AFFLUENCE

BOARD'S REPORT

TO

THE MEMBERS

The Board of Directors of your Company has the pleasure of presenting the Twenty Second Annual Report of IFCI Ltd together with the Audited Financial Statement for the year ended March 31, 2015.

Operational income for FY 2015 was higher than that of FY 2014 by 12.7% due to increase in interest income, the interest income though was impacted by Rs.247 crore due to reversal of income on account of fresh Non-Performing Assets (NPAs) (Rs.55 crore) and interest funding of restructured assets (Rs.192 crore). The operational income included income of Rs.251 crore from NPAs as against Rs.166 crore in FY 2014. However, income from other financial services was lower at Rs.355 crore vis-a-vis Rs.491 crore in FY 2014 mainly due to lower profit on sale of shares/debentures at Rs.269 crore in FY 2015 as against Rs.365 crore in FY 2014. Other income at Rs.97 crore was higher by 45% than Rs.67 crore in FY 2014, the increase primarily being due to profit of Rs.29 crore on sale of surplus properties during the current year. The finance cost of borrowing continued to increase due to higher borrowing required for growth in business at average cost of 10.24% as against average carrying cost of existing borrowing of 9.55%. The cost of borrowing for FY 2015 at Rs.2,102 crore was higher by 26.17% than Rs.1,666 crore for FY 2014. During the year, long term borrowing of Rs.7,947 crore was made while Rs.3,258 crore was repaid as per the schedule. The carrying cost of borrowings as at March 31, 2015 increased to 9.6% as compared to 9.5% as at March 31, 2014. The increasing trend is expected to continue for some more time till the cost of fresh borrowing falls below the carrying cost of borrowing. The overhead expense towards employee benefits and establishment cost for FY 2015 at Rs.104 crore was also higher by 11.8% than Rs.93 crore for FY 2015. This was mainly due to increase in employee benefit expenses and new recruitments and increase in corporate campaigning and advertisement expenses for branding prior to public issue as also for various business transactions through open tender process. However, overall the ratio of overhead expenses (excl. depreciation) to total income stood favourably at 3.2% for the year ended March 31, 2015, same as that for the year ended  March 31, 2014

DIVIDEND

Your Directors declared a Dividend of per equity share i.e. 10% of the face value of Rs.10/- each as interim dividend for the financial year 2014-15. Your Directors have also recommended dividend of Rs.0.50 per equity share, i.e. 5% of the face value of Rs.10/- each as final dividend, subject to the approval of the shareholders at the ensuing Annual General Meeting. Your Company also paid dividend of Rs.0.31 crore on preference shares.

CHANGE IN NATURE OF BUSINESS & MATERIAL CHANGES AND  COMMITMENTS AFFECTING FINANCIAL POSITION OF THE  COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND  THE DATE OF THE REPORT

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.

OWNERSHIP/CAPITAL STRUCTURE/CHANGE IN SECURITIES

There was no change in the ownership of the Government of India in your Company during the FY 2014-15 and it continued to hold 55.53% equity stake in IFCI as on March 31, 2015. There has also been no change in the capital structure of the Company. However, during FY 2015-16, Government of India acquired 6,00,00,000 Preference Shares of Rs.10/- each of the Company from certain Scheduled Commercial Banks and consequently increased its holding from 47.93% to 51.04% of the Paid-up Share Capital of the Company. Consequently, the Company became a Government Company in terms of Section 2(45) of the Companies Act, 2013, w.e.f. April 7, 2015. The change in the Debt Structure of the Company is as under:

Operational income for FY 2015 was higher than that of FY 2014 by 12.7% due to increase in interest income, the interest income though was impacted by Rs.247 crore due to reversal of income on account of fresh Non-Performing Assets (NPAs) (Rs.55 crore) and interest funding of restructured assets (Rs.192 crore). The operational income included income of Rs.251 crore from NPAs as against Rs.166 crore in FY 2014. However, income from other financial services was lower at Rs.355 crore vis-a-vis Rs.491 crore in FY 2014 mainly due to lower profit on sale of shares/debentures at Rs.269 crore in FY 2015 as against Rs.365 crore in FY 2014. Other income at Rs.97 crore was higher by 45% than Rs.67 crore in FY 2014, the increase primarily being due to profit of Rs.29 crore on sale of surplus properties during the current year. The finance cost of borrowing continued to increase due to higher borrowing required for growth in business at average cost of 10.24% as against average carrying cost of existing borrowing of 9.55%. The cost of borrowing for FY 2015 at Rs.2,102 crore was higher by 26.17% than Rs.1,666 crore for FY 2014. During the year, long term borrowing of Rs.7,947 crore was made while Rs.3,258 crore was repaid as per the schedule. The

DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) APPOINTED OR RESIGNED DURING THE YEAR

Since the last Board's Report the following changes have occurred in the composition of the Board of Directors and in the KMP of your Company: Prof Omprakash Mishra (DIN: 03068103) ceased to be Director on the Board of the Company w.e.f. August 27, 2014 (for want of majority in the proposal for his appointment as Independent Director at the last Annual General Meeting of the Company held on August 27, 2014). Prof Arvind Sahay (DIN: 03218334) was inducted on the Board as Additional and Independent Director w.e.f. September 12, 2014. Shri Anurag Jain (DIN: 01779759), Government Nominee Director ceased to be Director on the Board of the Company w.e.f. February 16, 2015, due to withdrawal of nomination from Government of India. Shri Rajesh Aggarwal (DIN: 03566931), Joint Secretary, Ministry of Finance, Department of Financial Services, New Delhi, was appointed as Director w.e.f. February 19, 2015 vice Shri Anurag  Jain (DIN: 01779759). Shri P G Muralidharan (DIN: 00960475)  resigned w.e.f. March 30, 2015 in view of his having reached the maximum age to act as Director of NBFC prescribed by Reserve Bank of India as per Revised Regulatory Framework for NBFC. Shri S N Ananthasubramanian (DIN: 00001399) resigned from the Board of the Company with effect from June 13, 2015 owing to professional commitments.

Shri B N Nayak, who had been acting as CFO pursuant to the provisions of Clause 49 of the Listing Agreement was designated as KMP in the category of CFO, w.e.f. May 26, 2014 pursuant to the provisions of the Companies Act, 2013.

DIRECTOR LIABLE TO RETIRE BY ROTATION

Ms Kiran Sahdev (DIN: 06718968) will retire by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible has offered herself for re-appointment.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The details of the Meetings of the Board of Directors forms part of the Corporate Governance Report appearing separately in the Annual Report.

COMPOSITION OF AUDIT COMMITTEE

Your Company has in place an Audit Committee of Directors in compliance with the provisions of the Listing Agreement and Companies Act, 2013. The details of Composition forms part of the Corporate Governance Report appearing separately in the Annual Report.

Your Directors would further like to inform that there has been no matter where the Board has not accepted recommendations of the Committee.

DISCLOSURE OF NOMINATION AND REMUNERATION POLICY

Pursuant to the provisions of the Companies Act, 2013 and Listing Agreement, the Company has put in place a Nomination as well as a Remuneration Policy. The Nomination & Remuneration Policy are atteched at Annexure I. The Policies have also been placed on the website of your company at www.ifciltd.com

POLICY ON DEALINGS WITH RELATED PARTY TRANSACTIONS

A. Approvals

I. Approval by Audit Committee

1. All Related Party Transactions (including any subsequent modifications thereof) shall require prior approval of the Audit Committee of Directors. However, the Audit Committee of Directors may grant omnibus approval for the RPTs proposed to be entered into by the Company subject to the following conditions:

(a) The Audit Committee shall lay down the criteria for granting the omnibus approval in line with the policy on Related Party Transactions of IFCI and such approval  shall be applicable in respect of transactions which are repetitive in nature.

(b) The Audit Committee shall satisfy itself the need for such omnibus approval and that such approval is in the interest of IFCI.

(c) Such omnibus approval shall specify:

i. The name(s) of the Related Party, nature of transaction, period of transaction, maximum amount of transaction that can be entered into.

ii. The indicative base price/current contracted price and the formula for variation in the price, if any, and

iii. Such other conditions as the Audit Committee may deem fit.

(d) Audit Committee shall review, on a quarterly basis, the details of RPTs entered into by IFCI pursuant to each of the omnibus approval given.

(e) Such omnibus approvals shall be valid for a period not exceeding one year and shall require fresh approvals after the expiry of one year.

Proviso:

The above clause will not be applicable in the following cases:

i. Transactions entered into between 2 Government Companies.

ii. Transactions entered into between a holding company and its wholly owned subsidiary whose accounts are consolidated with such holding company and placed before the shareholders at the general meeting for approval.

Explanation: All entities falling under the definition of related parties shall abstain from voting irrespective of whether the entity is a party to the particular transaction or not.

II. Approval by Board of Directors

Except with the consent of the Board of Directors given by a resolution at a meeting of the Board, IFCI shall not enter into any contract or arrangement with a related party with respect to:

> Sale, purchase or supply of any goods or materials;

> Selling or otherwise disposing of, or buying, property of any kind;

> Leasing of property of any kind;

> Availing or rendering of any services;

> Appointment of any agent for purchase or sale of goods, materials, services or property;

> Such related party's appointment to any office or place of profit in the company, its subsidiary company or associate company; and Related Party Transactions.

