To The Members
The Board of Directors of Your Company ("Your Company" or "IFCI")
presents the 30th (Thirtieth) Annual Report of IFCI Ltd., together with the
audited financial statements for the year ended March 31, 2023.
Financial Summary and State of Company's Affairs
The summarized financial performance of Your Company during the year and the previous
year are as under:
(Rs. in crore)
Particulars |
Standalone |
Consolidated |
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
Total Income |
546 |
764 |
1,519 |
1,596 |
Less: |
|
|
|
|
Total Expenses before Impairment Allowance, Depreciation &
Amortisation |
786 |
1,153 |
1,504 |
1,661 |
Impairment on financial instruments |
(79) |
1,373 |
(86) |
1,391 |
Depreciation and amortisation |
24 |
23 |
74 |
66 |
Total Expenses |
731 |
2,549 |
1,492 |
3,118 |
Exceptional Items |
0 |
- |
1 |
1 |
Profit/(Loss) before tax |
(185) |
(1,785) |
26 |
(1,523) |
Tax expense |
102 |
206 |
146 |
(238) |
Profit/(Loss) before share in profit of associates |
(287) |
(1,991) |
(120) |
(1,761) |
Total Expenditure Share in profit of associates |
0 |
- |
- |
- |
Profit/(Loss) for the year |
(287) |
(1,991) |
(120) |
(1,761) |
Other comprehensive income (net of tax) |
(32) |
(35) |
1,269 |
1,754 |
Total Comprehensive Income |
(319) |
(2,026) |
1,149 |
(7) |
Net profit/(Loss) attributable to - |
|
|
|
|
Owners of the Company |
NA |
NA |
(207) |
(1,831) |
Non-controlling interest |
NA |
NA |
88 |
70 |
Total Comprehensive Income attributable to - |
|
|
|
|
Owners of the Company |
NA |
NA |
448 |
(920) |
Non-controlling interest |
NA |
NA |
701 |
914 |
Earnings per share |
|
|
|
|
Basic Earnings per share of Rs. 10 each |
(1.31) |
(9.47) |
(0.95) |
(8.71) |
Diluted Earnings per share of Rs. 10 each |
(1.31) |
(9.47) |
(0.95) |
(8.71) |
The above numbers are extracted from the financial statements prepared in accordance
with the Indian Accounting Standards (Ind-AS), in compliance with the Companies (Account)
Rules, 2014 and Accounting Standards notified under Section 133 of the Companies Act,
2013, read with the Companies (Indian Accounting Standards) Rules, 2015 as amended.
Any regulation/ guidance/ clarifications/ directions issued by Government of India, RBI
or by any other Regulators, of Your Company will be implemented by Your Company as and
when they are issued/ applicable.
Financial Performance
During the year Your Company has continued to strengthen and expand its footprints in
Advisory Services and has positioned itself as a preferred advisor to Government of India
for Schemes launched under the aegis of AatmaNirbhar Bharat. However, owing to decline in
loan assets, due to repayments and non-recognition of income on stage 3 assets, Your
Company booked a total comprehensive loss of Rs. 319.35 crore during the year under
report. Provisions made during the year enhanced the provision coverage ratio to over
86.47%. However, the capital adequacy ratio reduced in current FY to -70.66 % with Tier-I
capital at -71.06%. During the year, the Government of India infused
Rs. 400 crore towards subscribing to the share capital of Your Company.
To augument its liquidity, Your Company has also adopted aggressive recovery measures
and fintech tools. Your Company is also focusing on measures for recovery in order to
maximize recovery under Insolvency and Bankruptcy Code (IBC) route and other modes,
expediting divestment of non-core assets and strengthening of the advisory business, which
are expected to improve the cash flow of Your Company and make the balance sheet of Your
Company healthier.
Sanctions, Disbursements and Recovery
Advisory Services business is fast becoming the mainstay of business operations of
IFCI. During the FY 2022-23, Your Company did not sanction any new loans. There were also
no disbursements towards loans/advances during FY 2022-23.
Your Company actively pursued recovery from Non-Performing Assets (NPAs), thereby
recovering Rs. 714 crore out of NPAs & Security Receipts (SRs) during FY 2022-23.
Your Company remains committed to continue its aggressive approach for recovery from
NPAs and stressed assets through multi-pronged resolution modes and strategies.
Treasury, Investment and Forex Operations
Your Company has been cautious in investing the surplus funds across diversified
instruments with focus on safety while making every effort towards maximizing yield in
consonance with liquidity management. In Rupee operations, the objective has been to
manage the surplus funds effectively with minimum risk and deployment of surplus funds in
lower duration instruments, to get optimum return. This was done because of volatility in
interest rates, in anticipation of future monetary tightening. The underlying investment
principle was safety, liquidity, and risk containment and accordingly Your Company
invested in Treasury Bills, Government Securities, Certificate of Deposit, Commercial
Papers, Inter-Corporate Deposits / Short Term Deposits (STD), Fixed Deposits / Bonds and
Mutual Fund Schemes during the year. Average Deployment during the year was Rs. 411.19
crore against Rs. 1346.83 crore in FY 2021-22 and annualized return on fund deployed was
4.87%. The return during FY 2022-23 from Treasury operations was higher than the previous
year as investments were made in instruments with shorter maturity, with the objective of
ensuring safety and liquidity. During the year under report, Your Company registered an
Interest income of Rs. 26.51 crore from investments as against Rs. 75.68 crore during the
previous year.
In view of volatility prevailing in market due to uncertainties on account of
increasing commodity prices and geographical conflict in later part of the year, Your
Company continued with the prudent strategy of selective disinvestment of slow
moving/illiquid stocks and booking profits from investments in stocks. Net investment
portfolio of Your Company as on March 31, 2023 stood at Rs. 2,277 crore as against Rs.
2,944 crore at the end of previous Financial Year. The Foreign Currency (FC) operations
were confined to servicing FC liabilities and containing the exchange risk arising due to
a mismatch in the outstanding amount of FC assets and liabilities. The mismatches were
covered through forward contracts and currency futures. The net mismatch position was
maintained well below the limits approved by the Board and RBI, by maintaining almost
square position.
Resource Mobilization and Borrowing Profile
During the year, Your Company was not able to mobilise fresh resources due to rating
constraints and weak financial parameters. However, through effective liquidity
management, Your Company has serviced its liabilities on and before due dates. During FY
2022-23, Your Company serviced debt of Rs. 1,832 crore (Principal of Rs. 1,267 crore and
Interest of Rs. 565 crore), which included prepayments.
The Principal liability outstanding of Your Company as on March 31, 2023 was Rs.
5,808.07 crore comprising of rupee borrowings of
Rs. 5,443.82 crore and foreign currency loan of Rs. 364.25 crore. Interest liability
outstanding (i.e. interest accrued but not due on borrowings) as on March 31, 2023 was Rs.
696.59 crore. The broad instrument wise break-up of outstanding borrowings as on March 31,
2023 is indicated below:
Your Company is committed to maintaining a high standard of Investor services and
devotes considerable effort to identify and follow best practices for timely resolution of
investor complaints. Your Company has taken various investor friendly initiatives like
encouraging updation of KYC details with R&TA, dematerialization of securities,
electronic payment of interest & redemption proceeds and implementation of Online
Service Request Portal for registering investor requests etc.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Conservation of Energy - The Company's operations do not involve any manufacturing or
processing activities. It provides financial assistance to the industries, thereby
requiring normal consumption of electricity. Accordingly, the provisions of Section 134
(3) (m) of the Companies Act, 2013 read with Rule 8 (3) of Companies (Accounts) Rules,
2014 are not applicable to the Company.
Nevertheless, Your Company has prioritized energy efficiency. In May, 2023 IFCI Tower
received Gold Certification from the Indian Green Building Council.
