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Auditor Report of IFCI Ltd.

Mar 31, 2023

IFCI Limited

Report on the Audit of Standalone Financial Statements Opinion

We have audited the accompanying Standalone Financial Statements of IFCI Limited (âthe Companyâ), which comprises the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year ended on that date and Notes to the Financial Statements, including a summary of Significant Accounting Policies and other explanatory information (hereinafter referred to as the âStandalone Financial Statementsâ).

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 (âthe Actâ) 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, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2023, and its Loss, total comprehensive loss, 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 (SAâs) specified under Section 143(10) of the Companies Act, 2013 (âthe Actâ). Our responsibilities under those Standards are further described in âAuditorâs Responsibilities for the Audit of Standalone Financial Statementsâ 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 (âthe ICAIâ) 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 ICAIâs 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 de-recognition of interest income on Stage 3 assets. Accordingly, the interest income is lower by '' 209.50 Crores (net of ECL) for the reporting period.

2. We draw attention to Note No. 41, where the valuation of the investments in subsidiary companies has been considered on the basis of financial results for the quarter ended 31st December 2022.

3. We draw attention to Note No. 54 where the Capital Risk Adequacy Ratio (CRAR) stands at (-) 70.66% as on 31.03.2023, 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 itâs 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.

No.

Key Audit Matters

How our matter was addressed in the audit

Impairment of Loan Assets -

Our Audit Procedure

Expected Credit Loss (ECL1

[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:

â¢ 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.

â¢ 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.

includes:

We have obtained an understanding of the guidelines as specified in Ind AS 109 âFinancial Instrumentsâ, various regulatory updates and the Companyâs internal instructions and procedures in respect of the expected credit loss and adopted the following audit procedures:

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.

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.

3. Review of the reports of the internal audit and any other audit/inspection mechanisms to ascertain

S. No.	Key Audit Matters	How our matter was addressed in the audit
	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.	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. 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	Our Audit Procedure
2.	instruments at Fair Value [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 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.	includes: We involved our team to review the managementâs 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. 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, 2023. Assessing whether the financial statement disclosures appropriately reflect the Companyâs exposure to derivatives valuation risks with reference to the requirements of the prevailing accounting standards and Reserve Bank of India Guidelines.

S. No.	Key Audit Matters	How our matter was addressed in the audit
		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	Our Audit Procedure
3.	Subsidiaries and Associates The carrying value of the Companyâs investment in subsidiaries represents 2.01 times of the Companyâs total net worth. Due to the materiality of the investment in the context of the parent Companyâs financial statements and the market risk related with recoverability of investments, this was considered to be the area of focus during the course of Companyâs audits Hence, it was considered as a key Audit matter in our Report.	includes: 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	Our Audit Procedure
4.	Technology (IT) The key financial accounting and reporting processes are highly dependent on the automated controls over the Companyâs 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. 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.	includes: Evaluated sample of key controls operating over the information/input in relation to financial accounting and reporting systems. 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 Financial Statements and Auditorâs Report Thereon

The Companyâs Board of Directors and Management is responsible for the preparation of the other information. The other information comprises the information obtained at the date of this auditorâs report, but does not include the standalone financial statements, consolidated financial statements and our auditorâs 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.

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.

Managementâs Responsibility for the Standalone Financial Statements

The Companyâs 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 Ind AS and other accounting principles generally accepted in India.

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 companyâs 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 Companyâs financial reporting process.

Auditorâs 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 auditorâs 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.

- Conclude on the appropriateness of managementâs 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs 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 auditorâs 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 (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure âAâ 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 âBâ, 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 Cash Flow Statement and Statement of change 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 âCâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs Internal Financial Control over financial reporting.

g) With respect to other matters to be included in the Auditorâs 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 Auditorâs 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 2023 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 (âIntermediariesâ), 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(âUltimate Beneficiariesâ) 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 (âFunding Partiesâ), 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 (âUltimate Beneficiariesâ) 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. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

For M/s M. K. Aggarwal & Co.

Chartered Accountants Firm Registration No: 01411N

CA Atul Aggarwal Partner

Place: New Delhi Membership No.: 099374

Date: May 25, 2023 UDIN: 23099374BGSEQO5773

Mar 31, 2022

Report on the Audit of Standalone Financial Statements Opinion

We have audited the accompanying Standalone Financial Statements of EFCI Limited (âthe Companyâ), which comprises the Balance Sheet as at March 31, 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year ended on that date and Notes to the Financial Statements, including a summary of Significant Accounting Policies and other explanatory information (hereinafter referred to as the âStandalone Financial Statementsâ).

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 (âthe Actâ) 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, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2022, and its Loss, total comprehensive loss, 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 (SAâs) specified under Section 143(10) of the Companies Act, 2013 (âthe Actâ). Our responsibilities under those Standards are further described in âAuditorâs 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 (âthe ICAIâ) 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 ICAIâs Code of Ethics. We believe that the audit evidences obtained by us is sufficient and appropriate to provide a reasonable basis for our 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 non-recognition of interest income on Stage 3 assets. Accordingly, the interest income is lower by ? 248.03 Crores (net of ECL) for the reporting period.

2. We draw attention to Note No. 40, regarding the entityâs impact of COVID-19 pandemic on its financial statements.

3. We draw attention to Note No. 41, where the valuation of the investments in subsidiary companies has been considered on the basis of financial results for the quarter ended 31st December 2021.

4. We draw attention to Note No. 54 where the Capital Risk Adequacy Ratio (CRAR) stands at (-) 64.85% as on 31.03.2022, 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).

Our Opinion is not modified in respect of these matters.

Key Audit Matters

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.

No.

Key Audit Matters

How our matter was addressed in the audit

Impairment of Loan Assets -

Our Audit Procedure

Expected Credit Loss (ECL)

[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:

â¢ 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.

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. 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.

includes:

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.

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.

s. No.	Key Audit Matters	How our matter was addressed in the audit
		Our results; We considered the credit impairment charge and provision recognized and the related disclosures to be acceptable & satisfactory.
2.	Valuation of financial	Our Audit Procedure
2.	instruments at Fair Value [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 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.	includes: We involved our team to review the managementâs 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. 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, 2022s. Assessing whether the financial statement disclosures appropriately reflect the Companyâs 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 The carrying value of the Companyâs investment in subsidiaries represents 2.83 times of the Companyâs total net worth. Due to the materiality of the investment in the context of the parent Companyâs financial statements and the market risk related with recoverability of investments, this was considered to be the area of focus during the course of Companyâs audits Hence, it was considered as a key Audit matter in our Report.	Our Audit Procedure
3.		includes: 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.

No.

Key Audit Matters

How our matter was addressed in the audit

Assessment of Information

Our Audit Procedure

Technology (IT)

The key financial accounting and reporting processes are highly dependent on the automated controls over the Companyâs 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.

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.

includes:

Evaluated sample of key controls operating over the information/input in relation to financial accounting and reporting systems.

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 Financial Statements and Auditorâs Report Thereon

The Companyâs Board of Directors and Management is responsible for the preparation of the other information. The other information comprises the information obtained at the date of this auditorâs report, but does not include the financial statements and our auditorâs 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.

Managementâs Responsibility for the Standalone Financial Statements

In preparing the standalone financial statements, management is

responsible for assessing the companyâs 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 Companyâs financial reporting process.

Auditorâs Responsibilities for the Audit of 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:

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

- Conclude on the appropriateness of managementâs 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 Companyâs ability to continue as agoing concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs 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 financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Erom 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 auditorâs 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

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;

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

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 âCâ. Our report express an unmodified opinion on the adequacy and operating effectiveness of the Companyâs Internal Financial Control over financial reporting.

i. The Company has disclosed the impact of pending litigations as at 31^st March 2022on 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 Rind 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 (âIntermediariesâ), 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(âUltimate Beneficiariesâ) 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 (âRinding

Partiesâ), 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 Rinding Party (âUltimate Beneficiariesâ) 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.

For M/s M. K. Aggarwal & Co.

