i k f finance ltd Directors report

To,

The members,

IKF FINANCE LIMITED

Your Directors have pleasure in presenting the 32^nd Annual Report together with the Audited Accounts for the financial period ended 31^st March, 2023.

Financial Results:

The summarized financial results of the Company are as given hereunder:

(Amounts in lakhs, unless otherwise stated)

	Standalone		Consolidated
Particulars	2022-23	2021-22	2022-23	2021-22
Revenue from Operations	28,641.88	22,059.57	37444.09	26,961.75
Other Income	17.80	30.25	400.63	207.95
Profit (loss) before depreciation, interest and tax	22937.44	17855.68	28435.78	21159.57
Depreciation/amortization	264.23	128.96	341.66	190.23
Finance cost	15,402.63	11,787.65	19217.55	13,617.93
Impairment expense on loans	-44.98	-224.16	43.38	-222.93
Portfolio Loans & other balances written off	584.83	735.94	584.83	735.94
Profit (loss)before tax	6,730.73	5,427.29	8248.36	6,838.43
Provision for tax/deferred tax	1,730.22	1,396.85	2096.37	1725.42
Profit (loss) after tax before exception item	5,010.37	4,038.72	6219.97	5,122.56
Less: Other comprehensive income / (loss)	9.86	8.28	67.98	9.58
Net profit (loss) after exceptional items	5,000.51	4,030.44	6151.99	5,122.98
Balance brought forward from previous year	16,622.42	13,591.31	18183.90	14,440.00
Dividend on Equity Shares	0.00	0.00	0.00	0.00
Tax on dividend	0.00	0.00	0.00	0.00
Transfer to Statutory Reserve as required by Section 45-IC of
	1,000.10	806.09	1268.00	1056.19
Reserve Bank of India Act, 1934
Transfer to General reserve	250.03	201.S2	250.03	201.52
Transferred to Share Based payment reserve	-3.99	6.03	-4.00	6.03
Surplus carried to Balance sheet	3,760.24	3031.11	4335.02	3743.90

Review of Operations:

Standalone:

The performance for the year ended March 31, 2023 has improved and the Revenue from operations has grown by 30% to Rs.286.42 Cr from Rs. 220.59 Cr for the corresponding previous year and Net Profit increased to Rs. 50.00 Cr as against Rs. 40.30 Cr registering a growth of 24% for the corresponding previous year. During the year, the Loan Book has grown by 34% from

Rs. 1593 Cr to 2137 Cr (before Impairment loss allowance). The total assets managed by the Company, including receivables assigned / securitized stood at around Rs.2452 Cr as at March 31, 2023 as against Rs. 1742 Cr in the previous year thereby registering a growth of 41%.

Consolidated:

The Companys performance, along with its subsidiarys performance for the year ended March 31, 2023 on a consolidated basis is satisfactory. The Revenue from operations has increased to Rs.374.44 Cr from Rs. 269.62 Cr and Net Profit increased to Rs. 61.52 Cr from Rs. 51.13 Cr registering a growth of 20 % for the corresponding previous year.

Future Outlook:

The Automobile Industry, amid high interest rates and inflationary concerns, is continue to perform better in line with the other segments.

The Commercial Vehicle industry is likely to record moderate volume growth of around 8-10% in FY24 as the demand levels are expected to be lower on the backdrop of inflationary concerns. The recent price hikes post the implementation of phase-II of the Bharat Stage-VI (BS-VI) emission norms will also impact CV demand. However, the sustenance in demand is aided by healthy replacement demand, increasing freight movement amid increasing government infrastructure spending and rising economic activities.

Segment wise, MHCV Goods Carriers are expected to grow by 10-12% in FY24 driven by healthy replacement demand, increasing freight movement amid a strong infrastructure push by the Government and increasing housing, construction and mining activities, while the LCV Goods Carriers are expected to grow by 6-8% aided by increasing e-commerce activities. Passenger Carrier for both MHCV and LCV is expected to grow by 14-16% driven by mandatory scrapping of government vehicles boosting healthy replacement demand.