Technology Absorption - Information Technology (IT) has transformed the conduct of
businesses in every sector of the economy. The in-house team of IT professionals in Your
Company is using in house developed "CIIS" which largely consists of
applications supporting major business functions as well as non-core functions. The system
has been successfully running and has constantly been upgraded in line with requirements.
During FY 2022-23, the existing software applications were upgraded with enhanced/added
features. New modules were developed in-house for different functions. Your Company has
launched a Service Request Portal as per regulatory guidelines. Your Company maintains
proper data backup and has set up a Disaster Recovery Site to protect data and business
information systems. Your Company has also implemented various tools as a cybersecurity
measure and upgraded its IT Infrastructure. Your Company has started using Document
Management Systems and has upgraded its IT infrastructure. Video Conferencing Facility has
also been enhanced to provide streamlined video communication and live content sharing by
using Webex/ Teams Meeting.
Foreign Exchange Earnings
The details in respect of foreign expenditure / earnings are as follows:
(Rs. in crore)
Particulars |
Year End 31.03.2023 |
Year End 31.03.2022 |
Expenditure in Foreign |
|
|
Currencies: |
|
|
Interest on borrowings |
2.87 |
3.16 |
Other Matters |
0.00 |
0.00 |
TOTAL |
2.87 |
3.16 |
Earning in Foreign Currencies: |
|
|
Earning in Foreign Currency |
NIL |
NIL |
Internal Financial Controls
Your Company has sound Internal Financial Controls over financial reporting through
policies and procedural manuals, designed to provide reasonable assurance regarding the
reliability of financial reporting and preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. The entity level
control framework, designed and implemented in earlier years, was subjected to sample
tests, for various processes, during the year under report by a well experienced Internal
Audit Team of Your Company with a frequency parallel with Internal Audit. There were a few
Internal Financial Control related issues, though not material, were addressed and
remedial actions were taken in the subsequent period of review. Based on the satisfaction
over the operating effectiveness of the Internal Financial Controls, the Board of
Directors believes that adequate Internal Financial Controls exist and are operating
effectively.
Vigilance
The Company has a dedicated Vigilance Department, headed by Chief Vigilance Officer.
Vigilance Department at Head Office which takes care of all vigilance matters of IFCI, its
Regional Offices & Subsidiaries. The comprehensive functioning of the Department is
divided into Preventive Vigilance, Detective Vigilance and Punitive Vigilance. With
amplified prominence given to Preventive Vigilance, the department conducts inspection of
various offices from time to time. If irregularities/ lapses are observed, then the same
are shared with Regional Incharges and the concerned departments of Head Office for taking
various steps to initiate corrective measures or to take actions towards systemic
improvements or initiate penal action based on the nature of case. Vigilance Department
also advises the Management for systemic improvement based on the findings. Vigilance
Department ensures the completion of Disciplinary proceedings as per extant guidelines
within the set timelines.
Vigilance Department ensures disposal of complaints and other referred cases as per
extant guidelines. Vigilance Department shares the communication with employees about
Preventive Vigilance. With the help of Vigilance Department, Your Company ensures disposal
of Vigilance Cases and Non-Vigilance cases.
During the year, systemic improvements suggested by Vigilance Department have been
implemented by the Management like procurement of goods and services through GeM portal,
rotation of staff in general and sensitive post. The Vigilance Awareness week is
celebrated every year, to promote ethical practices.
During the year Vigilance Awareness Week-2022 was observed from October 31 to November
06, 2022 with the Theme "Hkz"Vkpkj eqDr Hkkjr & fodflr Hkkjr
Corruption free India for a developed Nation".
Whistle Blower Policy
The Company has put in place a Vigil Mechanism in terms of the provisions of Section
177 (9) and (10) of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (Listing Regulations). Under Whistle Blower Policy,
Director(s) and employee(s) of IFCI can report to the Management their concerns, about
unethical behaviour, actual or suspected fraud or violation of the IFCI's Code of Conduct
or Ethics Policy and to provide adequate safeguards to them against any sort of
victimization on raising an alarm. The Policy also provides for direct access to the
Chairman of the Audit Committee in exceptional cases. The Whistle Blower Policy is
available on the link https://www.ifciltd.com/2022/ Whistle%20Blower%20Policy.pdf
Disclosure as per Sexual Harassment of Women at Workplace (Prevention, Prohibition And
Redressal) Act, 2013
An Internal Complaints Committee has been formed and the Members of the Committee, as
on the date of this report is as under:
1. Chief General Manager (HR) - Presiding Officer
2. Ms. Lata Lochav External Member
3. General Manager (HR)
4. Ms. Shikha Gupta, DGM
5. Ms. Trina Tejaswini, DGM (Law)
In the absence of any of the aforesaid internal members, Ms. Priyanka Sharma, DGM &
Company Secretary would be the alternate member. The quorum of the Committee shall
comprise of all members. A brief of the complaints received under Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 is as under:
No. of complaints pending at the start of the Financial Year 2022-23 |
Nil |
No. of complaints received during the Financial Year 2022-23 |
Nil |
No. of complaints resolved during the Financial Year 2022-23 |
Nil |
No. of Complaints pending at the end of the Financial Year 2022-23 |
Nil |
Number of workshops or awareness programs against sexual harassment
carried out during the Financial Year 2022-23 |
1 |
Nature of action taken by the employer |
Nil |
Management Discussion and Analysis
1. Industry Structure and Developments*
Industry Outlook The Indian Financial Sector has remained stable and
resilient, with further improvement in asset quality, capital and profitability,
notwithstanding the recent global financial market turbulence and acute banking stress
witnessed in some jurisdictions, macro stress tests for credit risk reveal that all banks
would comply with the minimum capital requirements even under a severe stress scenario.
Contagion and solvency risks have reduced. Since December 2022, the Indian Banking Sector
has expanded its balance sheet, business and profitability. Even as gross non-performing
assets and net non-performing assets of scheduled commercial banks declined to a decadal
low, the system-level capital to risk weighted assets ratio reached a new high. The net
interest margin increased further and post-tax profits recorded growth as credit expanded
alongside adequate provisioning and strengthening of capital buffers. As credit growth has
been outpacing deposit growth, financing conditions, especially banks' cost of funds have
tightened. The retail sector has been a major driver of bank credit growth in the recent
period.
Non-Banking Financial Companies (NBFCs)
Annual growth of credit disbursed by NBFCs sustained pace, after reaching double digits
in September 2022, with personal loans rising by 31.3% and loans to industry by 12.7%
(Y-o-Y) in March 2023. The personal loans portfolio of NBFCs grew the most during the last
four-year period {compound annual growth rate (CAGR) being more than 30%} resulting in
increase of its share in total loan portfolio to 31.2% in March 2023. As per the
activity-based classification, the largest two categories, namely, Investment and Credit
Company (NBFC-ICC) and Infrastructure Finance Company (NBFC-IFC), with shares of 54% and
40%, respectively, in outstanding credit registered double digit credit growth in March
2023. Micro Finance Institutions (NBFC-MFIs) have maintained robust credit growth over the
past two years (with a CAGR 27.6%).
The GNPA ratio of NBFCs continued to decline during H2:2022-23, with industry and
services each registering more than two percentage points reduction. Public sector NBFCs
(with a share of 44% in outstanding credit) had low GNPA ratios (2.8%) relative to their
private counterparts (credit share 56% and GNPA ratio 5.5%). The aggregate NNPA ratio of
NBFCs ebbed further to 1.3%, *(Source: RBI annual report 2022-23, RBI FSR June
2023, RBI Governor Statement Aug 10, 2023, MoSPI Press Releases) with the provisioning
coverage ratio (PCR) increasing to 70.4% in March 2023.