Chartered Accountants Firm Registration No: 01411N

CA Atul Aggarwal

Partner

Place: New Delhi Membership No.: 099374

Date: May 28, 2022 UDIN: 22099374AJUVXQ2993

Mar 31, 2021

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 (âthe Companyâ), which comprises the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year ended on that date and Notes to the Financial Statements, including a summary of Significant Accounting Policies and other explanatory information (hereinafter referred to as the âStandalone Financial Statementsâ).

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 (âthe Actâ) 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, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2021, and its Loss, total comprehensive loss, 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 (SAâs) specified under Section 143(10) of the Companies Act, 2013 (âthe Actâ). Our responsibilities under those Standards are further described in âAuditorâs Responsibilities for the Audit of Standalone Financial Statementsâsection 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 (âthe ICAIâ) 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 ICAIâs Code of Ethics. We believe that the audit evidences obtained by us is sufficient and appropriate to provide a reasonable basis for our opinion on the Standalone Financial Statements.

Emphasis of Matter:

1. We draw attention to Note No. 38, regarding the reversal of âInterest charged on Interestâ related to Moratorium period

i.e. 1^st March, 2020 to 31^st August, 2020.

2. We draw attention to Note No. 39, with regard to full impairment allowance on fraud accounts, in terms of RBI guidelines.

3. We draw attention to Note No. 40, regarding change in accounting policy towards de-recognition of income on certain Stage-3 assets. Consequently, the loss for the year is higher by ''613.71 Crores (net of ECL provision of ''833.38 Crores) and loan assets are lower by ''1447.08 Crores.

4. We draw attention to Note No. 41, regarding the entityâs impact of COVID-19 pandemic on its financial results.

5. We draw attention to Note No. 42, where the valuation of the investments in subsidiary companies has been considered on the basis of limited review of financial statement for the quarter ended 31^st December, 2020.

6. The Capital Risk Adequacy Ratio (CRAR) stands at (-) 10.81% as on 31.03.2021, below the RBI stipulated guideline vide circular dated 31^st May, 2018 (RBI/2017-18/181 DNBR (PD) CC.No.092/03.10.001/2017-18).

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 financial statements of the current period. These matters were addressed in the context of our audit of the 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-

No.

Key Audit Matters

How our matter was addressed in the audit

Impairment of Loan Assets -Expected Credit Loss (ECL)

[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:

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.

Our Audit Procedure includes:

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.

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.

No.

Key Audit Matters

How our matter was addressed in the audit

Valuation of financial instruments at Fair Value

[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 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 Audit Procedure includes:

We involved our team to review the managementâs 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.

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, 2021.

Assessing whether the financial statement disclosures appropriately reflect the Companyâs 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.

Valuation of investments in Subsidiaries and Associates

The carrying value of the Companyâs investment in subsidiaries represents 56% of the Companyâs total net worth.

Due to the materiality of the investment in the context of the parent Companyâs financial statements and the market risk related with recoverability of investments, this was considered to be the area of focus during the course of Companyâs audits. Hence, it was considered as a key Audit matter in our Report.

Our Audit Procedure includes:

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.

Assessment of Information Technology (IT)

Our Audit Procedure includes:

Evaluated sample of key controls operating over the information/input in relation to financial accounting and reporting systems.

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 Financial Statements and Auditorâs Report thereon

The Companyâs Board of Directors and Management is responsible for the preparation of the other information. The other information comprises the information obtained at the date of this auditorâs report, but does not include the financial statements and our auditorâs 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.

Managementâs Responsibility for the Standalone Financial Statements

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 entityâs 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 Companyâs financial reporting process.

Auditorâs Responsibilities for the Audit of 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 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure âAâ 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 âBâ, 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, 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 Cash Flow Statement and Statement of change 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 âCâ. Our report express an unmodified opinion on the adequacy and operating effectiveness of the Companyâs Internal Financial Control over financial reporting;

(g) With respect to other matters to be included in the Auditorâs 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 Auditorâs 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, 2021 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.

For M/s M. K. Aggarwal & Co.

Chartered Accountants Firm Registration No: 01411N

CA Atul Aggarwal

Partner

Place: New Delhi Membership No.: 099374

Date: June 28, 2021 UDIN: 1099374AAAAEP6095

Mar 31, 2018

INDEPENDENT AUDITORSâ REPORT

To the Members of IFCI Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of IFCI Limited (âthe Companyâ), which comprises the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Managementâs Responsibility for the Financial Statements The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorâs Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, its loss and its cash flow for the year ended on that date.

Emphasis of Matter

We draw attention to Note No 33 of the standalone financial statements related to change in appropriation policy of the company regarding amount recovered from borrowers which has resulted in increase of net loss by Rs,32.17 crore.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure I 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 II, 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, 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 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 Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of the written representations received from the directors, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164

(2) of the Act;

(g) With respect to the other matters to be included in the Auditorâs 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 on its financial position in its financial statements - Refer Note No. 25.1 to the financial statements;

(ii) The Company has made provision, 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. 26 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) The Company has not provided disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the financial year 2017-18, being not applicable.

Annexure I referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements of our report of even date on standalone financial statements

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets, except for leased plant and machinery having gross block of Rs,197.92 crore which have been fully depreciated in the earlier years.

(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 of immovable properties are held in the name of the Company.

(ii) The Company is a Non-Banking Financial Company, accordingly it does not hold any inventory. Thus, paragraph 3(ii) of the Order is not applicable.

(iii) According to the information provided and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register mentioned under Section 189 of the Companies Act, 2013. Accordingly, paragraph 3(iii) of the Order is not applicable.

(iv) According to the information and explanations given to us, the Company has not granted any loans, investments, guarantees and security covered under Section 185 of the Companies Act, 2013. The provisions of Section 186 of the Companies Act, 2013 is not applicable on the Company. Accordingly, paragraph 3(iv) of the Order is not applicable.

(v) According to the information provided and explanations given to us, the Company has not accepted any deposits from the public during the year within the meaning of Section 73 to 76 of the Companies Act, 2013.

(vi) According to the information provided and explanation given to us, maintenance of cost records by the Company has not been prescribed by the Central Government under Section 148(1) of the Companies Act, 2013. Thus, paragraph 3(vi) of the Order is not applicable.

(vii) (a) According to the information provided and explanations given to us, the Company is generally regular in depositing undisputed

statutory dues including provident fund, employeeâs state insurance, income tax, sales tax, wealth tax, goods and service tax, service tax, duty of customs, duty of excise, value added tax, cess and any other material statutory dues applicable to it with the appropriate authorities. There are no outstanding statutory dues existing as at the last day of the financial year for a period of more than six months from the day they became payable.

(b) According to the information and explanations given to us, there were no amounts due as on March 31, 2018 in respect of income tax or sales tax or wealth tax or service tax or goods and service tax or duty of customs or duty of excise or value added tax or cess which have not been deposited on account of any dispute other than those indicated below:

Name of the Statute	Nature of disputed dues	Amount crore)	Year to which demand relates	Forum, where dispute is pending
Finance Act, 1994 (Service Tax] #	Service Tax and Penalty demanded	10.83	FY 2004-05 to FY 2007-08	CESTAT, New Delhi
Finance Act, 1994 (Service Tax) #	Service Tax and Penalty demanded	3.63	FY 2008-09 to FY 2010-11	CESTAT, New Delhi
Finance Act, 1994 (Service Tax) #	Service Tax and Penalty demanded	1.12	FY 2005-06 to FY 2007-08	CESTAT, Bangalore
Finance Act, 1994 (Service Tax)	Service Tax and Penalty demanded	0.59	FY 2006-07 to FY 2010-11	CESTAT, New Delhi
Finance Act, 1994 (Service Tax)	Service Tax and Penalty demanded	1.80	FY 2008-09 to FY 2010-11	CESTAT, New Delhi $
Finance Act, 1994 (Service Tax)	Service Tax and Penalty demanded	1.61	FY 2008-09 to FY 2010-11	CESTAT, New Delhi
MP Commercial Tax Act, 1994	Sales Tax on Lease Transactions	0.01		Board of Revenue (Commercial Transactions Tax Tribunal) Gwalior, M.P

# Stay order has been received against the amount disputed and not deposited

$ Appeal filed on May 17, 2018

(viii) According to the information provided and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to a financial institution or bank or Government or dues to debenture holders.

