The Board of Directors of Your Company (“Your Company” or “IFCI”) are pleased to present before you the 33^rd (Thirty-Third)
Annual Report of IFCI Ltd., together with the audited financial statements for the year ended March 31, 2026, Auditors’ Report
thereon, Secretarial Auditors’ Report and review of financial statements by the Comptroller and Auditor General of India (C&AG).

2.0 Financial Summary and State of Company’s Affairs

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

The above numbers are extracted from the financial
statements prepared 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/ clarification/ direction 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 and applicable.

3.0 Financial Performance

During the financial year, Your Company reported a
Standalone Profit After Tax (PAT) of '51.71 crore, compared
to '43.80 crore in the previous year. The Total
Comprehensive Income stood at '49.93 crore, up from
'21.39 crore in the preceding financial year. The
improvement in profitability was primarily attributable to
higher dividend income, rental income, advisory income,
and reduction in finance cost, during the year. Several
strategic initiatives aimed at enhancing recoveries and
strengthening advisory services have led to improved
cashflows and a healthier Balance Sheet. As of the current
financial year, the Provision Coverage Ratio is 73.16% and
the Capital Adequacy Ratio stands at (-)18.78%, an
improvement from (-)23.04% in the previous year. Tier-I
Capital also improved to (-)18.78% from (-)23.04%. On a
consolidated basis, Your Company achieved a PAT of '434.71
crore, up from '348.61 crore in the previous year. The Total
Comprehensive Income stood at '573.95 crore as against
'7,010.70 crore in the previous year. The exceptionally high
Total Comprehensive Income reported in the previous year
was primarily attributable to significant increase in the fair
valuation of an investment owned by our subsidiary.

4.0 Sanctions, Disbursements and Recovery

During the FY 2025-26, Your Company did not sanction any
new loan. There was also no disbursement towards loans/
advances during FY 2025-26.

The recovery from Non-Performing Assets (NPAs) & Security
Receipts (SRs) for FY 2025-26 was '397 crore. Additionally,
the recovery from unquoted investments for FY 2025-26 was
'140 crore.

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

5.0    Treasury, Investment and Forex Operations

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

In Rupee operations, the objective has been to manage the
surplus funds effectively with minimum risk and
deployment of surplus funds to earn optimum return. The
underlying investment principles were safety, liquidity and
risk containment and accordingly Your Company invested
only in Government Securities, Fixed Deposits and Mutual
Funds Schemes. Average deployment during the year was
'732.31 crore against '1,145.18 crore in previous year and
the annualized return was 7.28%. During the year under
report, Your Company registered an income of '53.28 crore
from treasury investments against '83.42 crore during
previous year. The interest income was less compared to
previous year due to availabilities of lower surplus funds.

Net investment portfolio of Your Company as on March 31,
2026, stood at '2,050 crore as against '2,477 crore at the
end of previous financial year.

There was no foreign currency (FC) operation as there was
no outstanding FC liability.

6.0    Resource Mobilization and Borrowing Profile

During the year, Your Company has not mobilized fresh
resources. However, through effective liquidity management,
Your Company has serviced its liabilities on and before due
dates. During FY 2025-26 Your Company serviced debt of '548
crore ('225 crore principal and '323 crore interest) which
included payments due on March 31, 2026.

The Principal liability outstanding of Your Company as on
March 31, 2026, was ' 3,591.56 crore comprising of only
Rupee Borrowings. Interest liability outstanding (i.e. interest
accrued but not due) on borrowings as on March 31, 2026,
was ' 594 crore.

The broad instrument wise breakup of outstanding
borrowings as on March 31, 2026, is indicated below:

Your Company is committed to maintaining a high standard
of Investor services and considerable efforts are being made
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 Registrar & Transfer Agent,
dematerialization of securities, electronic payment of
interest & redemption proceeds and implementation of an
online service request portal for registering investor requests
etc.

7.0 Conservation of Energy, Technology Absorption, Foreign
Exchange Earnings and Outgo

Conservation of Energy - The Company’s operations do not
involve any manufacturing or processing activities. It
provides financial assistance to the industries and thereby
requires normal consumption of electricity. Accordingly, the
provisions of Section 134 (3) (m) of the Companies Act, 2013
read with Rule 8 (3) of Companies (Accounts) Rules, 2014
are not applicable on the Company. Nevertheless, Your
Company has prioritized energy efficiency.

