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Power Finance Corporation Ltd

BSE Code : 532810 | NSE Symbol : PFC | ISIN:INE134E01011| SECTOR : Finance |

NSE BSE
 
SMC down arrow

120.85

-4.15 (-3.32%) Volume 280564

21-Jan-2022 EOD

Prev. Close

125.00

Open Price

124.70

Bid Price (QTY)

120.85(710)

Offer Price (QTY)

0.00(0)

 

Today’s High/Low 124.80 - 120.00

52 wk High/Low 153.75 - 104.10

Key Stats

MARKET CAP (RS CR) 31865.78
P/E 3.29
BOOK VALUE (RS) 214.5502076
DIV (%) 100
MARKET LOT 1
EPS (TTM) 36.71
PRICE/BOOK 0.562572282498225
DIV YIELD.(%) 8.29
FACE VALUE (RS) 10
DELIVERABLES (%) 43.29
4

News & Announcements

20-Jan-2022

Power Finance Corporation Ltd - Power Finance Corporation Limited - Updates

19-Jan-2022

Power Finance Corporation Ltd - Statement Of Investor Complaints For The Quarter Ended December 2021

05-Jan-2022

Power Finance Corporation Ltd - Power Finance Corporation Limited - Suspension of Trading

31-Dec-2021

Power Finance Corporation Ltd - Power Finance Corporation Limited - Trading Window

23-Dec-2021

Board of Power Finance Corporation appoints directors

17-Dec-2021

Power Finance Corporation transfers Nangalbibra- Bongaigaon Transmission

14-Dec-2021

Power Finance Corporation transfers Koppal-Narendra Transmission to ReNew Transmission Ventures

12-Nov-2021

Board of Power Finance Corporation recommends Second Interim Dividend

Corporate Actions

Bonus
Splits
Dividends
Rights
Capital Structure
Book Closure
Board Meeting
AGM
EGM
 

Financials

Income Statement

Standalone
Consolidated
 

Peers Comparsion

Select Company Name BSE Code NSE Symbol
Gujarat State Financial Corporation 532160 GUJSTATFIN
Haryana Financial Corporation Ltd 530927
ICICI Ltd (Merged) 500015 ICICI
IFCI Ltd 500106 IFCI
Indian Railway Finance Corporation Ltd 543257 IRFC
REC Ltd 532955 RECLTD
SCICI Ltd (Merged) 500017 SCICI
Tourism Finance Corporation of India Ltd 526650 TFCILTD

Share Holding

Category No. of shares Percentage
Total Foreign 447762298 16.96
Total Institutions 358333335 13.57
Total Govt Holding 0 0.00
Total Non Promoter Corporate Holding 19091536 0.72
Total Promoters 1478291778 55.99
Total Public & others 336602461 12.75
Total 2640081408 100
  • Total Foreign
  • Total Institutions
  • Total Govt Holding
  • Total Non Promoter Corporate Holding
  • Total Promoters
  • Total Public & others

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 the development of the Indian power sector. The company is engaged in power sector financing, and the integrated development of the power and associated sectors. They provide large range of Financial Products and Services like Project Term Loan, 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. The Board of Directors of Power Finance Corporation at its meeting held on 29 September 2017 approved scheme of Arrangement for the amalgamation of its wholly owned subsidiary company i.e. PFC Green Energy Limited with the company in order to consolidate the similar nature of business of the two companies at one place which will provide several benefits including concentrated management focus, streamlined group structure, cost rationalization and more efficient utilization of capital etc. The synergies created by the scheme of arrangement would increase operational efficiency and integrate business functions. PFC Green Energy Limited is engaged is in similar line of business as the parent firm and is focused on renewable and green energy. 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.

Power Finance Corporation Ltd Chairman Speech

Ladies and Gentlemen,

Welcome to the 35th Annual General Meeting of your Company. Last year, the entire world had come together to navigate through an unprecedented global public health and economic crisis. As our nation emerges from the debilitating impact of the second wave, there is now hope that India’s large scale vaccination programme will help us effectively combat the impact of COVID. During these exceptional times, I would also like to wish you all and your loved ones the best of health and safe passage through this pandemic.

In the last fiscal year, the pandemic had caused large scale disruptions and impacted a large number of sectors and industries. The power sector was also not immune to its impact. During the initial phase of lockdown, power demand registered a drop of over 25%, which was unheard of. New capacity addition slowed down and implementation of under construction projects were affected. However, your Company was able to weather the challenges and posted excellent financial performance.

I am proud to share that in FY 2020-21, your Company has registered a profit ofRs. 8,444 Crore, its highest ever annual profit since inception. Also during the year, PFC’s net worth crossed Rs. 50,000 Crore mark, consolidating its position as the largest lender in the Indian Power sector. According to Forbes 2021 rankings, your Company now ranks 365th in terms of assets and 730th overall among Global Public Companies.

On operational front also, your Company demonstrated remarkable performance, achieving highest ever annual loan sanctions of Rs. 1.66 Lakh Crore and disbursement of Rs. 88,300 Crore. PFC’s loan assets stand at Rs. 3.71 Lakh Crore at the end of FY 2020-21. The stellar performance during this difficult period reflects the inherent strength of PFC’s human capital, systems and processes, and its resilience in absorbing severe economic shocks. Your Company acknowledges the role shareholders play in its growth and is happy to share its success with you. Thus, in FY 2020-21, PFC has declared a total dividend of 100% i.e. Rs. 10 per share.

Asset quality improved significantly during the year, with stressed assets worth Rs. 6,844 Crore being resolved, which is about 25% of our stressed asset book. Major assets which have been resolved include RKM Powergen, Essar Transmission, Suzlon Energy and Jal Power. This has resulted in the lowest NPA levels in the last 5 years, with Gross NPA ratio at 5.70% and Net NPA ratio at 2.09%. Two other large projects are in advanced stages of resolution and are expected to conclude soon.

Shri Ravinder Singh Dhillon, CMD presenting bank advice of an interim dividend of Rs.1,182.63 Crore to Shri R.K. Singh, Hon'ble Cabinet Minister of Power and New & Renewable Energy in the presence of Shri Alok Kumar, Secretary (Power) and other senior officers from Ministry of Power and PFC.

Your Company is steadfastly committed to a greener future and is at the forefront of India’s energy transition. In its Nationally Determined Contributions as part of the Paris Agreement on Climate Change, India has agreed to reduce the emission intensity of its GDP by 33-35% by the year 2030 from 2005 levels and to make 40% of its installed power generation capacity non-fossil fuel based. Our country is well on its way to achieve these targets and your Company is playing a significant role in this effort. During the first edition of RE-Invest, a global investors’ meet on renewable energy organised by the Union Ministry of New and Renewable Energy in 2015, PFC had committed to support renewable capacity addition of 3,000 MW by 2019. Your Company had surpassed this target, supporting renewable capacity addition of close to 9,000 MW during this period. During the last 5 years, PFC’s renewable energy loan book has grown at a remarkable pace, registering a CAGR of 46%.

Effectively addressing climate change will require much more effort from all the stakeholders. Recognising this, the Government of India has gone beyond the requirement under Paris Agreement and has set an ambitious target of 450 GW of renewable energy capacity by 2030, almost fivefold increase from the present level.