(ix) According to the information provided and explanations given to us, no moneys have been raised by way of initial public offer or further public offer (including debt instruments) and the term loans raised from different banks during the year were applied for the purposes for which those are raised.

(x) According to the information and explanations given to us and to the best of our knowledge and belief, no fraud by or on the Company by its officers or employees has been noticed or reported during the year.

(xi) According to the information and explanations given to us and in terms of GSR 463 (E) dated June 05, 2015, issued by the Ministry of Corporate Affairs, the provisions of Section 197 pertaining to managerial remuneration do not apply to a government company. Accordingly, paragraph 3(xi) of the Order is not applicable.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on 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) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has allotted 3,39,55,85 7 equity shares of Face Value of ''10 each, at a premium of ''19.45 per share, to the Government of India on Preferential Basis, on March 31, 2018. The requirement of Section 42 of the Companies Act, 2013 have been complied with and the amount raised have been used for the purposes for which the funds were raised.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with them.

(xvi) According to the information provided and explanations given to us, the Company is registered 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. B-14.00009.

Sl. No.	Directions	Reply
1	Whether the Company has clear title/ lease deed for freehold and leasehold respectively? If not please state the area of freehold and lease hold land for which title/ lease deeds are not available?	According to the information and explanations provided to us by the Company, the Company has clear title/ lease deeds for freehold and leasehold land, respectively.
2.	Whether there are any cases of waiver/ write off of debtors/ loans/ interest etc., If yes, the reason there for and amount involved.	According to the information and explanations provided to us by the Company, case(s) of waiver/ write-off of debts/ loan/ interest etc., are as under:
		Sl. No.		Nature of Dues			No. of Cases		Amount (in crore)
		A.		Write-off/ Technical write-off of loans			7		460.77
		B.		Debtors write-offs			2		1.19
		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 proper records are maintained for inventories lying with third parties & assets received as gift/ grant(s) from the Govt. or other authorities.	According to the information and explanations provided to us by the Company: (a) Being a Non-Banking Financial Institution, there is no involvement of any inventories; (b) The Company has not received any gift/ grants(s) from government or any other authorities during the year. Therefore, no records are required to be maintained for inventories lying with third parties & assets received as gift/ grant(s) from the Govt. or other authorities.
Part B-Sub-Directions
Sl. 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 Companyâs books of accounts? 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 Companyâs books of accounts, except for the cases mentioned below: (a) Where shares are lying in De-mat or physical form but not accounted for in the books of accounts to the extent identified on test check basis.
			Sl. No.		Company Name	Mode		No. of shares
			1.		ACC Ltd.	Demat		80
			2.		Reliance Industries Ltd	Demat		4,664
			3.		Tata Motors Limited	Demat		600
			4.		Tata Steel Limited	Demat		300
			5.		Asian Hotels (East) Ltd.	Demat		265
			6.		Asian Hotels (North) Ltd.	Demat		265
			7.		Asian Hotels (West) Ltd.	Demat		265
			8.		Bengal & Assam Company Ltd	Demat		23
			9.		Bhilwara Technical Textiles Ltd	Demat		958
			10.		Birla Precision Technology Ltd	Demat		13
			11.		Cimmco Ltd	Demat		24,550
			12.		Coromandel International Ltd	Demat		69,220
			13.		E I D Parry (India) Ltd.	Demat		430
			14.		Eveready Industries India Ltd.	Demat		200
			15.		Excel Glasses Ltd	Demat		50
			16.		Gabriel India Ltd., Parwanoo	Demat		3,500
			17.		GKW Ltd	Demat		110
			18.		Graphite India Ltd	Demat		366
			19.		Gujarat Sidhee Cement Ltd	Demat		275
			20.		HEG Ltd	Demat		1,785
			21.		Hi-Tech Gears Ltd	Demat		2,700
			22.		Indian Metals & Ferro-Alloys Ltd.	Demat		89
			23.		ITC Ltd	Demat		67
			24.		J.K. Cement Ltd	Demat		20
			25.		Larsen & Toubro Ltd	Demat		1,125
			26.		National Organic Chemical Industries Ltd	Demat		130
			27.		Ponni Sugars & Chemicals Ltd	Demat		64,800
			28.		Rainbow Denim Ltd	Demat		40
			29.		Rajasthan Spg & Wvg Mills Ltd	Demat		383
			30.		Reliance Capital Ltd	Demat		223
			31.		Reliance Communications Ltd	Demat		4,482
			32.		Reliance Infrastructure Ltd	Demat		335
			33.		Reliance Power Ltd	Demat		1,120
			34.		SRF Polymers Ltd	Demat		150
			35.		Tata Power Co. Ltd	Demat		900
			36.		Titagarh Wagons Ltd.	Demat		25

Sl. No.	Sub-Directions	Reply
		Sl. No.	Company Name	Mode	No. of shares
		37.	Ultratech Cement Ltd	Demat	100
		38.	Winsome Textile Industries Ltd	Demat	200
		39.	Zenith Ltd	Demat	38
		40.	Aditya Birla Capital Ltd	Demat	194
		41.	Aditya Birla Fashion And Retail Limited	Demat	483
		42.	Banswara Syntex Limited	Demat	100
		43.	Core Education & Technologies Ltd	Demat	3
		44.	Era Infra Engineering Ltd	Demat	27
		45.	Grasim Industries Limited	Demat	139
		46.	Indian Seamless Enterprises	Demat	1,028
		47.	Jaykay Enterprises Limited	Demat	100
		48.	Kama Holdings Limited	Demat	150
		49.	Reliance Home Finance Ltd	Demat	223
		50.	Western India Shipyard Ltd	Demat	30
		51.	Ansal Hotel	physical	47,27,750
		52.	Aryavastra Plywoods Ltd.	physical	60,000
		53.	Bhilwara Processors	physical	2,09,998
		54.	Biotech Synergy	physical	4,40,000
		55.	BR Foods	physical	3,50,000
		56.	Cimmco Ltd.	physical	2,860
		57.	DCM Shree Ram	physical	16,016
		58.	Depro Foods	physical	1,320
		59.	Essar Coated Steel Ltd.	physical	7,53,000
		60.	Excelsior Plants Co. Ltd.	physical	51,998
		61.	Flower and Tissue India Ltd.	physical	5,00,000
		62.	Ganesh Benzoplast Ltd.	physical	38,88,889
		63.	Gian Agra Industries Ltd.	physical	1,995
		64.	Globe United	physical	3,958
		65.	Golden Polymarbles Ltd.	physical	3,80,000
		66.	Hind Food Ltd.	physical	3,00,000
		67.	Hindal Co. India	physical	116
		68.	Jauss Polymers Ltd.	physical	11,000
		69.	JCT Ltd.	physical	5,00,315
		70.	JK Paper Limited	physical	27,813
		71.	Kinzle India Samay Ltd.	physical	1,23,400
		72.	Maharastra Steel Ltd.	physical	2,995
		73.	MM Polytex Ltd.	physical	1,00,000
		74.	Modi Alkalies and Chemicals	physical	7,84,590
		75.	Mohta Electro Steel	physical	18,361
		76.	MP Plywood	physical	25,000
		77.	Naina Semiconductor Ltd	physical	5,09,481
		78.	ORDe Textiles	physical	20,000
		79.	Orrissa Synthetics Ltd.	physical	100
		80.	Oshi Foods Ltd.	physical	2,10,000
		81.	Perfect Drugs Ltd.	physical	4,00,000
		82.	Pratibha Syntex Ltd.	physical	12,50,000
		83.	Punjab Fibre Ltd.	physical	87,076
		84.	Punsuni Frine and Components Ltd.	physical	2,20,000
		85.	Saurashtra Chemicals Ltd.	physical	11,07,024
		86.	Shama Forge	physical	24,863
		87.	Shama Forge (Pref Shares)	physical	7,495
		88.	Siel Ltd.	physical	3,36,348
		89.	Siel Sugar Ltd.	physical	300
		90.	Standard Woolens	physical	50,000
		91.	Tridev Duplex Board Pvt. Ltd.	physical	2,00,000
		92.	Tripati Woolens	physical	59,789
		93.	Usha Forging and Stamping	physical	45,000
		94.	Usha Forging and Stamping (Pref Shares)	physical	1,968
		95.	Usha Spinning and Weaving Mills Ltd.	physical	2,783
		As per management, with some exceptions, these shares have been transferred by the Company in the past and the beneficiaries did not get these shares transferred owing to various reasons. The historical values of the above shares are not ascertainable.
75