The Passenger Vehicle industry is likely to record moderate volume growth of around 7-9% in FY24 as the demand levels are expected to be lower on the backdrop of hike in vehicle prices, high-interest rate environment and inflationary concerns. Strong order book, improvement in supply chain and semiconductor supplies, robust demand for new model launches and increasing demand in the sports utility vehicle (SUV) segment are expected to keep the sales momentum rolling. The demand for premium variants is expected to remain healthy led by increasing demand for the luxury and premium models, while the demand for entry-level variants is expected to continue to remain under pressure due to high-interest rates and an inflationary environment.

YourCompanycontinuestofocusonRetailsegmentwithfocus on providing superior service to customers by continuously striving to lower the cost of borrowings, maintaining the asset quality with enhanced operating efficiencies to sustain the growth and profitability. Your Company is confident of sustaining the growth and profitability as it has built strong relationship with the customers over the last three decades.

Risk Management & Credit Monitoring:

Various risks like credit risk. Liquidity risk, interest rate risk, operational risk, market risk etc. are inevitable fallout of the lending business. As such, your company has put in place appropriate mechanism to review and monitor these risks at periodic intervals through the Audit Committee, Risk management Committee and the Asset Liability Management Committee. Liquidity risk and interest rate risk arising out of maturity mismatch of assets and liabilities are managed through regular monitoring of the maturity profiles. The Company monitors ALM periodically to mitigate the liquidity risk. The Company also measures the interest rate risk by the duration gap method. Operational risks arising from inadequate or failed internal processes, people and systems or from external events are adequately addressed by the internal control systems and are continuously reviewed and monitored at regular intervals. Your Company is proactive in assessing the risk associated with its various loan products and has evolved a variety of Risk management and monitoring tools while dealing with a wide spectrum of retail customers. The Risk Management Policy of the Company encompasses various risk tools such as Credit, Operational, Market, Liquidity and Interest Rate Risk and has put in place appropriate mechanism to effectively mitigate the risk factors.

Corporate Governance:

Your Companys Non-convertible debt securities got listed with Bombay Stock Exchange Limited ("BSE"). A report on the Corporate Governance along with a declaration by the Managing Director with regard to code of conduct is attached as part of this report.

Managements Discussion and Analysis:

Economic Environment:

During FY 2022-23, the fundamentals of the countrys economy remained resilient despite the global headwinds, high inflation, and steep increase in the interest rates by the regulators across the world.

Automotive Sector:

The automotive sector has performed well in line with the other major sectors on account of pent-up demand as the economy recovered from the Covid-19 pandemic, by and large.

During FY23, the CV industry reported strong year-on-year volume growth of 28.7%. The demand remains strong across all the segments. Segment-wise, medium and heavy commercial vehicles (MHCV) segment reported strong year-on-year volume growth of 39.7%, while the LCV segment reported growth of around 23.1%.

During FY23, the Passenger Vehicle industry demonstrated substantial year-on-year volume growth of 24.8%. This growth can be attributed to pent-up demand following the recovery from the Covid-19 pandemic, as well as the introduction of new products in the market, increased desire for personal mobility in the wake of the pandemic. The growing demand for utility vehicles significantly contributed to the overall volume growth, with utility vehicle volumes increasing by 33.2%.

Resource Mobilization:

Deposits:

The Company has not accepted any deposits during the year under review and it continues to be a Non-deposit taking Non Banking Financial Company in conformity with

the guidelines of the Reserve Bank of India and Companies

(Acceptance of Deposits) Rules, 2014.

Working Capital Limits:

During the year your company has reduced its dependence, in terms of utilization, on Cash Credit Limits by raising term resources to effectively manage the ALM. However, your company intends to increase the same proportionately in line with increase in the term resources going forward.

Term Loans:

During the year your Company has mobilized Term Loan(s)

of Rs. 558 Cr from existing lenders and Rs. 530 Cr from 13

new lenders.

Commercial Paper:

During the year under review, your Company has not issued

any Commercial Paper.

Non-Convertible Debentures:

During the year under review, your Company has mobilized Rs.140 Cr from Piramal Capital and Rs.70 Cr from Northern Arc Capital.

