On behalf of the Board of Directors, it is our pleasure to present the Sixteenth (16^th) Annual Report together with the Audited Financial Statements of your Company (“the Company” or “PTC India Financial Services Limited / PFS”) for the financial year ended 31^st March 2022.

1. Financial Performance and State of Company’s Affairs

The summarized financial results of your Company are given in the table below.

In FY 2021-22 the total income decreased by 15% from Rs 1139.45 crore in FY 2020-21 to Rs 968.74 crore. However, this got offset significantly by decrease in finance cost by 23% to Rs 581.47 crore as compared to Rs 752.98 crore in FY 2020-21. In FY 20-21, the spread on earning portfolio has improved to 3% from 2.71% and NIM on earning portfolio has improved from 3.47% to 4.19%. The other expenses decreased by 51.35% to Rs 16.99 crore during FY 2021-22 as compared to Rs 34.92 crore in FY 2020-21, the decrease in provision is due to one-time provision made during the FY 202021 amounting to Rs 10.39 crore for payment made to YIEDA towards stamp duty for purchase of land. Other income increased by 79% to Rs 15.86 crore during FY 2021-22 compared to Rs 8.88 crore in FY 2020-21. Provision for Impairment on Financial Instruments has decreased to Rs 167.86 crore in FY 2021-22 from Rs 231.84 crore in FY 2020-21.

In FY 2020-21, PFS focused on diversified sources of borrowings and also on reduction of cost of borrowings. During FY 2021-22, PFS received fresh sanctions of long-term loans of Rs 3,600 crore from existing lender viz

Canara Bank, Union Bank of India, State Bank of India, Bank of Baroda, Indian Bank and Bank of Maharashtra. PFS was able to reduce the Debt: Equity ratio during the year to 3.14 from 4.27 in FY 2020-21. The ratio of long-term borrowings to short-term borrowings has also been maintained

at comfortable level at 95:5 in FY 2021-22 against 89:11 in FY 2020-21

which indicates the strengthening of our cash flows and reduced payment obligations in the short-term. The Company has maintained sufficient liquidity in the form of High Quality Liquid Assets (HQLA) as per RBI guidelines and undrawn lines of credit to meet its financial obligation in foreseen future.

As at March 31, 2022, for loans under stage I and stage II, the management has determined the value of secured portion on the basis of best available information including book value of assets / projects as per latest available balance sheet of the borrowers, technical and cost certificates provided by the experts and valuation of underlying assets performed by external professionals appointed either by the Company or consortium of lenders. For loan under stage 3, the management has determined the value of secured portion on the basis of best available information, including valuation of underlying assets by external consultant / resolution professional (RP) for loan assets under IBC proceedings, claim amount in case of litigation and proposed resolution for loan under resolution through Insolvency and Bankruptcy Code (IBC) or settlement. The conclusive assessment of the impact in the subsequent period, related to expected credit loss allowance of loan assets, is dependent upon the circumstances as they evolve, including final settlement of resolution of projects / assets of borrowers under IBC.

During the FY 2021-22, with the focused efforts of the management, one NPA loan accounts amounting to Rs. 206.92 crore were resolved and few loan accounts are on verge of resolution. During the year gross NPAs have decreased from Rs. 824.11 crore to Rs. 724.09 crore and net NPAs have increased from Rs. 313.06 crore to Rs. 386.84 crore. For FY 2021-22, Gross NPA as a % to gross advances was 8.29% and Net NPA as a % to net advances was 4.67% as compared to 7.64% and 3.08% respectively for FY 2020-21. The Company is continuously focusing on resolving the stress assets and the efforts may result in better profitability in coming years. Most of the NPA accounts belong to legacy portfolio primarily comprising of Thermal projects. The Company is shifting its focus on other areas including renewable energy because of which the company’s exposure to thermal has reduced to 10% in FY 2021-22 in comparison to 30% as at FY 2015-16.

