About
Power Finance Corporation Ltd
Power Finance Corporation Ltd is a leading power sector Public Financial Institution and a Non-Banking Financial Company providing fund and non-fund based support for development of the Indian power sector. The Company is engaged in power sector financing, the integrated development of the power and associated sectors. They provide large range of Financial Products and Services like Rupee Term Loans, Transitional Financing Services, Project Term Loan, Equipment Lease Financing, Direct Discounting of Bills, Short Term Loan, and Consultancy Services etc for various Power projects in Generation, Transmission, and Distribution sector as well as for Renovation & Modernization of existing power projects.
The Company's clients include state power utilities, central power sector utilities, power departments, private power sector utilities (including independent power producers), joint sector power utilities, power equipment manufacturers and power utilities run by local municipalities. These clients are involved in all aspects of the generation, transmission and distribution and related activities in the power sector in India.
Power Finance Corporation Ltd was incorporated on July 16, 1986 as a public limited company. The GoI established the company as a financial institution in order to finance, facilitate and promote power sector development in India with the President of India holding 100% of the equity share capital. In December 31, 1987, they commenced their business operations. In the year 1988, they started lending activities. In the year 1990, the company was declared as a public financial institution.
In the year 1991, the company was conferred with a license to deal in foreign exchange in the power sector. In the year 1992, Project on Energy Management Consultation and Training (EMCAT) became operational with the objective to bring about improvement in the efficiency of the energy supply component of the power sector with the help of USAID. In the year 1996, the company started funding private power projects.
In the year 1998, the company was granted the Mini Ratna (Category I) status. They promoted a joint venture company, namely PTC Ltd in association with NTPC and PGCIL. In the year 1999, the company launched consultancy services in order to provide consultancy services to both state owned and private power utilities for the power and financial sectors.
In the year 2003, the company was appointed as a nodal agency by the MoP to fund the India Power Fund scheme to catalyze the process of fresh equity investment in the power sector. In the year 2005, the company entered into MoU with LIC and ten leading public sector banks for consortium financing of power projects. In the year 2006, the company incorporated seven subsidiary companies for developing UMPPs. They issued the letter of intent for the Sasan and Mundra UMPPs. In the year 2007, they incorporated their eighth subsidiary company for developing UMPP.
During the year 2006-07, the company launched their IPO and the holding of Government of India reduced from 100% to 89.78% of the paid-up equity. On successful completion of bidding process, two of the subsidiaries, Coastal Gujarat Power Ltd and Sasan Power Ltd were transferred to Tata Power Company Ltd and Reliance Power Ltd on April 22, 2007 and August 7, 2007 respectively. The company was registered as a Non Banking Financial Company by RBI and was conferred with the status of Nav Ratna by the Govt of India on June 22, 2007.
During the year 2007-08, the projects, namely Maneri Bhali U-1,3&4 (228 MW) of UTJVNL in Uttaranchal, Balimela U-7 of OHPC in Orissa and Teesta V HEP U-2 (170 MW) of NHPC in Sikkim, which were supported by the company were commissioned. The company sanctioned loans worth Rs 190 crore for R & M and Life Extension of thermal power plants. Also, they sanctioned Rs 222 crore for R&U of Hydro Power Projects.
In March 2008, the company signed an MoU with RITES Ltd (A Govt. of India Enterprise) to facilitate import of coal from African countries and elsewhere. Also, they signed an MoU with TNEB whereby PFC would finance cogeneration projects of around 250 MW planned to be set up at a cost of Rs1200 crore in various cooperative and public sector sugar mills in the state of Tamil Nadu.
In March 25, 2008, the company launched a 100% owned subsidiary company, namely PFC Consulting Ltd for providing consulting services. Also, they incorporated an advisory company namely Power Equity Capital Advisors Private Limited to provide advisory services related to equity investments in Indian power sector.
During the year 2008-09, the company established a Consortium Lending Group (CLG) with an aim to give fillip to Consortium Lending Operations, particularly through the Power Lenders' Club (PLC) which has 21 members including LIC, HUDCO and 18 Indian banks. The projects in association with the company, namely Baglihar HEP (3x150 MW) of JKPDCL in Jammu and Kashmir, Priyadarshni Jurala HEP (6x39 MW) of APPGCL in Andhra Pradesh and Varahi HEP (2x115 MW) of KPCL in Karnataka were commissioned.
During the year, the company sanctioned loans worth Rs 214 crore for R&M and life extension of thermal power plants. Also, they sanctioned Rs 48 crore for R&M of hydro power projects. Chhattisgarh State Electricity Board was reorganized / unbundled into Chhattisgarh State Power Holding Company Ltd., Chhattisgarh State Power Generation Company Ltd., Chhattisgarh State Power Transmission Company Ltd., Chhattisgarh State Power Distribution Company Ltd. and Chhattisgarh State Power Trading Company Ltd with effect from January 1, 2009. Also, the company in association with NTPC, NHPC and TCS promoted National Power Exchange Ltd with an authorized capital of Rs.50 crore.
The company was conferred with the coveted 'KPMG-Infrastructure Today Award 2008' for 'Most Admired Government Enabler - Power' category.
During the year 2009-10, the company sanctioned loans worth Rs 1,950 crore for R&M and life extension of thermal power plants. Also, they sanctioned Rs 74 crore for R&M of hydro power projects. In August 2009, Jharkhand Integrated Power Ltd. for Tilaiya UMPP in Jharkhand has also been transferred on 7th August, 2009 to Reliance Power Ltd. In November 2009, the company signed a joint venture agreement with TPC Ltd., Power Grid Corporation of India Ltd. and Rural Electrification Corporation Ltd for incorporating a Joint Venture Company with equal equity contribution (i.e. 25% each) from all the 4 CPSUs.
As on March 31, 2010, the company established twelve Special Purpose Vehicles for UMPPs to undertake preliminary site investigation activities necessary for conducting the bidding process for these projects. Ministry of Power is the 'facilitator' for the development of these UMPPs while Central Electricity Authority (CEA) is the 'Technical Partner'. These SPVs shall be transferred to successful bidder(s) selected through Tariff Based International Competitive Bidding Process for implementation and operation.
During the year 2010-11, loans worth Rs 556 crore were sanctioned for R&M and life extension of thermal power plants and an amount of Rs 562 crore was disbursed. Also, they disbursed Rs 83 crore for R&M of hydro power projects. In July 28, 2010, RBI classified the company as an Infrastructure Finance Company (IFC).
In October 2010, the company signed an MoU with NPCIL, the only player in nuclear power generation in India, for offering financial assistance to NPCIL for their new power projects as well as renovation, refurbishment and life extension projects etc.
During the first quarter of financial year 2011-12, the company made a Further Public Offer (FPO) of 22,95,53,340 equity shares of Rs 10 each. The issue included a fresh issue of 17,21,65,005 equity shares by the Company and an offer for sale of 5,73,88,335 equity shares by the President of India acting through Ministry of Power, Government of India.
In March 30, 2011, the company incorporated a wholly-owned subsidiary company namely Power Finance Corporation Green Energy Ltd to provide financial support for generating green (Renewable and Non-conventional sources of) energy. In July 18, 2011, they incorporated a wholly owned subsidiary, PFC Capital Advisory Services Ltd to syndicate and make financial arrangements for the Projects/ enterprises in the areas of power, energy, infrastructure and other industries.
During 2012, the corporation incorporated a Special Purpose Vehicle (SPV), as a wholly-owned subsidiary Company namely Deoghar Mega Power Limited. The Corporation also disbursed Rs 7,400 cr loan to 5 sick Discoms
In 2013, four Special Purpose Vehicles (SPVs) as wholly owned subsidiaries was incorporated by PFC Consulting Limited, a wholly owned subsidiary of the Corporation Limited. PFC Green Energy, a Wholly owned Subsidiary commenced operations in the month of March.
In 2014, the corporation incorporated Two (2) wholly Owned Subsidiaries of Power Finance Corporation Ltd, Cheyyur Infra Ltd and Odisha Infrapower Ltd. The Corporation decided to extend a Rs 15,000-crore loan to the Andhra Pradesh government to improve power sector infrastructure facilities and was officially announced. During the year, The Securities and Exchange Board of India granted a certificate of registration as a Debenture Trustee to PFC Capital Advisory Services Limited, a wholly owned subsidiary of Power Finance Corporation Limited (PFC).
In 2015, the corporation achieves MOU Targets of Financial Year 2014-15 for Sanctions and Disbursements. During the year, the Corporation incorporated Bihar Mega Power Limited as its wholly-owned subsidiary and also incorporated Jharkhand Infrapower Ltd as a wholly owned subsidiary of the corporation.
On 27 July 2015, Government of India offloaded 6.6 crore equity shares, representing a 5% stake in Power Finance Corporation via Offer for Sale through the stock exchanges mechanism. After the stake-sale, Government of India's holding in PFC declined to 67.8% from 72.8%.
On 21 April 2016, Power Finance Corporation informed the stock exchanges that Odisha Generation Phase-II Transmission Limited, a wholly owned subsidiary of PFC Consulting Limited (wholly owned subsidiary of Power Finance Corporation Limited) established for development of common transmission system for phase-II generation projects in Odisha, has been transferred to M/s Sterlite Grid 3 Limited (the successful bidder).
On 2 June 2016, Power Finance Corporation Ltd (PFC) announced that it has acquired 23.32% stake in Shree Maheshwar Hydel Power Corporation Limited (SMHPCL) upon invocation of shares pledged by SMHPCL's promoters and upon partial conversion of sub debt loan to SMHPCL. PFC decided to invoke the pledged shares following loan default from SMHPCL. PFC was one of the lenders to SMHPCL and had given loan of Rs 700 crore to SMHPCL along with guaranteeing Rs 400 crore to the bond holders of SMHPCL.
On 6 July 2016, Power Finance Corporation Ltd informed the stock exchanges that Warora-Kurnool Transmission Limited, a wholly owned subsidiary of PFC Consulting Limited (wholly owned subsidiary of Power Finance Corporation), established for development of Transmission System for 'Additional inter-Regional AC link for import into Southern Region i.e. Warora - Warangal and Chilakaluripeta - Hyderabad - KurnooI 765 kV link' Common Transmission System has since been transferred to M/s Essel Infraprojects Limited (the successful bidder) on 6 July 2016.
The Board of Directors of Power Finance Corporation Ltd at its meeting held on 14 July 2016 recommended issue of bonus shares in the ratio of 1:1.
On 15 July 2016, Power Finance Corporation Ltd informed the stock exchanges that Gurgaon-Palwal Transmission Limited (a wholly owned subsidiary of PFC Consulting Limited) established for development of Transmission System for 'Creation of new 400 kV substations in Gurgaon area and Palwal area as a part of ISTS' has since been transferred to M/s Sterlite Grid 4 Limited (the successful bidder) on 14 July 2016.
On 7 December 2017, Power Finance Corporation (PFC) announced that it has successfully closed the deal for issuance of USD 400 million Green Senior Unsecured Notes offering at a fixed rate coupon of 3.75% from the international debt capital markets under Regulation S of the U.S. Securities Act of 1933 (as amended) on 6 December 2017 and completed the formalities for listing at Singapore Exchange (SGX-ST) and International Securities Market segment of the London Stock Exchange.
Pursuant to the order of Ministry of Corporate Affairs dated February 5, 2019, PFC Capital Advisory Services Limited (PFCCAS, a wholly owned subsidiary of the Company) was amalgamated with PFC Consulting Limited, wholly owned subsidiary of the Company w.e.f. the appointed date i.e. April 1, 2018. Further, pursuant to the order of Ministry of Corporate Affairs dated February 7, 2019, PFC Green Energy Limited (PFCGEL, a wholly owned subsidiary of the Company) got amalgamated with the Company from the appointed date i.e. April 1, 2017.
During the year 2018-19, the Company acquired 52.63% shareholding held by the President of India in REC Limited (REC) at Rs 139.5036 per share for a total cash consideration of Rs. 1,44,99,99,50,186/- on March 28, 2019. By virtue of this investment, the Company became the holding company of REC and REC became subsidiary of PFC. Further, since PFC acquired REC on March 28, 2019, the holding of REC in Energy Efficiency Services Limited (EESL) i.e. 21.70% which when combined with PFC's share in EESLi.e. 36.36% amounts to 58.06%. Accordingly, company has since become the holding company of EESL and EESL has become subsidiary of PFC.
During FY 2018-19 Government of India (Gol) transferred 1,93,72,120 and 16,19,54,570 Equity Shares held in the Company, through the New Fund Offer, to the Asset Management Company (AMC) of Bharat 22 ETF and CPSE ETF respectively. Consequently, the Government of India's shareholding came down from 65.92% to 59.05% respectively.
During FY 2018-19, Power Finance Corporation (PFC) acquired 103,93,99,343 Equity Shares of REC (representing 52.63% of the Share Capital of REC) and since then, became the Holding Company and also the Promoter of REC. Consequently, REC Transmission Projects Company Limited, REC Power Distribution Company Ltd, Koderma Transmission Limited, Mandar Transmission Limited, Dinchang Transmission Limited, Chandil Transmission Limited and Dumka Transmission Limited, the subsidiaries of REC as on March 31, 2020 became the subsidiaries of PFC.
As on March 31, 2022, the Government of India's shareholding was 55.99%.
As at March 31, 2023, outstanding loan balances of Solar & Wind energy projects funded by PFC are Rs 14,765 crore & Rs 13,442 crore respectively. The total capacity (MW) of outstanding Solar & Wind energy projects funded by PFC as on March 31, 2023 is 9,324 MW.
On 25th August, 2022, PFC was granted the mandate by the Ministry of Power to extend lending support to the infrastructure and logistics sector. PFC has sanctioned loan of Rs 633 Crore to Blu Smart for the purchase of 5000 passenger Electric Vehicles (EVs). Further, PFC's funding of Rs 6,112 Crore to refinance 1,227 MW Solar and Wind Projects of JSW Energy Group underscores its commitment to sustainable energy.
As on March 31, 2023, 49 SPVs have been established for ITPs by PFC / PFCCL. During year 2023, nine companies/ Independent Transmission Projects (ITPs)-SPVs were incorporated including, Siot Transmission Limited, Fatehgarh III Beawar Transmission Limited, Beawar Dausa Transmission Limited, Khandukhal Rampura Transmission Limited - Transferred, Fatehgarh III Transmission Limited, Bhadla III Transmission Limited, Fatehgarh IV Transmission Limited, Raipur Pool Dhamtari Transmission Limited - Transferred and Dharamjaigarh Transmission Limited -Transferred. Further during FY 2022-23, SPVs established for development of transmission projects transferred comprised of Khetri-Narela Transmission Limited, Khandukhal Rampura Transmission Limited, Kishtwar Transmission Limited, Bhadla-Sikar Transmission Limited, Raipur Pool Dhamtari Transmission Limited and Dharamjaigarh Transmission Limited.