The capital position of NBFCs remained robust, with CRAR at 27.5% in March 2023, much
above the minimum requirement of 15%. The RoA recouped gradually to reach 3.3% by end of
the FY 2022-23. Share capital, reserves and surplus of NBFCs increased over the years,
contributed mostly by capital reserves and balances in profit and loss accounts. On the
other hand, their share of total borrowings in total funds reduced from 66.4% in March
2020 to 62.3% in March 2023 mostly due to lower issuance of debentures by NBFCs than other
sources of funds during the period. Around two-thirds of borrowings were long-term (more
than one year) in nature. NBFCs' borrowing from banks increased in 2022-23.
2. Opportunities & Threats
To create national manufacturing champions and generate employment opportunities for
the country's youth, Production Linked Incentive (PLI) Schemes are the cornerstone of the
Government of India's push for achieving an AatmaNirbhar Bharat. The objective is to make
domestic manufacturing globally competitive and to create global champions in
manufacturing. The strategy behind PLI Schemes is to offer the companies incentives on
incremental sales from products manufactured in India, over the base year. They have been
specifically designed to boost domestic manufacturing in sunrise and strategic sectors,
curb cheaper imports and reduce import bills, improve cost competitiveness of domestically
manufactured goods, and enhance domestic capacity and exports. Following are the PLI and
other Schemes of Government of India, where IFCI has been appointed as the Nodal Agency/
Project Management Agency (PMA):
Sl. No. |
Particulars of the PLI & Other Schemes |
Details of the Schemes available on the below Portals / Websites |
1 |
Scheme for Promotion of Manufacturing of Electronics Components and
Semiconductors (SPECS) |
https://specs.ifciltd.com |
2 |
Production Linked Incentive (PLI) Scheme for Large Scale Electronics
Manufacturing (PLI-LSEM) |
https://pli.ifciltd.com |
3 |
PLI Scheme for critical Key Starting Materials (KSMs)/Drug Intermediates
(DIs)/ Active Pharmaceutical Ingredients (API) (PLI-Bulk Drugs) |
https://plibulkdrugs.ifciltd.com |
4 |
PLI for Medical Devices (PLI-MD) |
https://plimedicaldevices.ifciltd.com |
5 |
Scheme for Promotion of Bulk Drugs Parks |
https://pharmaceuticals.gov.in/schemes/guidelines-scheme-promotion-bulk-drug-parks |
6 |
Scheme for Promotion of Medical Devices Parks |
https://pharmaceuticals.gov.in/schemes/guidelines-scheme-promotion-medical-devices-parks |
7 |
PLI for Food Processing Industry (PLISFPI) |
https://plimofpi.ifciltd.com |
8 |
PLI for IT Hardware (PLI-ITHW) |
https://pliithw.com |
9 |
PLI for White Goods (PLI-WG) |
https://pliwhitegoods.ifciltd.com |
10 |
PLI Scheme for Automobile & Auto Component Industry (PLI-Auto) |
https://pliauto.in |
11 |
PLI Textile Products: MMF Segment & Technical Textiles |
https://pli.texmin.gov.in |
12 |
PLI Scheme for Drone and Drone Components |
https://www.civilaviation.gov.in/en/application-pli-scheme |
13 |
PLI Scheme 'National Programme for Advanced Chemistry Cell Battery
Storage' (PLI-ACC) |
https://pliacc.in/ |
14 |
Scheme for Faster Adoption and Manufacturing of Electric Vehicles in
India Phase II (FAME-II) |
https://fame2.heavyindustries.gov.in/ |
15 |
Nodal Agency for Sugar Development Fund |
https://www.ifciltd.com/?q=en/content/nodal-agency-sugar-development-fund |
16 |
Modified Special Incentive Package Scheme (M-SIPS) |
https://www.ifciltd.com/?q=en/content/msips |
Note:
1. IFCI is also associated with India Semiconductor Mission as Agency for Techno
Financial Appraisal, Due Diligence and Verification for (i) Scheme for setting up of
Semiconductor Fabs, (ii) Scheme for setting up of Display Fabs and (iii) Scheme for
setting up of Compound Semiconductors / Silicon Photonics / Sensors Fab/ Discrete
Semiconductors Fab and Semiconductor Assembly, Testing, Marking and Packaging (ATMP)/
Outsourced Semiconductor Assembly and Test (OSAT) facilities in India (Portal:
https://ism.gov.in/).
2. IFCI is also appointed as Verification Agency for Special Incentives Scheme
for ESDM Sector 2020-2025 of Government of Karnataka (Portal:
https://k-tech.karnataka.gov.in/).
While positioning itself as a preferred advisor to Government of India, Your Company
also explored similar opportunities with State Governments and bagged an assignment from
the Government of Karnataka.
During the year, Your Company also made inroads into Corporate Advisory and bagged 31
assignments. Assignments included business restructuring, debt syndication and strategic
investment analysis across industries / sectors. Your Company has been empanelled as the
sole consultant with Technology Development Board (TDB) for a period of 3 years to
undertake due diligence / project appraisal of funding proposals submitted to TDB by
industrial concerns with innovative technologies. Your Company is also empanelled with
Maharatna and Navratna Companies. To explore all business opportunities, the Company is
focusing on reskilling of employees. Various Training Programmes are being organised for
employees on a wide range of topics such as BRSR Framework, Climate Finance/ESG. Advanced
Financial Modelling, Negotiation Skills, Leadership, Functional Analysis of Business.
Your Company focuses on group synergies and value maximization at the Group level. IFCI
through its subsidiary Stock Holding Corporation of India Limited (SHCIL), is making
contribution in promotion of digital economy in the country. SHCIL is one of the largest
Depository Participants, in the Country besides being the Country's largest premier
custodian in terms of assets under custody, and provides post trading and custodial
services to institutional investors, mutual funds, banks, insurance companies, etc. It
acts as a Central Record Keeping Agency (CRA) for collection of stamp duty, e-court fee
and e-registration in various States and Union Territories (UTs).
As on March 31, 2023, e-stamping services were operational in 23 States and UTs and
mobilised an amount of Rs. 53,132 crore in FY 2022-23 as compared to Rs. 39,672 crore in
FY 2021-22 in e-stamping services.
StockHolding Document Managemnet Services (SDMS) bagged a prestigious project of
National importance and has developed a CRCS Sahara Refund Portal for processing claims of
genuine investors of Sahara Cooperative Societies. Portal was inaugrated by Hon'ble Home
Minister.
IFCI Venture Capital Funds Limited (IVCF), another subsidiary of IFCI, is promoting
social sector initiatives of Government of India for encouraging entrepreneurship amongst
socially backward groups in the country. IVCF manages the Venture Capital Fund for
Scheduled Castes (VCF-SC) and Venture Capital Fund for Backward Classes (VCF-BC),
initiatives of Ministry of Social Justice and Empowerment (MoSJE) to promote
entrepreneurship amongst the selected segments of the society by providing concessional
finance. On April 14, 2022, IVCF, in association with MoSJE and Dalit Chambers of Commerce
& Industry (DICCI), had conducted a national level event by the name "Dr Ambedkar
Young Entrepreneur League" (AYE League) to provide further impetus to
entrepreneurship in the SC Community and to bring them in the mainstream. The event saw
participation of more than 1000 SC entrepreneurs from accross the Nation. The objective
was to create a platform for SC youth to showcase their innovative ideas and get funding
of upto Rs. 30 lakh under Ambedkar Social Innovation and Incubation Mission (ASIIM), an
initiative under VCF-SC. During the event, SC entrepreneurs across MSMEs were recognized
for Business Excellence and few leading Banks/ FIs which have played a significant role in
promoting SC entrepreneurship were also recognized. Apart from funding, IVCF also promoted
a Mentor Network that helps to connect the budding SC entrepreneurs with industry
experts/mentors, encouraging sharing of domain knowledge and experience from business
experts/mentors with young SC entrepreneurs. Ambedkar Young Entrepreneur League
(AYE) has onboarded 90 Mentors with varied skills / experience and around 200
Mentorship sessions have been facilitated. IVCF is also managing another initiative of
MoSJE named "Senior Care Ageing Growth Engine Venture Fund" (SAGE) which aims to
provide equity support for innovative ideas in elderly care segment. Further, looking at
the success MoSJE initiatives, Ministry of Tribal Affairs (MOTA) has also entrusted IVCF
with management of Venture Capital Fund for Scheduled Tribes (VCF-ST) which focuses on
promoting entrepreneurship amongst Scheduled Tribes in the country.