The profit before tax (PBT) for FY 2021-22 stood at Rs. 173.91 crore compared to Rs. 93.42 crore in FY 2020-21. The profit after tax (PAT) for FY 2021-22 stood at Rs. 129.98 crore against Rs. 25.60 crore in FY 2020-21.

For ensuring robust quality of portfolio, PFS continues to strengthen credit appraisal process and risk management function, PFS has further strengthened the project monitoring function and implemented early warning signal framework for early identification of stress in assisted projects, and, a special team has been set up to deal with and find resolution of stressed assets.

For further details of Summary of Operations, State of Company’s Affairs, Industry Scenario and Outlook, please refer Management Discussion and Analysis Report.

2. Net Owned Funds and Earnings Per Share (EPS)

The Net Owned Funds of the Company aggregated to Rs. 1944.67 crore and the total Capital Funds aggregated to Rs. 1990.19 crore as at 31^st March 2022. The percentage of aggregate risk weighted assets on the balance sheet

and the risk-adjusted value of off-balance sheet items to Net Owned Funds is 26.71% as at 31^st March 2022.

EPS of the Company for FY 2021-22 stands at Rs. 2.02 per share in comparison to Rs. 0.40 per share for FY 2020-21.

3. Reserves

Out of the profits earned during FY 2021-22, the Company has transferred an amount of Rs. 26.00 crore to Statutory Reserve in accordance with the requirements of Section 45-IC of the Reserve Bank of India Act, 1934 and Rs. 146.74 crore to the Impairment Reserve.

4. Dividend

Based on Company’s performance, the Board of Directors did not recommend the dividend for the FY 2021-22.

5. Fixed Deposits/Public Deposits

Your Company has not accepted any deposits during the year from public in terms of provisions of Companies Act, 2013 (“the Act”). Further, at the end of the financial year, there were no unclaimed, unpaid or overdue deposits.

6. Capital Adequacy Ratio

The Capital Adequacy Ratio as on 31st March 2022 stood at 26.71% compared to 24.10% as on 31st March 2021. No adverse material changes affecting the financial position of the Company have occurred during the financial year.

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

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate (i.e. 31^st March 2022) and the date of the report. No adverse Material changes affecting the financial position of the Company have occurred during the Financial Year.

8. Particulars of loans, guarantees and investments under Section 186

The particulars of loans, guarantees and investments forms part to the notes of the financial statements provided in this Annual Report.

9. Share Capital/ Finance

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

As on 31^st March 2022, PFS has a paid- up share capital aggregating to Rs. 6,422.83 million comprising of 642,283,335 equity shares of Rs. 10/- each fully paid- up. The promoter i.e. PTC India Limited holds 64.99% of the paid up share capital of the Company as on 31^st March 2022. The equity shares of the Company are listed on the National Stock Exchange of India Limited (“NSE”) and BSE Limited (“BSE”).

10. Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Returns are available on the Company’s website at https://www. ptcfinancial.com/cms/showpage/page/annual-reports.

11. Directors and Key Managerial Personnel

In accordance with provisions of the Act and Articles of Association of the Company, Mr. Pawan Singh shall retire by rotation at the ensuing AGM and

being eligible offers himself for re-appointment. The Board recommend his re-appointment. A resolution seeking shareholders’ approval for his reappointment forms part of the Notice.

Details of other changes in the composition of Board during the period under review have been specifically mentioned in the report on the Corporate Governance which is annexed with this report.

12. Dividend Distribution Policy

As per Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”), the Company has adopted the Dividend Distribution Policy to set out the parameters and circumstances that will be taken into account by the Board while determining the distribution of dividend to its shareholder.

The Dividend Distribution Policy is available on Company’s website, at:-

http://www.ptcfinancial.com/upload/pdf/Dividend%20

Distribution%20Policy-PFS.pdf

13. Details of Board meetings

Ten Board Meetings were held during the financial year ended on 31^st March 2022. The details of which are given below:-

Further, the attendance of each director is more specifically mentioned in the report of Corporate Governance, which is a part of this Report.