As at March 31, 2023, the Company along with its subsidiary RECL holds 33.13% stake in equity share capital of EESL (17.65% directly and 15.68% through its subsidiary RECL). As on March 31, 2023, PFC holds 24,55,00,000 Equity Shares of FV of Rs 10 each of Energy Efficiency Services Limited valued at Rs 158.08 crore.
During 2023, PFC, through The United States Agency for International Development (USAID) launched South Asia Distribution Utilities Network (DUN), across Bhutan, Bangladesh, India, Maldives, Nepal and Sri Lanka for the reform and modernisation of the sector.
As on March 31, 2023, PFC's Gross Loan assets comprised of Rs 48,198 crore in Renewable energy comprising Rs 16,251 crore of large hydro projects (>25MW) and Rs 31,947 crore other than large hydro projects.
During FY 2022-23, PFC signed a Loan Agreement for JPY 30 billion with Japan bank for International cooperation (JBIC). Further, a Project Loan agreement (PLA) was signed for JPY 2.65 billion between PFC and JBIC. Thus, the funds under the facility would be used by PFC to finance its renewable energy portfolio.
Power Finance Corporation Ltd
Chairman Speech
Ladies and Gentlemen,
Welcome to the 37th Annual General Meeting of your company. Let me
begin by congratulating you for yet another year of stellar financial performance by your
Company.
OPERATIONAL & FINANCIAL PERFORMANCE
The year 2022-23 was the year of resurgence for PFC, as we
emerged from the adverse impact of COVID and achieved impressive growth
along with outstanding financial performance.
I am delighted to share that, in FY 2022-23 we have delivered the
highest ever net profit of J11,605 crore, up 16% from the previous
fiscal. This is the third consecutive year in which we are setting a
new record for the highest annual profit. We registered double-digit growth of 13% in our
loan asset book.
As a result, loan asset portfolio surpassed the J4 lakh crore mark and
stood at J4,22,498 crore as on March 31, 2023. We have also achieved an all-time high loan
sanctions of J2.32 lakh crore and
disbursed J85,756 crore during the year, underscoring our role as the
principal lender to the Indian power sector. On the asset quality front also, significant
strides have been
made in reducing Non-Performing Assets, resulting in the NPA ratios
dipping to their lowest levels in the past seven years. In the fiscal year 2023, the Net
NPA ratio stood at 1.07%. Coupled with strong growth, consistent profits and stable asset
quality, we continued to have a robust net worth of J68,202 crore. Continuing with our
commitment to maximise shareholders return,
we have declared a dividend of J13.25 per share, which equates to
impressive 132.5% on the share face value.
MACRO-ECONOMIC SCENARIO & POWER SECTOR OUTLOOK
The global macroeconomic scenario in FY 2022-23 has been challenging,
but India has been one of the few bright spots, with the economy continuing to grow at a
robust pace, supported by healthy domestic demand and prudent monetary policy.
This favourable economic environment is set to benefit the Power
Sector's growth. Untapped demand potential is significant, driven by India's vast
population of nearly 1.44 billion.
The Government's "Make in India" initiative and the
Production-Linked Incentive scheme are expected to further boost demand. Projections
indicate a 7.18% Compound Annual Growth Rate (CAGR) in India's electricity consumption
until 2027.
To address this growing demand, additional capacity would be needed.
Government plans to double the installed capacity, with addition of around 500 GW of
capacity by 2032, with 87% from
non-fossil fuel sources and 13% from fossil fuels, requiring an
estimated investment of approximately J31 lakh crore.
An integral aspect within the power sector value chain is the role of
distribution companies (Discoms).
Over recent years, Discoms
have grappled with financial and operational challenges, which has put
a strain on the entire power sector value chain. However, a
transformative shift is underway. The government has undertaken
significant reforms for Discoms
over the past two years. The impact of these reformative measures, as
part of the Revamped Distribution Sector Scheme (RDSS), is evident. All India level
AT&C losses are at 16.5% in FY 2021-22, which is significantly lower than FY 2020-21
figure of 21.5%. The ACS-ARR gap, which is the cash-adjusted revenue gap per unit of
electricity sold, significantly improved to 40 paise per unit in
FY 2021-22 compared to 89 paise per unit in FY 2020-21.
Equally noteworthy is our success in implementing the LPS Rules. Over
the past year, we have disbursed loans worth J16,800 crore to power distribution companies
under these rules.
I am delighted to share that, in FY 2022-23 we have
delivered the highest ever net profit of J11,605 crore, up 16% from the
previous fiscal. This is the third consecutive year in which w are setting a new record
for the highest annual profit.
The settlement of current dues are also being monitored rigorously with
the help of PRAAPTI portal, which is set up and maintained by our subsidiary, PFCCL. The
scheme has brought in the much needed fiscal discipline in the sector, which is helping
all the players across the power sector value chain.
The power sector is currently at an interesting juncture, which creates
plethora of growth opportunities for PFC.
Embracing the motto 'Nayi Soch Nayi Raahein,' PFC is boldly moving into
new directions, shaping the future through innovative ideas and forward-looking
perspectives.
Forayed into Infrastructure Financing
On 25th August, 2022, PFC was granted the mandate by the Ministry of
Power to extend lending support to the infrastructure and logistics sector. With the
amendment in
the Memorandum of Association, PFC's lending capabilities have
been extended to encompass the wider infrastructure and logistics sectors. This is one of
those milestone decision, which will play a crucial role in PFC's long term business
growth. The idea is to gradually build it over time and creating a complementing business
line as the power sector matures.
Under the new mandate, we have supported projects in the domains of
healthcare, sea water desalination, petrochemicals,
optic fibre networks, roads, ports,
and metro rail systems. In the last financial year, we have sanctioned
projects worth J16,700 crore to
non-power infrastructure segments. Being a new funding area for PFC,
our present focus is on building appraisal and monitoring capabilities. Majority of the
projects we have funded till now are from the Government sector.
Forging a Greener Future through integrating Environment, Social and
Governance (ESG) pillars
In today's world, climate change is one of the most critical challenges
we face. Among its drivers, the energy sector emerges as pivotal, with its transformation
deeply impacting society. Recognising this, the Indian government has unveiled the
'Panchamrit' agenda, aiming
for a non-fossil energy capacity of
500GW by 2030, a billion-ton carbon reduction, a 45% emission intensity
decrease by 2030, and net-zero emissions by 2070.
PFC is fully committed to the Government's vision for a Greener
India. Over the years, PFC has consciously adapted its business model to tap renewable
energy business by making structural changes to integrate climate risk into our appraisal
and loan policies, as well as incorporating climate change considerations into our pricing
strategies. This has led to PFC's renewable portfolio multiplying by over 6 times in last
6 years, currently standing at J48,200 crore. Today PFC is India's largest renewable
financier, supporting almost a fifth of the India's renewable energy capacity.
We are also focussing on reducing adverse environmental impact of
fossil fuel based projects,which is demonstrated by over J2,500 crore of loans sanctioned
for implementing Flue Gas
De-sulphurisation (FGD) systems.
Notably, PFC has sanctioned loan of J633 crore to Blu Smart for the
purchase of 5000 passenger Electric Vehicles (EVs). This move is expected to lead to
emission savings exceeding 100,000 tons
of CO2 equivalent. To put this into perspective, it's
equivalent to the CO2 absorption capacity of over
5 million fully-grown trees in a year. This transaction also marks the
largest E-vehicle asset finance
initiative in India, poised to greatly enhance the adoption of clean
energy alternatives. Further, PFC's funding of J6,112 crore to refinance 1,227 MW solar
and wind projects of JSW Energy Group underscores its commitment to sustainable energy. In
alignment with Government initiative for making
urban India "Garbage Free", PFC has cumulatively sanctioned
waste to energy projects worth J1,600 crore with a combined capacity of 192 MW. Notably,
more than 80% of the disbursement for these projects has already been made.
Our commitment to making a sustainable future is strong, and we are
taking big steps forward. In the current FY 2023-24, PFC is steadfastly working to
institute a well-structured approach to our ESG practices, seamlessly
integrating Environmental, Social, and Governance principles into our
operations. In this direction, PFC has already taken tangible actions to integrate ESG
into our business. Recently, to have a focussed approach towards ESG, a
dedicated Environment, Social, and Governance (ESG) unit has been
established. This centralised ESG unit will work in close collaboration with various
stakeholders to chart the ESG course for PFC.
These endeavours constitute a few immediate steps we have taken towards
ESG integration. Our promise is to keep lending responsibly and sustainably. But we are
not just making changes for ourselveswe are leading the way for the entire energy
sector.
PFC'S FUTURE BUSINESS THRUST AREAS
We will continue to increase
our financing in our traditional business areas of generation and
T&D space. This will be further
complemented with infrastructure financing. In addition to these areas,
our financing endeavours will also be closely aligned with the government's goals and
vision for the power sector particularly in clean energy space and RDSS.
Renewable & Emerging Technologies in Clean Energy Space
In order to achieve India's energy transition targets, the share
of renewable energy in the energy mix, which is presently about 27%, will have to reach
50% by 2030. This requires quadrupling of the present solar and wind generation capacity.
We would also have to add about 10 GW of pumped storage capacity and over 100 GWh of
battery storage in order to meet the energy balancing
needs. Commensurate equipment manufacturing capacity and evacuation
infrastructure also need to be in place.
Given the huge investment required for decarbonisation of our economy,
funding of energy transition related projects will be PFC's mainstay
for the foreseeable future. PFC is focused on funding entire value
chain of energy transition. In addition to the traditional solar/wind projects, we are
also
exploring bankable projects in the
fields of renewable equipment manufacturing, energy storage, green
evacuation corridors and electric mobility, green hydrogen
and ammonia production and manufacturing of electric vehicles.
Revamped Distribution Sector Scheme (RDSS)
Your company has been designated by the Government of India as the
nodal agency for the implementation Revamped
Distribution Sector Scheme (RDSS)
RDSS has an outlay of J3,03,758 crore covering Smart metering and
infrastructure works, with an estimated Government grant of J97,631 crore. The objective
of the
scheme is to reduce AT&C losses to pan-India levels of 12-15% by
2024-25 and reduction of ACS-ARR gap to zero by 2024-25.
The funding under the scheme will be from the Government grants, and
balance will be counterpart funding from PFC or our subsidiary REC or State's own
equity for infrastructure works.
Before the counter-part funding starts, the action plans submitted by
the State Discoms are to be approved and Government grant portion is to be released based
on achievements of milestones. The action plan approval process is complete for nearly all
Eligible States of PFC. Further, sanctioned work is being awarded by Discoms and the grant
release cycle has started
On Capex side, 80% of the tenders for loss reduction projects have been
floated and 40% of the works awarded.
Around J1,679 crore of grant has been released so far by PFC. With the
progress we have made, we expect counterpart disbursements under RDSS to commence towards
the end of FY 2023-24.
In conclusion, we remain optimistic about our future growth. By
leveraging favourable market conditions and maintaining our commitment to prudent lending
practices, we expect to continue growing at a similar pace as we have witnessed this year.
CORPORATE GOVERNANCE & SOCIAL RESPONSIBILITY
At PFC, we are committed to upholding the highest standards of
transparency, accountability, and disclosure. As a publicly listed company, we adhere to a
comprehensive framework of
corporate governance frameworks and policies such as the Companies Act,
2013, SEBI's Listing Obligations & Disclosure Requirements Regulations, DPE Guidelines
etc. We also have various risk management Committees at Board level & senior
management levels which oversees the key functions of our company and provide strategic
directions in each area.
This ensures that every aspect of our work is guided by principles that
promote integrity, fairness, and responsible conduct.
ACKNOWLEDGEMENT
Before I conclude, I want to express my heartfelt gratitude to our
shareholders who have reposed faith in us. I am grateful to the Hon'ble Union
Minister of Power, New and Renewable Energy, Hon'ble Minister of State for Power and
the officials of Ministry of Power for their support and guidance. I also thank the Board
of Directors for their valuable guidance, our client utilities, employees, various
ministries, investors, auditors, regulators and other stakeholders of PFC for their
continued support.
Let us move forward with renewed determination, knowing that our
efforts are contributing to a brighter, more sustainable future for India.
Together, we can continue to light up lives, power progress, and make a
lasting impact on our nation's growth story.
Thank you, and let us make Power Finance Corporation's journey ahead
even more remarkable.
Parminder Chopra
Chairman & Managing Director
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Power Finance Corporation Ltd
Company History
Power Finance Corporation Ltd is a leading power sector Public Financial Institution and a Non-Banking Financial Company providing fund and non-fund based support for development of the Indian power sector. The Company is engaged in power sector financing, the integrated development of the power and associated sectors. They provide large range of Financial Products and Services like Rupee Term Loans, Transitional Financing Services, Project Term Loan, Equipment Lease Financing, Direct Discounting of Bills, Short Term Loan, and Consultancy Services etc for various Power projects in Generation, Transmission, and Distribution sector as well as for Renovation & Modernization of existing power projects.
The Company's clients include state power utilities, central power sector utilities, power departments, private power sector utilities (including independent power producers), joint sector power utilities, power equipment manufacturers and power utilities run by local municipalities. These clients are involved in all aspects of the generation, transmission and distribution and related activities in the power sector in India.
Power Finance Corporation Ltd was incorporated on July 16, 1986 as a public limited company. The GoI established the company as a financial institution in order to finance, facilitate and promote power sector development in India with the President of India holding 100% of the equity share capital. In December 31, 1987, they commenced their business operations. In the year 1988, they started lending activities. In the year 1990, the company was declared as a public financial institution.
In the year 1991, the company was conferred with a license to deal in foreign exchange in the power sector. In the year 1992, Project on Energy Management Consultation and Training (EMCAT) became operational with the objective to bring about improvement in the efficiency of the energy supply component of the power sector with the help of USAID. In the year 1996, the company started funding private power projects.
In the year 1998, the company was granted the Mini Ratna (Category I) status. They promoted a joint venture company, namely PTC Ltd in association with NTPC and PGCIL. In the year 1999, the company launched consultancy services in order to provide consultancy services to both state owned and private power utilities for the power and financial sectors.
In the year 2003, the company was appointed as a nodal agency by the MoP to fund the India Power Fund scheme to catalyze the process of fresh equity investment in the power sector. In the year 2005, the company entered into MoU with LIC and ten leading public sector banks for consortium financing of power projects. In the year 2006, the company incorporated seven subsidiary companies for developing UMPPs. They issued the letter of intent for the Sasan and Mundra UMPPs. In the year 2007, they incorporated their eighth subsidiary company for developing UMPP.
During the year 2006-07, the company launched their IPO and the holding of Government of India reduced from 100% to 89.78% of the paid-up equity. On successful completion of bidding process, two of the subsidiaries, Coastal Gujarat Power Ltd and Sasan Power Ltd were transferred to Tata Power Company Ltd and Reliance Power Ltd on April 22, 2007 and August 7, 2007 respectively. The company was registered as a Non Banking Financial Company by RBI and was conferred with the status of Nav Ratna by the Govt of India on June 22, 2007.