Sl. No.	Sub-D irections	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.
		Sl. No.	Company Name	No. of shares
		1.	Ajanta Textiles Ltd (Pref Shares)	38,219
		2.	BST Mfg. Ltd (Pref Shares)	9,920
		3.	Chemco Steels Ltd	5,00,000
		4.	Digvijay Synthetics Ltd (Pref Shares)	1,70,000
		5.	Echon Industries Ltd	14,00,000
		6.	G.R. Solvents & Allied Industries Ltd	1,25,000
		7.	Graham Firth Steel Products (I) Ltd	3
		8.	Hermonite Associates Ltd	1,30,000
		9.	Hindustan Agro Chemicals Ltd	19,300
		10.	I C Textiles Ltd (Pref Shares)	9,52,394
		11.	Lml Ltd (Pref Shares)	21,50,912
		12.	Minerva Holding Ltd	120
		13.	Modern Syntex (I) Ltd	60,00,000
		14.	Morepen Laboratories Ltd (Pref Shares)	87,373
		15.	Munak Chemicals Ltd	6
		16.	Nutech Packaging Ltd	5,25,000
		17.	OCM India Ltd	5,89,743
		18.	Parasrampuria Synthetics Ltd (Pref Shares)	13,89,450
		19.	Poddar Udyog Ltd (Pref Shares)	18,000
		20.	Pooja Granites And Marbles Pvt Ltd	2,76,000
		21.	Prag Bosmi Synthetics Ltd (Pref Shares)	26,14,577
		22.	Punj Steel Machine Tools Pvt Ltd (Pref Shares)	1,50,000
		23.	Regency Hospitals Ltd	11,123
		24.	Samcor Glass Ltd	20,00,000
		25.	Shree Maheswar Hydel Power Company Ltd.	83,87,028
		26.	Southern Wind Farms Pvt. Ltd.	1,00,000
		27.	Steel & Allied Products Ltd (Pref Shares)	5,980
		28.	Triveni Metal Tubes Ltd (Pref Shares)	449
		29.	Vegepro Foods & Feeds Ltd (Pref Shares)	10,00,000
		30.	West Bengal Consultancy Orgn. Ltd	12,700
		31.	Yuil Measure (I) Ltd (Pref Shares)	39,500
2.	Loans In respect of provisioning requirement of all restructured, rescheduled, renegotiated loan-whether a system of periodical assessment of realisable value of securities available against all such loans is in place and adequate provision has been created during the year? Any deficiencies in this regard, if any, may be suitably commented upon along with financial impact.	A system of assessment of realisable value of securities is 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. Adequate provision has been created during the financial year.

Annexure III referred to in paragraph 3 of Report on Other Legal and Regulatory Requirements of our report of even date on standalone financial statements:

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ) We have audited the internal financial controls over financial reporting of IFCI Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

The Companyâs management is responsible for establishing and maintaining internal financial controls 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 (âICAIâ). 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 companyâs 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.

Auditorsâ Responsibility

Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) 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, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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 over financial reporting 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 over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 auditorâs judgement, 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 Companyâs internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companyâs internal financial control over financial reporting 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 companyâs internal financial control over financial reporting 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

the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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 over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting 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, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, 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.

For KPMR & Associates

Chartered Accountants

Firm Registration No: 02504N

S M Yamin Qureshi

Place: New Delhi Partner

Date: May 23, 2018 Membership No. 081750

Mar 31, 2017

TO THE MEMBERS OF IFCI LIMITED Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of IFCI Limited (âthe Companyâ), which comprises the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managementâs Responsibility for the Financial Statements

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditorâs Responsibility

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, its loss and its cash flow for the year ended on that date.

Emphasis of Matter

We draw attention to note no 27 of the standalone financial statements related to litigation with the borrower. Pending adjudication of the matter by the Honourable Supreme Court, in the opinion of the management, no provision or adjustment is required in the books of accounts. Our report is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of subsection (11) of Section 143 of the Act, we give in the Annexure I 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 II, 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, 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 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 Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of the written representations received from the directors, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act;

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements-Refer Note No. 25.1 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) The Company has provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 08, 2016 to December 30, 2016-Refer Note No. 31 to the financial statements. Based on audit procedures and relying on the management representation, we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management.

Annexure I referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements of our report of even date on standalone financial statements

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets, except for leased plant and machinery having gross block of '' 70.92 crores which have been fully depreciated in the earlier years.

(b) The fixed assets are being physically verified by the management at all its office in a phased manner at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification. However, the policy with regard to the verification of physical assets and the periodicity thereof needs to be reviewed and approved by the Board.

(ii) The Company is a Non-Banking Financial Company, accordingly it does not hold any inventory. Thus, paragraph 3(ii) of the Order is not applicable.

(vii) (a) According to the information provided and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including provident fund, employeeâs state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other material statutory dues applicable to it with the appropriate authorities. There are no outstanding statutory dues existing as at the last day of the financial year for a period of more than six months from the day they became payable. (viii) According to the information provided and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to a financial institution or bank or Government or dues to debenture holders.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(b) According to the information and explanations given to us, there were no amounts due as on March 31, 2017 in respect of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess which have not been deposited on account of any dispute other than those indicated below:

Name of the Statute	Nature of disputed dues	Amount crore)³	Year to which demand relates	Forum, where dispute is pending
Finance Act, 1994 (Service Tax) #	Service Tax and Penalty demanded	6.98	FY 2004-05 to FY 2007-08	CESTAT, New Delhi
Finance Act, 1994 (Service Tax) #	Service Tax and Penalty demanded	0.30	FY 2008-09 to FY 2010-11	CESTAT, New Delhi
Finance Act, 1994 (Service Tax) #	Service Tax and Penalty demanded	0.45	FY 2005-06 to FY 2007-08	CESTAT, Bangalore
Finance Act, 1994 (Service Tax)	Service Tax and Penalty demanded	0.56	FY 2006-07 to FY 2010-11	CESTAT, New Delhi
Finance Act, 1994 (Service Tax)	Service Tax and Penalty demanded	1.73	FY 2008-09 to FY 2010-11	Commissioner of Service Tax (Appeals), New Delhi $
MP Commercial Tax Act, 1994	Sales Tax on Lease Transactions	0.01		Board of Revenue (Commercial Transactions Tax Tribunal) Gwalior, M.P

Annexure II referred to in paragraph 2 of Report on Other Legal and Regulatory Requirements of our report of even date of standalone financial statements Part A-Directions