> Underwriting the subscription of any securities or derivatives thereof, of the company:

Provided that nothing of the above shall apply to any transactions  entered into by IFCI in its ordinary course of business other than  transactions which are not on an arm's length basis.

{Ordinary Course of Business shall include those business which  forms part of the Object Clause of the Memorandum of Association  of the Company}

Explanation:

The expression "office or place of profit" means any office or place Where such office or place is held by a director, if the director holding it receives from IFCI anything by way of remuneration over and above the remuneration to which he is entitled as director, by way of salary, fee, commission, perquisites, any rent-free accommodation, or otherwise;

Where such office or place is held by an individual other than a director or by any firm, private company or other body corporate, if the individual, firm, private company or body corporate holding it receives from IFCI anything by way of remuneration, salary, fee, commission, perquisites, any rent-free accommodation, or otherwise;

The expression "arm's length transaction" means a transaction between two related parties that is conducted as if they were unrelated, so that there is no conflict of interest.

III. Approval by Shareholders

1. Except with the prior approval of the company by a special resolution, IFCI shall not enter into a transaction or transactions, where the transaction or transactions to be entered into:

As contracts or arrangements with respect to Clauses (a) to (e) of Sub-Section (1) of Section 188 of the Companies Act 2013, with criteria as mentioned below:

> Sale, purchase or supply of any goods or materials, directly or through appointment of agent, exceeding 10% of the turnover of the company or rupees one hundred crore, whichever is lower, as mentioned in Clause (a) and Clause (e) respectively of Sub-Section (1) of Section 188;

> Selling or otherwise disposing of or buying property of any kind, directly or through appointment of agent, exceeding ten per cent of net worth of the company or rupees one hundred crore, whichever is lower, as mentioned in Clause (b) and Clause (e) respectively of Sub-Section (1) of Section 188;

> Leasing of property of any kind exceeding ten percent of the net worth of the company or ten per cent of turnover of the company or rupees one hundred crore, whichever is lower, as mentioned in Clause (c) of Sub-Section (1) of Section 188;

> Availing or rendering of any services, directly or through appointment of agent, exceeding ten per cent of the turnover of the company or rupees fifty crore, whichever is lower, as mentioned in Clause (d) and clause (e) respectively of Sub-Section (1) of section 188.

Explanation — It is hereby clarified that the limits specified in Sub-Clauses (i) to (iv) shall apply for transaction or transactions to be entered into either individually or taken together with the previous transactions during a financial year. Is for appointment to any office or place of profit in the Company, its subsidiary company or associate company at a monthly remuneration exceeding two and half lakh rupees as mentioned in Clause (f) of Sub-Section (1) of Section 188; or  Is for remuneration for underwriting the subscription of any securities or derivatives thereof of the company exceeding one per cent of the net worth as mentioned in Clause (g) of Sub-Section (1) of Section 188.

Explanation: (1) The Turnover or Net Worth referred in the above Sub-rules shall be computed on the basis of the Audited Financial Statement of the preceding Financial Year. (2) In case of a wholly owned subsidiary, the special resolution passed by the IFCI shall be sufficient for the purpose of entering into the transactions between the wholly owned subsidiary and IFCI.

2. All Material RPTs shall require approval of the shareholders through Special Resolution and the related parties shall abstain from voting on such resolutions.

3. No Member of IFCI shall vote on such Special Resolution, to approve any contract or arrangement which may be entered into by the Company, if such member is a related party.

Proviso:

The above Clause will not be applicable in the following cases:

> Transactions entered into between 2 Government Companies.

> Transactions entered into between a holding company and its wholly owned subsidiary whose accounts are consolidated with such holding company and placed before the shareholders at the general meeting for approval.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Disclosure on Related Party Transactions during FY 2014-15 in the prescribed Form AOC-2 is provided in Annexure II.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of the Companies Act, 2013, the extract of the Annual Return in the prescribed format of Form MGT - 9 is at Annexure III.

CORPORATE SOCIAL RESPONSIBILITY - DETAILS ABOUT THE POLICY DEVELOPED AND IMPLEMENTED ON CORPORATE SOCIAL RESPONSIBILITY INITIATIVES DURING THE YEAR

In pursuance of Section 135 of the Companies Act, 2013, the Board of IFCI after the recommendation of the Corporate Social Responsibility Committee of Directors (CSR Committee) approved CSR policy for IFCI. The contents of the policy is on the website of IFCI at www. ifciltd. com.

The CSR Committee recommends to the Board of Directors on activities to be undertaken by the company as specified in Schedule VII of the Companies Act, 2013 and Companies (CSR policy) Rules, 2014. The CSR Committee recommends the amount to be incurred on the activities and earmarked funds for the envisaged priority areas, as per vision of the company for a particular financial year. To associate with the CSR Activities of IFCI and its Subsidiaries and Associates, a Trust, by the name of "IFCI Social Foundation" has also been established. The investment in CSR activities is project based and for every project, time frame and periodic milestones are set at the outset. Utilisation Certificate with regard to the approved and disbursed amount is obtained from the concerned executing NGO/Trust/Specialised Agency. The progress of activities are reviewed and monitored very closely for optimum utilisation of CSR funds.

The Disclosure of contents of Corporate Social Responsibility Policy in the Board's Report pursuant to the provisions of Companies (Corporate Social Responsibility Policy) Rules, 2014 is at

PARTICULARS OF EMPLOYEES AND REMUNERATION - PURSUANT TO RULE V OF COMPANIES (APPOINTMENT AND REMUNERATION) RULES, 2014

The requisite details envisaged under the provisions of Rule V of Companies (Appointment and Remuneration) Rules, 2014 are annexed with this report at Annexure V.

EMPLOYEE STOCK OPTION DETAILS

The requisite details pursuant to the provisions of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and pursuant to the provisions of Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014 are at Annexure VI. Though the ESOP Scheme has been discontinued, the disclosures are made in term of the above Guidelines.

ANNUAL EVALUATION ON PERFOMANCE

The performance evaluation of the Board, its Committees and individual Directors was conducted. The same was based on feedback from all the Directors on the Board as a whole, Committees and individual evaluation, as per the Nomination Policy. Based on the feedback, the performance was evaluated in the Meetings of the Nomination and Remuneration Committee (NRC), Independent Directors and the Board, in terms of the provisions of Companies Act, 2013 and Listing Agreement.

DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company is fully committed to take appropriate measures against Sexual Harassment of Women at Workplace as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 which came into force in April, 2013. Requisite organizational architecture in terms of constitution of Committee, amending the IFCI Staff Regulations etc. to comply with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 has been created. IFCI continues to adhere to the framework stipulated under the Sexual Harassment of Women at Workplace as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year 2014-15, no complaint on this ground has been received.

PARTICULARS OF LOAN, GUARANTEES OR INVESTMENT UNDER SECTION 186 OF THE COMPANIES ACT, 2013

As the Company is primarily engaged in the business of financing Corporates in the capacity of being a Non-Banking Financial Company, therefore the provisions of Section 186 [except for Sub-Section (1)] of the Companies Act, 2013 are not applicable to the Company.

DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY

Disclosure indicating development and implementation of Risk Management Policy is provided in the Management Discussion and Analysis Report forming part of this Report.

PUBLIC DEPOSITS

Your Company did not raise any public deposit during the year. There was no public deposit outstanding as at the beginning or end of the year ended on March 31, 2015.

DISCLOSURE ON RECEIPT OF COMMISSION BY A DIRECTOR FROM SUBSIDIARY COMPANY

No Director of the Company, including the CEO&MD and DMD was paid any commission during the FY 2014-15 from any subsidiaries of your Company on whose Boards they were Directors as nominees of the Company.

SIGNIFICANT OR MATERIAL ORDERS PASSED BY REGULATORS OR COURT OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY AND COMPANY'S OPERATIONS IN FUTURE

There has been no such order passed by any Regulator or Court impacting the going concern status of the Company and Company's operations.

VIGILANCE

During the financial year 2014-15, the Company has established a Vigil Mechanism under the provisions of Section 177 (9) and (10) of the Companies Act, 2013. In this regard, the Board of Directors of the Company has approved a Whistle Blower Policy under which its director(s) and employee(s) can report to the management their concerns about unethical behaviour, actual or suspected fraud or violation of the IFCI's code of conduct or ethics policy and to provide  adequate safeguards to them against any sort of victimization on raising an alarm. The Policy also provides for direct access to the Chairman of the Audit Committee in exceptional cases. During the year under review, no instance of the protected disclosure has been made to the Designated Authority or to the Chairman of the Audit Committee. Details of vigil mechanism is also available on Company's website at www.ifciltd.com

PERFORMANCE OF SUBSIDIARIES AND ASSOCIATES PROMOTED BY IFCI

SUBSIDIARIES

Stock Holding Corporation of India Ltd (SHCIL)

SHCIL was promoted by the public financial institutions and incorporated as a limited company on July 28, 1986. SHCIL, one of the largest Depository Participants, besides being the country's largest premier Custodian in terms of assets under custody, provides post trading and custodial services to institutional investors, mutual funds, banks, insurance companies, etc. It acts as a Central Record Keeping Agency (CRA) for collection of stamp duty in 15 States and 3 Union Territories on pan India basis. It is one of the largest Professional Clearing Members of the country. It distributes Fixed Deposits, Bonds and NCDs of reputed Institutes and Corporates, Mutual Fund Schemes, Initial Public Offers (IPO's) and National Pension System (NPS) etc. SHCIL has its registered office at Mumbai and a world class main operations office at Navi Mumbai and operates through its 188 retail branches all over India. SHCIL has presence in 18 States/Union Territories for stamping.