14. Committees of Board

The Board have all Statutory Committees that are given below:-

1) Audit Committee

2) Nomination and Remuneration Committee

3) Corporate Social Responsibility Committee

4) Stakeholders’ Relationship Committee

5) Risk Management Committee

6) IT Strategy Committee

Further, Committees of the Board and Group of Directors are formed from time to time for specific purpose.

During FY 2021-22, a CSR Committee Meeting of PFS could not be held, due to unavoidable circumstances. Hence, no CSR projects were

approved/executed during the year. The unspent amount was, therefore, transferred to IIT Delhi Endowment Fund, on 29^th September 2022, in compliance with Section 135 read with Schedule VII ix (b) of the Act.

The details of the Committees, their meetings and other disclosures are mentioned in the Corporate Governance report, which forms part of this report.

15. Corporate Social Responsibility

As a good corporate citizen, the Company is committed to ensuring its contribution to the welfare of the communities in the society where it operates, through its Corporate Social Responsibility (“CSR”) initiatives.

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

The objective of PFS’s CSR Policy is to consistently pursue the concept of integrated development of the society in an economically, socially and environmentally sustainable manner and at the same time recognize the interests of all its stakeholders.

To attain its CSR objectives in a professional and integrated manner, PFS shall undertake the CSR activities as specified under the Act. As on 31^st March 2022 the composition of the CSR Committee, the details of meetings and attendance thereof are mentioned in the Corporate Governance report, which forms part of this report.

The CSR Policy is available at the link at website of the Company, at http:// www.ptcfinancial.com/upload/pdf/corporate social responsibility policy.pdf

During the year under review, no change was carried out in the policy.

During FY 2021-22, a CSR Committee Meeting of PFS could not be held, due to unforeseen circumstances, which resulted in non-approval of any CSR projects.

Further, the report on CSR Activities/ Initiatives including all statutory details is annexed with this report as Annexure- I.

16. Vigil mechanism/Whistle Blower Policy

The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. In compliance with requirements of the Act and SEBI Listing Regulations, the Company has established a mechanism called ‘Whistle Blower Policy’ for employees to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Company’s code of conduct or ethics policy. ‘Whistleblowing’ is the confidential disclosure by an individual of any concern encountered in the workplace relating to a perceived wrongdoing. The policy has been framed to enforce controls so as to provide a system of detection, reporting, prevention and appropriate dealing of issues relating to fraud, unethical behavior etc. The policy provides for adequate safeguards against victimization of director(s) / employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. During the year under review, no complaint has been received.

The Whistle Blower policy is available at:-

http://www.ptcfinancial.com/upload/pdf/whistle blower policy.pdf

17. Directors’ Responsibility Statement

Pursuant to the requirement clause (c) of sub-section (3) of Section 134

read with Section 134(5) of the Act, your Directors, to the best of their knowledge confirms that:

(a) in the preparation of the annual accounts for the year ended 31^st March 2022, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31^st March 2022 and of the profit and loss of the Company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

18. Statutory Auditors, their Report and Notes to Financial Statements

M/s. MSKA & Associates, Chartered Accountants were appointed as Statutory Auditors of your Company in the 13^th AGM of the Company for a period of five years till conclusion of 18^th AGM of the Company. In accordance with RBI circular Ref.No.DoS.CO.ARG/ SEC.01/08.91.001/2021-22 issued subsequently in April, 2021, the tenure for statutory auditors of NBFCs was curtailed to a maximum period of three (3) financial years.

In view of above, M/s. MSKA & Associates, Chartered Accountants vacated office as Statutory Auditors of the Company after completing the audit engagement of financial year 2021-22.

Further, based on the recommendation of the Audit Committee, the Board of Directors of the Company at its meeting held on November 26, 2022 had appointed M/s Lodha and Co., Chartered Accountants as the Statutory Auditors of the Company to fill such casual vacancy.

