Chairman Statement

31st Annual General Meeting

Dear Shareholders,

I take great pleasure in welcoming you to the 31st Annual General Meeting of your Company. The Annual Report for the financial year 2015-16 has been circulated and with your permission I take it as read.

Financial year 2015-16 had been a year of challenges and the Company made efforts to retain its long term customers as well as start helicopter services in some new areas. The Company has unfortunately lost three helicopters in accidents during 2015 which has impacted the operating revenue and profit during 2015-16 as a result thereof during the year 2015-16 Company’s operating revenue was Rs.471.99 crores. Further net profit after tax during 2015-16 was Rs.36.08 crores against Rs.38.80 crores in 2014-15. Total flying hours during 2015-16 were 27,892 hours as against 31,380 hours during the previous year. Company managed average monthly deployment of helicopters during the year 2015-16 as 32 same as in the previous year inspite loosing of three helicopters. Reduction in flying hours was mainly due to loss of Mata Vaishno Devi tender during 2014 where an intensive flying of 2500 hours approx. every year and loss of contract with Government of Arunachal Pradesh. Average fleet serviceability during 2015-16 was 80% as against 78% in the previous year. The Company had Operations & Maintenance contracts of 4 Dhruv helicopters owned by BSF (MHA).

The Company initiated transformation programs and cost cutting measures by strict monitoring of expenses on travel expenses, TA//DA, advertisement, overtime, overheads and business promotion expenses. The video conferencing, efficient and effective control of inventory budget, generation of MIS for all the bases in the integrated computer system, cross conversion of pilots on different type of helicopters and monitoring of FTL/ FDTL through centralized computer system were continued to improve performance and efficiency in operations. Creation of Eastern Region resulted in improved focus on North East Region and recovery of outstanding from customers in the North East States.

Reserves and surpluses of the Company during 2015-16 rose to Rs.318.57 crores as against Rs.295.51 crores in 2014-15. As on 31.3.2016 the long term borrowings was Rs.38.21 crores (Previous Year Rs. 76.93 crores). The total outstanding loan as on 30.11.2016 was Rs.32.10 crores. The Company brought down its debt equity ratio to 0.13:1 following the repayment of the long term debts. Rating of the Company has been upgraded to Stable India A+ from Stable India A. This has been possible due to stability in business, continuous increase in revenue and better financial performance.

Helicopter industry is becoming more competitive and 85% of total operating revenue of Pawan Hans now comes from contracts through competitive tenders. ONGC has improved vintage condition from 5 years to 7 years which has resulted Pawan Hans able to secure contract for deployment of 3 Dauphin N3 helicopters to ONGC for its Crew Change Task being L1 under International competitive bidding in March 2015. Further, ONGC also awarded contract for one more Dauphin N3 helicopter from May 2016 for crew change task. Non-availability of offshore AS-4 qualified pilots in the market is a major constraint and continue to result in AOGs due to pilot shortage. The Company has been making continued efforts and conducting regular interviews for pilots. However, intake of qualified and experienced pilots is still low.

The Board of Directors have recommended dividend of Rs.1082.52 lacs @ 30% of Net Profit After Tax (PAT) of Rs.3608.41 Lacs (previous year dividend was Rs.776.18 lacs @ 20% of PAT). The dividend is payable on the entire paid up capital of Rs.245.616 crores. Provision has been made for corporate tax of Rs.220.38 lacs on Dividend (P.Y. Rs.158.01 lacs). The dividend is paid @ 30% of profit after tax only in view of requirement of funds for replacement of old fleet of 30 years old Dauphin N helicopters and 20 years old Bell 206L4 helicopters. However, the Company would make efforts to pay higher amount of dividend from the profits in subsequent years.

