ifci annual report 2008-09

1

Annual Report 2008-09

1

2


Board of Directors

EXECUTIVE DIRECTOR

Shri Javed Yunus

CHIEF GENERAL MANAGERS

Shri T K Ray Shri R P Singh Shri Rakesh Kapoor Shri R S Sandhu Shri Sonjoy Sethee (CFO)

Shri N D Auddy Smt Shashi Sharma Shri S P Arora Shri N K Duggal Shri B N Nayak

COMPANY SECRETARY

Smt Rupa Sarkar

STATUTORY AUDITORS

Ray & RayChartered Accountants

GENERAL MANAGERS/VICE PRESIDENT

Shri Dinesh Sharma Shri D K Jain Shri Gautam Meour

Shri Rattan Singh Shri V Satyavenkata Rao Shri S P Sharma

(As on 31.07.2009)

Shri Prakash P MallyaChairman of the Board

Shri K V Eapen Shri Sanjeev Kumar Jindal Shri P G Muralidharan

Prof Shobhit Mahajan Shri K Raghuraman Shri K Narasimha MurthyShri Tejinder Singh Laschar

Shri S Shabbeer Pasha Smt Usha Sangwan Shri Sujit K MandalWhole Time Director

Shri Atul Kumar RaiChief Executive Officer &

Managing Director

(On deputation to IFL)

Principal Officers

3


NoticeNOTICE is hereby given that the Sixteenth Annual GeneralMeeting of the Members of IFCI Limited will be held on Friday,September 18, 2009 at 10:30 A.M. at Air Force Auditorium,Subroto Park, New Delhi-110010 to transact the followingbusiness:

Ordinary Business

1. To consider and adopt the Audited Balance Sheet as atMarch 31, 2009 and the Profit and Loss Account for theyear ended March 31, 2009 and the report of the Board ofDirectors and Auditors’ thereon.

2. To confirm the interim dividend already paid on PreferenceShares as Final Dividend.

3. To declare dividend on Equity Shares.

4. To appoint a Director in place of Shri P G Muralidharan,who retires by rotation and being eligible, offers himselffor re-appointment.

5. To appoint Auditors and fix their remuneration and for thepurpose to consider and, if thought fit, to pass, with orwithout modification(s), the following resolution as aSpecial Resolution:

“RESOLVED that pursuant to the provisions of Section 224,224A, 225 and other applicable provisions, if any, of theCompanies Act, 1956, M/s Chokshi & Chokshi, CharteredAccountants, be and are hereby appointed as Auditors ofthe Company, in place of the retiring Auditors, Ray & Ray,Chartered Accountants, to hold office from the conclusionof this Annual General Meeting until the conclusion of thenext Annual General Meeting of the Company at aremuneration to be decided by the Board/Audit Committeeof Directors of the Company, in addition to reimbursementof all out of pocket expenses in connection with the auditof the Company.”

Special Business

6. To consider and, if thought fit, to pass, with or withoutmodification(s), the following resolution, as OrdinaryResolution:

“RESOLVED that pursuant to Section 260 of the CompaniesAct, 1956, Article 130 of the Articles of Association of theCompany, Shri Prakash P Mallya, who was appointed asan Additional Director with effect from October 14, 2008and who holds office upto the date of ensuing AnnualGeneral Meeting and in respect of whom the Company hasreceived a notice under Section 257 of the Companies Act,1956, proposing his candidature as a Director of theCompany, be and is hereby appointed as a Director of theCompany liable to retire by rotation.”


“RESOLVED that pursuant to Section 260 of the CompaniesAct, 1956, Article 130 of the Articles of Association of theCompany, Shri Tejinder Singh Laschar, who was appointedas an Additional Director with effect from October 14, 2008and who holds office upto the date of ensuing AnnualGeneral Meeting and in respect of whom the Company hasreceived a notice under Section 257 of the Companies Act,1956, proposing his candidature as a Director of theCompany, be and is hereby appointed as a Director of theCompany liable to retire by rotation.”


“RESOLVED that pursuant to Section 260 of the CompaniesAct, 1956, Article 130 of the Articles of Association of the

Company, Shri K Narasimha Murthy, who was appointedas an Additional Director with effect from October 14, 2008and who holds office upto the date of ensuing AnnualGeneral Meeting and in respect of whom the Company hasreceived a notice under Section 257 of the Companies Act,1956, proposing his candidature as a Director of theCompany, be and is hereby appointed as a Director of theCompany liable to retire by rotation.”


“RESOLVED that pursuant to Section 260 of the CompaniesAct, 1956, Article 130 of the Articles of Association of theCompany, Shri K Raghuraman, who was appointed as anAdditional Director with effect from October 14, 2008 andwho holds office upto the date of ensuing Annual GeneralMeeting and in respect of whom the Company has receiveda notice under Section 257 of the Companies Act, 1956,proposing his candidature as a Director of the Company,be and is hereby appointed as a Director of the Companyliable to retire by rotation.”


“RESOLVED that pursuant to Section 260 of the CompaniesAct, 1956, Article 130 of the Articles of Association of theCompany, Shri S Shabbeer Pasha, who was appointed asan Additional Director with effect from October 14, 2008and who holds office upto the date of ensuing AnnualGeneral Meeting and in respect of whom the Company hasreceived a notice under Section 257 of the Companies Act,1956, proposing his candidature as a Director of theCompany, be and is hereby appointed as a Director of theCompany liable to retire by rotation.”


“RESOLVED that pursuant to Section 260 of the CompaniesAct, 1956, Article 130 of the Articles of Association of theCompany, Smt Usha Sangwan, who was appointed as anAdditional Director with effect from March 23, 2009 andwho holds office upto the date of ensuing Annual GeneralMeeting and in respect of whom the Company has receiveda notice under Section 257 of the Companies Act, 1956,proposing her candidature as a Director of the Companybe and is hereby appointed as a Director of the Companyliable to retire by rotation.”

12. To consider and if thought fit, to pass, with or withoutmodification(s), the following resolution, as an OrdinaryResolution:

“RESOLVED that Shri Sujit K Mandal, who was appointedas an Additional and Whole Time Director by the Board ofDirectors of the Company with effect from November 1,2008 and who, as per the provisions of Section 260 of theCompanies Act, 1956 holds office upto the date of thisAnnual General Meeting and in respect of whom theCompany has, pursuant to Section 257 of the CompaniesAct 1956, received a notice from a member, in writing,proposing the candidature of Shri Sujit K Mandal, for theoffice of Director, be and is hereby appointed as a Directorof the Company not liable to retire by rotation.”

“RESOLVED FURTHER that subject to the provisions ofSection 198, 269, 309, 311 read with Schedule XIII andother applicable provisions of the Companies Act, 1956 andArticle 162 of Articles of Association of the Company and

4


such other approvals as may be required, and suchmodifications and conditions, if any, as any authority mayimpose while according approval, which the Board ofDirectors is hereby authorised to accept, consent of themembers, be and is hereby accorded for the appointmentof Shri Sujit K Mandal as Whole Time Director with effectfrom November 1, 2008 for a period of two years and tothe payment of remuneration as set out hereunder:

i) Pay: Basic Salary of Rs.1,08,662/- per month.

ii) Provident Fund: Monthly subscription to the Fund atthe minimum rate of 10% of the pay. IFCI shallcontribute every month a sum equal to 10% of pay tothe account in the Fund. He shall not be coveredunder IFCI Pension Regulations.

iii) Housing: Rent free accommodation, as per rules ofIFCI or House Rent Allowance @50% of the basic pay.

iv) Travelling, Boarding and Lodging: Actualexpenditure to be reimbursed for outstation journeysundertaken for official work.

v) Medical Benefits: Actual expenses incurred for selfand his family.

vi) Personal Accident Insurance: Premium (not to exceedRs.4000/- per annum).

vii) Club Fee: Fee of Clubs subject to a maximum of twoClubs (excluding admission and life membership fee).

viii) Gratuity: 15 days salary for each completed year ofservice. Part service in excess of six months shall bereckoned as a completed year of service.

ix) Payment of tax on Perquisites/Special (Perquisite)Allowance: IFCI to bear tax in full on non-monetaryperquisites and to pay special allowance on monetaryperquisites which are taxable.

x) Leave Travel Allowance: Entitled to travel withfamily, by any mode, i.e., Air, Train, Road once in ayear for visiting any place in India.

xi) Other Perquisites: Other retiral benefits and likeamounts/benefits would be paid as per rules of IFCI.

“RESOLVED FURTHER that in the event of absence orinadequacy of profit in any financial year during his tenure,the aforesaid remuneration shall be paid as minimumremuneration subject to compliance of provisions of ScheduleXIII of the Companies Act, 1956.”

“RESOLVED FURTHER that the Board of Directors, be andis hereby authorised to alter and vary the aforesaid termsas to remuneration (including perquisites) within theceiling limits in that behalf laid down in Schedule XIII tothe Companies Act, 1956.”

“RESOLVED FURTHER that for the purpose of giving effectto this resolution, the Board of Directors of the Company,be and is hereby authorised to do all such acts, deeds andthings as may be deemed necessary or desirable or to settleany question or difficulty that may arise, in such manneras it may deem fit.”

Registered Office: By order of the Board of DirectorsIFCI LtdIFCI Tower61 Nehru PlaceNew Delhi-110019

Rupa SarkarDated : July 22, 2009 Company Secretary

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE ISENTITLED TO APPOINT A PROXY TO ATTEND ANDVOTE INSTEAD OF HIMSELF AND THE PROXY NEED

NOT BE A MEMBER OF THE COMPANY. THE PROXIESIN ORDER TO BE VALID AND EFFECTIVE, MUST BEDELIVERED TO THE REGISTERED OFFICE OF THECOMPANY ATLEAST FORTY-EIGHT HOURS BEFORE THECOMMENCEMENT OF THE MEETING.

2. The Explanatory Statement pursuant to the provisions ofSection 173(2) of the Companies Act, 1956, setting outmaterial facts in respect of the business under Item Nos. 6,7, 8, 9, 10, 11 & 12 are annexed hereto.

3. All documents referred to in the accompanying Notice andthe Explanatory Statement are open for inspection at theRegistered Office of the Company on all working daysexcept Saturdays, Sundays and Holidays between 11:00A.M. and 1:00 P.M. up to the date of Annual GeneralMeeting.

4. Register of Members and Share Transfer Books for EquityShares will remain closed from Saturday, September 5,2009 to Friday, September 18, 2009 (both days inclusive).

5. IFCI is not including the financial statements and otherdetails of its subsidiaries viz. IFCI Financial Services Ltd,IFCI Venture Capital Funds Ltd, IFCI InfrastructureDevelopment Ltd, IFCI Factors Ltd and MPCON Ltd, in itsfinancial statements in terms of exemption granted by theMinistry of Corporate Affairs under Section 212(8) of theCompanies Act, 1956. However, annual accounts of thesubsidiary companies and the related detailed informationwill be made available to the investors of IFCI or itssubsidiary companies seeking such information at anypoint of time on specific request in writing to the Company.The Annual Accounts of the subsidiary companies are openfor inspection at the registered office of IFCI and at theregistered offices of the respective subsidiary companies upto the date of Annual General Meeting on any working day.

6. The members holding shares/bonds in physical form arerequested to intimate to the Registrar and Transfer Agents(R&TA), MCS Ltd, F-65, Okhla Industrial Area, Phase-I, NewDelhi-110020 for change of address, if any, at the earliest,quoting their registered folio number. Change of addressin respect of shares/bonds held in demat form is requiredto be intimated to the concerned Depository Participant.

7. Members holding shares in more than one folio in identicalorder of names are requested to write to R&TA enclosingtheir share certificates to enable them to consolidate theholdings in one folio to facilitate better service.

8. Members seeking any information with regard to accountsor operations are requested to write to the Company at anearly date, preferably atleast seven days prior to the dateof meeting, so as to enable the management to keep theinformation ready.

9. Members/Proxies should bring the attendance slips dulyfilled in for attending the meeting. Members who holdshares in dematerialized form are requested to bring theirclient ID and DPID numbers for easy identification ofattendance at the meeting.

10. Pursuant to Section 205A of the Companies Act 1956, theCompany has already transferred all unclaimed dividenddeclared up to the financial year ended March 31, 1994 tothe General Revenue Account of the Central Governmentas required by the Unpaid Dividend (Transfer to the GeneralRevenue Account of the Central Government) Rules, 1978.Those shareholders, who have so far not claimed theirdividend upto the aforesaid financial year, may claim theirdividend from the Registrar of Companies, Delhi & Haryana.

11. Consequent upon amendment to Section 205A andintroduction of Section 205C, the unclaimed dividend forthe financial years 1994-95 to 1998-99 has been transferredto the Investor Education & Protection Fund.

5


12. A special notice in terms of Section 190 of the CompaniesAct, 1956, has been received under Section 225(1) frommembers proposing the appointment of M/s Chokshi &Chokshi, Chartered Accountants, as Auditors of theCompany in place of M/s Ray & Ray, Chartered Accountants,the retiring auditors of the Company.

13. In order to provide protection against fraudulentencashment of Dividend Warrants, shareholders holdingshares in physical form are requested to intimate theCompany under the signature of the Sole/First joint holder,the following information which will be used by theCompany for Dividend payments:

i) Name of Sole/First joint holder and Folio No.

ii) Particulars of Bank Account viz.:

• Name of the Bank

• Name of Branch

• Complete address of the Bank with Pin CodeNumber

• Account type, whether Savings Bank (SB) orCurrent Account

• Bank Account Number alloted by the Bank

In case of Shareholders holding shares in electronic form,Bank account details provided by the DepositoryParticipants (DPs) will be used by the Company for printingon dividend warrants. Shareholders who wish to changesuch bank accounts may advise their DPs about suchchange with complete details of Bank Account includingMICR Code.

Shareholders residing at the centers where ElectronicClearance Service (ECS) facility is available are advised toavail of the option to collect Dividend by way of ECS.

Equity shareholders holding shares in physical form arerequested to send their ECS Mandate Form in the formatavailable for download on the Company's website(www.ifciltd.com) duly filled in, to the Registrar andTransfer Agent of the Company, MCS Ltd. In case of EquityShareholders holding shares in electronic form, the ECSMandate Form will have to be sent to the concernedDepository Participants (DPs) directly.

EXPLANATORY STATEMENT PURSUANT TO SECTION173(2) OF THE COMPANIES ACT, 1956

Item No. 6

Shri Prakash P Mallya, was appointed as an Additional Directorby the Board of Directors of the Company. In terms of Section260 of the Companies Act, 1956, Shri Mallya shall hold officeupto the date of this Annual General Meeting of the Company.The Company has received a valid notice and requisite depositfrom a member of the Company under Section 257 of theCompanies Act, 1956 proposing the candidature of Shri Mallyafor office of Director. In view of the background and valuableexperience of Shri Mallya, it will be in the interest of theCompany that Shri Mallya continues as a Director of theCompany. Brief resume of Shri Mallya is set out in the“Information about Directors seeking appointment/re-appointment at the Annual General Meeting as required underthe Code of Corporate Governance Clause of ListingAgreement.”

Your Directors recommend the resolution for approval of themembers.

Shri Mallya is interested in the resolution as it relates to hisappointment. None of the other Directors of the Company is,in any way, concerned or interested in the said resolution.

Item No. 7

Shri Tejinder Singh Laschar, was appointed as an AdditionalDirector by the Board of Directors of the Company. In terms of

Section 260 of the Companies Act, 1956, Shri Laschar shallhold office upto the date of this Annual General Meeting of theCompany. The Company has received a valid notice andrequisite deposit from a member of the Company under Section257 of the Companies Act, 1956 proposing the candidature ofShri Laschar for office of Director. In view of the backgroundand valuable experience of Shri Laschar, it will be in the interestof the Company that Shri Laschar continues as a Director ofthe Company. Brief resume of Shri Laschar is set out in the“Information about Directors seeking appointment/re-appointment at the Annual General Meeting as required underthe Code of Corporate Governance Clause of ListingAgreement.”


Shri Laschar is interested in the resolution as it relates to hisappointment. None of the other Directors of the Company is,in any way, concerned or interested in the said resolution.

Item No. 8

Shri K Narasimha Murthy, was appointed as an AdditionalDirector by the Board of Directors of the Company. In terms ofSection 260 of the Companies Act, 1956, Shri Murthy shall holdoffice upto the date of this Annual General Meeting of theCompany. The Company has received a valid notice andrequisite deposit from a member of the Company under Section257 of the Companies Act, 1956 proposing the candidature ofShri Murthy for office of Director. In view of the backgroundand valuable experience of Shri Murthy, it will be in the interestof the Company that Shri Murthy continues as a Director ofthe Company. Brief resume of Shri Murthy is set out in the“Information about Directors seeking appointment/re-appointment at the Annual General Meeting as required underthe Code of Corporate Governance Clause of ListingAgreement.”


Shri Murthy is interested in the resolution as it relates to hisappointment. None of the other Directors of the Company is,in any way, concerned or interested in the said resolution.

Item No. 9

Shri K Raghuraman, was appointed as an Additional Directorby the Board of Directors of the Company. In terms of Section260 of the Companies Act, 1956, Shri Raghuraman shall holdoffice upto the date of this Annual General Meeting of theCompany. The Company has received a valid notice andrequisite deposit from a member of the Company underSection 257 of the Companies Act, 1956 proposing thecandidature of Shri Raghuraman for office of Director.In view of the background and valuable experience ofShri Raghuraman, it will be in the interest of the Companythat Shri Raghuraman continues as a Director of the Company.Brief resume of Shri Raghuraman is set out in the “Informationabout Directors seeking appointment/re-appointment at theAnnual General Meeting as required under the Code of CorporateGovernance Clause of Listing Agreement.”


Shri Raghuraman is interested in the resolution as it relates tohis appointment. None of the other Directors of the Companyis, in any way, concerned or interested in the said resolution.

Item No. 10

Shri S Shabbeer Pasha, was appointed as an Additional Directorby the Board of Directors of the Company. In terms of Section260 of the Companies Act, 1956, Shri Pasha shall hold officeupto the date of this Annual General Meeting of the Company.The Company has received a valid notice and requisite deposit

6


from a member of the Company under Section 257 of theCompanies Act, 1956 proposing the candidature of Shri Pashafor office of Director. In view of the background and valuableexperience of Shri Pasha, it will be in the interest of theCompany that Shri Pasha continues as a Director of theCompany. Brief resume of Shri Pasha is set out in the“Information about Directors seeking appointment/re-appointment at the Annual General Meeting as required underthe Code of Corporate Governance Clause of ListingAgreement.”


Shri Pasha is interested in the resolution as it relates to hisappointment. None of the other Directors of the Company is,in any way, concerned or interested in the said resolution.

Item No. 11

Smt Usha Sangwan, was appointed as an Additional Directorby the Board of Directors of the Company. In terms of Section260 of the Companies Act, 1956, Smt Sangwan shall hold officeupto the date of this Annual General Meeting of the Company.The Company has received a valid notice and requisite depositfrom a member of the Company under Section 257 of theCompanies Act, 1956 proposing the candidature ofSmt Sangwan for office of Director. In view of the backgroundand valuable experience of Smt Sangwan, it will be in theinterest of the Company that Smt Sangwan continues as aDirector of the Company. Brief resume of Smt Sangwan is setout in the “Information about Directors seeking appointment/re-appointment at the Annual General Meeting as requiredunder the Code of Corporate Governance Clause of ListingAgreement.”


Smt Sangwan is interested in the resolution as it relates to herappointment. None of the other Directors of the Company is,in any way, concerned or interested in the said resolution.

Item No. 12

Shri Sujit K Mandal, was appointed as an Additional and WholeTime Director by the Board of Directors of the Company inaccordance with Section 260 of the Companies Act, 1956 witheffect from November 1, 2008. Shri Sujit K Mandal as anAdditional Director, shall hold office upto the date of thisAnnual General Meeting. The Company has received a noticein writing, along with requisite deposit from a member of theCompany under Section 257 of the Companies Act, 1956,proposing the candidature of Shri Mandal for the office ofDirector.

The Board of Directors of the Company also appointedShri Mandal as Whole Time Director of the Company w.e.f.November 1, 2008 for a period of two years, uptoOctober 31, 2010 subject to the approval of the members attheir General Meeting. The approval of members is being soughtfor appointment of Shri Sujit K Mandal as Whole Time Director,not liable to retire by rotation and payment of remuneration tohim as set out in Resolution No. 12.

Information about Directors as required under Clause 49 ofthe Listing Agreement relating to Corporate Governance is setout separately in the Notice of Annual General Meeting.


This may be treated as the Abstract and Memorandum ofInterest under Section 302 of the Companies Act, 1956.

Shri Sujit K Mandal, is interested in the resolution as it relates

to his appointment. None of the other Directors of the Companyis, in any way, concerned or interested in the resolution.

Registered Office: By order of the Board of Directors

IFCI LtdIFCI Tower61 Nehru PlaceNew Delhi-110019

Rupa SarkarDated : July 22, 2009 Company Secretary

INFORMATION ABOUT DIRECTORS SEEKINGAPPOINTMENT/RE-APPOINTMENT AS REQUIRED UNDERTHE CODE OF CORPORATE GOVERNANCE CLAUSE OFLISTING AGREEMENT

At the ensuing Annual General Meeting Shri P G Muralidharanshall retire by rotation. Shri P G Muralidharan being eligible offershimself for re-appointment. Shri Prakash P Mallya, Shri TejinderSingh Laschar, Shri K Narasimha Murthy, Shri K Raghuraman,Shri S Shabbeer Pasha and Smt Usha Sangwan who have beenappointed as Additional Directors by the Board, also seek approvalof members for re-appointment. Shri Sujit K Mandal, who hasbeen appointed as Additional & Whole Time Director by the Board,also seeks approval of members for re-appointment. Theinformation or details to be provided for the aforesaid Directorsunder Corporate Governance Code are as under:

a) Shri P G Muralidharan, former Secretary toGovernment of India, has more than 34 years of richexperience in various Ministries of Central & StateGovernments. During his extensive career, he was theChairman of various Public Sector Undertakings andhas led several key government delegations to variousoverseas destinations for important assignments. Heis on the Board of Religare Aegon AssetManagement Company (P) Ltd.

b) Shri Prakash P Mallya served Canara Bank for 32years and was also Executive Director in SyndicateBank before being posted as Chairman & ManagingDirector of Vijaya Bank. He is a Post Graduate inEconomics and banker by profession. He hasexperience of more than 34 years in the bankingsector. Shri Mallya has attained remarkableachievements in the business arena and has madevarious valuable contributions to research work inthe area of economics. He has achieved manyprestigious awards for excellence in the bankingsector. Presently he is a Director on the Board of StockHolding Corporation of India Ltd and Bank of India.

c) Shri Tejinder Singh Laschar is a Post Graduate inEconomics and Commerce. He has a Post GraduateDiploma in Development Policy from University ofGlasgow, Scotland, UK. He is from the IndianEconomic Service and has held importantassignments, such as Senior Economic Adviser,Ministry of Commerce and Industry- Government ofIndia; Economic Adviser, Ministry of Chemicals andFertilizers-Government of India and has spent manyyears in the Ministry of Finance. He has been aConsultant to The Institute of Public Enterprises,Osmania University, Hyderabad and Chairman andManaging Director of HFC Ltd. He was consultant toIndian Council for Research in InternationalEconomic Relations (ICRIER). He has had specializedtraining in Financial Analysis at InternationalMonetary Fund at Washington and Singapore. He hasdone assignment for The Asian Development Bank,Manila. He specialises in the areas of financialrestructuring of Companies, Capital and DebtMarkets, Fertilizers Production, Pricing, Imports,Foreign Direct Investment, Wholesale Price Index,

7


Index of Industrial Production and Service PriceIndex. He has been on the Board of Directors ofseveral Public Sector Banks, Independent Trustee ofprominent Mutual Funds, Director in Housing FinanceCompanies and several Government of IndiaCompanies. Presently he is a member of Task Force forMOU in Public Sector Units, set up by the Departmentof Public Enterprises, Government of India. He is alsoa Director on the Board of PNB Housing Finance Ltdand Independent Trustee of a Mutual Fund promotedby Shinsei Trustee Company (I) Pvt Ltd. He doesarbitration for the National Stock Exchange of India Ltd.

d) Shri K Narasimha Murthy, is a B.Sc., FCA and FICWA.He is a reputed Cost Accountant and has 28 years ofprofessional experience in the areas of Cost Control,Cost Reduction, Corporate Management, Audit,Strategic Planning and Management Consultancy etc.and has provided services to more than 100companies. He is a member on various committeesof the Government of India. He has completed variousnational level assignments. Presently he is Directoron the Board of IDBI Bank Ltd, LIC Housing FinanceLtd, Srikari Management Consultants Pvt Ltd, AndhraPradesh State Financial Corporation Ltd and partnerof Narasimha Murthy & Company, Cost Accountants.

e) Shri K Raghuraman, is a former Executive Directorof Punjab National Bank. He is a Commerce Graduateand a qualified Chartered Accountant. He has over34 years of banking experience. He has participatedin various international conferences/seminars abroadin the area of banking. He is also a Director on theBoard of Andhra Bank and Oriental Carbon andChemicals Ltd.

f) Shri S Shabbeer Pasha, is a Commerce Graduate,CAIIB, Graduate Member of the Institute of Cost andWorks Accountants of India and a qualified CharteredAccountant. He has wide experience of over 22 yearsin the areas of Audits, Bank Audits, Inspections andInvestigations, Direct Tax Laws, Corporate Consulting,Management Consultancy, Mergers and Acquisitionsand Information Technology related areas. He hasheld various positions on many committees of theGovernment of Karnataka and Government of India.He was Chairman of the Karnataka Chapter of theInstitute of Chartered Accountants of India. He hasserved in various committees of the Institute of

Chartered Accountants of India. Presently he ismember of the Committee on Trade Laws and WTOof ICAI, New Delhi. Shri Pasha is the proprietor ofK Rahman Khan & Company, Chartered Accountants.He has served as a Director on the Board of CanaraBank from 2005-06 to 2007-08. Presently he is servinghis second term as a Director on the Board of CanaraBank. He has also been involved in various socialactivities and is member and office bearer of manysocial organisations.

g) Smt Usha Sangwan, Executive Director of LifeInsurance Corporation of India holds a Master’sDegree in Economics, Licentiate from InsuranceInstitute of India and a Post Graduate Diploma inHuman Resource Management. Along with variedexperience of Housing Finance, Pension & GroupSuperannuation and almost all aspects of corebusiness of LIC, she has also served at Branch,Divisional, Zonal and Corporate levels. She has beenexposed to various prestigious training programmesin India and abroad. Prominent among them beingMarketing Strategies at ISB-Hyderabad,Transformational Leadership at IIM-Lucknow andHR as Business Strategy at Asian Institute ofManagement, Philippines. Smt Sangwan does nothold Directorship/Committee Membership in anyother Company.

h) Shri Sujit K Mandal, is a Mechanical Engineeringgraduate from National Institute of Technology,Durgapur and is a Post Graduate in BusinessManagement from Indian Institute of Management,Ahmedabad. He has rich experience of more than 36years of Industrial/Corporate Finance spanning nearlyall aspects of management in the industrial andfinancial sectors. He has vast experience in the areasof Project, Production Operations Management andCorporate Planning in reputed Engineering Industriesand developed expertise in Project Finance, ProductDevelopment, Corporate Advisory, ProjectDevelopment, NPA Management, Policy Formulations,Strategic Management and Corporate Planning andTurn Around Strategy etc. Presently he is Director onthe Board of Tourism Finance Corporation of IndiaLtd, IFCI Factors Ltd, IFCI Financial Services Ltd, IFCIVenture Capital Funds Ltd and is on the Board ofGovernors in Management Development Institute.

Listing at StListing at StListing at StListing at StListing at Stococococock Exck Exck Exck Exck Exchangehangehangehangehangesssss

The Company’s Equity Shares are listed at following six Stock Exchanges in India. Besides, the bonds issued to the public by theCompany were also listed at Stock Exchanges mentioned at Sl. Nos. 1, 2 and 3 below. After the redemption of these bonds onmaturity/through exercise of call option, the listing of these bonds have been discontinued.

1. Bombay Stock Exchange Ltd 2. The National Stock Exchange of India LtdPhiroze Jeejeebhoy Tower Exchange Plaza, 5th FloorDalal Street, Fort Plot No. C/1, G BlockMUMBAI-400 001 Bandra-Kurla Complex, Bandra (East)

MUMBAI-400 051

3. The Delhi Stock Exchange Association Ltd 4. The Calcutta Stock Exchange Association Ltd3/1 Asaf Ali Road 7 Lyons RangeDELHI-110 002 KOLKATA-700 001

5. The Madras Stock Exchange Ltd 6. Ahmedabad Stock Exchange LtdExchange Building Kamdhenu Complex, 1st Floor11 Second Line Beach Opp. Sahajanand CollegeCHENNAI-600 001 Panjarapole

AHMEDABAD-380 015

The Company has paid the annual listing fee to all the Stock Exchanges upto the Financial Year 2009-10 except to the StockExchanges at New Delhi, Kolkata, Ahmedabad and Chennai as the Company had applied for delisting ofsecurities pursuant to the resolution passed at the Annual General Meeting held on September 10, 2001 andSeptember 12, 2003.

8


Directors’ ReportTo the Members

The Board of Directors of your Company has the pleasure ofpresenting the Sixteenth Annual Report of IFCI Limited togetherwith the Audited Statements of Accounts for the year ended theMarch 31, 2009.

FINANCIAL RESULTS (Rs. crore)

2008-09 2007-08

1. Operational Income 1,402 1,9632. Total Income 1,484 2,1113. Cost of Borrowings 790 8214. Staff Cost/Other Expenditure 91 1525. Depreciation 7 76. Total Expenditure 888 9807. Profit before provisions/write-off 596 1,1318. Write-off/Provisions for Bad &

Doubtful Assets (net of reversal) (414) (953)9. Profit before Exceptional Items 1,010 2,08410. Amount Receivable from

Government of India written-off – (416)11. Profit before Tax 1,010 1,66812. Tax Expenses 353 64813. Profit after Tax and Exceptional Items 657 1,02014. Surplus/(Deficit) brought forward

from previous year 12 (836)15. Appropriations:

Reserve u/s 45IC of RBI Act 134 37Transfer to Capital Redemption Reserve 82 21Transfer to General Reserve 65 –Dividend on Equity Shares (incl. Tax) 71 –Dividend on Preference Shares (incl. Tax) 5 114

16. Balance carried to Balance Sheet 312 12

The total income of your Company for the year 2008-09 stoodat Rs.1,484 crore vis-à-vis Rs.2,111 crore in the previous yearmainly on account of lower profit from sale of shares, partly adeliberate decision to maximise returns which was not possibleowing to market indices remaining at lower levels during theyear. Employee expenses for the current year were lower ascompared to the previous year. In the current year, write-off ofRs.204 crore and provision of Rs.36 crore (in respect of currentinvestments) has been made. A provision of Rs.655 crore (net)has been reversed being no longer required consequent uponrecovery through OTS, etc. Consequently, your Company hasposted profit before tax of Rs.1,010 crore vis-à-vis Rs.1,668crore in the previous year, inspite of the challenging economicenvironment during the year.

Dividend

As the Company has made profits in the last three years andfulfils the necessary pre-conditions for declaration of dividend,the Board of Directors has recommended Dividend on EquityShares @ 8% for the year 2008-09. It is after a gap of 10 yearsthat the Company is proposing a dividend. Further, dividendof Rs.5.11 crore (including Corporate Dividend Tax) onPreference Shares has been paid as Interim Dividend.

Directors

Since the last Annual Report, Shri S Ravi resigned from theBoard w.e.f. October 16, 2008 and Shri Thomas Mathew Tresigned from the Board w.e.f. February 9, 2009.

The Board has placed on record its appreciation for the valuableservices rendered and the contribution made by them.

Shri R K Kapoor, being the Director appointed in the casualvacancy retired from the Board in the last AGM.

The Government of India has nominated Shri K V Eapen, JointSecretary, Ministry of Finance, Department of Financial Serviceson the Board w.e.f. September 12, 2008. Shri Sanjeev KumarJindal, Deputy Secretary, Ministry of Finance, Department ofFinancial Services was also inducted as a Government Nomineeon the Board of the Company w.e.f. June 27, 2009 in place ofSmt Sukriti Likhi.

To broadbase the Board, Shri Prakash P Mallya, Ex-CMD VijayaBank, Shri Tejinder Singh Laschar, IES, Shri K Raghuraman,Ex-Executive Director, Punjab National Bank, Shri S ShabbeerPasha, Practising Chartered Accountant, Shri K NarasimhaMurthy, Practising Cost Accountant were appointed asAdditional Directors of the Company w.e.f. October 14, 2008.

9


Smt Usha Sangwan, Executive Director, LIC also joined on theBoard w.e.f. March 23, 2009 as Additional Director. They willhold the office till the date of the ensuing Annual GeneralMeeting. Notice under Section 257 of the Companies Act, 1956has been received from the members proposing the candidatureof Addtional Directors for appointment as Directors of the Company.

Shri Sujit K Mandal, Ex-Executive Director, IFCI was appointedas a Whole Time Director on the Board w.e.f. November 1, 2008for a period of 2 years. A proposal is being placed before theshareholders for approval of the appointment of Shri Sujit KMandal, as a regular Director.

