IFCI Ltd Auditor Reports

To the Members of IFCI Limited

Report on the Audit of Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of IFCI Limited (“the Company”), which comprises the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year ended on that date and Notes to the standalone Financial Statements, including a summary of material Accounting Policies and other explanatory information (hereinafter referred to as the “Standalone Financial Statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2024, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Companies Act, 2013 (“the Act”). Our responsibilities under those Standards are further described in “Auditors Responsibilities for the Audit of Standalone Financial Statements” section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“the ICAI”) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidences obtained by us is sufficient and appropriate to provide a reasonable basis for our audit opinion on the Standalone Financial Statements.

Emphasis of Matter:

1. We draw attention to Note No. 39 of the financial statements regarding change in accounting policy towards recognition of interest income on Stage 3 assets w.e.f. 01.04.2021. Accordingly, the interest income for the FY 2021-2022 and FY 2022-2023 has increased by Rs. 248.03 Crores and Rs. 209.50 Crores respectively.

2. We draw attention to Note No. 40, where the valuation of the investments in subsidiary companies has been considered on the basis of financial statements for the period ended 31st December 2023.

3. We draw attention to Note No. 54 where the Capital Risk Adequacy Ratio (CRAR) stands at (-)48.35 % as on 31.03.2024, below the RBI stipulated guideline vide circular dated 31st May, 2018 (RBI/2017-18/181 DNBR (PD) CC.No.092/03.10.001/2017- 18).

4. In a certain case, it was observed that one party has appointed the company as its advisor/consultant for assisting and preparation of their proposal under SDF (Sugar Development Fund) scheme of Government of India (GOI). However, company is also acting as nodal agency/agent of government for independently carrying out various due diligence procedures on application received by nodal ministry under SDF Scheme. Notwithstanding express approval from GOI, the action of assisting/coaching an applicant into preparation of documents/ project reports on commercial terms, and simultaneously conducting due diligence on behalf of GOI, severely undermines the creditability of the proposals appraised by the company, and comprises the independent position of the company.

5. The company has informed us vide letter dt. 01.11.2022 received from nodal ministry that case specific data for SDF (Sugar Development Fund) Scheme may not be shared with auditors. Accordingly, same is not reviewed by us.

6. The company has informed us that as per communication received from nodal ministry towards PLI (Production Linked Incentive) schemes, files and documents shall not be made available to the auditors, hence we have not reviewed the same.

Our Opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters	How our matter was addressed in the audit
Impairment of Loan Assets - Expected Credit Loss (ECL1	Our Audit Procedure includes:
[Refer Note No. 53 to the Standalone Financial Statements read with accounting policy No. 6(b)] The most significant areas where we identified greater levels of management judgment are:	We have obtained an understanding of the guidelines as specified in Ind AS 109 “Financial Instruments”, various regulatory updates and the Companys internal instructions and procedures in respect of the expected credit loss and adopted the following audit procedures:
• ECL model-Impairment loss measurement requires use of statistical models to estimate the Probabilities of Default (PD), Loss Given Default (LGD) and Exposure at Default (EAD). These models are key driver to measure ECL.	1. Evaluation and understanding of the key internal control mechanisms with respect to the loan assets, assessment of the loan impairment including assessment of relevant data quality, and review of the real data entered.
• Individually assessed classification of various Stages- the carrying value of loans and advances to borrowers may be materially misstated if individual impairments are not appropriately identified and estimated.	2. Verification/review of documentations, operations/performance of Loan asset accounts, on test check basis of the large and stressed loan assets, to ascertain any overdue, unsatisfactory conduct or weakness in any loan asset account.
The effect of these matters is that, as part of our risk assessment, we determined that the value of ECL has a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the financial statements as a whole.	3. Review of the reports of the internal audit and any other audit/inspection mechanisms to ascertain the loan assets having any adverse indication/ comments, and review of the control mechanisms of the Company to ensure the proper classification of such loan assets and expected credit loss thereof.
In the event of any improper application of assumptions, the carrying value of loan assets could be materially misstated either individually or collectively. In view of the significance of the amount of loan assets in the standalone Financial Statements, the impairment of loan assets thereon has been considered as Key Audit Matter in our audit.	4. The accuracy of critical data elements input into the system used for computation of PD and LGD.
	5. The completeness and accuracy of data flows from source systems into the ECL calculation.
	6. Independent assessment of all Loan assets based on IRACP norms of RBI.
	Our results: We considered the credit impairment charge and provision recognized and the related disclosures to be acceptable & satisfactory.