Technology Absorption - 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 PLI
schemes and other Govt. schemes. Additionally, more
meetings were convened using Webex meetings and
Microsoft Teams to facilitate streamlined video
communication and live content sharing during the year.

Your Company has taken the following initiatives during
FY 2025-26:-

•    Migration of DESS portal: The DESS portal has been
successfully migrated to Oracle Cloud Infrastructure
resulting in improved scalability, enhanced availability,
and reduced dependency on on-premise infrastructure.

•    VMware Upgrade: VMware vCenter has been upgraded
to the latest stable version at both the Primary Data
Centre and Disaster Recovery (DR) site, enhancing
system stability, security posture, and supportability.

•    Upgradation of Video Conferencing Devices: Video
Conferencing (VC) infrastructure has been upgraded
to enhance audio-visual quality, ensure seamless virtual
collaboration, and working requirements.

•    Conversion of applications to APEX: Migration of CIIS
applications to Oracle APEX is in progress for Key
modules like Loan Accounting, Directories, and
Administration. Remaining modules are planned for
migration during the year. This initiative is expected
to enhance application maintainability and reduce
development turnaround time.

•    New Application modules:

(i)    A module for capturing Related Party Transactions
(RPT) has been developed to streamline regulatory
reporting and facilitate issuance of compliance
certificates. The module enables online validation
by respective Heads of Departments (HODs).

(ii)    A module for the Internal Audit Department has
also been developed to automate the departments’
processes and reporting.

(iii) An ESG solution has also been developed to
address the Environmental, Social, and
Governance (ESG) requirements of IFCI.

•    Oracle BI Analytics: Oracle BI has been upgraded to
Oracle Analytics and migrated to Oracle Cloud
Infrastructure (OCI), enabling improved reporting
capabilities, faster data processing, and enhanced
decision-making support.

•    Business Development Initiatives

A CRM module has been developed to track lead
lifecycle, monitor engagement effectiveness, and
improve conversion tracking. Additionally, an email
scheduler has been deployed to automate email
communication with a large base of prospective clients.

Further, no technology was imported during the year,
and no expenditure was incurred on R&D activities.

8.0    Foreign Exchange Earnings

During the FY 2025-26, there was no foreign exchange
outflow & earning.

9.0    Internal Financial Controls

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

10.0    VIGILANCE

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

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

With amplified prominence given to Preventive Vigilance,
the department conducts inspection of various offices from
time to time. The findings observed are shared with
subsidiaries and the concerned departments for taking
various steps to initiate corrective measures or systemic
improvements. Vigilance Department 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 27 to
November 02, 2025, with the theme: "ladri: gef ii>i
ft*+lniff" “Vigilance: Our Shared Responsibility”.

11.0    Whistle Blower Policy

The Company has put in place a Whistle Blower Policy /
Vigil Mechanism in term of the provisions of Section 177
(9) and (10) of the Companies Act, 2013 and Regulation 22
of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. 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/2026/Whistle%20Blower%20Policy.pdf.

12.0    Disclosure as per Sexual Harassment of Women At
Workplace (Prevention, Prohibition And Redressal) Act,
2013

An Internal Complaints Committee has been formed and
the Members of the said Committee as on the date of this
Boards’ Report are as under:

1.    Ms. Mansi Gupta - External Member

2.    Ms. Chhavi Singhal, GM - Presiding Officer

3.    Ms. Priyanka Sharma, GM

4.    General Manager, HR

5.    Ms. Trina Tejaswini, DGM (Law)

In the absence of any of the aforesaid internal members,
Ms. Sharmila Chhikara, DGM would be the alternate
member. The quorum of the Committee shall comprises of
all members.

A brief of the complaints received under Sexual Harassment
of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 as on March 31, 2026 is as under:-

13.0 Compliance of the provisions relating to Maternity Benefit
Act, 1961.

Your Company is complying with all the applicable
provisions of Maternity Benefit Act, 1961.

14.0    Right To Information

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 https://www.ifciltd.com/rtL-bare-act.
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 uploaded on the website of the Company for
first hand information of 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 116 RTI Applications and 27 RTI
Appeals in FY 2025-26 which were dealt with as per the
provisions of the RTI Act, 2005.

15.0    Promotion of Rajbhasha

Your Company takes pride in complying with Official
Language Act, 1963 of the Government, for which Official
Language Implementation Committees (OLICs) have 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.

