<dhhead>BOARD’S REPORT</dhhead>

1.0 To The Members

The Board of Directors of Your Company ("Your Company" or "IFCI") are pleased to present before you the 32^nd (Thirty-Second) Annual Report of IFCI Ltd., together with the audited financial statements for the year ended March 31, 2025, Auditors’ Report thereon, Secretarial Auditors’ Report and review of financial statements by the Comptroller and Auditor General of India (C&AG).

The summarized financial performance of Your Company during the year and the previous year are as under:

( in crore)

The above numbers are extracted from the financial in accordance with the Indian Accounting Standards (Ind-AS), in compliance with the Companies (Accounts) Rules, 2014 and Accounting

Standards notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, 2015 as amended.

Any regulation/ guidance/ clarifications/ directions issued by the

Government of India, Reserve Bank of India or by any other Regulators of Your Company will be implemented by Your Company as and when they are issued / applicable.

During the financial year, Your Company reported a Standalone Profit After Tax (PAT) of 43.80 crore, compared to 128.25 crore in the previous year. Total Comprehensive Income stood at 21.39 crore, down from 88.10 crore last year. The decline in profitability was primarily due to reduced interest income. Several strategic initiatives aimed at enhancing recoveries and strengthening advisory services, have led to improved cash flows and a healthier balance sheet. As of the current financial year, the Provision Coverage Ratio is 69.31%, while the Capital

Adequacy Ratio stood at (-)23.04%, an improvement from (-)48.35% in the previous year. Tier-I Capital also improved to (-)23.04% from statements prepared

(-)48.36%. On a consolidated basis, Your Company achieved a PAT of 348.61 crore, up from 241.05 crore in the previous year. Total Comprehensive Income surged to 7,010.70 crore from 575.38 crore, primarily driven by a significant increase in the fair valuation of one of the investments owned by our subsidiary.

During the FY 2024-25, Your Company did not sanction any new loans. There were also no disbursements towards loans/advances during FY 2024-25.

Your Company actively pursued recovery from Non-Performing Assets

(NPAs), thereby recovering 580 crore out of NPAs & Security Receipts

(SRs) during FY 2024-25.

Your Company remains committed to continue its aggressive approach towards recovery from NPAs and stressed assets through multi-pronged resolution modes and strategies.

Your Company has been cautious in investing the surplus fund across diversified instruments with the focus on safety while making every effort toward maximizing yield in consonance with liquidity management.

In Rupee operations, the objective has been to manage the surplus of surplus fund fundseffectively to earn optimum return. The underlying investment principles were safety, liquidity and risk containment and accordingly Your Company invested only in Treasury Bills, Government Securities, Fixed Deposits and Mutual Funds Schemes. Average deployment during the year was

1,145.18 crore against 887.91 crore in FY 2023-24 and the annualized return was 7.28%. During the year under report, Your Company registered an Interest Income of 107.99 crore from investment against 45.44 crore during the previous year. The interest income was higher due to higher interest rate and higher liquidity.

Net investment portfolio of Your Company as on March 31, 2025 stood at 2,477 crore as against 2,959 crore at the end of previous financial year.

The Foreign Currency (FC) operations were confined liabilities and the outstanding KfW loan of 334.25 crore was prepaid on

April 18, 2024.

During the year, Your Company was not able to mobilize fresh resources due to rating constraints and weak financial parameters. However, through effective liquidity management, Your Company has serviced its liabilities on and before due dates. During FY 2024-25 Your Company serviced debt of 1,923 crore ( 1,373 crore principal and 550 crore interest) which included payments due on March 31, 2025.

The Principal liability outstanding of Your Company as on March 31,

2025 was 3,778.05 crore comprising of only Rupee Borrowing. There was no Foreign Currency Loan as on March 31, 2025. Interest liability outstanding (i.e. interest accrued but not due) on borrowings as on

March 31, 2025 was 571 crore. The broad instrument wise breakup of outstanding borrowings as on March 31, 2025 is indicated below:

Your Company is committed to maintaining a high standard of Investor services and devotes considerable effort to identify and follow best practices for timely resolution of investor complaints. Your Company has taken various investor friendly initiatives such as encouraging updation of KYC details with R&TA, dematerialization of securities, electronic payment of interest & redemption proceeds and implementation of an online service request portal for registering investor requests etc.

Conservation of Energy- The Company’s operations do not involve any manufacturing or processing activities.

It provides financial assistance to the industries and thereby requires normal consumption of electricity. Accordingly,

16 the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of Companies (Accounts) Rules, 2014 are not applicable on the Company. Nevertheless, Your Company has prioritized energy efficiency. Further, IFCI Tower had been awarded Gold Certification from the Indian

Green Building Council.

Technology Absorption- Information Technology (IT) has transformed business operations across all sectors of the economy. At Your Company, our in-house team of IT professionals developed a system known as "Centralized

Integrated Information System" (CIIS), which primarily supports major business functions as well as non-core functions. This system has been successfully operational to servicing FC for over 20 years and has been consistently upgraded to meet evolving requirements. Your Company ensures proper data backup and has a Disaster Recovery Site to safeguard data and business information systems. Your Company has designed & developed and manages web portals for Government of India (GoI) for various

Production Linked Incentive (PLI) schemes and other Government schemes. Your Company has also developed Application Programming Interfaces (APIs) for National Testing Agency (NTA) to carry out Aadhar based verification for candidates appearing for NEET examination. Additionally, more meetings were convened using Webex

Meetings and Teams Meeting to facilitate streamlined video communication and live content sharing during the year. This enhancement also enables shareholders to attend AGM/EGM through Webex.

Your Company has taken the following initiatives during FY 2024-25:-

• Under digitization drive, Migrated Document Management System, documents and files to Oracle database with encryption. A module has been developed to enable secure document and file access through the CIIS module.

• Developed and deployed an application software module for capturing details of holding of shares by contractual employees and their relatives, in compliance with SEBI regulations. New modules were also developed in-house for various functions.

• Implemented Manage-Engine software to streamline the process of incident reporting, tracking and resolution.