Integrating variable generation of such a large scale into the grid poses its own set of challenges. To address this, the government has introduced various initiatives like development of large solar parks with dedicated green evacuation corridors, solarisation of agricultural feeders, promoting wind-solar hybrid projects and projects with round-the-clock or assured peak time supply commitment. In order to boost domestic manufacturing, production linked incentives for renewable energy generating equipment, storage batteries etc. have also been introduced.

Your Company is fully aligned with the government’s vision for de-carbonisation of the energy sector. During the last fiscal, various policy measures were introduced to boost renewable projects, including higher lending limits for solar and wind projects, introduction of Letter of Undertaking, a non-fund based product that can be used in lieu of Bank Guarantee by renewable developers during tariff based bidding, project specific funding to renewable energy equipment manufacturers and special rebate for solar projects with higher domestic content. Going forward, your Company will continue its focus on funding renewables and will play a key role in realising the country’s renewable energy capacity addition targets.

The ongoing sustainable energy transition has opened up new and emerging avenues for funding like e-mobility, utility scale energy storage etc. For tapping business from these sectors, PFC has amended its Memorandum and Articles of Association, enabling funding of energy storage projects, electric vehicles, charging infrastructure and large infrastructure projects with power sector linkages. Your Company has recently sanctioned financial assistance for deployment of 700 electric buses in various Districts of Uttar Pradesh under Fame II scheme. PFC has also funded a solar-wind hybrid pumped storage project in Andhra Pradesh, which will be one of the largest such integrated projects in the world. Your Company is also diversifying its asset base geographically and has recently sanctioned financial assistance for 600 MW Kholongchu Hydro Electric Project in Bhutan, which would be jointly implemented by SJVN & Druk Green Power Corporation of Bhutan.

In a bid to re-ignite growth in the economy, the Reserve Bank of India provided ample liquidity in the market in FY 2020-21 and brought down its benchmark interest rates. Capitalising on the low interest rate regime and aiming to diversify its borrowing base, your Company launched its maiden public issue of taxable bonds, mobilising Rs. 4,429 Crore. This was the first public issue of taxable bonds by a CPSU in the last decade and first ever public issuance of taxable bonds by a PSU in the Power Sector. A testament to investors’ trust in brand PFC, the issue received overwhelming response, getting subscribed nearly nine times and had to be closed for subscription 11 days ahead of schedule. As part of its diversification strategy, your Company also mobilised US$ 900 million from the foreign market. Your company is also allowed to raise funds through capital gain bonds under section 54EC of IT Act, which is an important source of funds for PFC owing to its low cost. As a result of these efforts, our cost of funds reduced by 31 bps to 7.48% in FY 2020-21 as compared to FY 2019-20. We have passed on the benefit to our borrowers, reducing lending interest rates across the board by around 65 bps to 200 bps.

The fact that your Company faced no challenge in raising funds from either domestic or international markets shows the confidence of the market in PFC’s business model and its credit profile. On the back of our robust financial performance, both Domestic and International Credit Rating agencies have re-affirmed our credit ratings, reflecting PFC’s strong business fundamentals.

Your company is a strategic partner of the Government of India for the overall development of the Indian power sector. PFC has been instrumental in ensuring liquidity in the power sector during the pandemic period. Along with its subsidiary REC, your Company has sanctioned Rs. 1.34 Lakh Crore and disbursed over Rs. 79,000 Crore to DISCOMs under the Liquidity Infusion Scheme as part of Aatmanirbhar Bharat Abhiyaan. PFC has been publishing performance report on state power utilities on an annual basis and is also involved in publishing the annual integrated rating of power distribution companies. These Shri R.K. Singh, Hon'ble Cabinet Minister of Power and New & Renewable Energy along with Shri Krishan Pal, Minister of State for Power, Shri Alok Kumar, Secretary (Power) and Shri Ravinder Singh Dhillon, CMD releasing PFC’s report on "Ranking & Ninth Integrated Ratings for State-owned Power Distribution Utilities" on the occasion of PFC’s 36th Foundation Day on 16th July 2021.

Shri S N Sahai, Former Secretary (Power), Govt. of India and Shri R.S. Dhillon, CMD signing a performance based ‘Memorandum of Understanding’ (MoU) for the FY 2020-21 in the presence of senior MoP & PFC officials.

reports are widely used by stakeholders including policy makers, developers, lenders, equity analysts, regulators, public at large etc. and helps in decision making.

Weak financial position of power distribution companies has been one of the persistent stress points of the Indian power sector. To strengthen the distribution sector, the Government of India has recently launched a major reform initiative, a reforms-based and results-linked Revamped Distribution Sector Scheme. The scheme aims to improve operational efficiencies and financial sustainability of DISCOMs by providing reform-linked financial assistance for strengthening of supply infrastructure. The Scheme, with a total outlay of Rs. 3.04 Lakh Crore, will be available till the year 2025-26. I am happy to inform you that your Company and its subsidiary REC are the two organisations designated as the nodal agencies for facilitating implementation of this vital scheme.

Your Company views corporate governance as a key element in improving economic efficiency and growth, as well as for building confidence of its stakeholders. Being a Listed Company, PFC complies with all applicable provisions within its ambit, relating to corporate governance as stipulated under the Companies Act, 2013, SEBI (Listing Obligations & Disclosure Requirements) Regulations, DPE Guidelines etc. Your Company maintains the highest standards of transparency, accountability and adequate disclosures.

Being a socially responsible entity, your Company has supported the national fightback against the pandemic through the first and the second wave. Out ofRs. 217 Crore disbursed for CSR activities during FY 2020-21, Rs. 210 Crore was spent on COVID relief measures, including contribution to PMCARES fund. PFC has procured and distributed cold chain equipment to various states and UTs to support the national vaccination programme. PFC has also undertaken distribution of ambulances, medical equipment and consumables in various parts of the country and has distributed packed lunch for healthcare professionals. Multiple vaccination camps were organised at PFC premises for our employees and officials of other CPSUs under the Ministry of Power. PFC was the first CPSU to vaccinate all its eligible employees with the first dose of vaccine. The fight against the pandemic is far from over and your Company stands firmly with the society in this fight.

I am grateful to all our shareholders who have reposed faith in us. My sincere and heartfelt thanks go out to the Shri Ravinder Singh Dhillon, CMD receiving "Governance Now" Award for "Strategic Performance" during the 8th PSU Awards by Shri Kailashnath Adhikari, MD, Governance Now in presence of Shri P.K. Singh, Director (Commercial) & Projects (Addl. Charge) and Smt. Parminder Chopra, Director, (Finance).

Hon’ble Union Minister of Power, New and Renewable Energy, Hon’ble Minister of State for Power and officials of the Ministry of Power for their continued support and guidance. I am also thankful to the Board of Directors, investors and our valued clients for their support.

I also convey my gratitude to Ministry of Finance, Reserve Bank of India, Department of Public Enterprises, Securities and Exchange Board of India, National Stock

Exchange of India Limited, Bombay Stock Exchange Ltd., NITI Aayog, Central Electricity Authority, Comptroller & Auditor General of India, Central Vigilance Commission,

Statutory Auditors, Internal Auditors, Registrars, various Commercial Banks, Financial Institutions, Credit Rating Agencies and other concerned Government Departments/ Agencies at the Central and State level for their continued support. I also appreciate the continuous and unwavering support by our partners in the Print and Electronic Media.

