It gives me great pleasure to welcome you all to the 17th Annual General Meeting of your Company. I pray for the good health of all of you and your family members.
To begin with, let me thank you for the confidence reposed and the support extended to the Company. It is your confidence and the support that motivates us to stay the course.
Throughout its seventeen-year history of operations, your company has established a significant footprint in financing infrastructure across the entire energy delivery spectrum, particularly in renewable energy and sustainability initiatives. Along the way, your organization has transformed into a responsible and adaptable financial services entity. During this time frame, our central objective has shifted towards sustainable expansion, with an increased emphasis on reducing our carbon footprint. As we concluded the fiscal year 2022-23, we made the deliberate choice to consolidate and harmonize our portfolio rather than aggressively pursuing growth targets.
India is among the fastest-growing trillion-dollar economies in the world with its first quarter real GDP growth rate of 7.8%, driven by key structural reforms and mitigants to face the external vulnerabilities .For India to continue on this growth path, infrastructure will play a very crucial role.
The power sector stands as a critical pillar of the Indian economy. As we witness the expansion of generation capacity through renewable sources and the integration of innovative elements such as battery energy storage systems (BESS), electric vehicles (EVs), and green hydrogen into the electricity value chain, we anticipate a synergistic impact on investments directed towards the modernization of the complete electricity value chain.
India's pledge to achieve Net Zero emissions by 2070 and its short-term goal of incorporating a minimum of 500 GW of non-fossil fuel energy capacity by 2030 will significantly boost investments in renewable energy and sustainability initiatives. As of July 2023, the cumulative installed renewable energy capacity, encompassing large hydro projects, stands at 177 GW, showcasing the country's progress in this sector.
Climate change is presenting an unparalleled existential challenge. The nation requires increased availability of green funding and environmentally friendly financial tools to facilitate the transition necessary to address climate change vulnerabilities. Your organization envisions that financing institutions such as PFS should play a transformative role in pushing sustainability to the forefront of business strategies for enterprises committed to achieving sustainable and inclusive growth.
Simultaneously, sectors like power transmission, transportation infrastructure, ports, energy storage (including batteries and pump storage), electric mobility, green hydrogen, distributed energy resources, and smart grids are also experiencing targeted policy initiatives. Your organization is dedicated to harnessing the prospective opportunities in these domains in the upcoming years.
Having accumulated more than fifteen years of experience, your company has developed substantial domain knowledge and a proficient approach to credit assessment. Your organization boasts a swift Turn Around Time and operates as an agile unit with a streamlined management hierarchy. It maintains robust procedures for evaluating, underwriting, and managing risks. Likewise, portfolio management and monitoring systems effectively detect possible issues through Early Warning Signals (EWS), empowering us with the ability for swift resolution.
Your Company maintained a healthy leverage level of 2.09 as on 31st March 2023. The liability mix has also shifted towards longer-term financing and we will focus on a healthy diversification of the liability base going forward. The capital adequacy ratio (CAR) remains in a comfortable zone of 33.05%.
Net NPA levels were at around 4.38% at the end of the Financial Year 2022-23. The stressed assets in our portfolio are reducing as exposure to conventional power projects has been going down quarter on quarter.
PFS reported a loan book of Rs 7,338 Crores as on March 31, 2023.
Throughout the fiscal year, the total revenue amounted to Rs. 797.08 Crores, with an uptick in Profit after Tax (PAT) which rose to Rs. 175.81 Crores. Furthermore, in FY 2022–23, there was a notable reduction of 25.50% in finance costs, amounting to Rs. 431.91 Crores. Our primary focus during this period centred on diversifying our sources of borrowing and concurrently lowering the cost of these borrowings. The provision for impairment on financial instruments also exhibited a decline to Rs. 80.69 Crores in FY 2022–23. In parallel, the Spread on our earning portfolio stood at 2.83%, and we achieved an improved Net Interest Margin (NIM) of 4.23%."
The strength in the PFS’s business model is also validated by the fact that the Board of Directors of PFS have recommended a dividend of 1 INR per share.
The organization has set up and reinforced systems and protocols to ensure efficient oversight of its business operations and related activities. These policies and procedures have been put in place with the aim of offering a reasonable level of confidence that the company's assets are shielded from unauthorized usage, and that transactions are accurately and promptly recorded and reported. These facets undergo regular reviews and evaluations.
Your organization is dedicated to making a positive impact on the communities in the regions where it conducts its operations through its Corporate Social Responsibility (CSR) endeavors. These initiatives adhere to the CSR Policy of your company, which places its central focus on the ongoing pursuit of holistic societal development, ensuring economic, social, and environmental sustainability while also acknowledging the interests of all stakeholders. Your company carries out CSR activities in compliance with the provisions outlined in the Companies Act and its associated regulations.
The fiscal year 2022-23 marked a significant period of reorganization for PFS. The company has onboarded new Independent Directors, and the Board Committees are operating effectively. PFS has also filled the position of Director of Finance and Executive Directors, and it is currently in the process of appointing a new Managing Director & CEO and Director of Operations. Furthermore, to ensure regulatory compliance and enhance control functions, PFS has implemented the Risk-Based Internal Audit (RBIA) framework and Internal Capital Adequacy Assessment Process (ICAAP).
I would like to seize this opportunity to express my gratitude to our valued shareholders and PTC India Limited, who have consistently shown their trust and confidence in us. I extend my heartfelt appreciation to the Ministry of Power, Ministry of New & Renewable Energy, Ministry of Finance, Ministry of Corporate Affairs, Reserve Bank of India, Securities and Exchange Board of India, National Stock Exchange of India Ltd, BSE Ltd, the Registrar, various commercial banks, Financial Institutions in India and overseas, and the esteemed project promoters who have received financing from us for their unwavering support and trust in our company. Additionally, I wish to convey my thanks to my fellow Board members for their contributions in guiding the company toward a path of sustainable growth.
Last but not the least; I would also like to acknowledge the contribution of employees of PFS. Without your continuous ,untiring efforts and resilience, none of this would have been possible.
With warm wishes.