Directors’ Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of theCompanies Act, 1956, with respect to Directors’ ResponsibilityStatement, it is herby confirmed:

i) that in the preparation of annual accounts, the applicableaccounting standards have been followed along withproper explanation relating to material departures;

ii) that the Directors have selected such accounting policiesand applied them consistently and made judgments andestimates that are reasonable and prudent, so as to givea true and fair view of the state of affairs of the Companyat the end of the financial year and of the profit or lossof the Company for the year under review;

iii) that the Directors have taken proper and sufficient carefor the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Company andfor preventing and detecting fraud and otherirregularities;

iv) that the Directors have prepared the annual accountsfor the year ended on March 31, 2009 on a ‘going concernbasis’.

Auditors

RBI guidelines as applicable to Public Sector Banks providefor a tenure of three years to Statutory Auditors. Though yourCompany has been classified as NBFC-ND-SI by RBI, the Boardkeeping in view Corporate Governance Principles and RBIGuidelines applicable to public sector banks, considered theappointment of another firm of Chartered Accountants asStatutory Auditors, in the place of the retiring StatutoryAuditors, M/s Ray & Ray, Chartered Accountants. Pursuant tothe provisions of Section 225 of the Companies Act, 1956, anotice, in writing, has been received from members proposingthe name of M/s Chokshi & Chokshi, Chartered Accountants,Mumbai, as Statutory Auditors of the Company. The Board,accordingly, considered the matter and decided to seek approvalof the members at the ensuing Annual General Meeting forappointment of M/s Chokshi & Chokshi, Chartered Accountants,Mumbai as Statutory Auditors of the Company to hold officefrom the conclusion of this Annual General Meeting to theconclusion of the next Annual General Meeting. The Companyhas received a letter from the auditors proposed to be appointedto the effect that their appointment, if made, would be withinthe prescribed limits under Section 224(1-B) of the CompaniesAct, 1956.

MANAGEMENT DISCUSSION AND ANALYSIS

(i) Operating Environment and Outlook

Global Scenario

The global economy has been in the throes of a crisis after aprolonged buoyancy by rising asset prices. Indications of the

impending correction became available for the first time inAugust, 2007. The bankruptcy of Lehman Brothers onSeptember 15, 2008 triggered a bigger run on key fundingmarkets, which led to large scale bank rescues, deposit anddebt guarantee. US government stepped in to support insurancecompany AIG. US treasury announced a temporary guaranteeof money market funds. The US Fed had taken a slew ofcontainment measures – it had pumped in almost US$ 900billion into the market through emergency auctions, cut theFed rate seven times from September, 2007 till October 8, 2008.

Led by the US Fed, other Central Banks of UK, Germany, Japan,Canada, Sweden and others also followed suit by devisingpackages to provide succor to beleaguered banks, cutting theirreference rates and pumping money into the inter-bank marketsto ease jittery credit markets. But, by then, world over, the stockmarkets had nose-dived, with both inter-bank and creditmarkets for bonds and commercial paper shrinked drastically.

From late October’08 to mid March’09, stock market remainedvolatile with increasingly dire economic data releases, weakearnings reports and uncertainties over ongoing governmentintervention.

Relative movements of global stock indices: FY 2008-09[Source: www.finance.yahoo.com]

The stock market data of developed economies arerepresented through the Dow Jones, DJ-STOXX and theNIKKEI, while the data in respect of developing economiesare represented through SENSEX, BMF BOVESPA & SSE 180.Quite clearly, while each of the economies suffered duringthe FY 2009, the volatility in the indices of the developingeconomies was higher when compared to the volatility in thedeveloped markets. At an aggregate level in the time framementioned, on any particular day, for every 1 percentage fallin the developed markets’ index, the developing markets fellapproximately 1.64 percentages. The same statistic for theSensex vis-à-vis the developed markets stood at 1.54percentages.

Crude oil prices, hovering below US$ 50 a barrel at thebeginning of the year 2007, touched US$ 145 a barrel inJuly’08, and thereafter dropped below US$ 34 a barrel in midDecember‘08, on reduced demand, as stockpiles rose andOPEC had to cut production to meet demand supplymismatches.

10


World GDP growth declined sharply in the fourth quarter of2008. IMF expects global economy to contract by 1.3% in 2009,with a number of advanced economies experiencing recession.World Bank has an even gloomier outlook of negative 2.9% forworld economy.

Various policy actions such as further rate cuts, lower reserverequirements and large fiscal stimulus packages reflected theirdesired impact after mid-March’09, when assets prices startedshowing a recovery trend. On April 2, 2009 a communiqué wasissued at the G20 Summit pledging joint efforts by governmentsto restore confidence and growth, including measures tostrengthen the financial system.

Impact on India

The impact of global downturn was felt in India during thefiscal 2009. Even with a depreciating Indian Rupee, exportsplunged by a record 33% for six consecutive months inMarch ’09. A substantial portion of this fall could be attributedto a heavy reduction in demand by major importers (the USand the UK) across the globe.

Coupled with this, many Foreign Institutional Investors (FIIs)offloaded large portions of their stocks from the Indian marketsin order to meet the redemption pressure. This resulted in anet outflow of US$ 15 billion in FY 2008-09 as against net inflowof US$ 20 billion in previous year. The sensex came crashingdown to the 9,000 levels as a result of this FII activity fromtheir initial high of 17,600.12 on May 02, 2008.

Economic Survey & Budget

‘Economic Survey 2008-09’ confirmed that economic growthof India decelerated in FY 2009 to 6.7% as against the averagegrowth rate of 8.8% in the previous five years (FY 2004 to FY2008). The growth in agriculture and allied activitiesdecelerated from 4.9% in FY 2008 to 1.6% in FY 2009, mainlyon account of the high base effect of FY 2008.

The manufacturing, electricity and construction sectorsdecelerated to 2.4%, 3.4% and 7.2% respectively during FY2009 from 8.2%, 5.3% and 10.1% respectively in FY 2008.

Despite the slowdown in growth, investment growth was at arate higher than that of GDP. The ratio of fixed investment toGDP consequently increased to 32.2% of GDP in FY 2009 from31.6% in FY 2008.

The Economic Survey ’09 has forecast a growth of 6.25% to7.75% for Indian economy during the current fiscal 2010,provided the US economy ‘bottoms out’ by September 2009.

The Union Budget 2009-10 has declared various social andinfrastructure initiatives. Private consumption, which sloweddown considerably in 2008-09, is expected to get stimulus withenhanced provision in various employment generation schemesapart from increase in threshold limit for paying Income Tax.To counter slowdown in private investment, budget-2009-10has announced increase in public sector investments,particularly in Infrastructure sector, where investment of theorder of Rs.1 trillion is expected in Public Private Partnersip(PPP) projects, which would attract private investment in thesector. Thus, government expenditure, which is expected toincrease by 15% in 2009-10, would continue to be the keydemand driver.

Although the fiscal deficit at 6.8% of GDP for the FY 2010 is anarea of concern, government intends to push the growth rateto the level of 9% at the earliest. The policy makers have to doa balancing act between providing economic stimulus andmanaging fiscal deficit.

Initiatives of IFCI

The current crisis has revealed the ‘procyclicality’ created bythe tendency of financial intermediaries to become less prudentduring cyclical upturns and more prudent during downturns.Your Company has responded swiftly to the challenges ineconomic environment.

However, because of the strong regulatory framework and thewell managed banking system, the resilience shown by ourfinancial markets was impressive and the impact of the crisisthat originated in US was less severe in India, as compared tothe other emerging economies. The vast domestic demandcontinued to play a critical role in India getting less affectedfrom global turbulence.

The Reserve Bank of India combated inflation, which toucheda peak of 12.9% in August’08, by tightening monetary measures.After the global slowdown, since October ’08, RBI has providedstimulus package and reduced CRR, SLR, Repo & Reverse RepoRates, created conducive liquidity conditions and promptedbanks to lower their lending and deposit rates to sustain thegrowth momentum in the economy.

Your Company has capitalized the business opportunities undersuch stressed market conditions, and re-established its presencein the financial market. Sanction of fresh loans and

Smt Pratibha Devisingh Patil, Hon’ble President of India andShri Atul Kumar Rai, CEO & MD, IFCI Ltd with other members of

Presidential Delegation to Spain and Poland

11


disbursements of the same were made only after the requireddue diligence, selective profit booking made from dis-investment and your Company participated modestly in thesecondary market. The drive for maximizing recovery from non-performing assets continued, but the recovery in absolute termshas reduced due to resolution of major non-performing assetsin the preceding two years.

The industrial sector in which your Company has major exposureincludes Power, Telecom and Other Infrastructure, whichperformed satisfactorily when viewed in the backdrop of theglobal economic slowdown. The prospects of other sectors inwhich your Company has major exposure viz., Iron and Steeland Textiles came under strain during the current year.

Diversification in the area of operations has been consolidated.With the establishment of Project Development Group (PDG)and strengthening the Corporate & Infrastructure Advisoryservices with executives having rich experience of projectappraisal, debt syndication, bid process management etc., yourCompany has already taken a major initiative to providecomplete solution under one roof for infrastructure projects aswell as to provide customized corporate advisory services andfacilitating the financial re-engineering of various governmentbodies. Your Company is also utilizing its expertise in NPAresolution, by taking over NPAs from Banks/other Institutionsat competitive prices.

Following subsidiary companies have synergized theiroperations with IFCI:

• IFCI Infrastructure Development Ltd. (IIDL) has beenestablished as a wholly owned subsidiary in the last fiscal.IIDL has taken up a number of prestigious projects in andaround Delhi, Ahmedabad and Bengaluru, which areexpected to contribute significantly to enhance your wealth.

• IFCI Venture Capital Funds Ltd. (IVCF) has been revitalizedwith fresh infusion of capital which now manages threeprivate equity/venture capital funds, apart from providingadvisory services and short term loans.

• IFCI Financial Services Ltd. (IFIN), another group company,is engaged in Stock Broking, Investment Banking, MutualFund Distribution & Advisory Services, DepositoryParticipant Services, Insurance Products etc. It has witnessedboth organic and inorganic growth. Through IFIN, yourCompany can now offer a wide array of financial productsand services to a wider base of the investing community.

• IFCI Factors Ltd. (IFL), a name rechristened from ForemostFactors Ltd, has been able to tap the vast potential of factoringservices, which is steadily replacing the hithertoconventional modes of working capital finance in thebanking spree.

• MPCON Ltd., a technical consultancy organization promotedin 1979, has now been strengthened by infusing more capital.MPCON Ltd. has now become a subsidiary of IFCI and itwould now be able to serve its clientele in a more effectivemanner.

Your Company has earned profit during last three years andis now proposing to pay dividend for the year 2008-09. Thecapital adequacy ratio of your Company is 19%, which iscomfortable. Your company is poised to raise resources in abig way to ensure accelerated growth in the years to come.

The Board of Directors of your Company has reviewed allthe policies in different areas of operation which are in placeso as to achieve the objectives of the business plan withinan acceptable level of risk. A new Risk ManagementCommittee has been set-up at the Board level to overviewthe risk management process.

The workspace meant for the staff of your Company has beenrevamped at IFCI Tower and other offices to create aconducive work environment. A conscious effort is beingmade to transform the work culture to one that isperformance oriented and innovative in outlook. Towardsthis, your Company has recruited Management/EngineeringGraduates & Professionals from the premier institutions ofIndia like IIMs, who are expected to contribute with theirideas to energize the growth process. With the combinationof expertise and experience with resources, your Companyis confident of establishing the brand “IFCI”, along-with itssubsidiaries and group companies to be known as a one stopshop catering to multiple business needs.

(ii) Industry Structure and Developments

Over the past few years, IFCI has consolidated itself withaggressive NPA recoveries and liability restructuring,whereby, inspite of overall adverse scenario, it has beenable to move aggressively and register huge growth inthe approval and disbursement of fresh assistance forproject finance to stimulate various industries in India.Acquisition of NPAs from banks and their resolutions hasalso been embarked upon.

Shri Pranab Mukherjee, Hon’ble Minister of Finance, Shri Atul Kumar Rai,CEO & MD, IFCI Ltd and Shri Pawan Munjal, MD & CEO of Hero Honda

Motors Ltd at the IFCI sponsored ‘CNN IBN Indian of theYear Awards - 2008’ held in February, 2009

The Hon’ble Comptroller and Auditor General of India, Shri Vinod Raialongwith spouse Smt Geeta Rai and, in the background, Smt Babni Lal Rai

at the inauguration of IFCI Auditorium

12


corporates including Navratna PSUs and throughinvestment in fixed deposits with PSU Banks andprime private sector banks. As per Company’s policy,no investment was made in securities below AAAcategory. Safety and liquidity were the prime criteriafor all investment decisions. The prudent investmentstrategy helped your Company remain unscathed bythe turbulence in the financial market. On the foreignexchange front, despite the global financial crisis,your Company managed its exposure in foreignexchange reasonably well. The foreign exchangeposition was nearly hedged throughout the year.Your Company did not use any “Exotic DerivativeProducts” during the year and did not have anyexotic derivatives exposure in equity/debt or foreignexchange market.

During the year, your Company pursued the strategyof selective disinvestment and trading both in cashand F&O segment and earned profit of Rs.129.69crore. Net investment portfolio of your Company ason March 31, 2009 stands at Rs.4,038.96 crore whichis higher than the net investment amount ofRs.2,270.72 crore as at the end of FY 2007-08. Itimplies that while booking profit from selectivedisinvestment, the portfolio size was increasedthrough investment in front line companies.

c) Management of Non-Performing Assets

Your Company has taken various measures forprevention of slippage of performing assets to non-performing assets. These include need basedrestructuring of debt, settlements, assignment ofNPAs which contributed to contain the NPAsposition.

During the year under report, debt restructuringpackages were formulated in 4 cases withrestructured amount involved being Rs.86.40 crore.Where recovery through the debt restructuring orlegal routes was found not feasible or very timeconsuming and future prospects were not good, yourCompany took recourse to Negotiated/One TimeSettlement (OTS) of dues. During 2008-09, OTS wasentered into in respect of 78 cases for an aggregatesettlement amount of Rs.373.57 crore compared to136 cases for an amount of Rs.1,497 crore in theprevious year. Apart from settlements by way of OTS,your Company also entered into Assignment Dealsas a part of the efforts to resolve NPAs. It contributedincrease in profitability by way of writing back ofNPAs fully provided for and redeployment of fundsgiving regular future income. The total number ofAssignment Deals entered into during the FinancialYear 2008-09 was 21, which resulted in NPA recoveryof a sum of Rs.185.92 crore.

Your Company initiated and pursued legal actions wherepossibility of early recovery of dues was found remote inthe normal course. As on March 31, 2008, 695 recoveryapplications filed by your Company involving an amountof Rs.9,967.18 crore, which were pending in DebtRecovery Tribunals/Courts in India. During 2008-09, 10new cases were filed, involving claim amount of Rs.535.18crore. Your Company has also obtained recoverycertificates through DRT in 10 cases for an aggregate

The corporate finance and financial services sectors inIndia are highly competitive. The global meltdown hasaffected the overall industrial and economic performanceof the country. This has posed a special challenge to yourCompany, who has embarked upon substantial assetcreation after a gap of 10 years.

IFCI, now being NBFC-ND-SI (Non-Banking FinancialCompanies-Non Deposit taking Systemically Important)has to compete, in the area of project finance with banksand Financial/Investment Institutions. Your Company has,in order to reduce credit risk, improved security coverageand higher marginal rate of return and increased itsexposure in the area of Promoters’ Funding, where it facedcompetition from NBFCs only.

Your Company has strengthened its operational areas,other than project finance. The share of income fromTreasury & Investment operations has increasedconsiderably during FY 2009. There had also beensignificant development in the areas of fee based activityand creation of value addition through subsidiaries.

IFCI has complied with different guidelines as issued byReserve Bank of India, as applicable to NBFC-ND-SI.

The details of various developments are given hereunder:

a) Approvals and Disbursements

During the year 2008-09, total approvals wereRs.4,014.88 crore as against Rs.2,550.49 crore in theprevious year. Out of the aforesaid approval,Rs.1,711.47 crore (43%) were of tenure of less thantwo years, Rs.1,194.04 crore (30%) were mediumterm rupee loans of tenor between two to five yearsand Rs.468.80 crore (12%) were of tenor of more than5 years. The amount approved towards equityparticipation in various Infrastructure and otherprojects was Rs.640.57 crore (15%).

Total disbursements during the year amounted toRs.3,311.45 crore compared to Rs.2,280.09 crore inthe previous year. Out of this, Rs.1,666.47 crore (50%)were of tenor of less than two years, Rs.958.99 crore(29%) were medium term rupee loans of tenorbetween two to five years and Rs.191.43 crore (6%)were of tenor of more than 5 years. The amountdisbursed towards equity participation wasRs.494.56 crore (15%).

b) Treasury and Investment Operations

During the year, your Company earned income ofRs.297 crore from treasury operations mainlythrough investment in short term paper of top rated

13


Table : Industry-wise net Outstandings as of March 31, 2009 (Rs. crore)

Industry Loans Debenture Leasing Shares/Units/ Guarantee March 31, % toG-Sec etc. 2009 Total

INFRASTRUCTUREPower 830.70 100.06 75.27 19.46 – 1025.49 9.0Port Construction, TelecomServices and Bridge Construction 587.84 207.73 – 60.39 – 855.96 7.5

SUB-TOTAL 1418.54 307.79 75.27 79.85 – 1881.45 16.5

OthersIron & Steel 1766.53 33.91 – 261.93 175.00 2237.37 19.6Banking & Finance 125.61 340.66 – 266.87 – 733.14 6.4Petroleum Refining 1156.07 81.73 – 30.42 – 1268.22 11.1Construction & Real Estate 640.95 – – 282.26 – 923.21 8.1Others 300.41 151.81 – 189.84 – 642.06 5.6Government Securities/MF etc. – – – 931.64 – 931.64 8.2Drugs & Pharmaceuticals 353.37 2.01 – 4.37 – 359.75 3.2Textiles 222.84 31.12 – 88.14 9.98 352.08 3.1Transport Equipment 30.82 – – 258.02 – 288.84 2.5Fertilisers 173.61 46.73 – 11.79 – 232.13 2.0Synthetic Resins andPlastic Materials 182.21 52.32 – 3.95 – 238.48 2.1Synthetic and OtherMan-made Fibres 12.96 37.92 – 110.07 – 160.95 1.4IT Services 159.05 – – – – 159.05 1.4Misc. Food Products 132.22 6.02 – 4.76 – 143.00 1.3Non-Ferrous Metal Industry 0.04 – – 135.07 – 135.11 1.2Paper 38.36 45.02 – 81.78 – 165.16 1.4Basic Chemicals 82.69 4.23 – 17.30 – 104.22 0.9Sugar 64.20 3.43 – 23.14 – 90.77 0.8Metal & Steel Products 32.69 8.33 – 32.60 – 73.62 0.6Hotel 58.83 5.92 – 1.96 – 66.71 0.6Machinery & Accessories 23.13 – – 38.75 – 61.88 0.5Electronics 15.04 6.15 – 27.47 – 48.66 0.4Cement 15.45 12.66 – 25.01 – 53.12 0.5Electrical Machinery & Appliances 0.52 0.71 – 25.60 – 26.83 0.2Misc. Non Metallic Mineral Product 13.80 4.84 – 2.28 1.67 22.59 0.2

SUB-TOTAL 5601.40 875.52 – 2855.02 186.65 9518.59 83.5

GRAND TOTAL 7019.94 1183.31 75.27 2934.87 186.65 11400.04 100.0

The industry-wise classification of outstanding portfolio as of March 31, 2009 is given in the table hereunder:

amount of Rs.409.79 crore. As of March 31, 2009, 673applications were pending in various Debt RecoveryTribunals/Courts in India for an aggregate amount ofRs.9,980.97 crore.

The recovery from sale of assets through DRT/CompanyCourts/OTS in suit filed cases amounts to Rs.249.16 croreduring 2008-09 as compared to Rs.573.48 crore duringthe previous year.

In addition to the above, your Company has alreadyinitiated action in 127 cases (upto March 31, 2008), underthe Securitization and Reconstruction of Financial Assetsand Enforcement of Security Interest Act, 2002 (SARFAESIAct) and fresh notices were issued in 12 cases during theyear 2008-09. During the year, your Company has recoveredRs.99.02 crore through sale of assets under the above Actas against Rs.79.41 crore recovered during 2007-08.

(iii) Financial Performance

Your Company’s profit before tax of Rs.1,010 crore in thecurrent year is lower as compared to Rs.1,668 crore in

the previous year mainly on account of lower profit onsale of shares due to market indices remaining at lowerlevels during the year. The profit after tax is Rs.657 crorein the current year against Rs.1,020 crore in the previousyear. The net NPAs as of March 31, 2009 stood at Rs.463crore. However, excluding one public sector power projectunder implementation, likely to be upgraded during thecurrent year, net NPAs stand at Rs.77 crore. Besides,satisfactory levels were reached for key financial ratiosincluding capital adequacy ratio, debt-equity ratio anddebt service coverage ratio.

(iv) Segment-wise/Product-wise Performance

More than 90% of the revenues of your Company wereaccounted for during the year by a single segment ofFinancing. As such, segment reporting as required underAccounting Standard-17 is not applicable.

(v) Industry-wise Classification of Portfolio

The total outstanding assistance provided by yourCompany as of March 31, 2009 was spread across anumber of industries.

(vi) Opportunities, Threats and Future Outlook

With an upswing in its performance, mood andcommitment of the employees, your Company is wellpoised to expand its operations and performance inaccordance with its business plan.

Your Company will explore possibilities for new businessfor short term and medium term. Further, due to restrictionfrom regulatory authority on banking sector for productslike Promoters’ Funding, Take-out Finance and DebtSwapping, the opportunity for NBFC in such areas wouldbe exploited.

14


The overall economic scenario continues to be subduedin the short term perspective and as such, till the overalleconomy gets an upward momentum, the credit off-takeand pressure on yield would remain. However, the Budgetof 2009-10 has provided various stimuli for industrialgrowth in the country, particularly in the Infrastructuresector. Various measures announced are expected toprovide positive impact on industries like Oil & Gas,Power, Construction, Textiles, Automobiles,Petrochemicals, Household Appliances and the like.

In addition to the normal lending activities, yourCompany is also concentrating on private equityparticipation, project development activities, non-fundbased income from advisory services, acquisition of NPAsfrom other lenders and thrust to the activities ofsubsidiaries/associate companies.

(vii) Risk Management

Risk is an inherent part of IFCI’s business. Your Companyrecognizes this and has taken strides to strengthen therisk management systems and practices. The RiskManagement Committee of Directors is the principalcommittee, constituted during the year under report, tosupport the Board of Directors in the oversight of Credit,Market and Operational Risks and any other risks, as maybe deemed necessary. At the executive level, a RiskManagement Committee of Executives was alsoconstituted to guide the Risk Management Departmentin identification, assessment, monitoring and control ofthe risks. Credit Risk is the most important risk for IFCI.The systems and controls, in place, to mitigate credit risksinclude exposure limits for borrowers, borrower groups,industrial sectors, multi-tier credit appraisal system, riskbased monitoring system, committee system forconsidering proposals and detailed risk assessment of newproposals. The loan policy and risk management policyof your Company are reviewed periodically keeping inview the changing economic and business environment.

The market risk was primarily managed by the Asset LiabilityCommittee (ALCO) through analysis of structural liquiditygaps and interest rate sensitivity positions and deploymentof surplus funds by treasury besides having approved limitsand triggers for various types of deployment. The investmentpolicy of your Company is revised periodically consideringthe current market scenario. The forex currency risk wasbeing managed by hedging, primarily, through forward coverand currency swaps.

To manage the operational risks, there are adequateinternal controls and systems in place aided and assistedby internal audit, remote back-up of data, disastermanagement policy and insurance.

With a view to managing risks at institutional level, yourCompany has taken action for setting up an Enterprise-wide Risk Management System (ERMS) with theassistance of a consulting agency of repute. The ERMSenvisages addressing institutional risk across all riskcategories, products and business verticals in acomprehensive and integrated manner, as alsoestablishing risk management as a practice at all levels ofthe organisation. The ERMS broadly has two components;(i) formulation of a framework for risk assessment,measurement and effective mitigation including riskpolicy, risk assessment and management methodologies,

risk organization structure and Management InformationSystem (MIS) for assessment and management of credit,market and operational risks at IFCI and (ii) implementationof Risk Rating Models for measuring credit risk in newbusiness proposals and the existing loan portfolio, tofacilitate the decision making process.

Going forward, with the growth of business andaugmentation of loan portfolio, risk management at IFCIwould assume a larger and more complex role. The stepstaken would streamline the mechanism for effectiveoverall institutional risk management at IFCI.

(viii) Nominee Directors

Your Company appoints Nominee Directors on the Boardsof assisted companies as well as other companies in whichyour Company has substantial stake to safeguard theinterest of your Company. The Nominee Directorsappointed by your Company have played a proactive rolein the development of professional management andformulation of proper corporate policies and strategiesto improve the performance and Corporate Governanceof the assisted companies. The feedback reports receivedfrom Nominee Directors act as a useful tool for creditmonitoring. The system of nominee directors isfunctioning effectively in your Company.

(ix) Resources

The total borrowing of your Company decreased fromRs.10,223 crore at the beginning of the year 2008-09 toRs.9,673 crore at the year end. This included Rs.9,042crore towards rupee borrowing and Rs.631 crore againstforeign currency borrowing in rupee terms. After anextended break during the period of stabilization, yourCompany took up resource raising in a limited mannerduring the year under report and mobilized an aggregateamount of Rs.254.77 crore at competitive rates, primarilyby way of private placement of bonds. In order to augmentthe resources further for the desired growth in business,plans have been made for resource raising in a big wayduring the current year. For this purpose, the exercise forrating of instruments is in progress.

The charts below indicate the investor and instrumentwise break-up of borrowing position as at March 31, 2009:

15


In the interest of the investors, who had not surrenderedtheir bonds for redemption, even after maturity, regularfollow up was made through letters and newspaperadvertisements, during the year, for the investors to lodgetheir claims. The grievances, if any, were taken uppromptly for redressal. A web based query submissionsystem was put in place during the year under report,which has enabled faster redressal of grievances.

(x) Public Deposits

The outstanding amount of public deposits, at thebeginning of the year, was Rs.0.07 crore, including Rs.0.02crore of interest accrued and due, which were fullymatured and unclaimed. During the year, anadvertisement was issued for the depositors to intimatethe change in address, if any, and subsequently, thematurity proceeds were paid to the depositors, at theirchanged address, where provided or at the address asper our records. With this payment, there was no publicdeposit outstanding as on March 31, 2009. Your Companyneither raised any fresh public deposit nor renewed anyexisting deposits during the year.

(xi) Internal Control Systems & their Adequacy

As part of the internal control systems, a comprehensiveand well documented system of Internal Audit is in placein your Company. During the period under review, thecoverage and scope of the internal audit was reviewedby the Audit Committee of Directors (ACD) of yourCompany and ‘Risk based Internal Audit’ system has beenintroduced to make it more focussed and effective.

Significant Developments

i) Corporate and Infrastructure Advisory Services

In the area of providing customised corporate advisoryservices, your Company, despite stiff competition duringthe year, has not only been able to retain its existing clientsbut has also been able to secure some prestigious newassignments relating to disinvestment of public sectorenterprises on competitive bidding basis, lead manager& equity participant in AMC floated in public sector,business/asset valuation assignments, financial/investment appraisal, business re-engineering, corporatefinancial restructuring, IPO monitoring and bid processmanagement from both public and private sector entities.

ii) Project Development Group

To boost the economic development, investment ininfrastructure sector has to increase by leaps and bounds.

To leverage on this opportunity, your Company has alignedits focus on development of infrastructure projects suchas ports, roads and power generation and transmission.

Your Company has already taken a step forward forcreating a score in the infrastructure sector. As of now,your Company has invested in power generation andtransmission and Toll Roads projects. To have competitiveedge in the market as also for further strengthening upof the vast and rich experience of project appraisal,documentation, syndication etc., your Companyendeavours to provide complete solution under one rooffor infrastructure projects and is carrying out a projectappraisal, debt syndication, bid process management etc.for infrastructure projects.

The aforesaid activities will enable your Company inestablishing long term consistent revenue streams andopportunities for capital gains.

iii) Human Resources

Improved performance and renewed commitment of theemployees apart from improvement in various systemslike Performance Management, have triggered theconsolidation, diversification and growth of yourCompany.

The manpower strength of your Company as of March31, 2009 was 223 including 203 executives andprofessionals compared to a total strength of 218 as ofMarch 31, 2008.

Your Company is progressing towards re-positioning itselfas a preferred employer in the Indian financial sector.During the year, your Company attracted talent fromleading banks, consulting organizations andmultinationals. Apart from lateral recruitments, yourCompany has been able to attract fresh talent from leadingB-Schools in India as also lawyers and CharteredAccountants at the entry level.

As a part of this re-positioning, your Company engagedthe services of globally renowned HR Consultants HewittAssociates in reorienting and restructuring the HRsystems and processes including Organization Diagnostics& Structuring, Performance Management System Design& Implementation, Compensation Restructuring &Benchmarking and Competency Framework Design.Thereby, your Company is realigning the compensationstructure in line with the market, in phases and has alsorevamped the Performance Management System inaccordance with the business imperatives.

IFCI has made an endeavour to constantly upgrade theknowledge and enhance the skill-set of the employees.

MVR Tollways Pvt Ltd, a Special Purpose Vehicle jointly promoted by IFCI

16


As part of the development initiatives, in-house functionaland behavioral interventions were organized at regularintervals. Employees were nominated to leading institutesin India and abroad for Executive Education Programsand Seminars/Workshops conducted by various Chambersof Commerce to keep them abreast with the latestdevelopments in the financial as well as other sectors.

During the year, your Company was conferred with the“Amity Leadership Award for Sectoral Excellence in theFinancial Sector” by Amity Business School, Noida,acknowledging the organization’s achievements in thefields of leadership, enterprise, innovation, policy,strategy, human resource management, partnerships,corporate citizenship and business performance increating value for stakeholders.

iv) Information Technology and Communications

During the year, the Information Technology Department’sfocus was on upgradation of Oracle Database andmigration of applications from existing client-serverarchitecture to web based three tier architecture. Theapplications in the areas of financial accounting, loanaccounting, debenture accounting, investment portfoliomanagement, asset classification, asset liabilitymanagement, employee compensation, legal monitoring,resources and real estate were converted to the newersoftware platform. This would facilitate to reach the stageof accessing these applications 24x7 anywhere.

In order to automate the business process in pre-sanctiondomain, applications were developed for generation ofLetter of Intent, Legal Documentation, loans disbursementnotes and related MIS.

The systems in the areas of Investment PortfolioManagement, Legal, Employee Information, FinancialAccounting and Asset Liability Management weremodified and upgraded to meet the additional businessrequirements.

IT security mechanism was also strengthened to preventvirus attacks and unauthorized access. The initiative tocreate a paperless environment in the Company wasfurther taken forward by using Document ManagementSystem, scanning and e-storing large volume ofdocuments.

v) Subsidiary Organizations

a) IFCI Infrastructure Development Limited (IIDL)

IIDL was promoted as a 100% subsidiary of yourCompany, foreseeing the opportunities available inthe real estate and infrastructure sector as also toleverage the experience and knowledge yourCompany has gained over the years.

IIDL is playing a vital role (i) in unlocking value fromreal estate held by IFCI by way of its office andresidential properties (ii) by availing newopportunities in real estate development throughdevelopment authorities, etc. (iii) by acquiringvaluable & strategic real estate in the process ofrecovery from non-performing assets of IFCI.

During the year 2008-09, IIDL has expanded its assetbase by purchasing assets and intensifyingdevelopment work on some of the assets. IIDL nowowns plots of land in different parts of the countryat prime locations. IIDL is also involved in a

prestigious project, which is part of the ongoingprojects aimed to cater to the demand during theCommonwealth Games to be hosted in Delhi inOctober, 2010.

Currently, the other projects in the pipeline includehousing projects at Ghaziabad, UP, development ofoffice complexes for IFCI at Ahmedabad andBangaluru. Real estate projects have longer gestationperiod and it is expected that IIDL will reap goodprofits in the years to come and would contributesignificantly in enhancing the wealth of shareholdersof IFCI.

b) IFCI Venture Capital Funds Limited (IVCF)

IVCF is the country’s first institution to take upinvestment in start-up companies mainly involvedin technology-oriented & innovative projects. It haspioneered effort for widening entrepreneurial basein the country and risk capital investment providedby IVCF lead to evolution of Venture Capital activityin India. Since inception, IVCF has financed over400 projects and supported commercialization ofmore than 50 new technologies.

In 2007-08, IFCI committed fresh infusion of Rs. 100crore towards equity capital in IVCF and a sponsorscontribution of Rs.165 crore towards corpus of aprivate equity fund to be set–up and managed byIVCF.