I also thank all our employees, without whose hard work and zeal the success your company has witnessed and the feats that it has achieved over the years would not have been possible.

I look forward to your continued support in the years to come and hope that with continued commitment of all stakeholders, PFC will continue to scale greater heights.

Ravinder Singh Dhillon

Chairman & Managing Director

   

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 the development of the Indian power sector. The company is engaged in power sector financing, and the integrated development of the power and associated sectors. They provide large range of Financial Products and Services like Project Term Loan, 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. The Board of Directors of Power Finance Corporation at its meeting held on 29 September 2017 approved scheme of Arrangement for the amalgamation of its wholly owned subsidiary company i.e. PFC Green Energy Limited with the company in order to consolidate the similar nature of business of the two companies at one place which will provide several benefits including concentrated management focus, streamlined group structure, cost rationalization and more efficient utilization of capital etc. The synergies created by the scheme of arrangement would increase operational efficiency and integrate business functions. PFC Green Energy Limited is engaged is in similar line of business as the parent firm and is focused on renewable and green energy. 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.

Power Finance Corporation Ltd Directors Reports

FY 2020-21

To,

The Members,

Power Finance Corporation Limited

Your Directors are pleased to present their 35th Annual Report on the performance of your Company for the financial year ended March 31, 2021 along with Audited Financial Statements, Auditor’s Report, Secretarial Auditor’s Report & report by the Comptroller and Auditor General of India.

1.0 FINANCIAL AND OPERATIONAL HIGHLIGHTS

• Total income achieved during the FY 2020-21 was up by 13% to Rs.37,767 Crore.

• Net Interest Income during the FY 2020-21 increased by 28% to Rs.12,951 Crore.

• Delivered highest ever Net profit of Rs.8,444 Crore during FY 2020-21.

• Board recommended a final dividend of Rs.2 per equity share in addition to an interim dividend of Rs.8 per equity share, which was paid in March 2021. The total dividend for the FY 2020-21 thus aggregates to Rs.10 per equity share as against Rs.9.50 per equity share paid for the previous year.

The final dividend will be paid after your approval at the Annual General Meeting. The total dividend pay-out for the FY 2020-21 will thus amount to Rs.2,640 Crore (inclusive of TDS) representing 31.27% of the profit after tax.

• Total expenditure for the FY 2020-21 amounted to Rs.27,559.26 Crore. Out of it, finance cost amounted toRs.23,194.49 Crore. This constituted 84.16% of total expenses in FY 2020-21.

During FY 2020-21, employee benefit expenses and other expenses, which includes administrative and office expenses were Rs.265.42 Crore (0.96 % of total expenses and 1.14% of finance cost) againstRs.282.73 Crore (1.12% of total expenses and 1.29% of finance cost) in the previous year.

• Highest ever loans sanctioned amounting to Rs.1,66,370 Crore during the FY 2020-21 to State, Central, Private and Joint Sector entities. Highest ever disbursements amounting to Rs.88,302 Crore during the same period.

• Gross Loan Asset book as on FY 2020-21 stood at Rs.3,70,771 Crore. The outstanding borrowing as on FY 2020-21 stood at Rs.3,25,095 Crore.

• Total provision of Rs.13,416 Crore towards Stage-III Loan Assets as at the end of FY 2020-21. The Net Stage-III Assets stands at Rs.7,734 Crore as on March 31, 2021, which is 2.09% to the Total Gross Loan Assets. In addition to above, provision of Rs.1,236 Crore and Rs.1,945 Crore made on Stage-I Loan Assets and Stage-II Loan Assets respectively as on March 31, 2021

• As on March 31, 2021, the Government of India’s shareholding is 55.99%.

• PFC's robust financials inspire higher levels of confidence amongst investors, regulators and other stakeholders in your Company.

1.1 FINANCIAL PERFORMANCE OVERVIEW 1.1.1 PROFITABILITY

( Rs. in Crore)

Particulars Standalone Consolidated
2020-21 2019-20 2020-21 2019-20
Total Income 37,766.57 33,371.06 71,700.51 62,275.36
Profit Before Tax 10,207.31 8,192.54 19,890.73 14,092.67
Tax expenses 1,763.30 2,537.40 4,174.53 4,615.42
Tax Profit After 8,444.01 5,655.14 15,716.20 9,477.25
Owners of the Company - - 11,747.83 7,122.13
Non-Controlling Interests - - 3,968.37 2,355.12
Total Comprehensive Income 8,534.21 5,320.51 16,264.09 8,588.64
Owners of the Company - - 12,078.90 6,495.85
Non-Controlling Interests - - 4,185.19 2,092.79

1.1.2 RESERVE & SURPLUS

( Rs. in Crore)

Particulars Standalone Consolidated*
2020-21 2019-20 2020-21 2019-20
Opening balance of Surplus 6,042.40 6,202.53 8,080.18 9,029.56
Profit After Tax for the year 8,444.01 5,655.14 11,747.83 7,122.13
Re-measurement of Defined Benefit Plans (3.13) (5.01) (8.75) (6.14)
Transfer towards Reserve for Bad & Doubtful Debts u/s 36(1) (viia) (c) of Income Tax Act, 1961 (609.83) (304.81) (761.49) (481.94)
Transfer to Special Reserve created and maintained u/s 36(1) (viii) of Income Tax Act, 1961 (2,534.77) (1,350.13) (3,883.87) (2,151.40)
Transfer to Special Reserve created u/s 45-IC (1) of Reserve Bank of India Act, 1934 (1,688.80) (1,131.02) (2,569.38) (1,645.79)
Transfer to Debenture Redemption Reserve - - - (25.87)
Transfer to General Reserve - - (516.40) -
Transfer to Interest Differential Reserve-KFW Loan (net) (1.25) (1.40) (1.25) (1.40)
Dividends (2,112.07) (2,508.08) (2,112.07) (2,508.08)
Dividend Distribution Tax - (264.79) - (514.99)
Transfer from Debenture Redemption Reserve on account of utilisation - - - -
Transfer from OCI – Equity Instruments 6.98 (249.96) 134.73 (295.33)
Other Comprehensive Income/(Expense) - - (0.20)
Reclassification of gain/loss on sale of equity instrument measured at OCI - - - -
Pooling of interest accounting for common control business combination - - - -
Impairment Reserve - - - (417.55)
Adjustments (339.68) (0.07) (349.01) (22.82)
Closing Balance of Surplus 7,203.86 6,042.40 9,760.52 8,080.18

* Attributable to owners of the Company (PFC).

1.2 OPERATIONAL PERFORMANCE OVERVIEW 1.2.1 ASSET QUALITY

( Rs. in Crore)

Particulars 2020-21 2019-20
Gross Loan Assets 3,70,771 3,44,905
Stage III Assets 21,150 27,872
Provision on Stage III Assets 13,416 14,749
Gross Stage III as % of Gross Loan Assets 5.70% 8.08%
Net Stage III as % of Gross Loan Assets 2.09% 3.80%

1.2.2 SANCTION / DISBURSEMENT (EXCLUDING R-APDRP / IPDS)

( Rs. in Crore)

Category

2020-21

2019-20

Sanctions Disbursements Sanctions Disbursements
State Sector 1,15,170 73,016 84,395 55,848
Central Sector 9,172 3,912 6,550 1,006
Joint Sector 8,907 2,123 1,873 2,326
Private Sector 33,121 9,251 18,270 8,817
Total 1,66,370 88,302 1,11,089 67,997

1.2.3 BORROWINGS

1.2.3.1 DEPOSITS

Your Company is a non-deposit taking NBFC, and thus has not accepted any public deposits during the FY 2020-21. Further, no Perpetual Debt Instruments (PDI) was issued by your Company during FY 2020-21.

