken to broad-base resource mix, explore new areas of business and build institutional capacity.

Financial Results

2. Starting its business operations effectively from September, 2007, PFS in its third year of operations i.e. 2009-10, has recorded revenue income of Rs.534.90 million rising from Rs.116 million in 2008-09. The highlights of financial results are as under.

(Rs. in million)

Particualrs 2009-10 2008-09

Revenue 534.90 116.00

Expenditure 167.42 28.92

Amortization & depreciation 0.47 0.24

Profit/(Loss) before tax 367.00 86.81

Provision for tax 112.48 1.51

Net profit/loss after taxation 254.52 85.30

Transfer to statutory reserve fund 50.95 17.06

Equity share capital (Rs. 10 each) 4,345.83 4,345.83

Reserve and surplus (including share premium) 2,001.14 1,746.62

The Profit Before Tax (PBT) has increased to Rs.367 million, from Rs.86.81 million in the year 2009-10 as compared to last year. This was largely due to increased level of disbursement of loans to power projects - both term loan and mezzanine/short-term loan, and increase in the fee-based income. The revenue for the year includes Rs. 348.84 million as interest on loans, and fee based income towards services involved in appraisal, structuring of financing product, due-diligence, legal documentation and disbursement as compared to Rs.13.89 million during the previous year.



Dividend

11. The Directors have not recommended dividend for the financial year ended on 31st March, 2010.

Transfer to Reserves

12. Out of profits of financial year 2009-10, Rs. 50.95 million has been transferred to Statutory Reserve Fund in terms of Section-45-IC of Reserve Bank of India Act, 1934.

Directors Responsibility Statement

13. In pursuance of Section-217 (2AA) of the Companies Act, 1956, the Directors make the following statement that :

(i) In preparation of the Annual Accounts, applicable accounting standards have been followed by PFS along with proper explanation relating to material departures;

(ii) The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year 2009-10 and of the profit or loss of the Company for that period;

(iii) Proper and sufficient care has been taken by the Directors for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

(iv) The Annual Accounts have been prepared on a going concern basis.

Non Acceptance of Public Deposit

14. PFS is a Non-Public Deposit taking Systematically Important NBFC. It has not accepted any public deposit during the year since inception.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo Etc.

15. Since PFS is engaged in investment and lending activities, particularly relating to conservation of energy and technology absorption are not applicable to it. The Company has incurred Rs.1.42 million as expenditure in foreign exchange during the financial year ended on 31st March, 2010.

Particulars of Employees

16. During the Financial Year ended on 31st March, 2010, particulars of the employee who was employed for full or part of the year and who was in receipt of remuneration from PFS, which in aggregate not more than Rs.2.40 million per annum or Rs.0.20 million per month as the case may be are given at Annexure of this report.

Auditors

17. M/s. Deloitte Haskins & Sells were appointed as statutory auditors of the Company for Financial Year 2009-10 by the shareholders and shall hold office upto the conclusion of the forthcoming Annual General Meeting.

The Auditors have audited the Accounts of the Company for the year ended 31st March, 2010. Audited Accounts together with the Auditors Report thereon are annexed to this report.

Corporate Governance

18. Your Company endeavours to inculcate good corporate governance practices in its organisational and business systems and processes. Your company realises that the good governance is a reflection of its culture, policies, relationship with stakeholders and commitments to values. Accordingly, it not only fulfils corporate governance requirements as stipulated by the Reserve Bank of India for NBFCs but also endeavours to adhere to corporate governance requirements stipulated by SEBI for listed companies, as a best practice.

Committees of Board of Directors:

19. The Board has constituted the following committees:

1) Audit Committee

2) Nomination-cum-Remuneration Committee

3) Compensation Committee for ESOP

4) Assets Liability Management Committee

5) Risk Management Committee

1. Audit Committee

As per the requirement of Companies Act, 1956, the Board has constituted an Audit Committee. The Committees role includes oversight of the companys financial reporting process to ensure that the financial statements of the company are true and fair, reviewing the companys financial and risk management. The Committee is chaired by Shri. P. Abraham, and Shri Shashi Shekhar, Shri Deepak Amitabh, Mrs. Rama Murali are the members of the committee. The Committee met five times in the financial year 2009-10. The Chairman of the Audit committee, Mr. P. Abraham was present in the last AGM of the company.

2. Nomination-cum-Remuneration Committee

The Board has constituted a Nomination cum Remuneration Committee in its 15th meeting on 5th of August, 2008. The Committees role includes fixing of remuneration of managerial personnel and ensuring that fit and proper person are placed on Board of the Company. The Committee is chaired by Shri T.N. Thakur and Shri P. Abraham, Shri. Deepak Amitabh, Shri L.B. Naidu are members of the Committee. During the financial year 2009-10, no meeting of the committee was held.