SHCIL has two wholly owned subsidiaries viz. (i) SHCIL Services  Ltd (SSL) and (ii) SHCIL Projects Ltd (SPL); SSL, the broking arm of  SHCIL, is providing stock broking services to retail and institutional clients across the country. SSL offers services in Cash & F & O segment of BSE & NSE. SPL is a Microsoft Gold certified partner for all its products and services is ISO 9001:2008 and CMMI Level-3 certified. SPL provides End to End Document Management Solutions and acts as an Insurance Repository. SPL has been granted a Certificate of Registration to act as an "Insurance Repository (IR)" by Insurance Regulatory & Development Authority (IRDA).

IFCI Infrastructure Development Ltd (IIDL)

IIDL was set up by IFCI Ltd in the year 2007 to venture into the real estate and infrastructure sector. Being a wholly owned subsidiary of IFCI Ltd, a Government of India Undertaking, IIDL has ventured into the Infrastructure Sector as an institutional player. IIDL is committed to the principles of transparency, professionalism and integrity with clients aspirations and interests being the driving force. The company since its inception has developed projects all over India focusing on construction that is driven by the overall infrastructure development of the country.

IIDL has successfully completed its flagship state of the art Serviced apartment project known as "Fraser Suites" being managed by Frasers Hospitality Pte Ltd, Singapore. IIDL was awarded a prestigious project spread over an area of 50 acre for developing a "Financial City" near Bengaluru International Airport by Karnataka Industrial Areas Development Board (KIADB), Government of Karnataka in the Global Investors Meet 2010. The Company has also been allotted 15 Acre of Land in Bengaluru Hardware Park adjacent to IFCI Financial City, Bengaluru for establishing "Supporting Infrastructure for Financial City" by KIADB, which is under planning stage.

IIDL has been appointed as the Project Management Consultants for developing "Management Development Institute" Murshidabad, West Bengal, a sprawling residential campus spread over 10 Acre of land on Turnkey basis. The Project was inaugurated on August 24, 2014 by Hon'ble President of India Shri Pranab Mukherjee along with Finance Minister, Shri Arun Jaitley.

On the residential front, "21st Milestone Residency" at, Ghaziabad, Uttar Pradesh offers 4,50,000 sq ft of living space spread over 4.0 Acre of land. "IIDL Aerie" located at prime residential area of Panampilly Nagar, Kochi, offers high end living space of around 1,50,000 sq ft with all modern amenities.

IIDL executed various projects as Project Management Consultants like "IFCI Bhawan" an office complex at Bengaluru, Ahmedabad for IFCI and Interior, fit outs and allied works including furnishing, civil and electrical works for the branches of "Bhartiya Mahila Bank" at New Delhi, Ahmedabad, Guwahati, Kolkata, Bangalore and Chennai.

IFCI Venture Capital Funds Ltd (IFCI Venture)

IFCI Venture was set-up in 1975 by your Company with the objective to broaden entrepreneurship base in India by providing risk capital mainly to first generation entrepreneurs under "Risk Capital Scheme". In 1988, IFCI Venture launched "Technology Finance and Development Scheme", to provide financial assistance for setting up projects aimed at commercialization of indigenous technologies. In the year 2008, IFCI Venture undertook management of 3 new PE/VC funds viz. India Automotive Component Manufacturers Private Equity

Fund-1-Domestic (IACM-1-D), Green India Venture Fund (GIVF) and

India Enterprise Development Fund (IEDF) with an aggregate corpus of Rs.508 crore, where investment have been done in 29 companies. All the three funds focused on investments in mid-sized companies involved in setting up niche business models in respective industry sectors with prospects of scalability. These funds were fully invested by 2011 and are currently under exit mode.

In the year 2014-15, IFCI Venture has initiated setting-up of three funds viz.

(a) Venture Capital Fund for Scheduled Castes (VCF-SC) - a Government of India initiative to promote entrepreneurship amongst Scheduled Castes entrepreneurs in India. The corpus of the fund is Rs.250 crore with Government of India contribution of Rs.200 crore and IFCI Ltd has committed Rs.50 crore towards the corpus. It was registered with SEBI and launched on January 16, 2015.

(b) Green India Venture Fund-II.

(c) Small and Medium Enterprises Advantage Fund.

For both the above funds, in-principle approval has been received and IFCI Ltd has committed Rs.50 crore each in both the Funds. IFCI Venture is expected to start operations under these two new funds  during FY 2015-16.

IFCI Venture is also registered with RBI as an NBFC and provides secured Corporate Loans to profit making mid-market companies in the range of Rs.5-20 crore with security of shares of listed companies and/or mortgage of property. The Company has a well-defined credit policy for sanction of loans.

IFCI Financial Services Ltd (IFIN)

IFIN was set up in 1995, by IFCI Ltd, to provide a wide range of financial products and services to institutional and retail clients. IFIN is primarily involved in the business of Stock Broking, Currency Trading, Depository Participant Services, Merchant and Investment Banking, Insurance (Corporate agent for both life and General Insurance), Mutual Fund Products Distribution and Corporate Advisory Services. IFIN has three wholly-owned subsidiaries namely IFIN Securities Finance Ltd, IFIN Commodities Ltd and IFIN Credit Ltd. IFIN Securities Finance Ltd, an NBFC is primarily engaged in the business of margin funding, providing loan against shares & property, promoter funding etc. IFIN Commodities Ltd, a registered member of the Multi Commodity Exchange of India Ltd (MCX), National Commodity and Derivatives Exchange Ltd (NCDEX) and National Spot Exchange Ltd (NSEL), is primarily engaged in the business of providing Commodity market related transaction services. IFIN Credit Ltd is not engaged in any major business activity.

IFCI Factors Ltd (IFL)

During the year under report, IFL continued to be a major provider of factoring services in India. After registering sizeable growth year on year in business following its acquisition by IFCI Ltd, the company has been in a phase of consolidation over FY 2013-14 and FY 2014-15 in the wake of adverse economic environment. The FY 2014-15 has been a tough year for the Company, amidst the challenging macro-economic environment. The RBI has taken notable step to address the economic slowdown and has relaxed the Income Asset pattern guideline for Factoring to Non-factoring ratio from the prevailing 75:25 to 50:50. This provides ample opportunity for the Company to offer secured structured products and enables the Company to operate both in working capital space as well as corporate loan market.

Further, with the enactment and implementation of the Factoring Regulation Act, 2011, initiative for setting up a Credit Guarantee Fund of Rs.500 crore for factoring business as announced in the Union Budget for FY 2013-14, and initiative by the RBI of exploring the possibility of setting up of a Trade Credit Exchange for electronic factoring of bills, in the times to come, factoring business in India is poised for growth.

MPCON Ltd

MPCON Ltd is a professionally managed Technical Consultancy Organization promoted by your Company established in 1979. It is a premier consulting organization having base in Central India, providing quality consulting services. During FY 2014-15, it consolidated its project consultancy business and also enhanced its presence in the training and capacity building spheres. It has bagged skilling projects for training close to 4500 candidates in Madhya Pradesh and Chhattisgarh from the Ministry of Rural Development, Govt. of India. It also participated in the STAR programme run by the National Skills Development Corporation. Apart from Training and Skill Development, the financial inclusion project has been expanded further to cover more areas in Madhya Pradesh. MPCON has also proved its worth in the other spheres of consultancy services such as Solid & Liquid Waste Management, Development of Course curriculum under National Vocational Education Framework, Impact Assessment Studies etc. for various departments of the State Government as well as the Central Government.

ASSOCIATES

Tourism Finance Corporation of India Ltd (TFCI)

TFCI, a Public Financial Institution was established in 1989, pursuant to the recommendations of the National Committee on Tourism set up under the aegis of the Planning Commission, Government of India. Your Company along with other All-India Financial/Investment Institutions and Nationalised Banks promoted TFCI to cater to the financial needs of burgeoning tourism industry. Since its inception, TFCI has provided high-quality research and consultancy services to the tourism industry in general and to the investors in tourism industry in particular. It provides financial assistance to enterprises for setting up and/or development of hotels, resorts, amusement parks and tourism-related projects, facilities and services. It undertakes appraisal of individual projects, project studies, and surveys for various State Government agencies/individual clients.