Also, in compliance with the provisions of Section 139 of the Act read with above referred RBI circular, the Board, after considering the recommendation of the Audit Committee, recommended the proposal to appoint them as Statutory Auditors of the Company for a period of three (3) consecutive years i.e. FY 2022-23 to 2024-25, subject to the requisite approval of members of the Company at the ensuing AGM.

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

The Statutory Auditors in their Audit Reports on the Financial Statements of the Company for the financial year 2021-22, provided certain qualification, which forms part of the Annual Report.

In this connection this is to inform that:

a) On January 19, 2022, three (3) independent directors of the Company resigned mentioning lapses in corporate governance and compliance. Since then RBI, SEBI and ROC (the ‘Regulators”) have reached out to the Company with their queries regarding the allegations made by

the then independent directors and directed the Company to submit its response against such allegations. SEBI also directed the Company to submit its Action Taken Report (ATR) together with Company’s response against such allegations. Basis the forensic audit report which was received by the Company on November 04^th, 2022 and other inputs from professional services firm retained by the Management, it has been decided that the management shall take necessary corrective actions and submit its ATR, if required, to the satisfaction of SEBI.

On February 11, 2022, RBI sent its team at the Company’s office to conduct scrutiny on the matters alleged in the resignation letters of ex-independent directors. While the RBl’s team completed its scrutiny at Company’s office on February 14^th, 2022 and the Company has satisfactorily responded to all queries and requests for information but has not received any further communication from RBI in this regard.

On November 04th, 2022, the Forensic auditor appointed by the Company, submitted its forensic audit report. The Company engaged a reputed professional services firm to independently review the management’s response and independent review of documents supporting such response and commenting on such observations, including financial implications and any indication towards suspected fraud. The management’s responses and remarks of professional services firm, together with report of forensic auditor, have been presented by the management to the Board in its meeting held on November 07th, 2022 and November 13th, 2022.

b) SEBI vide its email dated March 02 ^nd , 2022, rejected the ATR submitted by the Company and not acceded the Company’s request for conducting Board Meeting without an independent director. Subsequent to this, with recommendation of the Holding Company, the Company appointed four (4) independent directors through circular resolution. These directors are also independent directors on the Board of the Holding Company. Prior to the appointment of the independent directors, Chairman of PTC India Limited vide email dated March 25^th, 2022 informed RBI and SEBI about the proposed nomination of four (4) independent directors of PTC India Limited to the board of the Company, and post appointment, disclosures on such appointments have been made to the stock exchanges. On April 19^th, 2022, the Chairman, PTC India Limited sent another email to SEBI, with specific reference to earlier email dated March 25^th, 2022, and SEBI in its email dated April 19^th, 2022 has acknowledged the same. The Company has also made necessary communication to Stock Exchanges regarding appointment of directors and holding of board meetings. The Company, basis its discussions with SEBI and RBI as also summarized in such emails and advise received from external legal firm, believes that there is no non-compliance with SEBl’s directions vide its email dated March 02^nd, 2022. On June 28^th, 2022, the SEBI also directed the Company for waiving-off with the requirements of regulation 17 (1C) of SEBI Listing Regulations regarding ratification of directors’ appointment in shareholders’ meeting within three (3) months from the date of their appointment by the Board.

c) Post resignation of ex-independent directors, the Company has not been able to comply with the various provisions of the Act and SEBI Listing Regulations related to non-constitution of committees and sub- committees of the Board, timely conduct of their meetings and non-filing of annual and quarterly results with respective authorities. The Company intends to file for application for compounding of offences for noncompliance of such provisions with respective authorities and does not expect any material financial impact. if any, due to fines/ penalties arising from such process.

d) As on the date of this report, the Composition of Board and Committees thereto, are complying with the relevant provisions of the Act and SEBI Listing Regulations.