• Strengthened Network and Infrastructure security through regular Information System (IS) audits, timely patch updates.

• Completion of accessibility audit to assess the usability of the IFCI website for visually challenged individuals, in compliance with the provisions of the Rights of Persons with Disabilities (RPwD) Act, 2016. Further, no technology was imported during the year and no expenditure was incurred on R&D activities.

During the FY 2024-25, Foreign Exchange outflows were~ 332.66 crore and there was no foreign exchange earnings.

Your Company has sound Internal Financial Controls over financial reporting through policies and procedural manuals, designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with Generally Accepted Accounting Principles. The entity level control framework, designed and implemented in earlier years, was subjected to sample tests, for various processes, during the year under report by a well experienced Internal Audit Team of Your Company with a frequency parallel with Internal Audit. Based on the satisfaction over the operating effectiveness of the Internal Financial Controls, the Board of Directors believes that adequate Internal Financial Controls exist and are operating effectively.

Your Company has a dedicated Vigilance Department at Head Office headed by Chief Vigilance Officer, to take care of vigilance matters of IFCI, its Regional Offices & Subsidiaries.

The comprehensive functioning of the Department is divided into Preventive Vigilance, Detective Vigilance and Punitive Vigilance.

With amplified prominence given to Preventive department conducts inspection of various offices from time to time.

The findings observed are shared with subsidiaries and the concerned departments for taking various steps, to initiate corrective measures or systemic improvements. It also advises the Management for systemic improvement, from time to time. It ensures disposal of complaints, disciplinary matters and other referred cases as per extant guidelines.

The Vigilance Awareness week is celebrated every year, to promote ethical practices. During the year, Vigilance Awareness week was celebrated from October 28 to November 03, 2024 with the theme

^^lR;fu"Bk dh laL?fr ls jk"V? dh lef?** "Culture of Integrity for

Nation’s Prosperity".

The Company has put in place a Whistle Blower Policy / Vigil Mechanism in terms of the provisions of Section 177 (9) and (10) of the Companies

Act, 2013 and Regulation 22 of the SEBI (Listing Obligations hand Disclosure Requirements) Regulations, 2015 (Listing Regulations).

Under the Whistle Blower Policy, Director(s) and employee(s) of IFCI, can report to the Management their concerns about unethical behavior, actual or suspected fraud or violation of the IFCI’s code of conduct or ethics policy with adequate safeguards to them against any sort of victimization on raising an alarm. The Policy also provides for direct access to the Chairman of the Audit Committee in exceptional cases.

The Whistle Blower Policy is available on the link https://www.ifciltd. com/2025/Whistle%20Blower%20Policy_Vigil%20Mechanism.pdf.

An Internal Complaint Committee has been formed and the Members of the said Committee, as on 31/03/2025, are as under:

1. Smt. Pooja Mahajan(CGM)-PresidingOfficer

2. Smt. Lata Lochav External Member

3. General Manager (HR)

4. Smt. Shikha Gupta, DGM

5. Smt. Trina Tejaswini, DGM (Law)

In the absence of any of the aforesaid internal members, Smt. Priyanka Sharma, DGM is the alternate member. The quorum of the Committee shall comprise of all members.

A brief of the complaints received under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 is as under:-

Your Company is complying with all the provisions of Maternity Benefit

Act, 1961. the

IFCI has implemented the Right to Information Act, 2005 from 2013 onwards following the applicability of the RTI Act, 2005 to IFCI and has been providing information under RTI Act to the citizens ensuring transparency and fairness in its business activities. IFCI in compliance with the provisions of Section 4 of the Right to Information Act, 2005 has made necessary disclosures which are available on the website of Your Company at www.ifciltd.com. IFCI has designated a Central Public

Information Officer (CPIO) and First Appellate Authority (FAA) at its Head Office, New Delhi and also designated the Regional Office Heads at its Regional Offices as Central Assistant Public Information Officers

(CAPIOs) to facilitate dissemination of information on PAN-India basis.

IFCI had also designated a Transparency Officer in pursuance to the

Central Information Commission’s directive dated November 15, 2010. Further, the Right to Information Act, 2005 (RTI Act) has also been information of uploaded on the website of the Company for first the provisions of the RTI Act. The RTI Manual has also been uploaded on the website of IFCI Ltd. for easy access to the information. The RTI

Applications & their respective replies along with RTI Appeals & their respective decisions are also uploaded on the website of IFCI Ltd. in compliance with the Statutory directions. IFCI received a total number of 90 RTI Applications and 35 RTI Appeals in FY 2024-2025 which were dealt with as per the provisions of the RTI Act, 2005.

15.0 Promotion of Rajbhasha:

Your Company takes pride for complying with Official Language Act 1963 of the Government, for which Official Language Implementation Committees (OLICs) has been set up in the Head Office as well as in the Regional Offices. Quarterly meetings of OLIC are being regularly held to review the progress of the use of Hindi. All Computers available within the Company have Unicode facility and its website is also bilingual for the benefit of shareholders and general public. During the year, Hindi competitions as well as Hindi workshops were organized by Your Company for promotion of Rajbhasha within IFCI. Further, many officers from Your Company participated in various competitions organized by Nagar Rajbhasha Karyanvyan Samiti and some of them emerged as winners in these competitions.

1. Industry Structure and Developments *

The global economic expansion steadily continued in 2024, although growth was uneven amidst geopolitical tensions, geo-economic fragmentation, heightened trade tensions and elevated public debt. According to the International Monetary Fund, global growth at 3.3% in 2024 (3.5% a year ago) was below the historical average (2000-19) of 3.7%. Amidst challenging global economic environment, the Indian economy exhibited resilience during 2024-25, supported by robust macroeconomic fundamentals and proactive policy measures. Though the real gross

*Source: Excerpts from the RBI Annual Report 2024-25 and RBI Financial Stability Report June 2025.

17 domestic product growth moderated to 6.5% in 2024-25, India remained the fastest growing major economy. Economic activity was supported by an improvement in consumption demand and net exports on the expenditure side, and buoyant services sector and recovery in agricultural production on the supply side.