The details of all the subsidiaries are available on the website of IFCI at
www.ifciltd.com.
As regards threats, Your Company is facing liquidity risk, negative CRAR, high NPA
level and downward revision in credit rating. Your Company is taking steps to reduce the
level of NPAs through aggressive recovery efforts to augment its liquidity. Your Company
has also enlarged its footprint in Advisory Services so as to diversify its revenue
streams. Your Company has also adopted cost optimization measures including energy
efficiency measures. Government of India is the Promoter and the largest equity
shareholder of Your Company and it offers sufficient comfort and confidence to the
stakeholders. Government of India has consistently infused funds in Your Company through
equity participation. For the year 2022-23, the Government had infused funds aggregating
upto Rs. 100 crore and Rs. 400 crore in September 2022 and March 2023, respectively.
3. Segment-Wise or Product-Wise Performance
Your Company's main business is to provide financial assistance and it operates under a
single segment reporting framework.
4. Outlook*
The provisional estimates of national income released by the National Statistical
Office (NSO) on May 31, 2023 placed India's real Gross Domestic Product (GDP) at a growth
of 7.2% for FY 2022-23 (Y-o-Y basis) vis-?-vis a growth of 9.1% registered in previous
FY. The GDP growth of 6.1% has been registered in Q4 of FY 2022-23 (Y-o-Y basis) in
comparison to 4.1% growth registered in the corresponding quarter of previous FY.
As per the Annual Report 2022-23, of the Reserve Bank of India, a sustained recovery in
discretionary spending, particularly in contact intensive services, restoration of
consumer confidence, high festival season spending after two consecutive years of COVID-19
induced isolation and the government's thrust on capex provided impetus to the growth
momentum.
As per the NSO, an impressive 14.0% growth was registered by the "Trade, Hotels,
Transport, Communication & Services related to Broadcasting" sector, during
2022-23, followed by 10.0% growth by the Construction sector, over the previous year.
While "Financial, Real Estate & Professional Services" sector registered
growth of 7.1%, Manufacturing sector registered a growth of 1.3%. Mining & Quarrying
grew by 4.6% and "Electricity, Gas, Water Supply & Other Utility Services"
grew by 9.0% in 2022-23. Agriculture and allied activities were resilient in 2022-23, with
Gross Value Added (GVA) registering a growth of 3.3%. In the industrial sector,
manufacturing activity withstood global spillovers, while electricity generation exhibited
robust growth, and mining recorded steady activity. Sustained momentum was seen in
construction activity, while infrastructure and capital goods production benefitted from
the government-led investment in infrastructure. Production of consumer goods, on the
other hand, remained muted and recovery in sectors such as automobiles was lopsided.
Uneven recovery in consumption was evident as growth in the price sensitive entry-level
car segment turned sluggish as compared to the recovery in passenger cars.
*(Source: RBI annual report 2022-23, RBI FSR June 2023, RBI Governor Statement Aug 10,
2023, MoSPI Press Releases)
The continued lag in two-wheeler sales, 40% of which caters to rural India, is also
indicative of subdued rural demand. Financial markets experienced bouts of volatility in
2022-23, as geopolitical tensions intensified, interest rate hikes by the US Fed, turned
aggressive and the global growth outlook deteriorated, dampening investors' sentiments.
Equity markets in India, however, gained marginally, despite portfolio outflows and forex
market pressures, reflecting India's growth resilience and rising investment in the market
by resident entities. Money market interest rates hardened during 2022-23, tracking the
increase in the policy repo rate and the ebbing surplus liquidity conditions. Sovereign
bond yields hardened in line with the monetary policy actions and changing inflation
growth outlook. Weak global cues amid emergence of financial stability risks following the
collapse of a few niche banks in the US and concerns about financial health of a major
financial services provider in Europe imparted volatility to the markets towards the close
of the year.
Tax revenues remained robust - gross tax revenues exceeded budget estimates by Rs. 2.9
lakh crore - underpinned by Goods and Services Tax (GST) and direct tax collections. State
Governments had budgeted a Gross Fiscal Deficit (GFD) at 3.4% of GDP for 2022-23.
Provisional accounts indicate that the actual performance of State Governments may have
been better, primarily due to higher-than expected tax devolution from the Centre and a
healthy growth in states' own tax revenues. Despite prolonged geopolitical tensions and
slowing global trade, India's merchandise exports touched US$ 450.4 billion during 2022-
23, which is 6.7 per cent above the previous year's record level. India witnessed a
transition from net importer to exporter in areas such as mobile phones and toys and
registered a 10-fold increase in exports of defence goods in a short span, leveraging on
policies such as Make in India' and AatmaNirbhar Bharat'. Unlike merchandise
exports, strong growth of 27.9% was witnessed in services exports, led by software
services across key verticals such as Information Technology (IT) services, Business
Process Management (BPM), and Engineering Research and Design (ER&D), supported by a
rise in Global Capability Centres (GCCs). Within capital flows, net inflows under Foreign
Direct Investment (FDI), albeit strong, were lower during 2022-23 at US$ 28.0 billion than
US$ 38.6 billion a year ago. Belying market fears of a possible spike in India's external
vulnerabilities, India's current account deficit (CAD) at 2.7% of GDP (during
April-December 2022) remained sustainable, although it expanded from 1.1% a year ago.
India's foreign exchange reserves declined by US$ 28.9 billion during 2022-23. As stated
by the Governor, Reserve Bank of India in his statement: August 10, 2023, the global
economy continues to face daunting challenges of elevated inflation, high levels of debt,
tight and volatile financial conditions, continuing geopolitical tensions, fragmentations
and extreme weather conditions. The global growth is likely to remain low by historical
standards in the current year and next few years, despite the upward revision in the
global growth forecast for 2023 by the IMF. World merchandise trade volume growth is
projected by the WTO to decelerate from 2.7% in 2022 to 1.7% in 2023. Taking all these
factors into consideration, real GDP growth for 2023-24 is projected at 6.5% with Q1 at
8.0%; Q2 at 6.5%; Q3 at 6.0%; and Q4 at 5.7%. Real GDP growth for Q1:2024-25 is projected
at 6.6%. The risks are evenly balanced.
5. Risks and Concerns
In order to address risks, Your Company has put in place an Integrated Risk Management
Policy (IRMP) which addresses Credit Risk, Market Risk, Operational Risk and
Asset-Liability Management, as a part of Comprehensive Risk Management Framework which is
integrated with its business model. The General Lending Policy, IRMP, Liquidity Risk
Management and other business policies of Your Company are reviewed periodically, keeping
in view the changing economic and business environment. The Risk Management Vision
Statement and Qualitative Risk Appetite Statements of IFCI have also been put in place.
Parameters included in the Qualitative Risk Appetite statement are tested periodically.