19. Secretarial audit

Pursuant to provisions of Section 204 of the Act and rules mentioned thereunder, the Board of Directors of the Company appointed M/s. RDA & Associates, Practicing Company Secretaries, to conduct the Secretarial Audit of records and documents of the Company for the financial year 2021- 22. The Secretarial Audit Report is annexed as Annexure- II.

In the Secretarial Audit Report, it was emphasized that the Board of Directors of the Company is duly constituted with proper balance of Executive Director, Non-Executive Directors and Independent Directors, however constitution of the Board of Director was not maintained in the quarter ending December, 2021 and March, 2022 due to resignation of maximum Directors including all Independent Directors, therefore the Company was not able to comply with the provisions of the Section 135, 149, 173, 177 and 178 of the Act along with Regulation 17, 18 19, 20, 21, 33, 52 and 54 of SEBI Listing Regulations during aforesaid period. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

In this connection this is to inform that as on the date of this report, the Composition of Board and Committees thereto, are complying with the relevant provisions of the Act and SEBI Listing Regulations.

Save as otherwise provided above, the Secretarial Audit Report is not having any observation/ remarks/ qualification etc.

20. Related party transactions

The Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions as approved by the Board is available on the Company’s website at the link:

https://www.ptcfinancial.com/upload/pdf/20150629 Policy materiality of Related Party Transactions.pdf

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

Accordingly, information on transactions with related parties pursuant to section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 is annexed as Annexure- III, which is to be read with the relevant Notes to the Standalone Financial Statements.

21. Human Resources

Your Company treats its “human resources” as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A holistic assessment of manpower needs led to fresh recruitment at various level. A number of individual employee specific, group of employee specific and organizational wise programs that provide focused people attention are currently underway.

Your Company’s thrust is on the development of talent internally through job enlargement, rotation and development.

Your Company’s thrust on development of all levels of the employee has helped your organization achieve employee’s loyalty and attachment to the Company. There is a huge opportunity for all of us to learn, practice and perform. Though the expectation from the employees are realistic, each employee get to work on challenging assignments, and a chance to learn, innovate and perform. Handholding, guidance & mentoring has a special place for a young team and organization. Sharing of knowledge and learning from the experience of seniors has helped us grow steadily.

Your Company’s focus of human resource development is at all levels of organization including non-executive and support staff. The human resource development is critical to implementation organizational strategy and to make organization humble and responsive to the customers need. Employees are encouraged to participate and be part of the organizational growth and development strategy. Lateral entry at different levels keeps the organization vibrant.

22. Industrial Relations

Your Company has always maintained healthy, cordial, and harmonious industrial relations at all levels. Despite competition, the enthusiastic efforts of the employees have enabled the Company to grow at a steady pace.

23. Risk Management Policy

PFS has put in place a comprehensive policy framework for management of risks, which includes the following:-

• Risk Management Policy :- The Risk Management Framework of PFS encompasses credit risk, market risk, as well as operational risk management. The Risk Management Policy, evolved under the guidance of Risk Management Committee and duly approved by Board of Directors, is refined periodically based on emerging market trends and own experience. The Risk Management Committee is headed by Independent Director.

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

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

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

• Policy for Investment of Surplus Funds :- The policy of investment of surplus funds i.e. treasury policy provides the framework for managing investment of surplus funds. Realizing that the purpose of mobilization of resources in the Company is to finance equity as well as loans to power sector projects, the prime focus is to deploy surplus funds with a view to ensure that the capital is not eroded and that surplus funds earn optimal returns.

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

24. Employees’ Stock Option Scheme

The Shareholders’ approval was obtained at the Annual General Meeting held on 27th October 2008 for introduction of Employee Stock Option Plan at PTC India Financial Services Limited. All the ESOPs made under the Employees’ Stock Option Scheme-2008, have been surrendered and as on date no claim is outstanding.