Growth in Gross Value Added (GVA) in the agriculture and allied sectors in 2024-25 stood at 4.6% as compared with 2.7% a year ago, driven by record food grains production aided by adequate reservoir levels and favorable weather conditions. Growth in industrial sector moderated to 4.3% in 2024-25, primarily due to deceleration in manufacturing GVA.

The Production Linked Incentive (PLI) schemes helped to steer growth across several key manufacturing industries. As of November 2024, investment under PLI scheme reached 57% of the aggregate committed target under the schemes. The services sector, with a share of 64.1% in GVA, remained the mainstay of aggregate supply with a growth of 7.5% in 2024-25.

As per June 2025 Financial Stability Report of the Reserve Bank of

India, the economy is growing at a healthy pace, with the financial system meeting the financing needs of all sectors of the real economy.

The resilience of the banking system has been pivotal to the strength of the Indian Financial System. Scheduled Commercial Banks (SCBs) continued to record improvement in their asset quality, with the GNPA ratio and NNPA ratio declining to multi-decadal lows of 2.3% and 0.5%, respectively. The half-yearly slippage ratio, measuring new accretions to NPAs as a share of standard advances at the beginning of the half-year, remained stable at 0.7%. As of March 2025, the capital to risk weighted assets ratio of SCBs increased to a record high of 17.3%. The profitability of SCBs remained strong in 2024-25, with profit after tax increasing by

16.9% (y-o-y).

On fiscal front, the Central Government continued with its efforts towards fiscalconsolidation, supported by buoyant tax revenues, while maintaining the thrust on expenditure quality. A modest current account deficit and adequate forex reserves provided resilience to the external sector even as capital flows exhibited volatility.

2. Non-Banking Financial Companies (NBFCs)

As per RBI’s Annual Report 2024-25, aggregate credit extended by NBFCs expanded in double digits as at end December 2024 although growth in unsecured lending moderated. Profitability indicators and

NPA ratios continued to improve further during this period, while capital adequacy ratio remained robust.

In terms of the Financial Stability Report brought out by the Reserve Bank of India in June 2025, the credit growth of NBFCs (Upper and

Middle Layers) rose to 20.7% (y-o-y) in March 2025 from 16.0% in September 2024. Considering activity based classification,credit growth for the second largest category of NBFCs (in terms of outstanding loans), viz., NBFC-IFCs has risen, vis-?-vis March 2024. NBFC-MFI’s portfolio contracted in H2:2024-25 as lenders exercised prudence in response to the stress in the portfolio.

Delinquency level in both NBFC-UL and NBFC-ML improved. GNPA ratio of Government-owned NBFCs (58.7% share in advances by NBFC-

ML) improved to 1.4% while that of privately owned NBFCs of NBFC-ML remained at similar level (5.2%) as in September 2024. The system level CRAR of NBFCs was healthy at 25.8% in March 2025. NBFC-UL were consistently maintaining an elevated NIM at around 8%, as against around 4% by NBFC-ML. Consequently, profitability of NBFC-UL was much higher than that of NBFC-ML in terms of ROA and ROE. On the liquidity front, NBFC-UL were more vulnerable, given that they had a higher proportion of short-term liabilities to total assets in comparison with NBFC-ML. The share of long-term assets in total assets of NBFC-UL stood at 55.0% as against nearly two-thirds for NBFC-ML.

3. Opportunities & Threats

To make India self-sufficient, minimize import dependence, create global industrial champions within India and to ‘Make in India for the world’, the Government of India has launched several Production Linked Incentive (PLI) schemes. There has also been focus on self-sufficiency in healthcare for which the Government of India launched Bulk Drugs and Medical Device Parks. At present, IFCI is the Project Management

Advisor (PMA) for 10 out of the 14 PLI schemes.

Your Company’s endeavor to become a preferred partner (in the capacity of Project Monitoring / Nodal Agency) for the PLI Schemes and other schemes of the Government of India has provided not only an additional revenue stream but also lot of visibility.

PLI Schemes are the cornerstone of the Government of India’s push for achieving an Aatma Nirbhar Bharat. The objective is to make domestic manufacturing globally competitive and to create global champions in manufacturing. The strategy behind the PLI schemes is to offer companies incentives on incremental sales from products manufactured in India, over the base year. They have been specifically designed to boost domestic manufacturing in sunrise and strategic sectors, curb cheaper imports and reduce import bills, improve cost competitiveness of domestically manufactured goods, and enhance domestic capacity and exports.

As part of Your Company’s strategy to diversify into advisory services, Your Company has continued to bag schemes of the Government of India during FY 2024-25 which included Electric Mobility Promotion Scheme-2024 (EMPS), Scheme to Promote Manufacturing of Electric Passenger Cars (SMEC), PM E-Drive, IT hardware 2.0.

Following are the PLI and other Schemes of Government of India, where

IFCI has been appointed as the Nodal Agency / Project Management Agency (PMA):

SHCIL, has had a transformative impact on e-Stamping in India at present during FY 2024-25, Stock Holding has launched e-stamping in the state of Goa.

IFCI Venture Capital Funds Limited (IVCF), another subsidiary of IFCI, is promoting social sector initiatives of Government of India. Government of India has launched several ‘First of their kind schemes’ to support entrepreneurship among marginalized sections of the society. The schemes managed by IVCF are Venture Capital Fund for Scheduled Castes (VCF-SC) including Ambedkar Social Innovation Incubation Mission (ASIIM), Venture Capital Fund for Backward Classes (VCF-BC), Venture Capital Fund for Scheduled Tribes (VCF-ST) and SAGE Venture Fund (SAGE).

During FY 2024-25, IVCF signed an MoU with DICCI, CII to facilitate financial inclusion and economic growth of SC/ST Entrepreneurs. Further,

IVCF signed an MoU with Startup TN to promote entrepreneurship amongst SC and backward sections of society.

In coordination with Ministry of Tribal Affairs, a symposium on Development of Startup Ecosystem among Scheduled Tribe was organized by IVCF to bring together major stakeholders viz. VC Funds and Impact Investors to discuss strategies for empowering tribal entrepreneurs and fostering inclusive growth. Further, during FY 2024-25, IVCF organized several webinars / seminars across schemes to raise awareness among stakeholders.