1.2.3.2 BORROWINGS FROM DOMESTIC MARKET

The major borrowings from Domestic market during the FY 2020-21 are given as follows:

( Rs. in Crore)

Sr. No. Source Amount
1. Bonds 40,965.60
2. Rupee Term Loans 20,400.00
3. Commercial Paper (Maturity Value) 3,120.00
TOTAL 64,485.60*

*In addition to above funds amounting to Rs.4,775 Crore were raised and repaid during the FY 2020-21 through Commercial Paper.

Further, for maintaining adequate liquidity, credit lines to the tune of Rs.10,930 Crore were sanctioned as on March 31, 2021 by various scheduled commercial banks to the Company for short-term funding generally without any commitment charges.

Public Issue of NCDs

During the FY 2020-21, your Company launched first tranche of public issue of secured, redeemable, taxable Non-Convertible Debentures (NCDs) for base issue size of Rs.500 Crore with an option to retain oversubscription up to Rs.4,500 Crore, aggregating up to Rs.5,000 Crore. This was the first ever public issue of taxable NCDs by PFC and also by a Central PSU in the Indian power sector. Object of the said public issue was to raise funds for onward lending, financing/refinancing existing indebtedness and/or debt servicing (payment of interest and/or repayment/prepayment of interest and principal of existing borrowings) and general corporate purposes.

In order to address varied requirements of investors, PFC offered a bouquet of options with tenure of NCDs ranging from 3 years to 15 years. The 3-year tenure NCD in Series I offered a fixedcoupon rate of 4.65% p.a. to 4.80% p.a. depending on the category of investor, while the 5 year tenure NCD in Series II offered fixed coupon rate of 5.65% p.a. to 5.80% p.a. depending on the category of investor. The 10-year tenure NCDs offered options of rates of bothfixed interest. The fixed coupon rate was 6.63% p.a. (quarterly) to 7.00% p.a. and the floating coupon rate, on the other hand, was based on Benchmark FIMMDA 10-year G-Sec (Annualised) + spread of 55 basis points to 80 basis and cap rates) depending on the category points(subjecttofloor of investors. The 15-year tenure NCD offered a range of fixed coupon rates with maximum rate of 7.15% p.a.

The said public issue of NCDs (Tranche I) was opened for subscription on January 15, 2021 and was pre-closed on January 18, 2021. The issue was a resounding success with the base issue of Rs.500 Crore being oversubscribed about 9 times, raising Rs.4,428.99 Crore. Date of allotment of the NCDs issued under the said Tranche I of public issue is January 22, 2021 and the same have also been listed on the BSE Ltd. The principal amount of the said NCDs issued along with interest accrued thereon, is secured by way of firstpari passu charge through hypothecation of the book debts/receivables of PFC

(excluding book debts/receivables on which a specific charge has already been created). Further, M/s Beacon Trusteeship Ltd. has been appointed as the Debenture Trustee of the said NCDs.

As on March 31, 2021, PFC has utilised the entire net proceeds of the said Tranche I of public issue of the NCDs as per the objects specified in the Tranche I prospectus dated January 11, 2021.

1.2.3.3 EXTERNAL BORROWINGS

The foreign currency denominated borrowings during FY 2020-21 are as follows:

( Rs. in Crore)

Sr. No. Source Amount
1. Bonds under GMTN programme 3,641.08
2. Syndicated Loans 2,962.30
TOTAL 6,603.38

Green Bonds

PFC established its Green Bond Framework in October, 2017 as approved by Climate Bonds Initiative (CBI), London, UK. In this context, an agreement was executed between PFC & Climate Bonds Initiative.

Your Company issued its first USD Green bond in December, 2017 and raised USD 400 million 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. A generalised annual update to the holders of the bonds, as required under the agreement for climate bond certification 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, 2021, outstanding loan balances of Solar & Wind energy projects funded by PFC are 10,945 Crore &Rs. 8,696 Crore respectively. Accordingly, PFC greenRs. bond portfolio is more than the loan outstanding under the green bond.

1.3 CREDIT RATING

• During the FY 2020-21, Company's both long-term & short-term domestic borrowing programme (including bank loans) continued to be the highest rating.

Domestic Rating assigned by CRISIL, ICRA and CARE

• Long-term domestic borrowing programme Rating – CRISIL AAA, ICRA AAA and CARE AAA

• Short-term domestic borrowing programme Rating – CRISIL A1+, ICRA A1+ and CARE A1+

International Rating

The Company’s international credit ratings continue to be Baa3 and BBB – assigned by International Credit Rating Agencies Moody's and Fitch respectively.

1.4 MEMORANDUM OF UNDERSTANDING WITH GOVERNMENT OF INDIA

Your Company has been consistently accorded 'Excellent' Rating by Government of India since FY 1993-94 except for FY 2004-05. For the FY 2018-19, your Company was accorded ‘Excellent rating’. The rating for FY 2019-20 and FY 2020-21 is still awaited.

1.5 SUBSIDIARIES 1.5.1 REC LIMITED

Consequent upon acquisition of majority stake in REC (Formerly Rural Electrification India on March 28, 2019, Your Company is the promoter and holding Company of REC. Accordingly, the following subsidiaries of REC as on March 31, 2021 are also subsidiaries of PFC:

ii) Koderma Transmission Limited

iii) Mandar Transmission Limited

iv) Dinchang Transmission Limited

v) Chandil Transmission Limited

vi) Dumka Transmission Limited

vii) Kallam Transmission Limited

viii) Sikar New Transmission Limited

ix) Bidar Transmission Limited

x) Gadag Transmission Limited

xi) Rajgarh Transmission Limited

xii) Fatehgarh Bhadla Transco Limited

xiii) MP Power Transmission Package-I Limited

xiv) MP Power Transmission Package-II Limited

# renamed as REC Power Development & Consultancy Ltd. w.e.f. July 16, 2021.

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. 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 2020-21, the total income of REC was Rs.35,410 Crore and the net profit wasRs.8,362 Crore.

The detailed operational and financial performance of REC is available on its website i.e. www.recindia.nic.in.

1.5.2 PFC CONSULTING LIMITED

Your Company had been offering consultancy support to the Power Sector through PFC Consulting Limited, its wholly-owned subsidiary.