HARDICON Ltd

HARDICON was set up in 1985, jointly by all India Financial Institutions, PSU Banks & State level insttitutions viz. IFCI, SIDBI, SBI. Haryana Financial Corporation, Haryana State Industrial and Infrastructure Development Corporation and Delhi Financial Corporation of the two State Governments with the twin objectives of facilitating overall industrial development of the country by catering to the technical consultancy needs of the industry and promoting entrepreneurship. In the initial years, the focus of operations was confined to the states of Haryana and Delhi. Post liberalization

HARDICON expanded its service base beyond Haryana and Delhi and now undertakes nationwide assignments. Its broad spectrum of activities include Preparation of Techno-Economic Feasibility Reports, Project Appraisals, Valuation of Assets, Business Valuation, Skill & Entrepreneurship Development Training, Market Research/ Impact Assessment Studies, Implementation of Corporate Social Responsibility (CSR) activities of PSUs. Its portfolio of clients includes PSUs, large scale industrial sector enterprises as well as traditional SME sector clients.

Himachal Consultancy Organisation Ltd (HIMCON)

HIMCON was promoted in 1977 with your Company as the lead institution, along with other FIs such as IDBI, ICICI in collaboration with Nationalised Banks and state level Corporations and Institutions. HIMCON is a multi-functional and multi- disciplinary organization offering a wide range of services to the industrial and infrastructure development, and to a wider spectrum of clientele including those outside the state of Himachal Pradesh. The major thrust areas of HIMCON's service base includes Evaluation Studies, Project Appraisals, Compilation of Project Reports, Compilation of Pre-Feasibility/Feasibility Reports, TEVs, Services under SARFA&ESI Act 2002, Preparations of comprehensive development plans of the area, act as Project Monitoring Consultants and Conducting EDPs & Skill Development Training Programmes and Awareness Programmes. HIMCON has bagged first of its kind of mandate of Transforming Village Taseeng in Alwar District of Rajasthan into "World Class Model Heritage Village" as a part of Pradhan Mantri Adarsh Gram Yojna.

Rajasthan Consultancy Organisation Ltd (RAJCON)

RAJCON, jointly promoted by IFCI, SIDBI, ICICI along with State

Finance Corporations viz. Rajasthan State Industrial Development and Investment Corporation Ltd, Rajasthan Financial Corporation, Rajasthan Small Industries Corporation Ltd and Commercial Banks namely State Bank of Bikaner & Jaipur (SBBJ), Central Bank of

India (CBI), Punjab National Bank (PNB), Bank of Baroda (BOB) and

United Commercial Bank (UCO), was set-up in March 1978 with the twin objectives of facilitating overall industrial development of the country by way of providing technical consultancy services as well as promoting entrepreneurship. At present, RAJCON is carrying out varied nature of services which inter-alia includes Skill & Entrepreneurs Development Services, Technical Consultancy Services, etc. The Skill & Entrepreneurship based activities are undertaken on behalf of All India/State Level Corporations and Social Justice and Empowerment/Department of Government of India, while Technical Consultancy based activities are undertaken on behalf of Banks/FI's, Industrial/Business Groups, Individual Entrepreneurs etc.

North India Technical Consultancy Organisation Ltd (NITCON)

NITCON set up in 1984, is a joint venture of IFCI, SIDBI, ICICI Bank Ltd, State Level Corporations and Public Sector Commercial Banks to render cost effective professional consultancy services to units in small/medium/large scale industries/Entrepreneurs/Institutions/ Government and Government Agencies. NITCON has been an all time associate of the SME movement. NITCON has gained considerable expertise in undertaking Detailed Techno-Economic Appraisals/ TEFRs of investment proposals envisaging green field projects as also of expansion, modernization, diversification proposals. NITCON also takes up TEVS of existing industrial units for revival/rehabilitation involving BIFR/CDR cases, Energy Audits, Advisory Assignments and preparation of inventory and valuation of assets to help the institutions/banks in valuation of securities, sale of assets and one time settlement (OTS).

NITCON has over 3 decades of experience in promoting self-employment and wage employment, through Entrepreneurship Development Programmes (EDPs) as well as Skill Development Programmes (SDPs), having trained over 1 lac beneficiaries.

KITCO Ltd

KITCO Ltd (formerly Kerala Industrial and Technical Consultancy Organization Ltd) established in 1972, is one of the premier Engineering, Management & Project consultancy firm in India promoted by your Company jointly with IDBI, ICICI and other State Level Institutions. Some of the key fields where KITCO is a prominent player are Energy Studies, Skill Certification and Placement services. The company provides professional technical consultancy services to Small and Medium Enterprise (SME). KITCO is the only consultancy organization in the state having EIA accreditation. During the year under report, KITCO has been instrumental in setting up of TCO consortium having its office in Delhi. While KITCO will be the National Coordinating agency for the consortium, the other TCO members are:

NITCON (Punjab), MITCON (Maharashtra), ITCOT (Tamil Nadu), APITCO (Andhra Pradesh), GITCO (Gujarat), HARDICON (Haryana), MPCON (Madhya Pradesh), UPICO (Uttar Pradesh), HIMCON (Himachal Pradesh) and RAJCON (Rajasthan).

JOINT VENTURE

IFCI Sycamore Capital Advisors Pvt Ltd

The Company has 50% interest in one joint venture viz. IFCI Sycamore Capital Advisors Pvt Ltd (ISCAPL) incorporated in India in November 2011 which is under voluntary liquidation and Official liquidator has been appointed. The investment of IFCI Ltd in ISCAPL as on March 31, 2015 was at Rs.0.01 crore Class A Equity Shares and Rs.2.64 crore Fully Convertible Debentures against which adequate provision has been made considering the probability and quantum of share in distribution upon liquidation of the Company. Therefore, the same has not been considered for the purpose of consolidation of financial statements.

SOCIETIES

Institute of Leadership Development (ILD)

ILD - erstwhile Institute of Labour Development was established in 1992, by your Company recognizing the fact that, alongside the management, the workers have to be provided with opportunities and external facilities of training and development for meeting the continuous challenges of change. The name was rechristened as Institute of Leadership Development in the year 2008. ILD is working towards its mission to build capacities, hone up and infuse leadership skills among all levels of human resources in all types of organizations i.e., business and corporate entities, Banks, SMEs, NGOs, social action groups, key developmental sectors like education, health, energy and environment and the wide sweep of the government sector. ILD is also engaged in imparting skill development programmes for the unemployed youths of the state of Rajasthan and giving them job placements as well with the CSR fund support from different organizations. ILD is also an empanelled agency with Rajasthan Skill and Livelihoods Development Corporation (RSLDC), Jaipur, to carry out skill development programmes in the areas of Textile technology, Fashion Technology, Hospitality etc.

Management Development Institute (MDI)

MDI is one of India's premiere Business Schools promoted by IFCI Ltd, the Institute aims to inculcate professionalism in management education and enhance the effectiveness of organizations through education, training and research. MDI presently is self-financing educational society. MDI has the distinction of being the first internationally accredited Indian Business School having received international accreditation by AMBA in 2006. The long-term programmes of MDI have received global, regional and national accreditations - accreditation of Association of MBAs (AMBA) London, South Asian Regional Accreditation (SAQS) and National Board of Accreditation (NBA). MDI also has the distinction of being the only Indian B-school that has a community outreach programme, the International Summer University (ISU) wherein MDI has joined

hands with nine Indian universities and institutions to form a network of learning. During the year under report MDI received AICTE approval for conducting PG Level Management Programmes at its Murshidabad campus. The Hon'ble President of India inaugurated the new academic session at Murshidabad campus.

Rashtriya Gramin Vikas Nidhi (RGVN)

RGVN having its headquarter in Guwahati, Assam was established in April 1990, as an autonomous, non-profit organization registered under the Society's Registration Act of 1860. Your Company being a founding promoter of RGVN, provided the initial set-up support and with time the Industrial Development Bank of India (IDBI), the National Bank for Agriculture and Rural Development (NABARD) and the Tata Social Welfare Trust (TSWT) also became its promoters. RGVN is a national level multi-state development and support organization working in the states of Assam, Arunachal Pradesh, Meghalaya, Mizoram, Nagaland, Manipur, Tripura, Sikkim, Odisha, Jharkhand and Bihar. After expanding operations in the Northeast, development activities of RGVN were also extended to the poverty stricken pockets of Eastern Uttar Pradesh, coastal Andhra Pradesh and Chhattisgarh. RGVN's core strength comes from its network of NGOs and Self Help Groups, which are capable of handling large development projects. Over the years, RGVN has been able to groom and support small Community based Organizations involved in a variety of livelihood enhancement programmes.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

During FY 2014-15, IFCI acquired 980 equity shares of Rajasthan Consultancy Organisation Ltd (RAJCON), equivalent to 49% of equity shareholding, from HARDICON, as a result of which RAJCON has become an Associate Company of IFCI.

IFCI's shareholding in Asset Care and Reconstruction Enterprise Ltd (ACRE) has declined from 37.91% to 19.55%, due to preferential allotment by ACRE and acquisition of 80,000 equity shares of ACRE, by your Company from MPCON.

Details on performance and financial position of subsidiaries, associates and joint venture(s), as on March 31, 2015 are provided in Annexure VII.

COMPLIANCE

Submission of various returns and data/information to RBI, SEBI and other regulatory bodies and the Government of India was complied  with during FY 2014-15.