Your Company assesses the Portfolio Level Risks by way of monitoring of actual
exposures against prudential limits, stress testing under various scenarios, annual rating
migration exercise, rating distribution, portfolio rating highlighting the quality of
portfolio, mapping of internal and external ratings. Your Company regularly monitors and
revises its Benchmark Rates based on current market, macro & micro economic factors
and profitability. As part of Ind AS implementation, Your Company estimates rating
grade-wise Probability of Default (PD) numbers of its credit portfolio, based on past data
while Loss Given Default (LGD) numbers are worked out based on past history of cashflows
from NPAs. The risk components are utilized for calculation of Expected Credit Loss (ECL),
as part of Ind AS implementation. The Risk and Asset Liability Management Committee of
Executives (RALMCE), analyses the Dynamic Liquidity Position, Structural Liquidity Gaps
and Interest Rate Sensitivity positions, on a periodic basis, based on extant regulatory
prescriptions. The mid-office function of Integrated Treasury reports to the Risk
Management function and acts as an independent risk monitoring functionary. To manage the
Operational Risks, there are adequate internal controls and systems in place, aided and
assisted by Internal Audit, Internal Financial Controls, remote back-up of data, Disaster
Management Policy, IT security, physical security and suitable insurance of insurable
assets of Your Company, as well as of the assets mortgaged to Your Company. Besides
mechanism for stress testing of loan portfolio and measurement of liquidity position is
also in place, to assess likely impact on CRAR, profitability and liquidity.
Your Company would continue to work on various initiatives aimed at strengthening
credit risk standards, post sanction monitoring of the portfolio to mitigate any adverse
impact on the loan portfolio of Your Company. Your Company would also strive to develop a
strong culture for risk management and awareness within the organisation.
6. Internal Control Systems, their adequacy and Internal Audit
Your Company has adequate Internal Control System commensurate with size, scale and
complexity of its business and allied operations. The efficacy of these internal controls
is being verified by the Internal Audit Department on a regular basis. From Financial Year
2018-19, the internal audits are being carried in-house by a team of experienced
personnel. The periodicity of such audits varied from quarterly to yearly depending upon
the criticality and materiality of transaction risks based on the scope approved by the
Audit Committee of Directors. Besides this, exercise to ensure adequacy of Internal
Financial Controls (IFCs) with a periodicity in line with the Internal Audit is also done
by the Internal Audit Department. Based on the observations of Internal Audit Department,
corrective actions are undertaken by the process owners in their respective areas thereby
strengthening the control systems.
Your Company carries out audit, based on the guidelines of Risk Based Internal Audit
(RBIA) in terms of RBI guidelines issued vide Circular No. DoS. CO. PPG/ SEC.05/
11.01.005/2020-21 dated February 03, 2021 for All non-deposit taking NBFCs.
7. Material Development in Human Resources, Industrial Relations Front,
Including Number of People Employed
Over the past few years, Your Company has taken long strides in the Advisory Services
business. Advisory Services business is fast becoming the mainstay of business operations
of IFCI. Recognizing the same, IFCI has made efforts to reorient and develop its human
resource pool to cater to the paradigm shift in its business operations.
In this endeavour, major focus has been towards building capability, enhancing skills,
knowledge and attitude required for an Advisory focused business. Accordingly, in the
financial year 2022-23, 98% of the workforce has been provided training in areas which are
relevant to the organisation. In all, a total of 2,900 man hours of training was provided
on topics encompassing Behavioural, Technical and Functional aspects.
IFCI has also focused on critical levers provided by robust Human Resource Management
Policies to enhance the productivity of employees and foster accountability in all
respects. Delegation of Powers have been reviewed to create platforms for consultative
decision making and improve speed & quality in delivery of assignments. Value system
of the organisation is being clearly communicated to define expected behaviours and in
this direction Staff Accountability related Policies have also been strengthened. To
identify talent that can manage critical positions and cater to the career aspirations of
employees, Promotion Policy has also been revised, making it more relevant to the
requirements of the organisation in the wake of paradigm shift that is taking place in its
business operations.
The organization has also prioritized employee cohesiveness and the welfare of its
employees through the arrangement of a diverse range of events and celebrations. These
include activities such as observing International Day of Yoga, commemorating the 75th
IFCI Foundation Day, marking Independence Day, engaging in Swatchhta Campaigns,
celebrating Diwali, hosting a New Year Event, recognizing International Women's Day, and
participating in a 10k Marathon, among others. Sessions have also been organized for
increasing financial awareness amongst female employees.
Welfare of SCs/STs/OBCs/EWSs/PWDs
Your company makes continuous efforts for welfare of Scheduled Castes (SCs), Scheduled
Tribes (STs), Other Backward Classes (OBCs), Persons with Disabilities (PwDs), and
Economically Weaker Sections (EWSs) and adhers to the policies of Government of India in
this regard. The guideline governing reservations and relaxations for specific categories
as laidout by the Government of India are strictly followed by Your Company. Further, in
the training programmes Your Company give due representation to employees belonging to
reserved categories. Over the course of the year, 92% SC, 100% ST, and 78% OBCs employees
were covered in training by Your Company.
As of March 31, 2023, Your Company had 148 regular employees, of whom 21 (14%) were
from Other Backward Classes, 13 (9%) were from Scheduled Castes, and 1 (1%) were from
Scheduled Tribes.
ANNUAL STATEMENT SHOWING THE REPRESENTATION OF SCs, STs, OBCs & EWS AS ON FIRST
JANUARY OF THE YEAR 2023 AND NUMBER OF APPOINTMENTS MADE DURING THE PRECEDING CALENDAR
YEAR
Sl. Class |
|
Number of Employees |
|
|
Number of appointments made during the preceding
year |
No. |
|
(as on 01.01.2023) |
|
|
By Direct Recruitment |
|
By Promotion |
By Deputation/ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Absorption |
|
Total number of employees |
SCs |
STs |
OBCs |
EWSs |
Total |
SCs |
STs |
OBCs |
EWSs |
Total |
SCs |
STs |
Total |
SCs |
STs |
1 2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
15 |
16 |
17 |
18 |
1 Class I |
152 |
13 |
1 |
22 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
2 Class III |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
3 Class IV |
1 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
4 Contractual* |
9 |
- |
- |
1 |
- |
4 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Total |
162 |
13 |
1 |
23 |
0 |
4 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
*One contractual employee joined and relieved during the calendar year.