Sl. No.	Directions	Reply
1.	Whether the Company has clear title/lease deed for freehold and leasehold respectively? If not please state the area of freehold and lease hold land for which title/ lease deeds are not available?	According to the information and explanations provided to us by the Company, the Company has clear title/lease deeds for freehold and leasehold land, respectively.
2.	Whether there are any cases of waiver/write off of debtors/ loans/ interest etc., If yes, the reason there for and amount involved.	According to the information and explanations provided to us by the Company, case(s) of waiver/ write-off of debts/ loan/ interest etc., are as under:
		Sl. No.		Nature of Dues			No. of Cases		Amount (in crore)
		A.		Write-off/ Technical write-off of loans			59		394.79
		B.		Investments write-offs			6		28.36
		C.		Debtors write-offs			1		0.41
		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. In investment write-offs, the amount outstanding is generally fully provided for.
3.	Whether proper records are maintained for inventories lying with third parties & assets received as gift/grant(s) from the Govt. or other authorities.	According to the information and explanations provided to us by the Company: (a) Being a Non-Banking Financial Institution, there is no involvement of any inventories; (b) The Company has not received any gift/ grants(s) from government or any other authorities during the year. Therefore, no records are required to be maintained for inventories lying with third parties & assets received as gift/ grant(s) from the Govt. or other authorities.
Part B-Sub-Directions
Sl. 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 Companyâs books of accounts? 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 Companyâs books of accounts, except for the cases mentioned below 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		ACC Ltd.	Demat		160
			2		Aditya Birla Nuvo Ltd	Demat		93
			3		Aditya Birla Fashion And Retail Ltd.	Demat		483
			4		Asian Hotels Ltd.	Demat		265
			5		Asian Hotels Ltd.	Demat		265
			6		Asian Hotels Ltd.	Demat		265
			7		Banswara Syntex Ltd	Demat		100
			8		Bengal & Assam Company Ltd	Demat		23
			9		Bhilwara Technical Textiles Ltd	Demat		958
			10		Birla Precision Technology Ltd	Demat		13
			11		Cimmco Ltd	Demat		24,550
			12		Coromandel International Ltd	Demat		69,220
			13		E I D Parry (India) Ltd.	Demat		430
			14		Eveready Industries India Ltd.	Demat		200
			15		Excel Glasses Ltd	Demat		50
			16		Gabriel India Ltd., Parwanoo	Demat		3,500
			17		Gkw Ltd	Demat		110
			18		Graphite India Ltd	Demat		366
			19		Gujarat Sidhee Cement Ltd	Demat		275
			20		Heg Ltd	Demat		1,785
			21		Hi-Tech Gears Ltd	Demat		2,700
			22		Indian Metals & Ferro-Alloys Ltd.	Demat		89
			23		ITC Ltd	Demat		67
			24		J.K. Cement Ltd	Demat		20
			25		Jaykay Enterprises Ltd.	Demat		100
			26		Larsen & Toubro Ltd	Demat		750
			27		National Organic Ch. Industries Ltd	Demat		130
			28		Ponni Sugars & Chemicals Ltd	Demat		64,800
			29 30		Rainbow Denim Ltd Rajasthan Spg & Wvg Mills Ltd	Demat Demat		40 383
			31		Reliance Capital Ltd	Demat		6
			32		Reliance Capital Ltd	Demat		217
			33		Reliance Communications Ltd	Demat		4,482
			34		Reliance Industries Ltd	Demat		2,332

Sl. No.	Sub-Directions	Reply
		S. No.	Company Name	Mode	No of shares
		35	Reliance Infrastructure Ltd	Demat	10
		36	Reliance Infrastructure Ltd	Demat	325
		37	Reliance Power Ltd	Demat	34
		38	Reliance Power Ltd	Demat	1,086
		39	SRF Polymers Ltd	Demat	150
		40	Tata Motors Ltd.	Demat	420
		41	Tata Motors Ltd.	Demat	180
		42	Tata Power Company Ltd	Demat	900
		43	Tata Steel Ltd	Demat	300
		44	Titagarh Wagons Ltd.	Demat	25
		45	Ultra Tech Chem Company Ltd	Demat	100
		46	Winsome Textile Industries Ltd	Demat	200
		47	Zenith Ltd	Demat	38
		48	Kajaria Ceramics Ltd	Physical	4,000
		49	Kama Holdings Ltd	Demat	150
		50	The Hi-Tech Gears Ltd	Demat	2,700
		51	Era Infra Engineering Ltd	Demat	27
		52	Western India Shipyard Ltd	Demat	30
		53	Indian Seamless Enterprises Ltd	Demat	1,028
		As per management, above shares have been transferred by the Company in the past and the beneficiaries did not get these shares transferred owing to various reasons. The historical values of the above shares are not ascertainable.

Annexure III referred to in paragraph 3 of Report on Other Legal and Regulatory Requirements of our report of even date on standalone financial statements Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)

We have audited the internal financial controls over financial reporting of IFCI Limited (âthe Companyâ) as of March 31, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

Auditorsâ Responsibility

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

Meaning of Internal Financial Controls over Financial Reporting

A companyâs internal financial control over financial reporting 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 companyâs internal financial control over financial reporting 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 companyâs assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, 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.

For ASA & ASSOCIATES LLP For KPMR & ASSOCIATES

Chartered Accountants Chartered Accountants

FRN: 009571N/N500006 FRN: 02504N

Parveen Kumar S M Yamin Qureshi

Partner Partner

M. No. 088810 Membership No. 081750

Place : New Delhi

Date : May 19, 2017

Mar 31, 2016

TO THE MEMBERS OF IFCI LIMITED Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of IFCI Limited (âthe Companyâ), which comprises the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managementsâ Responsibility for the Financial Statements

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorsâ Responsibility

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorsâ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, its profit and its cash flow for the year ended on that date.

Emphasis of Matter

We draw attention to note number 28 of the standalone financial statements related to litigation with the borrower. Pending adjudication of the matter by the Honourable Supreme Court, in the opinion of the management, no provision or adjustment is required in the books of accounts. Our report is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor Report) Order, 2016 (the Order.) issued by the Central Government of India in terms of Subsection (11) of Section 143 of the Act, we give in the Annexure I 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 II, our report for the Company on the directions and sub-direction (Part A and B, respectively) issued by the Comptroller & Auditor General of India.

3. As required by Section 143(3) of the Act, 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 Accounts 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 dealt with by this report are in agreement with the books of accounts;

(e) On the basis of the written representations received from the directors, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act;

(g) 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 on its financial position in its financial statements - Refer Note No. 25.1 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note No. 25.3 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.

Annexure I referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements of our report of even date on standalone financial statements

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets, except for leased

plant and machinery having gross block of Rs. 70.92 crore which have been fully depreciated in the earlier years.

(b) The fixed assets are being physically verified by the management at all its offices in a phased manner at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification. However, the policy with regard to the verification of physical assets and the periodicity thereof needs to be reviewed and approved by the Board.

(ii) The Company is Non-Banking Financial Company, accordingly it does not hold any inventory. Thus, paragraph 3(ii) of the Order is not applicable.

(vii) (a) According to the information provided and explanations given to us, the company is generally regular in depositing undisputed statutory dues

including provident fund, employee s state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other material statutory dues applicable to it with the appropriate authorities. There are no outstanding statutory dues existing as at the last day of the financial year for a period of more than six months from the day they became payable.

(b) According to the information and explanations given to us, there were no amounts due as on March 31, 2016 in respect of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess which have not been deposited on account of any dispute other than those indicated below:

Name of the Statute	Nature of disputed dues	Amount (? crore)²	Year to which demand relates	Forum, where dispute is pending
Finance Act, 1994 (Service Tax)^#	Service Tax and Penalty demanded	6.98	FY 2004-05 to FY 2007-08	CESTAT, New Delhi
Finance Act, 1994 (Service Tax)^#	Service Tax and Penalty demanded	0.30	FY 2008-09 to FY 2010-11	CESTAT, New Delhi
Finance Act, 1994 (Service Tax)^#	Service Tax and Penalty demanded	0.45	FY 2005-06 to FY 2007-08	CESTAT, Bangalore
Finance Act, 1994 (Service Tax)	Service Tax and Penalty demanded	0.56	FY 2006-07 to FY 2010-11	An appeal is to be filed before CESTAT, New Delhi
Finance Act, 1994 (Service Tax)	Service Tax and Penalty demanded	0.89	FY 2008-09 to FY 2010-11	Commissioner of Service Tax, New Delhi
MP Commercial Tax Act, 1994	Sales Tax on Lease Transactions	0.01		Board of Revenue (Commercial Transactions Tax Tribunal) Gwalior, M.P.