3. Compensation Committee for ESOP

The Board has constituted a Compensation Committee for ESOP in its 14th meeting held on 29th April, 2008. The scope of the Committee is to finalize the basic feature of ESOP scheme and allocation of ESOP to Directors and employees of the Company. The Committee is chaired by Shri T.N. Thakur and Shri Deepak Amitabh and Shri L.B. Naidu are members of the committee. The Committee met twice during the financial year 2009-10.

4. Assets Liability Management Committee

The Board has constituted Assets Liability Management Committee in its 19th

meeting held on 30th March 2009. The Company has also put in place an ALM Policy for effectively managing market risk, interest rate and liquidity risk. The policy also provides for periodic reporting to Board and prescribes various limits. The Committee is chaired by Shri T.N. Thakur and Shri P. Abraham, Shri Deepak Amitabh, Dr. Ashok Haldia are the members of the Committee. The Committee met twice during the financial year 2009-10.

5. Risk Management Committee

The Board has constituted a Risk Management Committee in its 21st meeting held on 7th July, 2009, as per the requirement of Reserve Bank of India. The scope of the Committee is to review risk management in relation to various risks, like - credit risk, operational risk and integrated risk profile of the Company. The Committee is chaired by Shri Shashi Shekhar, and Shri. L.B. Naidu, Dr. Ashok Haldia are the members of the Committee. The Committee met twice during the financial year 2009-10

Employee Stock Option Plan - ESOP 2008

20. The Company instituted the Employee Stock Option Plan - ESOP 2008 to grant equity based incentives to all its eligible employees. During the year, second tranche of ESOP 2008 was approved by the shareholders on October 23, 2009 and provided for grant of 1,00,75,000 options exercisable at a price of Rs 16 per share, representing one share for each option upon exercise. During the previous year the first tranche of ESOP was approved by the shareholders on October 27, 2008 and the Company granted two types of options i.e. Growth options granted to the employees and exercisable at intrinsic value as on the date of grant as certified by an independent valuer and Founder Member Options exercisable at face value of shares i.e. Rs 10 per share, representing one share for each option upon exercise. The vesting period of these options granted is 4 years from the respective date of grant.

Movement in Stock Options Year ended 31.03.2010 (in Nos.)

Growth Founder Options Member Options

Outstanding at the beginning of the year 8865000 1210000

Add: Granted during the year 10075000 -

Less: Forfeited during the year 544500 -

Less: Exercised during the year - -

Less: Expired during the year - -

Options outstanding as at the end of the year 18395500 1210000

Debenture Trustees

21. The Company has issued Non Convertible Debentures(NCD) of Series I & 2, in line with the requirement of SEBI, appointed IDBI Trusteeship Services Limited as debentures trustee for NCDs Series I & 2.

Acknowledgement

The Board of Directors acknowledge with deep appreciation the cooperation received from the Ministry of Finance, Reserve Bank of India, PTC India Ltd., Macquarie India Holdings Ltd., G.S. Strategic Investments Ltd., various banks, and officials of the Company.

For and on behalf of the Board of Directors

(Tantra Narayan Thakur)

Chairman & Managing Director

Date : 23rd July, 2010

Place : New Delhi


Mar 31, 2009

1.0 The Directors have pleasure in presenting the Third Annual Report together with the audited accounts for the year ending 31st March, 2009.

2.0 Financial Results

2.1 PTC India Financial Services Limited (PFS) was incorporated in September, 2006 and commenced its business operations effectively from September, 2007. The financial highlights of PFS for the year 2008-09 are as follows.

Particualrs Rs. (in crores) Rs. (in crores)

2008-09 2007-08

Revenue 11.60 3.17

Expenditure 2.90 1.99

Amortization & Depreciation 0.02 1.78

Profit/ (Loss) before Tax 8.68 (0.60)

Provision for Tax 0.15 (0.50)

Net Profit/Loss after Taxation 8.53 (0.10)

Transfer to Statutory Reserve Fund 1.71 -

Equity share capital (Rs.10 each) 434.58 90.00 Reserve and surplus

(including share premium) 174.76 20.68

2.2 Gross income of the Company has increased by 266.38 % from Rs. 3.17 crore in 2007-08 to Rs. 11.60 crore in 2008-09, with increase in profit/loss before tax from Rs. (0.60) crore to Rs. 8.68 crore. During the year, the Company started financing through term loan, and participating in equity through structured product like Compulsorily Convertible Debentures (CCD). Revenue for the year thus also includes Rs.1.39 crores as income from interest, and fee based income towards services involved in appraisal, structuring of financing product, due- diligence, legal documentation, and disbursement.