ANNUAL STATEMENT SHOWING THE REPRESENTATION OF SCs,STs, OBCs & EWS IN VARIOUS
GRADES AS ON FIRST JANUARY OF THE YEAR 2023
Sl. Grades |
|
Number of Employees |
|
|
Number of appointments made during the preceding year |
|
|
No. |
|
(as on 01.01.2023) |
|
By Direct Recruitment |
|
By Promotion |
By Deputation/ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Absorption |
|
|
Total number of employees |
SCs |
STs |
OBCs |
EWSs |
Total |
SCs |
STs |
OBCs |
EWSs |
Total |
SCs |
STs |
Total |
SCs |
STs |
1 2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
15 |
16 |
17 |
18 |
1 ED |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
2 F |
2 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
3 E |
21 |
1 |
- |
2 |
- |
- |
- |
- |
- |
- |
- |
- |
|
|
|
|
4 D |
30 |
2 |
- |
3 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
5 C (including PS Gr C) |
50 |
5 |
1 |
6 |
- |
- |
- |
- |
- |
- |
1 |
- |
- |
- |
- |
- |
6 B (including PS Gr B) |
40 |
4 |
- |
7 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
7 A |
9 |
1 |
- |
4 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
8 Class III |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
9 Class IV |
1 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
10 Contractual* |
9 |
- |
- |
1 |
- |
4 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Total |
162 |
13 |
1 |
23 |
0 |
4 |
0 |
0 |
0 |
0 |
1 |
0 |
0 |
0 |
0 |
0 |
*One contractual employee joined and relieved during the calendar year
Group-wise Representation of Persons with Disabilities (PwD) up to 31.12.2022)
Sl. Group |
|
Nature of Employees |
|
Number of appointments/promotions made during the
calender year 2022(i.e. 01.01.2022 to 30.12.2022) |
No. |
|
(as on 31.12.2022) |
|
|
|
Appointment by Direct Recruitment |
|
|
|
|
|
Promotion |
|
|
|
|
|
|
|
|
|
|
|
|
No. of |
|
|
|
|
No. of |
|
|
|
|
No. of |
|
|
|
|
No. of |
|
|
|
|
|
|
|
|
|
vacancies reserved |
Appointments made |
|
vacancies reserved |
Appointments made |
|
Total |
VH |
HH |
OH |
ID |
VH |
HH |
OH |
ID |
Total |
VH |
HH |
OH |
ID |
Total |
VH |
HH |
OH |
ID |
Total |
VH |
HH |
OH |
ID |
Total |
1 2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
15 |
16 |
17 |
18 |
19 |
20 |
21 |
22 |
23 |
24 |
25 |
26 |
27 |
1 Class I |
1 |
1 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
2 Class-III |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
3 Class-IV |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Total |
1 |
1 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
NOTE:
(i) VH stands for Visually Handicapped (persons suffering from blindness or low vision)
(ii) HH stands for Hearing Handicapped (persons suffering from hearing impairment)
(iii) OH stands for Orthopedically Handicapped (persons suffering from locomotor
disability or cerebral palsy) (iv) ID stands for Intellectual Disability
8. Details of Significant Changes in Key Financial Ratios
The details of significant changes in Key Financial Ratios are as under:
Particulars |
FY |
FY |
Remarks |
Significant |
|
2023 |
2022 |
|
Changes* |
Interest Coverage Ratio |
0.71 |
-0.93 |
Earnings before interest and taxes / Total Interest expense (Profit
before Tax + finance cost)/finance cost |
Yes (>25%) |
Current Ratio |
1.53 |
1.33 |
Current asset / current liability |
No(<25%) |
Debt Equity Ratio |
9.28 |
15.74 |
Total borrowings / net worth |
Yes (>25%) |
Operating Profit Margin (%) |
-48.57% |
-53.93% |
Operating profit / total revenue(Profit before tax + impairment)/total
revenue |
Yes (>25%) |
Net Profit Margin (%) |
-58.57% |
-265.41% |
Total comprehensive income / total revenue |
Yes (>25%) |
Return on Net Worth |
-59.61% |
-143.86% |
Total comprehensive income / average net worth |
Yes (>25%) |
* Explanation: The change in the ratios were due to decrease in operational income
which was impacted on account of prepayment of loans and decline in standard assets.
Further, as Debtor Turnover Ratio or Inventory Turnover Ratios are not applicable to the
company (NBFC), the same has not been incorporated in the Table above.
9. Corporate Social Responsibility IFCI SOCIAL FOUNDATION (ISF)
IFCI has always strived to conduct its business holistically and responsibly. At IFCI,
along with economic performance, community and social stewardship have been key factors
for its holistic business growth. IFCI has been an early adopter of Corporate Social
Responsibility (CSR) initiatives and has been involved in socially relevant activities
ever since its inception in 1948. Today, it continues to work towards social and community
development and areas needing focus and attention, through the IFCI Social Foundation
(ISF), a registered Trust, established in 2014. ISF is functioning as an arm for CSR
activities of IFCI and
IFCI Group. ISF is guided by its values viz. Inclusiveness, Integrity, Commitment and
Passion with the overall vision "To be one of India's premier CSR Institutions and
strive to make sustainable social impact with inclusiveness". Its major focus has
been in areas of Education, Skill development, Healthcare and Sanitation, Poverty
alleviation, Women empowerment and Social Welfare of Women and Girl Child.
To associate with the CSR Activities a Trust, by the name of "IFCI Social
Foundation" (ISF) has also been established (MCA registration number CSR 00005110) to
carry out CSR activities. IFCI and ISF through its CSR projects have covered almost 23
states and Union Territories in India. The trust is registered for exemptions u/s 12A
& 80G of the Income Tax Act. The trust is also registered with Ministry of Corporate
Affairs in line with CSR Amendment Rules, 2021. ISF carries out CSR activities on behalf
of IFCI and IFCI Group Companies. The Annual Report on CSR activities forms part of
Board's Report at Annexure - I. CORPORATE SOCIAL RESPONSIBILITY
The investment in CSR activities is project based and for every project, time frame and
periodic milestones are set at the outset. As the Average Net Profit of IFCI Ltd for the
last preceding three years was negative, IFCI was not required to allocate any amount for
CSR activities for FY 2022-23.
Cautionary Statement
Certain Statements in Management Discussion and Analysis describing the Company's
objectives, estimates and expectations may be forward looking' within the meaning of
applicable laws and regulations. Actual results might differ materially from those
expressed or implied.
Details of Directors and Key Managerial Personnel (KMP) appointed or resigned during
the year
Following were the changes in Directors and Key Managerial Personnel during the FY
2022-23 and till the date of signing of this Board's Report: a) Shri Sunil Kumar Bansal
(DIN: 06922373), Deputy Managing Director, ceased to be on the Board of the Company w.e.f.
September 13, 2022 upon completion of his tenure. b) Shri Kanakasabapathi Kadiresan
(DIN: 09551363) ceased to be on the Board of the Company w.e.f. October 02, 2022 upon
resignation. c) Shri Surendra Behera (DIN: 09784122) and Shri Arvind Kumar Jain (DIN:
07911109) were appointed on Board of the Company w.e.f. November 09, 2022. Their
appointments were regularized and they were appointed as Director liable to retire by
rotation pursuant to shareholders resolution passed at 29th AGM held on
December 22, 2022. d) Dr. Bhushan Kumar Sinha (DIN: 08135512) Government Director, ceased
to be on the Board of the Company w.e.f.
January 06, 2023 vide Order of Government of India dated January 06, 2023. e) Ms.
Anindita Sinharay (DIN: 07724555), Government Director, ceased to be on the Board of the
Company w.e.f.
January 06, 2023 vide Order of Government of India dated January 06, 2023. f) The
Government vide its Order dated January 06, 2023 had nominated Shri Mukesh Kumar Bansal,
Joint Secretary, DFS
(DIN: 03359724) on the Board of the Company as Government Director. Accordingly, Shri
Mukesh Kumar Bansal, Joint Secretary, DFS was appointed as Director on the Board of Your
Company w.e.f. February 02, 2023. g) The Government vide its Order dated January 06, 2023
had nominated Shri Kartikeya Misra, Director, DFS, (DIN: 06440653) on the Board of the
Company as Government Director. Accordingly, Shri Kartikeya Misra, Director, DFS was
appointed as Director on the Board of Your Company w.e.f. February 02, 2023. h) The
Govenment vide its order dated May 10, 2023, has appointed Shri Umesh Kumar Garg (DIN:
00599426) as Independent Director on the Board of the Company for a period of 3(three)
years from the date of order of his appointment (w.e.f. May 10, 2023) or until further
order, whichever is earlier. The Board at its meeting held on May 25, 2023 had appointed
him as Additional and Independent Director for a period of 3(three) years from the date of
order of his appointment or until further orders, whichever is earlier in accordance with
the provisions of Companies Act, 2013, SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 and the Articles of Association of the Company. Further,
his appointment will be placed before the shareholders at this Annual General Meeting of
the Company for approval. i) The Board at its Meeting held on August 11, 2023, had
appointed Shri Suneet Shukla, Chief General Manager as Chief Financial Officer(CFO) of the
Company w.e.f. August 11, 2023. j) Prof. Narayanaswamy Balakrishnan (DIN: 00181842) who
retires by rotation at this Annual General Meeting(AGM) and being eligible, offers himself
for re-appointment and his proposal for re-appointment is being placed before the
shareholders, at this AGM.