Management of PE/VC Funds : IVCF presently managesthe following 3 Private Equity/Venture Capital Funds:

i) India Automotive Component ManufacturersPrivate Equity Fund-1-Domestic (IACM-1-D), aPrivate Equity Fund has a target corpus of Rs.330crore. IACM-1-D is dedicated for investmentmainly in Indian Automotive Componentcompanies and in other related/emerging sectors.

ii) India Enterprise Development Fund (IEDF), aVenture Capital Fund has a target corpus ofRs.250 crore. The focus of IEDF is to invest inknowledge based projects in key sectors ofIndian economy with outstanding growthprospects.

iii) Green India Venture Fund (GIVF), a VentureCapital Fund has a target corpus of amountequivalent to Euro 50 million. The focus of GIVFis to invest in commercially viable CleanDevelopment Mechanism (CDM), energyefficient and other commercially viable projects

Signing of the Management Contract between IFCI InfrastructureDevelopment Ltd and Frasers Hospitality Pte Ltd, Singapore:

Left to right - Shri Shivendra Tomar CEO, IIDL; Shri Choe Peng Sum, CEO, FrasersHospitality; Shri Atul Kumar Rai, Chairman, IIDL & Shri Javed Yunus, Director, IIDL

17


with an aim to reduce negative ecologicalimpact, efficient usage of resources such asenergy, power etc. and other related sectors/projects.

Advisory Services : IVCF also provides corporateadvisory services, leveraging three decades ofexperience in undertaking investment in start-upprojects. The focus of these advisory services is toprovide independent, fair and informed assessmentfor undertaking decisions through the Investmentcycle from deal identification to exit planning.

IVCF with its background, experience andunderstanding of critical aspects related to equityinvestment, is an apt partner to carry out in-depthdue diligence and appraisal of business plans.

Short Term Loans: IVCF also provides Short-TermLending to entrepreneurs and corporates for two tothree years to facilitate business growth and in theprocess earn regular income.

IVCF aims to become leading institutional player inVC industry of the country by revitalizing,strengthening and giving direction to its businessactivities.

c) IFCI Financial Services Limited (IFIN)

IFIN was promoted by IFCI Ltd, to provide a widerange of financial products and services to investors,institutional and retail. IFIN is primarily involved inStock Broking, Investment Banking, Mutual FundDistribution & Advisory Services, DepositoryParticipant Services, Insurance Products Distributionand the like.

IFIN is positioned as a global financial supermarket,built on the foundations of incisive research andtrust. Intense interaction with investors helps IFINunderstand their specific needs and suggest holisticand appropriate financial solutions. IFIN has a teamof professionals continuously scanning the financialarena and stay ever prepared to educate investorsand partner them in creating enduring wealth.

IFIN has well experienced, committed and qualifiedprofessionals in various facets of the financiallandscape to provide unmatched services to itsdiverse clientele. The team is being strengthened tolend support to the new areas into which IFIN isembarking.

IFIN has its presence in Chennai, Mumbai, Delhi,Pune, Jaipur, Kolkata, Coimbatore, Calicut &Bangaluru and rapidly expanding into other metros.It has further plans to have surefooted imprints inalmost all the major cities and towns of India andposition itself as a pan-India player to cater to theinvesting populace.

Synergies : IFIN is uniquely positioned, by virtue ofbeing in the fold of IFCI which is a pioneering AllIndia Financial Institution, to offer a wide array offinancial products and services to the investingcommunity in India and NRIs. These include:

• Stock Broking

• Commodities Broking

• Depository Participant Services

• Investment Banking

• Insurance Broking

• Mutual Fund Products Distribution

• IPO Distribution

• Corporate Advisory Services

• Portfolio Management Services

• Currency Trading

IFCI’s shareholders include a majority of financialinstitutions, who would act as an ideal clientele inthe Institutional Segment. IFCI being a listedCompany has over 8 lakh retail shareholders, whowould ideally help IFIN going retail and expandingits market share.

d) IFCI Factors Limited (IFL)

The company, (originally Foremost Factors Ltd),pioneered the export factoring business in India andbecame the first member of Factors ChainInternational from India. In April, 2008, yourCompany rechristened Foremost Factors Ltd as “IFCIFactors Ltd”.

IFL has embarked upon an aggressive growth planfor the next five years. IFL reported factoringturnover and net profit of Rs.402.32 crore and Rs.2.78crore respectively during the financial year endedMarch 31, 2009 as against factoring turnover ofRs.166.69 crore and net profit of Rs.0.58 crore in theprevious financial year. The Company thusregistered a growth of 141% in its turnover and 478%in its net profit.

Internationally, the global factoring volumesincreased from 724 Bn Euro in 2002 to 1325 Bn Euroin 2008 with compound annual growth rate of 15%.While America and Europe together account foralmost 80% of the total factoring business worldwide,Asia’s factoring volume accounts for about 20% ofthe total factoring volume. With India’s share beingjust 3% of total factoring business of Asia, there is avast potential for the factoring business to grow inIndia as factoring is gradually but steadily replacingthe hitherto conventional modes of working capitalfinance.

e) MPCON Limited

With a view to expanding our business outlook andreaping business opportunities in the highlylucrative consulting sector, your Companysubscribed Rs.25 lakh to the rights issue of MPCON,one of the Technical Consultancy Organizationspromoted by IFCI in the year 1979. With this infusionof capital, MPCON is now a subsidiary of IFCI.MPCON provides a complete set of consultancyservices to small and medium enterprises, individualentrepreneurs, Government Departments andagencies, state level institutions, commercial banksand other institutions. By strengthening its equitybase, MPCON would be able to procure high valueclients and thus would lead to increase in its

18


business. MPCON is having huge business potential keepingin view the development of key sectors of the economy in theStates of Madhya Pradesh and Chhattisgarh.

Compliance

Timely submission of various returns and data/information toRBI, SEBI and other regulatory bodies and the Government ofIndia is ensured through the Compliance Division of yourCompany at the Head Office.

Corporate Governance

A comprehensive report on corporate governance as stipulatedunder Clause 49 of the Listing Agreement is attached to thisReport.

IFCI has obtained a certificate from the Statutory Auditorsregarding compliance of conditions of Corporate Governanceas stipulated in Clause 49 of the Listing Agreement and thesame is annexed at the end of Corporate Governance Report.

Conservation of Energy, Technology Absorption, ForeignExchange Earnings and Outgo

As the Company’s operations do not involve any manufacturingor processing activities, the particulars as per the Companies(Disclosures of Particulars in the Report of the Board ofDirectors) Rules, 1998, regarding conservation of energy and

technology absorption, are not applicable. The particularsregarding expenditure and earnings in foreign exchange aregiven in Item Nos. 12 and 13 in the Notes to the Accounts.

Particulars of Employees

No employee of the Company was in receipt of remunerationabove the limit specified under Section 217(2A) of theCompanies Act, 1956.

Appreciation

The Board of Directors of your Company wishes to expressgratitude for the cooperation, guidance and support receivedfrom the Ministry of Finance, various other Ministries andDepartments of the Government of India and the Reserve Bankof India. The Board of Directors also acknowledges thecontinued cooperation received from all overseascorrespondent banks and other members of the bankingfraternity.

The Board of Directors would like to sincerely thank the variousBanks, Financial Institutions, SEBI and other investors andshareholders for their continued support.

The Directors of your Company place on record theirappreciation for the dedicated and sincere services renderedby the officers and staff at all levels.

For and on behalf of the Board of Directors

ATUL KUMAR RAI PRAKASH P MALLYA RUPA SARKARChief Executive Officer & Managing Director Chairman of the Board Company Secretary

Place: New DelhiDated: July 22, 2009

19


Report on Corporate Governance1. COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE:

The objective of Corporate Governance at IFCI is to enhanceshareholders’ value in the long term with transparency andaccountability. Corporate Governance at IFCI recognizes allstakeholders and decision-making process reflect this concern.

2. BOARD OF DIRECTORS:

(A) As on March 31, 2009, the Board of the Company consistedof 12 (twelve) Directors, out of whom 10 (ten) Directors were

Non-Executive while one was Managing Director and Chief

Executive Officer and one was Whole Time Director. The

composition of the Board is in conformity with the Listing

Agreement. The composition of the Board, number of meetings

held, attendance of the Directors at the Board Meetings and

last Annual General Meeting and the number of Directorship

and Chairmanship/Membership of Committees in other

companies in respect of each Director is given here in below:

Sl. Name of Director Category as on Attendance Particulars No. of Directorship(s)/Committee

No. March 31, 2009 Membership(s)/Chairmanship(s) of

other Companies as on March 31, 2009

No. of Meetings At AGM held on Other Committee Committee

during 2008-09 September 12, 2008 Directorship(s) Membership(s) Chairmanship(s)

Held Attended

1. Shri Prakash P Mallya (*) Non Executive- 6 6 N.A. 2 – –Independent

2. Shri K V Eapen(*) Nominee Director- 7 6 N.A. – – –Government of India

3. Smt Sukriti Likhi Nominee Director- 12 10 No 1 – –Government of India

4. Shri P G Muralidharan Non Executive- 12 8 Yes – – –Independent

5. Smt Usha Sangwan(*) Non Executive- 1 1 N.A. – – –Independent

6. Shri Tejinder Singh Non Executive- 6 6 N.A. 1 – –Laschar(*) Independent

7. Shri K Raghuraman (*) Non Executive- 6 6 N.A. 2 – –Independent

8. Prof Shobhit Mahajan Non Executive- 12 10 No 1 – –Independent

9. Shri K Narasimha Murthy(*) Non Executive- 6 6 N.A. 2 2 1Independent

10.Shri S Shabbeer Pasha(*) Non Executive- 6 6 N.A. 1 – –Independent

11.Shri Atul Kumar Rai Chief Executive Officer 12 12 Yes 7 1 –& Managing Director

12.Shri Sujit K Mandal (*) Whole Time Director 5 5 N.A. 4 – –

DIRECTORS RETIRED/RESIGNED DURING THE YEAR 2008-09

1. Shri R K Kapoor (**) Non Executive- 5 2 No 1 – –Independent

2. Shri Thomas Mathew T(***) Non Executive- 11 6 Yes 5 1 –Independent

3. Shri S Ravi (****) Non Executive- 7 6 Yes 11 5 2

Independent

( * ) Appointed/inducted on the Board during the year.

(**) Shri R K Kapoor has retired as his term expired in the AGM held on September 12, 2008 as Director appointed in casual vacancy.

(***) Shri Thomas Mathew T resigned from the Board of Directors w.e.f. February 9, 2009,

(****)Shri S Ravi has resigned w.e.f. October 16, 2008.

NOTE: 1. Number of meetings represents the meetings held during the period in which the Director was member of the Board.

2. Number of other Directorships indicated above is exclusive of the Directorships on the Board of Private Limited Companies andNon-Corporate Institutions.

3. In case of Directors Retired/Resigned, the status of other Directorship and Committee Membership is as on the basis of the last disclosure made bythe Director.

4. The details of Committee Memberships are in relation to the specified Committees viz. Audit Committee and Investors’ Grievance Committee.

(B) The Board has complete access to all information within theCompany including information as per Clause 49 of the ListingAgreement.

(C) Information pursuant to Clause 49 IV(G) of the ListingAgreement: A brief resume and name of the companies inwhich Directors, who are being appointed/reappointed, holdDirectorship/Committee Membership are given in the noticeunder heading “Information about Directors seekingappointment/reappointment as required under the Code ofCorporate Governance Clause of Listing Agreement.”

(D) Number of Board Meetings Held and Dates:

During the Financial Year 2008-09, the Board of Directors met12 (twelve) times. The dates of the meetings were April 29,May 14, May 29, June 12, July 12, September 12, October 14,November 21, December 22 in 2008 and January 30, January31 and March 23 in 2009.

3. AUDIT COMMITTEE:

(A) The Audit Committee of IFCI consists of 6 (six)Non-Executive Independent Directors. The Chairman of the

20


Committee is an Independent Director. The composition ofthe Audit Committee and attendance of Directors at themeetings is shown below:

Sl. Name of Director Category No. of MeetingsNo. during 2008-09

Held Attended

MEMBERS OF THE COMMITTEE

1. Shri K Narasimha Murthy(*) Chairman 2 2

2. Shri Tejinder Singh Laschar(*) Member 3 3

3. Shri K V Eapen(*) Member 3 3

4. Prof Shobhit Mahajan Member 5 4

5. Shri S Shabbeer Pasha(*) Member 3 3

6. Smt Usha Sangwan(*) Member – –

MEMBERS RETIRED/RESIGNED

1. Shri S Ravi Member 2 2

2. Smt Sukriti Likhi Member 2 1

3. Shri R K Kapoor Member 2 1

4. Shri Thomas Mathew T Member 4 2

5. Shri Prakash P Mallya (*) Member 1 1

(*) Shri K V Eapen, Shri S Shabbeer Pasha, Shri Tejinder Singh Laschar,Shri Prakash P Mallya have been co-opted in the Audit Committeew.e.f. October 14, 2008. Shri Prakash P Mallya is not a member ofthe Committee w.e.f. November 21, 2008. Shri K Narasimha Murthyhas been co-opted in the Audit Committee w.e.f. November 21,2008 and has been elected the Chairman of the Audit Committee.Smt Usha Sangwan became Member of the Audit Committee w.e.f.March 23, 2009.

Note:Number of meetings represents the meetings held during the periodin which the Director was member of the Committee.

The Statutory Auditors, Internal Auditors and other seniorexecutives are invited to participate in the meetings of the AuditCommittee wherever necessary, as decided by the Committee. TheCompany Secretary acts as Secretary to the Audit Committee.

(B) NUMBER OF AUDIT COMMITTEE MEETINGS HELDAND DATES:

During the Financial Year 2008-09, the Audit Committee ofDirectors of IFCI met 5 (five) times. The dates of themeetings were April 29, July 12, October 14 & December22 in 2008 and January 30 in 2009.

(C) TERMS OF REFERENCE:

The terms of reference of the Audit Committee are mainlyto see the effectiveness of operations of the audit functionof the Company, review the systems and procedures ofinternal control, oversee the Company’s financial reportingprocess, review with management the periodical and annualfinancial statements before submission to the Board, followup of all the issues/concerns raised in the inspection reportsof Reserve Bank of India and ensure compliance with theregulatory guidelines. The Committee is also responsiblefor objectively reviewing the reports of the Internal Auditorsand Statutory Auditors and ensuring that adequate followup action is taken by the management. In addition, theCommittee reviews the performance of the Company’sAuditors to ensure the effectiveness of the audit procedure.The Committee also proposes for the appointment ofStatutory Auditors and fixation of their fee.

4. REMUNERATION COMMITTEE OF DIRECTORS:

(A) Remuneration Committee of IFCI consisted of 3 (three) Non-Executive Independent Directors viz Shri P G Muralidharan,Chairman, Prof Shobhit Mahajan and Shri S Ravi. Thenumber of meetings held during the year 2008-09 were two.Shri S Ravi has since resigned from the Board w.e.f.October 16, 2008.

(B) The following are the details of the remuneration paid to the

managerial personnel during the Financial Year 2008-09:

Shri Atul Kumar Rai, Chief Executive Officer and ManagingDirector from 01.04.2008 to 31.03.2009

Particulars Rs. in Lakh

Salary & Allowances 57.96Contribution to PF 10.03Perquisites 0.42

TOTAL 68.41

Shri Sujit K Mandal (01.11.2008 to 31.03.2009) as Whole TimeDirector

Particulars Rs. in Lakh

Salary & Allowances 11.57Contribution to PF 0.39Perquisites 1.67

TOTAL 13.63

(C) Besides above, the Company is paying sitting fee of Rs.12000/-permeeting of the Board and Rs.6000/- per meeting of Committeethereof, to the Non-Executive Independent Directors exceptGovernment Nominee/Institutional Representatives.

(D) As per the disclosure made by the Non-Executive Directors of theCompany, Shri Tejinder Singh Laschar holds 400 shares of theCompany. None of the other Independent Directors hold anyshare and other convertible instruments of IFCI Ltd. as onMarch 31, 2009.

5. INVESTORS’ GRIEVANCE COMMITTEE:

(A) Investors’ Grievance Committee of IFCI consisted of 4 (four) Non-Executive Directors. During the Financial Year 2008-09, theCommittee met 4 (four) times on April 29, July 12, October 14 in2008 and on January 30, in 2009. The position of attendance ofdirectors at the meetings is as under:

Sl. Name of Director Category No. of MeetingsNo. during 2008-09

Held Attended

MEMBERS OF THE COMMITTEE

1. Shri P G Muralidharan Member 4 2

2. Shri K Narasimha Murthy(*) Member 2 2

3. Shri K Raghuraman (*) Member 2 2

MEMBERS RETIRED/RESIGNED

1. Shri S Ravi Member 2 2

2. Shri R K Kapoor Member 2 1

3. Smt Sukriti Likhi Member 4 3

(*) Shri K Narasimha Murthy and Shri K Raghuraman have beenco-opted in the Investors' Grievance Committee w.e.f.October 14, 2008.

Note:Number of meetings represents the meetings held during theperiod in which the Director was member of the Committee.

(B) Name & Designation of Compliance Officer:

Smt Rupa Sarkar, Assistant General Manager & CompanySecretary

Email: [email protected]

(C) The number of complaints received from the shareholders/bondholders during the last Financial Year and the number ofpending complaints are shown below:

Details Equity Shares/Bonds

Complaints received during the 1905Financial Year 2008-09

Pending as on March 31, 2009 Nil(*)

(*) Excluding complaints/issues in respect of which cases arepending in courts/CDRF.

The Company has redeemed IFCI Family Bonds issued underPublic Issue in 1996 on completion of the tenure/exercise ofcall option and payment of redemption amount has been madeto the bondholders who have surrendered their bond

21


certificates for redemption. Some of the bondholders are yetto surrender the bonds for redemption, Company has sentreminders to such bondholders, for surrender of their dulydischarged bonds for enabling IFCI to make repayment.

IFCI redeemed fully 16,40,66,900 numbers of 5% cumulativeredeemable preference shares of Rs.10/- each @ Rs.5/- pershare during 2008-09. Further, IFCI has made payment ofcumulative dividend on the preference shares amounting toRs.4,36,55,156 during 2008-09.

(D) The Company has constituted a Committee of its executives forapproval of the share transfers, transmissions and transpositions.Generally, the Committee meets twice in a month. All the requestsfor share transfers etc. were processed and the related sharecertificates were dispatched within 30 days from the date ofreceipt. Except for certain cases under litigation, there are noshare transfers pending for more than 30 days.

(E) In accordance with the Securities & Exchange Board of India(Prohibition of Insider Trading) Regulations, 1992, asamended, the Board of Directors of the Company adoptedCode of Conduct for Prohibition and Prevention of InsiderTrading and the Code of Corporate Disclosure Practice to befollowed by Directors, Officers and other employees. TheCompany also adopts the concept of Trading Window Closureto prevent its Directors, Officers and other employees fromtrading in the securities of IFCI at the time when there isunpublished price sensitive information.

(F) The Board of directors has laid down a Code of Conduct forall Board Members and senior management of the Company,which has been posted on the website of the Company.

6. GENERAL BODY MEETING:

(A) Location and time, where last three Annual General Meetingsheld:

SI. No. AGM Date Location Time

1. 12.9.2008 Air Force Auditorium 10:30 A.M.Subroto ParkNew Delhi-110010



(B) No special resolution for the equity shareholders was putthrough Postal Ballot in the last year, as there were no suchitems, which were required to be passed through Postal Ballot.

(C) Details of special resolutions passed in the previous threeAnnual General Meetings:

AGM As per Particulars of Special ResolutionsDate Companies

Act, 1956, U/S

12.09.2008 224A Appointment of StatutoryAuditors

12.09.2008 100-104 Reduction of Paid up equityshare capital of the Company,held by LIC


21.09.2007 As per Foreign Increase of FII InvestmentExchange Limit in the Equity SharesManagement of the Company underAct (FEMA), Portfolio Investment1999 Scheme


25.08.2006 31 Alteration of Article 147 ofArticles of Association

7. DISCLOSURES:

(A) Related party transactions during the year have been disclosedas required under Accounting Standard-18 issued by The

Institute of Chartered Accountants of India. The transactionswith the companies, where the Directors of the Company areinterested were in the normal course of business and therewere no materially significant related party transactions thatmay have potential conflict with the interests of the Companyat large.

There were no penalties, strictures imposed on the Companyby Stock Exchange or SEBI or any Statutory Authority on anymatter related to capital markets during the last three years.

(B) In preparation of the Financial Statements, the Company hasfollowed the accounting standards issued by The Institute ofChartered Accountants of India. The significant accountingpolicies have been set out in the Notes to the Accounts.

(C) Business Risk Evaluation and Management is an on goingprocess within the Company. During the year under review, adetailed exercise on ‘Risk Assessment & Management’ wascarried out covering the entire gamut of business operationsand the matter is reviewed by the Board/Risk ManagementCommittee. There is also a Risk Management Committeeconsisting of 4 (four) Non-Executive Independent Directors.

(D) The Company has Six Subsidiaries viz. IFCI Financial ServicesLtd, IFCI Venture Capital Funds Ltd, IFCI InfrastructureDevelopment Ltd, IFCI Factors Ltd, MPCON Ltd and IFCICommodity Ltd.

The requirements under Clause 49 of the Listing Agreement inrespect of the above Companies have been duly complied with.

(E) The certification under Clause 49(V) of Listing Agreement byCEO and CFO to the Board is appended to this report.

(F) On the non mandatory requirements relevant to the Company,the status of compliance is as under:

i) The Non Executive Chairman has been provided need-based facilities to dispose off his responsibilitieseffectively.

ii) No Independent Director is on the Board of the Companyfor more than nine years.

iii) The Board had set up a Remuneration Committeeconsisting of all Non-Executive Directors to determinethe remuneration of Executive Directors.

iv) The half-yearly declaration of financial performance isnot sent individually to each household of shareholdersbut published in the newspapers and also posted onCompany’s website and on the EDIFAR (websitemaintained by NIC).

v) Training of the Board Members and mechanism forevaluation of Non-Executive Board Members have notbeen put in place as the members of the Board are wellqualified and experienced persons.

vi) The employees are free to communicate their concerns/report unethical happenings to the Management/Boardthrough officers and even direct communication of theemployee to Audit Committee/Board is entertained.

8. MEANS OF COMMUNICATION:

IFCI’s quarterly/half-yearly Financial Results are published in theleading Hindi and English papers (last year these were publishedin Jansatta (Delhi), Rashtriya Sahara (Delhi) and all editions ofThe Financial Express, The Economic Times, The BusinessStandard). The Financial Results and official press releases arealso displayed on Company’s website (www.ifciltd.com). All pricesensitive information is made public at the earliest through pressrelease and intimation to stock exchanges.

Management Discussion and Analysis forms part of theDirectors’ Report and is given separately.

9. GENERAL SHAREHOLDER INFORMATION:

(i) Annual General Meeting: Date : September 18, 2009Time : 10:30 A.M.Venue : Air Force Auditorium

Subroto ParkNew Delhi-110010

22


(ii) Financial Calendar (tentative):

Results for quarter ending : Third week ofJune 30, 2009 July, 2009

Results for quarter ending : Third week ofSeptember 30, 2009 October, 2009

Results for quarter ending : Third week ofDecember 31, 2009 January, 2010

Results for quarter ending : Third week ofMarch 31, 2010 April, 2010

(iii) Dates of Book Closure : September 5, 2009 toSeptember 18, 2009(both days inclusive)

(iv) Dividend Payment Date : A final dividend ofRe.0.80 per equity sharewill be paid for theFinancial Year 2008-09on/after September 18,2009, subject to approvalby the shareholders atthe Annual GeneralMeeting

(v) Listing on Stock Exchange:

– Equity Shares Delhi, Mumbai, Calcutta,Chennai, Ahmedabad &National Stock Exchange

Note: (i) During the Financial year 2003-04, IFCI had redeemed allthe Family Bonds and advised the Stock Exchanges todiscontinue the listing of the Bonds.

(ii) Company has made a request to Stock Exchanges at Delhi,Kolkata, Chennai and Ahmedabad for de-listing of securities,approval from Stock Exchanges awaited.

(vi) Stock Code : 500106 (BSE)IFCI (NSE)00563 (ASE)9099 (DSE)67 (CSE)

Demat ISIN Number:

Equity Shares : INE039A01010

(vii) Market Price Data: (Price in Rs.)

Month & Year National Stock Exchange Bombay Stock ExchangeHigh Low High Low

April, 2008 64.50 41.05 64.60 41.30

May, 2008 66.20 54.60 66.40 54.70

June, 2008 63.45 40.05 63.35 36.80

July, 2008 48.00 29.10 48.10 29.20

August, 2008 53.45 42.25 53.40 42.45

September, 2008 50.05 33.30 50.10 31.35

October, 2008 37.80 15.35 37.50 15.40

November, 2008 22.65 16.00 22.70 15.25

December, 2008 24.50 15.60 24.45 15.60

January, 2009 26.70 17.35 26.75 17.35

February, 2009 21.95 17.80 21.90 17.80

March, 2009 20.95 15.80 20.95 15.80

Source: NSE / BSE

(viii) Performance in comparison to broad based indices:

IFCI Share price decreased during the year 2008-09 by 56.23% ascompared to decrease in BSE Sensex by 37.94% and NSE Nifty by36.19%.

(ix) Registrar and Transfer Agent:

(Both for Equity Shares MCS Ltd,and Family bonds) F-65, Okhla Industrial Area

Phase-INew Delhi-110020

(x) Share Transfer System:

Presently the share transfers, which are received in physical form,are processed and the share certificates returned within a periodof 30 days from the date of receipt, subject to documents beingvalid and complete in all respects.

(xi) Distribution of Shareholding (as on 31.03.2009):

The Shareholding in IFCI by major categories of Shareholders ason March 31, 2009 is as under:

(a) Shareholding Pattern:

Shareholding pattern of IFCI as on March 31, 2009 and March31, 2008 for the purpose of reporting in the Annual Report ofthe Company for the year 2008-09 is given as under:

Category of Shareholders As on 31.03.2009 As on 31.03.2008

No. % No. %

Banks & Financial Institutions 12,98,25,723 17.03 13,40,15,583 17.58

Insurance Companies 13,14,16,805 17.24 13,14,16,805 17.24

Mutual Funds 1,58,23,636 2.07 1,41,07,302 1.85

Other Bodies Corporates 10,58,66,857 13.89 10,60,39,046 13.91

FIIs & NRIs 5,47,17,391 7.18 10,13,60,526 13.30

Public 32,47,63,085 42.59 27,54,74,235 36.12

TOTAL 76,24,13,497 100.00 76,24,13,497 100.00

(B) Distribution Schedule:

Sl. Category No. of % of total Amount %No. Share- Share- of Total

From To holders holders (Rs.) Amount

1. 1 500 7,61,588 87.57 1,17,76,41,170 15.45

2. 501 1000 60,733 6.98 49,56,42,850 6.50

3. 1001 2000 26,659 3.07 40,87,15,060 5.36

4. 2001 3000 7,894 0.91 20,37,34,020 2.67

5. 3001 4000 3,349 0.39 12,14,09,430 1.59

6. 4001 5000 2,807 0.32 13,37,93,480 1.75

7. 5001 10000 3,800 0.44 28,09,47,050 3.69

8. 10001 50000 2,343 0.27 47,67,93,750 6.25

9. 50001 100000 238 0.03 16,81,23,860 2.21

10. 100001 and above 281 0.03 4,15,73,34,300 54.53

Total 8,69,692 100 7,62,41,34,970 100.00

(xii) Dematerialization of Shares and liquidity:

About 93.84% of the Equity Shares of the Company have alreadybeen dematerialized up to March 31, 2009. IFCI’s Shares are listedat major Stock Exchanges of the Country and being tradedactively.

(xiii) Outstanding GDRs/ADRs/Warrants or any Convertibleinstruments:

There are no GDR/ADR or Warrants or any other ConvertibleInstruments, which are pending for conversion into equity shares.

(xiv) Plant Location : IFCI is a Financial Institutionhaving its Corporate Office atNew Delhi

Regional Offices at : Ahmedabad, Bangalore,Bhopal, Kolkata,Chandigarh, Chennai,Delhi, Hyderabad, Jaipur,Lucknow and Mumbai

Other Offices at : Guwahati, Kochi, Panaji,Patna and Pune

(xv) Address for Correspondence:

(a) Investor Correspondence MCS LimitedF-65, Okhla Industrial AreaPhase I, New Delhi-110020

(b) Any other query IFCI Limited, IFCI Tower61 Nehru PlaceNew Delhi-110 019Website:www.ifciltd.com

Email: [email protected]

Declaration of Compliance with the Code Of Conduct as provided inClause 49 of the Listing Agreement with the Stock Exchanges

The Board Members and Senior Management of IFCI Ltd haveconfirmed compliance with the Code of Conduct, as laid down by theBoard of Directors of the Company, during the Financial Year 2008-09.

Sd/-

ATUL KUMAR RAIChief Executive Officer & Managing Director

23


CCCCCertificertificertificertificertificatatatatate in Te in Te in Te in Te in Terms of Clause 49 of terms of Clause 49 of terms of Clause 49 of terms of Clause 49 of terms of Clause 49 of the Listing Agrhe Listing Agrhe Listing Agrhe Listing Agrhe Listing Agreeeeeementementementementement

In terms of Clause 49 of the Listing Agreement, it is certified as under that:

(a) The financial statements and the cash flow statement for the year have been reviewed and that to the best of our knowledgeand belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements thatmight be misleading;

(ii) these statements together present a true and fair view of the company’s affairs and are in compliance with existingaccounting standards, applicable laws and regulations.

(b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which arefraudulent, illegal or violative of the Company.

(c) We accept responsibility for establishing and maintaining internal controls and have evaluated the effectiveness of theinternal control systems of the Company and have disclosed to the Auditors and the Audit Committee, deficiencies in thedesign or operation of internal controls, if any, of which we are aware and the steps we have taken or propose to take torectify these deficiencies.

(d) We have indicated to the Auditors and the Audit Committee:

(i) significant changes in internal control during the year;

(ii) significant changes in accounting policies during the year and the same have been disclosed in the notes to the financialstatements; and

(iii) instances of significant fraud of which we have become aware and the involvement therein, if any, of the managementor an employee having a significant role in the Company’s internal control system.

S SETHEE JAVED YUNUS ATUL KUMAR RAIChief Finance Officer Executive Director Chief Executive Officer & Managing Director

Place : New DelhiDate : June 27, 2009

AuditAuditAuditAuditAuditororororors’ Cs’ Cs’ Cs’ Cs’ Certificertificertificertificertification on Cation on Cation on Cation on Cation on Corororororporporporporporatatatatate Governance Governance Governance Governance Governanceeeee

TO THE MEMBERS OF IFCI LIMITED

We have examined the compliance of conditions of Corporate Governance by IFCI Limited, for the year ended on March 31, 2009,as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited toprocedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of CorporateGovernance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company hascomplied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency oreffectiveness with which the management has conducted the affairs of the Company.

For RAY & RAYChartered Accountants

ANIL P VERMAPlace: New Delhi Partner

Date : July 22, 2009 Membership No. 90408

24


ANNEXURE TO THE AUDITORS' REPORT TO THE MEMBERS OF IFCI LTD

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

(b) The fixed assets are being physically verified by the management at all its of-fices in a phased manner at reasonable intervals. Material discrepancies werenot noticed on such verification.

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

(ii) The nature of the Company does not require it to hold inventories and as such Clause4(ii) of the Companies (Auditor's Report) Order, 2003 ('Order') is not applicable.

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

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

(iv) In our opinion, and according to the information and explanations given to us, thereare adequate internal control procedures commensurate with the size of theCompany and the nature of its business, for the purchase of fixed assets and forsale of services. Further, during the course of our audit we have neither come acrossnor have we been informed of any continuing failure to correct major weakness inthe internal controls.

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

(b) In our opinion, and according to the information and explanations given to us,as there are no transactions that need to be entered into a register maintainedunder Section 301 of the Companies Act, 1956 paragraph (v) (b) of the Order isnot applicable.

(vi) In our opinion, and according to the information and explanations given to us, theCompany has, in respect of public deposits, complied with the directives issued bythe Reserve Bank of India and the provisions of Sections 58A and 58AA or any otherrelevant provisions of the Companies Act, 1956 and the rules framed there under. Asper the information and explanations given to us, no order has been passed byCompany Law Board or National Company Law Tribunal or Reserve Bank of India orany Court or any other Tribunal in this respect.

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

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

(ix) (a) According to the information and explanations given to us and on the basis ofour examination of the books of account, the Company has been regular indepositing undisputed statutory dues including Provident Fund, InvestorEducation and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax,Custom Duty, Cess and other material statutory dues as applicable with theappropriate authorities.

(b) As at March 31, 2009 according to the records of the Company and theinformation and explanations given to us, the following are the particulars ofdues on account of Income Tax/Sales Tax/Wealth Tax/Service Tax/Custom Duty/Excise Duty/Cess that have not been deposited on account of disputes:

Name of the Nature of the Amount Period to which Forum whereStatute Dues (Rs. in crore) the Amount dispute

relates pending

Income Tax Act, Income Tax 206.17 AY 1995-96, 1996-97 Appellate1961 & 1998-99 Authority –

Tribunal Level

M P Commercial Sales Tax on 0.006 – Board of RevenueTax Act lease (Commercial

transactions Tax Tribunal)M.P., Gwalior

However, according to the information and explanations given to us, the demand againstIncome Tax is fully covered by way of Advance Tax, deposited with Income Tax Au-thorities.