The Services offered by PFCCL are broadly in the following areas:

Transaction Advisory

Selection of Sellers/Developers Through ‘Case-1’ and ‘Case-2’;

• Guidelines & SBDs: Short-Term, Medium-Term, Long-Term (Case ‘1’, Case ‘2’ and UMPPs), Hydro, Solar, Wind, Pilot Scheme 1 & 2

• Reform & Restructuring

• Independent Transmission Projects

• Privatisation of Electricity Distribution in UTs

Project Development

• Ultra Mega Power Projects (UMPPs)

• Ultra Mega Renewable Energy Power Parks (UMREPPs)

• Smart Metering

• Owner’s Engineer, Lender’s Independent Engineer, Lender’s Insurance Advisor Limited) from Government of

PMA / PMC In Distribution Sector

• IPDS

• DDUGJY

• Smart Metering

• Smart Grid

• NSGM

• R-APDRP

Smart Solutions

• GIS & Smart Metering

• Smart Grid

• Energy Portfolio Management

• Procurement of Power: DEEP Portal

• Coal Linkage Auction under SHAKTI Scheme

• Pilot Scheme I & II

• PRAAPTI Portal

Other Services

• Tariff & Regulatory

• Selection of EPC Contractor

• Resource Mobilisation

• Project advisory for new power plant

• Strategy

• Contracts, commercial and legal

• Trading

• Project Appraisal

• Computerisation of Operations

• Accounting Systems

• Policy

• Energy Audit

Till date, consultancy services have been rendered to 74 clients spread across 25 States/UTs by PFCCL. The total number of assignments undertaken as on date is 150.

Further, during the FY 2020-21, the total income of PFCCL was Rs.74.90 Crore and the net profit earned wasRs.28.11 Crore. The net worth of PFCCL as on March 31, 2021 was Rs.88.18 Crore.

The Statutory Auditor of PFCCL during the course of audit for FY 2019-20, highlighted certain suspected irregularities in some of the transactions of PFCCL related to business promotions, official hospitality and related allocation of expenses to subsidiaries/ fellow subsidiary companies. Statutory Auditor of PFCCL vide its letter dated 25.06.2020 reported the matter to Board of Directors of PFCCL and MCA. Based on this letter of Statutory Auditor of PFCCL, investigation was initiated against some of the employees as per the applicable rules and regulations. As per the investigation, one of the employees of PFCCL has been awarded major penalty and further investigation is under way.

• Your Company is designated by Ministry of Power, Government of India 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.

As on March 31, 2021, for the said purpose, the following Special Purpose Vehicles (SPVs) have been incorporated as subsidiaries/deemed subsidiaries of the Company:

i) Chhattisgarh Surguja Power Limited (Previously known as Akaltara Power Ltd.)

ii) Coastal Karnataka Power Limited

iii) Coastal Maharashtra Mega Power Limited

iv) Coastal Tamil Nadu Power Limited

v) Orissa Integrated Power Limited

vi) Sakhigopal Integrated Power Company Limited

vii) Ghogarpalli Integrated Power Company Limited

viii) Tatiya Andhra Mega Power Limited

ix) Deoghar Mega Power Limited

x) Cheyyur Infra Limited

xi) Odisha Infrapower Limited

xii) Deoghar Infra Limited

xiii) Bihar Infrapower Limited

xiv) Bihar Mega Power Limited

xv) Jharkhand Infrapower Limited

xvi) Tanda Transmission Company Limited *

xvii) Bijawar-Vidarbha Transmission Limited*

xviii) Shongtong Karcham-Wangtoo Transmission Limited* risk

xix) Koppal-Narendra Transmission Limited*

xx) Karur Transmission Limited*

xxi) Ananthapuram Kurnool Transmission Limited*

xxii) Sikar-II Aligarh Transmission Limited*#

xxiii) Bhadla Sikar Transmission Limited*

xxiv) Khetri Narela Transmission Limited*

xxv) Kishtwar Transmission Limited**

xxvi) Khavda-Bhuj Transmission Limited**

xxvii) Nangalbibra-Bongaigaon Transmission Limited**

xxviii) Mohanlalganj Transmission Limited**

* wholly-owned subsidiaries of PFC Consulting Limited. **wholly-owned by PFC Consulting Limited and incorporated in FY 2021-22.

# Transferred on June 8, 2021.

2.0 RISK MANAGEMENT

2.1 ASSET LIABILITY MANAGEMENT

Your Company has put in place an effective Asset Liability Management System as per Asset Liability Management Policy formulated in line with the RBI’s guidelines on Liquidity Risk Management Framework to manage the liquidity and interest rate risks. 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 of the Notes to Accounts of the Standalone Financial statements forming part of this Annual Report.

2.2 FOREIGN CURRENCY RISK MANAGEMENT

Your Company has put in place Currency Risk Management (CRM) policy 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 in line with RBI guidelines.

As on March 31, 2021, the total o/s foreign currency liabilities are USD 6,309 mn, JPY 50,892 mn & EUR 11 mn; out of which USD 2,800 mn & JPY 459 mn are hedged. Further, 86% of the FC portfolio with residual maturity up to 5 years has been hedged.

2.3 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 a Risk Management Committee of Directors. Under the IRM policy, the Company has to identify the principal risks which may have an impact on its profitability/revenues. In this parameters regard,the Company has identified11 significant 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.

3.0 PFC & GOVERNMENT PARTNERSHIP

3.1 INDEPENDENT TRANSMISSION PROJECTS (ITPs)

Ministry of Power 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.

As on March 31, 2021, 36 Special Purpose Vehicles (SPVs), 2 by PFC and other 34 by PFC Consulting Limited (wholly-owned subsidiary), have been established for ITPs. Further in the month of April & May, 2021 PFCCL has incorporated 3 new SPVs for development of transmission schemes. Out of 39 SPVs, 26 SPVs were transferred to the successful bidders and bidding process for 9 SPVs are under progress. Further, due to de-notification of schemes by MoP, 2 SPVs were closed and other 3 SPVs are under process of closure.

3.2 ULTRA MEGA POWER PROJECTS (UMPPs)

Development of Ultra Mega Power Projects (UMPPs), with a capacity of about 4,000 MW each, adopting super critical technology is the initiative of Ministry of Power (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) in conjunction 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 the bidding process. The successful bidder is then expected to develop and implement these projects.

Your Company incorporated a total of 19 wholly-owned Special Purpose Vehicles (SPVs) for the UMPPs. Out of these, 4 UMPPs have been transferred to successful bidders and as per the direction of MoP and respective State Governments, PFC / PFCCL is in the process of closure of 4 UMPPs.

Further, MoP is in the process of revision of Standard Bidding Documents (SBDs). The developmental work for UMPPs is under progress.

3.3 INTEGRATED POWER DEVELOPMENT SCHEME (WITH RESTRUCTURED ACCELERATED POWER DEVELOPMENT AND REFORM PROGRAMME (R-APDRP) SUBSUMED IN IT) a) In order to provide impetus to strengthening of power distribution sector in urban areas and extend financial assistance against capital expenditure for addressing the gaps in sub transmission & distribution network and metering in urban areas to supplement the resources of DISCOMs/ Power Departments, Ministry of Power, Government of India launched ‘ Integrated Power Development Scheme ‘ (IPDS) on December 3, 2014. The scheme has been sanctioned under 3 main heads –

i. Strengthening of sub-transmission and distribution networks in the urban areas covering new substations, new lines, replacement of old lines/cables, Aerial Bunched and Underground cabling, metering etc.

ii. IT based technologies like IT enablement of smaller towns and ERP and smart Metering.

iii. New Technologies like Gas Insulated Sub-stations (GIS) and Real Time-Data Acquisition System (RT-DAS) projects.

Erstwhile, R-APDRP Scheme has been subsumed in the IPDS Scheme.

The estimated outlay of the scheme is Rs.32,612 Crore including a budgetary support of Rs.25,354 Crore from Government of India during the entire implementation period.