DOCUMENTS PLACED ON THE WEBSITE

Pursuant to the provisions of the Companies Act, 2013, Listing Agreement and various other Regulatory Requiremnts, the Company is required to place various Policies/Documents/Details on the Website of the Company. The list of Documents placed on the website at www. ifciltd.com, inter-alia are as under:

> Corporate Social Responsibility Policy.

> Financial Statements of the Company and Consolidated Financial Statements along with relevant documents.

> Audited Accounts of the Subsidiaries.

> Details of unpaid dividend.

> Details of Vigil Mechanism for Directors and employees to report genuine concerns.

> The terms and conditions of the appointment of Independent Directors.

> Policy on Material Subsidiary.

> Policy on Related Party Transactions and Dealing with Related Party Transactions.

CORPORATE GOVERNANCE

A detailed report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement, is attached to the Annual Report. Certificate from Practicing Company Secretary regarding compliance with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement has been obtained and is annexed at the end of Corporate Governance Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,

FOREIGN EXCHANGE EARNINGS AND OUTGO Conservation of Energy - The Company's operations do not involve any manufacturing or processing activities. It is involved in providing financial assistance, therefore the Company requires normal consumption of electricity. Therefore 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. Further, the Company is not an industry as listed in Schedule to Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rule, 1988.

Technology Absorption - In constant endeavour to drive competitive advantage through Operational Excellence, your organization is taking proactive steps towards Business Continuity planning. With regard to the same it is proposed to upgrade DC/DR as well as establish a Near Site. Further your Company is also working towards establishment of industry standard Network security policies and standards in line with the latest technology adoption. Your Company is also working towards implementing a standard product for Loan accounting, Treasury Operations, Asset Classification System, General Financial Accounting System, Loan/Debenture Accounting Systems, Asset & Liability Management (ALM), Bonds Monitoring and Processing System, Market Risk Management. Further, in order to integrate the customer services for our Customers, Shareholders and Bondholders your Company is planning to have an integrated customer service portal.

Foreign Exchange Earnings

The details in respect of foreign expenditure/earnings are as follows:

QUALIFICATIONS, RESERVATION OR ADVERSE REMARK OR

DISCLAIMER MADE BY THE STATUTORY AUDITORS

There were no qualifications or reservations or adverse remarks made by the Statutory Auditors for the stand alone Financial Statements or for the consolidated Financial Statements. However, the auditors had following observations on the consolidated Financial Statements :

"Emphasis of Matters :

The holding company holds investments in eight companies to the extent of 20% or more of their respective total share capital and accordingly these companies are the associates of the holding company as per the Companies Act 2013, for the reasons stated in the para 26.1 of the Financial Statements of the Group. Our report is not modified on the matter."

EXPLANATIONS OR COMMENTS BY THE BOARD:

In the case of the referred companies, the shares to the extent of 20% or more were acquired by the holding company as a part of regular business activity of financing through equity participation with firm commitment of buy-back with the promoters/group companies of the investee companies at pre-determined Rate of Return (ROR) after a pre-determined period. Since the shares had been acquired with an intention to dispose-off at a pre-determined ROR, the shares in net worth of the investee company following "Equity Method" was not considered appropriate indictor of the real economic interest of IFCI Ltd. and therefore, the investment in these companies have not been considered in 'Consolidated Financial Statements' following AS-13.

QUALIFICATIONS, RESERVATION OR ADVERSE REMARK OR

DISCLAIMER MADE BY THE SECRETARIAL AUDITORS

M/s Navneet K Arora & Co., Company Secretaries was appointed as Secretarial Auditor of the Company for the Financial Year 2014-15.

REPORT OF SECRETARIAL AUDITOR

"The Company has, in our opinion, complied with the applicable provisions of the Companies Act, 1956 and the Rules made under that Act and the provisions of Companies Act, 2013 and the Rules made thereunder as notified by Ministry of Corporate Affairs and the Memorandum and Articles of Association of the Company. During the period under review the Company has complied with the provisions of the Reserve Bank of India Act read with applicable Non-Banking Financial Companies (Reserve Bank) Directions as amended till date except delay in filing of e-returns in Form No.(s) NBS-7 for the quarter ended 30th September 2014, NBS-ALM-2 & 3 for Half Yearly ended on 30th September 2014 and NBS-7 for the quarter ended 31st December 2014 with the Reserve Bank of India."

EXPLANATIONS OR COMMENTS BY THE BOARD

Provisional NBS-ALM 2 & 3 were filed with RBI within the stipulated time period and subsequently the final returns were filed with RBI after approval of final accounts for the respective period. Similarily, the e-return NBS-7 was also filed only after Board's approval of final accounts for the period. The Company being listed, the results, which is part of NBS-7 return can not be disclosed prior to the same being provided to the stock exchanges. Reserve Bank of India was informed of the position and has not objected to the request of the Company considering the facts. The Secretarial Audit Report in the Form MR-3 is annexed at Annexure VIII.

STATEMENT ON DECLARATION BY INDEPENDENT DIRECTORS

Your Company has requisite number of Independent Directors on the Board. Pursuant to the provisions of the Companies Act, 2013, your Company has obtained Declaration of Independence from the Independent Directors under Section 149 of the Companies Act, 2013.

INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE  FINANCIAL STATEMENTS

Your Company has in place an Internal Financial Control driven by the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company's 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. However, as regular review for improvement & upgradation are the need of the hour, it is constant endeavour of the Company to improve the processes & policies and put in place improved internal financial controls.

DIRECTORS' RESPONSIBILITY STATEMENT

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

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

(ii) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(iii) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) The directors had prepared the annual accounts on a 'going concern basis';

(v) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. The "internal financial controls" means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to company's 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; and

(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.

Auditors

M/s ASA & Associates, LLP (DE1187) (Firm Regn. No. 009571N) and M/s Andros & Co. (DE1122) (Firm Regn. No. 08976N) were  appointed by the Comptroller & Auditor General of India (C&AG) as Joint Statutory Auditors of your Company for FY 2014-15. C&AG has appointed M\s ASA & Associates, LLP (DE1187) (Firm Regn. No. 009571N) and M\s KPMR & Associates (DE0637) (Firm Regn. No. 02504N) as Joint Statutory Auditors of your Company for FY 2015-16.

DEPARTMENTS AT IFCI

(A) Credit Appraisal, Monitoring and Industry Research (CAMIR)

With a view to pitch in new business for IFCI, carry out quality appraisal and timely recovery in standard assets in sectors other than infrastructure, a dedicated department viz. Credit Appraisal, Monitoring and Industry Research was created in your Company. The department dealt inter-alia, with business development, credit appraisal of proposals, monitoring of existing standard cases of Delhi, Mumbai and Ahmedabad Regional Offices and need-based reliefs/concessions/restructuring of stressed accounts.

(B) Project Development Group (PDG)

Project Development Group (PDG) was established in FY 2008­09, as a part of IFCI's strategy to enter into infrastructure projects early in their life cycle, so as to ensure a good return on IFCI's investments. Since then, PDG developed strong relationships with India's leading infrastructure companies and had been associated with them throughout the project development life cycle from inception to commissioning and thereafter to nurturing the projects to realize returns. PDG developed invaluable insights into the technical, practical and financial aspects of the infrastructure sector in general and the power generation and road sectors in particular. The group managed IFCI's exposure to infrastructure projects by way of vanilla equity investments, mezzanine instruments and term loans to infrastructure projects and their holding companies. The department also dealt with business development, credit appraisal and post disbursement monitoring and review of standard cases of all regional offices based out of northern, southern and eastern region of India.

During FY 2014-15, aligning with various external challenges being faced by the infrastructure sector, the department focused on consolidation of the investment portfolio from a value preservation standpoint. Simultaneously, it also achieved exits in some of the investments with reasonable returns.

(C) CREDIT I & II

In view of opening of new Regional Offices and expansion in business and with view to leveraging the credit expertise of both CAMIR and PDG better, it was decided to merge the activities of both the Groups and create two independent departments Credit-I and Credit-II with control of nine Regional Offices each. The new departments have started functioning from April, 2015. For 2015-16, IFCI's focus is not only to grow loan book but also to improve the quality of loan portfolio. Steps taken/being taken in this direction are:

(i) Improvement in Credit Appraisal System.

(ii) Improving skills in the area of credit appraisals.

(iii) Activation of Regional Offices at 6 centres viz. Bhopal, Bhubaneswar, Kochi, Lucknow, Patna and Pune for sourcing proposals at these centres. Regional Offices at 2 new centres, Vijayawada and Raipur are being opened.

(iv) Thrust on marketing quality business.

(D) Corporate Advisory Group

IFCI today provides an entire gamut of financial advisory services to clients across different sectors of the economy. In the area of providing customized corporate advisory services, your Company, despite stiff competition during the year, has not only been able to retain its existing clients but has also been able to secure some prestigious new assignments including management consultancy assignments with respect to bid advisory, due diligence, project appraisal, business re-engineering, valuation, feasibility study etc. from various private/public sector entities/ banks and Central/State Government(s). During the year, your Company has also been empanelled with many prestigious clients for various consultancy assignments.