(x) The Company did not have any accumulated losses as at the end of the financial yearand in the immediately preceding financial year.

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

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

(xiii) The Company is not a chit fund, nidhi, mutual benefit or a society. Accordingly, Clause4(xiii) of the Order is not applicable.

(xiv) (a) According to the information and explanations given to us and on the basis ofour examination of the books of account, proper records have been maintainedof the transactions and contracts and timely entries have been made therein inrespect of the shares, securities, debentures and other investments dealt with ortraded by the Company.

(b) The shares, securities, debentures and other securities have been held by theCompany, in its own name except to the extent of the exemption, if any, grantedunder Section 49 of the Act.

(xv) In our opinion and according to information and explanations given to us, the termsand conditions on which the Company has given guarantees for loans taken by othersfrom bank or financial institutions are not prejudicial to the interests of theCompany.

(xvi) In our opinion and according to information and explanations given to us, term loanshave been applied for the purpose for which they were obtained.

(xvii) According to information and explanations given to us and based on the overallexamination of the Balance Sheet of the Company, we report that no funds raised onshort term basis have been used for long term investment.

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

(xix) As all debentures and bonds issued are unsecured, creation of security or charge doesnot arise.

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

(xxi) According to information and explanations given to us, no fraud has been noticed orreported during the year.

For Ray & RayChartered Accountants

Anil P VermaPlace: New Delhi PartnerDate: June 27, 2009 Membership No. 90408

Auditors’ ReportTO THE MEMBERS OF IFCI LIMITED

We have audited the attached Balance Sheet of IFCI Ltd as at March 31, 2009 and also theProfit and Loss Account and the Cash Flow Statement for the year ended on that date annexedthereto. These financial statements are the responsibility of the Company’s management.Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India.Those Standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor’s Report) Order, 2003 and the Companies (Auditor’sReport) (Amendment) Order, 2004 issued by the Central Government of India in terms ofSub-Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure astatement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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

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

(v) On the basis of written representations received from the Directors, as onMarch 31, 2009 and taken on record by the Board of Directors, we report that none ofthe Directors of the Company is disqualified as on March 31, 2009 from being appointedas Director under Section 274(1) (g) of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts read together with the Significant Accounting Policiesand Notes thereon, give the information required by the Companies Act, 1956 in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company asat March 31, 2009;

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

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

For RAY & RAY

Chartered Accountants

Anil P VermaPlace: New Delhi PartnerDate: June 27, 2009 Membership No. 90408

25


In terms of our report of even date For and on behalf of Board


PRAKASH P MALLYA SANJEEV KUMAR JINDAL P G MURALIDHARAN

Chairman of the Board Director Director

ANIL P VERMA USHA SANGWAN TEJINDER SINGH LASCHAR K RAGHURAMAN SHOBHIT MAHAJAN

Partner Director Director Director Director

K NARASIMHA MURTHY S SHABBEER PASHA ATUL KUMAR RAI SUJIT K MANDAL

Director Director CEO & Managing Director Whole Time Director

Place: New Delhi JAVED YUNUS S SETHEE N K DUGGAL RUPA SARKAR

Dated: June 27, 2009 Executive Director Chief Finance Officer Chief General Manager Company Secretary

M. No. 90408

Balance Sheet as at March 31, 2009Rs. crore)

Schedule As at As atNo. March 31, 2009 March 31, 2008

I. SOURCES OF FUNDS

(1) Shareholders’ Funds

Share Capital I 1,108.29 1,190.32

Reserves and Surplus II 2,632.47 2,134.55

(2) Loan Funds (Unsecured)

Rupee Loans III 9,042.49 9,595.91

Foreign Currency Loans IV 631.29 627.08

TOTAL 13,414.54 13,547.86

II. APPLICATION OF FUNDS

(1) Fixed Assets V

Gross Block 1,102.04 1,197.61

Less: Depreciation 285.19 274.97

Net Block 816.85 922.64

Capital work-in-progress 63.72 54.30

(2) Investments VI 4,038.76 2,270.72

(3) Deferred Tax Assets 1,726.31 2,037.72

(4) Current Assets, Loans and Advances

Sundry Debtors VII 144.25 7.95

Cash & Bank Balances VIII 483.59 3,482.31

Other Current Assets IX 174.96 285.41

Loans to Assisted Concerns X 7,019.90 5,395.14

Other Loans & Advances XI 414.23 450.30

8,236.93 9,621.11

Less: Current Liabilities and Provisions

Current Liabilities XII 989.11 881.44

Provisions XIII 478.92 477.19

1,468.03 1,358.63

Net Current Assets 6,768.90 8,262.48

Significant Accounting Policies and Notes on Accounts XIX

TOTAL 13,414.54 13,547.86

26


(Rs. crore)Schedule For the For the

No. year ended year endedMarch 31, 2009 March 31, 2008

I. INCOME

Income from Operations XIV 1,402.07 1,963.00

Other Income XV 82.45 148.42

TOTAL INCOME (A) 1,484.52 2,111.42

II. EXPENDITURE

Cost of Borrowings XVI 790.05 820.67

Payments to and provisions for employees XVII 51.23 121.33

Establishment and Other Expenses XVIII 39.62 31.25

Depreciation (Net of transfer from Revaluation Reserve) 7.52 6.87

TOTAL EXPENDITURE (B) 888.42 980.12

III. PROFIT BEFORE PROVISIONS/WRITE OFF (A-B) 596.10 1,131.30

IV. BAD AND DOUBTFUL LOANS & ADVANCES AND OTHER ASSETS

– Provision/Write-off 279.85 400.07

– Provision Reversal (693.98) (1,353.36)

V. PROFIT BEFORE EXCEPTIONAL ITEMS 1,010.23 2,084.59

Amount receivable from Govt. of India written off – (416.00)

VI. PROFIT BEFORE TAX 1,010.23 1,668.59

Provision for Taxation

– Income Tax 111.62 148.22

– MAT Credit Entitlement (74.72) (145.70)

– Deferred Tax Charge (Net) 311.41 644.70

– Fringe Benefit Tax 4.77 0.80

VII. PROFIT AFTER TAX 657.15 1,020.57

Surplus/(Deficit) brought forward from Previous Year 12.36 (836.20)

Profit available for appropriation 669.51 184.37

VIII. APPROPRIATIONS:

Reserve u/s 45IC of RBI Act 133.90 36.87

Transfer to Capital Redemption Reserve 82.03 21.36

Transfer to General Reserve 65.00 –

Proposed Dividend

– Equity 60.99 –

– Preference 4.37 97.25

Tax on Distributed Profits

– Equity 10.37 –


Balance carried over to Balance Sheet 312.11 12.36

669.51 184.37

Basic Earnings per share of Rs.10.00 each (Rs.) 8.55 15.22Diluted Earnings per share of Rs.10.00 each (Rs.) 4.58 9.07

Significant Accounting Policies and Notes on Accounts XIX

Profit and Loss Account for the Year Ended March 31, 2009











M. No. 90408

27


(Rs. crore)

For the year ended For the year ended March 31, 2009 March 31, 2008

A. CASH FLOW FROM OPERATING ACTIVITES

Net Profit before Tax & Exceptional Items 1,010.23 2,084.59

Adjustments for:

Depreciation 7.52 6.87

Provision/write offs (414.13) (953.29)

Profit on Sale of Assets (38.40) (0.49)

Lease Equalisation 14.94 (430.07) 12.81 (934.10)

Operating Profit before Working Capital Changes 580.16 1,150.49

Adjustments for:

(Increase)/decrease in Current Assets 105.17 1,397.94

Increase/(decrease) in Current Liabilities 37.30 142.47 34.52 1,432.46

Cash Flow before Exceptional Items 722.63 2,582.95

Exceptional Items – (416.00)

Income Tax Paid (111.62) (148.22)

Dividend Paid (4.37) (113.78)

Net cash from Operating Activities 606.64 1,904.95

B. CASH FLOW FROM INVESTING ACTIVITIES

Sale of/(Addition) to Investments (incl. Application Money) (1,883.36) (144.16)

Purchase of/Advance for Fixed Assets (including Leased Assets) (18.54) (57.77)

Sale proceed of Fixed Assets 48.09 0.68

Net cash used in/raised from Investing Activities (1,853.81) (201.25)

C. CASH FLOW FROM FINANCING ACTIVITIES

Loans borrowed (net of repayments) (549.21) (2,701.29)

Loans lent (net of repayments) (1,095.31) 1,653.90

Issue of Preference Shares (net of redemption) (82.03) (1.36)

Issue of Equity Shares – 123.73

Share Premium (net of expenses) – 1,200.25

IDF/BRF/SWF (Net) – 0.01

Net Cash from Financing Activities (1,726.55) 275.24

Net Change in Cash & Cash Equivalent (A+B+C) (2,973.72) 1,978.94

Opening Cash and Cash Equivalent 3,457.31 1,478.37

Closing Cash and Cash Equivalent 483.59 3,457.31

Increase/(Decrease) in Cash & Cash Equivalent (2,973.72) 1,978.94

Note: Figures for previous year have been regrouped, wherever considered necessary

Cash Flow Statement for the Year Ended March 31, 2009











M. No. 90408

28


(Rs. crore)

SCHEDULE - I As at As atSHARE CAPITAL March 31, 2009 March 31, 2008

AUTHORISED

150,00,00,000 (Previous Year - 150,00,00,000) Equity Shares of Rs.10/- each 1,500.00 1,500.00

150,00,00,000 (Previous Year - 150,00,00,000) Cumulative RedeemablePreference Shares of Rs.10/- each 1,500.00 1,500.00

3,000.00 3,000.00

ISSUED

82,96,60,951 (Previous Year - 82,96,60,951) Equity Shares of Rs 10/- each 829.66 829.66

42,79,10,000 (Previous Year - 42,79,10,000) Cumulative RedeemablePreference Shares of Rs.10/- each 427.91 427.91

SUBSCRIBED

76,37,30,197 (Previous Year - 76,37,30,197) Equity Shares of Rs.10/- each 763.73 763.73


PAID UP

(A) EQUITY

76,24,13,497 (Previous Year - 76,24,13,497) Equity Shares of Rs.10/- each @ 762.41 762.41

TOTAL (A) 762.41 762.41

(B) PREFERENCE

1. 26,38,43,100 (Previous Year - 26,38,43,100) 0.10% Cumulative Redeemable PreferenceShares of Rs.10/- each (Redeemable at par on 02.08.2017 - Rs.38.84 crore,on 15.09.2018 - Rs.93.00 crore, on 17.09.2018 - Rs.50.00 crore,on 31.03.2019 - Rs.30.00 crore, on 31.10.2020 - Rs.2.00 crore,on 01.03.2021 - Rs.10.00 crore, on 02.03.2021 - Rs.30.00 crore,on 03.03.2021 - Rs.8.00 crore and on 31.03.2021 - Rs.2.00 crore) 263.84 263.84

2. 8,20,33,450 (Previous Year - 16,40,66,900) 5% Cumulative Redeemable PreferenceShares of Rs.10/- each (Redeemable at par on 01.04.2009 - Rs.82.04 crore) 82.04 164.07

TOTAL (B) 345.88 427.91

TOTAL (A + B) 1,108.29 1,190.32

@ Of the above 20,25,00,000 Equity Shares of Rs.10/- each have been allotted as fully paid up, without payment being received in cash, in exchange for sharesof the erstwhile Industrial Finance Corporation of India.

SCHEDULE - II (Rs. crore)

RESERVES AND SURPLUS As at Additions/ Deduction/ As atApril 1, Transfers Transfers March 31,

2008 during the year during the year 2009

(A) Capital Reserve 0.85 – – 0.85

(B) Capital Redemption Reserve 29.01 82.03* – 111.04

(C) Debenture Redemption Reserve 5.00 – – 5.00

(D) Grant received from Government of India(out of Interest Differential Fund in terms of KfW agreements) 184.48 – – 184.48

(E) Securities Premium Account 1,210.23 – – 1,210.23

(F) Special Reserve under Section 36(1)(viii) of theIncome Tax Act, 1961 for the period upto 31.03.97 1.69 – – 1.69

(G) Reserve u/s 45IC of RBI Act 36.87 133.90 – 170.77

(H) Revaluation Reserve 649.95 – 82.76 567.19

(I) Benevolent Reserve 4.11 – – 4.11

(J) General Reserve – 65.00 – 65.00

(K) Profit & Loss Account 12.36 299.75 – 312.11

TOTAL 2,134.55 580.68 82.76 2,632.47

Previous Year 873.84 1,270.85 10.14 2,134.55

* Represents Capital Redemption Reserve credited out of Profit & Loss Account pursuant to redemption of Preference Shares during the year

Schedules forming part of the Accounts

29


(Rs. crore)

SCHEDULE - III As at As at

UNSECURED LOANS - RUPEE March 31, 2009 March 31, 2008

(A) OPTIONALLY CONVERTIBLE DEBENTURES

(i) 9.75% Govt. of India - Redeemable on 30.10.2021 400.00 400.00

SUB - TOTAL ‘A’ 400.00 400.00

(B) NON-CONVERTIBLE DEBENTURES (NCDs)

(i) 6.00% IDBI – 100.00

(ii) 6.00% LIC - Redeemable on 28.12.2021 200.00 200.00

(iii) 6.00% SBI - Redeemable on 25.01.2022 200.00 200.00

(iv) 0.00% LIC - Redeemable on 01.04.2022 155.22 155.22

SUB - TOTAL ‘B’ 555.22 655.22

(C) BONDS

(a) Guaranteed by Government of India and redeemable at par

11.50% Bonds: Redemption - Rs.200 crore on 30.05.2009, Rs.150 crore on

19.09.2009, Rs.88 crore on 26.12.2009, Rs.180 crore on 26.06.2010,

Rs.150 crore on 24.09.2010, Rs.70 crore on 26.12.2010 and

Rs.180 crore on 19.08.2011 1,018.00 1,416.02

12.00% Bonds: Redemption - Rs.200 crore on 13.01.2012 and Rs.60 crore on 03.03.2012 260.00 260.00

7.79% Bonds: Redemption - 27.05.2012 102.21 102.21





8.41% Bonds: Redemption - 14.06.2018 133.85 –






Interest accrued and due 2.51 3.61

SUB-TOTAL ‘C’ (a) 2,468.15 2,561.10

(b) Other Bonds

(i) Privately Placed Bonds carrying maturity of One to Twenty years from date of placement

(earliest redemption due on 01.04.2009). Put option applicable on Rs.756.85 crore 4,487.12 4,894.71

(ii) Privately Placed Zero Coupon Bonds carrying maturity of 10 years from the date of issue.

Unamortised discount of Rs.0.14 crore (Previous Year – Rs.0.19 crore) 0.62 0.57

SUB-TOTAL ‘C’ (b) 4,487.74 4,895.28

(D) OTHER BORROWINGS

(i) Govt. of India under restructuring (to be issued in the form of 0.1%

Optionally Convertible Debentures (redeemable on 28.03.2023),

with a right of recompense on par with other stakeholders) 523.00 523.00

(ii) Banks & FIs 425.00 425.00

(iii) Subsidiaries 40.00 –

(iv) Under Interest Differential Fund 23.13 23.13

(v) Interest accured and due on above 20.10 17.24

(vi) Others (Put Option available on Rs.30 crore) 69.47 36.53

SUB-TOTAL ‘D’ 1,100.70 1,024.90

(E) FUNDS PLACED WITH THE CORPORATION

(a) Jute Development Fund (placed by Govt. of India) 3.90 3.57

(b) Employees’ Provident Fund 22.02 50.86

(c) Staff Welfare Fund 4.76 4.98

SUB-TOTAL ‘E’ 30.68 59.41

TOTAL {(A+B+C(a)+C(b)+D+E)} 9,042.49 9,595.91

Bonds, Debentures & Borrowings repayable within one year 745.43 661.91

30


(Rs. crore)

SCHEDULE - IV As at As atUNSECURED LOANS - FOREIGN CURRENCIES March 31, 2009 March 31, 2008

BORROWINGS (Long Term)

(A) Loans Guaranteed by Government of India

Lines of Credit (Kreditanstalt-fur-Wiederaufbau) 608.15 594.43

(B) Other unsecured loans

Lines of Credit 23.14 32.65

TOTAL 631.29 627.08

Loans repayable within one year 35.36 33.26

SCHEDULE - VFIXED ASSETS

PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK

As at Additions Deductions/ As at As at For the Deductions/ As at As at As at01.04.2008 Transfers 31.03.2009 01.04.2008 year Transfers 31.03.2009 31.03.2009 31.03.2008

Freehold Land @ 70.77 – 35.70 35.07 – – – – 35.07 70.77

Leasehold Land @ 207.85 – – 207.85 8.79 3.26 – 12.05 195.80 199.06

Plant & Machinery 24.46 – 5.53 18.93 12.18 1.15 3.01 10.32 8.61 12.28

Buildings @ 594.22 0.33 47.38 547.17 58.53 9.72 6.27 61.98 485.19 535.69

Furniture & Fixtures 15.19 4.30 $ 4.96 14.53 10.77 1.01 3.62 8.16 6.37 4.42Office Equipments 18.05 1.34 6.82 12.57 13.85 1.47 6.34 8.98 3.59 4.20

Electrical Installations 15.80 0.98 4.19 12.59 9.92 0.61 2.64 7.89 4.70 5.88

Vehicles 0.27 2.17 0.11 2.33 0.13 0.05 0.11 0.07 2.26 0.14

Leased Assets – Plant &Machinery 251.00 – – 251.00 251.00 – – 175.74 * 75.26 90.20

TOTAL 1,197.61 9.12 104.69 1,102.04 365.17 17.27 21.99 285.19 816.85 922.64

Capital work-in-progressincl. advances # 54.30 9.42 63.72 63.72 54.30

GRAND TOTAL 1,251.91 18.54 104.69 1,165.76 365.17 17.27 21.99 285.19 880.57 976.94

Previous Year 1,210.12 57.85 16.06 1,251.91 363.95 17.01 15.79 274.97 976.94

$ Includes Art Works – Rs.1.36 crore

* Leased Assets (Accumulated Depreciation) is net of Rs.75.26 crore on account of Lease Adjustment (Previous Year - Rs.90.20 crore)

# Advances include Rs.60.51 crore on account of land (Previous Year - Rs.54.06 crore)

@ includes on account of revaluation:

– Freehold Land - Gross block as on 01.04.08 - Rs.69.02 crore; Deductions - Rs.35.28 crore; as on 31.03.09 - Rs.33.74 crore

– Leasehold Land - Gross block as on 01.04.08 - Rs.186.24 crore; Deductions - Rs. Nil; as on 31.03.09 - Rs.186.24 crore; Depreciation for the year - Rs.3.01 crore(Previous Year - Rs.3.01 crore)

– Building - Gross block as on 01.04.08 - Rs.414.97 crore; Deductions - Rs.39.45 crore; as on 31.03.09 - Rs.375.52 crore; Depreciation for the year - Rs.6.74 crore(Previous Year - Rs.7.13 crore)

Note: Deductions of Land & Building represent transfer to IIDL (Subsidiary Company)

(Rs. crore)

SCHEDULE - VIINVESTMENTS (TRADE)

(Rs. crore)

As at March 31, 2009 As at March 31, 2008

(1) LONG TERM INVESTMENTS No. of Amount No. of Amount(A) QUOTED Shares/Units Shares/Units

1. Equity Shares

(a) Associates

– Tourism Finance Corporation of India Ltd 25,422,365 57.80 21,386,771 50.44

(b) Assistance under development financing 618.83 391.37

(c) Others 147.24 40.77

823.87 482.582. Bonds

(a) Unit Trust of India - US 64 – – 1,545,655 20.87

(b) LIC Housing Finance Ltd 300 30.66 – –

(c) HDFC Ltd (9.32%) 100 10.00 – –

(d) HDFC Ltd (9.2%) 3,000 300.00 – –

(e) Power Finance Corporation Ltd 100 10.13 – –

350.79 20.87

31


SCHEDULE - VI (Contd.) (Rs. crore)


No. of Amount No. of AmountShares/Units Shares/Units

3. Units

Investment in UTI Balance Fund 500,000 0.51 500,000 0.51

0.51 0.51

4. Government Securities

7.99% Government Security (Maturity Date - 09.07.2017) 4.94 –

4.94 0.00

B. UNQUOTED

1. Equity Shares

(a) Subsidiaries

i) IFCI Financial Services Ltd 6,903,188 6.90 6,903,188 6.90

ii) IFCI Venture Capital Funds Ltd 32,260,505 56.00 6,000,000 6.00

iii) IFCI Infrastructure Development Ltd 228,630,902 228.63 2,000,000 2.00

iv) IFCI Factors Ltd 79,154,700 90.19 – –

v) Madhya Pradesh Consultancy Organisation Ltd 3,480 0.35 – –

(b) Associates

i) Assets Care Enterprise Ltd 7,248,334 7.25 3,483,333 3.48

ii) IFCI Factors Ltd – – 9,968,750 6.86

iii) Himachal Consultancy Organisation Ltd 735 0.07 – –

iv) Hardicon Ltd 2,600 0.03 – –

v) North India Technical Consultancy Organisation Ltd 2,600 0.06 – –

(c) Assistance under development financing 431.09 201.02

2. Preference Shares 545.44 436.89

3. Debentures/Bonds 844.33 792.52

4. Security Receipts 150.27 166.53


(a) Investment in 9.75% GoI (IFCI Ltd) Special Security, 2021 400.00 400.00

(b) Investments in Govt. Securities and Treasury Bills 0.01 0.01

6. Application Money

(a) Equity Shares

i) Subsidiaries

– IFCI Financial Services Ltd (under reconciliation) 0.02 0.02

ii) Others 79.94 142.27

(b) Preference Shares 15.61 68.81

(c) Debentures 2.47 6.39

7. Units

(a) Units of UTI VECAUS - III (Fund) 775,000 7.75 875,000 8.75

(b) Units of IACM-1-D (Fund promoted by IVCF) 41,400,000 41.40 – –

TOTAL LONG TERM INVESTMENTS 4,087.92 2,752.41

(2) CURRENT INVESTMENTS

A. QUOTED

1. Equity Shares

(a) ABB Ltd 50,000 2.14 11,811 1.41

(b) ACC Ltd 250,000 14.84 44,180 4.38

(c) Bajaj Hindustan Sugar & Industries Ltd 50,000 0.24 – –

(d) Bajaj Holdings & Investment Ltd – – 18,262 2.25

(e) Bharti Airtel Ltd 50,000 3.13 35,000 3.04

(f) Chambal Fertilisers and Chemicals Ltd – – 200,000 1.26

(g) DLF Ltd 50,000 0.89 49,000 3.92

(h) ICICI Bank Ltd 100,000 3.41 15,000 1.66

(i) Infosys Technologies Ltd 5,000 0.68 – –

(j) ITC Ltd – – 90,000 1.78

(k) Larsen & Toubro Ltd 303,846 20.57 – –

(l) ONGC Ltd – – 26,713 2.71

(m) Punj Llyod Ltd – – 147,875 6.71

(n) Reliance Communications Ltd 800,000 14.05 180,000 11.34

(o) Reliance Industries Ltd 200,000 30.91 30,000 7.61

(p) Siemens India Ltd 420,000 11.13 32,000 2.53

(q) State Bank of India 300,000 32.27 60,459 13.97

(r) Steel Authority of India Ltd 50,000 0.50 – –

(s) Tata Iron & Steel Company Ltd 240,000 5.05 20,000 1.62

(t) Tata Motors Ltd – – 59,676 4.28

139.81 70.47

2. Bonds

(a) LIC Housing Finance Ltd – – 300 30.66

(b) HDFC Ltd (9.32%) – – 100 10.00

(c) HDFC Ltd (9.2%) – – 3,000 300.00

(d) Power Finance Corporation Ltd – – 100 10.13

0.00 350.79

32






(a) 7.99% Government Security (Maturity Date - 09.07.2017) 10.68 20.41

(b) 6.05% Government Security (Maturity Date - 02.02.2019) 84.66 –

95.34 20.41

4. Units of Mutual Funds

(a) AIG Mutual Fund – – 15,458,687 16.15

(b) Birla Mutual Fund 11,572,891 19.25 – –

(c) Bharti Axa Mutual Fund 44,319 4.70 – –

(d) Canara Reboco Liquid Fund 93,505,133 100.00 – –

(e) DBS Chola Mutual Fund – – 30,488,549 50.00

(f) IDFC Mutual Fund 47,118,069 48.75 – –

(g) JP Morgan Mutual Fund 43,996,927 50.00 9,601,444 10.00

(h) Principal PNB Mutual Fund 10,885,581 14.95 – –

(i) SBI Mutual Fund 50,919,090 100.00 – –

(j) UTI Mutual Fund – – 76,600 10.20

337.65 86.35

B. UNQUOTED

1. Equity Shares

(a) Bajaj Auto Ltd – – 18,262 0.88

(b) Bajaj Finserv Ltd – – 18,262 0.85

0.00 1.73

2. Pass Through Certificates

ICICI Bank 142.70 –

142.70 –

3. Commercial Paper

(a) Reliance Capital Ltd 200 9.72 – –

(b) Adlabs Films Ltd 1,000 48.77 – –

(c) IVRCL Infrastructure Projects Ltd 1,000 48.84 – –

107.33 –

4. Certificate of Deposit

Syndicate Bank 2,500 24.13 – –

24.13 –

TOTAL CURRENT INVESTMENTS 846.96 529.75

TOTAL 4,934.88 3,282.16

Less: Provision for Diminution in the value of Investments 896.12 1,011.44

Long Term 888.59 989.80

Current - Mark to Market 7.53 21.64

TOTAL 4,038.76 2,270.72

QUOTED INVESTMENTS

(1) Total Book Value 1,752.91 1,031.98

– Equity Shares 963.68 553.05

– Others 789.23 478.93

(2) Total Market Value 1,469.67 1,614.26

– Equity Shares 684.68 1,146.37

– Others 784.99 467.89

UNQUOTED INVESTMENTS

(1) Total Book Value 3,181.97 2,250.18


– Preference Shares 545.44 436.89

– Others 1,815.96 1,585.30

Note: Investments include Rs.33.52 crore (Previous Year - Rs.85.72 crore) in respect of equity shares which are subject to lock-in periodInvestments include Rs.0.30 crore (Previous Year - Rs.31.90 crore) in respect of equity shares which are subject to restrictive covenants

Company-wise details in respect of investments in assisted concerns where Market Value is equal to or exceeds Rs.2 crore in the case of Quoted Investmentsand where cost is equal to or exceeds Rs.2 crore in case of Unquoted Investments as included under items A (1) to (4) of Schedule - VI

(Rs. crore)

As on March 31, 2009 As on March 31, 2008

NAME OF THE COMPANY No. of Shares/ Book value No. of Shares/ Book valueEquity Shares – Quoted Debentures Debentures

Abhishek Industries Ltd – – 1,398,800 2.16

Ambuja Cements Ltd – – 500,000 3.00

Andhra Cement Company Ltd – – 1,000,000 1.00

Bartronics India Ltd 376,472 7.34 – –

Bharat Immunological & Biological Corporation Ltd 2,609,500 2.61 2,609,500 2.61

DCM Sriram Industries Ltd – – 187,457 2.39

Diana Tea Ltd – – 2,000,000 0.98

Energy Development Corporation Ltd – – 500,000 0.50

33


Schedule – VI (Contd.) (Rs. crore)



Essar Oil Ltd – – 2,000,000 9.00Facor Alloys Ltd – – 2,700,000 0.31Garden Silk Mills Ltd 514,285 3.60 514,285 3.60Gayatri Sugars Ltd – – 4,407,820 4.37GIC Housing Finance Company Ltd 4,235,489 12.33 4,235,489 12.33Givo Ltd – – 3,000,000 3.00Gujarat Heavy Chemicals Ltd – – 562,455 0.56Graphite India Ltd – – 445,300 0.36Hindalco Industries Ltd 13,294,859 127.63 – –HEG Ltd – – 85,000 –Indian Acrylics Ltd 12,000,000 12.00 12,000,000 12.00Indo Rama Synthetics Ltd 2,779,750 12.76 2,779,750 12.76Indraprastha Medical Corporation Ltd 775,000 0.78 1,175,000 1.18Infrastructure Development Finance Company Ltd 13,535,000 13.54 13,535,000 13.54Ispat Industries Ltd 66,300,000 66.30 66,300,000 66.30ITC Ltd – – 623,730 9.37J K Lakshmi Cement Ltd 1,319,000 7.89 1,319,000 7.89Jaiprakash Associates Ltd 250,000 0.30 250,000 0.30Jayaswal Neco Ltd 2,476,734 2.48 2,476,734 2.48Jaypee Hotels Ltd 683,800 1.67 683,800 1.67JCT Electronics Ltd 38,117,700 17.67 – –JCT Ltd 25,340,000 6.33 25,340,000 6.33Jhagadia Copper Ltd – – 4,900,000 4.90JSW Steel Ltd 1,099,958 65.23 981,583 15.71K.G.Denim Ltd – – 1,479,756 2.34Kanoria Chemicals & Industries Ltd – – 1,200,000 5.20Kirloskar Ferrous Industries Ltd 3,565,000 3.57 3,565,000 3.57Kothari Petrochemicals Ltd – – 3,292,500 3.29Lloyds Steel Industries Ltd – – 4,632,114 12.65Manali Petrochemicals Ltd – – 2,840,250 1.89Mysore Cements Ltd 1,349,944 1.35 1,349,944 1.35Mysore Paper Mills Ltd – – 4,504,386 4.50Noida Toll Bridge Ltd 1,200,000 1.20 2,000,000 2.00Pennar Industries Ltd 1,273,629 0.64 1,273,629 0.64Power Trading Corporation Ltd 1,506,855 1.51 1,506,855 1.51Reliance Capital Ltd – – 30,000 0.20Ruchi Strips and Alloys Ltd 5,569,025 5.65 5,569,025 5.65Saurashtra Cements Ltd – – 455,257 3.32South Asian Petrochem Ltd – – 945,775 1.50Southern Iron & Steel Ltd – – 2,901,375 17.99Spel Semi Conductor Ltd – – 1,755,000 1.76Sree Rayalaseema Alkalies & Allied Chem. Ltd 17,000,000 17.00 17,000,000 17.00SRF Ltd 584,000 3.82 584,000 3.82Star Paper Mills Ltd 6,034,069 43.70 701,600 3.95Sujana Universal Industries Ltd – – – –Tinplate Company of India Ltd – – 564,000 2.76Unimers (I) Ltd – – 1,843,042 1.64Welspun India Ltd – – 6,034,069 43.70Welspun Stahl Rohren Ltd – – 262,500 0.38Welspun Syntex Ltd 7,950,000 31.60 – –XL Telecom Ltd – – 500,000 0.25Equity Shares – UnquotedBlue Blends India Ltd 3,000,000 3.00 3,000,000 3.00Clearing Corporation of India Ltd 2,000,000 2.00 2,000,000 2.00Dewan Rubber Industries Ltd 1,200,000 6.60 1,200,000 6.60Essar Steel Ltd 720,000 2.88 720,000 2.88Hind Agro Industries Ltd 2,700,000 2.70 2,700,000 2.70HPCL Mittal Energy Ltd 18,636,000 21.93 – –India Paging Services Ltd 15,239,300 15.24 15,239,300 15.24Indian Metals & Ferro Alloys Ltd – – 301,647 4.02Ispat Profiles Ltd 13,161,250 13.16 13,161,250 13.16Malvika Steel Ltd 3,188,300 12.26 3,188,300 12.26Meta Copper & Alloys Ltd 9,042,000 9.04 9,042,000 9.04Modern Syntex Ltd 2,422,798 6.97 2,422,798 6.97National Stock Exchange Ltd 2,321,000 6.52 2,450,000 6.65North Eastern Development Finance Corporation Ltd 10,000,001 10.00 10,000,001 10.00Pertech Computers Ltd 500,000 3.00 500,000 3.00Ritspin Synthetics Ltd 9,500,000 9.50 17,579,300 17.43Samcor Glass Ltd 2,000,000 7.60 2,000,000 7.60Securities Trading Corporation Ltd 337,400 4.58 337,400 4.58Sidhartha Super Spinning Mills Ltd 4,000,000 4.00 4,000,000 4.00Stock Holding Corporation Ltd 3,570,000 4.46 3,570,000 4.46Surat Textile Mills Ltd 2,000,000 6.00 2,000,000 6.00Tata Motors – DVR – A – Ordy 8,196,720 250.00 – –Welspun Syntex Ltd – – 31,800,000 31.60Preference Shares – UnquotedBellary Steel and Alloys Ltd 567,260 5.67 567,260 5.67

34


Schedule – VI (Contd.) (Rs. crore)