3.0 Operations Review

3.1 Investment in the power sector was adversely affected during the year 2008-09 because of unprecedented turmoil in the financial markets in India and globally. Liquidity crisis or general risk aversion in the financial markets posed a challenge for entities, like, PFS, which are exclusively devoted to financing to power sector projects, to meet requirements of projects in pipeline - at developmental stage or in implementation process. With the advantage of strong parentage of PTC India Limited available, PFS was able to commit a significant level of assistance during the year in the form of equity and term loan to private power projects. The portfolio of projects assisted by PFS, though relatively small in number, as would be the case for any new entity, comprised of private power projects in renewable as well as non-renewable space.

3.2 During the year, PFS has sanctioned financial assistance of Rs.722 crores to 15 projects, in the form of equity and/or debt. Cumulatively, PFS has sanctioned financial assistance of Rs.886 crores to 19 projects entities till 31st March, 2009 supporting capacity creation of more than 4600 MW and involving capital investment of more than Rs. 20,000 crore. Sector-wise, assisted projects comprised of 8 coal based thermal power projects, 6 bio-mass based thermal power projects, 1 project based on wind energy. The first ever power exchange, namely, Indian Energy Exchange Limited (IEX) co-promoted by PFS, started its operation in June 2008. Most of the projects in which equity participation was committed till the third quarter of the year are in advance stage of implementation.

3.3 At the end of the year, PFS has undisbursed committed sanction, equity as well as debt, of Rs. 660 crores. With strong pipeline of projects available and potential that exists for financing power sector projects, your Company expects to record much higher level of growth in the current 2009-10.

3.4 During the year, PFS has also focused on mobilization of resources through equity as well as debt in order to meet growth in operations. Equity base has been increased from Rs.110.6 crores as at the end of the year 2007-08 to Rs.601.7 crores as on 31st March, 2009. To provide for resources for enabling debt funding, PFS obtained Lines of Credit from various banks and, for tenure upto 10 – 15 years. The efforts to raise fund with different maturity period and at a lower cost through other alternatives available are actively on.

3.5 Treasury operations are focusing, as part of investment policy and as a separate profit centre, on fixed income securities while ensuring protection to the capital investment.

3.6 As a philosophy, PFS believes in maintaining a strong rapport with the assisted projects by adding value at every stage of development and implementation. As a back up, a project monitoring and support mechanism has been put in place.

3.7 PFS has also focused, during the year, on developing a credible network of relationship with financial institutions, banks, merchant bankers, multilateral and bilateral organizations. This has helped in identifying business development opportunities, resource mobilization, and participation in co-financing and syndication opportunities.

3.8 PFS Board has adopted business plan prepared with the assistance of Pwc for a period of 2008-09 to 2012-13. The business plan also provides for broad strategies for achieving targeted growth. Activity level of PFS in the remaining part of the year, developments in the financial market, and current scenario of power sector, may require, scaling up the targeted activity level, and suitable modification in the strategy, to be pursued.

4.0 Human Resource Development

4.1 PFS has a nucleus organization set up mainly comprising of persons have qualification and rich experience in the power and financial sector. With the growth in the level of operations, new skill set are being added through fresh recruitment and capacity building measures.

5.0 Capital Structure

5.1 During the financial year 2008-09, PFS has increased its capital base (Share Capital plus Premium) from Rs.110.6 crore to Rs.601.7 crore by offering to the existing shareholders, namely, Macquarie India Holdings Limited, GS Strategic Investments Limited, and PTC India Limited (PTC) in terms of the Shareholders Agreement.

5.2 On account of call money raised on 27th March 2008, and 19th February 2009, and addition of shares allotted on 10th April 2008 and 30th March 2009, the capital structure of PFS as on 31st March, 2009 stood as under.

Sr. Particulars of No. of Equity Shares % Shareholding

No. Shareholders held on

31.03.2009 31.03.2008 31.03.2009 31.03.2008

1. PTC India Ltd. 337250001 54000,006 77.60% 60%

2. GS Strategic

Investments Ltd. 48666667 18000002 11.20% 20%

3. Macquarie India

Holdings Limited 48666667 18000002 11.20% 20%

Total 434583335 90000010 100% 100%

6.0 Dividend

6.1 The Directors have not recommended dividend for the financial year ended on 31st March 2009. 7.0 Transfer to Reserve

7.1 Out of the profit of financial year 2008-09, Rs. 1.71 crore has been transferred to Statutory Reserve Fund in terms of Section 45-IC of Reserve Bank of India Act, 1934. 8.0 Directors Responsibility Statement

8.1 In pursuance of section 217 (2AA) of the Companies Act 1956, the Directors make the following statement that:

(i) In the preparation of the Annual Accounts, the applicable accounting standards had been followed by PFS along with proper explanation relating to material departures;

(ii) The Directors have selected such Accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year 2008-09 and of the profit or loss of the Company for that period;

(iii) Proper and sufficient care has been taken by the Directors for maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities and

(iv) The Annual Accounts had been prepared on a going concern basis. 9.0 Non Acceptance of Public Deposit

9.1 PFS is a Non-Public Deposit taking Systematically Important NBFC.

It has not accepted any public deposit during the year since inception. 10.0 Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo etc.