Corporate Governance & Compliances
A detailed report on Corporate Governance as stipulated under SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 is attached to the Annual Report. a) The
credit ratings assigned to the various financial facilities / instruments of the Company
during the Financial Year 2022-23 is provided in the Corporate Governance Report forming
part of this Annual Report. b) The details of the Meetings of the Board of Directors and
the Audit Committee forms part of the Corporate Governance Report appearing separately in
the Annual Report. Further, there has been no instance during the FY under report where
the Board has not accepted the recommendations of the Audit Committee. c) The details of
Composition of Board & Committees forms part of the Corporate Governance Report
appearing separately in the Annual Report. d) Pursuant to the provisions of the Companies
Act, 2013 and
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company
is required to place various Policies / Documents / Details on the Website of the Company.
The Company has a functional website www.ifciltd.com and all the requisite information are
being uploaded thereat and available at https://www.ifciltd.com/?q=en/content/
disclosure-under-regulation-46-and-62-sebi-%E2%80%93-lodr e) During the Financial Year
2022-23, there were no Independent Directors on the Board of Your Company, as per the
requirement of the Companies Act 2013. However, IFCI being a Government Company, the power
to appoint Independent Directors vests with the Department of Financial Services, being
the Ministry administratively in charge of the Company. Considering, Your Company's
request, DFS, MOF vide letter dated May 10, 2023 had appointed Shri Umesh Kumar Garg as
Independent Director on the Board of the company, for a period of 3 years. f) As
stipulated under the Listing Regulations, the Business Responsibility and Sustainability
Report (BRSR') forms part of the Annual Report for the FY 2022-23. g) During the
Financial Year 2022-23, neither the Statutory Auditors nor the Secretarial Auditors have
reported any fraud in their respective Audit Reports. h) The Company is in compliance with
the applicable Secretarial Standards issued by the Institute of Company Secretaries of
India and approved by the Central Government under Section 118 (10) of the Companies Act,
2013. Further, during the Financial Year 2022-23, all returns / data / statements
submitted by concerned departments as advised by RBI, SEBI and other Regulatory
Authorities have been submitted. i) In view of delay in receiving of the comments of
Comptroller and Auditor General of India (C&AG) on the Supplementary Audit Report for
the FY 2022-23, approval of the Registrar of Companies (ROC) for extension of 3 months,
for convening, calling and holding AGM beyond September 30, 2023 was sought. The ROC had
granted extension of 3 months for holding the AGM for FY 2022-23. j) Key Initiatives taken
for Investor services continued to be of utmost importance for your Company. Investors'
grievances received in physical or electronic form or through web-based query submission
system, were taken up promptly and redressed.
Other Disclosures a) Your Company has made an application to the Registrar of
Companies (ROC) Delhi & Haryana to grant extension of time for holding the
Annual General Meeting of Your Company for the Financial Year ended March 31, 2023.
Accordingly, this Annual General Meeting is being convened within the time period
allowed by the ROC. b) In view of the loss incurred during the Financial Year 2022-23, no
dividend has been recommended on equity shares.
Also, as per the provisions of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Company has formulated a Dividend Distribution Policy which is
available on the website of Your Company at www.ifciltd.com. c) During the FY 2022-23,
there was no Company which has become or ceased to be Subsidiary, Joint Venture or
Associate Company of IFCI Ltd. The Company as on March 31, 2023 has 2 Material
Subsidiaries' viz. Stock Holding Corporation of India Ltd. and IFCI Infrastructure
Development Ltd. Policy on Determining Material Subsidiary is available on the website of
the Company at www.ifciltd.com. Details on performance and financial position of
subsidiaries, associates and joint venture during the FY 2022-23 can be referred from Form
AOC-1 forming part of this Annual Report. d) During the Financial Year 2022-23,
9,29,36,802 number of Equity Shares were allotted to the Promoters of the Company i.e.
Government of India (GoI) at a price of Rs. 10.76 (Rupees Ten and Seventy Six Paisa only)
[including a premium of
Rs. 0.76 (Seventy Six Paisa only)] per Equity Share aggregating upto Rs. 100,00,00,000
(Rupees One Hundred Crore). Consequent to the allotment of equity shares, the shareholding
of GoI increased from extant 64.86% to 66.35% in FY 2022-23.
Further, 29,36,85,756 number of Equity Shares were allotted to the Promoters of the
Company i.e. Government of India (GoI) at a price of Rs. 13.62 (Rupees Thirteen and Sixty
Two Paisa only) [including a premium of Rs. 3.62 (Rupees Three and Sixty Two Paisa only)]
per Equity Share aggregating upto
Rs. 400,00,00,000 (Rupees Four Hundred Crore) in Financial Year 2023-24. Consequent to
the allotment of equity shares in FY 2023-24, the shareholding of GoI increased from
66.35% to 70.32% of the Total Paid-Up Share Capital of the Company (as on April 27, 2023).
Change in the debt structure of the Company during the FY 2022-23 is as under:
Total Number of Securities at the beginning of the year |
Issued during the year |
Redemption made during the year |
Total number of securities at the end of the year |
113,92,949 |
- |
65,395 |
113,27,554 |
e) During the Financial Year 2022-23, Your Company had transferred an amount of Rs.
1,30,82,420 and Rs. 2,25,96,911 pertaining to the unclaimed dividend for Financial Year
2014-15 (Final) and 2015-16 (Interim) respectively. Further, 40,78,288 number of equity
shares were transferred to IEPF in respect of which dividend has remained unclaimed for 7
consecutive years. Shareholders whose unclaimed dividends/shares have been transferred to
IEPF, may claim the same by making an application to the IEPF Authority, in Form No.
IEPF-5, available on www.iepf.gov.in. f) As the Company is primarily engaged in the
business of financing Companies in the capacity of being a Non-Banking Financial Company,
therefore the provisions of Section 186 [except for subsection (1)] of the Companies Act,
2013 are not applicable to the Company. g) Your Company did not raise any public deposit
during the year. h) During the FY 2022-23, there were no significant or material orders
passed by Regulators or Court impacting the going concern status of the Company. Further,
there has been no change in the business of the Company during the reporting period.
Further, there have been no material changes and commitments which affect the financial
position of Your Company between the end of financial year and date of Board's Report. i)
Pursuant to Notification dated June 5, 2015 issued by the Ministry of Corporate Affairs,
Government Companies are exempted from the disclosure requirements of Section 197 of the
Companies Act, 2013. Therefore, such particulars have not been included in Board's Report.
Further, no Director of the Company, including MD&CEO, was paid any commission during
the FY 2022-23 by any of the Subsidiaries of Your Company, on whose Boards they were
Directors as nominees of Your Company. j) Pursuant to the provisions of the Companies Act,
2013 (to
22 the extent applicable) and Listing Regulations, the Company had framed a
Nomination and Remuneration Policy. However, pursuant to the exemption granted to
Government Companies vide Notification No. F.No. 1/2/2014-CL.V dated June 5, 2015, issued
by The Ministry of Corporate Affairs, the Policy has not been made part of Board's Report.
k) Pursuant to the provisions of the Companies Act, 2013, the Annual Return of the Company
is available on the website of the Company at www.ifciltd.com l) All Related Party
Transactions entered into during the year under report were in Ordinary Course of the
Business and at Arm's Length basis. No Material Related Party Transactions were entered
into during the year by Your Company. Accordingly, the disclosure of Related Party
Transactions as required under Section 134(3)(h) of the Companies Act, 2013, in Form AOC-2
is not applicable and hence do not form part of the Board's Report. m) The performance
evaluation of the Board, its Committees and individual Directors was conducted by the
Nomination and Remuneration Committee and the Board. The focus areas of improvements
mentioned by the Directors included Structure of the Board / Composition of the Committees
which are non-compliant as per the statutory requirements.