Bhaval Synthetics (I) Ltd 400,000 3.80 400,000 3.80Blue Blends (India) Ltd 1,000,000 9.90 1,000,000 9.90Dhampur Sugar Mills Ltd 1,198,530 11.99 1,198,530 11.99Essar Steel Ltd 22,116,599 22.12 22,116,599 22.12Gangadharan Appliances Ltd 306,250 3.06 306,250 3.06Gayatri Sugars Ltd 2,452,245 2.45 2,452,245 2.45GPI Textiles Ltd 106,386,496 53.19 – –Gujarat Poly AVX Electronics Ltd 209,000 2.09 209,000 2.09IC Textiles Ltd 952,394 9.52 952,394 9.52Ispat Industries Ltd 57,155,107 63.32 57,155,107 63.32Jai Parabolic Springs Limited 350,000 3.50 350,000 3.50Jayaswal Neco Ltd – – 657,264 6.57JCT Ltd 500,315 3.75 500,315 3.75Jhagadia Copper Ltd 6,448,070 64.48 5,991,210 59.91JSW Steel Ltd 21,262,362 20.17 15,723,089 15.72Kalyanpur Cement Ltd 584,040 5.80 584,040 5.80LML Ltd 2,150,912 21.51 2,150,912 21.51Malwa Cotton Spinning Mills Ltd 1,724,610 17.25 1,724,610 17.25Mangalore Refinery & Petrochemicals Ltd 7,148,949 7.15 7,148,949 7.15Meta Copper & Alloys Ltd 4,521,000 45.21 4,521,000 45.21Nagarjuna Fertilisers Ltd 1,026,880 10.27 1,026,880 10.27Oswal Spinning & Weaving Mills Ltd 99,730,160 9.97 99,730,160 9.97Prag Bosimi Synthetics Ltd 2,614,577 26.15 2,614,577 26.15Prudential Moali Sugars – – 400,000 2.00Ritspin Synthetics Ltd – – 934,760 9.35S Kumar Nationwide Ltd 1,372,790 12.22 1,372,790 12.22Saurashtra Chemical Ltd 1,046,700 10.47 1,046,700 10.47Shree Satpuda Tapi Parisar SSK Ltd 9,178 4.59 9,178 4.59Spectrum Power Generation Ltd 11,820,000 11.82 11,820,000 11.82Suryalakshmi Cotton Mills Ltd 271,600 2.72 271,600 2.72West Coast Paper Mills Ltd 6,500,000 65.00 – –Western India Plywoods Ltd 923,270 9.23 923,270 9.23Debentures – UnquotedAshima Ltd 2,400,000 16.00 2,400,000 16.00Bharti Ventures Ltd 1,000 100.00 – –C.T. Cotton Yarns Ltd 480,000 2.89 480,000 2.89DCM Shriram Industries Ltd 898,000 3.45 898,000 4.84DSL Enterprises Pvt Ltd 2,962 29.58 2,962 29.58Emtex Industries Ltd 900,000 9.00 900,000 9.00Essar Oil Ltd 2,631,500 26.88 2,631,500 26.88Ganesh Benzoplast Ltd 74,663 7.47 74,663 7.47Ginni Filaments Ltd 649,169 6.49 649,169 6.49GTC Industries Ltd 1,000,000 4.77 1,000,000 6.52Hind Agro Industries Ltd 1,175,000 5.88 1,175,000 7.64Indo Rama Synthetics Ltd 11,000,000 4.81 11,000,000 8.47Ispat Profiles Ltd 3,301,954 33.02 3,301,954 33.02Jayaswal Neco Ltd – – 63,429 6.34JCT Electronics Ltd 3,000,000 25.50 3,000,000 30.00JCT Ltd 1,751,104 9.56 1,751,104 12.54Kajaria Ceramics Ltd 1,000,000 4.84 1,000,000 6.72Knitwear Technology Ltd – – 370,484 3.70Krishna Lifestyle Technology Ltd 626,000 6.26 626,000 6.26Lanco Kondapalli Power Ltd 3,750,000 5.13 3,750,000 9.54Lloyds Steel Industries Ltd 5,000 38.72 5,105,000 101.00Majestic Hotels Ltd 522,040 5.22 – –Malanpur Steels Ltd 2,000,000 20.00 2,000,000 19.79Mesco Pharmaceuticals Ltd 1,000,000 5.49 1,000,000 5.99Modern Denim Ltd 1,750 7.50 1,750 7.50Modern Syntex Ltd 9,014 43.75 9,014 50.00Modern Terry Towel Ltd – – 1,750 10.30Modern Thread Ltd 3,435 18.75 3,435 18.75Mukund Ltd 2,500,000 22.08 2,500,000 23.13Mysore Paper Mills Ltd 67,702 6.77 67,702 6.77Nagarjuna Fertilizers & Chemicals Ltd 10,500,000 46.73 10,500,000 49.44Navin Fluorine International Ltd 423,000 4.23 423,000 4.23Pasupati Acrylon Ltd 1,000,000 4.00 1,000,000 9.00Pentafour Products Ltd 28,000,000 2.80 28,000,000 2.80Prag Bosimi Synthetics Ltd 3,585,978 41.76 3,585,978 41.76Quipo Telecom Infrastructure Ltd 10,000,000 100.00 – –Reliance Industries Ltd 1,636,306 16.36 1,636,306 16.36Shamken Spinners Ltd 500,000 5.00 500,000 5.00Sree Rayalaseema Alkalies & Allied Chem Ltd 3,547,949 31.04 3,547,949 35.48Star Paper Mills Ltd – – 600,000 3.00Sujana Steels Ltd 800,000 8.00 800,000 8.00Sujana Universal Industries Ltd – – 1,200,000 12.00Sun Polytron Industries Ltd 1,300 13.00 1,300 13.00Uflex Ltd 3,279,117 32.79 3,279,117 32.79Usha India Ltd 5,000,000 50.00 5,000,000 50.00Videocon Industries Ltd 21 6.15 50 21.17

35


Disclosure in respect of Investments in assisted concerns where Market Value is less than Rs.2 crore in case of Quoted Investments and where cost is less thanRs.2 crore in case of Unquoted Investments as included under items A(1) to (4) of Schedule -VI

As on March 31, 2009 As on March 31, 2008PARTICULARS

No. of concerns 580 590

Book value 201.74 102.40

Market/Break value 115.54 100.35

(Rs. crore)SCHEDULE - VII As at As atSUNDRY DEBTORS March 31, 2009 March 31, 2008

(A) LEASE RENTAL RECEIVABLE

– Considered good – –

– Considered doubtful 27.21 39.79

Less: Provision (27.21) (39.79)

(B) OTHERS

– Considered good 144.25 7.95



TOTAL 144.25 7.95

SCHEDULE - VIIICASH & BANK BALANCES

(A) Cash in hand (including postage stamps) 0.01 0.02

(B) Cheques on hand & under collection & remittances in transit 6.91 21.90

(C) Balances with Reserve Bank of India

– Current Account 0.47 0.04

(D) Balances with Scheduled Banks

– Current Account in India 5.99 9.90

– Deposit Account in India 455.62 3,370.00

– Current Account outside India 14.59 3.29

– Deposit Account outside India – 52.16

(E) Deposit placed with others – 25.00

TOTAL 483.59 3,482.31

SCHEDULE - IXOTHER CURRENT ASSETS

(A) Accrued Income

(i) Interest and commitment charges on Loans 39.74 36.19

(ii) Interest on Investments 110.52 105.28

(iii) Other Income 24.63 143.87

(B) Assets aquired in settlement of dues & held for sale 0.07 0.07

TOTAL 174.96 285.41

SCHEDULE - X

LOANS

(A) ASSISTED CONCERNS

(i) In Rupees & Foreign Currencies 9,859.34 8,706.44

(ii) Advance for Assets 115.72 79.08

(B) LOAN TO SUBSIDIARIES 25.54 11.49

(C) OTHER INSTITUTIONS 0.06 0.06

10,000.66 8,797.07

Less: Provision for bad and doubtful loans 2,980.76 3,401.93

TOTAL 7,019.90 5,395.14

Notes:

(1) The above amounts include interest and other charges accrued and due

(2) Classification of Loans

(i) Secured by Assets 8,456.26 8,651.16

(ii) Guaranteed by Central/State Govts. 1.76 1.78

(iii) Against Prom.Notes & Usance Bills accepted/Guaranteed by Banks 47.04 47.04

(iv) Against pledge of shares 1,398.51 –

(v) Unsecured {incl. Rs. Nil (Previous Year - Rs. Nil) against Corporate Guarantees} 97.09 97.09

10,000.66 8,797.07

Note :

Out of the above

(i) Considered good 7,019.90 5,395.14

(ii) Considered doubtful 2,980.76 3,401.93

10,000.66 8,797.07

36


(Rs. crore)SCHEDULE - XI As at As atOTHER LOANS & ADVANCES March 31, 2009 March 31, 2008(a) Advance Tax paid (net of provisions)

(i) Income Tax (including Tax deducted at source) 45.35 74.01

(ii) Interest Tax 6.30 6.30

(b) MAT Credit Entitlement 316.13 241.41

(c) Other Loans and Advances

(i) Secured 10.06 8.53

(ii) Unsecured



Less: Provision for doubtful debts (1.00) (1.00)

(d) Sundry Deposits 5.23 55.93

(e) Forward Deal Suspense 5.36 17.53

(f) Pre-paid Expenses 0.91 0.54

TOTAL 414.23 450.30

SCHEDULE - XIICURRENT LIABILITIES

(a) Interest accrued but not due on bonds and borrowings 377.82 401.29

(b) Sundry Creditors

(i) Total outstanding dues to Micro & Small Enterprises – –

(ii) Total outstanding dues of creditors other than Micro & Small Enterprises 180.05 85.21

(c) Advance Receipts 0.83 0.73

(d) Other Liabilities 328.43 269.02

(e) Investor Education and Protection Fund* (to be credited by the following amounts)

(i) Unpaid Matured Deposits – 0.05

(ii) Unpaid Matured Debentures 99.07 122.21

(iii) Interest accrued on (i) to (ii) above 2.91 2.93

TOTAL 989.11 881.44

* As on 31.03.2009, no amount was due and outstanding for transfer to Investor Education and Protection Fund

SCHEDULE - XIIIPROVISIONS

(a) Assets 397.53 466.85

(b) Expenses 9.29 10.34

(c) Proposed Dividend 60.99 –

(d) Corporate Dividend Tax 11.11 –

TOTAL 478.92 477.19

(Rs. crore)SCHEDULE - XIV For the year ended For the year endedINCOME FROM OPERATIONS March 31, 2009 March 31, 2008

(a) On Lending Operations (incl. funded interest) 789.91 881.08

(b) On Investment Operations

(i) Dividend (Gross)

– Long Term 26.73 23.66

– Current – 0.15

(ii) Interest (Gross) 134.40 63.72

(iii) Profit on sale of Shares/Units/Debentures (Net)

– Assistance under development financing - Long Term 94.23 615.50

– Investments - Long Term 30.59 32.42

– Investments - Current 4.87 2.68

(c) Leasing Operations

(i) Lease Rentals etc. 15.13 28.09

(ii) Lease Equalisation Account (14.94) (12.81)

(d) Business Services Fee and Commission (incl. guarantee commission) 29.27 8.91

(e) Interest/Income from treasury operations 262.42 265.75

(f) Exchange Fluctuation Gains/(Loss) (3.98) 2.17

(g) Provision/Write off/Liability no longer required written back* 33.44 51.68

TOTAL 1,402.07 1,963.00

Note: i) Income Tax deducted at source from Interest etc. 27.29 7.41

ii) Dividend income from subsidiaries 0.52 1.01

iii) Interest income from subsidiaries 2.97 0.17

* Includes

– Liability not payable 31.10 47.79– Amount written off in earlier years written back 2.34 3.89

37


(Rs. crore)SCHEDULE - XV For the year ended For the year endedOTHER INCOME March 31, 2009 March 31, 2008

(a) Interest on staff advances 0.57 0.90

(b) Profit on sale of fixed assets (Net) 38.40 0.49

(c) Rental Income 19.06 14.63

(d) Miscellaneous Income @ 24.42 132.40

TOTAL 82.45 148.42

@ Includes: Interest on income tax/interest tax refund 22.89 131.51

SCHEDULE - XVICOST OF BORROWINGS

(a) Fixed

(i) Interest on SLR Bonds 245.67 279.03

(ii) Interest on other Bonds & Borrowings 493.36 504.87

(iii) Interest on Foreign Currency Borrowings 14.82 28.78

(b) Others

(i) Interest on Bank Overdraft 29.90 –

(ii) Interest on Funds placed with the Company 3.00 3.96

(iii) Commitment Charges, Brokerage, Commission and other costs 3.30 4.03

TOTAL 790.05 820.67

SCHEDULE - XVIIPAYMENTS TO AND PROVISIONS FOR EMPLOYEES

(a) Salaries and Allowances * 30.77 109.00

(b) Contribution to Retirement Funds # 18.63 9.69

(c) Staff Welfare Expenses 1.83 2.64

TOTAL 51.23 121.33

* Includes:

– Annuity for DA relief/Restoration of pension for retired employees 11.67 4.14

– VRS Expenditure – 40.93

– Leave Encashment 3.60 7.18

# Includes Gratuity 1.29 3.88

SCHEDULE - XVIIIESTABLISHMENT AND OTHER EXPENSES(a) Rent 0.18 0.22

(b) Rates and Taxes 2.65 3.88

(c) Insurance 0.08 0.09

(d) Repairs and Maintenance

– Buildings 11.00 7.93

– Others 0.34 0.32

(e) Electricity 4.03 3.70

(f) Auditors’ Remuneration 0.15 0.14

(g) Directors’ Fee 0.07 0.05

(h) Other Miscellanous Expenses 21.12 14.92

TOTAL 39.62 31.25

SCHEDULE - XIX

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

(A) SIGNIFICANT ACCOUNTING POLICIES

1. The financial accounts, unless otherwise stated, are prepared at historical cost underthe accrual method of accounting.

2. REVENUE RECOGNITION

2(a) Income on Non-Performing Assets (NPA) has been recognised, as and whenreceived.

2(b) Front-end fee, Premium on pre-payment of loans/reduction in interest rates andLC Commission are accounted for on realization basis.

2(c) Dividends declared by the respective companies till the close of the accountingyear are accounted for as income.

2(d) Rental on leased assets is accounted for from the commencement date, asprescribed in the lease agreement entered with the lessees. In respect of leasetransactions commenced on/or before 31.03.2001, income from leases (exceptin case of Non-Performing Assets) is recognised on the basis of implicit rate inthe lease to the net investment outstanding on the lease over the primary leaseperiod.

3. INVESTMENTS

3(a) Investments are classified under current and long term categories and valuedin accordance with the Reserve Bank of India Guidelines and AccountingStandard-13 on ‘Accounting for Investments’ issued by The Institute of CharteredAccountants of India.

(i) ‘Long term Investments’ are carried at acquisition/amortised cost. Aprovision is made for diminution other than temporary on an individualbasis.

(ii) ‘Current Investments’ are carried at the lower of cost or fair value on anindividual basis. However, appreciation if any, within the category, isavailable for set off.

3(b) Security Receipts issued by an Asset Reconstruction Company (ARC)/

Securitisation Company (SC) are valued in accordance with RBI guidelines.Accordingly, the net asset value obtained from the ARC is reckoned forvaluation of such investments. Appreciation in the value, if any, is ignoredand depreciation is provided for.

3(c) The front-end fee/underwriting commission/commitment fee received inrespect of devolvement of underwriting and direct subscription is reducedfrom the cost of related investments.

3(d) Surplus on sale of investments is net of losses thereon.

4. FOREIGN EXCHANGE TRANSACTIONS

4(a) The expenses and income in foreign exchange are accounted for at the ratesprevailing on the date of transactions/at the forward rate, if booked, for suchtransaction.

4(b) Assets and liabilities held in foreign currencies and accrued income andexpenditure in foreign currencies are translated into Indian Rupees at therates advised by Foreign Exchange Dealers Association of India (FEDAI)prevailing towards the close of the accounting period. Gains/losses, if any, onvaluation of various assets and liabilities are taken to Profit & Loss Account.

5. FIXED ASSETS AND DEPRECIATION

5(a) Fixed Assets are carried at cost (including capitalized interest) lessaccumulated depreciation. Accumulated depreciation on assets in respect oflease transactions commenced on or before 31.03.2001 is adjusted for thebalance in the ‘Accumulated Lease Equalization Account’.

5(b) Depreciation on assets given on lease is provided on Straight Line Method atthe rates prescribed under Schedule XIV to the Companies Act, 1956 or overthe primary period of lease of assets, whichever is higher.

5(c) Depreciation in respect of office building and certain other assets at NehruPlace, New Delhi, is provided on Straight Line Method and on other assets onthe Written Down Value Method at the rates prescribed under Schedule XIVto the Companies Act, 1956.

5(d) Depreciation on increase in value of fixed assets due to revaluation is provided

38


on straight-line basis over the balance useful life of asset and adjusted out ofrevaluation reserve.

5(e) Art works capitalized under Furniture and Fixtures are not being depreciated.

5(f) Leasehold Land is amortized over the lease period.

6. PROVISIONS/WRITE OFF AGAINST LOANS AND OTHER CREDIT FACILITIES

6(a) All credit exposures are classified into performing and non-performing assets(NPAs) as per the Reserve Bank of India Guidelines. Further, NPAs are classifiedinto sub-standard, doubtful and loss assets based on the criteria stipulated byRBI. Provisions on standard assets are made as per the approval of the Board.Provisions are made on sub-standard and doubtful assets at rates prescribed byRBI. Loss assets and unsecured portion of doubtful assets are provided/writtenoff as per the extant RBI guidelines. Additional provisions are made againstspecific non-performing assets over and above what is stated above, if in theopinion of the management, increased provisions are necessary.

6(b) For restructured/rescheduled assets, provision is made in accordance with theguidelines issued by RBI.

6(c) Recovery against debts written off/provided for is credited to revenue. Incomeis recognized where amounts are either recovered and/or adjusted againstsecurities/properties or advances there-against or are considered recoverablein terms of Reserve Bank of India Guidelines.

6(d) The purchase and sale of NPAs is accounted as per guidelines prescribed by RBI.

7. GRANTS RECEIVED FROM GOVERNMENT OF INDIA UNDER INTERESTDIFFERENTIAL FUND (IDF)

Grants received from Government of India under Interest Differential Fund (IDF) is ofa capital nature and to be utilized for specified purposes for promotional activities ofIndustrial Development. Accordingly, the money so received, net of expenditure forthe approved purposes is shown under ‘Reserves and Surplus’ in the Balance Sheet.The amounts invested and loans made out of the fund for approved purposes areshown under ‘Investments’ and ‘Loans’ respectively. The interest/dividend/otherincome earned and profit on sale of investments are treated as income of the Company.

8. MISCELLANEOUS EXPENDITURE

8(a) Expenses on issue of Shares and Bonds are charged as per guidelines containedin Accounting Standard - 26 - “Intangible Assets”.

8(b) Voluntary Retirement Scheme (VRS) expenses are charged off as and whenincurred.

9. EMPLOYEE BENEFITS

9(a) Monthly contribution to the Provident Fund being in the nature of definedcontribution is charged against revenue. The fund is administered through dulyconstituted and approved administrators.

9(b) The Company had a defined benefit employees retirement scheme in the formof pension. Consequent upon implementation of new compensation structurefor existing employees during the year, the Trustees have entrusted theadministration of cumulative accruals to the fund to Life Insurance Corporationof India (LICI) by entering into a Group Superannuation Cash AccumulationScheme, providing for defined contribution in lumpsum for past service anddefined monthly contribution by employer and/or employee and, thus, freezingthe liability of IFCI. Accordingly, the contribution determined in respect ofemployees opting for the same based on the extant rules viz. period of servicerendered in IFCI; applicable pension regulations and directions communicatedby IFCI on the date of switching over to LICI has been deposited with LICI. LICIshall be maintaining the individual accounts in respect of employees who haveopted for the same and for whom defined contribution has been remitted.Employees shall be opting for the annuity/ withdrawal with contribution standingto their credit on their ceasing to be in employment of IFCI.

The existing pension optees shall, however, continue to be governed by theprovisions of scheme in operation at the time of their retirement and areaccordingly entitled to DA relief and family pension as and when due. Thecontribution made on account of same is charged to Accounts as and when due.

9(c) The Company has a defined benefit employees scheme in the form of Gratuity.The Trustees of the scheme have entrusted the administration of related fundto Life Insurance Corporation of India (LICI). Expense for the year is determinedon the basis of actuarial valuation of the Company’s year-end obligation in thisregard and the value of year end assets of the scheme. Contribution is depositedwith LICI based on intimation received by the Company.

9(d) The Company has a post retirement medical benefit scheme for employees andtheir dependants subject to certain limits for hospitalization and normal medicaltreatment. The same is charged against revenue as and when incurred.

9(e) Voluntary Retirement Scheme expenditure is also charged against revenue asand when due.

10. TAXATION

Tax Expenses comprises of current & deferred income tax and fringe benefit tax. Currentincome tax and fringe benefit tax is measured at the amount expected to be paid to thetax authorities in accordance with the Income Tax Act. Deferred Tax is recognized,subject to consideration of prudence, on timing differences, being difference betweentaxable income and accounting income/expenditure that originate in one period andare capable of reversal in one or more subsequent year(s). Deferred taxes are reviewedfor their carrying values at each balance sheet date.

(B) NOTES ON THE ACCOUNTS

1(a) Contingent Liabilities not provided for in respect of:

(Rs. crore)

As at 31.03.2009 31.03.2008

(i) Interest tax/Sales tax/Property tax/Trade tax pending in appeals basedon judicial pronouncement and/orlegal opinion and other matters 3.39 2.68

(ii) Guarantees issued:– Foreign Currency – 2.83– Indian Currency 186.65 190.42

(iii) Performance Guarantees issued 0.62 –

(iv) Claims not acknowledged as debts 46.96 46.56

(v) Assets sold with recourse 2.88 8.40

(vi) The Company is contesting demands (net of provisions of Rs.19.30 crore) of

Rs.186.87 crore (Previous Year - Rs.170.72 crore), raised by Income TaxAuthorities at various levels. It includes demand of Rs.23.72 crore on issues,which have been restored to Assessing Officer for re-examination. In view ofvarious judicial pronouncements and legal opinions in respect of issues decidedin favour of/against IFCI, no provision is considered necessary. The demand,however, stands deposited with Income Tax Authorities by way of Advance tax(including Tax Deducted at Source).

1(b) Estimated amount of contract (including lease contract) remaining to be executed oncapital account (net of advances) as at 31.03.2009 – Rs. Nil (Previous Year - Rs.6.21crore).

2. The Company has been granted exemption as on March 31, 2009 by the Governmentof India, Ministry of Corporate Affairs, under Section 211(4) of the Companies Act,1956, regarding the following requirements of Schedule VI of the Companies Act, 1956:

i) Company-wise details of investments where the market value in case of quotedinvestments and cost in case of unquoted investments in any particular companynot exceeding Rs.2 crore each

ii) Age-wise Classification of Sundry Debtors

The accounts have been prepared in accordance therewith.

3. The stakeholders of IFCI in FY 2002-03 had approved the package for restructuring ofdebt/liabilities, inter alia, providing for release of Rs.5,220 crore (comprising Rs.3,604crore towards principal and Rs.1,616 crore towards interest over future years onliabilities taken over/to be serviced by Govt. of India) as Grant. Government of Indiareleased Rs.2,932.31 crore, comprising Rs.523 crore as loan (FY 2002-03) andRs.2,409.31 crore (FY 2003-04 to FY 2006-07) as Grant. The amount of Rs.2,409.31crore received as Grant in FY 2003-04 to 2006-07 comprised of Rs.1,606.31 croretowards principal and Rs.803 crore towards interest. Out of Rs.1,606.31 crore receivedtowards principal, Rs.1,359 crore (FY 2003-04) was accounted as extra-ordinary incomeand Rs.247.31 crore (FY 2004-05 to FY 2006-07) as Restructuring Reserve in theReserves & Surplus A/c and thereafter transferred to Profit & Loss A/c, as per theguidelines conveyed by RBI. The amount of Rs.803 crore received towards interestwas reduced from the cost of borrowings in respective years. In view of GoI letterdated December 12, 2007, stating that it would assist IFCI Ltd in case such a situationarises, no Grant has been received in FY 2007-08 and 2008-09.

4. The bonds guaranteed by Govt. of India of Rs.2,468.15 crore include bonds ofRs.1,187.64 crore which have been rolled over for 10 years from the respective duedates in line with the minutes of meetings of stakeholders, held on November 26, andDecember 2, 2002. Government of India has been requested to extend the guaranteefor the rolled over period.

5(a) Transfer of equivalent amount to Capital Redemption Reserve Account in respect ofPreference Shares of Rs.20 crore redeemed in the FY 2001-02, was complied with inFY 2007-08. However, the Company’s application to the Regional Director, Kanpur forcompounding is yet to be disposed off by the authorities.

5(b) During the current year, Preference Shares of Rs.82.035 crore have been redeemed asper restructured terms on 01.04.2008 and necessary amount has been transferred tothe Capital Redemption Reserve Account from Profit and Loss Account.

6(a) Govt. of India has the option of converting the debentures, as shown at ‘A’ of ScheduleIII, wholly or partly into fully paid equity shares of IFCI Limited, at par, at any timeduring the currency of debentures subject to compliance with provisions of SEBIguidelines, in respect of preferential allotment. IFCI also has the right to redeem theconvertible debentures issued to Govt. of India, fully or partly, at par, at any time afterexpiry of five years from the date of the issue with prior approval of RBI.

6(b) During the financial year 2007-08, Zero Coupon Optionally Convertible Debentures(ZCOCDs) amounting to Rs.1,323.99 crore held by Public Sector Banks and FinancialInstitutions were converted into equity shares of the Company. LIC had, however,stated that they would convert only as much of their ZCOCDs into equity as wouldmaintain their shareholding at 8.39% post conversion of ZCOCDs. Accordingly, theshareholders at the AGM held on September 12, 2008 had approved reduction of sharecapital for aligning the stake of LIC to 8.39% as requested by LIC. The order of theHigh Court of Delhi passed on February 26, 2009 for reduction of Equity Share Capitaland minutes forming part of the petition have been registered by Registrar of Companieson April 15, 2009. The reduction in Equity Share Capital is effective from the date ofregistration.

6(c) The Optionally Convertible Debentures held by LIC and GoI do not have specific termsof conversion.

7. The Company has availed loans of Rs.300 crore (Previous Year - Rs.300 crore) againstsecurity of cash flow/negative lien against certain identified assets.

8. As directed by Reserve Bank of India, the assets and liabilities in foreign currencyhave been valued as per Foreign Exchange Dealers Association of India Guidelines.

9. Profit for the current year is less by Rs.0.12 crore (Previous Year - Rs.0.99 crore) due tofollowing of FEDAI for revaluation of outstanding swap contracts vis-á-vis AccountingStandard-11, issued by The Institute of Chartedred Accountants of India (ICAI).

10. In respect of Investments in shares, debentures and security receipts in certain cases,scrips are yet to be received.

11. Other Loans and Advances include Rs. 0.12 crore (Previous Year - Rs. Nil) due formDirectors. Maximum balance during the year Rs. 0.12 crore (Previous Year-Rs. Nil).

(Rs. crore)

Year ended 31.03.2009 31.03.2008

12. Expenditure in Foreign Currencies:

– Interest on borrowings 6.88 33.67– Other matters 0.76 0.04

7.64 33.71

13. Earnings in Foreign Currencies:

– Interest – 6.94

14. Auditors' Remuneration:

– Fee (including Service Tax) 0.15 0.14

– Out of pocket expenses – –

0.15 0.14

15. Managerial Remuneration:

– Salary and allowances 0.70 0.17

– Contribution to Retirement Funds* 0.10 0.01

– Perquisites 0.02 –

0.82 0.18

*Excluding Contributions to gratuity and leave encashment, as not determinable individually

39


Computation of Net Profit and Managerial Remuneration:

(Rs. crore)

Year ended 31.03.2009 31.03.2008

Profit before Taxation and Exceptional Items 1,010.23 2,084.59

Add: Directors' Remuneration 0.82 0.18

Add: Wealth Tax 0.04 0.06

Less: Profit on sale of fixed assets (net) (38.40) (0.49)

Net Profit as per Section 198 of the Companies Act, 1956 972.69 2,084.34

Maximum permissible remuneration to CEO & MD/

Whole Time Directors u/s 198 of the Companies

Act, 1956 @10% of the profits computed as above 97.27 208.43

Payable for the year 0.82 0.18

16. The Gross Block of Fixed Assets includes Rs.595.50 crore (Previous Year - Rs.670.23

crore) on account of revaluation of Fixed Assets carried out in past. Consequent to the

said revaluation, there is an additional charge of depreciation of Rs.9.75 crore (Previous

Year - Rs.10.14 crore) and an equivalent amount has been withdrawn from Revaluation

Reserve and credited to Profit and Loss Account.

17. Balances appearing under loans, sundry debtors and sundry creditors are subject to

confirmation in certain cases.

18. There are no Micro and Small Enterprises, to whom the Company owes dues, which

are outstanding for more than 45 days as at March 31, 2009. This information as

required to be disclosed under the Micro, Small and Medium Enterprises Development

Act, 2006 has been determined to the extent such parties have been identified on the

basis of information available with the Company.

19. Details of investments purchased and sold/redeemed during the year ended

March 31, 2009 are enclosed as Annexure.

20. There are no material prior period items included in Profit & Loss Account required to

be disclosed as per Accounting Standard-5 issued by The Institute of Chartered

Accountants of India (ICAI) read with RBI Guidelines.

21. Defined Benefit Plans/Long Term Compensated Absences - As per Actuarial Valuations

as on March 31, 2009 and recognized in the financial statements in respect of Employee

Benefit Schemes:

(Rs. crore)

Gratuity Leave Encashment

Funded Un-funded

I. Components of Employer Expense

1. Current Service Cost 0.30 –

2. Interest Cost 0.40 –

3. Expected Return on Plan Asset 0.40 –

4. Curtailment Cost/(Credit) – –

5. Settlement Cost/(Credit) – –

6. Past Service Cost – –

7. Actuarial (gain)/loss recognized 0.66 –

8. Expense recognized in

Statement of Profit/Loss 0.96 3.60

II. Actual Returns for the year ended

March 31, 2009 0.65 –

III. Net (Asset)/Liability recognized in

Balance Sheet as at March 31, 2009

1. Present Value of Defined

Benefit Obligation 6.24 –

2. Fair Value on Plan Assets 6.57 –

3. Status (Surplus/Deficit) 0.33 –

4. Unrecognised Past Service Cost – –

5. Net (Asset)/Liability recognized

in Balance Sheet (0.33) –

IV. Change in Defined Benefit Obligations (DBO)

during the year ended March 31, 2009

1. Present Value of Obligation at

the beginning of the year 5.05 5.55



4. Curtailment cost – –

5. Settlement Cost – –

6. Plan Amendments – –

7. Acquisitions – –

8. Actuarial (gain)/loss on Obligations 0.91 –

9. Benefits Paid 0.43 –

10. Present Value of Obligation

at the end of the year 6.24 8.35

V. Change in Fair Value of Assets during the

year ended March 31, 2009

1. Fair Value of Plan Asset at

the beginning of the year 5.05 –

2. Acquisition Adjustment – –


4. Actuarial gain/loss on Plan Asset 0.25 –

5. Contributions 1.29 –


7. Fair Value of Plan Asset

at the end of the year 6.57 –

(Rs. crore)

Gratuity Leave Encashment

Funded Un-funded

VI. Actuarial Assumptions

1. Mortality Table – LIC 1994-96

2. Early Retirement & Disablement – Age Related

3. Discount Rate 8.00% 8.00%

4. Inflation Rate 7.00% 5.00%

5. Return on Asset 8.00% –

VII. Major Category of Plan Assets as a % of the

Total Plan Assets as at March 31, 2009

1. Government Securities 15.61% –

2. Special Deposit Scheme – –

3. High Quality Corporate Bonds – –

4. Insurance Companies 84.39% –

5. Cash & Cash Equivalents – –

22. As more than 90% of revenue for the Company comes from a single segment of

financing, segment reporting as required under Accounting Standard-17, issued

by The Institute of Chartered Accountants of India (ICAI) is not applicable to IFCI.

23. Disclosure of details pertaining to related party transactions in terms of Accounting

Standard-18, issued by The Institute of Chartered Accountants of India (ICAI) - "Related

Party Disclosures" are as under:

i) The details of related party transactions undertaken by the Company during

the year are summarised as follows:

Related Party Relationship

IFCI Financial Services Ltd (IFIN) Subsidiary

IFCI Venture Capital Funds Ltd (IVCF) Subsidiary

IFCI Infrastructure Development Ltd (IIDL) Subsidiary

IFCI Factors Ltd (IFL) Subsidiary (w.e.f. 08.05.2008)

MPCON Ltd Subsidiary (w.e.f. 28.02.2009)

IFCI Commodity Ltd Subsidiary (indirect control

through IFCI Financial

Services Ltd w.e.f.