16.0    Management Discussion and Analysis

1. Industry Structure and Developments¹

In 2025, the global economy displayed resilience with
3.4 per cent growth (3.3 per cent a year ago) amidst
high tariffs, elevated policy uncertainty, rising public
debt and geopolitical tensions. These headwinds were
largely offset by frontloading of imports, supply-chain
realignments, and a surge in Artificial Intelligence (AI)-
related investment. Global financial conditions
remained broadly accommodative, barring April and
May 2025 reflecting tariff tensions.

India remained the fastest growing major economy, with
GDP growth estimated at 7.6% for 2025-26, up from

7.1% in the previous year, supported by strong domestic
consumption, sustained investment, proactive policy
initiatives and sound macroeconomic fundamentals.
On the demand side, private final consumption
expenditure and fixed investment served as the key
growth drivers. On the supply side, a buoyant services
sector and a robust manufacturing performance helped
offset subdued agricultural activity.

Growth in Gross Value Added (GVA) in the agriculture
and allied sector moderated during 2025-26, reflecting
weather-related disruptions in kharif crops, although
favourable rabi conditions provided support. Foodgrain
and horticulture production reached record levels.
Industrial sector posted strong growth in 2025-26,
driven by a robust manufacturing sector. The growth
was facilitated by steady industrial credit growth and
broad sectoral policies like the Production Linked
Incentive (PLI) scheme and the National Manufacturing
Mission. The services sector continued to be the
primary driver of aggregate supply, contributing to
around 69% of real GVA growth. Labour market
conditions remained stable during January-December
2025. The share of agriculture sector continued to
decline in total employment, while that of other
services, manufacturing and trade sectors increased.

Headline inflation moderated to 2.1% in 2025-26 from
4.6% in the previous year. The financial sector remained
resilient on the back of healthy bank and non-bank
balance sheets, improved asset quality and capital
buffers, enabling double-digit credit growth. On the
fiscal front, consolidation efforts continued along with
improvement in expenditure quality and containment
of revenue expenditure. The Central Government
achieved its fiscal consolidation goal of reducing the
gross fiscal deficit which stood at 4.4% of GDP in 2025¬
26 (RE), driven by containment of revenue expenditure
and higher revenue receipts, mainly from direct taxes
and non-tax revenue. A modest Current Account Deficit
(CAD) and adequate forex reserves provided resilience
to the external sector even as portfolio investment
exhibited net outflows.

India’s merchandise trade deficit widened to US$ 333.2
billion during 2025-26 (US$ 282.5 billion a year ago).
A strong services trade surplus and a steady flow in
private transfer receipts helped contain CAD within a
sustainable level of 1.0% of GDP during April-December
2025. Capital flows witnessed significant volatility
during 2025-26. While net Foreign Direct Investment
(FDI) inflows rose, other major forms of capital flows
fell during the year. India’s foreign exchange reserves
(US$ 691.1 billion as at end-March 2026) remained
adequate in terms of the standard metrics of reserve
adequacy, including import cover of about 11 months
and external debt cover of 90.3%, thereby providing
buffer against adverse global spillovers.

Bank credit to the commercial sector grew by 15.9%
(y-o-y) in 2025-26 (10.9% a year ago). Credit from non¬
bank sources registered a growth of 13.3% (y-o-y)
[15.1% a year ago]. Profitability of Scheduled
Commercial Banks (SCBs) remained robust along with
an improvement in asset quality. The Gross Non¬
Performing Assets (GNPA) ratio declined to a multi-

decadal low, while the Capital to Risk-Weighted Assets
Ratio (CRAR) remained comfortably above the
regulatory requirements. Further, asset quality and
capital adequacy of the Non-Banking Financial
Companies (NBFCs) remained robust during the year.

2. Non-Banking Financial Companies (NBFCs)

As per RBI’s Annual Report, 2025-26, asset quality and
capital adequacy of the NBFCs remained robust during
the year.

In terms of the Financial Stability Report brought out
by the Reserve Bank of India in June 2026, the aggregate
credit growth of NBFCs (Upper and Middle Layers)
decelerated to 16.6% y-o-y in March 2026. Across
activity-based categories, credit growth moderated for
both NBFC-ICCs and NBFC-IFCs. In contrast, credit
growth of NBFC-MFIs turned positive and accelerated
to 14.5% y-o-y in March 2026. Sector-wise, NBFCs’
credit growth accelerated in the agriculture and retail
loan segments, while slowed down in industry and
services sectors. Within retail loans, growth was
primarily driven by gold loans and other retail loans,
whereas vehicle/ auto loans witnessed a slowdown.