Annexure II referred to in paragraph 2 of Report on Other Legal and Regulatory Requirements of our report of even date of standalone financial statements:

Part A - Directions

Sl. No.	Directions	Reply
1.	Whether the Company has clear title/lease deed for freehold and leasehold respectively? If not please state the area of freehold and leasehold land for which title/lease deeds are not available?	According to the information and explanations provided to us by the Company, the Company has clear title/lease deeds for freehold and leasehold land, respectively.
2.	Whether there are any cases of waiver/write off of debtors/loans/interest etc., If yes, the reason there of an amount involved.	According to the information and explanations provided to us by the Company, case(s) of waiver/ write-off of debts/loan/interest etc., are as under:
		Sl. No.	Nature of Dues	No. of Cases	Amount (in crore)
		A.	Write-off/Technical write-off of loans	28	441.08
		B.	Investments write-offs	232	119.40
		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/wavier cases was fully provided for in the books of accounts to the extent of the amount of write-off/waiver. In investment write-offs, the amount outstanding is generally fully provided for.
3.	Whether proper records are maintained for inventories lying with third parties & assets received as gift/grant(s) from the Govt. or other authorities.	According to the information and explanations provided to us by the Company: (a) Being a Non-Banking Financial Institution, there is no involvement of any inventories; (b) The Company has not received any gift/grant(s) from government or any other authorities during the year.

Part B - Sub-Directions

Sl. No.	Sub-Directions	Reply
1.	Employee Benefits: Independent verification may be made of information/inputs furnished to Actuary, viz., number of employees, average salary, retirement age and assumptions made by the Actuary regarding discount rate, future cost increase, mortality rate, etc., for arriving at the provision for liability of retirement benefits, viz., gratuity, leave encashment, post-retirement medical benefits etc.	According to the information and explanations provided to us by the Company, independent verification has been made of information/inputs furnished to Actuary, viz., number of employees, average salary, retirement age and assumptions made by the Actuary regarding discount rate, future cost increase, mortality rate, etc., for arriving at the provision for liability of retirement benefits, viz., gratuity and leave encashment. As informed to us, there are post-retirement medical benefits.
2.	Investments: Whether the titles of ownership in respect of CGS/SGS Bonds/Debentures etc. are available in physical or de-mat form and these, in aggregate, agree with the respective amounts shown in the Company Rs.s books of accounts? if not, details may be stated.	According to the information and explanations provided to us by the Company, the following bonds/debentures, owned by the Company, were not available in physical/de-mat form, having been transferred to the repo buyer under repo transactions, within the extant guidelines of Reserve Bank of India:
		Sl. No.	Bond Issuer Company	Quantity	Amount (Rs. crore)
		1.	Air India Ltd (Series 1) [9.841 27-Sep-26	159	17.39
		2.	Damodar Valley Corporation Ltd [8.691 25-Mar-28	2000	209.00
		3.	Food Corporation of India (Series V-B) [8.81 22-Mar-28	465	46.50
		4.	India Renewable Energy Development Agency Ltd (Ser V-A) [8.441 10-May-23	1100	110.00
		5.	Indian Renewable Energy Development Agency Ltd (Ser V-B) [8.491 10-May-28	940	94.00
		6.	Mahanagar Telepone Nigam Ltd [8.571 28-Mar-23	400	40.00
		7.	Power Grid Corporation of India Ltd (XLIII Issue-F) [7.93] 20-May-22	150	15.00
		8.	Power Grid Corporation of India Ltd (XLIII Issue-G) [7.931 20-May-23	150	15.00
		9.	Power Grid Corporation of India Ltd (XLIII Issue-H) [7.931 20-May-24	150	15.00
		10.	Power Grid Corporation of India Ltd (XLIII Issue-I) [7.931 20-May-25	150	15.00
		11.	Power Grid Corporation of India Ltd (XLIII Issue-J) [7.931 20-May-26	150	15.00
		12.	Power Grid Corporation of India Ltd (XLIII Issue-K) [7.931 20-May-27	150	15.00
		13.	Power Grid Corporation of India Ltd (XLIII Issue-L) [7.931 20-May-28	150	15.00
		14.	8.06% REC (Series 115) 31 May 2023	850	85.00
		15.	10% Reliance Capital Ltd (F Series B-264) 03-Nov-17	100	10.05
		16.	10% Reliance Capital Ltd (F Series B-272) 20-Dec-17	370	37.19

Annexure III referred to in paragraph 3 of Report on Other Legal and Regulatory Requirements of our report of even date on standalone financial statements:

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)

We have audited the internal financial controls over financial reporting of IFCI Limited (âthe Companyâ) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

Auditorâs Responsibility

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

Meaning of Internal Financial Controls over Financial Reporting

A companyâs internal financial control over financial reporting 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 companyâs internal financial control over financial reporting 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 unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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 control over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting 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, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, 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.

For ASA & Associates LLP Parveen Kumar For KPMR & Associates S M Yamin Qureshi

Chartered Accountants Partner Chartered Accountants Partner

FRN: 009571N/N500006 Membership No. 088810 FRN: 02504N Membership No. 081750

Place : New Delhi

Date : May 28, 2016

Mar 31, 2015

We have audited the accompanying standalone financial statements of IFCI Limited ("the Company"), which comprises the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management''s Responsibility for the Financial Statements The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, its profit and its cash flow for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2015 (''the OrdeF) issued by the Central Government of India in terms of Sub-Section (11) of Section 143 of the Act, we give in the Annexure I 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 II, our report for the Company on the directions issued by the Comptroller & Auditor General of India.

3. As required by Section 143(3) of the Act, 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 Accounts 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 dealt with by this report are in agreement with the books of accounts.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the other matters to be included in the Auditor''s 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 on its financial position in its financial statements - Refer Note No. 25.1 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note No. 25.3 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.

Annexure I referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements of our report of even date

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets,except for leased plant and machinery having gross block of Rs. 70.92 crore (PY - Rs. 70.92 crore) which have been fully depreciated.

(b) The fixed assets are being physically verified by the management at all its offices in a phased manner at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification. However, the policy with regard to the verification of physical assets and the periodicity thereof needs to be reviewed and approved by the Board.

(ii) The Company is a Systemically Important Non-Banking Financial Company, accordingly it does not hold any inventory. Thus, paragraph 3(ii) of the Order is not applicable.

(iii) According to the information provided and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register mentioned under Section 189 of the Companies Act, 2013.

(iv) The present ERP of the company requires up-gradation and Information Systems audit to test the designing and effectiveness of the automated controls. Except as above, in our opinion and according to the information and explanations given to us, generally there is an adequate internal control system commensurate with the size of the company and nature of its business, for the purchase of fixed assets and for the sale of services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal control system.

(v) According to the information provided and explanations given to us, the Company has not accepted any deposits from the public during the year within the meaning of Section 73 to 76 of the Companies Act, 2013.

(vi) According to the information provided and explanation given to us, maintenance of cost records by the Company has not been prescribed by the Central Government under Section 148(1) of the Companies Act, 2013. Thus, paragraph 4(vi) of the Order is not applicable.

(vii) (a) According to the information provided and explanations given to us, the company is generally regular in depositing undisputed statutory dues including provident fund, employee''s state, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to it with the appropriate authorities. There are no outstanding statutory dues existing as at the last day of the financial year for a period of more than six months from the day they became payable.

(b) According to the information and explanations given to us, there were no amounts due as on March 31, 2015 in respect of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess which have not been deposited on account of any dispute other than those indicated below:

Name of the Nature of Amount Year to which Statute disputed dues (Rs. )* demand relates

Finance Act, Service Tax 70,233,120 FY 2005-06 to 1994(Service and Penalty FY 2007-08 Tax)# demanded

Finance Act, Service Tax 3,048,230 FY 2008-09 to 1994 (Service and Penalty FY 2009-10 Tax) demanded

Finance Act, Service Tax 4,534,112 FY 2005-06 to 1994 (Service and Penalty FY 2007-08 Tax) demanded

Finance Act, Service Tax 5,957,624 FY 2006-07 to 1994 (Service and Penalty FY 2008-09 Tax) demanded

MP Sales Tax 60,000 Commercial on Lease Tax Act, 1994 Transactions

Name of the Forum, where Statute dispute is pending

Finance Act, CESTAT, Delhi 1994(Service Tax)#

Finance Act, CESTAT, Delhi 1994 (Service Tax)

Finance Act, CESTAT, 1994 (Service Bangalore Tax)

Finance Act, Commissioner 1994 (Service of Service Tax, Tax) Chennai

MP Board of Commercial Revenue Tax Act, 1994 (Commercial Transactions Tax Tribunal) Gwalior, M.P

* net of amount deposited under protest

# Stay order has been received against the amount disputed and not deposited

(c) According to the information provided and explanations given to us, the amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under has been transferred to such fund within time.