The following significant developments have taken place:-

i) Pawan Hans has developed first time, a vision document Strategic Corporate Plan:2020 and appointed Administrative Staff College of India (ASCI) as Consultant to develop long term Business Plan. ASCI has submitted & presented the Business Plan 2027 which envisage Company’s helicopter/seaplane strength to grow to 83 from present strength of 43 and revenue to Rs.1685 crores from present revenue of Rs.477 crores in next 10 years. Company’s Board and Ministry of Civil Aviation has accepted the Business Plan in principle. Presently the Business Plan is in the process of its analytical and risk assessment by SBI Caps Ltd.

ii) A long awaited decision has been received now, whereby the Government of India has decided for conversion of loan of Rs.130.91 crores for acquisition of Westland helicopters in 1986 into equity and waiver of interest to the tune of Rs.339 crores. Required procedure for increase in share capital shall be carried out after sanction of required budgets. Ministry of Civil Aviation has played very constructive & positive role in resolving this 30 years old case.

iii) There had been recognition of Pawan Hans for its Overall Operational Excellence and Sustainable Business Performance in recent time and it received the following Prestigious Awards/recognitions:-

a) During Air Show at Paris in 2015, M/s.Turbomeca conferred Excellence Award to Pawan Hans for its overall contribution to the success of the Worldwide Aerial Engine Fleet.

b) Pawan Hans has been awarded with ASSOCHAM- Civil Aviation and Tourism Award- 2015 in recognition for Promoting Remote & Regional Connectivity as Best General Aviation Company.

c) Pawan Hans has been awarded Certification of Recognition for implementation of Information and Communication Technology in PHL under Digital India initiatives as one of the leading Mini Ratna-I, PSU presented by Minister of IT and Minister of Steel organized by “Governance Now”.

d) Pawan Hans has been awarded for Connecting Rural India through Helicopters during mega event of Aero Expo India 2016 organized by PHD Chamber of Commerce.

 

iv) Pawan Hans has prepared 2020 Strategic Business Plan to meet the requirement of emerging diversification and keeping in view the above, Pawan Hans has made strategic changes in the Organization structure to remain a vibrant, transparent and system driven organization.

v) Keeping in view the enlarged scope of Company’s Mission, the newly devised Logo depicting theme based on identity, safety, environment, business and vision of the Company has been approved by the Board of Directors.

vi) To commemorate the 30th Anniversary of the Company and service to the Nation, Pawan Hans has organized on 16th October 2015 the International Conclave on Civil Helicopters on “Safety Management System, Multi Mission Utility of Helicopters and Regional Air Connectivity” with large number of International and National participants in the Civil Aviation.

vii) The Company has been able to get renewal of insurance for the period 1.08.2016 to 31.07.2017 from M/s National Insurance Company Ltd. on the sum assured value of Rs.1122.25 crores for Operating Helicopter fleet and inventory value of Rs.300 crores with the annualized premium works out a net total premium of Rs.17.39 crores before service tax.

viii) The Company has lost three helicopters in accidents during 2015 i.e. one Dauphin N3 helicopter (VT-PHK) on 4th August 2015 at Khonsa near Dibrugarh, Assam. Second Dauphin N-3 helicopter VT-PWF on 04.11.2015 while undertaking night training flight at Bombay High and third Dauphin N helicopter VT-ELJ on 24.11.2015 with damage to the helicopter during operations while landing at Dimapur for Government of Nagaland.

ix) The Safety Department has been strengthened and New Safety Policy with “Zero Tolerance to Safety” has been implemented in the organization. Third party safety (SMS) audit has been awarded to M/s S.G.S. India Pvt. Ltd. and a Consultant from M/s SGS Hart Aviation Australia, is carrying out detailed safety audit and improve the safety system in organization. Steps have been taken towards safety and preventive steps like cautionary letter reiterating need to follow SOPs, understanding weather phenomenon in the hills, safety circulars to be followed and emphasis on training for handling critical emergencies in hilly terrain and marginal weather The Company is pursuing safety in operations with renewed efforts.

x) Pawan Hans operated helicopters for joy rides in Godavari Pushkaram in July,2015 and Brahmotsav Fesival, Tirupati in September,2015 providing aerial rides in association with Andhra Pradesh Tourism in support of Government of Andhra Pradesh and Dussara festival in mysuru & Hampi festival in Karnataka to promote heli-tourism in various States and earned a revenue of Rs.2.52 crores. Pawan Hans has also signed MoU with Maharashtra Government, Goa Government for providing helicopter services to promote heli-tourism in their States. Pawan Hans has launched the Helicopter Services in the states of Goa and Mumbai- Maharashtra in January, 2016 providing helicopter rides in the initial phase and plans to subsequently launch air connectivity in a phased manner in these States.