02.01.2009)

Assets Care Enterprise Ltd (ACE) Associate

Tourism Finance Corporation of

India Ltd (TFCI) Associate

HIMCON Ltd Associate

NITCON Ltd Associate

HARDICON Ltd Associate

With Subsidiaries (Rs. crore)

Type of Transaction IFIN IVCF IIDL IFL MP-

(Year ended 31.03.2009) CON

Infusion of Equity - Cash – 50.00 120.00 83.33 0.25

Other than Cash – – 106.63 – –

Rent & Maintenance received by IFCI 0.37 0.50 0.22 0.13 –

Brokerage paid by IFCI 0.16 – – – –

Fee for Depository Services 1.28 – – – –

Salaries/Other Estt. Exp. paid by IFCI for

employees posted by IFCI, recovered/

recoverable from them – 0.09 0.24 0.15 –

Salaries/Other Estt. Exp. paid

by IFCI for employees posted in

IFCI, paid/payable to them – 0.12 – – –

Consideration for assets sold by IFCI – – 106.63 – –

Loan to IFL (o/s) – – – 25.00 –

Maximum amount outstanding

(receivable) during the year – 11.49 – 40.69 –

Maximum amount outstanding

(payable) during the year – – 41.30 – –

Deposits with IFCI – – 40.00 – –

Interest paid/payable by IFCI – – 1.30 – –

Interest received/receivable

on Loan to IVCF/IFL – 1.08 – 1.89 –

Professional Fee paid by IFCI – – 0.07 – 0.01

Employees deputed by

IFCI as at 31.03.2009 (Nos.) – – 3 1 –

Employees deputed in

IFCI as at 31.03.2009 (No.) – – 1 – –

With Associates (Rs. crore)

Type of Transaction ACE TFCI HIM- NIT- HARDI-

(year ended 31.03.2009) CON CON CON

Infusion of Equity 3.77 7.36 – 0.04 –

Rent & Maintenance received by IFCI 0.18 0.57 – – –

Salaries/Other Estt. Exp. paid by IFCI

for employees deputed by IFCI,

recovered/recoverable from them 0.19 – – – –

Employees deputed by IFCI as at 31.03.09 (No.) 1 – – – –

Employees posted by IFCI as at 31.03.09 (No.) 1 – – – –

Professional Fee paid by IFCI – – 0.07 0.03 0.05

40


ii) Key Managerial Personnel of the Company during the year:

– Shri Atul Kumar Rai, Chief Executive Officer & Managing Director

– Shri Sujit K Mandal, Whole-Time Director (w.e.f. 01.11.2008)

24. Earnings per share (EPS) (Rs. crore)

Year ended 31.03.2009 31.03.2008

I. Computation for Basic EPS

(a) Profit Computation for Equity shareholders

Net profit as per Profit & Loss Account 657.15 1,020.57

Less: Preference Dividend (5.11) (10.07)

Net profit for Equity Shareholders 652.04 1,010.50

(b) Weighted Average Number of EquityShares outstanding during the year 76,24,13,497 66,40,31,855

II. Computation for Diluted EPS

(a) Profit Computation for Equity shareholders(including potential shareholders)



Add: Interest on Convertible Debentures 35.05 35.05

Net profit for equity shareholders(including potential shareholders) 687.09 1,045.54

(b) Weighted Average Number of Equity Sharesoutstanding during the year incl. ConvertibleDebentures held by LIC/GoI assumingconversion price as per SEBI Guidelines 1,50,16,94,913 1,15,23,42,213

III. Earnings Per Share(Weighted Average, not annualised)Basic (Rs.) 8.55 15.22Diluted (Rs.) 4.58 9.07

25(a) Provisions of Accounting Standard-19, issued by The Institute of Chartered Accountantsof India (ICAI) - "Leases" are not applicable as the Company has not entered into leasingtransaction on or after April 01, 2001.

25(b) (i) The Company has entered into lease agreement for office premises at two centers.Some of the significant terms and conditions of the arrangements are:

• Agreement may generally be terminated by either party on serving a noticeperiod.

• The lease arrangements are generally renewed on expiry of lease period subjectto mutual agreement.

• The company shall not sublet, assign or part with the possession of the premiseswithout prior written consent of lessor.

(ii) Rent in respect of above is charged to Profit & Loss Account.

(iii) The year - wise break up of future minimum lease payments in respect of leasedpremises are as under:

(Rs. crore)

Particulars 2008-09 2007-08

Minimum Lease payments:

a) Not later than one year 0.14 –

b) Later than one year but not later than five years 0.10 –

c) Later than five years – –

26. Current Tax represents primarily Minimum Alternate Tax (MAT), as reduced by the MAT

Credit Entitlement, which, the Company is confident, that it would be in position to

utilize against normal tax within the period specified under Income tax Act, 1961.

27. In terms of Accounting Standard-22, issued by The Institute of Chartered Accountantsof India (ICAI) - "Accounting for Taxes on Income", Deferred Tax Asset as at March 31,2009 and March 31, 2008 works out as under:

(Rs. crore)

As at 31.03.2009 31.03.2008

Unabsorbed Business Loss 251.03 358.50

Unabsorbed Depreciation 58.07 58.07

Provision against Loans/Advances & other Assets 1,463.14 1,673.33

Timing difference in Depreciable Assets (57.12) (65.20)

Other Timing Differences 11.19 13.02

Deferred Tax Assets (Net) 1,726.31 2,037.72

For the current year Deferred Tax charge of Rs.311.41 crore has been charged in the accounts.

28. Fixed Assets possessed by the Company are treated as 'Corporate Assets' and not 'CashGenerating Units' as defined by Accounting Standard-28 issued by The Institute ofChartered Accountants of India (ICAI) - "Impairment of Assets". As on March 31, 2009,there were no events or changes in circumstances which indicate any impairment in theassets.

29. Movement in Provisions, in terms of Accounting Standard-29, issued by The Institute ofChartered Accountants of India (ICAI) - "Provisions, Contingent Liabilities and ContingentAssets" is given as under:

(Rs. crore)

Opening Addition/ Deduction/ ClosingBalance Transfer Transfer Balance

Leave Encashment 5.55 2.80 – 8.35

Income Tax 270.96 111.37 – 382.33

Fringe Benefit Tax 1.36 4.77 – 6.13

Assets 4,894.09 105.27 723.67 4275.69

30. The following additional information is disclosed in terms of RBI Circulars:

(A) Loans and advances availed by the non-banking financial company inclusive of

interest accrued thereon but not paid:

(Rs. crore)

As on 31.03.2009 As on 31.03.2008

Particulars Outstanding Overdue Outstanding Overdue

(a) Debentures: Secured – – – –

Unsecured 955.22 – 1,055.22 –

(b) Deferred Credits – – – –

(c) Term Loans 991.23 – 988.37 –

(d) Inter Corporate Loans &

Borrowings 109.47 – 36.53 –

(e) Commercial Paper – – – –

(f) Other Loans

(i) Funds placed with IFCI 30.68 – 59.41 –

(ii) Bonds 6,955.89 – 7,456.38 –

The Company has not defaulted in repayment of dues to any financial institution or

bank or bond/debenture holders.

(B) Break-up of Leased Assets and stock on hire and other assets counting towards

loan activities:

(Rs. crore)

31.03.2009 31.03.2008

(i) Lease assets including lease rentals

(a) Financial Lease 103.29 130.80

(b) Operating Lease – –

(ii) Stock on hire incl. hire charges under sundry debtors

(a) Assets on hire – –

(b) Repossessed Assets – –

(iii) Other loans counting towards AFC activities

(a) Loans where assets have been repossessed – –

(b) Loans other than (a) above – –

(C) Borrower group-wise classification of assets financed:

(Rs. crore)

Category 31.03.2009 31.03.2008

1. Related Parties

(a) Subsidiaries 25.55 11.49

(b) Companies in same group – –

(c) Other Related Parties – –

2. Other than Related Parties 8,252.92 6,413.43

Total 8,278.47 6,424.92

Amount is net of provision and excludes Provision against Standard Assets

(D) Investor group - wise classification of all investments (Current & Long Term) in

shares and securities (both Quoted & Unquoted):

(Rs. crore)

31.03.2009 31.03.2008

Category Market/Break- Book Market/Break Book

up/FairValue/ Value up/Fair Value/ Value

NAV NAV

1. Related Parties

(a) Subsidiaries 444.92 423.47 24.96 14.90

(b) Companies in same group Nil Nil Nil Nil

(c) Other Related Parties 42.85 65.21 67.53 60.78

2. Other than Related Parties 4,177.57 4,550.25 3,757.19 3,206.48

Total 4,665.34 5,038.93 3,849.68 3,282.16

(E) Other Information: (Rs. crore)

Particulars 31.03.2009 31.03.2008

1. Gross Non-Performing Assets

(a) Related Parties – –

(b) Other than Related Parties 5,152.17 5,404.98

2. Net Non-Performing Assets

(a) Related Parties – –

(b) Other than Related Parties 463.26 –

3. Assets acquired in satisfaction of debt 0.07 0.07

(F) Capital to Risk Assets Ratio (CRAR):

As on 31.03.2009 31.03.2008

A. Capital

(a) Capital to Risk Assets Ratio (CRAR) 19.7% 17.4%

(i) Core CRAR 14.5% 12.8%

(ii) Supplementary CRAR 5.2% 4.6%

(b) Subordinated debt raised, outstanding

as Tier II Capital (Rs. crore) – –

(c) Risk-weighted assets (Rs. crore)

(i) On-Balance Sheet Items 11,729.62 8,612.27

(ii) Off-Balance Sheet Items 412.72 205.69

41


(G) Exposure to Real Estate Sector: (Rs. crore)

Category 31.03.2009 31.03.2008

a) Direct Exposure:

(i) Residential Mortgages-

Lending fully secured by mortgages onresidential property that is or will beoccupied by the borrower or that is rented(Individual housing loans up to Rs.15 lakh

may be shown separately) – –

(ii) Commercial Real Estate-

Lending secured by mortgages on commercial

real estate (office building, retail space,

multipurpose commercial premises,

multi-family residential buildings,

multi-tenanted commercial premises, industrial

or warehouse space, hotels, land acquisition,

development and construction, etc.). Exposure

would also include non-fund based (NFB) limits 76.99 –

(iii) Investments in Mortgage Backed Securities (MBS)

and other securitised exposures: – –

a) Residential

b) Commercial Real Estate

b) Indirect Exposure:

Fund based and non-fund based exposures

on National Housing Bank (NHB) and

Housing Finance Companies (HFCs) – –

(H) Maturity Pattern of assets and liabilities:

(Rs. crore)

1 Day to Over Over Over Over Over Over Over Total

30/31 1 Mth to 2 Mths to 3 Mths to 6 Mths to 1 Yr to 3 Yrs to 5 Years

Days 2 Mths 3 Mths 6 Mths 1 Year 3 Years 5 Years

Liabilities

Borrowings

from Banks 3.00 19.53 4.25 42.40 222.88 477.23 730.03 2,655.09 4,154.41

Market

Borrowings 32.30 27.06 47.20 50.20 296.66 939.19 1,090.12 2,328.61 4,811.34

Total 35.30 46.59 51.45 92.60 519.54 1,416.42 1,820.15 4,983.70 8,965.75

Assets

Advances 108.08 34.37 144.25 430.82 616.33 1,726.61 770.19 3,252.14 7,082.79

Investments 103.60 21.63 20.95 115.08 21.79 151.15 117.87 3,590.75 4,142.82

Total 211.68 56.00 165.20 545.90 638.12 1,877.76 888.06 6,842.89 11,225.61

(I) Details of Loan Assets subjected to Restructuring: (Rs. crore)

As at 31.03.2009 31.03.2008

CDR Non-CDR CDR Non-CDR

Standard 39.10 48.63 – 121.65

Sub-Standard – 37.77 – –

Doubtful – – – 151.01

Total 39.10 86.40 – 272.66

(J) Assets sold to Securitisation Company/Reconstruction Company: (Rs. crore)

Particulars 31.03.2009 31.03.2008

1. Number of Accounts 7 10

2. Aggregate outstanding of accounts sold to SC/RC 427.79 373.88

3. Aggregate consideration 105.09 136.28

4. Additional consideration realized in respectof accounts transferred in earlier years – –

5. Aggregate gain/(loss) over net book value – –

(K) Details of Non-performing financial assets purchased: (Rs. crore)

Particulars 31.03.2009 31.03.2008

1. (a) Number of accounts purchased during the year 3 –

(b)Aggregate Outstanding (Rs. crore) 19.85 –

2. (a) Of the above number of accountsrestructured during the year – –

(b)Aggregate Outstanding – –

(L) Details of Non-performing financial assets sold: (Rs. crore)

Particulars 31.03.2009 31.03.2008

Number of accounts sold during the year 5 14

Aggregate outstanding 35.75 268.92

Aggregate consideration received (Rs. crore) 6.18 322.61

31. Total value of outstanding Currency Swaps was USD 9.45 million against INR andEUR 40.80 million against USD (Previous Year - US$ 11.5 million against INR andEUR 29.9 million against USD) equivalent to Rs.323.98 crore (Previous Year - Rs.236.25crore), whereas total value of outstanding Forex Deals other than Currency Swapswas USD 3.5 million against INR and EUR 16 million against USD equivalent toRs.124.03 crore (Previous Year - USD 10 million and EUR 20 million).

32. Foreign Currency exposure that is not hedged by derivative instrument or otherwiseis USD 0.01 million and EUR 0.02 million, equivalent to Rs.0.16 crore.

33. Previous year figures have been re-grouped/re-arranged wherever necessary, toconform to current year presentation.

34. Balance Sheet abstract and Company’s General Business Profile as per Part IV ofSchedule VI of the Companies Act, 1956 enclosed as Appendix.

Signatories to all Schedules I to XIX









JAVED YUNUS S SETHEE N K DUGGAL RUPA SARKAR

Executive Director Chief Finance Officer Chief General Manager Company SecretaryPlace: New Delhi

Dated: June 27, 2009

M. No. 90408

42


Details of Investments Purchased and Sold/RedeemedMUTUAL FUNDS (Rs. crore)

Name of the Scheme No. of Units Face Value Amount

AIG India Liquid Fund - Super Institutional - Growth 1,281,356.72 1000 144.62

AIG India Treasury Plus Fund - Super Institutional Growth 7,407,412.18 10 7.76

Bharti AXA Liquid Fund Super Institutional Plan Growth 3,588,413.10 1000 372.7

Birla Sun Life Cash Plus - Instl. Prem. - Growth 404,126,357.35 10 557.16

Canara Robeco Liquid Super Institutional Growth Fund 1,057,139,491.19 10 1118.49

DBS Chola Liquid Institutional Plus Cumulative 11,804,964.95 10 19.80

DBS Chola Liquid Super Institutional Plan Cumulative 181,284,561.89 10 215.26

DBS Chola Short Term Floating Rate Cumulative 47,403,423.14 10 57.75

DSP BlackRock Cash Manager Fund Institutional Plan - Growth 445,049.71 1000 50.01

DSP BlackRock Cash Plus Fund Growth Institutional Plan - Growth 198,871.31 1000 22.02

DSP BlackRock Money Manager Fund - Institutional Plan - Growth 176,416.36 1000 20.06

DSP BlackRock Liquidity Fund - Institutional Plan - Growth 170,387.24 1000 20.00

DWS Insta Cash Plus Fund Super Institutional Plan - Growth 485,875,095.00 10 545.7

Fidelity Cash Fund Super Institutional Growth 414,609,333.29 10 490.1

Fidelity Liquid Plus Fund Super Institutional Growth 9,568,425.53 10 10.03

Fortis Money Plus Institutional Growth 38,129,501.26 10 50.09

Fortis Overnight Institutional Plus Growth 276,371,637.75 10 300.25

HDFC Liquid Fund Premium Plan Growth 287,736,124.55 10 495.95

ICICI Prudential Institutional Liquid Plan - Super Institutional Growth 347,598,700.21 10 445.26

ICICI Prudential Sweep Cash Option - Cumulative 49,517,565.99 10 60.03

IDFC Cash Fund - Super Inst Plan C - Growth 207,543,054.32 10 218.35

IDFC Liquid Plus Fund - Treasury Plan - Super Inst Plan C - Growth 49,360,101.84 10 50.39

IDFC Money Manager Fund - Treasury Plan - Super Inst Plan C - Growth 95,258,475.98 10 98.55

ING Liquid Fund Super Institutional - Growth Option 42,380,458.27 10 51.48

JM High Liquidity Fund Super Institutional Plan Growth 327,654,703.50 10 446.17

JP Morgan India Liquid Fund - Super Inst. Growth Plan 212,973,533.37 10 234.64

JP Morgan India Treasury Fund - Super Inst. Growth Plan 88,918,981.84 10 50.98

Lotus India Liquid Fund Super Institutional Growth 101,526,706.56 10 117.66

Mirae Assets Liquid Fund - Super Institutional Plan Growth Plan 304,106.75 1000 30.78

Principal Cash Management Fund Liquid Option Inst. Prem. Plan - Growth 326,873,165.01 10 442.17

Principal Floating Rate Fund SMP - Insti Option - Growth Plan 24,985,869.21 10 32.51

Reliance Liquid Fund - Cash Plan - Growth Option - Growth Plan 103,889,211.15 10 144.7

Reliance Liquid Fund - Treasury Plan - Institutional Option - Growth Option - Growth Plan 158,713,028.96 10 332.96

Reliance Liquidity Fund - Growth Option 44,873,533.17 10 57.22

Reliance Money Manager Fund - Institutional Option - Growth Plan 1,279,202.56 1000 151.32

Religare Liquid Fund - Super Institutional Growth 57,995,363.49 10 69.95

SBI - Magnum Insta Cash Fund - Cash Option 423,073,216.49 10 816.52

SBNPP Liquid Plus Super Inst. Growth 42,067,331.97 10 53.81

SBNPP Money Fund Super Inst. Growth 108,422,571.29 10 196.54

Standard Chartered Liquidity Manager - Plus - Growth 86,150.06 1000 10.02

Tata Floating Rate Short Term Inst. Plan - Growth 96,004,682.67 10 122.8

Tata Liquid Super High Inv. Fund - Appreciation 2,660,535.88 1000 425.53

Templeton India Treasury Management Account Super Institutional Plan Growth 5,479,591.19 1000 699.4

UTI Liquid Cash Plan Institutional - Growth Option 4,227,193.75 1000 543.3

UTI - Liquid Plus Fund Institutional Plan (Growth Option) 436,447.88 1000 50.33

UTI Money Market Fund - Growth Plan 270,476,195.60 10 652.61

UTI Treasury Advantage Fund - Institutional Plan (Growth Option) 2,271,281.52 1000 265.33

Annexure

43


Adlabs Films Limited 1,575 5 0.08

Air Deccan Limited 850 10 0.01

Andhra Bank 4,66,900 10 2.41

Alstom Projects India Limited 35,200 10 1.51

Axis Bank Limited 13,500 10 0.86

Bajaj Hindustan Sugar and Industries Limited 25,000 1 0.19

Bank of Baroda 4,89,300 10 12.38

Bank of India 1,15,900 10 3.31

Bharti Airtel Limited 35,000 10 2.27

Canara Bank 1,92,800 10 3.27

Chambal Fertilisers and Chemicals Limited 1,75,000 10 0.71

DLF Limited 70,000 2 1.39

Essar Oil Limited 1,59,556 10 1.34

Housing Development Finance Corporation Limited 5,000 10 0.72

HDFC Bank Limited 10,000 10 0.98

Hindalco Industries Limited 1,59,772 1 0.68

Hindustan Oil Exploration Limited 1,10,400 10 1.48

Infosys Technologies Limited 5,000 5 0.66

Indian Overseas Bank 44,250 10 0.40

ITC Limited 50,000 1 0.87

IVRCL Infrastructure & Projects Limited 1,40,000 2 1.59

JSW Steel Limited 1,74,625 10 5.23

Larsen & Toubro Limited 25,500 2 1.63

ONGC Limited 67,500 10 6.21

Oriental Bank of Commerce 1,54,800 10 2.03

Punj Lloyd Limited 2,30,250 2 2.26

Reliance Capital Limited 77,928 10 4.65

Reliance Industries Limited 32,600 10 6.16

Reliance Communications Limited 15,000 10 0.22

Reliance Petroleum Limited 10,000 10 0.08

State Bank of India 2,24,188 10 27.87

Siemens India Limited 62,000 2 1.53

Syndicate Bank 1,14,000 10 0.57

Tata Steel Limited 1,11,188 10 3.95

TVS Motor Company Limited 32,450 1 0.11

Union Bank of India 2,56,200 10 3.59

GOVERNMENT SECURITIES

Particulars No. of Units Face Value (Rs.) Amount

6.05% G Sec 2019 1,500 1,00,000 15.21

7.95% G Sec 2032 500 1,00,000 5.45

7.99% G Sec 2017 3,500 1,00,000 36.52

8.24% G Sec 2018 2,000 1,00,000 23.16

EQUITY SHARES (Rs. crore)

Name of the Scheme No. of Units Face Value Amount

Annexure Contd.

44


BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL PROFILEas per Part IV of Schedule VI to the Companies Act, 1956

I. Registration details

Registration No. 5 5 - 5 3 6 7 7 State Code 5 5

Balance Sheet Date 3 1 0 3 0 9

II. Capital Raised during the Year (Amount in Rs. Crore)

Public Issue Rights Issue

N I L N I L

Bonus Issue Private Placement

N I L N I L

III. Position of Mobilisation and Deployment of Fund (Amount in Rs. Crore)

Sources of Funds Total Liabilities Total Assets

1 4 8 8 2 - 5 7 1 4 8 8 2 - 5 7

Paid-up Capital Reserves & Surplus

1 1 0 8 - 2 9 2 6 3 2 - 4 7

Secured Loans Unsecured Loans

N I L 9 6 7 3 - 7 8

Applications of Funds Net Fixed Assets Investments

8 8 0 - 5 7 4 0 3 8 - 7 6

Net Current Assets * Misc. Expenditure

6 7 6 8 - 9 0 N I L

Accumulated Losses Deferred Tax Asset

N I L 1 7 2 6 - 3 1

* Includes Rs. 7,019.90 crore by way of Term Loans to Industrial Concerns/Other Institutions

IV. Performance of the Company (Amount in Rs. Crore)

Turnover Total Expenditure

1 4 8 4 - 5 2 8 8 8 - 4 2

Profit Before Tax & Exceptional Items Profit After Tax & Exceptional Items

1 0 1 0 - 2 3 6 5 7 - 1 5

Earnings Per Share Rs. Dividend rate %

8 . 5 5 8 . 0 0

V. Generic Names of Three Principal Products/Services of the Company (As per Monetary Terms)

Item Code No. (ITC Code) Product Description

NOT APPLICABLE PROJECT FINANCING


NOT APPLICABLE FINANCIAL SERVICES


NOT APPLICABLE INVESTMENTS

Appendix

45


Name of the IFCI Venture IFCI Financial IFCI Infrastructure IFCI Factors MPCON

Subsidiary Company Capital Funds Ltd Services Ltd Development Ltd Ltd Ltd

1. Financial Year of the Subsidiary March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009

Company ended on

2. (a) Issued, Subscribed and Paid 3,41,10,505 Equity 90,73,088 Equity 22,86,30,902 Equity 7,93,57,700 Equity 5,268 Equity

up capital of the Subsidiary Shares of Shares of Shares of Shares of Shares of

Company Rs.10/- each Rs.10/- each Rs.10/- each Rs.10/- each Rs.1,000/- each

(b) Extent of interest of IFCI in 3,22,60,505 Equity 69,03,188 Equity 22,86,30,902 Equity 7,91,54,700 Equity 3,480 Equity

capital of the Subsidiary Shares of Rs.10/- Shares of Rs.10/- Shares of Rs.10/- Shares of Rs.10/- Shares of

each (94.58%) each (76.08%) each (100%) each (99.74%) Rs.1,000/-

each (66.06%)

3. Net aggregate amount of

Profits/Losses of the

Subsidiary so far as it

concerns the Members of

IFCI and is not dealt with in

the Accounts of IFCI

(a) The Financial Year ended

March 31, 2009 (Rs. crore) 2.39 0.14 0.49 2.77 0.35

(b) For the previous Financial

Years of the Subsidiary

since it became Subsidiary

of IFCI (Rs. crore) 6.66 4.87 0.01 Nil Nil

4. Net aggregate amount of

Profits/Losses of the

Subsidiary so far as dealt

with or provisions made for

those losses in the

Accounts of IFCI

(a) The Financial Year ended

March 31, 2009 (Rs. crore) Nil Nil Nil Nil 0.01

(b) For the previous Financial

Years of the Subsidiary

since it became Subsidiary

of IFCI (Rs. crore) 0.90 2.72 Nil Nil Nil

Statement pursuant to Section 212 of the Companies Act, 1956Relating to Subsidiary Companies

For and on behalf of Board



USHA SANGWAN TEJINDER SINGH LASCHAR K RAGHURAMAN SHOBHIT MAHAJAN

Director Director Director Director





46

IFCI Limited (Consolidated Financial Statements)

TO THE BOARD OF DIRECTORSIFCI LIMITED

We have examined the attached Consolidated Balance Sheet ofIFCI Limited and its subsidiaries and associates (the IFCI Group)as at March 31, 2009, the consolidated Profit and Loss Accountand the consolidated Cash Flow Statement for the year ended onthat date, annexed thereto. These financial statements are theresponsibility of the Company’s management. Our responsibilityis to express an opinion on these financial statements based onour audit.

We conducted our audit in accordance with auditing standardsgenerally accepted in India. Those standards require that we planand perform the audit to obtain reasonable assurance aboutwhether the financial statements are prepared, in all materialrespects, in accordance with an identified financial reportingframework and are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financialstatements. We believe that our audit provides a reasonable basisfor our opinion.

In respect of the financial statements of certain subsidiaries andassociates, we did not carry out the audit. These financialstatements have been audited by other auditors whose reports havebeen furnished to us, and our opinion, insofar as it relates to theamounts included in respect of the subsidiaries and associates isbased solely on the reports of the other auditors. The details ofassets, revenues and net cash inflows in respect of thesesubsidiaries and the net carrying cost of investment and currentyear share of profit in respect of these associates, to the extent towhich they are reflected in the consolidated financial statementsare given below:

AUDITED BY OTHER AUDITORS:

(Rs. crore)

Total assets Total revenues Net cash inflows

Subsidiaries 494.75 35.23 67.38

Net carrying cost Current yearof investment share of profit

Associates 90.34 12.10 –

We further report that in respect of one associate, the un-auditedfinancial statements have been certified by management and havebeen furnished to us, and in our opinion, in so far as it relates tothe amounts included in respect of the associate are based solelyon these certified financial statements.

Since the financial statements for the financial year endedMarch 31, 2009, which were compiled by management of thisCompany was not audited, any adjustments to their balances could

have consequential effects on the attached consolidated financialstatements. However, the size of this associate in the consolidatedposition is not significant in relative terms. The details of the netcarrying cost of investment and current year share of profit inrespect of this associate, to the extent to which they are reflectedin the consolidated financial statements is given below:

CERTIFIED BY MANAGEMENT:

(Rs. crore)

Net carrying cost Current yearof investment share of profit

Associate 8.47 0.84

We report that, the consolidated financial statements have beenprepared by the Company in accordance with the requirements ofthe Accounting Standard-21, “Consolidated Financial Statements”and (AS)-23, “Accounting for Investments in Associates inConsolidated Financial Statements” issued by The Institute ofChartered Accountants of India and on the basis of the separateaudited/certified financial statements of the IFCI Group includedin the consolidated financial statements.

We report that on the basis of the information and according to theexplanations given to us, and on the consideration of the separateaudit report on individual audited financial statements of the IFCIGroup, we are of the opinion that the said consolidated financialstatements, read together with significant accounting policies inSchedule XX and notes appearing thereon specifically Note No.15 & 19 regarding pending approval of Central Government inrespect of payment of Managerial remuneration and loans givento the relative of Managing Director without prior approval ofCentral Government, give a true and fair view in conformity withthe accounting principles generally accepted in India:

(a) in the case of the consolidated Balance Sheet, of the state ofaffairs of the IFCI Group as at March 31, 2009;

(b) in the case of the consolidated Profit and Loss Account, of theconsolidated results of operations of the IFCI Group for theyear ended on that date; and

(c) in the case of the consolidated Cash Flow Statement, of theconsolidated cash flows of the IFCI Group for the year endedon that date.


Anil P VermaPlace: New Delhi PartnerDate : June 27, 2009 Membership No. 90408

Auditors’ Report

47


(Rs. crore)Schedule As at As at

No. March 31, 2009 March 31, 2008

I. SOURCES OF FUNDS

(1) Shareholders’ Funds

Share Capital I 1,108.29 1,190.32

Reserves and Surplus II 2,724.86 2,172.55

(2) Minority Interest

Share Capital 4.40 1.85

Reserves and Surplus 4.67 1.67

(3) Loan Funds (Unsecured)

Rupee Loans III 9,008.90 9,595.91

Foreign Currency Loans IV 631.29 627.08

TOTAL 13,482.41 13,589.38

II. APPLICATION OF FUNDS

(1) Fixed Assets V

Gross Block 1,108.50 1,200.00

Less: Depreciation 288.72 276.12

Net Block 819.78 923.88

Capital work-in-progress 70.96 54.31

(2) Investments VI 3,702.46 2,282.60

(3) Goodwill on consolidation 34.78 –

(4) Deferred Tax Assets 1,726.79 2,037.63

(5) Current Assets, Loans and Advances

Sundry Debtors VII 284.74 8.17

Cash & Bank Balances VIII 575.80 3,507.14

Other Current Assets IX 322.93 286.93

Loans to Assisted Concerns X 7,001.19 5,383.65

Other Loans & Advances XI 436.75 464.53

8,621.41 9,650.42

Less: Current Liabilities and Provisions

Current Liabilities XII 1,015.75 881.60

Provisions XIII 479.37 477.88

1,495.12 1,359.48

Net Current Assets 7,126.29 8,290.94

(6) Miscellaneous Expenditure to the extent XIV 1.35 0.02not written off or adjusted

Significant Accounting Policies and Notes on Accounts XX

TOTAL 13,482.41 13,589.38

Consolidated Balance Sheet as at March 31, 2009











M. No. 90408

48


(Rs. crore)Schedule For the For the

No. year ended year endedMarch 31, 2009 March 31, 2008

I. INCOME

Income from Operations XV 1,432.22 1,968.26

Other Income XVI 80.97 147.87

TOTAL INCOME (A) 1,513.19 2,116.13

II. EXPENDITURE

Cost of Borrowings XVII 789.52 820.67

Payments to and provisions for employees XVIII 57.04 123.26

Establishment and Other Expenses XIX 51.07 31.14

Depreciation (Net of transfer from Revaluation Reserve) 8.12 7.01

Preliminary & preoperative expenses written off 2.28 –

TOTAL EXPENDITURE (B) 908.03 982.08

III. PROFIT BEFORE PROVISIONS/WRITE OFF (A-B) 605.16 1,134.05

IV. BAD AND DOUBTFUL LOANS & ADVANCES AND OTHER ASSETS

– Provision/Write-off 279.96 400.07

– Provision Reversal (693.98) (1,353.36)

V. PROFIT BEFORE EXCEPTIONAL ITEMS 1,019.18 2,087.34

Amount receivable from Govt. of India written off – (416.00)

VI. PROFIT BEFORE TAX 1,019.18 1,671.34

Provision for Taxation

– Income Tax 115.64 149.09

– MAT Credit Entitlement (74.72) (145.70)

– Deferred Tax Charge (Net) 310.55 644.73

– Fringe Benefit Tax 4.87 0.82

VII. PROFIT AFTER TAX 662.84 1,022.40

Add: Share in profit of Associates 10.11 6.30

Less: Goodwill for the year adjusted (10.11) (6.30)

Surplus/(Deficit) brought forward from Previous Year 26.41 (823.58)

Profit available for appropriation/(Loss) 689.25 198.82

VIII. APPROPRIATIONS

Reserve u/s 45IC of RBI Act 136.45 36.87

Transfer to Capital Redemption Reserve 82.03 21.36

Transfer to General Reserve 65.00 –

Proposed Dividend

– Equity 60.99 –


Tax on Distributed Profits

– Equity 10.37 –


Balance carried over to Balance Sheet 329.30 26.41

689.25 198.82

Basic Earnings per share of Rs.10.00 each (Rs.) 8.63 15.25

Diluted Earnings per share of Rs.10.00 each (Rs.) 4.61 9.09

Significant Accounting Policies and Notes on Accounts XX

Consolidated Profit & Loss Account for the Year Ended March 31, 2009











M. No. 90408

49


(Rs. crore)

For the year ended For the year endedMarch 31, 2009 March 31, 2008

A. CASH FLOW FROM OPERATING ACTIVITES

Net Profit/(Loss) before Tax & Exceptional Items 1,019.18 2,087.34

Adjustments for:

Depreciation 8.12 7.01

Prilimnary Expenses written off 2.28 –

Provision/write offs (414.02) (953.29)

Profit on Sale of Assets (37.57) (0.49)

(Increase)/decrease in Misc. Expenditure (3.61) (0.02)

Lease Equalisation 14.94 (429.86) 12.81 (933.98)

Operating Profit/(Loss) before Working Capital Changes 589.32 1,153.36

Adjustments for:

(Increase)/decrease in Current Assets (189.94) 1,291.72

Increase/(decrease) in Current Liabilities 63.56 (126.38) 34.88 1,326.60

Cash Flow before Exceptional Items 462.94 2,479.96

Exceptional Items – (416.00)

Income Tax Paid (115.64) (149.09)

Dividend Paid (3.63) (114.18)