Particulars	Piramal Capital	Northern Arc Capital
(a) date of issue and allotment of the securities;	28.10.2022	27.03.2023
(b) number of securities	140	7000
(c) whether the issue of the securities was by way of preferential allotment, private placement or public issue;	Private Placement	Private Placement
(d) brief details of the debt restructuring pursuant to which the securities are issued;	Nil	Nil
(e) issue price	Rs. 1,00,00,000	Rs. 1,00,000
(f) coupon rate	SBI MCLR Linked	10.60%
(g) maturity date;	28.04.2028	Quarterly
		27.03.2025
(h) amount raised	Rs. 140 Cr	Rs. 70 Cr

Credit Rating of Securities:

Name of the Credit Rating Agency	Borrowing Instrument	Amount Rated (in crores)	Date of Rating	Rating Assigned	Rating Valid Till	Whether New/ Renewal/ Reassigned/ Withdrawn
CARE	Long Term Bank Facilities	2250	03-07-2023	CARE A	02-07-2024	renewal
CARE	Subordinate Debt	165	03-07-2023	CARE A	02-07-2024	renewal
CARE	NCDs	120	03-07-2023	CARE A	02-07-2024	renewal
CARE	PP MLDs	15	03-07-2023	CARE A	02-07-2024	renewal
Brickwork Ratings	Term Loans	713.68	15-09-2022	BWR A	14-09-2023	renewal
Brickwork Ratings	Subordinate Debt	20	15-09-2022	BWR A	14-09-2023	renewal
Brickwork Ratings	NCDs	2.50	15-09-2022	BWR A	14-09-2023	renewal

Securitization / Assignment of Loan Receivables:

During the year, your Company has Assigned Vehicle Loan Receivables to the tune of Rs. 225.76 Cr.

Borrowing Profile:

Total borrowings of the Company for the year under review (at amortized cost) stood at Rs.2037 Cr, of which borrowings from Banks constituted 67.40%, borrowings from NBFCs & FIs 15.32%, Non-Convertible Debentures 11.62% and Tier II Capital / Sub-Debt 8.02%. Your Company is continuously exploring all options to access low cost funds, mostly by way of Term Loans and Cash Credit in the current financial year, to further expand the operations.

Capital Adequacy:

The Capital to Risk Assets Ratio of your company is 33.02% as on 31.03.2023, well above the minimum of 15% prescribed by the Reserve Bank of India, of which Tier I Capital constituted 26.25% and Tier II constituted 6.77%.

Dividend:

Your Directors have not recommended payment of dividend for the financial year ended 31^st March 2023 since it is proposed to retain the same in the business.

Transfer of unclaimed dividend to Investor Education and Protection Fund:

During the period under review, no such case was raised to credit / to pay any amount to the Investor Education and Protection Fund.

Share Capital: a. Authorized Share Capital:

During the year the Authorised Share Capital of the Company was increased from Rs.85,00,00,000/- (Rupees Eighty Five Crores only) divided into 6,00,00,000 (Six Crore only) Equity Shares of Rs.10/- (Rupees Ten only) each and 25,00,000 (Twenty Five Lac only) Preference

Shares of Rs.100/- (Rupees One Hundred only) each was increased to Rs. 105,00,00,000/- (Rupees One Hundred and Five Crores only) divided into 8,00,00,000 (Eight Crore only) Equity Shares of Rs.10/- (Rupees Ten only) each and 25,00,000 (Twenty Five Lac only) Preference Shares of Rs.100/- (Rupees One Hundred only) each in the Extraordinary General Meeting held on 20^th March, 2023.

b. Paid up Share Capital:

The total Paid up Share Capital of the Company was increased to Rs. 64,57,50,500 as on 31.03.2023 consisting of Rs. 6,45,75,050 fully paid equity shares of Rs. 10/- each as against Rs.52,65,90,670 consisting 5,26,59,067 fully paid shares of Rs.10/- each as on 31.03.2022. During the year the Company has raised capital of Rs. 255,06,82,727 (including premium) by allotting new 1,19,15,983 fully paid equity shares of

Rs. 10/- each.

Compulsorily Convertible Preference Shares.