 

2. Valuation of financial instruments at Fair Value	Our Audit Procedure includes:
[Refer Note No. 52 to the Standalone Financial Statements read with accounting policy No. 6(b)] Company enters into derivative contracts in accordance with RBI guidelines to manage its currency and interest rate risk. These derivative contracts are categorized at FVTPL and certain derivative contracts are designated under cash flow hedge (Hedge Accounting).	We involved our team to review the managements underlying assumptions in estimating the fair valuation arrived at for those financial derivative contracts and the possible outcome of the underlying contracts accruing any profit or loss to the company.
We consider the valuation of the derivative financial instruments and hedge accounting as a key audit matter due to its material exposure and the fact that the inappropriate application of these requirements could lead to a material effect on the income statement.	Our team also considered general market practices and other underlying assumptions in arriving at such fair valuation of the financial derivative contracts as outstanding/pending for settlement as on March 31, 2024.
	Assessing whether the financial statement disclosures appropriately reflect the Companys exposure to derivatives valuation risks with reference to the requirements of the prevailing accounting standards and Reserve Bank of India Guidelines.
	Our results: We did not find any material misstatement in measuring derivative contracts at fair value and the related disclosures to be acceptable & satisfactory.

 

3. Valuation of investments in Subsidiaries and Associates	Our Audit Procedure includes:
Due to the materiality of the investment in the context of the parent Companys financial statements and the market risk related with recoverability of investments, this was considered to be the area of focus during the course of Companys audits Hence, it was considered as a key Audit matter in our Report.	Review of financial statements of all subsidiaries and associates.
	Our results: We did not find any material risk in recoverability of the investments and the valuation of the investments has been done on fair value.

 

4. Assessment of Information Technology (IT)	Our Audit Procedure includes:
The key financial accounting and reporting processes are highly dependent on the automated controls over the Companys IT systems. There is a risk that improper segregation of duties or user access management controls (in relation to key financial accounting and reporting systems) may undermine our ability to place some reliance thereon in our audit.	Evaluated sample of key controls operating over the information/input in relation to financial accounting and reporting systems.
We have considered this as key audit matter as any control lapses, validation failures, incorrect input data and wrong extraction of data may result in wrong reporting of data to the management and regulators.	Our results: We did not find any material deficiencies as per our analysis of reports emanating from IT systems on Financial Accounting and reporting.

Information other than the Standalone Financial Statements and Auditors Report Thereon

The Companys Board of Directors and Management is responsible for the preparation of the other information. The other information comprises the information included in the Companys annual report, but does not include the standalone financial statements, consolidated financial statements and our auditors report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Managements Responsibility for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position and financial performance including other comprehensive income, cash flow and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including Ind AS specified under section 133 of the Companies Act, 2013.

This responsibility also includes 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the entity or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management and Board of Directors.

- Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in

(i) planning the scope of our audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 (‘the Order) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure “A” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required under section 143(5) of the Companies Act, 2013, we enclose herewith, as per Annexure “B”, our report for the Company on the directions and sub-directions (Part A and Part B, respectively) issued by the Comptroller & Auditor General of India.

3. As required by Section 143(3) of the Act, based on our audit we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The Balance Sheet and the Statement of Profit and Loss including other comprehensive income, the Statement of Cash Flows and Statement of changes in Equity dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

e) As per notification number G.S.R. 463(E) dated June 5, 2015 issued by Ministry of Corporate Affairs, Section 164(2) of the Act regarding the disqualifications of Directors is not applicable to the Company, since it is a Government Company.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure “C”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys Internal Financial Control over financial reporting.

g) With respect to other matters to be included in the Auditors Report in accordance with the requirements of Section 197(16) of the Act, since it is a government company, the provision of section 197 of the Act is not applicable to the company as per GSR 463 (E) dated June 05, 2015, issued by the Ministry of Corporate Affairs.

h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31^st March 2024 on its financial position in its standalone financial statements - Refer Note No. 35.2 to the financial statements;

ii. The Company has made appropriate adjustment in the Profit & Loss Account, as required under the applicable law and accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note No. 52 to the financial statements;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. a) The Management has represented to us that, to the best of their knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. There has been no dividend declared or paid by the company during the year under audit.

vi. Based on our examination, which included test checks, the Company has used accounting softwares for maintaining its books of account for the financial year ended March 31, 2024 which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the softwares. Further, during the course of our audit we did not come across any instance of the audit trail being tampered with.