Net cash from Operating Activities 343.67 1,800.69

B. CASH FLOW FROM INVESTING ACTIVITIES

Sale of/(Addition) to Investments (incl. Application Money) (1,556.13) (142.24)

Purchase of/Advance for Fixed Assets (including Leased Assets) (27.46) (4.23)

Sale proceed of Fixed Assets 48.38 0.72

Net cash used in/raised from Investing Activities (1,535.21) (145.75)

C. CASH FLOW FROM FINANCING ACTIVITIES

Loans borrowed (net of repayments) (582.80) (2,701.29)

Loans lent (net of repayments) (1,087.63) 1,705.34

Issue of Preference Shares (net of redemption) (82.03) (1.36)

Issue of Equity Shares – 123.73

Share Premium (net of expenses) 37.22 1,200.25

IDF/BRF/SWF (Net) 0.44 0.01

Net Cash from Financing Activities (1,714.80) 326.68

Net Change in Cash & Cash Equivalent (A+B+C) (2,906.34) 1,981.62

Opening Cash and Cash Equivalent 3,482.14 1,500.52

Closing Cash and Cash Equivalent 575.80 3,482.14

Increase/(Decrease) in Cash & Cash Equivalent (2,906.34) 1,981.62

Note: Figures for previous year have been regrouped, wherever considered necessary

Consolidated Cash Flow Statement for the Year Ended March 31, 2009











M. No. 90408

50


SCHEDULE - II (Rs. crore)

RESERVES AND SURPLUS As at Additions/ Deduction/ As atApril 1, Transfers Transfers March 31,2008# during the year during the year 2009

(A) Capital Reserve 0.86 – – 0.86

(B) Capital Redemption Reserve 29.01 82.03* – 111.04

(C) Debenture Redemption Reserve 5.00 – – 5.00

(D) Grant received from Government of India(out of Interest Differential Fund in terms of KfW Agreement) 184.48 – – 184.48

(E) Securities Premium Account 1,210.23 37.22 – 1,247.45

(F) Special Reserve under Section 36(1)(viii) of theIncome Tax Act, 1961 for the period upto 31.03.97 1.74 – – 1.74

(G) Reserve u/s 45IC of RBI Act 36.87 136.45 – 173.32

(H) Revaluation Reserve 649.95 – 82.76 567.19

(I) Benevolent Reserve Fund 4.11 – – 4.11

(J) General Reserve 0.56 65.74 – 66.30

(K) Profit & Loss Account 30.63 337.40@ – 368.03

TOTAL # 2,153.44 658.84 82.76 2,729.52

Less: Minority Interests in Reserves and Surplus – – – 4.67

TOTAL RESERVES – – – 2,724.86

Previous year 885.30 1,310.27 21.35 2,174.22

Less: Minority Interests in Reserves and Surplus – – – 1.67

TOTAL RESERVES – – – 2,172.55

* Represents Capital Redemption Reserve credited out of Profit & Loss Account pursuant to redemption of Preference Shares during the year/earlier years

@ includes amount on account of consolidation

# includes opening balance of entities that became subsidiaries during the year (IFCI Factors & MPCON)

Schedules Forming Part of the Accounts(Rs. crore)

SCHEDULE - I As at As atSHARE CAPITAL March 31, 2009 March 31, 2008

AUTHORISED

150,00,00,000 (Previous Year - 150,00,00,000) Equity Shares of Rs.10/- each 1,500.00 1,500.00

150,00,00,000 (Previous Year - 150,00,00,000) Cumulative RedeemablePreference Shares of Rs.10/- each 1,500.00 1,500.00

3,000.00 3,000.00

ISSUED

82,96,60,951 (Previous Year - 82,96,60,951) Equity Shares of Rs 10/- each 829.66 829.66


SUBSCRIBED

76,37,30,197 (Previous Year - 76,37,30,197) Equity Shares of Rs.10/- each 763.73 763.73


PAID UP

(A) EQUITY

76,24,13,497 (Previous Year - 76,24,13,497) Equity Shares of Rs.10/- each @ 762.41 762.41

TOTAL (A) 762.41 762.41

(B) PREFERENCE

1. 26,38,43,100 (Previous Year - 26,38,43,100) 0.10% Cumulative Redeemable PreferenceShares of Rs.10/- each (Redeemable at par on 02.08.2017 - Rs.38.84 crore,on 15.09.2018 - Rs.93.00 crore, on 17.09.2018 - Rs.50.00 crore,on 31.03.2019 - Rs.30.00 crore, on 31.10.2020 - Rs.2.00 crore,on 01.03.2021 - Rs. 10.00 crore, on 02.03.2021 - Rs.30.00 crore,on 03.03.2021 - Rs.8.00 crore and on 31.03.2021 - Rs.2.00 crore) 263.84 263.84

2. 8,20,33,450 (Previous Year - 16,40,66,900) 5% Cumulative Redeemable PreferenceShares of Rs.10/- each (Redeemable at par on 01.04.2009 - Rs.82.04 crore) 82.04 164.07

TOTAL (B) 345.88 427.91

TOTAL (A + B) 1,108.29 1,190.32

@ Of the above 20,25,00,000 Equity Shares of Rs.10/- each have been allotted as fully paid up, without payment being received in cash, in exchange forshares of the erstwhile Industrial Finance Corporation of India.

51


(Rs. crore)SCHEDULE - III As at As atUNSECURED LOANS - RUPEE March 31, 2009 March 31, 2008

(A) OPTIONALLY CONVERTIBLE DEBENTURES

(i) 9.75% Govt. of India - Redeemable on 30.10.2021 400.00 400.00

SUB - TOTAL ‘A’ 400.00 400.00

(B) NON-CONVERTIBLE DEBENTURES (NCDs)

(i) 6.00% IDBI – 100.00

(ii) 6.00% LIC - Redeemable on 28.12.2021 200.00 200.00

(iii) 6.00% SBI - Redeemable on 25.01.2022 200.00 200.00

(iv) 0.00% LIC - Redeemable on 01.04.2022 155.22 155.22

SUB - TOTAL ‘B’ 555.22 655.22

(C) BONDS

(a) Guaranteed by Government of India and redeemable at par

11.50% Bonds: Redemption - Rs.200 crore on 30.05.2009, Rs.150 crore on19.09.2009, Rs.88 crore on 26.12.2009, Rs.180 crore on 26.06.2010,Rs.150 crore on 24.09.2010, Rs.70 crore on 26.12.2010 andRs.180 crore on 19.08.2011 1,018.00 1,416.02

12.00% Bonds: Redemption - Rs.200 crore on 13.01.2012 and Rs.60 crore on 03.03.2012 260.00 260.00












Interest accrued and due 2.51 3.61

SUB-TOTAL ‘C’ (a) 2,468.15 2,561.10

(b) Other Bonds

(i) Privately Placed Bonds carrying maturity of One to Twenty years from date of placement(earliest redemption due on 01.04.2009). Put option applicable on Rs.756.85 crore 4,487.12 4,894.71

(ii) Privately Placed Zero Coupon Bonds carrying maturity of 10 years from the date of issue.Unamortised Discount of Rs.0.14 crore (Previous Year - Rs.0.19 crore) 0.62 0.57

SUB-TOTAL ‘C’ (b) 4,487.74 4,895.28

(D) BORROWINGS

(i) Govt. of India under restructuring (to be issued in the form of0.1% Optionally Convertible Debentures (redeemable on 28.03.2023),with a right of recompense on par with other stakeholders) 523.00 523.00

(ii) Banks and FIs 425.00 425.00

(iii) Under Interest Differential Fund 23.13 23.13

(iv) Interest accrued and due on above 20.10 17.24

(v) Others (Put Option available on Rs.30 crore) (Rs.6.41 crore secured against FDRs) 75.88 36.53

SUB-TOTAL ‘D’ 1,067.11 1,024.90

(E) FUNDS PLACED WITH THE CORPORATION

(a) Jute Development Fund (placed by Govt. of India) 3.90 3.57

(b) Employees’ Provident Fund 22.02 50.86

(c) Staff Welfare Fund 4.76 4.98

SUB-TOTAL ‘E’ 30.68 59.41

TOTAL {(A+B+C(a)+C(b)+D+E)} 9,008.90 9,595.91

Bonds, Debentures & Borrowings repayable within one year 745.43 661.91

SCHEDULE - IV

UNSECURED LOANS - FOREIGN CURRENCIES

BORROWINGS (Long Term)

(A) Loans Guaranteed by Government of India

Lines of Credit (Kreditanstalt-fur-Wiederaufbau) 608.15 594.43

(B) Other unsecured loans –

Lines of Credit 23.14 32.65

TOTAL 631.29 627.08

Loans repayable within one year 35.36 33.26

52


SCHEDULE - VFIXED ASSETS

PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK

As at Additions Deductions/ As at As at For the Deductions/ As at As at As at01.04.2008 $ Transfers 31.03.2009 01.04.2008 $ year Transfers 31.03.2009 31.03.2009 31.03.2008

Freehold Land @ 70.77 – 35.70 35.07 – – – – 35.07 70.77

Leasehold Land @ 207.85 – – 207.85 8.79 3.26 – 12.05 195.80 199.06

Plant & Machinery 24.57 – 5.64 18.93 12.23 1.16 3.07 10.32 8.61 12.34

Buildings @ 596.35 0.39 48.55 548.19 59.14 9.79 6.64 62.29 485.90 537.21

Furniture & Fixtures 15.60 4.31& 5.17 14.74 11.06 1.04 3.77 8.33 6.41 4.54Office Equipments 21.73 2.62 7.18 17.17 16.43 1.88 6.54 11.77 5.40 5.30

Electrical Installations 16.01 0.98 4.33 12.66 10.05 0.62 2.73 7.94 4.72 5.96

Vehicles 0.49 2.51 0.11 2.89 0.27 0.12 0.11 0.28 2.61 0.22

Leased Assets – Plant &Machinery 251.00 – – 251.00 251.00 – – 175.74 * 75.26 90.20

TOTAL 1,204.37 10.81 106.68 1,108.50 368.97 17.87 22.86 288.72 819.78 925.60

Capital work-in-progressincluding advances # 54.31 16.65 70.96 70.96 54.31

GRAND TOTAL 1,258.68 27.46 106.68 1,179.46 368.97 17.87 22.86 288.72 890.74 979.91

Previous Year 1,212.17 58.37 16.23 1,254.31 365.09 17.15 15.92 276.12 978.19

& Includes Art Works - Rs.1.36 crore

$ Includes opening balance of entities that became subsidiaries during the year (IFCI Factors & MPCON)

* Leased Assets (Accumulated Depreciation) is net of Rs.75.26 crore on account of Lease Adjustment (Previous Year–Rs.90.20 crore)

# Advances include Rs.60.51 crore on account of land (Previous Year–Rs.54.06 crore)

@ includes on account of revaluation:

– Freehold Land – Gross block as on 01.04.08 – Rs.69.02 crore; Deductions – Rs.35.28 crore; as on 31.03.09 – Rs.33.74 crore

– Leasehold Land – Gross block as on 01.04.08 – Rs.186.24 crore; Deductions – Rs. Nil; as on 31.03.09 – Rs.186.24 crore; Depreciation for the year – Rs.3.01 crore(Previous Year–Rs.3.01 crore)

– Building – Gross block as on 01.04.08 – Rs.414.97 crore; Deductions – Rs.39.45 crore; as on 31.03.09 – Rs.375.52 crore; Depreciation for the year – Rs.6.74 crore(Previous Year–Rs.7.13 crore)

Note: Deductions of Land & Building represent transfer to IIDL (Subsidiary Company)

(Rs. crore)

SCHEDULE - VIINVESTMENTS (TRADE)

(Rs. crore)


(1) LONG TERM INVESTMENTS No. of Amount No. of Amount(A) QUOTED Shares/Units Shares/Units

1. Equity Shares

(a) Associates

– Tourism Finance Corporation of India Ltd 25,422,365 57.80 21,386,771 50.44

Add/(Deduct):

Accumulated share in profit at the beginning of the year 19.94 23.16

Adj. on account of fresh investment & profit for the year 11.88 (3.23)89.62 70.37


(c) Others 147.71 40.77856.16 503.89

2. Bonds

(a) Unit Trust of India - US 64 – – 1,545,655 20.87

(b) LIC Housing Finance Ltd 300 30.66 – –

(c) HDFC Ltd (9.32%) 100 10.00 – –

(d) HDFC Ltd (9.2%) 3,000 300.00 – –

(e) Power Finance Corporation Ltd 100 10.13 – –

350.79 20.87

3. Units

Investment in UTI Balance Fund 500,000 0.51 500,000 0.51

0.51 0.51


7.99% Government Security (Maturity Date – 09.07.2017) 4.94 –

4.94 0.00

(B) UNQUOTED

1. Equity Shares

(a) Associates

(i) Assets Care Enterprise Ltd 7,328,334 7.33 3,483,333 3.48

Add/(Deduct):

Accumulated share in profit at the beginning of the year 0.30 0.05

Adj. on account of fresh investment & profit for the year 0.84 0.25

8.47 3.78

53


(ii) IFCI Factors Ltd 9,968,750 6.86

Add/(Deduct):

Accumulated share in profit at the beginning of the year – 4.85

Adj. on account of fresh investment & profit for the year – 0.29

12.00

(iii) Himachal Consultancy Organisation 735 0.07

Add/(Deduct):

Accumulated share in profit at the beginning of the year 0.24 –

Adj. on account of fresh investment & profit for the year 0.08 –

0.39

(iv)HARDICON Ltd 2,600 0.03

Add/(Deduct):



0.14

(v) North India Technical Consultancy Organisation Ltd 2,600 0.06

Add/(Deduct):



0.19


2. Preference shares 545.44 436.89

3. Debentures/Bonds 844.33 792.52

4. Security Receipts 150.27 166.53


(a) Investment in 9.75% GoI (IFCI Ltd) Special Security, 2021 400.00 400.00

(b) Investments in Govt. Securities and Treasury Bills 0.01 0.01

6. Application Money

(a) Equity shares

(i) Subsidiaries

– IFCI Financial Services Ltd (under reconciliation) 0.02 0.02

(ii) Others 79.94 142.27

(b) Preference Shares 15.61 68.81

(c) Debentures 2.47 6.39

7. Units

(a) Units of UTI VECAUS – III (Fund) 775,000 7.75 875,000 8.75

(b) Units of IACM–1–D (Fund promoted by IVCF) 41,400,000 41.40 – –

(c) Investment in Venture Funds GIVF 8.00 –

(d) Investment in Venture Funds IEDF 1.51 –

TOTAL LONG TERM INVESTMENTS 3,751.65 2,765.06

(2) CURRENT INVESTMENTS

(A) QUOTED

1. Equity Shares

(a) ABB Ltd 50,000 2.14 11,811 1.41

(b) ACC Ltd 250,000 14.84 44,180 4.38

(c) Bajaj Hindustan Sugar & Industries Ltd 50,000 0.24 – –

(d) Bajaj Holdings & Investment Ltd – – 18,262 2.25

(e) Bharti Airtel Ltd 50,000 3.13 35,000 3.04

(f) Chambal Fertilisers and Chemicals Ltd – – 200,000 1.26

(g) DLF Ltd 50,000 0.89 49,000 3.92

(h) ICICI Bank Ltd 100,000 3.41 15,000 1.66

(i) Infosys Technologies Ltd 5,000 0.68 – –

(j) ITC Ltd – – 90,000 1.78

(k) Larsen & Toubro Ltd 304,246 20.59 – –

(l) ONGC Ltd – – 26,713 2.71

(m)Punj Llyod Ltd – – 147,875 6.71

(n) Reliance Communications Ltd 800,000 14.05 180,000 11.34

(o) Reliance Industries Ltd 200,000 30.91 30,000 7.61

(p) Siemens India Ltd 420,000 11.13 32,000 2.53

(q) State Bank of India 300,000 32.27 60,459 13.97

(r) Steel Authority of India Ltd 50,000 0.50 – –

(s) Tata Iron & Steel Company Ltd 240,000 5.05 20,000 1.62

(t) Tata Motors Ltd – – 59,676 4.28

(u) Hindalco Industries Ltd 1,000 0.01

(v) TV 18 1,000 0.01

(w)Investment by IFCI Financial Services Ltd – 0.13

139.98 70.47




54


2. Bonds

(a) LIC Housing Finance Ltd – – 300 30.66

(b) HDFC Ltd (9.32%) – – 100 10.00

(c) HDFC Ltd (9.2%) – – 3,000 300.00

(d) Power Finance Corporation Ltd – – 100 10.13

0.00 350.79


(a) 7.99% Government Security (Maturity Date – 09.07.2017) 10.68 20.41

(b) 6.05% Government Security (Maturity Date – 02.02.2019) 84.66 –

95.34 20.41

4. Units of Mutual Funds

(a) AIG Mutual Fund – – 15,458,687 16.15

(b) Birla Mutual Fund 11,572,891 19.25 – –

(c) Bharti Axa Mutual Fund 44,319 4.70 – –

(d) Canara Reboco Liquid Fund 93,505,133 100.00 – –

(e) DBS Chola Mutual Fund – – 30,488,549 50.00

(f) IDFC Mutual Fund 47,118,069 48.75 – –

(g) JP Morgan Mutual Fund 43,996,927 50.00 9,601,444 10.00

(h) Principal PNB Mutual Fund 10,885,581 14.95 – –

(i) SBI Mutual Fund 50,908,980 100.00 – –

(j) UTI Mutual Fund – – 76,600 10.20

337.65 86.35

(B) UNQUOTED

1. Equity Shares

(a) Bajaj Auto Ltd – – 18,262 0.88

(b) Bajaj Finserv Ltd – – 18,262 0.85

0.00 1.73

2. Pass Through Certificates

ICICI Bank 142.70

142.70 0.00

3. Commercial Paper

(a) Reliance Capital Ltd 200 9.72 – –

(b) Adlabs Films Ltd 1,000 48.77 – –

(c) IVRCL Infrastructure Projects Ltd 1,000 48.84 – –

107.33 0.00

4. Certificate of Deposit

Syndicate Bank 2,500 24.13 – –

24.13 0.00

TOTAL CURRENT INVESTMENTS 847.13 529.75

TOTAL 4,598.78 3,294.81

Less: Provision for Diminution in the value of Investments 896.32 1,012.21

Long Term 888.79 990.57

Current - Mark to Market 7.53 21.64

TOTAL 3,702.46 2,282.60

QUOTED INVESTMENTS

(1) Total Book Value 1,785.37 1,053.29


– Others 789.23 478.93

(2) Total Market Value 1,469.67 1,614.89

– Equity Shares 684.68 1,147.00

– Others 784.99 467.89

UNQUOTED INVESTMENTS

(1) Total Book Value 2,813.41 2,241.52


– Preference Shares 545.44 436.89

– Others 1,825.47 1,585.30

Note: Investments include Rs.33.52 crore (Previous Year – Rs.85.72 crore) in respect of equity shares which are subject to lock-in period Investments include Rs.0.30 crore (Previous Year – Rs.31.90 crore) in respect of equity shares which are subject to restrictive covenants




Company-wise details in respect of investments in assisted concerns where Market Value is equal to or exceeds Rs.2 crore in the case of Quoted Investmentsand where cost is equal to or exceeds Rs.2 crore in case of Unquoted Investments as included under items A (1) to (4) of Schedule - VI

(Rs. crore)



Abhishek Industries Ltd – – 1,398,800 2.16Ambuja Cements Ltd – – 500,000 3.00Andhra Cement Company Ltd – – 1,000,000 1.00Bartronics India Ltd 376,472 7.34 – –Bharat Immunological & Biological Corporation Ltd 2,609,500 2.61 2,609,500 2.61DCM Sriram Industries Ltd – – 187,457 2.39

55


Diana Tea Ltd – – 2,000,000 0.98Energy Development Corporation Ltd – – 500,000 0.50Essar Oil Ltd – – 2,000,000 9.00Facor Alloys Ltd – – 2,700,000 0.31Garden Silk Mills Ltd 514,285 3.60 514,285 3.60Gayatri Sugars Ltd – – 4,407,820 4.37GIC Housing Finance Company Ltd 4,235,489 12.33 4,235,489 12.33Givo Ltd – – 3,000,000 3.00Gujarat Heavy Chemicals Ltd – – 562,455 0.56Graphite India Ltd – – 445,300 0.36Hindalco Industries Ltd 13,294,859 127.63 – –HEG Ltd – – 85,000 –Indian Acrylics Ltd 12,000,000 12.00 12,000,000 12.00Indo Rama Synthetics Ltd 2,779,750 12.76 2,779,750 12.76Indraprastha Medical Corporation Ltd 775,000 0.78 1,175,000 1.18Infrastructure Development Finance Company Ltd 13,535,000 13.54 13,535,000 13.54Ispat Industries Ltd 66,300,000 66.30 66,300,000 66.30ITC Ltd – – 623,730 9.37J K Lakshmi Cement Ltd 1,319,000 7.89 1,319,000 7.89Jaiprakash Associates Ltd 250,000 0.30 250,000 0.30Jayaswal Neco Ltd 2,476,734 2.48 2,476,734 2.48Jaypee Hotels Ltd 683,800 1.67 683,800 1.67JCT Electronics Ltd 38,117,700 17.67 – –JCT Ltd 25,340,000 6.33 25,340,000 6.33Jhagadia Copper Ltd – – 4,900,000 4.90JSW Steel Ltd 1,099,958 65.23 981,583 15.71K. G. Denim Ltd – – 1,479,756 2.34Kanoria Chemicals & Industries Ltd – – 1,200,000 5.20Kirloskar Ferrous Industries Ltd 3,565,000 3.57 3,565,000 3.57Kothari Petrochemicals Ltd – – 3,292,500 3.29Lloyds Steel Industries Ltd – – 4,632,114 12.65Manali Petrochemicals Ltd – – 2,840,250 1.89Mysore Cements Ltd 1,349,944 1.35 1,349,944 1.35Mysore Paper Mills Ltd – – 4,504,386 4.50Noida Toll Bridge Ltd 1,200,000 1.20 2,000,000 2.00Pennar Industries Ltd 1,273,629 0.64 1,273,629 0.64Power Trading Corporation Ltd 1,506,855 1.51 1,506,855 1.51Reliance Capital Ltd – – 30,000 0.20Ruchi Strips and Alloys Ltd 5,569,025 5.65 5,569,025 5.65Saurashtra Cements Ltd – – 455,257 3.32South Asian Petrochem Ltd – – 945,775 1.50Southern Iron & Steel Ltd – – 2,901,375 17.99Spel Semi Conductor Ltd – – 1,755,000 1.76Sree Rayalaseema Alkalies & Allied Chemicals Ltd 17,000,000 17.00 17,000,000 17.00SRF Ltd 584,000 3.82 584,000 3.82Star Paper Mills Ltd 6,034,069 43.70 701,600 3.95Sujana Universal Industries Ltd – – – –Tinplate Company of India Ltd – – 564,000 2.76Unimers (I) Ltd – – 1,843,042 1.64Welspun India Ltd – – 6,034,069 43.70Welspun Stahl Rohren Ltd – – 262,500 0.38Welspun Syntex Ltd 7,950,000 31.60 – –XL Telecom Ltd – – 500,000 0.25Equity Shares – UnquotedBlue Blends India Ltd 3,000,000 3.00 3,000,000 3.00Clearing Corporation of India Ltd 2,000,000 2.00 2,000,000 2.00Dewan Rubber Industries Ltd 1,200,000 6.60 1,200,000 6.60Essar Steel Ltd 720,000 2.88 720,000 2.88Hind Agro Industries Ltd 2,700,000 2.70 2,700,000 2.70HPCL Mittal Energy Ltd 18,636,000 21.93 – –India Paging Services Ltd 15,239,300 15.24 15,239,300 15.24Indian Metals & Ferro Alloys Ltd – – 301,647 4.02Ispat Profiles Ltd 13,161,250 13.16 13,161,250 13.16Malvika Steel Ltd 3,188,300 12.26 3,188,300 12.26Meta Copper & Alloys Ltd 9,042,000 9.04 9,042,000 9.04Modern Syntex Ltd 2,422,798 6.97 2,422,798 6.97National Stock Exchange Ltd 2,321,000 6.52 2,450,000 6.65North Eastern Development Finance Corporation Ltd 10,000,001 10.00 10,000,001 10.00Pertech Computers Ltd 500,000 3.00 500,000 3.00Ritspin Synthetics Ltd 9,500,000 9.50 17,579,300 17.43Samcor Glass Ltd 2,000,000 7.60 2,000,000 7.60Securities Trading Corporation Ltd 337,400 4.58 337,400 4.58Sidhartha Super Spinning Mills Ltd 4,000,000 4.00 4,000,000 4.00Stock Holding Corporation Ltd 3,570,000 4.46 3,570,000 4.46Surat Textile Mills Ltd 2,000,000 6.00 2,000,000 6.00Tata Motors – DVR – A – Ordy 8,196,720 250.00 – –Welspun Syntex Ltd – – 31,800,000 31.60Preference Shares – UnquotedBellary Steel and Alloys Ltd 567,260 5.67 567,260 5.67Bhaval Synthetics (I) Ltd 400,000 3.80 400,000 3.80Blue Blends (India) Ltd 1,000,000 9.90 1,000,000 9.90

Schedule - VI (Contd.) (Rs. crore)



56


Dhampur Sugar Mills Ltd 1,198,530 11.99 1,198,530 11.99Essar Steel Ltd 22,116,599 22.12 22,116,599 22.12Gangadharan Appliances Ltd 306,250 3.06 306,250 3.06Gayatri Sugars Ltd 2,452,245 2.45 2,452,245 2.45GPI Textiles Ltd 106,386,496 53.19 – –Gujarat Poly AVX Electronics Ltd 209,000 2.09 209,000 2.09IC Textiles Ltd 952,394 9.52 952,394 9.52Ispat Industries Ltd 57,155,107 63.32 57,155,107 63.32Jai Parabolic Springs Ltd 350,000 3.50 350,000 3.50Jayaswal Neco Ltd – – 657,264 6.57JCT Ltd 500,315 3.75 500,315 3.75Jhagadia Copper Ltd 6,448,070 64.48 5,991,210 59.91JSW Steel Ltd 21,262,362 20.17 15,723,089 15.72Kalyanpur Cement Ltd 584,040 5.80 584,040 5.80LML Ltd 2,150,912 21.51 2,150,912 21.51Malwa Cotton Spinning Mills Ltd 1,724,610 17.25 1,724,610 17.25Mangalore Refinery & Pertrochemicals Ltd 7,148,949 7.15 7,148,949 7.15Meta Copper & Alloys Ltd 4,521,000 45.21 4,521,000 45.21Nagarjuna Fertilisers Ltd 1,026,880 10.27 1,026,880 10.27Oswal Spinning & Weaving Mills Ltd 99,730,160 9.97 99,730,160 9.97Prag Bosimi Synthetics Ltd 2,614,577 26.15 2,614,577 26.15Prudential Moali Sugars – – 400,000 2.00Ritspin Synthetics Ltd – – 934,760 9.35S Kumar Nationwide Ltd 1,372,790 12.22 1,372,790 12.22Sauratshtra Chemical Ltd 1,046,700 10.47 1,046,700 10.47Shree Satpuda Tapi Parisar SSK Ltd 9,178 4.59 9,178 4.59Spectrum Power Generation Ltd 11,820,000 11.82 11,820,000 11.82Suryalakshmi Cotton Mills Ltd 271,600 2.72 271,600 2.72West Coast Paper Mills Ltd 6,500,000 65.00 – –Western India Plywoods Ltd 923,270 9.23 923,270 9.23Debentures – UnquotedAshima Ltd 2,400,000 16.00 2,400,000 16.00Bharti Ventures Ltd 1,000 100.00 – –C.T. Cotton Yarns Ltd 480,000 2.89 480,000 2.89DCM Shriram Industries Ltd 898,000 3.45 898,000 4.84DSL Enterprises Pvt Ltd 2,962 29.58 2,962 29.58Emtex Industries Ltd 900,000 9.00 900,000 9.00Essar Oil Ltd 2,631,500 26.88 2,631,500 26.88Ganesh Benzoplast Ltd 74,663 7.47 74,663 7.47Ginni Filaments Ltd 649,169 6.49 649,169 6.49GTC Industries Ltd 1,000,000 4.77 1,000,000 6.52Hind Agro Industries Ltd 1,175,000 5.88 1,175,000 7.64Indo Rama Synthetics Ltd 11,000,000 4.81 11,000,000 8.47Ispat Profiles Ltd 3,301,954 33.02 3,301,954 33.02Jayaswal Neco Ltd – – 63,429 6.34JCT Electronics Ltd 3,000,000 25.50 3,000,000 30.00JCT Ltd 1,751,104 9.56 1,751,104 12.54Kajaria Ceramics Ltd 1,000,000 4.84 1,000,000 6.72Knitwear Technology Ltd – – 370,484 3.70Krishna Lifestyle Technology Ltd 626,000 6.26 626,000 6.26Lanco Kondapalli Power Ltd 3,750,000 5.13 3,750,000 9.54Lloyds Steel Industries Ltd 5,000 38.72 5,105,000 101.00Majestic Hotels Ltd 522,040 5.22 – –Malanpur Steels Ltd 2,000,000 20.00 2,000,000 19.79Mesco Pharmaceuticals Ltd 1,000,000 5.49 1,000,000 5.99Modern Denim Ltd 1,750 7.50 1,750 7.50Modern Syntex Ltd 9,014 43.75 9,014 50.00Modern Terry Towel Ltd – – 1,750 10.30Modern Thread Ltd 3,435 18.75 3,435 18.75Mukund Ltd 2,500,000 22.08 2,500,000 23.13Mysore Paper Mills Ltd 67,702 6.77 67,702 6.77Nagarjuna Fertilizers & Chemicals Ltd 10,500,000 46.73 10,500,000 49.44Navin Fluorine International Ltd 423,000 4.23 423,000 4.23Pasupati Acrylon Ltd 1,000,000 4.00 1,000,000 9.00Pentafour Products Ltd 28,000,000 2.80 28,000,000 2.80Prag Bosimi Synthetics Ltd 3,585,978 41.76 3,585,978 41.76Quipo Telecom Infrastructure Ltd 10,000,000 100.00 – –Reliance Industries Ltd 1,636,306 16.36 1,636,306 16.36Shamken Spinners Ltd 500,000 5.00 500,000 5.00Sree Rayalaseema Alkalies & Allied Chemicals Ltd 3,547,949 31.04 3,547,949 35.48Star Paper Mills Ltd – – 600,000 3.00Sujana Steels Ltd 800,000 8.00 800,000 8.00Sujana Universal Industries Ltd – – 1,200,000 12.00Sun Polytron Industries Ltd 1,300 13.00 1,300 13.00Uflex Ltd 3,279,117 32.79 3,279,117 32.79Usha India Ltd 5,000,000 50.00 5,000,000 50.00Videocon Industries Ltd 21 6.15 50 21.17

Disclosur in respect of Investments in assisted concerns where Market Value is less than Rs.2 crore in case of Quoted Investments and where cost is less thanRs.2 corre in case of Unquoted Investments as Included under items A(1) to (4) of Schedule - VI

PARTICULARS As on March 31, 2009 As on March 31, 2008

No. of concerns 580 590Book value 201.74 102.40Market/Break value 115.54 100.35

Schedule - VI (Contd.) (Rs. crore)



57


(Rs. crore)

SCHEDULE - VII As at As atSUNDRY DEBTORS March 31, 2009 March 31, 2008(A) LEASE RENTAL RECEIVABLE

– Considered good – –



(B) OTHERS




TOTAL 284.74 8.17

SCHEDULE - VIIICASH & BANK BALANCES(A) Cash in hand (including postage stamps) 0.01 0.02

(B) Cheques on hand & under collection & remittances in transit 7.06 21.90

(C) Balances with Reserve Bank of India

– Current Account 0.47 0.04

(D) Balances with Scheduled Banks

– Current Account in India 9.97 10.67

– Deposit Account in India 543.70 3,394.06

– Current Account outside India 14.59 3.29

– Deposit Account outside India – 52.16

(E) Deposit placed with others – 25.00

TOTAL 575.80 3,507.14

SCHEDULE - IXOTHER CURRENT ASSETS(A) Accrued Income

(i) Interest and commitment charges on Loans 39.82 37.65

(ii) Interest on Investments 113.00 105.28

(iii) Other Income 24.67 143.89

(B) Assets acquired in settlement of dues & held for sale 0.07 0.07

(C) Stock–in–Trade 145.37 0.04

TOTAL 322.93 286.93

SCHEDULE - XLOANS

(A) ASSISTED CONCERNS

(i) In Rupees & Foreign Currencies 9,866.42 8,706.69

(ii) Advance for Assets 115.72 79.08

(B) OTHER INSTITUTIONS 0.06 0.06

9,982.20 8,785.83

Less: Provision for bad and doubtful loans 2,981.01 3,402.18

TOTAL 7,001.19 5,383.65

Notes:

(1) The above amounts include interest and other charges accrued and due

(2) Classification of Loans

(i) Secured by Assets 8,437.80 8,639.92

(ii) Guaranteed by Central/State Govts. 1.76 1.78

(iii) Against Prom. Notes & Usance Bills accepted/Guaranteed by Banks 47.04 47.04