During the year 2007-08, the projects, namely Maneri Bhali U-1,3&4 (228 MW) of UTJVNL in Uttaranchal, Balimela U-7 of OHPC in Orissa and Teesta V HEP U-2 (170 MW) of NHPC in Sikkim, which were supported by the company were commissioned. The company sanctioned loans worth Rs 190 crore for R & M and Life Extension of thermal power plants. Also, they sanctioned Rs 222 crore for R&U of Hydro Power Projects.
In March 2008, the company signed an MoU with RITES Ltd (A Govt. of India Enterprise) to facilitate import of coal from African countries and elsewhere. Also, they signed an MoU with TNEB whereby PFC would finance cogeneration projects of around 250 MW planned to be set up at a cost of Rs1200 crore in various cooperative and public sector sugar mills in the state of Tamil Nadu.
In March 25, 2008, the company launched a 100% owned subsidiary company, namely PFC Consulting Ltd for providing consulting services. Also, they incorporated an advisory company namely Power Equity Capital Advisors Private Limited to provide advisory services related to equity investments in Indian power sector.
During the year 2008-09, the company established a Consortium Lending Group (CLG) with an aim to give fillip to Consortium Lending Operations, particularly through the Power Lenders' Club (PLC) which has 21 members including LIC, HUDCO and 18 Indian banks. The projects in association with the company, namely Baglihar HEP (3x150 MW) of JKPDCL in Jammu and Kashmir, Priyadarshni Jurala HEP (6x39 MW) of APPGCL in Andhra Pradesh and Varahi HEP (2x115 MW) of KPCL in Karnataka were commissioned.
During the year, the company sanctioned loans worth Rs 214 crore for R&M and life extension of thermal power plants. Also, they sanctioned Rs 48 crore for R&M of hydro power projects. Chhattisgarh State Electricity Board was reorganized / unbundled into Chhattisgarh State Power Holding Company Ltd., Chhattisgarh State Power Generation Company Ltd., Chhattisgarh State Power Transmission Company Ltd., Chhattisgarh State Power Distribution Company Ltd. and Chhattisgarh State Power Trading Company Ltd with effect from January 1, 2009. Also, the company in association with NTPC, NHPC and TCS promoted National Power Exchange Ltd with an authorized capital of Rs.50 crore.
The company was conferred with the coveted 'KPMG-Infrastructure Today Award 2008' for 'Most Admired Government Enabler - Power' category.
During the year 2009-10, the company sanctioned loans worth Rs 1,950 crore for R&M and life extension of thermal power plants. Also, they sanctioned Rs 74 crore for R&M of hydro power projects. In August 2009, Jharkhand Integrated Power Ltd. for Tilaiya UMPP in Jharkhand has also been transferred on 7th August, 2009 to Reliance Power Ltd. In November 2009, the company signed a joint venture agreement with TPC Ltd., Power Grid Corporation of India Ltd. and Rural Electrification Corporation Ltd for incorporating a Joint Venture Company with equal equity contribution (i.e. 25% each) from all the 4 CPSUs.
As on March 31, 2010, the company established twelve Special Purpose Vehicles for UMPPs to undertake preliminary site investigation activities necessary for conducting the bidding process for these projects. Ministry of Power is the 'facilitator' for the development of these UMPPs while Central Electricity Authority (CEA) is the 'Technical Partner'. These SPVs shall be transferred to successful bidder(s) selected through Tariff Based International Competitive Bidding Process for implementation and operation.
During the year 2010-11, loans worth Rs 556 crore were sanctioned for R&M and life extension of thermal power plants and an amount of Rs 562 crore was disbursed. Also, they disbursed Rs 83 crore for R&M of hydro power projects. In July 28, 2010, RBI classified the company as an Infrastructure Finance Company (IFC).
In October 2010, the company signed an MoU with NPCIL, the only player in nuclear power generation in India, for offering financial assistance to NPCIL for their new power projects as well as renovation, refurbishment and life extension projects etc.
During the first quarter of financial year 2011-12, the company made a Further Public Offer (FPO) of 22,95,53,340 equity shares of Rs 10 each. The issue included a fresh issue of 17,21,65,005 equity shares by the Company and an offer for sale of 5,73,88,335 equity shares by the President of India acting through Ministry of Power, Government of India.
In March 30, 2011, the company incorporated a wholly-owned subsidiary company namely Power Finance Corporation Green Energy Ltd to provide financial support for generating green (Renewable and Non-conventional sources of) energy. In July 18, 2011, they incorporated a wholly owned subsidiary, PFC Capital Advisory Services Ltd to syndicate and make financial arrangements for the Projects/ enterprises in the areas of power, energy, infrastructure and other industries.
During 2012, the corporation incorporated a Special Purpose Vehicle (SPV), as a wholly-owned subsidiary Company namely Deoghar Mega Power Limited. The Corporation also disbursed Rs 7,400 cr loan to 5 sick Discoms
In 2013, four Special Purpose Vehicles (SPVs) as wholly owned subsidiaries was incorporated by PFC Consulting Limited, a wholly owned subsidiary of the Corporation Limited. PFC Green Energy, a Wholly owned Subsidiary commenced operations in the month of March.
In 2014, the corporation incorporated Two (2) wholly Owned Subsidiaries of Power Finance Corporation Ltd, Cheyyur Infra Ltd and Odisha Infrapower Ltd. The Corporation decided to extend a Rs 15,000-crore loan to the Andhra Pradesh government to improve power sector infrastructure facilities and was officially announced. During the year, The Securities and Exchange Board of India granted a certificate of registration as a Debenture Trustee to PFC Capital Advisory Services Limited, a wholly owned subsidiary of Power Finance Corporation Limited (PFC).
In 2015, the corporation achieves MOU Targets of Financial Year 2014-15 for Sanctions and Disbursements. During the year, the Corporation incorporated Bihar Mega Power Limited as its wholly-owned subsidiary and also incorporated Jharkhand Infrapower Ltd as a wholly owned subsidiary of the corporation.
On 27 July 2015, Government of India offloaded 6.6 crore equity shares, representing a 5% stake in Power Finance Corporation via Offer for Sale through the stock exchanges mechanism. After the stake-sale, Government of India's holding in PFC declined to 67.8% from 72.8%.
On 21 April 2016, Power Finance Corporation informed the stock exchanges that Odisha Generation Phase-II Transmission Limited, a wholly owned subsidiary of PFC Consulting Limited (wholly owned subsidiary of Power Finance Corporation Limited) established for development of common transmission system for phase-II generation projects in Odisha, has been transferred to M/s Sterlite Grid 3 Limited (the successful bidder).
On 2 June 2016, Power Finance Corporation Ltd (PFC) announced that it has acquired 23.32% stake in Shree Maheshwar Hydel Power Corporation Limited (SMHPCL) upon invocation of shares pledged by SMHPCL's promoters and upon partial conversion of sub debt loan to SMHPCL. PFC decided to invoke the pledged shares following loan default from SMHPCL. PFC was one of the lenders to SMHPCL and had given loan of Rs 700 crore to SMHPCL along with guaranteeing Rs 400 crore to the bond holders of SMHPCL.
On 6 July 2016, Power Finance Corporation Ltd informed the stock exchanges that Warora-Kurnool Transmission Limited, a wholly owned subsidiary of PFC Consulting Limited (wholly owned subsidiary of Power Finance Corporation), established for development of Transmission System for 'Additional inter-Regional AC link for import into Southern Region i.e. Warora - Warangal and Chilakaluripeta - Hyderabad - KurnooI 765 kV link' Common Transmission System has since been transferred to M/s Essel Infraprojects Limited (the successful bidder) on 6 July 2016.
The Board of Directors of Power Finance Corporation Ltd at its meeting held on 14 July 2016 recommended issue of bonus shares in the ratio of 1:1.
On 15 July 2016, Power Finance Corporation Ltd informed the stock exchanges that Gurgaon-Palwal Transmission Limited (a wholly owned subsidiary of PFC Consulting Limited) established for development of Transmission System for 'Creation of new 400 kV substations in Gurgaon area and Palwal area as a part of ISTS' has since been transferred to M/s Sterlite Grid 4 Limited (the successful bidder) on 14 July 2016.
On 7 December 2017, Power Finance Corporation (PFC) announced that it has successfully closed the deal for issuance of USD 400 million Green Senior Unsecured Notes offering at a fixed rate coupon of 3.75% from the international debt capital markets under Regulation S of the U.S. Securities Act of 1933 (as amended) on 6 December 2017 and completed the formalities for listing at Singapore Exchange (SGX-ST) and International Securities Market segment of the London Stock Exchange.
Pursuant to the order of Ministry of Corporate Affairs dated February 5, 2019, PFC Capital Advisory Services Limited (PFCCAS, a wholly owned subsidiary of the Company) was amalgamated with PFC Consulting Limited, wholly owned subsidiary of the Company w.e.f. the appointed date i.e. April 1, 2018. Further, pursuant to the order of Ministry of Corporate Affairs dated February 7, 2019, PFC Green Energy Limited (PFCGEL, a wholly owned subsidiary of the Company) got amalgamated with the Company from the appointed date i.e. April 1, 2017.
During the year 2018-19, the Company acquired 52.63% shareholding held by the President of India in REC Limited (REC) at Rs 139.5036 per share for a total cash consideration of Rs. 1,44,99,99,50,186/- on March 28, 2019. By virtue of this investment, the Company became the holding company of REC and REC became subsidiary of PFC. Further, since PFC acquired REC on March 28, 2019, the holding of REC in Energy Efficiency Services Limited (EESL) i.e. 21.70% which when combined with PFC's share in EESLi.e. 36.36% amounts to 58.06%. Accordingly, company has since become the holding company of EESL and EESL has become subsidiary of PFC.
During FY 2018-19 Government of India (Gol) transferred 1,93,72,120 and 16,19,54,570 Equity Shares held in the Company, through the New Fund Offer, to the Asset Management Company (AMC) of Bharat 22 ETF and CPSE ETF respectively. Consequently, the Government of India's shareholding came down from 65.92% to 59.05% respectively.
During FY 2018-19, Power Finance Corporation (PFC) acquired 103,93,99,343 Equity Shares of REC (representing 52.63% of the Share Capital of REC) and since then, became the Holding Company and also the Promoter of REC. Consequently, REC Transmission Projects Company Limited, REC Power Distribution Company Ltd, Koderma Transmission Limited, Mandar Transmission Limited, Dinchang Transmission Limited, Chandil Transmission Limited and Dumka Transmission Limited, the subsidiaries of REC as on March 31, 2020 became the subsidiaries of PFC.
As on March 31, 2022, the Government of India's shareholding was 55.99%.
As at March 31, 2023, outstanding loan balances of Solar & Wind energy projects funded by PFC are Rs 14,765 crore & Rs 13,442 crore respectively. The total capacity (MW) of outstanding Solar & Wind energy projects funded by PFC as on March 31, 2023 is 9,324 MW.
On 25th August, 2022, PFC was granted the mandate by the Ministry of Power to extend lending support to the infrastructure and logistics sector. PFC has sanctioned loan of Rs 633 Crore to Blu Smart for the purchase of 5000 passenger Electric Vehicles (EVs). Further, PFC's funding of Rs 6,112 Crore to refinance 1,227 MW Solar and Wind Projects of JSW Energy Group underscores its commitment to sustainable energy.
As on March 31, 2023, 49 SPVs have been established for ITPs by PFC / PFCCL. During year 2023, nine companies/ Independent Transmission Projects (ITPs)-SPVs were incorporated including, Siot Transmission Limited, Fatehgarh III Beawar Transmission Limited, Beawar Dausa Transmission Limited, Khandukhal Rampura Transmission Limited - Transferred, Fatehgarh III Transmission Limited, Bhadla III Transmission Limited, Fatehgarh IV Transmission Limited, Raipur Pool Dhamtari Transmission Limited - Transferred and Dharamjaigarh Transmission Limited -Transferred. Further during FY 2022-23, SPVs established for development of transmission projects transferred comprised of Khetri-Narela Transmission Limited, Khandukhal Rampura Transmission Limited, Kishtwar Transmission Limited, Bhadla-Sikar Transmission Limited, Raipur Pool Dhamtari Transmission Limited and Dharamjaigarh Transmission Limited.
As at March 31, 2023, the Company along with its subsidiary RECL holds 33.13% stake in equity share capital of EESL (17.65% directly and 15.68% through its subsidiary RECL). As on March 31, 2023, PFC holds 24,55,00,000 Equity Shares of FV of Rs 10 each of Energy Efficiency Services Limited valued at Rs 158.08 crore.
During 2023, PFC, through The United States Agency for International Development (USAID) launched South Asia Distribution Utilities Network (DUN), across Bhutan, Bangladesh, India, Maldives, Nepal and Sri Lanka for the reform and modernisation of the sector.
As on March 31, 2023, PFC's Gross Loan assets comprised of Rs 48,198 crore in Renewable energy comprising Rs 16,251 crore of large hydro projects (>25MW) and Rs 31,947 crore other than large hydro projects.
During FY 2022-23, PFC signed a Loan Agreement for JPY 30 billion with Japan bank for International cooperation (JBIC). Further, a Project Loan agreement (PLA) was signed for JPY 2.65 billion between PFC and JBIC. Thus, the funds under the facility would be used by PFC to finance its renewable energy portfolio.
Power Finance Corporation Ltd
Directors Reports
Dear Shareholders,
On behalf of the Board of Directors, I am delighted to present the
37th Annual Report of your Company, along with Audited Standalone and Consolidated
Financial Statements for the Financial Year 2022-23.
Your Company has registered yet another year of robust performance and
made substantial progress in its field. The performance highlights of your Company for the
financial year 2022-23 are briefly mentioned here to give an overview of accomplishments
on all fronts:
- PFC'S ROBUST GROWTH AND FINANCIAL STRENGTH: CATALYST FOR A GREENER TOMORROW
- Forayed into infrastructure financing A step forward in shaping India's
Growth Story
- Your Company received the assent of Government of India to lend to Logistics and
Infrastructure sectors, a milestone decision, which will play a crucial role in PFC's long
term business growth.
- Since receiving the approval for lending to Infrastructure sector in August 2022, PFC
has sanctioned around
` 16,647 crores and disbursed around ` 1,016 crores of loans till March
31, 2023 in its debut year. In the FY 2022- 23, PFC has forayed into new areas of
Desalination plants, Ports, Metro rail etc.
- Strong financial performance year on year - Maximizing value for Shareholders
- Highest ever PAT with an increase of 16%. i.e. ` 11,605 crore in FY 2022-23 vs. ` 10,022
crore in FY 2021-22.
- Net worth increased by 15% on account of increasing profits i.e. ` 68,202 crore as at
March 31, 2023 vs. ` 59,350 crore as at March 31, 2022.
- Total income achieved during the FY 2022-23 was up by 2.78% to ` 39,666 crore.