Asset quality of NBFCs continued to improve across
all major economic sectors. Within retail loans, GNPA
ratios recorded a marginal uptick in the housing and
education loan segments. Asset quality improved, with
a steady decline in GNPA ratios for both Upper Layer
(UL) and Middle Layer (ML) NBFCs. NBFC-ML
continued to maintain a much higher Provisioning
Coverage Ratio (PCR) than NBFC-UL. Key profitability
ratios and regulatory capital ratios remained healthy,
despite witnessing a decline in March 2026. While the
funding pattern of NBFCs at the aggregate level
remained more or less similar to that a year ago,
dependence on bank borrowings increased for both
NBFC-UL and NBFC-ML in March 2026 compared to
the previous year.

On the liquidity front, short-term liabilities as a
percentage of total assets increased marginally. For a
common set of NBFCs, growth in credit by NBFC-UL

remained broadly stable at 19.8%. NBFC-ML witnessed
a pickup in credit growth from 12.6% in September
2025 to 14.4% in March 2026.

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 Your Company’s strategy to diversify into
advisory services, Your Company has continued to bag
assignments under various Government of India
schemes during FY 2025-26, including the Scheme to
Promote Manufacturing of Sintered Rare Earth
Permanent Magnets (REPM), and the Electronic
Component Manufacturing Scheme (ECMS) for portal
development work.

Following are the PLI and other Schemes of Government of India, where IFCI has been appointed as the Nodal Agency /
Project Management Agency (PMA):

Note: The tenure of the Production Linked Incentive (PLI) Scheme for Drones and Drone Components concluded during FY
2024-25.

In its endeavour, Your Company has continued its
aggressive focus on resolution of stressed assets and
Non-Performing Assets 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.

StockHolding has established a strategic alliance with
State Bank of India and IDFC First Bank to offer seamless
Custody-Banking proposition for both foreign and
domestic institutional investors.

During the year 2025-26, Stock Holding Services
Limited (SSL) launched its new mobile application
“Stockfin2.0” with latest User Interface (UI)/User
Experience (UX), along with updated features. Further,
StockHolding Services Limited (SSL) has also entered
into a business tie-up with Department of Posts to
provide online access for Post office customers to capital
market products, expanding financial inclusion and
distribution reach.

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 the 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 2025-26, IFCI Venture Capital Funds Limited
(IVCF) signed an MoU with University of Mumbai, The
Federation of Indian Chambers of Commerce and
Industry (FICCI) for awareness with respect to venture
capital funds. Further, IFCI Venture 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, vide its letter no. IFCI/CS/2024-787 &
788 dated November 22, 2024, informed the Exchanges
about receiving in-principle approval for the proposed
“Consolidation of IFCI Group”, which involves the
merger/amalgamation of IFCI Limited, StockHolding
Corporation of India Limited, and other group entities
of IFCI Limited. Subsequently, your Company vide its
letter no. IFCI/CS/2025-541 & 542 dated July 14, 2025,
notified the Exchanges regarding further update on the
matter. The referred letters are available on the
Company’s website at https://www.ifciltd.com and on
the website of the stock exchanges.

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. Outlook²

Global Economy

As per RBI’s Annual Report, 2025-26, geopolitical risk
has re-emerged as the dominant drag on global growth
in 2026. The adverse impact of outbreak of the conflict
in West Asia in end-February 2026 is reflected in the
forecasts of global growth and inflation. In International
Monetary Fund’s (IMF) baseline scenario, the global
economy is projected to grow by 3.1% in 2026 (as
against the earlier projection of 3.3% in January 2026),
while global merchandise and services trade volume is
expected to decelerate to 2.8% in 2026. Further
intensification of the conflict, its prolongation or
widening geographical spread, if any, remain the key
downside risks to the global economic outlook.
Financial markets may exhibit higher volatility with
tighter macroeconomic conditions and broader risk-off
sentiment.

Domestic Economy

As per RBI’s Annual Report, 2025-26, against the
backdrop of a moderate global growth, the outlook for
the Indian economy in 2026-27 remains positive,
supported by strong macroeconomic fundamentals,
although a prolonged West Asia conflict may pose
downside risk. The healthy balance sheets of the
corporate and banking sectors along with the
government’s continued thrust on capital expenditure
bode well for India’s strong growth trajectory. The
outlook for the agriculture sector in 2026-27 remains
contingent upon the progress and distribution of the
south-west monsoon. To reinforce India’s
manufacturing ambitions, the Union Budget 2026-27
has earmarked seven strategic and frontier sectors -
electronics, semiconductors, biopharma, rare earths,
chemicals, textiles, and capital goods - for a focused
policy push. Complementing this, measures such as
PLI and PM E-DRIVE to strengthen energy security are
expected to catalyse green tech manufacturing and
reduce critical import dependence, while investments
in freight corridors, waterways, coastal shipping and
last-mile connectivity would deepen regional
integration and support industrial expansion.