(E) Sugar Development Fund

Your Company has been acting as the nodal agency of the Government of India since inception of the Sugar Development Fund (SDF) for the purpose of disbursement, follow-up and recovery of SDF loans sanctioned for modernization of sugar factories, setting-up of bagasse based cogeneration projects, ethanol projects and cane development schemes. Cumulative sanctions and disbursements under SDF up to March 31, 2015 stood at Rs.5,604 crore and Rs.4,795 crore respectively. The agency commission booked for the FY 2014-15 is Rs.17.20 crore. In addition, IFCI also carries out financial appraisals of projects for availing SDF loans by sugar mills.

IFCI is in the process of making SDF portal functional and same will be utilized by SDF, GoI and sugar companies. It will make SDF operations efficient and also contributes towards image building of IFCI.

(F) Scheduled Caste Guarantee Enhancement Fund

Your Company has also been designated by Government of India, as the Nodal Agency under the Scheme of Credit Enhancement Guarantee for Scheduled Castes Entrepreneurs to provide guarantee to banks against loans to young and start-up entrepreneurs belonging to scheduled caste with an objective to encourage entrepreneurship in marginal strata of the society. The Government of India has provided Rs.200 crore to your Company during FY 2014-15 for this purpose.

(G) Human Resources

Your Company has continued to lay focus on enhancement in productivity of employees and their skill upgradation. In this  regard, 222 employees have been sent on trainings organized in house and at training programmes organized by other Training Institutes and foreign trainings. Your Company has been awarded by Asia Pacific HRM Congress for managing health of its employees at work for the year 2014. The level of satisfaction among employees has improved which resulted into lower attrition rate as compared to previous year.

(H) Information Technology and Communication

IT has emerged as an important medium for delivery of financial products and services. Information Technology (IT) enables sophisticated product development, better market infrastructure, implementation of reliable techniques for control of risks and helps the financial intermediaries to reach geographical distant and diversified markets.

The most noteworthy developments related to IT sector in your Company during FY 2014-15 are:

Formulation of e-Governance Committee of Board of Directors headed by a renowned IT Professor as its Chairman having exhaustive knowledge in the IT field which will be of immense value to the Company. E-Governance Committee has been formed inter-alia, for revamping the IT structure at IFCI for a secured and more effective structure to enable seemless transactions in your growing Company.

Technology Adoption

In constant endeavour to drive competitive advantage through Operational Excellence, your organization is taking proactive steps towards Business Continuity planning. With regard to the same, the process is on to upgrade disaster recovery infrastructure. Further your Company is also working towards establishment of industry standard Network security policies and standards in line with the latest technology adoption. Your Company is also working towards implementing a standard product for Loan Accounting, Treasury Operations, Asset Classification System, General Financial Accounting System, Loan/Debenture Accounting Systems, Asset & Liability Management (ALM), Bonds Monitoring and Processing System, Market Risk Management, through a reputed IT Service provider in substitution of the in-house developed system on oracle 10G plateform.

Further, in order to integrate the customer services for our Customers, Shareholders and Bondholders your Company is planning to have an integrated customer service portal.

(I) Legal

On the legal front, your Company has carried out the legal activities for facilitation of sanctions and disbursements and has ensured compliance with statutory requirements during the year. Further, your Company was also able to defend successfully before the Hon'ble Supreme Court of India in the suits filed against it during the year 2014-15.

(J) Management of Non-Performing Assets (NPAs)

Your Company continued its efforts to exploit aggressively all channels available to reduce its NPAs. A considerable success was achieved in past few years and last year also by way of substantial recovery from the NPAs as reflected in the recovery as under:

To resolve and minimize the NPAs, your company has been taking all possible legal actions and also adopting all techniques and filing necessary applications before Debt Recovery Tribunal and also by adopting other methods of recovery viz. filing of criminal complaints u/s 138 of Negotiable Instruments Act, 1881 lodging FIR, attachment of secured and unsecured properties of the borrower and guarantor, arrest of absconding guarantor and taking stringent steps under the provisions of SARFAESI Act, 2002. Efforts were also made to ensure that the Loan Accounts are closely monitored so as to avoid slippage of accounts to NPA.

(K) Right to Information

IFCI has implemented the Right to Information Act, 2005 from 2013 onwards following the applicability of the RTI Act to IFCI and has been providing information to the applicants as per the provisions of the RTI Act. The relevant information as per the RTI Act has been posted on IFCI's website at www.ifciltd.com During the year, IFCI received 110 applications and 30 appeals seeking information under RTI Act, which were replied to as per the provisions of the RTI Act within the stipulated time.

(L) Promotion of Rajbhasha

During the year, your Company continued its efforts towards promoting the use of Hindi in its official work. With a view to motivating and encouraging the officers to use Hindi in official work, Hindi competitions were organized at Head Office as well as other offices of the Company. The officers of your Company at Corporate Office bagged prizes in various Hindi Competitions organized by Town Official Language Implementation Committee. The quarterly meetings of Official Language Committee and Annual Hindi week were duly held in various offices of your Company. All the computers available with your Company have been upgraded with Unicode facility and the website of your Company has also been made bilingual for the benefit of the stakeholders and to further promote use of Hindi.

(M) NOMINEE DIRECTORS

Your Company appoints Nominee Directors on the Boards of assisted concerns following the established practice of Institutions and Banks to monitor the performance of the companies where they have provided financial assistance. The underlying objective of making such appointment is to help build professional management and facilitate effective functioning of the Board as well as formulation of proper corporate policies and strategies to improve productive efficiency and promote long term growth of the assisted companies, keeping in view the overall interest of the shareholders and financial institutions. The feedback received from Nominee Directors act as a tool for credit monitoring. The system of Nominee Directors is functioning effectively in your Company.

With the Companies Act, 2013 coming into force, the Nominee Directors on assisted concerns need to be more vigilant with regard to functioning of assisted concern as well as reporting and reviewing the performance of the concerned company. Your Company has taken steps to update its officers about the new Act so that they may contribute effectively as Nominee Directors on the Boards of assisted concerns.

MANAGEMENT DISCUSSION AND ANALYSIS

(A) MACRO ECONOMIC ENVIRONMENT

Global Developments and Outlook

Global economic growth remained weak during the financial year 2014-15, with uneven prospects across the globe. Various factors like weak demand, Eurozone crisis etc. were the main reasons for decline in global economic growth. The World Economy grew by 3.4% in 2014 and not much change is anticipated as it is expected to grow at 3.5% in 2015 and at 3.8% in 2016.

During FY 2014-15, yields from long-term bonds declined further and hovered at lowest levels in many advanced economies to the extent that this decline reflected in lower real interest rates. In an environment of stagnant and uneven growth, raising actual and potential output continues to be a policy priority of advanced economies as the main macroeconomic policy issues are persistent and sizable.

The exchange rates across major currencies have changed substantially in recent months, reflecting variations in countries' growth rates and monetary policies due to lower oil prices globally. The advanced economies have generally benefitted from lower oil prices. The emerging and developing Asian countries also showed deceleration in growth as they grew by 6.8% in 2014 as compared to 7.0% in 2013.

It is expected that in 2015, growth will be driven by a rebound in advanced economies, supported by the decline in oil prices, with the United States playing the most important role. In emerging markets, in contrast, growth is projected to decline in 2015, reflecting downward revisions for oil exporters, a slowdown in China that reflects a move towards more sustainable growth that is less reliant on investment and a weaker outlook for Latin America resulting from a softening of other commodity prices.

Domestic Developments and Outlook

The Indian Economy has seen an uneven growth during FY 2014­15, while the growth outlook remained subdued throughout the year, the sentiments were optimistic as they received a boost from a host of domestic and global factors such as formation of stable government, sharp fall in crude oil prices, passing of major bills such as insurance and mining, and investment oriented union budget. As a result, the Indian economic outlook improved amidst subdued growth prospects of major advanced and emerging economies.

An improvement was seen in India's Gross Domestic Product (GDP) in FY 2014-15 at 7.3% as compared to 6.9% in the previous year (as per revised calculation method), which was a tad lower than China's 7.4% (for CY 2014). The Indian Economy grew at 7.5% in Q4 of FY 2014-15 and out-performed the Chinese Economy which grew by 7.0% in January-March quarter of 2015. As per the Economic Survey of India for 2014-15, it is expected that Indian Economy will grow by more than 8% in FY 2015-16. IMF and ADB has made projections that India will outpace China, Japan and Germany.

Growth in 2014-15 was largely driven by domestic demand. However, the outlook for domestic and macro-economic scenario is optimistic for 2015-16 as the Industry and Service sectors are projected to grow at a uniform rate. External sector is returning to the path of strength and resilience as India has met its fiscal deficit target. This is one of the primary goals of budget for  FY 2015-16.

Some green shoots of growth were visible during the year. The new investment proposals saw some improvement in 2014-15. In the Union Budget, the Government announced a 25% increase in capital spending primarily on highways and railways to kick-start the investment demand. A slew of initiatives were taken in the financial year that includes rationalization of administered pricing policies in petroleum and natural gas and to ensure adequate availability of key inputs like coal and power. The biggest financial inclusion initiative under the Pradhan Mantri Jan Dhan Yojana (PMJDY), extending financial services to the large hitherto unserved population to unlock growth potential was quite successful.