R-APDRP scheme cost of Rs.44,011 Crore (with a budgetary support of Rs.22,727 Crore) as already approved by CCEA is also carried forward to IPDS in addition to the outlay of Rs.32,612 Crore.

b) Details of Sanctions/Disbursements under IPDS (R-APDRP scheme subsumed)

(Rs. in Crore)

Scheme

2020-21

Cumulative up to March’2021

Approved Project Cost Disbursements Approved Project Cost Disbursements
R-APDRP (2,749) * 300 31,965 13,194
IPDS (745) # 3,210 31,314 15,661

Note: * Negative sanction for R-APDRP in 2020-21 indicates reduction in cost upon final closure of R-APDRP Projects.

# Reduction in sanctioned project cost for IPDS Projects is due to cancellation of Projects by 16th Monitoring Committee Meeting held on August 3, 2020 considering delay in award of Projects by Utilities and less availability of time for project implementation up to present Sunset date of Mar, 2022 for IPDS/R-APDRP. 18th Monitoring Committee Meeting held on March 18, 2021 decided to revoke cancellation of few Projects based on the request of Utilities.

c) Other developments

• IT and Technical interventions undertaken under the scheme is helping in improvement of Billing/Collection efficiency which will ultimately result in reduction in Aggregate Technical and Commercial (AT&C) losses. The reduction in AT&C loss is already visible in many R-APDRP towns because of establishment of IT system and Part-B completion coupled with administrative and other measures.

• 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.

• The initiatives have helped in giving an impetus to Digital Economy which is evident from the fact that collection of over 50% revenue across IT enabled towns was through Digital means as per data captured on IPDS website.

• Gas Insulated Substations (GIS) have been commissioned for first time in Bihar, Karnataka, UP and NER States.

• More than 3.5 lakh Smart Meters have been installed in the country.

• ‘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.

Revamped Distribution Sector Scheme

The Central Government has approved a ‘Revamped Distribution Sector Scheme – A Reforms based and Results linked Scheme ‘ with the objective of improving the quality and reliability of power supply to consumers through a distribution financially Sector. The Scheme aims to reduce the AT & C losses to pan-India levels of 12-15% and Average Cost of Supply (ACS) – Average Revenue Realised (ARR) gap to zero by 2024-25. The Scheme has an outlay of Rs.3,03,758 Crore. Under the scheme, eligible DISCOMs would be provided financial support for upgradation of the Distribution Infrastructure and Smart Metering Systems for the network as well as prepaid smart metering systems for consumers. The funding against the works other than prepaid Smart Metering and System Metering would be contingent upon DISCOMs meeting the pre-qualifying criteria and achieving at least 60% marks on the result evaluation matrix formulated on the basis of action plans for loss reduction and work plans of DISCOMs agreed upon by the Government of India.

Your Company has been designated as the Nodal Agency for the said scheme along with its subsidiary REC Limited. Thus, your Company is contributing towards improving operational efficiency and financial health of Distribution Utilities.

4.0 JOINT VENTURES, ASSOCIATE COMPANIES AND OTHER MAJOR INVESTMENTS (AS ON MARCH 31, 2021) 4.1 ENERGY EFFICIENCY SERVICES LIMITED

Energy Efficiency Services Limited (EESL) was incorporated on December 10, 2009. EESL was jointly promoted by Power Grid, NTPC, REC and PFC with 25% equity stake each for implementation of Energy Efficiency projects in India and abroad.

As on March 31, 2021, the Company along with its subsidiary REC holds 47.15% stake in equity share capital of EESL (24.97% directly and 22.18% through its subsidiary REC).

Based on the provisional financials of EESL for FY 2020-21, its turnover for the year was Rs.1,471.85 Crore (on standalone basis).

Further, the Profit Before Tax and Profit After Tax for the FY 2020-21 were Rs.43.96 Crore and Rs.32.87 Crore respectively.

4.2 PTC INDIA LIMITED

PTC India Limited (PTC) was jointly promoted by Power Grid, NTPC, NHPC and PFC. PFC has invested Rs.12 Crore in PTC which is 4.05% of PTC's total equity. PTC is the leading provider of power trading solutions in India, a Government of India initiated public-private partnership, whose primary focus is to develop a commercially vibrant power market in the country.

4.3 PFC had invested in Power Exchange India Limited (PXIL). PFC’s investment in equity shares of PXIL as on March 31, 2021 is Rs.3.22 Crore. Due to erosion of Net Worth of PXIL, the investment has been fair valued at nil as no material amount is expected to be realised.

5.0 INITIATIVES TOWARDS REFORMS AND RESTRUCTURING

5.1 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 based on the evaluation of entity’s performance against specific parameters covering operational & financial performance including regulatory environment, generation of audited accounts, etc. as per categorisation policy.

With respect to State Power Distribution entities (including SEBs/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 and C. The categorisation enables PFC to determine credit exposure limits, pricing of loans and stipulation of security to the state power entities.

5.2 ANNUAL PERFORMANCE RESEARCH REPORT OF STATE POWER UTILITIES

PFC brought out the Report on the Performance of State Power Utilities (SPUs) for the period of 3 years i.e. 2016-17 to 2018-19 covering 104 utilities for the year 2018-19. The Report is a part of PFC’s effort to provide a reliable database which can help to determine the results associated with the reforms in the sector. The Report is recognised by various stakeholders as a useful source of information regarding the state power sector.

The Report analyses financial and operational performance e.g. profitability, gap between average cost of supply and average revenue, net worth, capital employed; receivables, payables, AT&C losses etc. and consumption pattern of the sector at utility, state and national level.

The Report for the 3 year period i.e. 2017-18 to 2019-20 is under finalisation and a draft report has been submitted to MoP in March 2021.

5.3 ANNUAL INTEGRATED RATING OF STATE DISTRIBUTION UTILITIES

Ministry of Power has taken various reform initiatives, to bring about improvements in the State Distribution Sector and has put in place an Integrated Rating Methodology for an objective evaluation of performance of State Distribution Utilities. A range of financial, operational & reform-related parameters identified as part of the Integrated Rating Methodology, besides covering the power sector reform initiatives of the State Governments/ DISCOMs and also including parameters relating to actual performance of the Utilities. 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 self-sustainability.

Ninth Integrated Ratings for FY 2019-20, covering 41 Utilities in 22 States and inter-se ranking of the Utilities was released by the Hon’ble Minister of Power, New & Renewable Energy on July 16, 2021.

6.0 PRESIDENTIAL DIRECTIVES

During last 3 years, Ministry of Power vide its letter dated May 10, 2018 issued Presidential Directives with regard to the pay scale revision for Board level and below Board level executives w.e.f. January 1, 2017 in accordance with DPE OMs dated August 3, 2017 and August 4, 2017. In line with the Presidential Directives, the pay scales for Board level and below Board level executives of your Company as well as other perks and allowances, etc. have been revised w.e.f. January 1, 2017.

7.0 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.

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 implemented wide range of CSR & SD activities in the field of Environment Sustainability, Healthcare, Sanitation & Drinking water and Skill development. 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.

8.0 HR INITIATIVES DEVELOPMENT & TRAINING

During the FY 2020-21, the focus of conducting in house programmes was maintained in order to ensure specific skill development in line with the corporate goals. Customised need-based virtual in-house programmes were organised besides sponsoring employees to other programmes conducted by external agencies. A total of 254 employees were sponsored for virtual programmes.