The details of all the subsidiaries are available on the website of IFCI at www.ifciltd.com.

Your Company received a communication from Department of Financial Services (DFS), Ministry of Finance, vide letter F.No.2/22/2016-IF-1 dated November 22, 2024 according In-principle approval to consider ‘Consolidation of IFCI Group’ which entails Merger / Amalgamation of IFCI Limited and StockHolding Corporation of India Limited and other group companies of IFCI Limited as follows:

In its endeavour to contribute to the net zero emission targets of the nation, Your

Company had set up a new advisory vertical during the previous financial year to provide a gamut of ESG (Environment, Social & Governance) and sustainability services. The vertical has developed a comprehensive ESG tech platform for banks and corporates for providing end-to-end ESG services.

Towards fostering growth of Small and Medium Enterprises (SMEs) in the Country, Your Company signed a Memorandum of Understanding (MoU) with

BSE during the year. Under the MoU, Your Company shall carry out financial appraisal and due diligence of SMEs aspiring to list on SME exchanges and advance ESG practices amongst SMEs in India. IFCI has also conducted a workshop on Strategic Partnership & Business Opportunities for Aspiring SMEs.

During the year, Your Company reduced its borrowing by 28% which was backed by advisory income and recoveries. Your Company has continued its aggressive focus on resolution of stressed assets and Non-Performing Assets (NPAs), by adopting multi-pronged strategies.

Your Company focuses on group synergies and value maximization at the

Group level. IFCI through its subsidiary StockHolding Corporation of India

Limited (SHCIL), is making contribution in promotion of digital economy in the Country.

SHCIL, a subsidiary of IFCI Limited, is one of the largest Depository

Participants in the Country besides being the Country’s premier custodian and provides post trading and custodial services to institutional investors, mutual funds, banks, insurance companies, etc. It also acts as a Central Record Keeping Agency (CRA) for collection of stamp duty, e-court fee and e-registration in various States and Union Territories (UTs). There has been massive penetration of e-stamping across the Country, which has not only contributed to financial gains by virtue of cost savings but has also curbed revenue leakage. It has also reduced paper consumption contributing to broader ecological sustainability.

DFS has advised to take further necessary action and to commence the process in accordance with the applicable laws, rules, regulations etc.

At the meeting held on November 22, 2024, the Board of accorded In-principle approval to consider Consolidation of IFCI Group as stated above, and to commence the process for the same, in accordance with the regulatory/ statutory/ applicable laws, rules, regulations, guidelines, framework and standards etc.

Your Company has appointed a Transaction Advisor for carrying out consolidation process. As per evaluation of the Transaction Advisor, the Board of IFCI Limited at its meeting held on July 14, 2025, recommended to the

Government of India for approval of the Group Consolidation as follows:

The Board further recommended divestment of IFCI’s shareholding in MPCON

Limited, a direct subsidiary of IFCI Limited to the Government of India for approval.

The above consolidation and divestment are subject to the applicable regulatory /statutory approvals and applicable laws, rules, regulations, guidelines, framework and standards, etc.

4. Segment-Wise or Product-Wise Performance

Your Company’s main business is to provide financial assistance and it operates under single segment reporting framework.

5. Outlook*

As per RBI’s June 2025 Financial Stability Report (FSR), the near-term global financial stability risks have risen significantly, driven by heightened geopolitical tensions and economic and trade policy uncertainties. Shifting US trade policies and lack of clarity surrounding its economic policies triggered a spike in volatility and sharp price declines across a range of markets. Consequently, financial conditions have tightened, and growth prospects have weakened. Though markets have recovered from the early-

April lows due to sharp tariff hikes, considerable uncertainty persists about the evolution of trade patterns and economic outlook. Moreover, despite the recent market turmoil, asset valuations in several markets stay high relative to fundamentals and risks remain concentrated with exposures to a few large stability risks remain elevated, technologyfirms. as unprecedented trade and policy uncertainties and unpredictability could potentially interact with the existing vulnerabilities - rising public debt, high leverage in the non-banking financial intermediaries sector and stretched asset valuations - to amplify adverse shocks.

Citing escalation in trade tensions and elevated policy uncertainty, the International Monetary Fund in its April 2025 World Economic Outlook has revised global growth projection downwards to 2.8% in 2025 and 3.0% in 2026. Other multilateral agencies have also lowered their global growth forecasts. The Organisation for Economic Co-operation and Development (OECD), in its Economic Outlook released in June 2025, has revised the global GDP growth forecast for 2025 to 2.9%. Similarly, the World Bank, in its June 2025 Global Economic Prospects, projected global GDP growth (using PPP weights) to decelerate from 3.3% in 2024 to 2.9% in 2025. As per RBI’s Annual Report, 2024-25, the global economy in 2025 is likely to grow not only below its historical average (2000-19) of 3.7%, but also below the growth of 3.3% in 2024.

The Indian economy is growing at a healthy pace, supported by strong macroeconomic fundamentals, it remained the fastest growing major economy in the world during 2024-25. The outlook for the Indian economy remains promising in 2025-26, supported by revival in consumption demand, government’s continued thrust on capex while adhering to the path of fiscal consolidation, healthy balance sheets of banks and corporates, easing financial conditions, continuing resilience of the services sector and strengthening of consumer and business optimism, besides sound macroeconomic fundamentals.

The prospects for agriculture sector appear favourable in 2025-26 on the back of expected above normal south-west monsoon and several productivity-enhancing government policies. Manufacturing sector is expected to gain further traction in 2025-26 supported by improvement in domestic demand, higher capacity utilisation, healthy balance sheets of corporates and banks, and consumer and business optimism. The government’s focus on widening the manufacturing base and the policy support through the ongoing PLI scheme and National Manufacturing Mission is expected to further strengthen ‘Make in India’ initiative. The construction sector is also expected to continue its robust performance in 2025-26.