10.1 Since PFS is engaged in investment and lending activities, particulars relating to conservation of energy and technology absorption are not applicable to it. The Company has not incurred any expenditure or income in foreign exchange during the financial year ended on 31st March 2009.

11.0 Particulars of the Employees

11.1.1 During the Financial Year ended on 31st March 2009, particulars of the employee who was employed for full or part of the year, and who were in receipt of remuneration from PFS, which in aggregate not more than Rs 24 lacs per annum or Rs 2 lakh per month as the case may be are given at Annexure of this report.

12.0 Auditors

12.1 M/s. Price Waterhouse, Chartered Accountants has been appointed as auditors of the Company till the conclusion of the Third Annual General Meeting of the Company.

12.2 The Auditors have audited the Accounts of the Company for the Year ended 31 March 2009. Audited Accounts together with the Auditors Report thereon are annexed to this report.

13.0 Board of Directors

13.1 Consequent upon change in the shareholding structure with effect from 31st March, 2009, GS Strategic Investments Limited and Macquarie India Holdings Limited, ceased to have right to nominate their representative on the Board of Directors. On a special request made by the Board, the Directors earlier nominated by GS Strategic Investments Limited and Macquarie India Holdings Limited agreed to remain on the Board in their individual capacity.

13.2 During the year, the term of Shri T.N. Thakur, CMD and Shri Deepak Amitabh, Director & CFO ended on 24th April 2009. The Board was pleased to re-appoint Shri Thakur as CMD and Shri Deepak Amitabh as Director and CFO.

14.0 Audit Committee

14.1 Shri P. Abraham is the Chairman and Shri Shashi Shekhar and Shri Deepak Amitabh are the members of the Audit Committee. During the financial year 2008-09, one meeting of Audit committee was held on 29th April 2008 and all the members were present in this meeting.

15.0 Nomination cum Remuneration Committee Meeting

15.1 Nomination cum Remuneration Committee Meeting has been constituted by the Board in August 2008. The Committee met once on 27th October, 2008. 16.0 Compensation Committee for ESOP

16.1 Compensation Committee for ESOP has been constituted by the Board in its 14th meeting held on 29th April 2008. During the year, two meetings of the Committee for ESOP were held.

17.0 Assets Liability Management Committee

17.1 PFS Board in its meeting held on 30th March 2009 has approved the Assets Liability Management (ALM) Policy and constituted an Assets Liability Management Committee (ALCO) to monitor risk related to liquidity and interest rate and also monitor implementation of decisions taken.

18.0 Employee Stock Option Plan – ESOP 2008

18.1 The Company instituted Employee Stock Option Plan – ESOP 2008 to grant equity based incentives to all its eligible employees and the eligible employees of the Holding Company. The ESOP 2008, finally approved by the shareholders on October 27, 2008 provides for grant of 10,075,000 options. The Company has granted two types of options i.e. Growth Options granted to the employees exercisable at fair market value as on the date of grant as certified by an independent valuer, and Founder Member Options exercisable at face value of shares i.e. Rs 10 per share. The maximum tenure of these options granted is 4 years from the date of grant. The balance options available for grant as at March 31, 2009 are 10,075,000.

18.2 The details of options granted to employees under the ESOP 2008 are set out below.

Movement in Stock Options Year ended 31.03.2009

Growth Founder

Options Member

Options

Outstanding at the beginning of the year - -

Add: Granted during the year 8,865,000 1,210,000

Less: Forfeited during the year - -

Less: Exercised during the year - -

Less: Expired during the year - -

Options outstanding as at the end of the year 8,865,000 1,210,000

19.0 Acknowledgment

19.1 The Board of Directors acknowledge with deep appreciation the co- operation received from the Ministry of Finance, Reserve Bank of India, PTC India Ltd., Macquarie India Holdings Ltd., GS Strategic Investments Ltd., various banks, and officials of the Company and PTC India Ltd.

For and on behalf of the Board of Directors

(Tantra Narayan Thakur)

Chairman & Managing Director

Place : New Delhi

Date : 27th July, 2009


Mar 31, 2008

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