- The Board of Directors of the Company has recommended final dividend (`1,188.04 crore )
@ 45% on the paid up equity share capital i.e. ` 4.50 /- per equity share of
` 10/- each for the financial year 2022-23, subject to the approval of
the shareholders at the ensuing Annual General Meeting. The Company had also paid interim
dividend (` 2,310.07 crore ) of ` 8.75 /- per equity share of ` 10 /- each during FY
2022-23. Thus, the total dividend declared for the FY 2022-23 is (` 3,498.11 Crore) i.e.
` 13.25 per equity share of ` 10 each.
- PFC bagged SAFA Gold Award in Best Presented Accounts/Annual Report Awards (BPA) for the
Financial Year 2020-21 in Public Services Entities category'.
- Consistent & Sustainable Growth
- Registered a growth of 13% in Loan assets book i.e.
` 4,22,498 crore as at March 31, 2023 vs. ` 3,73,135 crore
as at March 31, 2022
- Total Loans Sanctioned by your Company amounted to
` 2,31,625 crore during the FY 2022-23 to State, Central, Private and
Joint Sector entities and Disbursements amounted to ` 85,756 crore during the same period.
- Under the Late Payment Surcharge Rules, PFC sanctioned
` 47,906 crore and disbursed ` 16,764 crore till March 31, 2023.
- Stable Asset Quality
- Continuous efforts in resolution of stressed assets lead to 21% sharp reduction in
stressed assets. The Net NPA ratio is of 1.07% in FY 2022-23 vs. 1.76% in FY 2021-22.
- During the year PFC successfully resolved four Stage III Loans viz; Suzlon Energy Ltd,
South-East UP Power Transmission Company Limited, Jhabua Power Limited and Ind Barath
Energy Utkal Ltd., the total principal outstanding prior to date of Resolution being
` 4,634 crore.
- Thrust on Global and Green Borrowing
- During FY 2022-23, PFC has signed a Loan Agreement for JPY 30 Billion with Japan Bank
for International Cooperation ( JBIC). Further, a Project Loan agreement (PLA) has also
been signed for JPY 2.65 billion between PFC and JBIC. JBIC has provided this long term
facility under its initiative titled 'Global action for Reconciling Economic growth and
Environmental preservation' ("GREEN"). Thus, the funds under the facility would
be used by PFC to finance its renewable energy portfolio.
- Foreign Currency loans worth USD 1.60 bn were raised during the year:
- JPY denominated loan equivalent to USD 875 mn at 1.02% - the largest FCL raised by PFC
in a single transaction.
- FCNRB loan of USD 720 mn at 4.96% - this was the first time PFC raised FCNRBs in USD
with an embedded swap to EUR.
- Availed loans from Multi-lateral agencies:
- EUR 58.74 mn availed from KfW after a gap of 20 years.
- FINANCIAL SYNOPSIS
- Profitability
- (` in crore)
Standalone Consolidated
|
Particulars |
2022-23 |
2021-22 |
2022-23 |
2021-22 |
Total Income |
39,665.63 |
38,591.17 |
77,625.19 |
76,344.92 |
Profit Before Tax |
14,170.62 |
12,227.65 |
26,496.07 |
23,382.22 |
Tax expenses |
2,565.15 |
2,205.75 |
5,317.48 |
4,614.01 |
Profit After Tax |
11,605.47 |
10,021.90 |
21,178.59 |
18,768.21 |
Owners of the Company
|
|
|
15,889.33 |
14,014.79 |
Non-Controlling Interests
|
|
|
5,289.26 |
4,753.42 |
Total Comprehensive Income |
11,445.80 |
10,202.73 |
20,047.88 |
18,889.78 |
Owners of the Company
|
|
|
15,218.55 |
14,163.78 |
Non-Controlling Interests
|
|
|
4,829.33 |
4,726.00 |
- Reserve & Surplus
(` in crore)
Standalone Consolidated*
|
Particulars |
2022-23 |
2021-22 |
2022-23 |
2021-22 |
Opening Balance of Surplus |
8,863.49 |
7,203.86 |
12,757.10 |
9,760.52 |
Profit after tax for the year |
11,605.47 |
10,021.90 |
15,889.33 |
14,014.79 |
Re-Measurement of Defined Benefit Plans |
(2.68) |
(3.70) |
(5.04) |
(6.98) |
Transfer towards Reserve for Bad & Doubtful
Debts u/s 36(1)(viia)(c) of Income Tax Act, 1961 |
(529.39) |
(576.44) |
(529.39) |
(576.44) |
Transfer to Special Reserve created and
maintained u/s 36(1)(viii) of Income Tax Act, 1961 |
(2,372.31) |
(2,423.45) |
(3,780.27) |
(4,044.97) |
Transfer to Special Reserve created u/s 45-IC(1)
of Reserve Bank of India Act, 1934 |
(2,321.09) |
(2,004.38) |
(3,484.93) |
(3,062.34) |
Transfer to Debenture Redemption Reserve |
- |
- |
- |
- |
Transfer to General Reserve |
- |
- |
- |
- |
Transfer to Interest Differential Reserve - KFW
Loan (net) |
(0.90) |
(1.42) |
(0.90) |
(1.42) |
Dividends |
(2,640.08) |
(3,366.10) |
(2,640.08) |
(3,366.10) |
Dividend Distribution Tax |
- |
- |
- |
- |
Transfer from Debenture Redemption Reserve on
account of utilisation |
- |
- |
- |
- |
Transfer from OCI Equity Instruments |
- |
- |
- |
- |
Other Comprehensive Income/(Expense) |
- |
- |
|
|
Reclassification of gain/loss on sale of equity
instrument measured at OCI |
46.13 |
13.22 |
48.77 |
58.90 |
Pooling of interest accounting for common control
business combination |
- |
- |
- |
- |
Impairment Reserve |
- |
- |
- |
- |
Adjustments |
- |
- |
(18.30) |
(18.86) |
Closing Balance of Surplus |
12,648.64 |
8,863.49 |
18,236.28 |
12,757.10 |
*Attributable to owners of the Company (PFC)
- OPERATIONAL SYNOPSIS
- Asset Quality
(` in crore)
Particulars |
2022-23 |
2021-22 |
Gross Loan Assets |
4,22,498 |
3,73,135 |
Stage III Assets |
16,502 |
20,915 |
Provision on Stage III Assets |
11,999 |
14,344 |
Gross Stage III as % of Gross Loan Assets |
3.91% |
5.61% |
Net Stage III as % of Gross Loan Assets |
1.07 % |
1.76% |
- Sanction/Disbursement (excluding RDSS/IPDS/R-APDRP)
(` in crore)
SECTOR |
FY2022-23
|
FY 2021-22
|
Category |
Sanctions |
Disbursements |
Sanctions |
Disbursements |
State Sector |
149,300 |
57,963 |
36,197 |
41,512 |
Central Sector |
26,704 |
3,063 |
63 |
10 |
Joint Sector |
19,418 |
2,300 |
6,743 |
773 |
Private Sector |
36,203 |
22,430 |
8,613 |
8,947 |
Total |
2,31,625 |
85,756 |
51,616 |
51,242 |
- BORROWINGS
- Borrowings from Domestic Market
During the FY 2022-23, PFC has raised funds to an amount of ` 62,297.47 crore vide
Private Placement of Bonds
- External Borrowings
The foreign currency denominated borrowings during FY 2022-23 are as follows:
Source |
Amount |
Bonds (including 54EC ) |
44,697.47 |
Rupee Term Loans |
17,600.00 |
Total |
62,297.47 |
Further, for maintaining adequate liquidity, credit lines to the
tune of ` 12,150 crore were sanctioned as on March 31, 2023 by various scheduled
commercial banks to the Company for short-term funding generally without any commitment
charges.
RBI has prescribed Liquidity Coverage Ratio (LCR) framework for NBFCs.
These guidelines aims for maintenance of a liquidity buffer in terms of LCR by ensuring
that NBFCs have sufficient High Quality Liquid Asset (HQLA) to survive any acute liquidity
stress scenario lasting for next 30 days. PFC maintains sufficient liquidity buffer in the
form of HQLA as prescribed.
ii. External Borrowings
The foreign currency denominated borrowings during FY 2022-23 are as follows:
( ` in crore)
Sr. No. |
Source |
Amount |
1. |
Foreign Currency Term Loans |
7,258.77 |
2. |
Foreign Currency Non-Resident Borrowings |
5,930.87 |
3. |
Loan from KFW under ODA (Official |
516.58 |
|
Development Assistance) route |
|
|
TOTAL |
13,706.23 |
Green Bonds
PFC established its Green Bond Framework in October, 2017 as
approved by Climate Bonds Initiative (CBI), London, UK. The Green Bond framework for
funding renewable projects (viz. Solar and Wind) has been updated in August, 2021 to align
with the latest set of guidelines namely Climate Bonds Standard version 3.0, the Green
Bond Principles (GBP), 2021 issued by the International Capital Markets Association
(ICMA). In this context, an agreement was executed between PFC & Climate Bonds
Initiative.
PFC has issued its first USD Green bond in December, 2017 and raised US
$400 million (` 2,575 crore) at a coupon of 3.75% and these bonds are listed on the London
Stock Exchange's new International Securities Market (ISM) and Singapore Stock
Exchange. Further, in September, 2021 PFC issued its first ever Euro Green Bonds amounting
to
EUR 300 million (` 2,597 crore) at a coupon of 1.841% and these bonds
are listed on the Singapore Stock Exchange, India INX and NSE IFSC. Annual update to the
holders of the bonds, as required under the PFC's Green bond framework is as
follows:-
The funds raised under Green bonds have been utilised to finance
renewable energy projects as per the "Eligible Projects" under PFC's Green
Bond Framework. As at March 31, 2023, outstanding loan balances of Solar & Wind energy
In FY 2022-23, the achievement of your Company on some of the key MoU
parameters (on consolidated basis) has been as under:
MoU Parameter |
Achievement |
Revenue from Operations |
` 77,568.30 crore |
Loans Disbursed to Total Funds Available |
99.99% |
Overdue loans to Total Loans |
0.11% |
NPA to Total Loans |
1.07% |
Cost of raising funds through Bonds as |
-16.69 bps |
compared to similarly rated CPSEs/ entities
(Margin over Reuters) |
|
projects funded by PFC are ` 14,765 crore & ` 13,442 crore respectively. The total
capacity (MW) of outstanding Solar & Wind energy projects funded by PFC as on March
31, 2023 is 9,324 MW. Accordingly, PFC green bond portfolio is more than the amount raised
through issue of green bonds.
Cost of raising funds through Bonds as
compared to similarly rated CPSEs/ entities (Margin over Reuters)
- SUBSIDIARIES
- REC Limited
-16.69 bps
Externally Aided Projects
Outstanding balance from multilateral/ bilateral agencies as at
March 31, 2023 is as follows:
KFW |
EUR 63,428,374.05* |
Credit National |
EUR 2,104,961.44 |
ADB |
USD 6,245,707.13 |
* Includes Eur 58,747,000.56 disbursed by KFW in FY 2022-23 under
Discom Investment Facility (ODA Loan- Without Govt. Guarantee).
- CREDIT RATING
Your Company has been assigned the highest ratings by Domestic
Credit Rating Agencies and Sovereign Rating by International Credit Rating Agencies as at
March 31, 2023:
Sr. No. |
Rating Agency |
Long-Term Rating |
Short-Term Rating |
Domestic Credit Rating Agencies (Borrowing Programme) |
1. |
CRISIL |
CRISIL AAA |
CRISIL A1+ |
2. |
ICRA |
ICRA AAA |
ICRA A1+ |
3. |
CARE |
CARE AAA |
CARE A1+ |
International Credit Rating Agencies (Issuer rating) |
1 . |
Fitch Ratings |
BBB- |
2. |
Moody's |
Baa3 |
Your Company believes that these credit ratings enables us to develop
strong relationship with our lenders and borrow funds at competitive rates.
- MEMORANDUM OF UNDERSTANDING WITH
GOVT. OF INDIA
Your Company has been consistently accorded Excellent'
Rating by Government of India since FY 1993-94 except for two financial years. For the FY
2021-22, your Company was accorded Excellent' rating. The rating for FY 2022-23
is still awaited.
The following subsidiaries of REC as on March 31, 2023 are also subsidiaries of PFC:
- REC Power Development & Consultancy Ltd.
- Bidar Transmission Limited
- Chandil Transmission Limited
- Dumka Transmission Limited
- Koderma Transmission Limited
- Mandar Transmission Limited
- Sikar Khetri Transmission Limited
- Ramgarh II Transmission Limited
- Beawar Transmission Limited
- Meerut Shamli Power Transmission Limited
- Luhri Power Transmission Limited
- Neres XVI Power Transmission Limited
- Khavda II-D Transmission Limited
- KPSI Transmission Limited
REC is also a Systemically Important (Non-Deposit Accepting or Holding)
Non-Banking Finance Company (NBFC) registered with Reserve Bank of India (RBI) as an
Infrastructure Finance Company (IFC). Its business activities involve financing projects
in the complete power sector value chain, be it generation, transmission or distribution
and also logistics and infrastructure sector. REC provides financial assistance to state
electricity boards, state governments, central/state power utilities, independent power
producers, rural electric cooperatives and private sector utilities.
During the FY 2022-23, the total income of REC was
` 39,520 crore and the net profit was ` 11,167 crore on standalone
basis.
The detailed operational and financial performance of REC
is available on its website i.e. www.recindia.nic.in.
- PFC Consulting Limited
Your Company had been offering consultancy support to the Power
Sector through PFC Consulting Limited (PFCCL), its wholly-owned subsidiary. The Services
offered by PFCCL are broadly in the following areas:
- Transaction Advisory:
End-to-End solutions in Transaction Advisory Services across
different areas in power sector (Selection of Sellers/Developers, Reform &
Restructuring, Independent Transmission Projects, Privatisation of Electricity
Distribution in Union Territories, Resolution Plan)
- Project Development:
Project Development & implementation of various GoI
initiatives (Ultra Mega Power Projects, Ultra Mega Renewable Energy Power Parks,
Owner's Engineer, Lender's Independent Engineer, Lender's Insurance
Advisor, Setting up of Manufacturing Zone for power and renewable energy equipment)
- PMA/ PMC/ GoI Schemes:
Project management & change agents focusing on revamped
solutions & aiming for loss reduction (Revamped Distribution Sector Scheme,
Procurement of Power, DEEP Portal, Coal Linkage Auction under SHAKTI Scheme, Pilot Scheme,
PRAAPTI Portal, Integrated Power Development Scheme)
- Smart Solutions:
Smart solutions to improve performance & processes,
productivity & pro-active planning (Smart Metering, Energy Portfolio Management)
- Policy Formulation Support:
Support to Government/ Regulators for formulation of
Policies, Regulatory framework and Guidelines & SBDs
- Other Services:
Strategy, Regulatory, Tariff Support,
fund mobilisation and other aspects of power sector
Till date, consultancy services have been rendered by PFCCL to its
clients spread across India. The total projects of assignments undertaken as on date are
more than 200.