Other important Developments:-

In addition to the above developments, there are some other important developments in the Company after the financial year 2015-16:-

i) The Company has completed construction of Heliport at Rohini in September 2016 on 25 acres of land and created basic Helipad facilities at Rohini at a total project cost of Rs.99.27 crores which also includes equipments for operationalization of Heliport. The construction has been completed and heliport is scheduled to be operationalised in January 2017 after having permission for operations from DGCA and MHA. The Company has entered into MoU with HAL for setting up of MRO at Rohini Heliport and process for setting up is underway. Further, the Company has developed a Heliport at Hadapsar in Pune on the land of DGCA and construction work has been done through NBCC on deposit work basis at the cost of Rs.11.34 crores. PHL has approached DGCA for approval of the cost of additional work of Rs.2.34 crores and request to handover the facility to Pawan Hans for starting training and commercial activities of effective gainful utilization of facility.

ii) Towards fleet augmentation, during 2016-17 the Company is planning to acquire 3 medium helicopters, 4 light helicopters and two heavy duty helicopters with 20% funding from internal resources and 80% through term loan from ONGC/bankers. Further, the Company proposes replacement of 9 numbers old Dauphin N helicopters through funding of 80% of the total cost by GBS and 20% from IEBR. The Company has signed Purchase Agreement with M/s.Bell Helicopter Textron Inc. for purchase of 03 brand new Bell 412EP helicopters. The Company has approached ONGC for funding of Rs.160 crores, being 80% cost of acquisition of three Bell 412EP helicopters otherwise, the Company would approach PSU Banks for loans. Further, the Company has issued tender for purchase of three light single engine helicopters with option for purchase of one additional helicopter at the same rates, terms & conditions. The bids have been received and are under evaluation. Pawan Hans would also go for retender for acquisition of two heavy duty helicopters.

iii) Pawan Hans has proposed creation of heli-hub at Delhi, Mumbai & Guwahati and creation of Greenfield Heliport, MRO facility and setting up of skill development centre for technical and operational staff.

iv) The Company has undertaken Safety Initiatives by implementing Safety Management System (SMS) for its operations and maintenance activities as per ICAO/DGCA guidelines and has already implemented two phases of SMS out of four. A new Safety Oversight department has been created and a Voluntary Reporting System and Hazard Reporting System has been introduced in the company. The company has introduced FOQA (Flight Operations Quality Assurance) system in its operations to analyse and monitor operation of helicopters. Safety Policy of the company has also been revised to include Safety as a core activity. National Institute of Aviation Safety & Services (NIASS) the dedicated training centre of the Company in Delhi has been strengthening knowledge and skill levels of pilots and technical employees.

v) The Company is complying Guidelines on Corporate Governance issued by DPE. Industrial relations during the period continued to be cordial and regular meetings with employee’s representative bodies were held. The Company is playing a vital role in the growth of helicopter industry in India which has a vast scope of growth.

I take this opportunity to thank you all for the confidence reposed in the management. I am also grateful for the support and guidance of the Government of India, Ministry of Civil Aviation, DGCA and other various agencies in efficient management of the Company. I deeply appreciate the confidence reposed by ONGC, GAIL,GSPC, NTPC, Ministry of Home Affairs, BSF, the State Governments of Meghalaya, Mizoram, Arunachal Pradesh, Himachal Pradesh, Nagaland, Sikkim, Maharashtra, Tripura, Assam, Odisha, Andaman & Nicobar Islands and Lakshadweep Islands in the Company and also services rendered by its employees towards Company’s growth.

(Dr. B. P. Sharma)

Chairman & Managing Director

Dated: 13th January, 2017

For More Informations, Please Contact

Sh. Sanjiv Agarwal
GM (Legal & Company Secretary)
Phone: 01202476775
Fax:
E-Mail: sanjiv.agarwal@pawanhans.co.in
Website Policy | Disclaimer | Feedback | Sitemap | FAQ's | Telephone Directory | Official Language| Holiday List

© 2017 Pawan Hans Ltd. All rights reserved.
Vigilance
Rate this site