As proviso to Rule 3(1) of the companies (Accounts) Rules, 2014 is applicable from April 1, 2023 reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2024.

	For S MANN AND COMPANY
	Chartered Accountants
	Firm Registration No: 000075N
	CA SUBHASH CHANDER MANN
	Partner
Place : New Delhi	Membership No.: 080500
Date : April 30, 2024	UDIN: 24080500BKFBIH6705

ANNEXURE “A” TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements section of our report to the members of IFCI Limited of even date on standalone financial statements)

(i) a) (A) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has maintained proper records showing full particulars including quantitative details and situation of property, plant and equipment other than certain assets having gross block of Rs. 197.92 crores which have been fully depreciated in the earlier years.

(B) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has maintained proper records showing full particulars of intangible assets.

b) As explained to us, the management carries out the physical verification of property, plant and equipment and right-of-use assets once in a year which, in our opinion, is reasonable having regard to the size of the company and nature of its assets. The management of the company has physically verified the assets during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds off all immovables properties (other than properties where the company is the lessee and lease agreements are duly executed in favor of the lessee) disclosed in the financial statements are held in the name of the company.

d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not revalued its Property, Plant and Equipment (including Right-of-use assets) or Intangible assets or both during the year.

e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no proceedings initiated or pending against the Company as at March 31, 2024 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.

(ii) a) The Company is a Non-Banking Financial Company; accordingly, it does not hold any inventory. Thus, reporting under clause 3(ii) (a) of the Companies (Auditors Report) Order, 2020 is not applicable.

b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company has not been sanctioned working capital limits in excess of five crore rupees, in aggregate, at any points of time during the year, from banks or financial institutions on the basis of security of current assets and hence, reporting under clause 3(ii) (b) of the Companies (Auditors Report) Order, 2020 is not applicable.

(iii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company has made investments in, provided any guarantee or security or granted any loans and advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnership or any other parties during the year.

a) Since the Companys principal business is to give loans. Accordingly, the provision of clause 3(iii)(a) of the Order is not applicable to it.

b) The Company, being a Non-Banking Financial Company (‘NBFC), registered under provisions of RBI Act, 1934. In our opinion and according to the information and explanations given to us, the investments made, guarantees provided, security given and the terms and conditions of the grant of all loans and advances in the nature of loans and guarantees, provided during the year are, prima facie, not prejudicial to the Companys interest.

c) In our opinion and according to the information and explanations given to us, in respect of loans and advances in the nature of loans, the schedule of repayment of principal and payment of interest has been stipulated and in cases where repayment of principal and payment of interest is not received as stipulated, the cognizance thereof is taken by the Company in course of its periodic regulatory reporting and dealt with as per the provisions of RBI Act, 1934 and rules made thereunder, in pursuance of its compliance with provisions of the said Act/Rules, particularly, the Income Recognition, Asset Classification and Provisioning Norms.

d) The total amount overdue for more than ninety days as at 31.03.2024 stands at Rs. 4615.56 Crores. The reasonable steps have been taken by the company for recovery of the same.

e) Since the Companys principal business is to give loans. Accordingly, the provision of clause 3(iii)(e) of the Order is not applicable to it.

f) Based on our audit procedures & according to the information and explanation made available to us, the Company has not granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment during the year to Promoters, related parties as defined in clause (76) of section 2 of the Companies Act, 2013.

(iv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not given any loans, investment, guarantees and securities which may be covered under section 185 and 186 of the Companies Act, 2013.

(v) According to the information provided and explanations given to us and on the basis of our examination of the records of the Company, the Company has not accepted any deposits or amount which is deemed to be deposits from the public during the year within the meaning of Section 73 to 76 or any other relevant provision of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. Accordingly, directives issued by Reserve Bank of India is not applicable. Further, no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal with respect to such deposits.

(vi) The Central Government has not prescribed the maintenance of cost records under Sub- section 1 of Section 148 of the Act, for any of the services rendered by the Company. Accordingly, reporting under clause 3(vi) of the Companies (Auditors Report) Order, 2020 is not applicable to the Company.