There are no Compulsorily Convertible Preference Shares outstanding as on 31.03.2023

c. Issue of Shares with differential voting rights

The Company has not issued any Shares with differential voting rights during the period under review.

d. Buy Back of Securities

The Company has not bought back any of its securities during the year under review.

e. Sweat Equity

The Company has not issued any Sweat Equity Shares during the year under review.

f. Bonus Shares

The Company has not issued any bonus shares during the year under review.

g. Employees Stock Option

The Board of Directors has granted total 5,62,860 stock options to the eligible employees at a price of Rs.120/- (Rupees One Hundred and Twenty only) per share.

Disclosure as required under Rule 12(9) of Companies (Share Capital and Debentures) Rules, 2014 during the financial year are as below:

(a)	options granted	5,62,860
(b)	options vested	1,08,465
(c)	options exercised	Nil
(d)	the total number of shares arising as a result of exercise of option	Nil
(e)	options lapsed	4,07,910
(f)	the exercise price	Rs. 120/-
(g)	variation of terms of options	NA
(h)	money realized by exercise of options	NIL
(i)	total number of options in force	1,08,465
(j)	employee wise details of options granted to:
	(i) key managerial personnel	Ch Sreenivasa Rao, CFO & Company Secretary- 15,180 Options
	(ii) any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year	1. D Nagaraj Goud, National Business Head, 80,140 Options-14.24% (Lapsed) 2. G Chakrapani, National Credit Manager-51,500 Options-9.07% 3. M Girish Kumar, National Head-Collections-51,500 Options-9.07% (Lapsed) 4. Hardik Harish Joshi-Zonal Manager-34,000 Options-6.04% (Lapsed)
	(iii) identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant	Nil

Transfer to Reserves

The Company has transferred 250.47 Lacs to General Reserves out of the current year profits for the Financial Year 2022-23 as against Rs.201.53 Lacs during the Financial Year 2021-22. Further your Directors has transferred Rs. 1001.89 Lacs to Statutory Reserve @ 20% profit after tax as required under Section 45-IC of Reserve Bank of India Act, 1934 during the Financial Year 2022-23 as against Rs. 1000.10 Lacs during the Financial Year 2021-22. Further Rs. (4.00) Lacs was transferred during the Financial Year 2022-23 to Share Based payment reserve as against Rs. 3.99 Lacs during the Financial Year 2021-22. Further the Company has transferred Rs. 24315.23 Lacs to share premium account during the year 2022-23.

Details of Subsidiary, Associate and Joint Venture Companies

The Company is not having any Associate and Joint Venture Companies as on date by virtue of Section 2 (6) of the Companies Act, 2013. As on 31.03.2023, IKF Home Finance Limited is the Subsidiary Company in which the Company holds 89.13%. Policy for determining ‘material subsidiaries is available on the companys website and can be accessed through the web-link https://www.ikffinance.com/assets/pdf/ policies/Policy%20on%20Material%20Subsidiaries.pdf.

No Company has become or ceased to be the Companys Subsidiaries, joint ventures or associate companies during the year.

Salient features of the financials of the above-mentioned subsidiary have been given in Form AOC-1 as Annexure-I to this report

Auditors:

Statutory Auditors:

In due compliance of the Reserve Bank of India(RBI) vide Notification Ref. No. DOS.CO.ARG/SEC.01/08.91.001/2021-22 dated 27^th April, 2021 guidelines for appointment statutory auditors of NBFCs your Company has appointed M/s SGCO & Co., LLP., Chartered Accountants (Firm Regn No 112081W/W100184) as Statutory Auditors for a further period 3 (three) years at the 30^th Annual General Meeting to hold the office of Statutory Auditors from the conclusion of 30^th Annual General Meeting to till the conclusion of 33^rd Annual General Meeting of the Company.

Qualification by the Statutory Auditor:

The Audit Report does not contain any qualification, reservation or adverse remarks.

Secretarial Auditor:

Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed M/s. B S S & Associates, Company Secretaries as Secretarial Auditors of the Company. Secretarial Audit Report is enclosed as Annexure-II to this Report.

Qualification by Secretarial Auditor:

The Secretarial Audit Report does not contain any qualification, reservation or adverse remarks.

Maintenance of Cost Records:

Cost Records are not required to be maintained by the Company under Section 148 of the Companies Act, 2013. Accordingly, such accounts and records are not maintained.