Further, during the FY 2022-23, the total income of PFCCL is
` 139.66 crore and the net profit earned is ` 63.80 crore. The net
worth of PFCCL as on March 31, 2023 is ` 163.09 crore.
Your Company is designated by Ministry of Power (MoP) as the
Nodal Agency' for facilitating development of Ultra Mega Power Projects and its
wholly-owned subsidiary i.e. PFC Consulting Limited is the Bid Process
Coordinator' for Independent Transmission Projects. Further various State Governments
have appointed PFCCL as Bid Process Coordinator for their Intra State Transmission
Projects. .
The following Special Purpose Vehicles (SPVs) have been incorporated as
subsidiaries of PFCCL as on March 31, 2023:
- Bijawar-Vidarbha Transmission Limited (Under
process of Strike-off)
- Ananthapuram Kurnool Transmission Limited
- Chhatarpur Transmission Limited
- Fatehgarh IV Transmission Limited
- Fatehgarh III Transmission Limited
- Bhadla III Transmission Limited
- Fatehgarh III Beawar Transmission Limited
- Beawar Dausa Transmission Limited
- Siot Transmission Limited
- PFC Projects Limited
Coastal Karnataka Power Limited (CKPL), a wholly-owned company of
PFC Ltd was set up for developing the UMPPs in the State of Karnataka as per the mandate
from GoI. During FY 2022-23, CKPL's MoA has been amended to enable for Bidding in
lenders' backed resolution plan by PFC and it has been renamed as PFC Projects
Limited (PPL).
- Other subsidiaries established for
development of UMPP's
- Coastal Tamil Nadu Power Limited
- Orissa Integrated Power Limited
- Sakhigopal Integrated Power Company Limited
- Ghogarpalli Integrated Power Company Limited
- Deoghar Mega Power Limited
- Cheyyur Infra Limited
- Odisha Infrapower Limited
- Deoghar Infra Limited
- Bihar Infrapower Limited
- Bihar Mega Power Limited
- Jharkhand Infrapower Limited
- PROACTIVE RISK MANAGEMENT THROUGH A MULTI LAYERED RISK FRAMEWORK
- Asset Liability Management
Your Company has put in place a sound and robust Asset Liability
Management Policy formulated in line with the RBI's guidelines to establish focus on
liquidity and interest rate risk management process in PFC. Measurement and monitoring of
Liquidity risk is done through cash flow approach; and for Interest rate risk, it is done
through traditional gap analysis technique as detailed in RBI guidelines. Such analysis is
made on periodical basis in various time buckets and is used for critical decisions
regarding the time, volume and maturity profile of the borrowings and creation of mix of
assets and liabilities in terms of time period (short, medium and long-term) and
in terms of fixed and floating interest rates. The details of the asset
liability management maturity pattern are given at Note No. 53.1 of the Notes to Accounts
of the Standalone Financial statements forming part of this Annual Report.
An ALM Committee of Functional Directors has been constituted as per
PFC's Asset Liability Management Policy formulated in line with the RBI's
guidelines.
As on March 31, 2023 the ALM Committee of Functional Directors
comprised of Smt. Parminder Chopra, Director (Finance) as Chairman of the Committee and
Shri R.R. Jha, Director (Projects) as Member.
- Foreign Currency Risk Management
Your Company has put in place "Policy for Management of Risks
on Foreign Currency Borrowings" to manage risks associated with foreign currency
borrowings. The Company enters into hedging transactions to cover exchange rate and
interest rate risk through various instruments like forwards, options and swaps.
As on March 31, 2023, the total o/s foreign currency liabilities stand
at USD eqv 7,852 mn, and currency wise denominated borrowings are USD 5,841 mn, JPY
1,32,381 mn & EUR 932 mn. Out of the total foreign currency borrowing portfolio, USD
eqv 4,959 mn i.e. 63% is hedged. Also, 82% of the FC portfolio with residual maturity up
to 5 years is hedged.
- Integrated Enterprise Wide Risk Management
In order to manage risks faced by your Company, it has put in place
an Integrated Enterprise Wide Risk Management Policy (IRM policy). For implementation of
the policy, Your Company has constituted the Risk Management Committee. Under the IRM
policy, the Company has to identify the principal risks which may have an impact on its
profitability/revenues. In this regard, the Company has identified 11 significant risk
parameters which arise from the Company's business model and from its use of
financial instruments. These risk parameters cover the major operational risks, financial
risks, market risks, regulatory risks etc. faced by the Company and are regularly assessed
as per the Risk Assessment Criteria.
Further, the above would also cover aspects relating to development and
implementation of a risk management policy for the Company including identification
therein of elements of risk, which should cover the requirements of Sec. 134(3)(n) of
Companies Act, 2013.
- PFC A STRATEGIC PARTNER OF GOVERNMENT OF INDIA IN BRINGING POWER SECTOR REFORMS
- Revamped Distribution Sector Scheme (RDSS) & Integrated Power Development Scheme
(with Restructured Accelerated Power Development and Reform Programme (R-APDRP) Subsumed
In It)
The Company is involved in various GoI programmes for the power
sector, including acting as a nodal agency for the IPDS (R-APDRP subsumed) and Revamped
Distribution Sector Scheme (RDSS) launched by Govt. of India in July, 2021.
MoP/GoI vide OM dated 20.07.2021 has conveyed sanction of President of
India for implementation of "Revamped Distribution Sector Scheme (RDSS) A
Reforms-based and Results-linked, Distribution Sector Scheme" to improve the
operational efficiencies and financial sustainability of DISCOMs, by providing financial
assistance to DISCOMs for upgradation of the Distribution Infrastructure and Prepaid Smart
Metering & System Metering based on meeting pre-qualifying criteria and achieving
basic minimum benchmarks in reforms. PFC and REC (PFC's subsidiary) are the
designated nodal agencies for operationalisation of the Scheme, as per RDSS guidelines and
directions of inter-ministerial Monitoring Committee/MoP from time to time. Nodal agencies
are eligible for 0.5% of the sum total of the Gross Budgetary Support (GBS) component of
the various projects approved by Monitoring Committee as its fee. PFC is the nodal agency
for 17 States/UTs under the Scheme. The approved projects under IPDS/R-APDRP were subsumed
in RDSS. All State-owned distribution companies and State/UT Power Dept. excluding private
sector companies are eligible for financial assistance under the Scheme. The
implementation period of the Scheme is 5 Years (FY 2021-22 to FY 2025-26).
Scheme Objectives
- Improve the quality, reliability and affordability of power supply to consumers through
a financially sustainable and operationally efficient distribution sector.
- Reduce AT&C losses to pan-India levels of 12-15% by 2024-25.
- Reduce ACS-ARR gap to zero by 2024-25.
Scope of Scheme
The Scheme has two parts:
- Part A
covers Metering works (prepaid smart metering for consumers and system
metering) and distribution infrastructure works (loss reduction; modernisation &
system augmentation components).
- Part B
covers Training & Capacity Building and other Enabling & Supporting
Activities.
Outlay and Budgetary Support
The Scheme has an outlay of ` 3,03,758 crore with an estimated
gross budgetary support of ` 97,631 crore from the GoI.
Targeted infrastructure creation under RDSS in States across India
based on fund sanction:
- Around 500 new Substations
- Over 4,00,000 Distribution transformers
- Around 7.5 lakh ckm of AB and XLPE cables
- Around 7 lakh ckm of overhead lines
- Over 20 crore Smart meters
Financial Assistance under RDSS in states
allocated to PFC (as on March 31, 2023)
(Amounts in ` crore)
Scheme |
FY 2022-23
|
Cumulative up to March, 2023
|
Approved
Cost
|
GoI Fund Disbursed |
Approved
Cost
|
GoI Fund Disbursed |
RDSS |
54,534
|
1,142
|
1,16,951
|
1,679
|
Other Initiatives
- Supporting the States by preparing Model Bidding Documents for Automation and ERP
projects under RDSS.
- Working on developing a Centre of Excellence in the form of National SCADA Resource
Centre (NSRC) under RDSS at NPTI, Faridabad for developing the technical and operational
skills of the Distribution Workforce across SCADA / DMS systems supplied by multiple OEMs.
- PFC (alongwith its subsidiary company i.e. REC) has developed an Integrated web portal
that will serve as single version of truth for various government Schemes as well as vital
reports being published by PFC/ REC viz. RDSS Scheme, DISCOM Integrated Rating (IR)
Report, DISCOM Performance Report, Consumer Services Rating of DISCOMs (CSRD), PRAAPTI
Portal, Energy audit reports etc.
- PFC is taking-up capacity building/ training programme for DISCOMs' employees under
RDSS by engaging NPTI. Till March 2023; 175 training programmes were conducted through
NPTI covering 6,490 DISCOM personnel.
- PFC is supporting skill development of the workforce for rolling out the RDSS Smart
metering programme by
training 1,000 persons on various job-roles under PFC's CSR Programme.
- PFC, in partnership with The United States Agency for International Development (USAID)
has launched the South Asia Distribution Utilities Network (DUN), a regional platform to
foster collaboration among electricity distribution Utilities across Bangladesh, Bhutan,
India, Maldives, Nepal and Sri Lanka for the reform and modernisation of the sector. PFC
will act as the anchor institution with technical support from USAID through its South
Asia Regional Energy Partnership (SAREP) programme.
- PFC with technical assistance of Foreign Commonwealth and Development Office (FCDO),
Government of UK in association with MoP, GoI has developed Digital Utility Manager (DUM)
Training Programme. The programme aimed at proactive technology adoption at DISCOMs, to
have flexibility in the mode of learning making this self- paced, covering frontier
technologies such as Smart Grids, AMI, EVs, Energy Storage, Al/ ML, Blockchain, Robotics
etc.
- PFC is also handholding the DISCOMs in incorporating better corporate governance
practices.
The impact of various reforms measures undertaken by States
Government/DISCOMs under RDSS Scheme is evident as all India average AT&C losses have
improved to 16.5% in FY 22 (data based on 11th Integrated Rating report), which is
significantly lower than 21.5% in FY 21.
Further, ACS-ARR gap, which captures the cash-adjusted revenue gap per
unit, also significantly improved to 40 paise per unit energy in FY 22 compared to 89
paise per unit energy in FY 21. In addition, there has been significant improvement in
compliances in form of filing and issuance of Tariff Orders, submission of Quarterly and
Annual accounts by DISCOMs etc.
Integrated Power Development Scheme (IPDS) (including R-APDRP
subsumed)
The erstwhile Schemes of IPDS (including R-APDRP subsumed) launched
by Ministry of Power, Government of India in order to provide impetus to strengthening of
power distribution sector, consumer/ system metering, IT enablement of distribution
sector, Digital technology initiatives, new & innovative technologies etc. in urban
areas were subsumed in RDSS Scheme. The Schemes have been sunset in March, 2022.
Achievements of IPDS (including R-APDRP subsumed)
- The Schemes have helped in making a difference in the lives of around 10 crore urban
electricity consumers living in 3,600 towns across the country where the Power
Distribution infrastructure has been upgraded.
- IT and Technical interventions coupled with administrative and other measures undertaken
under the Schemes have helped in improvement of Billing/
Collection efficiency for reduction in Aggregate Technical and Commercial (AT&C)
losses.
- There has been an increased in transparency by way of capturing of data from
36,000 urban feeders (11 kV) in IT enabled towns on Urban Distribution Monitoring System
under National Power Portal.
- Real Time Data Acquisition System has been set up covering around 15,000 feeders for
capturing data
w.r.t. reliability indices at feeder level.
- 92 Gas Insulated Substations (GIS) & Hybrid PSS have been commissioned/upgraded.
Such substations have been set up for the first time in Bihar, Karnataka, UP and NER
States.
- Around 10 lakh Smart/Prepaid Meters have been installed in the country under IPDS.
- 1912' Short-code for Complaints on Electricity' is now
operational in all DISCOMs.
- Capacity building/training of Utility personnel has also been carried out using Digital
means under IPDS/ R-APDRP to enhance their skill through workshops/ webinars on AT&C
loss reduction, smart metering, project management, guidelines, best practices etc.
Thus, your Company is contributing towards better power supply to the
people of India and improving operational efficiency and financial health of Distribution
Utilities.
- Late Payment Surcharge Rule, 2022
Ministry of Power (MoP) vide Gazette Notification dated June 3,
2022, notified "The Electricity (Late Payment Surcharge and Related Matters) Rules,
2022" (LPS Rules). These rules provide a mechanism for settlement of outstanding dues
of Generating Companies, Inter-State Transmission Licensees and Electricity Trading
Licensees.
Power Finance Corporation Limited (PFC) has been designated by MoP, as
the Nodal Agency for implementation of LPS Rules' 2022. PFC shall be responsible for
all the activities related to implementation of the said Rules including regular review
and monitoring.
For operationalisation of Rules, PRAAPTI Portal (developed and managed
by PFC Consulting Ltd.) acts as an information portal wherein suppliers enter invoice
details and Discoms update the corresponding payment amount to ensure invoice and payment
tracking of power bills in the country. Based on the information available on PRAAPTI,
regulations are imposed on defaulting Discoms as per LPS Rules, 2022 by Grid controller of
India Limited.
With the implementation of Electricity (LPS and Related Matters) Rules,
2022, remarkable improvement has been seen in recovery of outstanding dues of Suppliers
including Generating Companies, Transmission Companies and Traders. Against legacy dues of
` 1,39,747 crore as on 03.06.2022, 13 States/UTs have paid instalment of ` 69,790 crore
(12 EMIs). Discoms of 11 out of these 13 states opted for loans from PFC/REC (total loan
sanctioned of
` 1,05,065 crore). Further, 20 States/UTs reported to have no
outstanding dues as on 03.06.2022
In view of regulations under LPS Rules, 2022 the Distribution companies
are paying their current dues in time. Since implementation of the rule, as on July 24,
2023, total bills amounting to ` 4,85,041 crores have been settled against total billed
amount of ` 5,60,366 crore (excluding EMI Payments against legacy dues and including
Disputed Invoices).
- Independent Transmission Projects (ITPs)
MoP has also initiated Tariff Based Competitive Bidding Process for
development and strengthening of transmission system through private sector participation.
The objective of this initiative is to develop transmission capacities
in India and to bring in the potential investors after developing such projects to a stage
having preliminary survey work, identification of route, preparation of survey report,
initiation of process of land acquisition for sub- stations, if any, initiation of process
of seeking forest clearance, if required etc.
MoP has designated PFC Consulting Limited (a wholly-owned subsidiary of
PFC) as one of the Bid Process Coordinator for Independent Transmission Projects. As on
March 31, 2023, 49 SPVs have been established for ITPs by PFC / PFCCL.