(vii) In respect of statutory dues, on the basis of information and explanations given to us and on the basis of our examination of the records of the company, we report that:

a) The Company has generally been regular in depositing, undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Goods & Service Tax and other material statutory dues as applicable to it with appropriate authorities and there were no undisputed amounts payable in respect of aforesaid dues outstanding for a period of more than six months from the date, they become payable as at 31 March, 2024, as per the accounts of the Company.

b) Wherever any dues/demand has been raised by any statutory authority and has been disputed by the Company, the same has been duly deposited under contest except in following cases:

Name of the Statute	Nature of disputed dues	Disputed Amount (amount in crore)	Pending amount not deposit/adjusted out of (A) (amount in crore)	Year to which demand relates	Forum, where dispute is pending
The Income- Tax Act, 1961*	Income Tax	43.40	2.61	A Y 2016-17	CIT(A), New Delhi
The Income- Tax Act, 1961 *	Income Tax	74.52	55.17	AY 2019-20	CIT(A), New Delhi
Finance Act, 1994 (Service Tax)	Service Tax and Penalty	1.80	1.71	FY 2008-09 to FY 2010-11	CESTAT, New Delhi
The Income- Tax Act, 1961	Tax Deducted at Source	0.04	0.04	FY 2008-09 & FY 2020-21 to FY 2023-24	Demand as per Traces Portal
The Goods and Service Tax Act, 2017	Goods and Service Tax, Interest and Penalty	0.13	0.13	FY 2020-2021	Dy. Comm. of State Tax,
The Goods and Service Tax Act, 2017	Goods and Service Tax, Interest and Penalty	0.61	0.61	FY 2019-2020	Dy. Comm. of State Tax, Mumbai
The Goods and Service Tax Act, 2017	Goods and Service Tax, Interest and Penalty	0.05	0.05	FY 2019-2020	Dy. State tax Officer (Circle), Nungambakkam
The Goods and Service Tax Act, 2017	Goods and Service Tax	0.01	0.01	FY 2018-2019 to FY 2020-2021	Superintendent Gunfoundry, 1 CGST Range

*Income tax matters which are disputed/unpaid as appearing in e-filing portal of Income tax department as on March 31, 2024 and amount is exclusive of interest.

(viii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not surrendered or disclosed any transactions, previously unrecorded as income in the books of account, in the tax assessments under the Income-tax Act, 1961 as income during the year.

(ix) a) According to information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not defaulted in repayment of loans or borrowing in the payment of interest thereon to any banks, financial institutions and Government.

b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not been declared a wilful defaulter by any bank or financial institution or other lender.

c) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, the company has utilized the money obtained by way of term loans for the purpose for which they were obtained.

d) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, no funds have been raised on short term basis by the company. Accordingly, reporting on clause 3(ix)(d) of the Order is not applicable.

e) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures as defined under the Companies Act, 2013. Accordingly, reporting on clause 3(ix)(e) of the Order is not applicable.

f) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries, associates or joint ventures as defined under the Companies Act, 2013. Accordingly, reporting on clause 3(ix)(f) of the Order is not applicable.

(x) a) According to the information provided and explanations given to us and on the basis of our examination of the records of the Company, the Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, reporting on clause 3(x)(a) of the Order is not applicable.

b) According to the information provided and explanations given to us and on the basis of our examination of the records of the Company, the Government of India has infused a sum of Rs. 400 Crores and Rs. 500 Crores towards share capital on March 07, 2023 and March 08, 2024 respectively. The company has allotted 29,36,85,756 number of equity shares of Rs. 13.62/- each (including security premium of Rs. 3.62) on April 27, 2023 and 12,39,77,188 number of equity shares of Rs. 40.33/- each (including security premium of Rs. 30.33) on April 18, 2024 to the President of India (Government of India) against the receipt of Rs. 400 Crores and Rs. 500 Crores respectively on preferential basis and the company has complied with the requirements of section 42 and section 62 of the Companies Act, 2013 and the funds raised have been used for the purposes for which the funds were raised.

(xi) a) According to the information provided and explanations given to us and on the basis of our examination of the records of the Company, no fraud by the company and no fraud on the company has been noticed or reported during the course of our audit.

b) In our opinion and according to the information and explanations given to us, no report under sub-section (12) of section 143 of the Act has been filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.

c) According to the information and explanations given to us, there were no whistle blower complaints received during the year by the Company.

(xii) According to information and explanations given to us, the Company is not a Nidhi Company. Hence, the Nidhi Rules, 2014 are not applicable to the Company. Accordingly reporting under clause 3(xii) of the Companies (Auditors Report) Order, 2020 is not applicable to the Company.

(xiii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable Accounting Standards.

(xiv) a) In our opinion and based on examination, the company has an internal audit system commensurate with their size and nature of its business.

b) We were unable to obtain some of the internal audit reports of company as the internal audit was not conducted, therefore we have considered, during the course of our audit, the reports of the Internal Auditor(s) issued to the Company during the year till date, in determining the nature, timing and extent of our audit procedures.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with directors or persons connected with them which are covered under Section 192 of Companies Act, 2013.