Cost Audit:

In terms of the provisions of Section 148 of the Companies Act, 2013 read with Rule 3 & 4 of the Companies (Cost Record and Audit) Rules, 2014 and all other applicable provisions of the Companies Act, 2013, the Cost Audit is not applicable to the Company.

Internal Audit and Auditor:

As part of the effort to evaluate the effectiveness of the internal control systems, and to maintain its objectivity and independence and on recommendations of the Audit Committee your directors have re-appointed M/s. Brahmayya

& Co, Chartered Accountant as an internal auditor of the Company for the year ended 31^st March, 2023 who shall report to the Audit Committee / Board. Based on the report of internal auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon were presented to the Audit Committee / Board.

Internal Financial Controls:

The Company has a well-established internal financial control and risk management framework, with appropriate policies and procedures, to ensure the highest standards of integrity and transparency in its operations and a strong corporate governance structure, while maintaining excellence in services to all its stakeholders. Appropriate controls are in place to ensure: (a) the orderly and efficient conduct of business, including adherence to policies, (b) safeguarding of assets, (c) prevention and detection of frauds / errors, (d) accuracy and completeness of the accounting records and (e) timely preparation of reliable financial information.

Vigil Mechanism / Whistle Blower Policy:

Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Board has adopted Whistle Blower Policy. This policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior.

A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. The policy also provided adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairman of the Audit Committee in exceptional cases.

Your Company hereby affirms that during the year no Director / employee have been denied access to the Chairman of the Audit Committee and that no complaints were received.

Corporate Social Responsibility Committee:

During the year under review the Company has spent an amount of Rs. 91,28,600/- under the CSR activity. The report on CSR activities for FY 2022-23 is enclosed as Annexure-III. This Corporate Social Responsibility policy is available on the website of the company and can be accessed through the web-link https://www.ikffinance.com/assets/pdf/policies/ CSR%20Policy.pdf.

Annual Return:

As required under Section 92(3) of the Companies Act, 2013, Annual return in Form MGT-7 is available on the companys website and can be accessed through the web-link https:// www.ikffinance.com/investors.php#headingOne.

Material Changes and Commitments, if any:

There are 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 and the date of the report.

Details of significant and material orders passed by the regulators/ courts/ tribunals impacting the going concern status and the Companys operations in future:

There are 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 and the date of the report.

Directors & Key Managerial Personnel:

Directors:

Shri Satyanand Sinha Chunduri (DIN: 03644504), and Smt. Vasumathi Devi Koganti (DIN: 03161150) retired and re-elected at the last Annual General Meeting of the Company held on 30.09.2022. In terms of Section 152 of the Companies Act, 2013.

During the year there were changes in the composition of Board of Directors, on 30.09.2022 Shri Nageswara Rao Yalamanchili who appointed as an additional director (Non-Executive & Independent), w.e.f., 01.12.2021 was appointed as Independent Director by the shareholders at the Annual General Meeting held on 30.09.2022. Shri Sunil Chandiramani and Shri Gopala Krishna Gurrappa were appointed as additional director(s) (Non-Executive & Independent) at the Board Meeting held on 30.09.2022 and was appointed as Independent Directors by the Shareholders at the Extra Ordinary General Meeting held on 13.02.2023. Shri. S. Veerabhadra Rao, Independent Director resigned from the Board w.e.f., 10.02.2023.

Further Shri. Abhishek Agarwal (DIN: 06760344) was appointed as Nominee Director of Accion Digital Transformation Fund LP (New Investor) by the Board of Directors with effect from 30.05.2023. Shri. Sethuraman

Ganesh (DIN 07152185) was appointed as Additional Director (Independent and Non-Executive) by the Board of Directors with effect from 14.07.2023. Smt. Indira Devi Vupputuri, Whole Time Director resigned with effect from 14.07.2023.

Based on the confirmations received from Directors, none of the Directors are disqualified from appointment under Section 164 of the Companies Act 2013.

Key Managerial personnel:

During the financial year, there was a change in the appointment of Key Managerial Personnel. Shri. Sreepal Gulabchand Jain, Chief Financial Officer was resigned w.e.f., 10.02.2023 and Shri. Ch. Sreenivasa Rao, the Company Secretary was appointed as Chief Financial Officer of the Company w.e.f., 10.02.2023.