Amidst elevated global economic and trade policy uncertainties, the Indian economy continues to display resilience, underpinned by strong macroeconomic fundamentals and robust financial system. Moreover, as

India’s growth is largely dependent on domestic demand, the impact of external shocks remained limited. The continued momentum in various high frequency indicators of services sector, robust agricultural production and above normal southwest monsoon forecasts, and strong goods and services tax collections underscore the sustained momentum and resilience of the economy. The headwinds from protracted geopolitical tensions, elevated uncertainty and trade disruptions, and weather-related uncertainty pose downside risks to growth. Moreover, deceleration in global growth will act as a drag on domestic output. The near-term and medium-term outlook gives greater confidence of a durable alignment of headline inflation with the target of 4%.

India’s fiscal position and credibility has enhanced significantly in recent years on account of ongoing fiscal consolidation, improvement in the quality of expenditure and earmarking of debt-to-GDP as the nominal anchor for the central government’s fiscal policy. The resilience of the external sector has been a key contributing factor to India’s macroeconomic and financial stability. Current account deficit at 0.6% of GDP during

25 remains eminently manageable, supported by sustained buoyancy in services exports and remittances. In the capital account, high gross foreign direct investment during 2024-25 indicates that India continues to remain an attractive investment destination. The net capital flows, however, fell short of CAD during 2024-25, leading to a depletion in foreign exchange reserves. Notwithstanding the uncertainty surrounding the trade outlook,

India’s external vulnerability indicators remain robust and continue to show improvement. Foreign exchange reserves at US$ 697.9 billion, as on June 20, 2025, are sufficient to cover more than imports on BoP basis; external debt stood at a moderate 19.1% of GDP at end March 2025; the share of short-term debt on residual maturity basis stood at 45.4% of foreign exchange reserves at end March 2025; and net international investment position improved.

Going forward, the easing of supply chain pressures, softening of global commodity prices and higher agricultural production on the back of a likely above-normal south-west monsoon augur well for the inflation outlook in 2025-26. However, global financial market volatility, geopolitical tensions, trade fragmentation, supply chain disruptions and climate-induced uncertainties pose downside risks to the growth outlook and upside risks to the inflation outlook. The Indian economy is poised to sustain its position as the fastest growing major economy during 2025-26, supported by pickup in private consumption, healthy balance sheets of banks and corporates, easing financial conditions and the government’s continued thrust on capital expenditure.

6. Risks and Concerns

In order to address risks, Your Company has put in place an Integrated Risk Management Policy (IRMP) which addresses Credit Risk, Market

Risk, Operational Risk and Asset-Liability Management, as a part of

Comprehensive Risk Management Framework which is integrated with its business model.

The General Lending Policy, IRMP, Liquidity Risk Management and other business policies of Your Company are reviewed periodically, keeping in view the changing economic and business environment. The Risk Management Vision Statement and Qualitative Risk Appetite Statements of IFCI have also been put in place. Parameters included in the Qualitative Risk Appetite statement are tested periodically.

Your Company assesses the Portfolio Level Risks by way of monitoring of actual exposures against prudential limits, annual rating migration exercise, rating distribution, mapping of internal and external ratings.

As part of Ind-AS implementation, Your Company estimates rating grade-wise Probability of Default (PD), Loss Given Default (LGD) and Expected Credit Loss (ECL) as part of Ind-AS implementation. The Risk and Asset Liability Management Committee of Executive (RALMCE), analyses the Dynamic Liquidity Position, Structural Liquidity Gaps and Interest Rate Sensitivity positions on a periodic basis, based on external regulatory prescriptions. The mid-

Integrated treasury reports to the Risk Management function and acts as an independent risk monitoring functionary. To manage operational risks there are adequate internal controls and systems in place, aided and assisted by Internal Audit, Internal Financial Controls, remote back-up of data. Disaster Management Policy, IT security, physical security and suitable insurance of insurable assets of Your Company as well as of the assets mortgaged to Your Company and management of liquidity position is also in place to assess likely impact on CRAR, profitability and liquidity.

7. Internal Control Systems, their adequacy and Internal Audit

Your Company has adequate Internal Control System commensurate with size, scale and complexity of its business and allied operations. The efficacy of these internal controls is being verified by the Internal Audit Department on a regular basis. From Financial Year 2018-19, the internal audits are being carried in-house by a team of experienced personnel. The periodicity of such audits varied from quarterly to yearly depending upon the criticality and materiality of transaction risks based on the scope approved by the Audit Committee of Directors.

- Your Company carries out audit, based on the guidelines of Risk Based Internal Audit (RBIA) in terms of RBI guidelines issued vide Circular dated February 03, 2021 for all Non-Deposit taking NBFCs.

8. Material Development in Human Resources, Industrial Relations Front, Including Number of People Employed

Efficient Human Resource (HR) Management plays a vital role in driving the Company's mission to build a positive and high-performing work culture. Our HR efforts are focused on strengthening employee engagement, 11 months of merchandise supporting career development, and cultivating a diverse and inclusive environment. In the financial year 2024-25, Your Company introduced several initiatives aimed at enhancing employee productivity and providing them with the essential skills, knowledge and competencies needed to achieve the Company’s vision.

During FY 2024-25, there was focus on skilling of employees and about 97.45% employees were given 1,754 man-hours training in the areas of

Finance, Effective Negotiations, AI and Machine Learning, Advanced MS-Excel, ESG, POSH, Procurement through GeM, communication skills, leadership and other behavioral skills.

Your Company has been successful in deployment of required manpower resources in critical roles to support IFCI's strategic objectives. Your

Company has implemented different retention strategies by offering value proposition to deployed resources and continuous skilling and reskilling efforts.

Your Company has successfully achieved digital integration of systems for deployed executives, ensuring seamless alignment with IFCI’s internal digital infrastructure. This integration allows deployed executives to access, update and manage data through the same digital platforms and processes used within IFCI, promoting uniformity and operational

Delegation of Powers have been regularly reviewed and Fine-Tuned to create platforms for consultative decision making and improve speed & quality in delivery of assignments. The value system of the organization is being clearly communicated to define expected behaviors and in this direction Staff Accountability related Policies have also been strengthened.