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 amendments in Medical Attendance Rules, EPF Trust Rules and Preventive Measures for Covid, etc.

Your Company has undertaken various measures to contain the spread of COVID-19 pandemic. Working through e-office has been implemented to ensure smooth and paperless work in all conditions. Necessary provisions such as remote working and video conferencing were enabled to facilitate work from home during lock-down conditions. The physical meetings in office were minimised to contain the spread of infection. Several camps were organised in the office premises during the period for testing and vaccination of employees. Health talks were also organised to take care of various concerns among employees including stress management during the pandemic.

RECREATIONAL ACTIVITIES

Your Company 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, in addition to organising an Inter-Division T-20 Cricket Tournament for its employees on February, 2021 to encourage team spirit in the Company. The Tournament also witnessed participation of women teams.

HUMAN RESOURCE 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.

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, 2020 to March 31, 2021 was 0.42%.

RESERVATION OF POSTS

The status of implementation of reservation policy of Government of India is as under:

Group Total Employees as on March 31, 2021 SC SC % ST ST % OBC OBC % EWS EWS %
A 461 84 18.22 29 6.29 85 18.44 1 0.22
B 5 1 20.00 1 20.00 0 0.00 0 0.00
C 17 2 11.76 1 5.88 3 17.65 0 0.00
D 0 0 0.00 0 0.00 0 0.00 0 0.00
Total 483 87 18.01 31 6.42 88 18.22 1 0.21

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/ ESM/ PwD 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.

REPRESENTATION OF WOMEN EMPLOYEES

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 Government of India philosophy on the subject. The women are well represented, with 20.29% of the total work force.

Group Total Employees as on March 31, 2021 Number of Women Employees Percentage of overall staff strength
A 461 95 20.61%
B 5 0 0.00%
C 17 3 17.65%
D 0 0 0.00%
Total 483 98 20.29%

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.

INTERNAL COMPLAINTS COMMITTEE

An Internal Complaints Committee to examine the cases related to sexual harassment is in place under the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013. The complaints received by the Committee are being dealt in line with the provisions in the Act.

a) Number of complaints pending as on April 1, 2020:01

b) Number of complaints filed during FY 2020-21: Nil

c) Number of complaints disposed of during FY 2020-21: 01

d) Number of complaints pending as on March 31, 2021: Nil

9.0 VIGILANCE

The Vigilance Unit proactively functioned as an effective tool of management. During the FY 2020-21 Vigilance Unit has done Preventive vigilance. This aspect was constantly emphasised by conducting periodic & surprise inspections of various units.

During the period, the Vigilance Unit has also issued directions/ effective guidelines to rationalise systems and procedures in order to eliminate gaps and confirming transparency in day to day operations. Information technology was used as an effective tool for providing on-line services to all the stakeholders and to carried out enhanceorganisational efficiency. detailed investigation in respect of complaints registered during this period.

The Vigilance Unit continuously worked for systemic improvements with a view to increase transparency, objectivity and accountability in the operations of the Company. Thus, it has contributed towards overall improvement in the functioning of your Company.

10.0 OFFICIAL LANGUAGE

It is a matter of great pride that your Company has been awarded the First Prize in Public Sector Category in Region ‘A’ of ‘ Rajbhasha Kirti Puraskar' for the year 2019-20 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 7th time.

Hindi Day on September 14, 2020 and Hindi Month from September 14, 2020 to October 13, 2020 were celebrated to create a Hindi oriented environment. Due to COVID-19, five online competitions like ‘Rajbhasha Hindi Prashnottari’, ‘Likhe Kahani-Apni Zubani’, ‘Nibandh Lekhan’ etc. were organised during the Hindi Month. On the closing ceremony of ‘Hindi Month’, a cultural programme was organised on October 13, 2020 in which employees of PFC presented cultural programme comprising of PFC song and Poem recitation.

During the year, 9 Hindi workshops and 1 Sangoshthi were organised in which 297 executives participated. Under the joint aegis of Department of Official Language and PFC, a Technical Workshop/Conference on ‘Kanthastha’ was organised in which more than 50 Officials from various Central Government Offices,

Undertakings, Banks and Para Military Forces located in Delhi participated. A Hindi competition namely ‘Rajbhasha Samanya Gyan Pratiyogita’ was also organised in which more than 75 employees participated. The Head Office (Delhi) and the Regional Office (West), Mumbai of your Company were inspected by the Parliamentary Committee of Official Language respectively and

Honourable Committee appreciated the work being done in Hindi in PFC.

Four Issues including ‘Rajbhasha Visheshank’ of House Journal ‘Urja Deepti’ were also published and made available on website of Department of Official Language, Ministry of Home Affairs.

11.0 DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Companies Act, 2013, it is confirmed that:

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

(b) such accounting policies have been selected, applied consistently and judgements & estimates made 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 that period; sufficient care

(c) has proper been and taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the accounts have been prepared on a going concern basis;

(e) the Company has laid down internal financial controls to be followed and that such internal financial controls are adequate and are operating effectively;

(f) the Company has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

12.0 AUDITORS STATUTORY AUDITORS

Gandhi Minocha & Co., Chartered Accountants and Dass Gupta & Associates, Chartered Accountants were appointed as Joint Statutory Auditors of the Company for FY 2020-21 by the Office of the Comptroller & Auditor General of India.

The Joint Statutory Auditors have audited the accounts of the Company for the FY 2020-21 and have given their report without any qualification, reservation, adverse remark or disclaimer. The copy of the audit report is annexed herewith. as at March 31,

SECRETARIAL AUDITOR

Amit Agarwal & Associates, Company Secretaries was appointed as the Secretarial Auditor of the Company for the FY 2020-21 by the Board of Directors of the Company.

The observations of the Secretarial Auditor and reply of the management on the observations, for the FY 2020-21 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.

13.0 STATUTORY DISCLOSURES

13.1 CONSERVATION OF ENERGY / TECHNOLOGY ABSORPTION to conservation There are no significant of energy and technology absorption as your Company does not own any manufacturing facility.

13.2 FOREIGN EXCHANGE EARNINGS AND OUTGO

The Foreign exchange outgo for the FY 2020-21 aggregating Rs.5,096.27 Crore was made on account of debt servicing, financial & other charges.

The Foreign exchange earnings for the FY 2020-21 were nil.

13.3 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT, 2013

Your Company is exempt from the provisions of Section 186 of the Companies Act, 2013.

However, the details of Investment are given at Note No. 11 of the Notes to Accounts of the Standalone Financial statements forming part of this Annual Report.

13.4 DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Our outsourced Internal Auditor M/s ASA & Associates LLP, Chartered Accountants, 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. Gandhi Minocha & Co., Chartered Accountants and Dass Gupta & Associates, 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 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.

13.5 COMPLIANCE OF SECRETARIAL STANDARDS

The Company complies with all applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India.

13.6 PARTICULARS OF REMUNERATION U/S 197(12) OF THE COMPANIES ACT, 2013

The provisions of Section 197 of the Companies Act, 2013 and Rules made thereunder related to Managerial Remuneration are not applicable to your Company being a Government Company.