Declaration by Independent Directors:

The Independent Directors of the Company have submitted their declarations as required under Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as per sub-section (6) of Section 149 of the Act.

Familiarization programme for Independent Directors:

The Company proactively keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry.

Independent Directors Meeting:

The Independent Directors met on 24.08.2022 without the attendance of Non-Independent Directors and members of the Management. The Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole; the performance of the Chairman of the Company, taking into account the views of Executive Director and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the independent directors appointed during the year:

During the year, the Company has appointed three Independent directors Shri. Y. Nageswara Rao, Shri Sunil Chandiramani and Shri. Gopala Krishna Gurrappa. In the opinion of the Board all the Independent Directors of your Company possess integrity, experience, expertise and requisite proficiency required under all applicable laws and policies of your Company.

Board Evaluation:

The Board adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Board functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, contribution at the meetings and otherwise, independent judgment, governance issues etc.

Change in the nature of business:

There was no change in the nature of business of the Company during the financial year 2022-2023.

Number of meetings of the Board of Directors:

During the financial year 2022-23 the Board of Directors has met Eight times viz 30/05/2022, 11/08/2022, 30/09/2022, 10/11/2022, 13/01/2023, 10/02/2023, 21/02/2023 and 27/03/2023. The details of which are given in the Corporate Governance Report. The maximum interval between any two meetings did not exceed 120 days, as_prescribed in the Companies Act, 2013 and Secretarial Standard-1.

Audit Committee:

The Composition of the Audit Committee is provided in the Corporate Governance Report forming part of this report. All the recommendations made by the Audit Committee were accepted by the Board.

Nomination and Remuneration Policy:

The Nomination and Remuneration Policy containing guiding principles for payment of remuneration to Directors, Senior Management, Key Managerial Personnel and other employees including Non-executive Directors along with Board Evaluation criteria are provided in the Corporate Governance Report. The terms of reference are placed on Companys website and can be accessed through the web-link https://www.ikffinance.com/assets/pdf/policies/ Nomination%20and%20Remuneration%20Policy.pdf.

Criteria of making payments to non-executive directors is provided in the Corporate Governance Report.

Particulars of loans, guarantees or investments under Section 186:

The Company, being a non-banking finance company registered with the Reserve Bank of India and engaged in the business of giving loans, is exempt from complying with the provisions of Section 186 of the Companies Act, 2013. Accordingly, the disclosures of the loans given as required under the aforesaid section have not been given in this Report.

Remuneration ratio of the Directors / Key Managerial Personnel (KMP):

The provisions of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not applicable to the Company.

During the financial year 2022-2023, there were no employees in the Company whose details are to be given pursuant to Rule 5(2) The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Particulars of contracts or arrangements with related parties:

All transactions entered by the Company with Related Parties were in the Ordinary course of Business and are at Arms Length pricing basis. The Audit Committee granted approvals for the transactions and the same were reviewed by the Committee and the Board of Directors.

There were no materially significant transactions with Related Parties during the financial year 2022-23 which were in conflict with the interest of the Company. The details of contracts and arrangements with related parties as referred to in Section 188(1) of the Companies Act, 2013 were given as Annexure-IV to the Boards Report in form No: AOC-2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014.

Related Party Disclosure – As per Point no A of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended

The detailed disclosures were covered in the Financial Statements, which forms part of this Report.

Directors Responsibility Statement:

Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

(a) in the preparation of the annual accounts for the period ended 31^st March, 2023, 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 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 this 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;

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

(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.

Companys Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace:

The Company prohibits any form of sexual harassment and any such incidence is immediately investigated and appropriate action taken in the matter against the offending employee(s) based on the nature and the seriousness of the offence. The Company has a policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace (the Policy) and matters connected therewith or incidental thereto covering all the aspects as contained under the "The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013" notified by the Government of India vide Gazette Notification dated 23^rd April, 2013.

The Company has complied with provisions relating to the constitution of Internal Complaints Committee. There was no case of sexual harassment reported during the year under review.

Details in respect of frauds reported by auditors under Section 143 (12) other than those which are reportable to the central government:

There were no frauds as reported by the Statutory Auditors under Sub-section 12 of Section 143 of the Companies Act, 2013 along with Rules made there-under other than those which are reportable to the Central Government.