(xvi) a) The Company is a Non- Banking Finance Company and has obtained registration under section 45-IA of the Reserve Bank of India Act, 1934. The Company has been granted certificate of registration to commence/carry on the business of non-banking financial institution without accepting pubic deposits on August 18, 2009 vide registration No. is B-14.00009.

b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company has not conducted any NonBanking Financia l or Housing Finance activities without a valid Certificate of Registration (CoR) from the Reserve Bank of India as per the Reserve Bank of India Act, 1934.

c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Accordingly, reporting under clause 3(xvi)(c) of the Order is not applicable.

d) According to the information and explanations given to us and on the basis of our examination, the group has no CIC as part of the Group.

(xvii) According to the information and explanations given to us and on the basis of our examination of the records of the company, the company has not incurred cash losses during the current financial year, but has incurred cash losses in the immediately preceding financial year for Rs. 621.01 Crores.

(xviii) There has been no resignation of the statutory auditors during the year. Accordingly, clause 3(xviii) of the Order is not applicable.

(xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report and that the Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date, and that our opinion is a merely an estimation and basis various contingent events and probable future scenarios. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) a) According to the information and explanations given to us and on the basis of our examination of the records of the company, it is not required to transfer any unspent amount to a Fund specified in Schedule VII of the Companies Act in compliance with the provision of sub section (6) of Section 135 of the said Act.

b) According to the information and explanations given to us and on the basis of our examination of the records of the company, there is no amount which is remaining unspent under sub section 5 of Section 135 of the Act pursuant to any ongoing CSR project.

	For S MANN AND COMPANY
	Chartered Accountants
	Firm Registration No: 000075N
	CA SUBHASH CHANDER MANN
	Partner
Place : New Delhi	Membership No.: 080500
Date : April 30, 2024	UDIN: 24080500BKFBIH6705

ANNEXURE “B” TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements section of our report to the members of IFCI Limited of even date on standalone financial statements)

Part A - Directions

S. No. Directions	Reply
1. Whether the company has system in place to process all the accounting transactions through IT systemRs. If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications, if any, may be stated.	Yes, all the accounting transactions process through IT system. The income tax computation and deferred tax computation have been done manually on MS excel, however the accounting entries for both are passed through IT system only.
2. Whether there is any restructuring of an existing loan or cases of waiver/write off of debts/loans/interest etc. made by a lender to the company due to the companys inability to repay the loanRs. If yes, the financial impact may be stated. Whether such cases are properly accounted forRs. (In case, lender is a government company, then this direction is also applicable for statutory auditor of lender company)	There is no restructuring of loans availed by the company during the year under reference. There are no cases of waiver/write off of debts/loans/interest etc. made by a lender to the company due to the companys inability to repay the loan. However, according to the information and explanations provided to us by the Company, company as a lender, following are case(s) of waiver/ write-ofi of debts/ loan/ interest etc. The details of such write-off/waiver are as under:
	S. No. Nature of Dues	Amount (Rs. in crores)
	A. Waiver/Write-off/ Technical write-off of loans	437.26
	B. Recovery/Write-back of Amount Earlier Written Off	61.43
	C Debtors write-offs	4.62
	It was informed that the waiver/write-off is decided on case-to-case basis with due assessment of the possibility of recovery/realization in each case considering the available security, status of the borrower/investee and pending litigation. The outstanding in technical write-offs/ waiver cases was fully provided for in the books of accounts to the extent of the amount of write-off/ waiver.
3. Whether funds (grants/subsidy etc.) received/receivable for specific schemes from Central/State Government or its agencies were properly accounted for/utilized as per its term and conditionsRs. List the cases of deviation.	There is no grant/subsidy received/receivable by the company from Central/ State Government or its agencies during the year under audit. Further, the funds received for Credit Enhancement Guarantee Scheme for Scheduled Castes and under various PLI Schemes have been properly accounted for and utilized as per terms and conditions of the scheme. The above information is solely based upon management representations and to the extent as per Para 5 & 6 of ‘Emphasis of Matters section of this report.