25. Declaration given by Independent Directors

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Act, that he/she meets the criteria of independence laid down in Section 149(6) of the Act and Regulation 25 of the SEBI Listing Regulations. The Independent Directors have also confirmed that they have complied with the Company’s code of conduct for Directors and Senior Management Personnel.

All the Independent Directors of the Company have registered themselves in the data bank maintained with the Indian Institute of Corporate Affairs, Manesar (‘IICA’). In the opinion of the Board, all the Independent Directors possess strong sense of integrity and have requisite experience, qualification and expertise. For further details, please refer the Corporate Governance report.

Based on the declarations received from the Independent Directors, the Board of Directors has confirmed that they meet the criteria of independence as mentioned under Regulation 16(1)(b) of the SEBI Listing Regulations and that they are independent of the management.

26. Company’s policy on appointment and remuneration of Senior Management and KMPs

As per the requirements of the Act, the Board of Directors of your Company has constituted a ‘Nomination and Remuneration Committee’. The Committee’s role is to be supported by a policy for nomination of Directors and Senior Management Personnel including Key Managerial Personnel as also for remuneration of Directors, Key Managerial Personnel, Senior Management Personnel and other employees.

The Policy of the Company on Nomination and Remuneration & Board Diversity is also placed on the website of the Company i.e. www. ptcfinancial.com and is also annexed to this report at Annexure- IV.

During the year under review, no change was carried out in the policy.

27. Formal Annual Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by SEBI Listing Regulations.

The Company pays performance linked remuneration to its WTDs / MD. It is ensured that the remuneration is determined in a way that there exists a fine balance between fixed and incentive pay. On the basis of Policy for Performance Evaluation of Independent Directors, a process of evaluation is being followed by the Board for its own performance and that of its Committees and individual Directors. The performance evaluation process and related tools are reviewed by the “Nomination and Remuneration Committee” on a need basis, and the Committee may periodically seek independent external advice in relation to the process. The Committee may amend the Policy, if required, to ascertain its appropriateness as per the needs of the Company.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc. The performance of the Committees was evaluated

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

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

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

An Internal Complaints Committee has been constituted to look into grievance /complaints of sexual harassment lodged by employees as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Further, no complaints were received during the year and no complaint is pending on 31st March 2022.

29. Internal financial controls and Internal Auditor

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

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

The Internal Auditor monitors and evaluates the efficacy & adequacy of internal financial controls & internal control system in the Company that has been put in place to mitigate the risks faced by the organization and thereby achieves its business objective. Broadly, the objectives of the project assigned are:-

• Review the adequacy and effectiveness of the transaction controls;

• Review the operation of the Control Supervisory Mechanisms;

• Recommend improvements in processes management;

• Review the compliance with operating systems, accounting procedures and policies

The internal control and compliance are on-going process. Based on the findings and report of the internal auditor, process owners undertake corrective action that may be required in their respective areas for further strengthening the controls and control environment. Significant audit observations and corrective actions thereon are presented to the Audit Committee. The internal auditors also independently carry out the design evaluation and testing of controls related to requirements of Internal Financial Controls. The evaluation of design effectiveness and testing of controls for various business activities, processes and sub processes was carried out and found satisfactory.

30. Cost Auditors

The provisions of Cost Audit are not applicable to the Company.

31. Details of Holding, Subsidiaries, Associates and Joint Ventures

Your Company continues to be the subsidiary of PTC India Limited. Further, the Company has two associate companies namely M/s. R.S. India Wind Energy Private Limited and M/s. Varam Bio Energy Private Limited. The statement of performance and financial position of each of the associate companies is given in Form AOC-1 as Annexure - V.

The policy for determining material subsidiaries as approved may be accessed on the Company’s website following link:

link: http://www.ptcfinancial.com/ upload/pdf/20150629_Policy_on_

determining_Material_Subsidiaries.pdf

32. Corporate Governance Report

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by Securities and Exchange Board of India (“SEBI”). A separate report on Corporate Governance along with certificate from M/s. Dwivedi & Associates, Company Secretaries on compliance with the conditions of Corporate Governance as stipulated under SEBI Listing Regulations is provided as part of this Annual Report.