Your Company has also prioritized employee cohesiveness and the welfare of its employees through the arrangement of a diverse range of events and celebrations. These include activities such as observing International Day of Yoga, commemorating the IFCI Foundation Day, marking Independence Day, engaging in Swatchhta Campaigns, celebrating Diwali, hosting a New Year Event, recognizing International Women's Day, among others.

Sessions have also been organized for increasing financial awareness amongst female employees.

Your Company has successfully developed a new Human Resource

Information System (HRIS) pertaining to Advisory Services, in its effort to continuously streamline HR operations and better information management.

9. Welfare of SCs/STs/OBCs/EWSs/PwDs function of

Your Company is fully committed to the Government of India’s guidelines concerning the welfare of Scheduled Castes (SCs), Scheduled Tribes (STs), Other Backward Classes (OBCs), Persons with Disabilities (PwDs) and Economically Weaker Sections (EWSs), implementing these directives both in letter and in spirit. By adhering to these guidelines, the Company actively fosters the well-being and advancement of SCs, STs, OBCs, PwDs and EWSs at all stages, including providing representation in training programmes for employees from reserved categories.

As of January 01, 2025, your Company employed a total of 118 regular employees (excluding DMD & CVO). Of these, 19 employees (16%) were from the Other Backward Classes, 11 (9%) from the Scheduled Castes and 1 (1%) from the Scheduled Tribes.

(i) VH stands for Visually Handicapped (persons suffering from blindness or low vision) (ii) HH stands for Hearing Handicapped (persons suffering from hearing impairment)

(iii) OH stands for Orthopedically Handicapped (persons suffering from loco motor disability or cerebral palsy)

(iv) ID stands for Intellectual Disability

The details of significant changes in Key Financial Ratios are as under:

*Explanation: - The change in the ratios were due to decrease in operational income which was impacted due to decrease in interest income on account of recognition of Stage 3 income & memo recovery. Further, as Debtor Turnover Ratio or Inventory Turnover Ratios are not applicable to the company (NBFC), the same has not been incorporated in the Table above.

The Return on Net Worth declined due to decrease in total comprehensive income to 21.93 crore in FY 2024 25 from 88.10 crore in FY 2023–24.

1. IFCI Social Foundation (ISF)

IFCI has always strived to conduct its business holistically and responsibly. At IFCI, along with economic performance, community and social stewardship have been key factors for its holistic business growth. IFCI has been an early adopter of Corporate Social Responsibility (CSR) initiatives and has been involved in socially relevant activities ever since its inception in 1948. Today, it continues to work towards social and community development and areas needing focus and attention, through the IFCI Social Foundation (ISF), a registered Trust established in 2014 (MCA Registration No. CSR00005110). ISF has been functioning as an arm for CSR activities of IFCI and IFCI Group. ISF is guided by its values viz. Inclusiveness, Integrity, Commitment and Passion with the overall vision "To be one of India’s premier CSR Institutions and strive to make sustainable social impact with inclusiveness". Its major focus has been in areas of Education, Skill Development, Healthcare and Sanitation, Poverty Alleviation, Women Empowerment and Social Welfare of Women and Girl Child. IFCI and ISF through its CSR projects have covered almost 23 states and Union Territories in India. The trust is registered for exemptions u/s 12A & 80G of the Income Tax Act. The trust is also registered with Ministry of Corporate Affairs in line with

CSR Amendment Rules, 2021.

2. CSR Expenditure / Allocation

As the Average Net Profit of IFCI Ltd for the last preceding three years was negative, IFCI was not required to allocate any amount for CSR activities for FY 2024-25. Pursuant to the amendment in the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on CSR activities forms part of Board’s Report at Annexure - I.

Certain Statements in Management Discussion and Analysis describing the Company’s objectives, estimates and expectations may be ‘forward looking’ within the meaning of applicable laws and regulations. Actual results might differ . materiallyfromthoseexpressed orimplied

Following were the changes in Directors and Key Managerial Personnel during the FY 2024-25 and till the date of signing of this Board’s Report:

a) The Government vide its Order dated March 27, 2024 had nominated Shri Jitendra Asati, Director, DFS, (DIN: 10042542) on the Board of the Company as Government Director. Accordingly, Shri Jitendra Asati, Director, DFS was appointed as Director on the Board of Your Company w.e.f. April 04, 2024.

b) The Government vide its Order dated March 27, 2024 had nominated Shri Surjith Karthikeyan, Director, DFS, (DIN: 09634785) on the Board of the Company as Government Director. Accordingly, Shri Surjith Karthikeyan, Director, DFS was appointed as Director on the Board of Your Company w.e.f. April 04, 2024. c) The Government vide its Order dated April 03, 2024 had extended the tenure of Shri Manoj Mittal, MD & CEO (DIN: 01400076) of the Company for further period of 2 years beyond his current tenure ending on June 11, 2024, i.e. from 12.06.2024 till 11.06.2026, or until further orders, whichever is earlier. Later, the Government vide its Order dated July 26, 2024, had appointed Shri Manoj Mittal as Chairman & Managing Director (CMD), Small Industries Development Bank of India (SIDBI) for a period of 3 years from the date of assumption of charge of the post or until further orders, whichever is earlier. In view of the assumption of his charge as CMD of SIDBI w.e.f. July 27, 2024, Shri Manoj Mittal ceased to be the MD & CEO of IFCI Ltd., w.e.f. July 27, 2024. d) The Government vide its order dated March 21, 2025, appointed Shri Rahul Bhave (DIN: 09077979) as Managing Director & Chief

Executive Officer (MD & CEO) on the Board of Your Company.