Part B - Sub-Directions

S. No. Sub-Directions	Reply
1. Investments
Whether the titles of ownership in respect of CGS/SGS/ Bonds/Debentures etc. are available in physical/de-mat form and these, in aggregate, agree with the respective amounts shown in the Companys books of accountsRs. If not, details may be stated.	According to the information and explanations provided by the Company and based on audit procedures performed by us, the titles of ownership in respect of CGS/ SGS/ Bonds/ Debentures, etc. are available in physical/de- mat form and these, in aggregate, agree with the respective amounts shown in the Companys books of accounts, except for the cases mentioned below: a)Where shares are lying in Demat or physical form but not accounted for in the books of accounts to the extent identified on test check basis.
	S. No. Company Name	Mode	No of shares
	1 Hindalco India	Demat	1160
	2 Mawana Sugars*	Demat	137
	3 XPRO India	Demat	2325
	4 JK Lakshmi Cement	Demat	180
	*Shares Received in lieu of holding in SIEL Ltd and SIEL Sugar Ltd The company is in the process of claiming the aforesaid shares from the company and the Investor Education & Protection Funds and would be taken in book after approval from competent authority.

 

S. No. Sub-Directions	RePly
	b) Where shares are accounted in the books of Account but are not available in Demat or physical form, to the extent identified on test check basis.
	S. No. Company Name	No of shares
	1 LML LTD (PREF.)	21,50,912
	2 OCM INDIA LTD	5,89,743
	3 SAMCOR GLASS LTD	20,00,000
	4 SOUTHERN WIND FARMS PVT. LTD.	1,00,000
	5 ASHOK PAPER MILLS LTD (PREF.)	30,000
	6 ASHOK PAPER MILLS LTD	3,00,000
	7 CACHAR SUGAR MILLS LTD (PREF.)	14,953
	8 KILBURN OFFICE AUTOMATION LTD	400
	The company is in the process of requesting for issue duplicate shares certificate in respect of aforesaid companies.
2. Loans In respect of provisioning requirement of all restructured, rescheduled, renegotiated loan-whether a system of periodical assessment of realizable value of securities available against all such loans is in place and adequate provision has been created during the yearRs. Any deficiencies in this regard, if any, may be suitably commented upon along with financial impact.	There is a system of assessment of realizable value of securities available for loan portfolio including restructured, rescheduled, renegotiated loans and is updated on quarterly basis. However, valuation exercise is undertaken on periodical basis or, as and when warranted by the circumstances. In view of adoption of Ind AS norms the financial accounts of the company are drawn as per Ind AS. Impairment in the assets has been calculated in accordance with Ind AS by calculating Expected Credit Loss (ECL) in case of loans as per accounting policy of the company. The company is following the policy of provision on loan assets on the basis of Ind AS Norms vs IRAC Norms, whichever is higher.
3. Whether Resolution Plan/One Time Settlement (OTS) entered into by the Company with the borrower has been taken into consideration for booking of the outstanding loan amount and for adjustment of Impairment loss allowance	Proper accounting adjustments for impairment and settlement have been done with respect of OTS Settlements and resolution plan.
4. Review the valuation of investment(s) in common Associates/entities/Joint Venture by all group companies of IFCI to recognize impairment, if any. Discrepancies/ deficiencies, if any, may be suitably highlighted in Audit Report (applicable on consolidated financial statements only).	It is not applicable for the standalone financial statements. Hence, reporting for this point is not applicable.

 

	For S MANN AND COMPANY
	Chartered Accountants
	Firm Registration No: 000075N
	CA SUBHASH CHANDER MANN
	Partner
Place : New Delhi	Membership No.: 080500
Date : April 30, 2024	UDIN: 24080500BKFBIH6705

ANNEXURE “C” TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 3(f) under Report on Other Legal and Regulatory Requirements section of our report to the members of IFCI Limited of even date on standalone financial statements)

Report on the Internal Financial Controls with reference to Standalone Financial Statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls with reference to standalone financial statements of IFCI Limited (“the Company”) as of March 31, 2024 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management s Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls with reference to standalone financial statements based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements of the company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls with reference to standalone financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls with reference to standalone financial statements.

Meaning of Internal Financial Controls with reference to standalone financial statements

A companys internal financial control with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control with reference to standalone financial statements includes those policies and procedures that

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to standalone financial statements

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial control with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system with reference to standalone financial statements and such internal financial controls with reference to standalone financial statements were operating effectively as at March 31, 2024 so far as our examination has revealed regarding internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

	For S MANN AND COMPANY
	Chartered Accountants
	Firm Registration No: 000075N
	CA SUBHASH CHANDER MANN
	Partner
Place : New Delhi	Membership No.: 080500
Date : April 30, 2024	UDIN: 24080500BKFBIH6705