Labour market conditions are expected to improve
further, supported by the full-scale implementation of
the four labour codes, strengthening domestic demand
and productivity. Considering these factors, and on the
assumption that the adverse impact of the West Asia
conflict would remain contained in the near-term, real
GDP growth for 2026-27 is projected at 6.9% with risks
tilted to the downside.

The central government’s thrust on growth inducing
capital spending is expected to continue. On the
receipts side, direct taxes are budgeted at 6.9% of GDP
in 2026-27, highest in more than a decade. Gross Fiscal
deficit (GFD) is projected at 4.3% of GDP in 2026-27,
reflecting the Centre’s continued fiscal consolidation
efforts in recent years. The CPI inflation for 2026-27 is
projected at 4.6% with risks tilted to the upside.

Robust outlook for India’s services trade balance, in
particular software and business services, and inward
remittances from non-gulf countries is expected to
support current account balance during 2026-27.

Going forward, India’s growth outlook remains positive,
though the West Asia conflict and the attendant risks
of elevated energy prices, supply chain disruptions,
financial market volatility, uncertainty surrounding
global trade policies and weather-related disruptions
could pose headwinds to growth and inflation in the
short run. However, healthy corporate and bank balance
sheets, governments continued thrust on capital
expenditure and the implementation of trade
agreements with the key partners are expected to sustain
investment and growth momentum.

6. Risks and Concerns

IFCI has a dedicated Integrated Risk Management
Department (IRMD) which ensures proper
identification, measurement, monitoring and mitigation
of all pertinent risks and promotes compliance culture
with an effective reporting system. Risk Management
serves as a key enabler in decision making by facilitating
effective resource allocation in line with the IFCI's risk
appetite matching with its existing operations, ensuring
that strategic decisions are made with thorough
consideration of both risks and opportunities. The
guiding principles to manage risk in IFCI is compliance
of regulatory & legal requirements and achieving
balance between risk and return, while ensuring
independence of risk and business functions.

IFCI has put in place an independent Risk Governance
Structure, in line with regulatory guidelines and
industry best practices and its current operations. The
Board of Directors is the highest governing body and is
duly assisted by the Risk and Asset liability
Management Committee of the Directors (RALMCD) and
Risk and Asset Liability Committee of the Executives
(RALMCE).

Responsibility for the effectiveness of overall risk
management throughout IFCI lies with Chief Risk
Officer (CRO), who is directly reporting to Managing
Director & Chief Executive Officer (MD & CEO). CRO
monitors the overall effectiveness of risk management
throughout IFCI.

In order to address risks, your company has put in place
Asset Liability Management (ALM) Policy, Market Risk
Management (MRM) Policy, and Operational Risk
Management (ORM) Policy aligned with the Reserve
Bank of India's extant Directions for NBFCs. However,
the Credit Risk Management Policy continues to be
governed under the existing Integrated Risk
Management Policy (IRMP) and extant RBI Directions
on Credit Risk Management.

The Asset Liability Management (ALM) Policy, Market
Risk Management (MRM) Policy, and Operational Risk
Management (ORM) Policy, Credit Risk Management
Policy and other business policies of Your Company
are reviewed periodically, keeping in view the changing
regulatory requirement.

As a part of the Credit Risk Management, Your Company
assesses the Portfolio Level Risks by way of monitoring
of actual exposures against prudential limits, annual
rating migration exercise and mapping of internal &
external ratings.

The Dynamic Liquidity Statement (DLS), Structural
Liquidity Statement (SLS) and Interest Rate Sensitivity
positions (IRS) and Liquidity Coverage Ratio (LCR) are
placed before the Risk and Asset Liability Management
Committee of Executive (RALMCE) on a Monthly basis
as per regulatory requirement. The Information related
to mid-office function of Integrated Treasury
Department is shared with IRMD for monitoring on
weekly basis. Operational risk in IFCI is being managed
through Operational Risk Management (ORM) Policy,
Business Continuity Plan (BCP) and IT Policy.

The Risk Appetite Statement submitted to the Board of
Directors on annual basis for reporting on CRAR,
Leverage Ratio, Net Interest Margin (NIM), Net NPA
and Borrowings to Gross Advances ratio.