Consequently, Shri Bhave ceased to be Deputy Managing Director (DMD) of Company and assumed charge as MD & CEO of Your Company w.e.f. March 21, 2025 (forenoon). Pursuant to

Regulation 17(1C) of SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015, the approval of shareholders will be obtained at ensuing AGM. e) Shri Surjith Karthikeyan (DIN: 09634785), Government Director, ceased to be on the Board of the Company w.e.f. July 29, 2025, upon withdrawal of nomination by the Government of India. f) The Government vide its Order dated July 24, 2025 (communication received on July 29, 2025) had nominated Shri Shailesh Kumar, Deputy Secretary, Department of Financial Services (DFS), on the Board of the Company as Government Director. Accordingly, Shri Shailesh Kumar, Deputy Secretary, DFS was appointed as Director on the Board of Your Company w.e.f. August 05, 2025. Pursuant to Regulation 17 (1C) of SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015, the approval of shareholders will be obtained at ensuing AGM. g) Shri Surendra Behera (DIN: 09784122), Non-Executive Director ceased to be on the Board of the Company w.e.f. August 19, 2025, upon resignation. h) Shri Rajeev Sachdev was appointed as Additional Director (Non-

Executive-Non-Independent) by the Board w.e.f. August 25, 2025. Pursuant to Regulation 17(IC) of SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015, the approval of shareholders will be obtained at ensuing AGM. i) Shri Arvind Kumar Jain (DIN: 07911109) will retire by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible has offered himself for re-appointment.

A detailed report on Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

(SEBI Listing Regulations) is attached to the Annual Report. a) The credit ratings assigned to the various financial facilities / instruments of the Company during the Financial Year 2024-25 is provided in the Corporate Governance Report forming part of this Annual Report. b) The details of the Meetings of the Board of Directors and the Audit Committee forms part of the Corporate Governance Report appearing separately in the Annual Report. Further, there has been no instance during the FY under report where the Board has not accepted the recommendations of the Audit Committee. c) The details of composition of Board & Committees and number of Meetings of the Board & its Committees held during the year, forms part of the Corporate Governance Report appearing separately in the Annual Report. d) Pursuant to the provisions of the Companies Act, 2013 and SEBI

Listing Regulations, the Company is required to place various

Policies / Documents / Details on the Website of the Company. The Company has a functional website www.ifciltd.com and all the requisite information are uploaded thereat and available at https:// www.ifciltd.com/?q=en/content/disclosure-under- regulation-46-and-62-sebi-%E2%80%93-lodr. e) During the Financial Year 2024-25, the Company did not had requisite number of Independent Directors (including woman Independent Director) on the Board, as per the requirement of the

Companies Act, 2013 & SEBI Listing Regulations. However, IFCI being a Government Company, the power to appoint Independent Directors vests with the Ministry administratively in-charge of the Company. f) As stipulated under the SEBI Listing Regulations, the Business

Responsibility and Sustainability Report (‘BRSR’) forms part of the Annual Report for the FY 2024-25. g) During the Financial Year 2024-25, neither the Statutory Auditors nor the Secretarial Auditors have reported any fraud in their respective Audit Reports. h) The Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118 (10) of the Companies Act, 2013. Further, during the Financial Year 2024-25, all returns / data / statements submitted by concerned departments as advised by RBI, SEBI and other Regulatory Authorities have been submitted. i) Key initiatives taken for Investor services continued to be of utmost importance for Your Company. Investors’ grievances received in physical or electronic form or through web-based query submission system, were taken up promptly and redressed. j) The Independent Director of the Company as on March 31, 2025 has declared that he meets the citeria of independence as laid down under Section 149 (6) of the Companies Act, 2013 (the Act) and

Regulation 16(1)(b) of SEBI LODR and has provided declaration under Section 149(7) of the Act and Regulation 25 of SEBI LODR.

21.0 Other Disclosures:

a) Your Company has made an application to the Registrar of

Companies (ROC) Delhi & Haryana to grant extension of time for holding the Annual General Meeting of Your Company for the Financial Year ended March 31, 2025. Accordingly, this Annual General Meeting is being convened within the time period allowed by the ROC. b) In view of the insufficient profits during the Financial Year 2024-

25, no dividend has been recommended on equity shares. Also, as per the provisions of SEBI Listing Regulations, the Company has formulated a Dividend Distribution Policy which is available on the website of Your Company at https://www.ifciltd.com/2025/

IFCI_Limited%20Equity%20Dividend%20Distribution%20

Policy.pdf. During the FY 2024-25, Your Company did not transfer any amount to any reserve.

c) During the FY 2024-25, there was no Company which has become or ceased to be Subsidiaries, Joint Venture or Associate f) As the Company is primarily engaged in the business of financing

Companies in the capacity of being a Non-Banking Financial

Company, therefore the provisions of Section 186 [except for subsection (1)] of the Companies Act, 2013 are not applicable to the Company. g) Your Company did not raise any public deposit during the year. or material h) During the FY 2024-25, there were no significant orders passed by Regulators or Court impacting the going concern status of the Company. Further, there has been no change in the business of the Company during the reporting period. Further, there have been no material changes and commitments which affect the financial position between the end of financial year and date of Board’s Report. i) Pursuant to Notification dated June 05, 2015 issued by the Ministry of Corporate Affairs (MCA), Government Companies are exempted from the disclosure requirements of Section 197 of the Companies Act, 2013. Therefore, such particulars have not been included in Board’s Report. Further, no Director of the Company, including

Company of IFCI Ltd. As on March 31, 2025, the Company has

2 ‘Material Subsidiaries’ viz. Stock Holding Corporation of India

Ltd., and MPCON Ltd. Policy on Determining Material Subsidiary is available on the website of the Company at https://www. ifciltd.com/2025/Policy%20for%20Determination%20of%20 Material%20Subsidiary.pdf. Details on performance and financial position of subsidiaries, associates and joint venture during the FY 2024-25 can be referred from Form AOC-1 forming part of this Annual Report. Further, IFCI Infrastructure Development Ltd. ceased to be the Material Subsidiary of the Company as on March 31, 2025. d) Change in the Capital structure of the Company during the FY 2024-25 is as under: During the FY 2024-25, 12,39,77,188 number of Equity Shares were allotted to the Promoters of the Company i.e. Government of India (GoI) at a price of 40.33 (Rupees Forty and Thirty Three Paisa only) [including a premium of 30.33 (Rupees Thirty and

Thirty Three Paisa only)] per Equity Share aggregating upto

500,00,00,000 (Rupees Five Hundred Crore) on April 18, 2024 in Financial Year 2024-25. Consequent to the allotment of equity shares, the shareholding of GoI increased from 70.32% to 71.72% of the Total Paid-Up Share Capital of the Company (as on April 18, 2024).