33. Management Discussion and Analysis

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

34. Business Responsibility Report

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

35. Particulars of Employees

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

a. The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year 2021-22; (Rs. in lakhs)

# Ceased w.e.f July 09, lull

b. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;

# Decrease in compensation as Performance Related Pay for the FY 2020-21 has not been paid in financial 2021-22, however the same has been paid in financial year 2022-23 to the above functionaries.

## Decrease in compensation as he has not been paid Performance Related Pay in FY 2021-22, the same was paid to him in FY 2022-23. In addition, he has retired from service w.e.f July 09, 2021

c. The median remuneration of the employees has decreased to Rs.20.61 lakhs during FY 2021-22 from Rs. 23.25 lakhs during FY 2020-21 as Performance Related Pay for the FY 2020-21 has not been paid in FY 2021-22, however the same has been paid in FY 2022-23 to the employees;

d. 45 permanent employees are on the rolls of company as at March 31, 2022;

e. The average remuneration decreased to Rs 24.43 lakhs in FY 2021-22 from Rs. 31.30 lakhs in FY 2020-21;

f. The average percentile decrease in the salary of employees other than the managerial personnel is from Rs 27.32 lakhs in FY 2020-21 to Rs 22.32 lakhs in FY 2021-22, resulting in an decrease of 18.32%.

g. The average remuneration of Key Managerial Personnel decreased to Rs 45.67 lakhs in FY2021-22 from Rs. 53.22 lakhs in FY2020-21, resulting in decrease of -14.18%. as Performance Related Pay for the FY 2020-21 has not been paid in financial 2021-22, however the same has been paid in financial year 2022-23 also, due to retirement of Mr Naveen Kumar w.e.

h. There are no employees who are in receipt of remuneration in excess of the highest paid director during the year;

i. It is affirmed that the remuneration is as per the remuneration policy of the Company.

B. It is affirmed that :-

I. The remuneration is as per the remuneration policy of the Company;

and

II. There are no employees who are in receipt of remuneration in excess of the highest paid director during the year and holds by himself or through his/ her relatives not less than two percent of equity shares.

36. Details of conservation of energy, technology absorption

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

37. Foreign Exchange earnings & outgo

The Company has incurred expenditure of Rs. 95.61 crore (previous year Rs. 100.25 crore) in foreign exchange during the financial year ended 31st March 2022.

41. Compliance with Applicable Secretarial Standards

During the period under review, the Company has complied with the provisions of the Secretarial Standard - 1 (Secretarial Standard on meeting of the Board of Directors) & Secretarial Standard - 2 (Secretarial Standard on General Meeting) issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118 of the Act.

42. Acknowledgement

The Board of Directors acknowledge with deep appreciation the cooperation received from its Directors, Ministry of Power (MoP), Ministry of Finance (MoF), Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), National Stock Exchange of India Limited (NSE), BSE Limited (BSE), PTC India Limited (PTC) and other stakeholders, International Finance Corporation (IFC), DEG, FMO and OeEB, various Banks/FIs, Consortium partners and Officials of the Company.

The Board also acknowledge with deep appreciation the cooperation received from its Director(s) who retire as Director(s) during the year.

The Board also conveys its gratitude to the shareholders, credit rating agencies for the continued trust and confidence reposed by them in the Company. 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 Statutory Auditor, Internal Auditor and Secretarial Auditor for their constructive suggestions and co-operation.

We would also like to place on record our appreciation for the untiring efforts and contributions made by the employees to ensure all round performance of your Company.

For and on behalf of the Board

PTC India Financial Services Limited

Sd/-

Rajib Kumar Mishra

Date : 03^rd December 2022 Chairman

Place : New Delhi DIN: 06836268