(viii) There are no accumulated losses at the end of the financial year and the Company has not incurred cash losses during the financial year covered by our audit report and in the immediately preceding financial year.

(ix) According to the information provided and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

(x) According to the information provided and explanations given to us, the Company has given guarantees for loans taken by others, Performance Guarantees and Letters of Comforts for subsidiaries and others. The terms and conditions of these guarantees and Letters of Comfort are not prima facie prejudicial to the interests of the Company.

(xi) In our opinion and according to the information provided and explanations given to us, the term loans availed by the Company were applied for the purpose for which they were obtained.

(xii) During the year, the company has reported fraud by one of its borrower company where the borrower has induced the company to reschedule its outstanding loan facilities on false assurances and forged documents by inflating the value of security by Rs. 81 crore.

For ASA & Associates LLP For ANDROS & CO. Chartered Accountants Chartered Accountants FRN: 009571N/N500006 FRN: 008976N

Parveen Kumar Puneet Gupta Partner Partner Membership No. 088810 Membership No. 093714

Place : New Delhi Date : May 26, 2015

Mar 31, 2014

We have audited the accompanying financial statement of IFCI Limited ("the Company") which comprises of the Balance Sheet as at 31st March, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of Significant Accounting Policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these Financial Statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in Sub - Section (3C) of Section 211 of the Companies Act , 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control . An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information as required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

(b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flows of the company for the year ended on that date.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order'') issued by the Central Government of India as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004, in terms of Sub - Section (4A) of Section 227 of the Act, we give, based on the information and explanation given to us, a statement in the Annexure on the matters specified in paragraphs 4 and 5 of that Order.

2. As required by Section 227(3) of the Act, we report that

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

(b) In our opinion proper books of accounts 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, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our Opinion, the Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in Sub - Section (3C) of Section 211 of the Companies Act, 1956;

(e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of Clause (g) of Sub- Section(1) of Section 274 of the Companies Act, 1956;

(f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under Section 441A of the Companies Act, 1956 nor has it issued any Rules under the said Section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE AUDITORS'' REPORT

The Company is a Non Banking Financial Company (NBFC) and the Clause (ii) (a, b, c); (iii) (b, c, d, f, g) and (xiii) (a, b, c, d) of Companies (Auditors Report) Order 2003 or not applicable and hence no opinion on these have been expressed.

(i) (a) The Company has maintained proper records to show full particulars including quantitative details and situation of its fixed assets.

(b) The fixed assets are being physically verified by the Management at all its offices in a phased manner at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification. However, the policy with regards to the verification of phyiscal assets and the periodicity thereof needs to be reviewed and approved by the Board.

(c) The Company did not dispose off any substantial part of fixed assets during the year that may affect the going concern.

(ii) (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) The company has not taken any loans, secured or unsecured from Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(iii) There are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to fixed assets and with regard to the sale of services. Further during the course of our audit we have neither come across nor have we been informed of any instances indicative of major weaknesses in the aforesaid internal control procedures which would require corrective actions.

(iv) (a) There are no transactions that need to be entered into a Register maintained under Section 301 of the Companies Act, 1956.

(b) As there are no transactions that need to be entered into a Register maintained under Section 301 of the Companies Act, 1956, therefore, paragraph (v)(b) of the Order is not applicable.

(v) The Company has not accepted any deposits from the public during the year under Sections 58A, 58AA or any other relevant provisions of the Act.

(vi) The Company has an internal audit system commensurate with the size of the Company and nature of its business.

(vii) Clause (viii) of paragraph 4 of the aforesaid Order is not applicable to the Company since the Central Government has not prescribed maintenance of cost records under Section 209 (1)(d) of the Companies Act, 1956 for the Company.

(viii) (a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it with the appropriate authorities. As per the information and explanation and records made available to us there were no undisputed dues payable for the period of more than six months form the date they became payable as at March 31, 2014.

(b) There are no dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty/Cess which have not been deposited

on account of any dispute other than those indicated below:

Name Nature of Amount Year to which Forum, where of the the disputed (Rs.)* demand dispute is Statute Dues relates pending

Finance Act, Service Tax 7,02,33,120 FY 2005-06 to CESTAT, Delhi 1994 and penalty FY 2010-11 (Service Tax) Demanded#

Finance Act, Service Tax 45,34,112 FY 2005-06 to CESTAT, 1994 and penalty to FY 2007-08 Bangalore (Service Tax) Demanded

MP Commercial Sales Tax 60,000 Â Board of Tax Act, 1994 on Lease Revenue Transactions (Commercial Transactions Tax Tribunal) Gwalior, M P

* net of amount deposited under protest

# stay order has been received against the amount disputed and not deposited

(ix) There are no accumulated loss and the Company has not incurred any cash loss during the financial year covered by our audit report and in the immediately preceeding financial year.

(x) The Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

(xi) Based on our examination of documents and records, we are of the opinion that the Company has maintained adequate records where the Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xii) Based on our examination of the records, we are of the opinion that proper records have been maintained of the transactions and contracts in respect of the Company''s dealing or trading in shares, debentures and other investments and timely entries have been made in those records. We also report that the Company has held the shares, securities, debentures and other investments in its own name except to the extent of the exemption, if any, granted under Section 49 of the Companies Act, 1956.

(xiii) The Company has given guarantees for loans taken by others Performance Guarantees and Letters of comforts for subsidiaries and others. The terms and conditions of these guarantees and Letters of comfort are not prima facie prejudicial to the interests of the Company.

(xiv) Term loans availed by the Company were applied by the Company during the year for the purpose for which they were obtained.

(xv) Funds raised on short term basis have not been used for long term purpose.

(xvi) The Company has not made any preferential allotment of shares during the financial year to the parties and companies covered under the register maintained under Section 301 of the Companies Act, 1956.

(xvii) The Company has issued secured tax free bonds for which creation of charge has not been completed since the prescribed form under the Companies Act, 2013 is yet to be notified by the Ministry of Corporate Affairs.

(xviii) The Company has not raised any money by public issue during the year.

(xxi) During the course of our examination of the books and records of the Company carried out in accordance with generally accepted practices, in India we have neither come across any instance of fraud on or by the Company nor, the Company has noticed and reported any such case during the year, and accordingly the company has not informed us of any such case.

For THAKUR, VAIDYANATH AIYAR & CO. For ANDROS & CO.

Chartered Accountants Chartered Accountants

FRN: 000038N FRN: 08976N

V Rajaraman Brij Bhushan Garg

Partner Partner

M. No. 2705 M. No. 84865

Place : New Delhi Date : April 29, 2014

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of IFCI Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of Sub- section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

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

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

(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956;

(e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of Clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956.

For the annexure referred to in our report of even date to the Members of IFCI Ltd (''the Company'') for the year ended on March 31, 2013; we report that:

(i) (a) The Company has maintained proper records to show full particulars including quantitative details and situation of its fixed assets.

(b) The fixed assets are being physically verified by the Management at all its offices in a phased manner at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) The Company did not dispose off any substantial part of fixed assets during the year that may affect the going concern.

(ii) The nature of the Company''s business/activities/transactions does not require it to hold inventories and as such Clause 4(ii) of the Companies (Auditors'' Report) Order, 2003 (''Order'') is not applicable.

(iii) (a) The Company has not granted loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. (b) In view of our comment in paragraph (iii)(a) above, Clauses (iii)(b), (iii)(c) and (iii)(d) of paragraph 4 of the aforesaid Order are not applicable.