Further, 8,07,23,280 number of Equity Shares were allotted to the Promoters of the Company i.e. Government of India (GoI) at a price of 61.94 (Rupees Sixty One and Ninety Four Paisa only) [including a premium of 51.94 (Rupees Fifty One and Ninety Four Paisa only)] per Equity Share aggregating upto 500,00,00,000

(Rupees Five Hundred Crore) on February 28, 2025. Consequent to the allotment of equity shares, the shareholding of GoI increased from extant 71.72% to 72.57% as on February 28, 2025.

Consequent to the above allotments, as on March 31, 2025, the

Authorized Share Capital of the Company was 50,00,00,00,000 consisting of 4,00,00,00,000 Equity Shares of 10/- each and 1,00,00,00,000 Preference Shares of 10/- each. The Issued Capital of the Company is 2761,56,17,850 consisting of 2,76,15,61,785 Equity Shares of 10/- each, the Subscribed Capital is 2695,63,10,310 consisting of 2,69,56,31,031 Equity Shares of 10/- each and the Paid-up Capital is 2694,31,43,310 consisting of 2,69,43,14,331 equity shares of 10/- each.

(e) Change in the debt structure of the Company during the FY 2024-25 is as under:

MD & CEO, was paid any commission during the FY 2024-25 by any of the Subsidiaries of Your Company, on whose Boards they were Directors as nominees of Your Company. Further, the Company has not issued any stock options to the Directors or any employee of the Company during the FY 2024-25.

j) In terms of the provisions of the Companies Act, 2013 (to the extent applicable) and SEBI Listing Regulations, the Company has framed Nomination and Remuneration Policy. However, pursuant to the exemption granted to Government Companies vide Notification dated June 05, 2015, issued by the MCA, the Policy has not been made part of Board’s Report.

k) As per the provisions of the Companies Act, 2013, the Annual Return of the Company is available on the website of the Company at https://www.ifciltd.com/?q=en/content/financial-reports l) All Related Party Transactions (RPTs) entered during the year under report were in ordinary course of the business and at arm’s length basis. No Material RPTs, were entered during the year by Your Company. Accordingly, the disclosure of RPTs as required under Section 134(3)(h) of the Companies Act, 2013, in Form AOC-2 is not applicable and hence, do not form part of the Board’s Report.

m) The performance evaluation of the Board, its Committees and individual Directors was conducted by the Nomination and by the

Remuneration Committee and the Board. Based on the feedback received from the Directors on the focus areas of improvement, requisite steps were taken, i.e. Directors were nominated to attend training sessions, letters were sent on quarterly basis to the Ministry administratively in-charge of the Company requesting appointment of requisite number of Independent Directors (including woman Independent Director) on the Board of IFCI. The Ministry administratively in-charge of the Company is seized of the matter. The Board had been kept informed of development / updates through circular resolutions and mails. Moreover, the Board shall be communicated of the major developments from time to time.

n) No application was made or any proceedings was pending against Your Company under the Insolvency and Bankruptcy Code, 2016, during the year under report.

o) Details of the Debenture Trustee(s) for the debt securities issued by Your Company are as under:

p) During the FY 2024-25, no unclaimed dividend amount pertaining to Equity Shares were due to be transferred to Investor Education and Protection Fund (IEPF). However, the unclaimed amount in respect of bonds transferred to IEPF during FY 2024-25 was

3,86,515/-. q) During the financial year 2024-25, no event has taken place that give rise to reporting of details w.r.t. differencebetween amount of the valuation done at the time of onetime settlement and valuation done while taking loan from the Banks or Financial Institutions.

r) During FY 2024-25, the percentage of Procurements made by Your Company through GeM Portal was 75.16%.

M/s. S. Mann & Co. (DE1161) (Firm Reg. No. 000075N) was appointed by the Comptroller & Auditor General of India (C&AG) as Statutory Auditors of Your Company for Financial Year 2024-25. As per the requirement of Section 148 of the Companies Act, 2013, the requirement of Cost Audit is not applicable to the Company.

The Standalone and Consolidated Financial Results of the Company for

Auditors theFinancial Year 2024-25 were unqualified of the Company. However, the Statutory Auditors provided for certain ‘Emphasis of Matter’. The complete Auditors’ Report on the Standalone and Consolidated Financial Statements forms part of the Annual Report.

M/s Agarwal S. & Associates, Company Secretaries was appointed as Secretarial Auditor of the Company for the Financial Year 2024-25. The observations of the Secretarial Auditor along with Management Reply is as under:

The Secretarial Audit Report of the Company along with the Secretarial Audit Reports of the ‘Material Unlisted Subsidiaries’ i.e. MPCON

Limited and Stock Holding Corporation of India Limited for the

Financial Year ended March 31, 2025, are enclosed at Annexure – II.

The comments of Comptroller & Auditor General of India (C&AG) along with Consolidated IFCI’s Comments on C&AG Supplementary Audit observations forms part of the Board’s Report as Annexure-III.

Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to Director's Responsibility Statement, it is hereby confirmed that:

(i) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period; (iii) The Directors had taken proper and sufficient maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) The Directors had prepared the annual accounts on a going concern basis;

(v) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(vi) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Your Directors wish to express gratitude for the cooperation, guidance and support from the Ministry of Finance, various other Ministries and Departments of the Government of India, The Reserve Bank of India,

The Securities and Exchange Board of India, The Stock Exchanges and other regulatory bodies, the Comptroller & Auditor General of India and the State Governments. Your Directors also acknowledge the valuable assistance and continued cooperation received from all banks, financial institutions, overseas correspondent banks, other members of the banking fraternity and investors. Your Directors would also like to express their appreciation for the efforts and dedicated service put in by the employees at all levels of Your Company.