During the year, the following nine companies / ITP-SPVs were incorporated:
- Siot Transmission Limited
- Fatehgarh III Beawar Transmission Limited
- Beawar Dausa Transmission Limited
- Khandukhal Rampura Transmission Limited
Transferred
- Fatehgarh III Transmission Limited
- Bhadla III Transmission Limited
- Fatehgarh IV Transmission Limited
- Raipur Pool Dhamtari Transmission Limited
Transferred
- Dharamjaigarh Transmission Limited Transferred
Further, during the FY 22-23, following SPVs established for
development of transmission projects has been transferred to the successful bidders
selected through TBCB:
- Khetri-Narela Transmission Limited
- Khandukhal Rampura Transmission Limited
- Kishtwar Transmission Limited
- Bhadla-Sikar Transmission Limited
- Raipur Pool Dhamtari Transmission Limited
- Dharamjaigarh Transmission Limited
As on March 31, 2023, out of 49 SPVs, 36 SPVs were transferred to the
successful bidders and bidding process for 8 SPVs are under progress. Further, due to
de-notification of schemes by MoP, 4 SPVs were closed and 1 SPV is under process of
closure.
iv. Ultra Mega Power Project (UMPP)
Development of Ultra Mega Power Projects (UMPPs), with a capacity
of about 4,000 MW each, adopting super critical technology is the initiative of MoP,
Government of India for which your Company has been designated as the 'Nodal Agency' and
Central Electricity Authority (CEA) as the Technical Partner by MoP.
PFC Consulting Limited (a wholly-owned subsidiary of PFC) along with
MoP and CEA undertake preliminary site investigation activities, land acquisition
activities, site specific studies to obtain appropriate regulatory and other approvals for
land, water, coal block, environment etc. necessary to conduct catalyst of the bidding
process. The successful bidder is then expected to develop and implement these projects.
Your Company incorporated a total of 19 Special Purpose Vehicles (SPVs)
as its wholly-owned subsidiaries for 14 UMPPs. Out of these, 4 UMPPs are awarded and 4
UMPPs are closed.
In reference to closed UMPPs, SPVs namely Tatiya Andhra Mega Power Ltd.
(2nd Andhra UMPP), Coastal Maharashtra Mega Power Ltd. (Munge UMPP) and Chhattisgarh
Surguja Power Ltd. (Chhattisgarh UMPP) are striked-off from the
records of RoC in FY 22-23. Further, SPV namely Coastal Karnataka Power
Ltd. (Karnataka UMPP) is being utilised by PFC for bidding stressed assets projects (name
of the SPV changed to PFC Projects Ltd.).
As the Country is transforming from fossil to non-fossil fuel, MoP has
decided to close remaining UMPP's also and advised your Company to take necessary
steps for closure of UMPP in consultation with state Government.
- OTHER MAJOR INVESTMENTS
- PTC India Limited
PTC India Limited ("PTC") was jointly promoted by Power
Grid, NTPC, NHPC and PFC. PFC has invested ` 12 crore in PTC constituting 120,00,000
equity shares which is 4.05% of PTC's total equity share capital. PTC is the leading
provider of power trading solutions in India, a GoI initiated public- private partnership,
whose primary focus is to develop a commercially vibrant power market in the country. PTC
has reported profit after tax of ` 370 crore for the financial year 2022-23 as compared to
Profit after Tax of ` 425 crore for Financial year 2021-22. As on March 31, 2023, PFC
holds 120,00,000 shares of PTC valued at ` 102.06 crore.
- Power Exchange India Limited
Power Exchange India Limited ("PXIL") is India's first
institutionally promoted Power Exchange, that provides innovative and credible solutions
to transform the Indian power markets. PXIL, provides nationwide, electronic exchange for
trading of power and handles power trading and transmission clearance, simultaneously, it
provides transparent, neutral and efficient electronic platform. PXIL offers various
products such as day ahead, day ahead contingency, any day, intra-day and weekly
contracts. PXIL provides trading platform for renewable energy certificates. As on March
31, 2023, PFC's investment in 32,20,000 equity shares of PXIL is valued at ` 3.59 crore.
- Energy Efficiency Services Limited
Energy Efficiency Services Limited ("EESL") was
incorporated as a public limited company on December 10, 2009 under the Companies Act,
1956. EESL intends to focus on energy efficiency and climate change initiatives. The
Company along with its subsidiary RECL is holding 33.33 % stake in equity share capital of
Energy Efficiency Services Limited (EESL). However, in the absence of any practical
ability to direct the relevant activities as per the requirements of Ind AS 28
'Investment in Associates and Joint Ventures', the Company does not have any
significant influence, accordingly EESL has not been considered as an associate company.
As at March 31, 2023, the Company along with its subsidiary RECL holds
33.13% stake in equity share capital of EESL (17.65% directly and 15.68% through its
subsidiary RECL). As on March 31, 2023, PFC holds 24,55,00,000 Equity Shares of FV of ` 10
each of Energy Efficiency Services Limited valued at ` 158.08 crore.
- NHPC Limited
PFC has initially invested 26,05,42,051 equity shares of NHPC
Limited at the rate of ` 21.78 per share (including securities transaction tax, brokerage
and other charges) amounting to ` 567.46 crore in April 2016 during disinvestment by GoI
through offer for sale route. PFC has sold 10,52,17,881 number of equities shares till
March 31, 2023. As on March 31, 2023 PFC holds 15,53,24,170 shares of NHPC Limited valued
at ` 624.40 crore.
NHPC has reported profit after tax of ` 3,834 crore for the
financial year 2022-23 as compared to Profit after Tax of
` 3,538 crore for Financial year 2021-22.
- COAL INDIA LIMITED
PFC has invested 1,39,64,530 equity shares of Coal India Limited at
the rate of ` 358.58 per share (including securities transaction tax, brokerage and other
charges) amounting to ` 500.74 crore in February 2015 through offer for sale route. As on
March 31, 2023, PFC holds 1,39,64,530 equity shares of Coal India Limited Valued at `
298.35 crore.
CIL has reported profit after tax of ` 14,802 crore for the
financial year 2022-23 as compared to Profit after Tax of
` 11,202 crore for Financial year 2021-22.
- INITIATIVES FOR MONITORING DISCOM'S
PERFORMANCE
- Annual Integrated Rating of State
Distribution Utilities
Ministry of Power has taken various reform initiatives, to bring
about improvements in the Distribution Sector and has put in place an Integrated Rating
Methodology for an objective evaluation of performance of Distribution Utilities. The
objective of the integrated rating is to rate all utilities in the power distribution
sector based on their financial performance and their ability to sustain the performance
level. Private Distribution Utilities and Power Departments are also being included to
provide complete sectoral coverage.
The methodology adopted attempts to objectively adjudge the performance
of distribution utilities against various parameters broadly classified under i) Financial
Sustainability parameters ii) Performance Excellence parameters and iii) External
Environment parameters. For the introduction of Power Departments in the rating exercise,
a subset of metrics with modified weightages from the overall methodology have been
utilised for rating.
These ratings are carried out by reputed independent agencies and
co-ordinated by your Company. These ratings are immensely beneficial as a diagnostic tool
in the hands of the State Governments as well as Utilities to build on their strengths and
work on areas requiring improvements so as to improve their operational efficiency and
financial sustainability. Eleventh Integrated Ratings for FY 2021- 22, covering 69
Utilities/departments across the country and inter se ranking of the Utilities was
released by the Hon'ble Minister of Power, New & Renewable Energy on April 10,
2023.
- Annual Performance Report of Power
Utilities
PFC publishes the Report on Performance of State Power Utilities on
an annual basis. The Report covers a range of key financial and operational parameters
such as profitability, gap between average cost of supply and average revenue, net worth,
receivables, payables, AT&C losses and consumption pattern of the sector at utility,
state and national level. The report covers distribution utilities in all States and UTs
of India and all State Gencos/ Transcos/ Trading utilities, offering a comprehensive
insight into the Indian Power Sector.
The Report for the years 2018-19 to 2020-21 was released by the Hon'ble
Cabinet Minister for Power, New & Renewable Energy in the Conference of Power and
Renewable Energy Ministers of State/UTs held in October 2022.
The report for the years 2019-20 to 2021-22 is
under finalisation.
- Categorisation of Utilities
For purposes of funding, your Company classifies State Power
Generation and Transmission entities into A++, A+, A, B and C categories. The
categorisation (biannually) of State Power Generation and Transmission entities is arrived
at based on the evaluation of entity's performance against specific parameters
covering operational & financial performance including regulatory environment,
availability of audited accounts, etc. as per categorisation policy.
With respect to State Power Distribution entities (including
PDs/entities with integrated operations), your Company's categorisation policy
provides for adoption of MoP's Integrated Ratings by aligning such ratings/gradings
with PFC's standard categories of A+, A, B, C and D.
The categorisation enables PFC to determine pricing of loans and
stipulation of security to the state power entities.
- PRESIDENTIAL DIRECTIVES
During last 3 years, there has been no Presidential Directive.
- RIGHT TO INFORMATION: EMPOWERING CITIZENS THROUGH TRANSPARENT COMMUNICATION
The RTI Act, 2005 is a progressive legislation based on
citizen's right to know which is a fundamental right enshrined in the Constitution of
India. The primary goal of the Right to Information Act is to empower citizens, promote
openness and accountability in government operations, combat corruption, and make our
democracy truly function for the people. An informed citizen is better equipped to keep a
required track on governance instruments and hold the government responsible to the
governed. The Act is a significant step in informing citizens about the activities of the
government.
All constitutional authorities, agencies, owned and controlled, also
those organisations which are substantially financed by the government comes under the
purview of the Act. The Act also mandates public authorities of union government or state
government, to provide timely response to the citizens' request for information.
An elaborate mechanism has been set up in PFC to deal with requests
received under the RTI Act, 2005. PFC has implemented the Right to Information Act, 2005
to provide information to the citizens of India and also to maintain accountability and
transparency in the working of the Company. For effective implementation of the RTI Act,
PFC has designated its Company Secretary as Public Information Officer (PIO) to dispose
off the RTI applications received in the corporation at its registered office. Further, an
ED level officer has been designated as a First Appellate Authority (RTI) in PFC to
dispose off the RTI appeals. The
relevant information/ disclosures are also made available
on the official website (www.pfcindia.com) of the Company.
As regards process in disposal of RTI applications, it is stated that
PIO compiles the information from respective Head of the Units who are Deemed PIOs under
Section 5(5) of the RTI Act, 2005 and the said information is made available to the
applicant within the prescribed period of 30 days.
If the RTI applicant is not satisfied with the reply of the PIO, he can
file an appeal with the First Appellate Authority (RTI) of PFC, within 30 days of the
receipt of the reply. The First Appellate Authority (RTI) disposes off the appeals within
the prescribed period of 30 days. During the period from April 1, 2022 to March 31, 2023,
all 140 applications and 13 RTI appeals received under the RTI Act, were duly processed
and replied to. PFC has also complied with the requirement of filing of online RTI
Quarterly Returns on the portal of Central Information Commission (CIC) during the said
period.
Further, in order to strengthen compliance of the provisions of
disclosures as contained in Section 4 of the RTI Act, 2005, Department of Personnel &
Training (DoPT) vide its OM No. 1/6/2011-IR dated 15.04.2013 issued guidelines on the
following:
- Suo moto disclosure of more items under Section 4;
- Guidelines for digital publication of proactive disclosure under Section 4;
- Guidelines for certain clauses of Section 4(1)(b) to
make disclosure more effective;
- Compliance mechanism for suo-moto disclosure (proactive disclosure) under RTI Act, 2005.
In compliance of the aforesaid Guidelines, PFC has placed the requisite
information on the website of the Company.
Besides the above, PFC is also linked with the online RTI Portal of
Govt. of India, Department of Personnel & Training (https://rtionline.gov.in), which
enables citizens of India, to file RTI applications/first appeals online along with
payment gateway. Payment can be made through internet banking of SBI & its associate
banks, debit/credit cards of Master/Visa and RuPay cards.
To strengthen the proactive / suo motu disclosure, DoPT has come out
with detailed instructions vide DoPT OM No. 1/6/2011-IR dated April 15, 2013. The
guidelines lay down one of the most important mechanisms in terms of getting its proactive
disclosures audited by the third party every year to ensure effective compliance of the
guidelines. In line with the above, PFC has successfully got its RTI Disclosures audited
through National Power Training Institute (NPTI) during 2022-23. The said audit report is
also placed on PFC website for information of the public.
- CORPORATE SOCIAL RESPONSIBILITY
The aim of PFC's Corporate Social Responsibility and
Sustainability Policy (CSR and Sustainability Policy) is to
ensure that the Company becomes a socially responsible corporate entity
committed to improving the quality of life of the society at large by undertaking projects
for Sustainable Development, mainly focusing on fulfillment of Power and Energy needs of
the society.
The policy embodies a holistic approach, aligning the company's efforts
with the key tenets of Environmental, Social, and Governance (ESG) principles, as is
evident through the comprehensive array of initiatives, spanning Environment
Sustainability, Healthcare, Education, and more.
PFC has implemented its CSR and Sustainability Policy with all its
earnest and zeal. To oversee the activities of CSR, PFC has in place a Board level
CSR&SD Committee of Directors headed by an Independent Director.
PFC has implemented wide range of activities in the field of
Environment Sustainability, Rehabilitation and Reconstruction Activities, Healthcare,
Education, Sports, Sanitation & Drinking water and Skill development & Livelihood
etc. Further, as per DPE's mandate, PFC has also contributed to thematic areas i.e.
Health & Nutrition, with preference given to Aspirational Districts.
The CSR Report under Companies (CSR Policy), Rules is annexed herewith.
- HR INITIATIVES Capacity Building
Your Company firmly believes that being in service sector, Human
Resource is the most important asset of the organisation. To foster market
competitiveness, your Company is committed to cultivating a high-performance
work culture that unleashes individuals' full potential, while
equipping and empowering them to engage in continuous learning in line with business goals
and adapt to future challenges. Our goal is to develop top-tier organisational
capabilities that set us apart from the competition.
During this year, your Company organised various training and
development programmes in line with corporate goals. The range of trainings imparted
include orientation programme to new recruits as well as hands- on, managerial,
behavioural and leadership training for its employees. Besides this, a wide range of
functional training programmes were also organised which included Stressed Asset
Management with focus on Insolvency & Bankruptcy Code 2016, Advanced Excel, Public
Procurement through GeM Portal, Capacity Building for Financial Institutions on Energy
Efficiency Financing, AML-KYC-CFT and Fraud Monitoring & Recovery Aspects of Loan
Assets, Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition
& Redressal) Act, 2013, Implementation of ISO 45001:2018 - OHS Standards, Exposure
Norms & Capital Requirements for NBFCs, and more.
Furthermore, all newly recruited employees of PFC participated in a
comprehensive 3-week Foundation course for Power Sector Professionals of National Power
Training Institute (NPTI). This course covered essential
topics such as Basics of Power Sector, Renewables & Solar Energy,
Government Schemes, Energy Transition, Energy Conservation & Energy Efficiency, SCADA,
Project Appraisal, and more.