Since, there was no Independent Director on the Board of the Company during the
Financial Year 2022-23 hence, no Meeting of the Independent Directors could be held.
Communications requesting appointment of requisite number of Independent Directors have
been sent to the Department of Financial Services being the Administrative Ministry
In-Charge and the appointments are awaited. Meanwhile, considering our request 1(one)
Independent Director Shri Umesh Kumar Garg, has been appointed on the Board by GoI. n) No
application was made or any proceedings was pending against Your Company under the
Insolvency and Bankruptcy Code, 2016, during the year under report. o) Details of the
Debenture Trustee(s) for the debt securities issued by Your Company are as under:
Name of Debenture Trustee |
Contact Details |
Axis Trustee Services Limited |
The Ruby, 2nd Floor, SW 29 Senapati Bapat Marg, Dadar West Mumbai -
400028 Phone no : +91 022 6230 0451 E-mail: debenturetrustee@axistrustee.in Website:
www.axistrustee.in |
IDBI Trusteeship Services Limited |
Universal Insurance Building, Ground Floor, Sir P M Road, Fort, Mumbai -
400 001 Phone nos: 022 66311776 E-mail: itsl@idbitrustee.com Website: www.idbitrustee.com |
Centbank Financial Services Limited |
3rd Floor (East Wing) Central Bank of India, MMO Building 55 M
G Road, Mumbai - 400 001 Phone no: (022) 2261 6217 E-mail: info@cfsl.in;
complaints@cfsl.in Website: www.cfsl.in |
Auditors
M/s M K Aggarwal & Co. (DE0500) (Firm Reg. No. 001411N) was appointed by the
Comptroller & Auditor General of India (C&AG) as Statutory Auditors of Your
Company for Financial Year 2022-23. Further, C&AG has appointed M/s S Mann and Company
(DE1161) (Firm Reg. No. 000075N) as Statutory Auditors of Your
Company for FY 2023-24. As per the requirement of Section 148 of the Companies Act,
2013, the requirement of Cost Audit is not applicable to the Company.
Qualifications, Reservation or Adverse Remarks or Disclaimer made by the Statutory
Auditors
The Standalone and Consolidated Financial Results of the Company for the Financial Year
2022-23 were unqualified by the Statutory Auditors of the Company. However, the Statutory
Auditors provided for certain Emphasis of Matter'. The complete Auditors' Report on
the Standalone and Consolidated Financial Statements forms part of the Annual Report.
M/s Agarwal S. & Associates, Company Secretaries was appointed as Secretarial
Auditor of the Company for the Financial Year 2022-23. The observations of the Secretarial
Auditor along with Management Reply is as under:
S. Observations of |
Management Reply |
No. Secretarial Auditor |
|
a. Non-compliance of Regulation 17(1)(a) of Securities and Exchange
Board of India (Listing Obligations and D i s c l o s u r e R e q u i r e m e n t s )
Regulations, 2015, the Company shall have at least one Independent Woman Director during
the period from April 01, 2022 to March 31, 2023. |
As per the applicable provision of Regulation 17(1)(a) of SEBI Listing
Regulation, 2015, the Board of Directors shall have at-least 1 Woman Independent Director.
In this regard, this is to submit that as per the provisions of Regulation 149(6)(a) of
the Companies Act, 2013, the power to appoint Independent Directors including Woman
Independent Director vests with the Ministry administratively in-charge of the Company
i.e. Department of Financial Services, MOF. MOF, DFS, being the Ministry administratively
in-charge of the Company, is seized of the matter as request for appointment of
Independent Directors, has already been sent to MOF, DFS. The appointment of requisite
number of Independent Directors is awaited. |
b. Non-Compliance of Section 149 (4) of Companies Act, 2013 and
Regulation 17(1)(b) of Securities and Exchange Board of India (Listing Obligations and D i
s c l o s u r e R e q u i r e m e n t s ) Regulations, 2015, the Company shall have
requisite no. of Independent Directors on the Board of Company from April 01, 2022 to
March 31, 2023. |
Once the appointment of Woman Independent Director is made by the
Department of Financial Services, the abovementioned provisions will be complied with. |
c. Non-compliance of Regulations 17(10) and 25(4) of Securities and
Exchange Board of India (Listing Obligations and D i s c l o s u r e R e q u i r e m e n t
s ) Regulations, 2015, in the absence of Independent Directors, no separate meeting was
held during the financial year. A c c o r d i n g l y , performance evaluation for/by the
Independent Directors was not carried out. |
In the absence of Independent Directors on the Board of the Company, the
Company is not in compliance of the provisions of Section 149 (4) of Companies Act, 2013
and Regulation 17(1)(b) of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015. As mentioned in point (a) above, in terms of Section 149(6)(a) of the
Companies Act, 2013, IFCI being a Government Company, the power to appoint the Independent
Directors vest with the Administrative Ministry in-Charge i.e. Ministry of Finance (MOF), |
d. Non-Compliance of Section 177(2) & 178(1) of Companies Act, 2013
and Regulation 18(1)(b), 19(1)(b) &(c), 20(2A) and 21 of Securities and Exchange Board
of India (Listing Obligations and D i s c l o s u r e R e q u i r e m e n t s )
Regulations, 2015, the composition of Audit Committee, Nomination and Remuneration C o m m
i t t e e , S t a k e h o l d e r s ' Relationship Committee and Risk Management Committee
were not complied with the statutory requirements during the period from April 01, 2022 to
March 31, 2023. |
Department of Financial Services (DFS). As stated above DFS has been
already requested to appoint requisite number of Independent Directors. Once the requisite
number of Independent Directors are appointed, the provisions will be complied with. |
|
In the absence of Independent Directors on the Board of the Company, the
performance evaluation of and by Independent Directors as envisaged under Regulation
17(10) & 25(4) of Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015, could not be carried out. |
|
Due to the absence of Independent Directors on the Board of the Company,
the Audit Committee, Nomination and Remuneration Committee, Stakeholders' Relationship
Committee and Risk Management Committee were constituted without the Independent Directors
and the Company was not in compliance of Section 177(2) & 178(1) of the Companies Act,
2013 and Regulation 18(1)(b), 19(1)(b) & (c), 20(2A) and 21 of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015. Once the requisite number of Independent Directors are appointed by Department of
Financial Services, the Committees will accordingly be constituted. |
The Secretarial Audit Report of the Company along with the Secretarial Audit Reports of
the Material Subsidiaries' i.e. M/s IFCI Infrastructure Development Limited and M/s
Stock Holding Corporation of India Limited for the Financial Year ended March 31, 2023,
are enclosed at Annexure II.
Comments of Comptroller & Auditor General of India
The comments of Comptroller & Auditor General of India (C&AG) along with
Consolidated IFCI's Comments on C&AG Supplementary Audit observations will be enclosed
at Annexure-III.
Directors Responsibility Statement
Pursuant to the requirement under Section 134 of the Companies Act 2013, with respect
to Directors' Responsibility Statement, it is hereby confirmed that: (i) In the
preparation of the annual accounts, the applicable accounting standards had been followed
along with proper explanation relating to material departures;
(ii) 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; (iii) 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; (iv) The Directors had prepared the annual
accounts on a going concern basis; (v) 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; (vi) 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.
Appreciation
Your Directors wish to express gratitude for the cooperation, guidance and support from
the Ministry of Finance, various other Ministries and Departments of the Government of
India, The Reserve Bank of India, The Securities and Exchange Board of India, the Stock
Exchanges and other regulatory bodies, the Comptroller & Auditor General of India and
the State Governments. Your Directors also acknowledge the valuable assistance and
continued cooperation received from all banks, financial institutions, overseas
correspondent banks, other members of the banking fraternity and investors. Your Directors
would also like to express their appreciation for the efforts and dedicated service put in
by the employees at all levels of Your Company.