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 from time to time, for All Non-Deposit
taking NBFCs.

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

Effective Human Resource (HR) management continues
to play a pivotal role in advancing the Company’s
mission of fostering a positive, inclusive, and high-
performance work culture. The Company’s HR
initiatives remain focused on enhancing employee
engagement, facilitating professional growth, and
nurturing a diverse and collaborative workplace
environment.

During FY 2025-26, the Company undertook several
initiatives aimed at strengthening employee capabilities
and improving organisational effectiveness. Emphasis
was placed on continuous learning and development,
resulting in approximately 99.03% of employees
receiving training amounting to 2,755 man-hours. The
training programmes covered a broad spectrum of areas,
including Financial Modelling, Power BI, Listing
Regulations relating to Related Party Transactions
(RPTs), Government of India Reservation Policy,
Accessibility of Services for Persons with Disabilities
(PwDs), Public Grievance Redressal, KYC/AML Practices

and Regulatory Expectations for NBFCs, Artificial
Intelligence and Emerging Technologies, Risk-Based
Internal Audit, Operational Risk Management and
Operational Resilience for NBFCs, ESG and
Sustainability, Effective Business Communication and
Writing, as well as various behavioral and leadership
competencies.

The Company successfully strengthened its workforce
by deploying the required manpower resources in
critical roles to support IFCI’s business objectives.
During FY 2025-26, the Company successfully
conducted a promotion exercise aimed at recognising
merit, rewarding performance, and strengthening the
leadership pipeline across various levels of the
organisation. The exercise was carried out in a
transparent and structured manner, aligned with the
Company’s commitment to fostering a performance-
driven culture and providing employees with
meaningful career progression opportunities. By
creating avenues for internal growth and advancement,
the Company reaffirmed its focus on talent
development, succession planning, and building a
future-ready workforce capable of supporting its long¬
term strategic objectives.

In line with its commitment to effective governance,
the Delegation of Powers framework has been
periodically reviewed and refined to facilitate
consultative decision-making and enhance the speed
and quality of execution. The Company has also
continued to reinforce its organisational values by
clearly communicating expected standards of conduct
and strengthening staff accountability-related policies.

Recognising the importance of employee well-being and
organisational cohesion, the Company organised a range
of cultural, social, and engagement activities throughout
the year. These included celebrations and observances
such as the International Day of Yoga, IFCI Foundation
Day, Independence Day, Swachhta Campaigns, Diwali
festivities, New Year celebrations, International
Women’s Day, and other employee engagement
initiatives, fostering a strong sense of belonging and
teamwork.

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

Your Company adheres to the Government of India’s
directives for upliftment and welfare of Scheduled
Castes (SCs), Scheduled Tribes (STs), Other Backward
Classes (OBCs), Persons with Disabilities (PwDs), and
Economically Weaker Sections (EWSs), ensuring their
consistent implementation in both policy and practice.
Measures are actively undertaken to foster equity,
inclusion, professional growth, equal opportunity, and
capacity building, with particular emphasis on
adequate representation of these groups in learning &
development and employee welfare & engagement
programs.

As of January 01, 2026, the Company employed 112
regular staff members (excluding the MD & CEO and
CVO). Within this workforce, 19 employees (17%)
belonged to the Other Backward Classes, 11 employees
(10%) to the Scheduled Castes, and 1 employee (1%)
to the Scheduled Tribes.

ANNUAL STATEMENT SHOWING THE REPRESENTATION OF SCs, STs, OBCs & EWSs AS ON FIRST JANUARY OF THE YEAR
2026 AND NUMBER OF APPOINTMENTS MADE DURING THE PRECEDING CALENDAR YEAR

ANNUAL STATEMENT SHOWING THE REPRESENTATION OF SCs, STs, OBCs & EWSs IN VARIOUS GRADES AS ON FIRST
JANUARY OF THE YEAR 2026

GROUP-WISE REPRESENTATION OF PERSONS WITH DISABILITIES (PwDs) UP TO 31.12.2025

NOTE:

(i)    VH stands for Visually Handicapped (persons suffering from blindness or low vision)

(ii)    HH stands for Hearing Handicapped (persons suffering from hearing impairment)

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

(iv)    ID stands for Intellectual Disability

10. Details of Significant Changes in Key Financial Ratios

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

*Explanation: - The decrease in the Interest Coverage Ratio
is primarily attributable to the decrease in Earnings Before
Interest and Tax (EBIT) in FY 2026 as compared to FY 2025.
The decrease in the Operating Profit Ratio is primarily
attributable to the decline in Net Operating Profit before
Tax in FY 2026 as compared to FY 2025. The increase in
Return on Net Worth is primarily attributable to the increase
in Total Comprehensive Income during FY 2026 as compared
to FY 2025. Further, as the Debtor Turnover Ratio and
Inventory Turnover Ratio are not applicable to the Company,
being an NBFC, and accordingly, the same have not been
included in the above table.