As of March 31, 2023, your Company successfully provided 2,608 mandays
of training to its employees by organising need based customised programmes and sponsoring
employees to external programmes organised by reputed training agencies.
Overall, these initiatives have significantly contributed to enhancing
the skills and knowledge of our workforce in alignment with our organisational goals.
Employee Engagement Activities
PFC being a founding member of Power Sports Control Board (PSCB),
PFC employees participated with full vigor and enthusiasm in various Inter-CPSU sports
tournaments organised by the PSCB member organisations during the period, viz. Badminton,
Chess, Carrom and Table Tennis Tournament. PFC Chess Team won Ist Prize in single
tournament. PFC organised the Inter CPSU Chess Tournament under the aegis of PSCB from
27-29th April, 2022 at Vishwa Yuvak Kendra, New Delhi successfully. PFC also participated
in Power Cup Cricket Tournament which was organised in collaboration with all power sector
CPSEs based in Delhi-NCR during the month of January-February, 2023 organised by Power
Grid and won 2nd Prize in the Tournament.
Apart from these, PFC organised a PFC Foundation Day programme for its
employees & their family member on July 16, 2022 at JLN Stadium, New Delhi. During the
year PFC organised Family Picnic in March 2023 for its employees and their dependent
family members at Vishalgarh Farms, Gurgaon.
Talent Management
Your Company has put in place effective human resource acquisition
and maintenance function, which is benchmarked with best corporate practices designed to
meet the organisational needs. This apart from other strategic interventions leads to an
effective management of Human Resources thereby ensuring high level of productivity.
PFC's recruitment efforts are focused on attracting and nurturing diverse talent.
The Industrial Relations within the Company have been very cordial and
harmonious with the employees committing themselves entirely to the objectives of the
Company. There were no man-days lost during the year under review. The attrition during
the period from April 1, 2022 to March 31, 2023 was 0.04%.
Employee Welfare Measures
Your Company endeavours to follow the best management practices of
the industry.
Commitment of the workforce is ensured through an effective package of
welfare measures which include comprehensive insurance, medical facilities and other
amenities which lead to a healthy workforce. During the period, several new initiatives
were taken for employees' welfare such as introducing flexi-timing for employees
below HoU level, implementing paperless medical claims system and review of certain
provisions under TA Rules, Company Leased Accommodation Rules, etc.
Diversity & Inlcusion
The Company follows the Presidential Directives and guidelines
issued by the Government of India to promote inclusive growth. The status is presented
under:
Status of Reservation of Posts for various categories
Group |
Total Employees as on March 31, 2023
|
SC1 |
SC% |
ST2
|
ST% |
OBC3 |
OBC% |
EWS4 |
EWS% |
A |
500 |
89 |
17.80% |
32
|
6.40% |
100 |
20.00% |
5 |
1.00% |
B |
4 |
0 |
0.00% |
1
|
25.00% |
0 |
0.00% |
0 |
0.00% |
C |
15 |
2 |
13.33% |
1
|
6.67% |
3 |
20.00% |
0 |
0.00% |
D |
0 |
0 |
0.00% |
0
|
0.00% |
0 |
0.00% |
0 |
0.00% |
Total |
519 |
91 |
17.53% |
34
|
6.55% |
103 |
19.84% |
5 |
0.96% |
PFC makes all efforts to ensure compliance of the Directives and
Guidelines issued by the Government of India from time to time pertaining to the welfare
of SC/ ST/ OBC/ ESM5/ PwD6 employees. The steps taken include due reservations and
relaxation as applicable under the various directives for direct recruitment as well as
for promotions. Separate Liaison officers have been appointed to look into the matter of
reservations.
1Scheduled Caste
2Scheduled Tribe
3Other Backward Classes 4Economically Weaker Section 5Ex-Servicemen
6Persons with Disabilities
Empowering Diversity: Women's Representation In Workforce
Your Company has women in important and critical functional areas.
Women representations have gone across hierarchical levels. The Company provides equal
growth opportunities for the women in line with Govt. of India philosophy on the subject.
The women are adequately represented, with 21.00% of the total work force.
Group |
Total Employees as on
March 31, 2023
|
Number of Women Employees
|
Percentage of overall staff strength
|
A |
500 |
107 |
21.40% |
B |
4 |
1 |
25.00% |
C |
15 |
1 |
6.67% |
D |
0 |
0 |
0.00% |
Total |
519 |
109 |
21.00% |
PFC as part of its social responsibility makes all efforts to ensure
compliance of the Directives and guidelines issued by the Government of India from time to
time pertaining to the welfare of female employees.
Fostering A Safe Workplace: Compliance With Sexual Harassment
Prevention
The Company has complied with the provisions relating to the
constitution of Internal Complaints Committee under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Disclosures in relation to the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013:
PFC won the Rajbhasha Kirti Puraskar. PFC was awarded the third
prize of highest and prestigious Rajbhasha Keerti' for the year 2021-22 in the
category of undertaking A' area for best performance in official language. PFC
has been awarded this award for the ninth consecutive time.
- PFC has been ranked 9th amongst the Top 10 Profit- making CPSEs as per the "Public
Enterprises Survey 2021-22" published by the Department of Public Enterprises,
Ministry of Finance, Govt. of India.
- PFC was ranked at 34' out of Top 500' Indian Companies by the
Fortune Magazine.
- ICAI Gold Shield Award in the category of Public Sector Entities' of ICAI
Awards for Excellence in Financial Reporting for 2021-22.
- Governance Now (Sab TV Group's) Award to PFC in the categories of "Best
Performer (Financial) & Use of Emerging Technologies: Cloud".
- PFC bagged Dun & Bradstreet's India's Best PSU Award in the category of
"Best Navratna" in a virtual format.
- Smt. Parminder Chopra, presently CMD, PFC has been bestowed with Icon of the
year' award by the Institute of Cost Accountants of India.
PFC bagged four awards at the 16th Annual Global Communications Conclave organized
by the Public
Number of complaints filed during the Relations Council of India in the
categories of Best
- financial year 2022-23 -NIL
- Number of complaints disposed of during the financial year 2022-23 - NIL
- Number of complaints pending as on end of the financial year 2022-23 - NIL
- AWARDS & RECOGNITIONS
Awards received under the pillars of Environment, Social,
Governance (ESG): Showcasing PFC's efforts in creating sustainable impact:
- Environmental
- PFC received Green Urja Energy Efficiency Award' for being the Best Renewable
Energy Financing Institution this year at the Atma Nirbhar Bharat Summit organized by
Elets.
- Indian Chamber of Commerce's (ICC) Gold Award for the "Top Financing
institution in Renewable Energy and Energy Efficiency category at the 11th Green Energy
Summit.
- Social
- PFC has been ranked 2nd in "Swachhata Ranking" by NDMC in the category of
offices in NDMC area.
Corporate Film (Gold), Best Annual Report (Silver), Best House Journal
Print (Regional) and Best Use of Social Media.
- VIGILANCE: FOSTERING ACCOUNTABILITY
AND TRANSPARENCY
PFC operates with a proactive vigilance unit functioning as a
robust vigil mechanism within the corporation. During the Financial Year 2022-23, the
Vigilance Unit has undertaken preventive vigilance, emphasizing periodic & surprise
inspections of various units, contributing to operational integrity and transparency.
During the period, the Vigilance Unit has also issued instructions/operative guidelines to
rationalize systems and procedures in order to eliminate gaps and confirming transparency
in day to day operations. As a new initiative the first edition of the Vigilance Magazine
"Prahari" was inaugurated, which contains various articles related to vigilance,
power & allied sector and award winning entries of the Vigilance Awareness Week. The
Vigilance Unit carried out detailed investigation in respect of complaints registered
during this period.
Power Finance Corporation Limited observed Vigilance Awareness Week
from 31.10.2022 to 06.11.2022, actively promoting ethical practices and the theme
"Corruption- Free India for a developed India." On this occasion, banners
showing observance of the Vigilance Awareness Week were displayed at
the prime locations in and outside the office premises. Theme of Vigilance Awareness Week
-2022 was also displayed on desktops of all the employees of the
corporation. Publicity of the event was also done through social media such as Facebook,
Twitter, Instagram, and Newspapers including their online editions. To instill integrity
and ethical values, "e-pledge on Integrity" was taken by the employees via the
intranet and PFC website.
During the week, competitions focused on Pictorial, Slogan Writing,
Poem Writing were organized on the subjects related to Vigilance. These competitions were
open to all regular employees of this Corporation including those posted in the regional
offices. The aim of these competitions was to stimulate the creativity, imagination and
originality of the employees to enable them to come out with innovative ideas about
dealing with Good Governance. A one day workshop on the topic PFC's Conduct,
Discipline and Appeal Rules" was also organized by the Corporation with eminent
faculty for the benefit of employees, in which regular employees participated. A talk
"ABBFF and Role of IAC" was also organized for the employees of the PFC by Shri
Vijay Kumar Tyagi, CVO, PNB. A Talk session on Preventive Vigilance was organized by the
PFCCL for employees of the PFCCL by Shri R. N. Nayak, Ex-Director, CVC. It emphasized upon
constant systemic improvements, integrity and transparency in public life.
In compliance of the instructions of CVC, the sensitive posts in the
Corporation have been identified and the concerned officers were rotated on a regular
basis. Agreed lists and List of officers of Doubtful Integrity for the year 2023 were
prepared in respect of corporate office at Delhi and regional offices at Mumbai and
Chennai in consultation with the CBI, aligning with transparent and responsible practices.
Prescribed periodical statistical returns were sent to CVC, CBI, MOP on time.
The Vigilance Unit continuously pursued systemic improvements to
improve transparency, objectivity and accountability in the operations of the corporation.
Thus, it has contributed towards strengthening in the functioning of the
organization.'
- OFFICIAL LANGUAGE
PFC always gives utmost priority to Rajbhasha Hindi in all its
official working. It is a matter of great pride that PFC has been awarded with the Third
Prize in Public Sector Category in Region A' of 'Rajbhasha Kirti Puraskar' for
2021-22 by Rajbhasha Vibhag, Ministry of Home Affairs for its concerted efforts made in
implementation of Official Language Policy. The Prize has been received by PFC for
consecutively 9th time.
Hindi Day on September 14, 2022 and Hindi Month from September 14, 2022
to October 13, 2022 were celebrated to create a Hindi oriented environment. Five (05)
competitions like Katha Visataran', Hindi Tippan evam Aalekhan',
Rajbhasha Niti', Shabd Gyan' and Anek Rang Ek Pratiyogita
ke sang' were organised during the Hindi Month. A play
"Mahabharat Ek Amar Katha" was organised for PFC employees during Hindi
Month on 07.10.2022 at Sirifort Auditorium Complex, New Delhi. The play was presented by
the well-known theatre company Felicity Theatre'. The drama is written and
directed by film, television veteran Puneet Issar. Along with Puneet Issar, many veteran
actors like Gufi Paintal, Rahul Bhuchar presented their brilliant performances in this
play.
During the year, 06 Hindi workshops and 01 Sangoshthi were organised in
which 336 employees participated. Apart from the competitions held during Hindi month, in
order to motivate employees, 04 Hindi competitions namely Smaranshakti
Pratiyogita', Bujho toh Jaane Pratiyogita' and Shabdon Ka
Taana-baana Pratiyogita' and Vishwa Hindi Diwas Pratiyogita' were also
organised in which 205 employees participated. Review meetings with various units,
internal inspections and Personal contact programme were conducted for the purpose of
reviewing the Rajbhasha related work being done by these units and employees. To motivate
the employees towards Hindi, the book "Kamayani" written by Jaishankar Prasad
was distributed to all the employees.
The meeting of Hindi Salahakar Samiti, Ministry of Power was held on
May 12, 2022 at Ashok Hotel, New Delhi. All co-ordination work related to the arrangement
of this meeting was done by PFC. The meeting was presided over by Shri R. K. Singh,
Hon'ble Minister of Power and New & Renewable Energy.
Four (04) Issues including Atulya Bharat Visheshank' of
House Journal Urja Deepti' were also published and made available on website of
Department of Official Language, Ministry of Home Affairs.
All these efforts were motivational tools in creating possibilities of
better and progressive use of Rajbhasha Hindi in the Corporation.
- DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 134(5) of the Companies Act,
2013, it is confirmed that:
- in the preparation of the annual accounts, the applicable accounting standards had been
followed along with proper explanation relating to material departures;
- the Directors had 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 and of
the profit and loss of the company for that period;
- the Directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the company and for preventing and detecting fraud and other irregularities;
- the Directors had prepared the annual accounts on a going concern basis; and
- the Directors, had laid down internal financial controls to be followed by the company
and that such internal financial controls are adequate and were operating effectively;
- 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.
- AUDITORS
- Statutory Auditors
Dass Gupta & Associates, Chartered Accountants and Prem Gupta
& Company, Chartered Accountants were appointed as Joint Statutory Auditors of the
Company for FY 2022-23 by the Office of the Comptroller & Auditor General of India.
The Joint Statutory Auditors have audited the accounts of the Company
for the FY 2022-23 and have given their report without any qualification, reservation,
adverse remark or disclaimer. The copy of the audit report is annexed herewith.
- Secretarial Audit:
Your Company had engaged M/s. Mehta & Mehta, Company
Secretaries as Secretarial Auditors for FY 2022-23. Secretarial Audit Report is annexed
herewith.
The observations of the Secretarial Auditor and reply of the management
on the observations, for the FY 2022-23 along with copy of the audit report is annexed
herewith.
- Comments of Comptroller & Auditor General
of India
The Comptroller and Auditor General of India (C&AG) has
mentioned that on the basis of audit, nothing significant has come to their knowledge
which would give rise to any comment upon or supplement to Statutory Auditors' report. The
copy of the report of C&AG is annexed herewith.
- DIGITIZING GOVERNANCE PRACTICES BY LEVERAGING TECHNOLOGY
Pursuant to the Companies Act, 2013, the Companies are permitted to
send documents like Notice of Annual General Meeting, Annual Report etc. through
electronic means to its members at their registered e-mail addresses. PFC, being a
socially responsive Company actively supports the implementation of Green
Initiative' of the Ministry of Corporate Affairs (MCA). Your Company has effected
electronic delivery of Notices and Annual Reports to shareholders, whose e-mail IDs are
registered. The intimation of dividend (interim/final) is also being sent electronically
to such shareholders. Further, pursuant to Section 108 of the Companies Act, 2013 read
with Rule
20 of the Companies (Management and Administration) Rules, 2014, the
Company is providing e-voting facility to all members to enable them to cast their votes
electronically
in respect of resolutions set forth in postal ballot and Annual General
Meeting (AGM). The Company will also be conducting the AGM this year through video
conferencing/ other audio-visual means. Members can refer to the detailed instructions for
e-voting and electronic participation in the AGM, as provided in the Notice of AGM.
- STATUTORY DISCLOSURES
- Your Company is a non-deposit taking NBFC, and thus has not accepted any public deposits
during the FY 2022-23. Further, no Perpetual Debt Instruments (PDI) was issued by your
Company during FY 2022-23. The Board of Directors of the Company has passed requisite
resolution in this regard, in compliance of RBI Guidelines.