(e) The Company has not taken loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(f) In view of our comment in paragraph (iii)(e) above, Clauses (iii)(f) and (iii)(g) of paragraph 4 of the aforesaid Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventories, fixed assets and with regard to the sale of services. Further during the course of our audit we have neither come across nor have we been informed of any instances indicative of major weaknesses in the aforesaid internal control procedures which would require corrective action. (v) (a) In our opinion, and according to the information and explanations given to us, there are no transactions that need to be entered into a Register maintained under Section 301 of the Companies Act, 1956. (b) In our opinion, and according to the information and explanations given to us, as there are no transactions that need to be entered into a Register maintained under Section 301 of the Companies Act, 1956, paragraph (v)(b) of the Order is not applicable.

(vi) The Company has not accepted any deposits from the public during the year under Sections 58A, 58AA or any other relevant provisions of the Act. Further, during the course of our audit, we have neither come across nor have we been informed of any order passed under the aforesaid Sections by the National Company Law Tribunal during the year.

(vii) In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

(viii) In our opinion, Clause (viii) of paragraph 4 of the aforesaid Order is not applicable to the Company since the Central Government has not prescribed maintenance of cost records under Section 209 (1)(d) of the Companies Act, 1956 for the Company.

(ix) (a) According to the books and records as produced before us and examined by us in accordance with generally accepted auditing practices in India and also the management''s representation, we are of the opinion that the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it. According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Custom Duty and Excise Duty which were outstanding as at March 31, 2013 for a period of more than six months from the date they became payable.

(b) According to the records of the Company, there are no dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty/Cess which have not been deposited on account of any dispute other than those indicated below:

* net of amount deposited under protest

# stay order has been received against the amount disputed and not deposited

(x) There are no accumulated losses and the Company has not incurred any cash losses during the financial year covered by our audit report and in the immediately preceeding financial year.

(xi) Based on our audit procedure and on the basis of the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

(xii) Based on our examination of documents and records, we are of the opinion that the Company has maintained adequate records where the Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) We are given to understand that the provisions of any special statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/Society are not applicable to the Company.

(xiv) Based on our examination of the records, we are of the opinion that proper records have been maintained of the transactions and contracts in respect of the Company''s dealing or trading in shares, debentures and other investments and timely entries have been made in those records. We also report that the Company has held the shares, securities, debentures and other investments in its own name except to the extent of the exemption, if any, granted under Section 49 of the Companies Act, 1956.

(xv) The Company has given guarantees for loans taken by subsidiaries, joint venture companies from Banks and Financial Institutions. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees are not prima facie prejudicial to the interests of the Company considering the relationship between the companies.

(xvi) In our opinion and according to the information and explanations given to us, term loans availed by the Company were prima-facie applied by the Company during the year for the purpose for which they were obtained.

(xvii) According to the information and explanations given to us and based on the overall examination of the Balance Sheet of the Company, funds raised on short term basis have prima-facie not been used for long term investment.

(xviii)In our opinion and according to information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956 during the year.

(xix) Since the Company has not issued any debentures during the year, the question of creation of any security or charge does not arise.

(xx) The Company has not raised any money by public issue during the year.

(xxi) During the course of our examination of books of account carried out in accordance with generally accepted auditing practices, we have neither come across any instance of fraud on or by the management nor have we been informed of such case by the management.

F o r RAY & RAY

Chartered Accountants

Firm Registration No.301072E

Arvind Yennemadi

Partner

Place : Thiruvananthapuram

Date : May 20, 2013 Membership Regn. No.031004

Mar 31, 2010

We have audited the attached Balance Sheet of IFCI Ltd. as at March 31, 2010 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India.

Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (AuditorÃs Report) Order, 2003 and the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

(iii) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956.

(v) As per information and explanation given to us, the central Government has, till date, not prescribed any cess payable under Section 441A of the Companies Act, 1956.

(vi) On the basis of written representations received from the Directors, as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on March 31, 2010 from being appointed as Director under Section 274(1) (g) of the Companies Act, 1956.

(vii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and Notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN PARA 1 OF OUR REPORT OF EVEN DATE

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situations of fixed assets.

(b) The fixed assets are being physically verified by the management at all its offices in a phased manner at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) The Company did not dispose off a substantial part of fixed assets during the year. However, the Company did dispose off certain land and buildings during the year. This has not affected the going concern.

(ii) The nature of the Company does not require it to hold inventories and as such Clause

4(ii) of the Companies (Auditors Report) Order, 2003 (Order) is not applicable.

(iii) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. As the Company has not granted any loans, secured or unsecured, to parties listed in the registers maintained under Section 301 of the Companies Act, 1956, paragraphs (iii) (a), (b), (c) & (d) of the Order are not applicable.

(b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. As the Company has not taken any loans, secured or unsecured, from parties listed in the registers maintained under Section 301 of the Companies Act, 1956, paragraphs (iii) (e), (f) and (g) of the Order are not applicable.

(iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and for sale of services. Further, during the course of our audit we have neither come across nor have we been informed of any continuing failure to correct major weakness in the internal controls.

(v) (a) In our opinion, and according to the information and explanations given to us, there are no transactions that need to be entered into a register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion, and according to the information and explanations given to us, as there are no transactions that need to be entered into a register maintained under Section 301 of the Companies Act, 1956, paragraph (v) (b) of the Order is not applicable.

(vi) In our opinion, and according to the information and explanations given to us, the Company has, not accepted any public deposits and hence, directives issued by the Reserve Bank of India and the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable. As per the information and explanations given to us, 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 in this respect.

(vii) In our opinion, the internal audit function carried out during the year by a firm of Charted Accountants appointed by the management have been commensurate with its size and nature of its business.

(viii) According to the information and explanations given to us the Central Government has not prescribed maintenance of cost records under Clause (d) of Sub-Section (1) of Section 209 of the Companies Act, 1956.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income-Tax, Sales-Tax, Wealth Tax, Service Tax, Custom Duty, Cess and other material statutory dues as applicable with the appropriate authorities. There are no arrears of outstanding statutory dues as at 31.03.2010 for a period of more than 6 months from the date they became payable.

(b) As at March 31, 2010, according to the records of the Company and the information and explanations given to us, the following are the particulars of dues on account of Income Tax/Sales Tax/Wealth Tax/Service Tax/Custom Duty/ Excise Duty/Cess that have not been deposited on account of disputes:

Name of the Nature of the Amount Period

to which Forum where

Statute Dues the Amount dispute

relates pending

M P Commercial Sales Tax on Rs.60,000/- - Board of Revenue

Tax Act lease (Commercial

transactions Tax Tribunal)

M.P., Gwalior

However, according to the information and explanations given to us, the demand against Income Tax is fully covered by way of Advance Tax, deposited with Income Tax Authorities. (x) The Company did not have any accumulated losses as at the end of the financial year and in the immediately preceding financial year.

(xi) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders, except the differential interest in respect of certain bonds which are in the process of restructuring.

(xii) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion, the Company has maintained adequate documents and records in this respect.

(xiii) The Company is not a chit fund, nidhi, mutual benefit or a society. Accordingly, Clause

(xiii)a. of the Order is not applicable. (xiv) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has maintained proper records of the transactions and contracts and timely entries have been made therein in respect of the shares, securities, debentures and other investments dealt with or traded by the Company.

(b) The shares, securities, debentures and other securities have been held by the Company, in its own name except to the extent of the exemption, if any, granted under Section 49 of the Companies Act, 1956. (xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by others from bank or financial institutions are not prima-facie prejudicial to the interests of the Company.

(xvi) In our opinion and according to the information and explanations given to us, term loans availed by the Company were prima-facie applied by the Company during the year for the purpose for which they were obtained.

(xvii) According to the information and explanations given to us and based on the overall examination of the Balance Sheet of the Company, funds raised on short term basis have prima-facie not been used for long term investment.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956 during the year.

(xix) As all debentures and bonds issued are unsecured, creation of security or charge does not arise.

(xx) The Company has not raised any money by public issues during the year.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For CHOKSHI & CHOKSHI

Chartered Accountants

Firm Registration No.101872W

Kanu S. Chokshi

Partner

Camp: New Delhi Membership No.17085

Date : April 30, 2010

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