17.0 Corporate Social Responsibility (CSR)

1.    IFCI Social Foundation (ISF)

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. 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 with Ministry of Corporate Affairs in line with
CSR Amendment Rules, 2021.

2.    CSR Expenditure / Allocation

As the Average Net Profit of Your Company for the last
preceding three years was negative, IFCI was not
required to allocate any amount for CSR activities for
FY 2025-26. Pursuant to the amendment in the
Companies (Corporate Social Responsibility Policy)
Rules, 2014, the Annual Report on CSR activities forms
part of Boards’ Report at Annexure - I.

18.0    Cautionary Statement

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

19.0    Details of Directors and Key Managerial Personnel (KMP)
appointed / ceased or resigned during the year

Following were the changes in Directors and Key Managerial
Personnel during the FY 2025-26 and till the date of signing
of this Boards’ Report:

a)    Shri Surjith Karthikeyan (DIN: 09634785), Government
Director, ceased to be on the Board of the Company
with effect from July 29, 2025, upon withdrawal of
nomination by the Government of India.

b)    The Government vide its Order dated July 24, 2025
(communication received on July 29, 2025) had
nominated Shri Shailesh Kumar (DIN: 11226831),
Director (at present), Department of Financial Services
(DFS), on the Board of the Company as Government
Director. Accordingly, Shri Shailesh Kumar, was
appointed as Director on the Board of Your Company
with effect from August 05, 2025 and by the
shareholders at its 32^nd AGM held on October 29, 2025.

c)    Shri Surendra Behera (DIN: 09784122), Non-Executive
Director ceased to be on the Board of the Company with
effect from August 19, 2025, upon resignation.

d)    Shri Rajeev Sachdev (DIN: 10681633) was appointed
as Additional Director on the Board of the Company
with effect from August 25, 2025. The appointment was
regularized and he was appointed as Director liable to
retire by rotation pursuant to shareholders resolution
passed at 32^nd AGM held on October 29, 2025.

e)    The Board at its Meeting held on November 11, 2025,
had appointed Shri Chirag Sapra, Deputy General
Manager as Chief Financial Officer (CFO) of the
Company with effect from November 11, 2025, vice Shri
Suneet Shukla, Chief General Manager.

f)    The Government vide its order dated February 16, 2026,
had appointed Shri Manikumar Sivaramakrishnan
(DIN: 08956660) as Deputy Managing Director (DMD)
on the Board of the Company, for a period of three (3)
years, from the date of his assumption of charge of the
post or until further orders, whichever is earlier.
Accordingly, Shri Manikumar was appointed as Deputy
Managing Director with effect from April 06, 2026
(forenoon) (i.e. date of his assumption of charge of the
post). Pursuant to Regulation 17(1C) of SEBI (LODR)
Regulations, 2015, the approval of shareholders is being
obtained at this AGM.

g)    Shri Umesh Kumar Garg (DIN: 00599426), Independent
Director, ceased to be on the Board of the Company
with effect from May 10, 2026, upon completion of his
tenure as Independent Director on May 09, 2026.

h)    Prof. Narayanaswamy Balakrishnan (DIN: 00181842)
will retire by rotation at the conclusion of the
forthcoming 33^rd Annual General Meeting. He has

expressed his unwillingness to be re-appointed and has
not offered himself for re-appointment at this AGM.
The Board has expressly resolved not to fill the vacancy
so caused.