- No significant and material orders were passed by any regulator or court or tribunal
impacting the going concern status and company's operations during the FY 2022-23.
- The Company maintains an adequate system of Internal Control, including suitable
monitoring procedures to ensure accurate and timely financial reporting of various
transactions, efficiency of operations and compliance with statutory laws, regulations and
Company procedures/ policies. For details, please refer to the Management Discussion
and Analysis Report' annexed to this report.
- Information on composition, terms of reference and number of meetings of the Board and
its Committees held during the year, Whistle-Blower Policy, remuneration to Whole time
Directors, sitting fees to Independent Directors and details regarding IEPF and web-links
for familiarisation programmes of Directors, Policy on Materiality of Related Party
Transactions and Dealing with Related Party Transactions, Policy for determining Material
Subsidiaries, etc. have been provided in the Report on Corporate Governance',
prepared in compliance with the provisions of SEBI (LODR) Regulations, 2015 and DPE
Guidelines on Corporate Governance, 2010, as amended from time to time, which forms part
of this Annual Report.
- Pursuant to Section 186(11) of the Companies Act, 2013, loans made, guarantees given,
securities provided or investment made by a company engaged in the business of financing
of companies or of providing infrastructural facilities in the ordinary course of its
business are not applicable to the Company, hence no disclosure is required to be made.
Further, details of investments are appearing at note no.11 of the Notes to Accounts of
the standalone financial statements.
- The provisions of Section 197 of the Companies Act, 2013 and Rules made thereunder
relating to managerial remuneration are not applicable to Government companies, therefore
no disclosure is required to be made.
- The Company has not issued any stock options to the Directors or any employee of the
Company.
- The Central Government has not prescribed the maintenance of cost records for the
products/services of the Company under the Companies (Cost Records and Audit) Rules, 2014
read with the Companies (Cost Records and Audit) Amendment Rules, 2014 prescribed by the
Central Government under Section 148 of the Companies Act, 2013. Accordingly, cost
accounts and records are not required to be maintained by the Company.
- During the year under review, neither the statutory auditors nor the secretarial auditor
has reported to the audit committee, under Section 143(12) of the Companies Act, 2013, any
instances of fraud committed against PFC by its officers or employees.
- The Company is compliant with the applicable Secretarial Standards issued by the
Institute of Company Secretaries of India.
- The Independent Directors of the Company are nominated/appointed by the President of
India acting through the administrative ministry, i.e., MoP. Accordingly, the appointing
authority considers the integrity, expertise and experience of the individual to be
nominated/appointed. In the FY 2022-23 no new Independent Directors were appointed on the
Board of PFC.
- There are no significant particulars, relating to conservation of energy and technology
absorption as your Company does not own any manufacturing facility.
- The Foreign exchange outgo for the FY 2022-23 aggregated to ` 10,226.94 crore. The
Foreign exchange earnings for the FY 2022-23 were nil. The payments are majorly for the
purpose of servicing principal and interest component of foreign currency borrowings.
- Total expenditure for the FY 2022-23 amounted to
` 25,495.01 crore as against total expenditure of
` 26,363.52 crore in FY 2021-22. Out of it, finance cost amounted to `
23,282.57 crore in FY 2022-23 as compared to ` 22,671.30 crore in FY 2021-22. This
constituted 91.32 % of total expenses in FY 2022-23. During FY 2022-23, employee benefit
expenses and other expenses were ` 219.01 crore and ` 128.55 crore
respectively against 213.11 crore and ` 122.71 crore respectively in
the previous year.
- M/s. ASA & Associates LLP, Chartered Accountants, appointed for testing the adequacy
and operative effectiveness of Internal financial control over financial reporting, has
certified that the Company maintains an adequate system of internal financial controls,
evaluates and makes an assessment of its adequacy and effectiveness in a satisfactory
manner which takes care of requirements under Companies Act, 2013.
The Statutory Auditors of the Company i.e. Dass Gupta & Associates,
Chartered Accountants and Prem Gupta & Company, Chartered Accountants and have also
given their Report on the Internal Financial Controls stating that the Company has, in all
material respects, an internal financial controls system over financial reporting and such
internal financial controls over financial reporting were operating effectively as at
March 31, 2023 based on internal control over financial reporting criteria established by
the Company considering the essential components of internal control stated in the
Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by
the Institute of Chartered Accountants of India.
- The Annual Return of PFC for FY 2021-22 is available on the link chrome-extension://
efaidnbmnnnibpcajpcglclefindmkaj/https://w w w.
pfcindia.com/DocumentRepository/ckfinder/files/
Investors/Annual_Return/Annual_Report_21_22.pdf and for FY 2022-23 it shall be made
available on your Company's website www.pfcindia.com.
- The details of Debenture Trustees appointed by the Company for the different series of
Bonds issued by your Company are annexed herewith.
- During the year no application has been made or any proceedings pending against PFC
under the Insolvency and Bankruptcy Code, 2016. Further, details of the difference between
amount of the valuation done at the time of one time settlement and the valuation done
while taking loan from the banks or financial institutions, are not applicable.
- Procurement from Micro & Small Enterprises:
Government of India has notified Public Procurement Policy for Micro
and Small Enterprises (MSEs) Order, 2012 to support marketing of products produced and
services rendered by them. In compliance to the policy, annual procurement plan including
items to be procured from Micro & Small Enterprises (MSEs) are uploaded on PFC website
for the benefit of MSEs.
The benefits to MSEs like exemption from tender fees and earnest money
deposit, purchase preference, interest on delayed payments and exemption from prior
experience - prior turnover criteria subject to meeting of quality and technical
specifications are also extended to encourage these enterprises.
During the financial year, your Company has procured products and
services from MSEs, which constituted 66.09% of the total annual procurement value,
against the mandate of 25 % set by Ministry of Micro, Small and Medium Enterprises, Govt.
of India. During the year, 309 MSEs were benefited out of which 19 MSEs belonged to SC/ST
category and 48 MSEs were owned by women.
PFC is also registered on the Trade Receivables Discounting System
(TReDS) platform for financing of trade receivables of Micro, Small & Medium
Enterprises (MSMEs). TReDS platform facilitates the discounting of invoices of MSMEs
leading to prompt generation of working capital for their regular business operations.
Your Company had also organised/participated in 03 vendor development
programmes in co-ordination with Ministry of Micro, Small and Medium Enterprises, Govt. of
India to encourage participation of Micro and Small Enterprises.
The details of the procurements made from Micro, Small and Medium
Enterprises (MSEs) during the FY 2022-23 and the targets for FY 2023-24 as required to be
disclosed under Micro, Small and Medium Enterprises Development Act, 2006 along with
Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012 is as under:
Sr. Particulars No. |
FY 2022-23
(` in crore)
|
Target for FY 2023-24
(` in crore)
|
I. Total annual procurement (in value) |
46.81 |
169.2 (135* + 34.2) |
II. Total value of goods and services procured
from MSEs (including MSEs owned by SC/ST entrepreneurs) |
30.93 |
42.3 |
III. Total value of goods and services procured
from only MSEs owned by SC/ST entrepreneurs. |
3.90 |
6.768 |
IV. % age of procurement from MSE (including MSEs owned by SC/ST entrepreneurs) out of
total procurement.
|
66.09 |
25 |
V. % age of procurement from only MSEs owned by
SC/ST entrepreneurs) out of total procurement |
8.33 |
4 |
VI. Total Number of vender development programmes
for MSEs |
3 |
2 |
VII. Confirmation of uploading annual MSE procurement profile on your website by
hyperlink of same. https://www.pfcindia.com/
DocumentRepository/ckfinder/files/
Statutory_Requirements/Codes_and_ Policies/Public_Procurement_Policy_for_
MSME/Procurement%20Target%20%20 and%20Profile%202023-24%20V0_0.pdf
*One Time IT infrastructure refresh expenditure planned for FY 2023-24
- INFORMATION TECHNOLOGY
PFC has undertaken various information technology initiatives to
achieve sustainable business growth, improve overall productivity, ensure data integrity
and data privacy. PFC has implemented state-of-the-art Data center providing various IT
services and housing ERP application system to integrate all the Business functions,
reflecting PFC's commitment to operational excellence.
Digital Transformation & ERPImplementation
MS Unit has taken up initiatives for a complete digital
transformation as per the laid down IT roadmap to adopt state-of-the-art technology which
can help PFC to reflect the standards of being a MAHARATNA. As part of this, the most
ambitious project is to implement a comprehensive IT ERP platform that can ensure
end-to-end integration and digitization of the processes and services as a single source
of truth. At present, the ERP platform is under implementation stage and some modules are
released for user experience.
Enhancing Digital reach - Online Borrower Services
In the digital era, Information Technology has been put to use to
ensure timely "information sharing" to enhance the customer experience of the
borrowers. PFC has implemented "Online Borrower Portal", through which the
disbursement detail, loan ledger, due-receipt, outstanding detail &
remittance detail etc., are made available in an online mode which can be accessed for
instant information dissemination. Through this portal, borrowers not only have access to
their loan data instantly, and also it allows them to plan for further necessary action
timely.
Business automation & Paperless Office
PFC continuously poised to utilize Information Technology to enable
its employees to cater to business functions efficiently. Implementation of collaboration
tools for online meetings, e-Office solution for efficient file processing, paperless
digital board meetings thru Board Pac and paperless employee claims are few of the
initiatives highlighting PFC's efforts in going Green.
Adopting Robust Cyber Security Measures
PFC has developed a comprehensive cyber security framework to
safeguard its IT assets, PFC has taken substantial initiatives to augment the cyber
security arrangements. PFC has implemented Anti-APT Devices, Next Generation Firewall,
IPv6 for increased cybersecurity posture and also inducted Managed Detection &
Response Services for proactive cyber security protection. As per the guidelines of
Ministry of Power, the "Cyber Jagrukta Diwas" is being conducted on every first
Wednesday of the month at PFC, contributing to a vigilant cyber-safe environment.
Ensuring Business Continuity
It is very crucial to safeguard the business operations of PFC in
order to ensure business continuity. As a milestone achievement, PFC has established a
disaster recovery site on a private cloud which is considered as highly secured, to
replicate the existing data center setup in a different seismic zone. With this, PFC can
continue its business operation during any disaster or cyber security incidents. This
critical measure bolsters PFC's commitment to sustainability and resilience.
PFC Website & Knowledge sharing
The bi-lingual PFC website is maintained with up-to-date
information as per "Guidelines for Indian Government Websites". The face
uplifted website has been made more informative to address the information requirements of
external stakeholders.
Business Analytics
MIS portal for Business intelligence and reporting requirements is
in place for decision support. The portal has been enriched regularly with more business
data metrics.
Knowledge sharing Portal
To share their domain knowledge amongst employees handling various
functions within PFC, a software portal has been developed which is named as
"PEEPAL" for knowledge sharing, mutual appreciation and to create a positive
association among the employees.
Compliance to guidelines issued by statutory
bodies
The compliance guidelines issued by various statutory &
regulatory bodies have been stringently followed and implemented at PFC. As per the
guidelines issued by RBI vide Master Directions to NBFCs, the IT Strategy Committee has
been constituted, IT policy has been implemented & IT audits are being carried out
regularly on annual basis. All guidelines & regulations pertaining to Information
Technology issued by various statutory and regulatory bodies like Meity, RBI, MoP, NCCC,
NCIIPC etc. have been implemented and strictly followed by PFC.
Through these strategic IT initiatives, PFC continues its unwavering
dedication to ESG principles, contributing to sustainable growth, operational efficiency,
and responsible corporate practices.
- ESTABLISHMENT OF VIGIL MECHANISM
The establishment of a robust vigil mechanism is a pivotal aspect
of your Company's commitment to Environmental, Social, and Governance (ESG) principles.
This mechanism encompasses a range of codes and policies, including fair practices, codes
of conduct, prevention of insider trading,
fraud prevention, related party transactions, public procurement, and a
comprehensive whistle-blower policy. These measures reinforce the organization's focus
towards transparent, accountable and ethical business practices.
The vigil mechanism's effectiveness is underscored by its accessibility
and visibility. Details of these codes and policies, along with pertinent information, are
readily available on the Corporation's official website. This not only reflects your
Company's commitment to open communication but also empowers stakeholders to understand
and engage with the principles that govern the organization.
- GRIEVANCE REDRESSAL
PFC has a Grievance Redressal System for dealing with grievances of
the public at large and in accordance with the guidelines issued by the Government of
India, the Company has also constituted a Grievance Redressal Committee to redress the
grievances of its employees.
The transparency and accessibility of this system are key tenets of
PFC's responsible governance approach. The status of public grievances is openly available
on the PFC web portal, accessible to all stakeholders.
The link for accessing the same is as under:-
https://pfcindia.com/DocumentRepository/ckfinder/files/
Statutory_Requirements/Status_of_Public_Grievances/ PFC%20CPGRAMS%20Report.pdf
The systems are duly notified and the Nodal Officers ensure quick
redressal of grievances within the permissible time frame. PFC's commitment to
transparency extends further through its Citizen's Charter, ensuring clear
communication of its business practices. The Charter is available on the website of PFC to
facilitate easy access.
- STATUTORY AND OTHER INFORMATION
Information required to be furnished as per the Companies Act,
2013, Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, DPE's Guidelines on Corporate Governance for CPSEs
and other applicable statutory provisions is annexed to this report as follows:
Particulars |
Annexure |
Management Discussion and Analysis Report |
A |
Integrated Reporting |
B |
Report on Corporate Governance |
C |
Business Responsibility and Sustainability Report |
D |
Secretarial Audit Report |
E |
Annual Report on CSR Activities |
F |
Disclosure of particulars of
contracts/arrangements entered into by the Company with related parties (AOC-2) |
G |
Details of Debenture Trustees |
H |
- ACKNOWLEDGEMENT
Your Board of Directors acknowledge and place on record their
appreciation for the assistance, co-operation and encouragement extended to the Company by
the Government of India particularly the Ministry of Power, Ministry of Finance, Ministry
of Corporate Affairs, State Governments, Reserve Bank of India, Department of Public
Enterprises, NITI Aayog, DIPAM, Securities and Exchange Board of India, National Stock
Exchange of India Limited, Bombay Stock Exchange Limited, Ministry of Micro, Small and
Medium Enterprises, and other concerned Government departments/agencies at the Central and
State level etc.
The Company is also thankful to the Comptroller & Auditor General
of India, the Statutory Auditors, Secretarial Auditor and RBI Auditors and the bankers for
their constructive suggestions and co-operation.
Your Directors would also like to convey their gratitude to the
shareholders, investors, clients and customers for their unwavering trust and support.
Last but not the least the directors would like to thank the employees for their
continuing support and contribution in ensuring an excellent all round performance.
(Parminder Chopra)
Chairman and Managing Director
DIN: 08530587
Place: New Delhi Dated: August 21,2023
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