13.7 ANNUAL RETURN LINK

The Annual Return of PFC for FY 2019-20 is available on the link https://pfcindia.com/Home/VS/10256 and for FY 2020-21 it shall be made available on your Company’s website www.pfcindia.com.

13.8 REPORTING OF FRAUDS BY AUDITORS

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.

13.9 DEBENTURE TRUSTEES

The details of Debenture Trustees appointed by the Company for the different series of Bonds issued by your Company are annexed herewith.

13.10 DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

No significantand material orders were passed by any regulator or court or tribunal impacting the going concern status and company’s operations during the FY 2020-21.

13.11 DETAILS OF THE APPLICATION MADE OR ANY PROCEEDINGS PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR AND 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 ALONG WITH THE REASONS THEREOF.

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.

13.12 DETAILS OF PROCUREMENT FROM MSES

The details of the procurements made from Micro, Small and Medium Enterprises (MSEs) during the FY 2020-21 and the targets for FY 2021-22 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. No. Particulars 2020-21 (Rs. in Crore) Target for 2021-22 Rs. ( in Crore)
I. Total annual procurement (in value) 42.30 141.86*
II. Total value of goods and services procured from MSEs (including MSEs owned by SC/ST entrepreneurs) 21.63 35.47
III. Total value of goods and services procured from only MSEs owned by SC / ST entrepreneurs 0.04 5.67
IV. % age of procurement from MSE (including MSEs owned by SC / ST entrepreneurs) out of total procurement 51% 25%
V. % age of procurement from only MSEs owned by SC / ST entrepreneurs out of total procurement 0.1% 4%
VI. Total number of vendor development programmes for MSEs 2 2

 

VII. Confirmation of uploading annual MSE procurement profile on yourwebsite by hyperlink of same https://pfcindia.com/DocumentRepository/ckfinder/ files/Statutory_Requirements/Codes_and_Policies/ Public_Procurement_Policy_for_MSME/Procurement_ Target_2021_22.pdf

* Including Rs. 95.34 Crore as one time requirement of MS unit in PFC (related to IT infrastructure refresh – planned for FY 2021-22).

14.0 RIGHT TO INFORMATION ACT

The Right to Information is a fundamental right under the Constitution of India. RTI Act is a progressive legislation based on citizen’s right to know which is a fundamental right enshrined in the Constitution of India. The purpose of the Act is to make the executive accountable and ensure transparency in the implementation of schemes and policies. Under the act, information may be sought from a public authority as defined under the act. Right to information includes right to inspect documents. Under the Act, it is believed that an informed citizen is better equipped to keep necessary vigil on the instruments of governance and make the government more accountable. The information seekers, have, subject to few exceptions, an overriding right under the Act, to get information lying in the possession of the Public Authorities.

An elaborate mechanism has been set up in PFC to deal with requests received under the RTI Act, 2005. Your Company 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.

The Company has designated a Public Information Officer (PIO) and a First Appellate Authority (RTI) at its registered office for effective implementation of the RTI Act. The relevant information/ disclosures are also made available on the official website (www. pfcindia.com) of the Company. During the period from April 1, 2020 to March 31, 2021, all 136 applications 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:

(i) Suo moto disclosure of more items under Section 4;

(ii) Guidelines for digital publication of proactive disclosure under Section 4;

(iii) Guidelines for certain clauses of Section 4(1)(b) to make disclosure more effective;

(iv) 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. Further, the above 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. Accordingly, National Power Training Institute (NPTI) (the only Training Institute under the Ministry of Power) has been nominated for carrying out third party audit of RTI Disclosures of power companies including PFC. For FY 2020-21, NPTI will be conducting third party audit of RTI Disclosures of PFC and the said report will be posted on our website.

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.

15.0 GRIEVANCE REDRESSAL

Your Company has a Grievance Redressal System for dealing with grievances of the public at large. The systems are duly notified and the Nodal Officers ensure quick redressal of grievances within the permissible time frame. Your Company has also notified Citizen’s Charter to ensure transparency in its work activities. The Charter is available on the website of PFC to facilitate easy access.

16.0 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 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

17.0 ACKNOWLEDGEMENT

The Board of Directors place on record their appreciation for the co-operation, guidance and encouragement extended to the Company by the Government of India particularly Ministry of Power, Ministry of Finance, Ministry of Corporate Affairs, 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 and other concerned Government departments/agencies at the Central and State level etc.

The Board also conveys its gratitude to the shareholders, investors, various International and Indian Banks/Multilateral agencies/ financial Institutions/ credit rating agencies for the continued trust and for the confidence reposed by them in PFC.

Your Directors would also like to convey their gratitude to the clients and customers for their unwavering trust and support.

The Company is also thankful to the Comptroller & Auditor General of India and the Statutory Auditors, Secretarial Auditor and Internal Auditors for their constructive suggestions and co-operation.

Your Directors also recognise and appreciate the untiring efforts and contributions made by the employees to ensure excellent all round performance of your Company.

For and on behalf of the Board of Directors
(R. S. Dhillon)
Place: New Delhi Chairman & Managing Director
Dated: 26th August, 2021 DIN: 00278074

   

Power Finance Corporation Ltd Company Background

Ravinder Singh DhillonRavinder Singh Dhillon
Incorporation Year1986
Registered OfficeUrjanidhi No 1 Barakhamba Lane,Connaught Place
New Delhi,New Delhi-110001
Telephone91-11-23456000,Managing Director
Fax91-11-23412545
Company SecretaryManohar Balwani
AuditorGandhi Minocha & Co
Face Value10
Market Lot1
ListingBSE,NSE,
RegistrarKFin Techologies Pvt Ltd
Karvy Selenium Tow-B,31&32 Financial Dist,Nanakramguda ,Hyderabad-500032

Power Finance Corporation Ltd Company Management

Director NameDirector DesignationYear
Manohar Balwani Company Secretary 2021
Praveen Kumar Singh Director (Commercial) 2021
Ravinder Singh Dhillon Chairman & Managing Director 2021
R C Mishra Non-Exec. & Independent Dir. 2021
Parminder Chopra Director (Finance) 2021
Tanmay Kumar Nominee (Govt) 2021
Rajiv Ranjan Jha Director (Projects) 2021

Power Finance Corporation Ltd Listing Information

Listing Information
BSE_500
BSE_200
BSEDOLLEX
BSE_PSU
CNX500
BSEMID
CNXMIDCAP
CNXMID50
CNX_PSE
CNX200
CNXFINANCE
CNXDIVIDEN
BSEINFRA
BSECPSE
NFT100EQWT
BSEALLCAP
BSEFINANCE
BSEMIDSELE
BSEBHARA22
MID150
LMI250
MSL400
BSEEVI
NFTYLM250
NFTYMSC400
NFTYFS2550
NF500M5025

Power Finance Corporation Ltd Finished Product

Product NameUnit Installed
Capacity
Production
Quantity
Sales
Quantity
Sales
Value
Interest Rs.00031950.42
Dividend Rs.0001289.52
Fee Income Rs.000122.96
Commitment Charges on Loan Rs.0000
Income from Surplus Funds Rs.0000
Other Operating Revenue NA 0000
prepayment premium Rs.0000
Service Charges Rs.0000
Lease Income Rs.0000
Income from Consult.Services Rs.0000
Profit on Sale of Investments Rs.0000

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