20.0 Corporate Governance & Compliances

A detailed report on Corporate Governance as stipulated

under SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 (SEBI Listing Regulations)

is enclosed to this Annual Report.

a)    The credit ratings assigned to the various financial
facilities / instruments of the Company during the
Financial Year 2025-26 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 of Directors 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
of Directors.

c)    The details of composition of Board and its Committees,
forms part of the Corporate Governance Report
appearing separately in the Annual Report.

d)    Pursuant to the provisions of the Companies Act, 2013
and SEBI Listing Regulations, the Company is required
to place various Policies / Documents / Details on the
Website of the Company. The Company has a functional
website https://www.ifci!td.com and all the requisite
information are being uploaded thereat and available
at https://www.ifciltd.com/investor/sebi-lodr-disclosure.

e)    During the Financial Year 2025-26, the Company did
not have requisite number of Independent Directors
(including one-woman Independent Director) on the
Board of the Company, as per the requirement of the
Companies Act 2013 and 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
2025-26.

g)    During the Financial Year 2025-26, 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
2025-26, 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, 2026, has declared that he meets the criteria 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 (Listing Obligation and Disclosure Requirements)
Regulations, 2015.

k)    As no Independent Director was appointed during the
year, a statement regarding opinion of the Board with
regard to integrity, expertise and experience (including
proficiency) of the Independent Director, has not been
made part of this report.

21.0 Other Disclosures:

a)    In view of the insufficient profits during the Financial
Year 2025-26, 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/2026/Equity Dividend Distribution Policy.pdf
During the FY 2025-26, Your Company transferred
'44.75 crore to Reserve u/s 45-IC of the RBI Act, during
the financial year 2025-26. Further, the Company
transferred an amount of '87.58 crore from the
Debenture Redemption Reserve to General Reserve
during financial year 2025-26.

b)    During the FY 2025-26, there was no Company which
has become or ceased to be Subsidiaries, Joint Venture
or Associate Company of IFCI Ltd. As on March 31,
2026, the Company has 1 ‘Material Subsidiary’ viz.,
Stock Holding Corporation of India Ltd., Policy on
Determining Material Subsidiary is available on the
website of the Company at

https://www.ifciltd.com/2026/Policy_for_D6t6rminine_Mat6iial_Subsidiarv_und6r_R6eulation.pdf

Details on performance and financial position of
subsidiaries, associates and joint venture during the
FY 2025-26 can be referred from Form AOC-1 forming
part of this Annual Report. Further, MPCON Ltd. ceased
to be the Material Subsidiary of the Company as on
March 31, 2026.

c)    There was no change in the Capital Structure of the
Company during FY 2025-26.

d)    Change in the debt structure of the Company during
FY 2025-26 is as under:

e)    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.

f)    Your Company did not raise any public deposit during
the year. Accordingly, details relating to deposits,
covered under chapter V of the Companies Act, 2013
has not been made part of this report.

g)    During the FY 2025-26, there were no significant or
material orders passed by Regulators or Court impacting
the going concern status of the Company. However,
Union of India through SFIO has filed a petition before
NCLT, New Delhi against IFCI and 91 other respondents
under section 222(1)-242(4)-221-241(2)-224(5) & 246
of the Companies Act,2013. Notice on the petition was
issued by NCLT and served upon IFCI. No interim
orders in the petition have been passed against the
company. Information in this regard was intimated by
the Company to Stock Exchanges in line with
requirement of Listing Regulations. Further, there has
been no change in the business of the Company during
the reporting period. Also, there have been no material
changes and commitments which affect the financial
position between the end of financial year and date of
Boards’ Report.

h)    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 MD & CEO, was paid any
commission during the FY 2025-26 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 2025-26.

i)    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 Boards’ Report.

j)    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/investor/financial-reports.

k)    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 Boards’ Report.

l)    The performance evaluation of the Board, its
committees and individual Directors were conducted
by the Nomination and Remuneration Committee and
the Board. In the absence of requisite number of
Independent Directors on the Board of the Company,
the meeting of the Independent Directors could not be
held.

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

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

for a period of five years, i.e. FY(s) 2025-26 to 2029-30.
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
Subsidiary’ i.e. Stock Holding Corporation of India Limited
for the Financial Year ended March 31, 2026, is enclosed at
Annexure - II.

24.0    Comments of Comptroller & Auditor General of India

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

25.0    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 have 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 have 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;

(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.

26.0 Appreciation

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

Shri Manikumar Sivaramakrishnan    Shri Rahul Bhave

Deputy Managing Director    Managing Director &

DIN: 08956660    Chief Executive Officer

DIN:09077979

Address: IFCI Tower    Address: IFCI Tower

61 Nehru Place    61 Nehru Place

New Delhi-110019    New    Delhi-110019

Date: August 11, 2026

1

Source: Excerpts from the RBI Annual Report 2025-26
and RBI Financial Stability Report June 2026.

2

Source: Excerpts from the RBI Annual Report 2025-26
and RBI Financial Stability Report June 2026.