Disclosure under Regulation 53(e) of SEBI LODR:

Name of the debenture trustees with full contact details

1. Catalyst Trusteeship Limited, GDA House, Plot No. 85, Bhusari Colony (Right), Paud Road Pune - 411 038, Maharashtra, India Contact No: +91 20 66807200 E-mail Id: dt@ctltrustee.com

2 IDBI Capital Trusteeship Services Limited

Asian Building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai – 400 001, Maharashtra, India Contact No: 022-40807000 E-mail Id: itsl@idbitrustee.com

3 Vardhman Trusteeship Private Limited, 3^rd Floor, Room No - 15 6, Lyons Range, Turner Morrison House Kolkata – 700 001, West Bengal, India Contact No: 022 42648335 E-mail Id: Corporate@vardhamantrustee.com

Details of revision of financial statement- Nil

Details of utilization of funds raised through preferential allotment or qualified institutions placement:

During the year under review, the Company had raised Rs.210,00,00,000 (Rupees Two Hundred and Ten Crores) through preferential issue/private placement Non-Convertible Debentures (‘NCDs). The funds were utilised by the Company for its general corporate purposes. There has been no deviation in the utilisation of issue proceeds of Private Placement of Non-Convertible Debentures (‘NCDs), Commercial papers and Tier II Debt, from the Objects stated in the Private Placement Offer Letter.

Secretarial Standards:

The Company complies with all applicable Secretarial Standards.

Other Disclosures:

Reasons for delay, if any, in holding the annual general meeting- Nil

Disclosures by NBFC Systemically Important Non-Deposit Taking Company and Deposit taking Company

The Company made relevant disclosures in the notes to accounts of financial statements

Pecuniary relationship/transaction with non-executive directors:

During the year under review, there were no pecuniary relationship/transactions of any non–executive directors with the Company, apart from sitting fees for attending meetings as directors.

Customer Complaints:

(Currency : INR in lakhs)

Particulars	As at	As at
	March 31, 2023	March 31, 2022
(a) No. of complaints pending at the beginning of the year	0	2
(b) No. of complaints received during the year	48	13
(c) No. of complaints redressed during the year	48	15
(d) No. of complaints pending at the end of the year	-	-

Perpetual Debt Instruments (PDI):

During the financial year, the Company has not issued any Perpetual Debt Instruments (PDI).

Registrar and Share Transfer Agency:

The Company has appointed M/s. Bigshare Services Private Limited situated at Plot No-306, 3^rd Floor, Right Wing, Amrutha Ville Opp. Yashoda Hospital, Rajbhavan Road Somajiguda, Hyderabad-500 082, as its Registrar and Share transfer agency for handling both physical and electronic transfers.

Details of significant changes in key financial ratios, along with detailed explanations thereof: the key financial ratios were disclosed in the Financial Statements, which forms part of this Report.

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 number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

Awards and recognition:

The Company has not received any award during the Financial Year.

Cautionary Statement:

Statements in these reports describing companys projections statements, expectations and hopes are forward looking. Though, these expectations are based on reasonable assumption, the actual results might differ.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The Company, being a non–banking finance company (NBFC), does not have any manufacturing activity. The directors, therefore, have nothing to report on conservation of energy and technology absorption.

Foreign Exchange Earnings and Outgo

Total foreign exchange earned	Nil
Total foreign exchange used	Nil

Code of conduct:

The Company has adopted Code of Conduct for the Board and for the senior level employees of the Company and they are complying with the said code.

Industrial Relations:

Industrial relations continued to be cordial throughout the year under review.

The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year:

During the year under review, Company has not made any application under The Insolvency and Bankruptcy Code, 2016 (31 of 2016).

The details of 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

The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.

Acknowledgments:

Your Company will always keep interest of its customers, employees and the stakeholders as a priority and shall reciprocate their confidence reposed in the Company. It has been a mutually beneficial relationship and looks forward to their continued support.

For and on behalf of the Board

IKF FINANCE LIMITED

Vupputuri Gopala Kishan Prasad	Vasumathi Devi Koganti
Chairman & Executive Director	Managing Director
DIN: 01817992	DIN: 03161150

Place: Vijayawada Date: 14.07.2023