With all the above positive indicators, the Indian economy is becoming a favourable destination for investment. The Rupee remained relatively stable and the Current Account Deficit

(CAD) is continuously shrinking from 2% of GDP in Q4 of 2013-14 to 1.6% in Q3 of 2014-15. Make in India programme launched by the GoI has been envisioned to channelize the urge in the manufacturing sector in India and create numerous employment opportunities in order to maximize the demographic dividend. To promote the small business units, GoI has come up with Micro units' development and re-finance agency (MUDRA) as a sole regulator for all micro finance institutions in order to bring uniformity of regulations in this context. The National Skills Development Mission has also been announced in the  Budget 2015.

(B) INDUSTRY STRUCTURE AND DEVELOPMENT

The resilience of the Indian banking system against macroeconomic shocks was tested through a series of macro stress tests for credit risk at the system, bank group and sectoral levels. The Indian Non-Banking Finance Companies (NBFCs) continued to face a challenging economic environment during FY 2014-15 on account of subdued economic, industrial and manufacturing growth and relatively high credit costs due to increased risk perception in the economy. RBI also came up with implementation of few stringent norms w.e.f. March 31, 2015 which will surely impact the bottom line of NBFCs. Uneven growth in industrial activity contributed to stress on asset quality of NBFCs as the payback capacity of companies continued to be affected during the FY 2014-15 resulting in higher restructuring of accounts. A number of important changes happened in the operation of the monetary policy during the year. The share of NBFC sector has gained systemic importance in the recent years and has steadily grown from 10.7% of banking assets in 2009 to 14.3% of banking assets in 2014.

NBFCs have witnessed a stress in asset quality during the last two-three years due to weak operating environment and economic downturn. Sectors which are directly linked to economic activities like commercial vehicle, construction equipment and infrastructure financing have witnessed sharp deterioration in asset quality.

During the FY 2014-15, RBI issued revised guidelines thereby tightening the provisioning norms for NBFCs. These norms would be a challenge to handle in the short term, though in the long term it would be beneficial for the financil health of your Company. The budget for 2015-16 has also proposed to provide level playing field to all Systemically Important NBFCs by extending them the privilege of FI and powers under SARFAESI Act on account of which, such NBFCs are likely to expand their business aggressively posing stiff competition to your Company.

Guidelines issued by RBI during FY 2014-15 for NBFCs and the  impact thereon:

RBI has issued various guidelines for gradual synchronisation of norms for banks to be applicable to NBFCs. Due to above, the following are expected to take place:

> Over the period of next three years there will be economic recovery and credit growth will pick up for NBFC sector as well. As a result and over the period of three years, outstanding advances book will increase thereby lowering the NPA percentage.

> With the economic recovery, fresh slippages would reduce thereby helping in reducing the impact.

> Also, over the transition phase NBFCs will fine tune their systems and processes and try to align their borrowers to new reporting systems.

(C) INITIATIVES AND DEVELOPMENTS AT IFCI

During the FY 2014-15, your Company restored and re-operationalized its six Regional Offices at Bhopal, Bhubaneswar,  Kochi, Lucknow, Patna and Pune. It will increase its Pan-India presence and will provide the requisite fillip to tap new business from the regions.

The Government of India (GoI) has acquired six crore preference shares of Rs.10/- each of your Company from six public sector banks in April, 2015. With this, the shareholding of GoI in paid up share capital of your Company now stands increased to 51.04% and your Company has become a Public Sector Undertaking (Government Company under Section 2(45) of the Companies Act, 2013) w.e.f. April 7, 2015. The opportunities as well as responsibilities of your Company now stand increased with this development. Your Company came out with a Public Issue of Non-Convertible Debentures (NCDs) after about two decades and successfully raised an amount of Rs.1,972.26 crore at competitive cost. This will surely help your Company to bring down its cost of borrowings in future. During the year rating agencies, CARE Ratings and ICRA upgraded the credit rating of long term borrowing of your Company from 'A" to "A+" and of short term borrowing from 'A1" to "A1+".

During FY 2014-15, your Company was also successful in exiting some of the long term equity investment which has contributed to profitability of your Company. Your Company also reduced its stake in one of its Associates namely Tourism Finance

Corporation of India Ltd (TFCI) from 42% to 39.10% to unlock  the long term investment value. IFCI's shareholding in Asset Care Reconstruction Enterprises Ltd (ACRE) has declined from 37.91% to 19.55%, due to Preferential allotment by ACRE and acquisition of 80,000 equity shares of ACRE by your Company,  from MPCON Ltd.

The GoI has designated your Company as a Nodal Agency for setting up of a Venture Capital Fund under Social Sector initiatives with an aim to promote entrepreneurship among the Scheduled Castes (SC) and to provide concessional finance to them. The fund has been put in place after getting approval of SEBI under AIF Regulation 2012, with contribution of Rs.200 crore from GoI. Your Company has committed a contribution of Rs.50 crore as Lead Investor and Sponsor of the Fund. IFCI Venture Capital Funds Ltd, a subsidiary of your Company has been designated as an Investment Manager of the Fund. During FY 2014-15, the Fund has been operationalized and first disbursement has been done.

Your Company has also been designated by Government of India, as the Nodal Agency under the Scheme of Credit Enhancement Guarantee for Scheduled Caste Entrepreneurs to provide guarantee to banks against loans to young and start-up entrepreneurs belonging to scheduled caste with an objective to encourage entrepreneurship in marginal strata of the society. The GoI has provided Rs.200 crore to your Company during FY  2014-15.

Your Company has figured in the listing of top 500/250 companies of India by Dun & Bradstreet, Economic Times, Dalal Street, Business Today and Fortune India.

(D) PERFORMANCE OF IFCI - FINANCIAL AND OPERATIONAL

Your Company continued to value its existing clients by providing customized financial products and services and also added new customers by revamping its 6 regional offices at Bhopal, Bhubaneswar, Kochi, Lucknow, Patna and Pune in order to enhance its customer base and for providing requisite impetus to its business. During FY 2014-15, your Company sanctioned general corporate loans of various maturities to meet financing requirements of its clients with good track records and credit worthiness, rupee term loans, refinancing of high cost debt and capital expenditure for ongoing projects against adequate tangible security. Besides fund based activity, your Company also extended its presence in non-fund based activities like Export Performance Bank Guarantee, etc.

Financial Performance

The Income from Operations and Other Income of your Company grew by 13% and 45% in FY 2014-15 to Rs.3,251 crore and Rs.97 crore in comparison to Rs.2,886 crore and Rs.67 crore respectively in FY 2013-14. The net provisions made against bad and doubtful assets was lower at Rs.434 crore in current FY 2014-15 as against Rs.520 crore in FY 2013-14. Profit before tax of your Company in FY 2014-15was higher atRs.718 crore in comparison to Rs.660 crore in FY 2013-14, the net profit of your Company grew marginally by 3% to Rs.522 crore in FY 2014-15 as compared to Rs.508 crore in previous year. Standard loans to Borrowers which stood at Rs.16,539 crore as on March 31, 2014 increased to Rs.22,849 crore as on March 31, 2015 on account of increase in disbursements during the year. Gross NPAs of your Company came down from 17.3% on March 31, 2014 to 10.3% on March 31, 2015 during the year, the net NPAs also declined from 11.4% to 8.0% to sale of and recovery from NPAs.

Sanctions and Disbursements

During the year under report, your Company sanctioned for various proposals aggregating to Rs.12,230 crore which refelected a growth 21.11% over Rs.10,098 crore of sanction in the previous year. Disbursements during the year at Rs.8,687 crore also registered a marginal growth over disbursements Rs.8,683 crore achieved in  the FY 2013-14.

Treasury, Investment and Forex Operations

In FY 2014-15, there have been several tectonic shifts in the global and domestic environment. The most significant factor that was driving the markets was the collapse of international commodity prices, particularly that of crude. For Indian economy, this translated into sizable softening of prices of both raw materials and intermediates. With several emerging market economies slowing down along with sluggish advance economies, India became a preferred destination for global fund managers and investors. High inflow of foreign investment was witnessed in bond as well as equity market.

The CPI inflation increased from 1.2% in November 2013 to 4.4% in November 2014 and further increased in December 2014 to 5%. The uptick in Inflation in December 2014 was somewhat lower than expected which contributed to RBI's decision of reducing Repo rate each in two inter-meeting decisions in January 2015 and March 2015. The WPI was at 5.2% in April 2014 and continued to decline in all months of the fiscal year gone and in the month of March 2015 it came at (-)2.3% as against 6.0% during the corresponding period of the previous fiscal year whereas the CPI in March 2015 was 5.17%. In the above backdrop, your Company has been cautious in investing the surplus funds with focus on safety while making every effort for efficient management of liquidity and return. In rupee operation, the objective has been to manage the surplus fund effectively with minimum risk and deploying it to get optimum return with availability of funds for business requirement. With priority on safety, your Company invested in Treasury Bills, Certificates of Deposit, Government Securities, Short Term Deposit (STD) and Mutual Fund Schemes. Average Deployment during the year was Rs.1,920.33 crore and annualized return on fund deployed was 8.88%. Your Company has consistently generated return higher than the average 91 day T-bill yield during FY 2014-15 from Treasury operations. During the year under report, your Company registered an income of Rs.170 crore from Fixed Income Money Market operations, as against Rs.232 crore during the previous year. The lower income is  on account of reduction of surplus funds available with Treasury vis-a-vis last year to minimise negative carrying cost. The Foreign Currency operations were restricted to containing the exchange risk arising due to mismatch in the outstanding amount of FC assets and liabilities. The mismatches were covered through forward contracts and currency future. The net mismatch position was restricted to much below the limit of USD 3 million approved by RBI by maintaining almost square position.

During the year, your Company continued with the strategy of selective disinvestment of slow moving/illiquid stocks and strengthening the portfolio through investment in blue chip stocks. During FY 2014-15, your Company earned a profit of Rs.263 crore from sale of long term equity and Rs.7 crore from equity trading.

Net investment portfolio of your Company as on March 31, 2015 stood at Rs.7,590 crore as against Rs.7,514 crore at the end of previous financial year. Your Company was successful in its objective of reducing the Direct Equity exposure as a percentage of Networth. Direct equity exposure at Rs.2,451 crore was 41% of the Networth on March 31, 2015, brought down from 58% from the end of the year 2013-14, excluding investment in subsidiaries and other group companies.

Resource Mobilization

During the year under report, your Company mobilized an amount of Rs.7,947 crore at competitive rates by way of term loan of Rs.5,975 crore and through Public Issue of Secured Non-convertible Debentures of Rs.1,972 crore. The Public Issue of bonds/NCDs was made after about 2 decades and received excellent response from investors. Your company would continue to make all efforts to mobilize resources through different avenues to minimize the cost of borrowing.

The total borrowings of your Company were at Rs.25,174 crore as on March 31, 2015 comprising of rupee borrowings of Rs.24,710 crore and foreign currency loan of Rs.464 crore. The broad instrument wise break-up of rupee borrowings outstanding as at March 31, 2015 is indicated below:

 OPPORTUNITIES, THREATS AND FUTURE OUTLOOK

Your Company as a Financial Institution and an NBFC has been able to manage to hold strongly against the headwinds such as an uneven inflation, tight liquidity, lower credit demand and more stringent norms from RBI. Your Company has also been able to capitalize its reach, marketing prowess and presence in niche segments to stay unscathed so far and have been catering to all segments of industry for more than six and half decades. With the strong corporate and institutional relationships and an established brand image in the financial sector, your Company has developed an entire range of financial products including debt, equity, mezzanine instruments, equity related products, project development, consultancy, etc. of short, medium and long term duration. Your Company will continue to strive for newer business opportunities in the form of creation of fresh assets, disinvestment including unlocking of unquoted shares, advisory services, sugar development fund, appraisals and syndications for generating higher fund based income and so on.

It has been the endeavour of your Company to continuously analyse its portfolio risks and initiate timely interventions like diversification in order to chart out a balanced growth, despite the challenging environment. Despite having adverse and subdued economic environment, your Company has been able to maintain comfortably its capital adequacy. Your Company has also adopted strategies to shift towards secured lending practices thereby increasing its capacity to absorb cyclical stress on assets quality by bringing down its Gross NPAs and increasing its income from operations and profitability.

Easing of environmental and mining norms in gas and energy sector will boost activity in power sector thereby enabling offtake by many stalled projects. This will also help your Company to contribute to the industrial growth of the country. It is expected that an improvement in macro-economic environment will boost growth in industrial as well as other sectors, lower inflation will create more opportunities for your Company in the next year. Being an NBFC, IFCI does not enjoy leverage of access to low cost funds and deceleration in economic and credit growth and change in operating environment pose challenges to your Company. However, with the enhancement of stake by Government of India in your Company to 51% recently, it is expected that it will open up newer avenues for your Company in bolstering not only its brand image but also provide required impetus to increase business. It shall be the endeavour of your Company to strive for ways to lower down its cost of funds and thereby cater to borrowers with the best credit ratings. Your Company can also explore newer opportunities under the Make in India initiative of Government of India as the Government has identified your Company as a possible nodal agency which can play a pivotal role in Government's initiative.

Gradually strengthening regulatory framework for NBFC's will lead to more robust governance structures and better performance. Competition within the financial services sector is expected to toughen, but your Company see these factors as opportunities for improvement. Your Company shall continue to pursue creation of fresh assets by diversifying its loan portfolio, project development activities by way of participating in debt/ equity which shall result in ample opportunities in future and resultant growth of your Company.

(F) SEGMENT-WISE/PRODUCT-WISE PERFORMANCE

The Company operates in India and hence, it is considered to operate only in domestic segment. More than 90% of revenue for the Company comes from a single segment of Financing. Accordingly, segment reporting as required under Accounting Standard-17, issued by the Institute of Chartered Accountants of India, is not applicable.

(G) RISK MANAGEMENT AT IFCI - RISK MANAGEMENT AND CONCERNS

Financial institutions (FI's) involved in lending operations, including IFCI, are susceptible to risks arising out of changes in the credit quality of the borrowers or counter parties. To address these risks, your Company has put in place a comprehensive credit risk management framework which is integrated with its business model.

In pursuance of RBI guidelines, necessary role centres have been created in the organisational structure to facilitate discharge of risk management functions, which include the Board of Directors, the Risk Management Committee of Directors (RMCD), the Risk Management Committee of Executives (RMCE) and the Credit Risk Management Department (CRMD). The systems and controls to mitigate credit risks are in place. The General Lending Policy, Credit Risk Policy, Market Risk Policy and Operational Risk Policy of your Company are reviewed periodically keeping in view the changing economic and business environment. As a part of Credit Risk Management, internal credit rating and risk assessment are done for all new credit proposals. The rating migration analysis is conducted periodically to guide the decision taking authorities for taking decision in future perspective.

In line with the industry best practices and to ensure proper credit evaluations and monitoring standards, your company carries out credit audit of standard exposures at regular intervals. The main objectives of the audit exercise include detection of weaknesses in outstanding exposures, initiation of timely corrective action, compliance with internal sanction and disbursement norms and follow-up and monitoring of cases, which serves as a tool for top management to assess portfolio quality with constant endeavor for asset quality improvement.

The market and liquidity risk is monitored by the Asset Liability Committee of Executives (ALCO) through analysis of dynamic liquidity position, structural liquidity gaps and interest rate sensitivity positions. The Treasury and Investment Policy specifies approved limits and triggers for various types of deployment. The market risk policy of your company is reviewed periodically in the light of the prevalent market scenario. To manage the operational risks, there are adequate internal controls and systems in place aided and assisted by internal audit, remote back-up of data, disaster management policy and appropriate insurance of insurable assets of your Comapany as well as of the assets mortgaged to your Comapny.

In the future, risk management is expected to play a more prominent role because of liberalization, deregulation and global integration of financial markets, which would add newer dimensions to risks faced by Banks and NBFC's. Inter­relationships and associations amongst various risk categories and mushrooming of newer risks, will require more proactive and efficient management of risks which will determine the strength and resilience of financial institutions. Your Company would continue to work on various initiatives aimed at strengthening credit risk standards, post sanction monitoring of the portfolio to mitigate any adverse impacts on the loan portfolio of your Company. Your Company would also strive to develop a strong culture for risk management and awareness within the organisation.

(H) INTERNAL CONTROL SYSTEM

Your Company has in place adequate system of internal control through the process of Risk Based Internal Audit. Internal Audit of all operating units was carried out during the year under report as per the scope approved by the Audit Committee of Directors. All the internal audit reports along with corrective measures taken are regularly reviewed by the Audit Committee of Directors.

(I) MATERIAL DEVELOPMENTS IN HUMAN RESOURCE

In view of the prevailing challenging environment, IFCI decided to enlarge its customer base and to increase its presence in various parts of the country. In order to strengthen the human resources to effectively understand new business, Your Company has undertaken Recruitment and Promotion exercise. In this regard, 42 new appointments in junior officer grade have been made in financial year 2014-15. Your Company has developed a mechanism for structured meetings with Officers Association and Scheduled Castes & Scheduled Tribe Employee Welfare Association. Your Company has also put in place online Grievance Redressal System for its employees to provide a fair platform for raising grievance, if any, in an effective and confidential manner conferring to matters pertaining to payments, working conditions etc., which are addressed in a fair and transparent way.

(J) CAUTIONARY STATEMENT

Statements in Management Discussion and Analysis describing the Company's Objectives, estimates and expectations may be 'forward looking' within the meaning of applicable laws and regulations. Actual results might differ materially from those expressed or implied.

COMMENTS OF COMPTROLLER & AUDITOR GENERAL OF INDIA

The comments of Comptroller & Auditor General of India (C&AG) are at  Addendum.

Appreciation

Your Directors wish to express gratitude for the cooperation, guidance and support from the Ministry of Finance, various other Ministries and Departments of the Government of India, Securities and Exchange Board of India, Reserve Bank of India, Stock Exchanges, other regulatory bodies, Comptroller & Auditor General of India and 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 application for the efforts and dedicated service put in by the employes at all levels of your Company.

S V Ranganath

Non-Executive Chairman of the Board

DIN : 00323799

Address: IFCI Tower 61 Nehru Place  Dated: August 11, 2015 New Delhi - 110 019