(iv) Against pledge of shares 1,398.51 –

(v) Unsecured {incl. Rs. Nil (Pevious Year - Rs. Nil) against Corporate Guarantees} 97.09 97.09

9,982.20 8,785.83

Note :

Out of the above

(i) Considered good 7,001.19 5,383.65

(ii) Considered doubtful 2,981.01 3,402.18

9,982.20 8,785.83

SCHEDULE - XIOTHER LOANS & ADVANCES

(a) Advance Tax paid (net of provisions)

(i) Income Tax (including Tax deducted at source) 45.87 74.59

(ii) Interest Tax 6.30 6.30

(b) MAT Credit Entitlement 316.13 241.41

(c) Other Loans and advances

(i) Secured 10.06 8.58

(ii) Unsecured



Less: Provision for doubtful debts (1.00) (1.00)

(d) Sundry Deposits 8.78 57.70

(e) Forward Deal Suspense 5.36 17.53

(f) Pre–paid Expenses 0.94 0.60

TOTAL 436.75 464.53

58


(Rs. crore)SCHEDULE - XII As at As atCURRENT LIABILITIES March 31, 2009 March 31, 2008

(a) Interest accrued but not due on bonds and borrowings 376.52 401.29

(b) Sundry Creditors

(i) Total outstanding dues to Micro & Small Enterprises – –

(ii) Total outstanding dues of creditors other than Micro & Small Enterprises 182.25 85.30

(c) Advance Receipts 2.00 0.73

(d) Other Liabilities 353.00 269.09

(e) Investor Education and Protection Fund* (to be credited by the following amounts)

(i) Unpaid Matured Deposits – 0.05

(ii) Unpaid Matured Debentures 99.07 122.21

(iii) Interest accrued on (i) to (ii) above 2.91 2.93

TOTAL 1,015.75 881.60

* As on 31.03.2009, no amount was due and outstanding for transfer to Investor Education and Protection Fund

SCHEDULE – XIIIPROVISIONS

(a) Assets 397.53 466.85

(b) Expenses 9.74 11.03

(c) Proposed Dividend 60.99 –

(d) Corporate Dividend Tax 11.11 –

TOTAL 479.37 477.88

SCHEDULE – XIVMISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)

Preliminary Expenditure 1.35 0.02

TOTAL 1.35 0.02

SCHEDULE – XV For the year ended For the year endedINCOME FROM OPERATIONS March 31, 2009 March 31, 2008

(a) On Lending Operations (incl. funded interest) 789.18 882.05

(b) On Investment Operations

(i) Dividend (Gross)

– Long Term 27.14 23.03

– Current – 0.15

(ii) Interest (Gross) 142.86 63.72

(iii) Profit on sale of Shares/Units/Debentures (Net)

– Assistance under development financing – Long Term 94.23 615.50

– Investments – Long Term 31.36 32.69

– Investments – Short Term 4.85 3.38

(c) Leasing Operations

(i) Lease Rentals etc. 15.13 28.09

(ii) Lease Equalisation Account (14.94) (12.81)

(d) Business Services Fee and Commission (incl. guarantee commission) 50,27 10.47

(e) Interest/Income from treasury operations 262.42 267.84

(f) Exchange Fluctuation Gains/(Loss) (3.74) 2.17

(g) Provision/Write off/Liability no longer required written back* 33.46 51.98

TOTAL 1,432.22 1,968.26

Note: i) Income Tax deducted at source from Interest etc. 27.29 7.59

ii) Dividend income from subsidiaries 0.52 1.01

iii) Interest income from subsidiaries 2.97 0.17

* Includes

– Liability not payable 31.10 47.78

– Amount written off in earlier years written back 2.34 3.89

SCHEDULE – XVIOTHER INCOME(a) Interest on staff advances 0.57 0.90

(b) Profit on sale of fixed assets (Net) 37.57 0.49

(c) Rental Income 17.84 14.63

(d) Miscellaneous Income @ 24.99 131.85

TOTAL 80.97 147.87

@ Includes: Interest on income tax/interest tax refund 22.89 131.51

SCHEDULE – XVIICOST OF BORROWINGS(a) Fixed

(i) Interest on SLR Bonds 245.67 279.03

(ii) Interest on other Bonds & Borrowings 493.36 504.87

(iii) Interest on Foreign Currency Borrowings 14.82 28.78

(b) Others

(i) Interest on Bank Overdraft 30.35 –

(ii) Interest on funds placed with the Company 1.99 3.96

(iii) Commitment Charges, Brokerage, Commission and other costs 3.33 4.03

TOTAL 789.52 820.67

59


SCHEDULE – XVIII For the year ended For the year endedPAYMENTS TO AND PROVISIONS FOR EMPLOYEES March 31, 2009 March 31, 2008

(a) Salaries and Allowances * 35.88 110.68

(b) Contribution to Retirement Funds # 19.07 9.86

(c) Staff Welfare Expenses 2.09 2.72

TOTAL 57.04 123.26

* Includes

– Annuity for DA increase for retired employees 11.67 4.14

– VRS Expenditure – 40.93

– Leave Encashment 3.60 7.18

# includes Gratuity 1.29 3.93

SCHEDULE – XIXESTABLISHMENT AND OTHER EXPENSES

(a) Rent 0.74 0.19

(b) Rates and Taxes 2.84 3.88

(c) Insurance 0.25 0.10

(d) Repairs and Maintenance

– Buildings 11.07 7.99

– Others 0.56 0.32

(e) Electricity 4.11 3.70

(f) Auditors’ Remuneration 0.18 0.15

(g) Directors’ Fee 0.09 0.05

(h) Other Miscellaneous Expenses 31.23 14.76

TOTAL 51.07 31.14

SCHEDULE - XX

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

(A) SIGNIFICANT ACCOUNTING POLICIES

1. BASIS FOR PREPARATION OF ACCOUNTS

1(a) The consolidated financial statements include the accounts of theCompany and its Subsidiary Companies. The accompanying financialstatements have been prepared incorporating Accounting Policies ofthe parent company under the historical cost convention, incompliance with the relevant Accounting Standards (AS) issued byThe Institute of Chartered Accountants of India (ICAI) and incompliance with the Companies Act, 1956.

1(b) The financial accounts, unless otherwise stated, are prepared athistorical cost under the accrual method of accounting.

2. REVENUE RECOGNITION

2(a) Income on Non-Performing Assets (NPA) has been recognised, as andwhen received.

2(b) Front-end fee, Premium on pre-payment of loans/reduction in interestrates and LC Commission are accounted for on realization basis.

2(c) Dividends declared by the respective companies till the close of theaccounting year are accounted for as income.

2(d) Rental on leased assets is accounted for from the commencement date,as prescribed in the lease agreement entered with the lessees. In respectof lease transactions commenced on/or before 31.03.2001, incomefrom leases (except in case of Non-Performing Assets) is recognisedon the basis of implicit rate in the lease to the net investmentoutstanding on the lease over the primary lease period.

2(e) The fee receivable for managing the Venture Capital Fund on behalfof UTI is taken on annual basis. However, the performance relatedfee, which is determined at the conclusion of the scheme will beaccounted for at the time of winding up of the scheme.

2(f) Broking Income is recognised on the basis of settlement date oftransactions.

2(g) Interest earned on fixed income bearing securities is accounted foron accrual basis.

2(h) Income from Merchant Banking/Loans Syndication Fee is recognizedwhen the right to receive the income is established.

2(i) Depository Services income are recognised on the basis of agreementsentered into with clients and when the right to receive the income isestablished.

2(j) Insurance Commission from Agency business is booked upon actualreceipt of commission from the principal agent.

2(k) Commission from selling of Mutual Funds is booked upon actualreceipt of commission from Asset Management Company.

2(l) Income by way of fee for project advisory and execution services isrecorded on the accrual basis as per services rendered pursuant tothe specific agreements.

2(m) Income from factoring services are accounted on accrual basis exceptin the case of non performing assets where income is accounted onrealization.

2(n) Income on project consultancy, entrepreneurship developmenttrainings etc. under the Grants in Aid/and similar other programmesawarded by the Central/State Governments are accounted for onprorata basis.

2(o) Factored Debts purchased are included under Current Assets asSundry Debtors. The unpaid balance of the price of the debts factoredand due to the clients on collection is included under the CurrentLiabilities as contractual obligation.

3. STOCK - IN - TRADE

3(a) The assets acquired due to devolvement are treated as stock-in-trade.Stock-in-trade is valued at lower of cost and quoted value, computedscrip-wise. Provision is made for diminution arising therefrom. Thefront-end fee, underwriting commission and commitment fee receivedin respect of devolvement is reduced from the cost of relatedinvestments.

3(b) Stock-in-trade comprises land with or without removable structureincluding existing/added boundary walls, Land and Building/Residential Complex, Build up Floor space acquired/purchased fordevelopment and/or for sale, other removable/disposable assetsexisting thereon and capable of separate sale. These are valued atlower of cost or net realizable value, costs are determined by addingall considerations/cost attributable to purchase/acquisition, and otherexpenses incurred thereto.

4. INVESTMENTS

4(a) Investments are classified under current and long term categories andvalued in accordance with the Reserve Bank of India Guidelines andAccounting Standard-13 on ‘Accounting for Investments’ issued byThe Institute of Chartered Accountants of India.

(i) ‘Long term Investments’ are carried at acquisition/amortised cost.A provision is made for diminution other than temporary on anindividual basis.

(ii) ‘Current Investments’ are carried at the lower of cost or fair valueon an individual basis. However, appreciation if any, within thecategory, is available for set off.

4(b) Security Receipts issued by an Asset Reconstruction Company (ARC)/Securitisation Company (SC) are valued in accordance with RBIGuidelines. Accordingly, the net asset value obtained from the ARCis reckoned for valuation of such investments. Appreciation in thevalue, if any, is ignored and depreciation is provided for.

4(c) The front-end fee/underwriting commission/commitment fee receivedin respect of devolvement of underwriting and direct subscription isreduced from the cost of related investments.

4(d) Surplus on sale of investments is net of losses thereon.

5. FOREIGN EXCHANGE TRANSACTIONS

5(a) The expenses and income in foreign exchange are accounted for atthe rates prevailing on the date of transactions/at the forward rate, ifbooked, for such transaction.

60


5(b) Assets and liabilities held in foreign currencies and accrued incomeand expenditure in foreign currencies are translated into IndianRupees at the rates advised by Foreign Exchange Dealers Associationof India (FEDAI) prevailing towards the close of the accountingperiod. Gains/losses, if any, on valuation of various assets andliabilities are taken to Profit & Loss Account.

6. FIXED ASSETS AND DEPRECIATION

6(a) Fixed Assets are carried at cost (including capitalized interest) lessaccumulated depreciation. Accumulated depreciation on assets inrespect of lease transactions commenced on or before 31.03.2001 isadjusted for the balance in the ‘Accumulated Lease EqualizationAccount’.

6(b) Depreciation on assets given on lease is provided on Straight LineMethod at the rates prescribed under Schedule XIV to the CompaniesAct, 1956 or over the primary period of lease of assets, whichever ishigher.

6(c) Depreciation in respect of office building and certain other assets atNehru Place, New Delhi, is provided on Straight Line Method and onother assets on the Written Down Value Method at the rates prescribedunder Schedule XIV to the Companies Act, 1956.

6(d) Depreciation on increase in value of fixed assets due to revaluation isprovided on straight-line basis over the balance useful life of assetand adjusted out of revaluation reserve.

6(e) Art works capitalized under Furniture and Fixtures are not beingdepreciated.

6(f) Leasehold Land is amortized over the lease period.

6(g) In the case of IFCI Factors, intangible assets are valued at cost lessaccumulated amortization and any impairment lossses. Expenditureon major software products is written off over a period of five years.

6(h) In the case of IFCI Financial Services, intangible assets are recognizedif they are separately identifiable and the Company controls the futureeconomic benefits arising out of them. All other expenses on intangibleitems are charged to the profit and loss account. The computersoftware which is identified as intangible assets and has beenamortized at the rate of 40% following WDV method.

The consideration paid for non-compete fee to Managing DirectorSmt Chandra Ramesh is identified as intangible assets and has beenamortized as per terms of the non-compete agreement at straight linebasis.

7. PROVISIONS/WRITE OFF AGAINST LOANS AND OTHER CREDITFACILITIES

7(a) All credit exposures are classified into performing and non-performingassets (NPAs) as per the Reserve Bank of India Guidelines. Further,NPAs are classified into sub-standard, doubtful and loss assets basedon the criteria stipulated by RBI. Provisions on standard assets aremade as per the approval of the Board. Provisions are made on sub-standard and doubtful assets at rates prescribed by RBI. Loss assetsand unsecured portion of doubtful assets are provided/written off asper the extant RBI Guidelines. Additional provisions are made againstspecific non-performing assets over and above what is stated above,if in the opinion of the management, increased provisions arenecessary.

7(b) For restructured/rescheduled assets, provision is made in accordancewith the guidelines issued by RBI.

7(c) Recovery against debts written off/provided for is credited to revenue.Income is recognized where amounts are either recovered and/oradjusted against securities/properties or advances there-against or areconsidered recoverable in terms of Reserve Bank of India Guidelines.

7(d) The purchase and sale of NPAs is accounted as per guidelinesprescribed by RBI.

7(e) The provisioning for doubtful Loans & Advances of IFCI VentureCapital Funds Ltd is done as per the prudential norms laid down bythe Reserve Bank of India for asset classification as applicable toNBFCs.

7(f) Loans/debts, which in the opinion of the Company, based on thepresent available information, are fully irrecoverable, are written off.

7(g) Factored debts are classified into performing and non performingassets in terms of guidelines laid down by the Reserve Bank of India.Provision for factored debts is made in accordance with the guidelineslaid down by Reserve Bank of India.

8. GRANTS RECEIVED FROM GOVERNMENT OF INDIA UNDERINTEREST DIFFERENTIAL FUND (IDF)

Grants received from Government of India under Interest Differential Fund(IDF) is of a capital nature and to be utilized for specified purposes forpromotional activities of Industrial Development. Accordingly, the moneyso received, net of expenditure for the approved purposes is shown under‘Reserves and Surplus’ in the Balance Sheet. The amounts invested and

loans made out of the fund for approved purposes are shown under‘Investments’ and ‘Loans’ respectively. The interest/dividend/other incomeearned and profit on sale of investments are treated as income of theCompany.

9. MISCELLANEOUS EXPENDITURE

9(a) Expenses on issue of Shares and Bonds are charged as per guidelinescontained in Accounting Standard-26 - “Intangible Assets”.

9(b) Voluntary Retirement Scheme (VRS) expenses are charged off as andwhen incurred.

10. EMPLOYEE BENEFITS

10(a) Monthly contribution to the Provident Fund being in the nature ofdefined contribution is charged against revenue. The fund isadministered through duly constituted and approved administrators.

10(b) The Company had a defined benefit employees retirement scheme inthe form of pension. Consequent upon implementation of newcompensation structure for existing employees during the year, theTrustees have entrusted the administration of cumulative accruals tothe fund to Life Insurance Corporation of India (LICI) by enteringinto a Group Superannuation Cash Accumulation Scheme, providingfor defined contribution in lumpsum for past service and definedmonthly contribution by employer and/or employee and, thus,freezing the liability of IFCI. Accordingly, the contribution determinedin respect of employees opting for the same based on the extant rulesviz. period of service rendered in IFCI; applicable pension regulationsand directions communicated by IFCI on the date of switching overto LICI has been deposited with LICI. LICI shall be maintaining theindividual accounts in respect of the employees who have opted forthe same and for whom defined contribution has been remitted.Employees shall be opting for the annuity/withdrawal withcontribution standing to their credit on their ceasing to be inemployment of IFCI.

The existing pension optees shall, however, continue to be governedby the provisions of scheme in operation at the time of their retirementand are accordingly entitled to DA relief and family pension as andwhen due. The contribution made on account of same is charged toAccounts as and when due.

10(c)The Company has a defined benefit employees scheme in the form ofGratuity. The Trustees of the scheme have entrusted the administrationof related fund to Life Insurance Corporation of India (LICI). Expensefor the year is determined on the basis of actuarial valuation of theCompany’s year-end obligation in this regard and the value of yearend assets of the scheme. Contribution is deposited with LICI basedon intimation received by the Company.

10(d) The Company has a post retirement medical benefit scheme foremployees and their dependants subject to certain limits forhospitalization and normal medical treatment. The same is chargedagainst revenue as and when incurred.

10(e)Voluntary Retirement Scheme expenditure is also charged againstrevenue as and when due.

10(f) IFCI Venture Capital Funds Ltd has a policy for gratuity with LIC.The premium paid to LIC is debited to Profit & Loss Account eachyear.

11. TAXATION

Tax Expenses comprises of current & deferred income tax and fringe benefittax. Current income tax and fringe benefit tax is measured at the amountexpected to be paid to the tax authorities in accordance with the IncomeTax Act. Deferred Tax is recognized, subject to consideration of prudence,on timing differences, being difference between taxable income andaccounting income/expenditure that originate in one period and are capableof reversal in one or more subsequent year(s). Deferred taxes are reviewedfor their carrying values at each balance sheet date.

(B) NOTES ON THE ACCOUNTS

1(a) The consolidated financial statements comprise the individual financialstatements of IFCI Ltd and its following subsidiaries as on 31.03.2009 andfor the year ended on that date:

Name of the Subsidiary Proportion of OwnershipInterest (%)

IFCI Financial Services Ltd (IFIN) 76.08

IFCI Venture Capital Funds Ltd (IVCF) 94.58

IFCI Infrastructure Development Ltd (IIDL) 100.00

IFCI Factors Ltd (IFL) 99.74

MPCON Ltd 66.06

IFCI Commodity Ltd* 100.00

All the subsidiaries are incorporated in India

* Wholly owned subsidiary of IFCI Financial Services Ltd formed during the year

61


1(b) The following associate companies are considered in consolidation based

on equity method as provided in AS-23 and the Company’s ownership

interest therein are as under:

Name of the Associate Proportion of Ownership

Interest (%)

Tourism Finance Corporation of India Ltd 31.50

Assets Care Enterprise Ltd 37.91

HARDICON Ltd 26.00

Himachal Consultancy Organisation Ltd 36.75

North India Technical Consultancy Organistion Ltd 26.00

Investments as on March 31, 2009 are as under: (Rs. crore)

Particular TFCI ACE HARDI HIM NIT

CON CON CON

Original Cost of Investments 50.44 3.48 0.03 0.07 0.02

Accumulated share in profit at the

beginning of the year 19.94 0.30 0.03 0.24 0.07

Acquired during the year 7.36 3.85 – – 0.04

Share of profit for the year 9.12 0.82 0.08 0.07 0.01

Adjustment of goodwill for the year 2.76 0.02 – 0.01 0.05

Carrying cost of investments 89.62 8.47 0.14 0.39 0.19

2(a) Contingent Liabilities not provided for in respect of:

(Rs. crore)

As at 31.03.2009 31.03.2008

(i) Interest tax/Sales tax/Property tax/

Trade tax pending in appeals based

on judicial pronouncement and/or

legal opinion and other matters. 4.21 2.68

(ii) SEBI Turnover Based Fee – 0.48

(iii) Guarantees issued

– Foreign Currency – 2.83

– Indian Currency 187.90 190.42

(iv) Performance Guarantees issued 0.62 –

(v) Claims not acknowledged as debts 46.92 46.58

(vi) Assets sold with recourse 2.88 8.40

(vii) The Company is contesting demands (net of provisions of Rs.19.30 crore)

of Rs.186.92 crore (Previous Year - Rs.170.82 crore), raised by Income

Tax Authorities at various levels. It includes demand of Rs.23.72 crore

on issues, which have been restored to Assessing Officer for

re-examination. In view of various judicial pronouncements and legal

opinions in respect of issues decided in favour of/against IFCI, no

provision is considered necessary. The demand, however, stands

deposited with Income Tax Authorities by way of Advance tax (including

Tax Deducted at Source).

2(b) Estimated amount of contract (including lease contract) remaining to be

executed on capital account (net of advances) as at 31.03.2009 – Rs.46.37

crore (Previous Year – Rs.6.21 crore).

3. The financial statements of IFCI Venture Capital Funds Ltd do not include

the assets and liabilities of Private Equity/Venture Funds being managed

by it as the same are separate entities.

4. Other Loans & Advances includes Bid Advance of Rs.15.76 crore, being

the amount(s) deposited with the Court for purchasing auction assets of

sick companies through bid awarded in favour of IVCF by the Hon’ble

Court of Punjab, Haryana and Himachal Pradesh. IVCF has already taken

possession of these assets.

Subsequently, IVCF has also received an advance of Rs.17.29 crore for

eventual sale of these assets to IFCI Infrastructure Development Ltd.

5. The Company has been granted exemption as on March 31, 2009 by the

Government of India, Ministry of Corporate Affairs, under Section 211(4)

of the Companies Act, 1956, regarding the following requirements of

Schedule VI of the Companies Act, 1956:

i) Company-wise details of investments where the market value in

case of quoted investments and cost in case of unquoted investments

in any particular company not exceeding Rs.2 crore each

ii) Age-wise Classification of Sundry Debtors

The accounts have been prepared in accordance therewith.

6. The Company has been granted exemption as on March 31, 2009 by the

Ministry of Finance, Department of Corporate Affairs, under Section 212(8)

of the Companies Act, 1956, regarding attachment of the Balance Sheet of

Subsidiaries. Requisite details requiring disclosure in terms of the exemption aregiven as under:

7. The stakeholders of IFCI in FY 2002-03 had approved the package forrestructuring of debt/liabilities, inter alia, providing for release of Rs.5,220crore (comprising Rs.3,604 crore towards principal and Rs.1,616 croretowards interest over future years on liabilities taken over/to be servicedby Govt. of India) as Grant. Government of India released Rs.2,932.31 crore,comprising Rs.523 crore as loan (FY 2002-03) and Rs.2,409.31 crore(FY 2003-04 to FY 2006-07) as Grant. The amount of Rs.2,409.31 crorereceived as Grant in FY 2003-04 to 2006-07 comprised of Rs.1,606.31 croretowards principal and Rs.803 crore towards interest. Out of Rs.1,606.31crore received towards principal, Rs.1,359 crore (FY 2003-04) wasaccounted as extra-ordinary income and Rs.247.31 crore (FY 2004-05 toFY 2006-07) as Restructuring Reserve in the Reserves & Surplus A/c andthereafter transferred to Profit & Loss A/c, as per the guidelines conveyedby RBI. The amount of Rs.803 crore received towards interest was reducedfrom the cost of borrowings in respective years. In view of GoI letter datedDecember 12, 2007, stating that it would assist IFCI Ltd in case such asituation arises, no Grant has been received in FY 2007-08 and 2008-09.

8. The bonds guaranteed by Govt. of India of Rs.2,468.15 crore include bondsof Rs.1,187.64 crore which have been rolled over for 10 years from therespective due dates in line with the minutes of meetings of stakeholders,held on November 26, and December 2, 2002. Government of India hasbeen requested to extend the guarantee for the rolled over period.

9(a) Transfer of equivalent amount to Capital Redemption Reserve Account inrespect of Preference Shares of Rs.20 crore redeemed in the FY 2001-02,was complied with in FY 2007-08. However, the Company’s applicationto the Regional Director, Kanpur for compounding is yet to be disposed offby the authorities.

9(b) During the current year, Preference Shares of Rs.82.035 crore have beenredeemed as per restructured terms on 01.04.2008 and necessary amounthas been transferred to the Capital Redemption Reserve Account from Profitand Loss Account.

10(a) Govt. of India has the option of converting the debentures, as shown at ‘A’of Schedule III, wholly or partly into fully paid equity shares of IFCILimited, at par, at any time during the currency of debentures subject tocompliance with provisions of SEBI guidelines, in respect of preferentialallotment. IFCI also has the right to redeem the convertible debenturesissued to Govt. of India, fully or partly, at par, at any time after expiry offive years from the date of the issue with prior approval of RBI.

10(b) During the Financial Year 2007-08, Zero Coupon Optionally ConvertibleDebentures (ZCOCDs) amounting to Rs.1,323.99 crore held by Public SectorBanks and Financial Institutions were converted into equity shares of theCompany. LIC had, however, stated that they would convert only as muchof their ZCOCDs into equity as would maintain their shareholding at 8.39%post conversion of ZCOCDs. Accordingly, the shareholders at the AGMheld on September 12, 2008 had approved reduction of share capital foraligning the stake of LIC to 8.39% as requested by LIC. The order of theHigh Court of Delhi passed on February 26, 2009 for reduction of EquityShare Capital and minutes forming part of the petition have been registeredby Registrar of Companies on April 15, 2009. The reduction in Equity ShareCapital is effective from the date of registration.

10(c) The Optionally Convertible Debentures held by LIC and GoI do not havespecific terms of conversion.

11. The Company has availed loans of Rs.300 crore (Previous Year-Rs.300 crore)against security of cash flow/negative lien against certain identified assets.

12. As directed by Reserve Bank of India, the assets and liabilities in foreigncurrency have been valued as per Foreign Exchange Dealers Association ofIndia Guidelines.

13. Profit for the current year is less by Rs.0.12 crore (Previous Year-Rs.0.99crore) due to following of FEDAI for revaluation of outstanding swapcontracts vis-à-vis Accounting Standard-11, issued by The Institute of

IFIN IVCF IIDL IFL MPCON

Year ended March 31 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

Capital 9.07 6.90 34.11 7.85 228.63 2.00 79.36 20.00 0.53 0.20

Reserves 9.43 6.58 33.37 7.10 0.50 0.01 18.96 4.07 1.63 1.12

Total Assets 20.25 14.31 85.33 27.17 230.54 2.00 148.74 34.25 10.58 7.87

Total Liabilities 1.75 0.83 17.85 12.22 1.41 0.01 50.42 10.18 8.42 6.55

Investments 2.30 – 10.66 1.41 – – – – 0.09 0.08

Turnover (incl. PriorPeriod Income) 5.52 3.64 7.94 3.67 4.16 0.05 10.52 3.24 7.09 6.15

Profit before Taxation 0.63 2.38 3.39 1.37 0.76 0.01 4.24 0.90 0.80 0.74

Provision for Taxation 0.41 0.76 0.86 0.16 0.27 – 1.46 0.32 0.27 0.25

Profit after Taxation 0.22 1.62 2.53 1.21 0.49 0.01 2.78 0.58 0.53 0.49

Proposed Dividend(incl. CDT) – 0.60 – – – – – – 0.02 0.02

(Rs.crore)

62


Chartered Accountants of India (ICAI).

14. In respect of Investments in shares, debentures and security receipts in

certain cases, scrips are yet to be received.

15. In the case of IFCI Infrastructure Development Ltd:

a) Fixed Assets include Rs.0.88 crore towards the cost of Residential Flats

at Goa purchased from IFCI Ltd. The process of execution and

registration of title deeds as per applicable State Laws is yet to be

completed, although possession has been handed over.

b) Inventories include:

i) Two properties have been purchased for an aggregate consideration

of Rs.9.60 crore. The process of execution and registration of title

deeds as per applicable State Laws is yet to be completed, although

possession has been handed over.

ii) Three properties puchased through BIidding Process from financial

institutions, who acquired these assets under SARFA&ESI Act and

for which Sale Letters have been issued by the Authorized Officer,

appointed under the said Act and possession of properties also taken.

c) Capital work in progress includes costs incurred on Construction of

Service Apartiments, a project undertaken with development rights

from the site owner IFCI Ltd. Costs incurred considerations paid to

the contractors on the basis of continuing/completed stage of

construction as per work evaluation, sums paid to Architects and other

professionals in connection with the project and all other costs

incurred as are directly attributable to the Service Apartments project.

16. Other Loans and Advances include Rs.0.54 crore (Previous Year-Rs. Nil)

due from Director/Relative of Director (includes advance of Rs.0.42 crore

given to relative of Director of IFIN without obtaining the approval of

Central Government). Maximum balance during the year Rs.0.54 crore

(Previous Year-Rs. Nil).

(Rs. crore)

Year ended 31.03.2009 31.03.2008

17. Expenditure in Foreign Currencies:

– Interest on borrowings 6.88 33.67

– Other matters 0.76 0.04

7.64 33.71

18. Earnings in Foreign Currencies:

– Interest – 6.94

– Discounting and service charges 0.31 –

0.31 6.94

19. Auditors' Remuneration:

– Fee (including Service Tax) 0.18 0.15

– Out of pocket expenses – –

0.18 0.15

20. Managerial Remuneration:

– Salary and allowances 1.82 0.34

– Contribution to Retirement funds* 0.18 0.03

– Perquisites 0.07 0.03

2.07 0.40

* Excluding contribution to gratutiy and leave encashment, as not determinable

individually

Note : Contribution towards Group Personal Accident Insurance Policy and Group

Gratuity Insurance cannot be ascertained since it is for the Company as a

whole.

Computation of Net Profit and Managerial Remuneration (in respect of

IFCI Ltd):

(Rs. crore)

Year ended 31.03.2009 31.03.2008

Profit before Taxation and Exceptional Items 1,010.23 2,084.59

Add: Directors' Remuneration 0.82 0.18

Add: Wealth Tax 0.04 0.06

Less: Profit on sale of fixed assets (net) (38.40) (0.49)

Net Profit as per Section 198 of the

Companies Act, 1956 972.69 2,084.34

Maximum permissible remuneration to CEO & MD/

WTD u/s 198 of the Companies Act, 1956 @10%

of the profits computed as above 97.27 208.43

Payable for the year 0.82 0.18

IFCI Financial Services Ltd. has made application to the Department ofCompany Affairs, New Delhi for managerial remuneration paid in excess ofthe limit specified in the Schedule XIII of the Companies Act, 1956. Thenecessary approval is still awaited.

21. Quantitative details of Stock-in-trade:

(Rs. crore)

31.03.2009 31.03.2008

Particulars Nos. Amount Nos. Amount

Opening Stock 2,77,930 0.03 3,77,469 0.12

Add: Purchases 1,91,850 4.09 76,463 3.08

Less: Sales 3,22,754 2.82 1,76,002 3.17

Balance at year end 1,47,026 1.41 2,77,930 0.03

22. The Gross Block of Fixed Assets includes Rs.595.50 crore (Previous Year-

Rs.670.23 crore) on account of revaluation of Fixed Assets carried out in

past. Consequent to the said revaluation, there is an additional charge of

depreciation of Rs.9.75 crore (Previous Year-Rs.10.14 crore) and an equivalent

amount has been withdrawn from Revaluation Reserve and credited to Profit

and Loss account.

23. Balances appearing under loans and advances (including with NSE), sundry

debtors and sundry creditors are subject to confirmation. In the opinion of

the management the same are good and recoverable.

24. There are no Micro and Small Enterprises, to whom the Company owes dues,

which are outstanding for more than 45 days as at March 31, 2009. This

information as required to be disclosed under the Micro, Small and Medium

Enterprises Development Act, 2006 has been determined to the extent such

parties have been identified on the basis of information available with the

Company.

25. Details of investments purchased and sold/redeemed during the year ended

March 31, 2009 are enclosed as Annexure with IFCI’s stand alone Balance

Sheet.

26. There are no material prior period items included in Profit & Loss A/c required

to be disclosed as per Accounting Standard-5 issued by The Institute of

Chartered Accountants of India (ICAI) read with RBI Guidelines.

27. During the year, Chennai based company C.R. Finance and Securities Private

Limited (CRFS) got merged with IFCI Financial Services Ltd. The Scheme of

Amalgamation and Merger of C.R. Finance and Securities Private Limited

into IFCI Financial Services Limited has been approved by the Hon’ble High

Courts of New Delhi and Chennai with effect from the appointed date defined

in the scheme. As per the Scheme, the entire undertaking of CRFS including

all its assets and liabilities stood transferred/deemed to be transferred to and

vested in the IFIN.

The appointed date was April 1, 2008 and effective date for scheme was

March 26, 2009. The current results includes performance of CRFS, which

has been amalgamated with the IFCI Financial Services Limited during the

current financial year.

Merger has been accounted for under the Pooling of Interest method as

prescribed by Accounting Standard-14 on Accounting for Amalgamation

issued by The Institute of Chartered Accountants of India. Accordingly the

assets, liabilities and reserves of CRFS have been taken over at their book

values and the excess value has been credited to General Reserve, by Rs.0.83

crore as specified in the Scheme of Merger.

As per the Scheme, 0.7233 equity shares of face value of Rs.10/- each (fully

paid up) of IFIN against every one equity share of face value of Rs.10/- each

(fully paid up) of CRFS were required to be allotted to shareholders of CRFS

as a purchase consideration. Accordingly, 21,69,900 equity shares of IFIN

have been allotted to the equity shareholders of CRFS.

The merger expenses amounted to Rs.0.10 crore have been adjusted against

the General Reserve.

28. To comply with the Accounting Standard-14 on Accounting for

Amalgamation issued by The Institute of Chartered Accountants of India,

the method of depreciation followed by C. R. Finance & Secutities Pvt Ltd

(Amalgamating Company) has been changed from SLM method to WDV

method to ensure the uniform accounting policy in line with the policy

followed by the IFCI Financial Services Ltd. Had there been no change in the

accounting policy, the profit would have been increased by Rs.0.06 crore.

29. Defined Benefit Plans/Long Term Compensated Absences - As per Actuarial

Valuations as on March 31, 2009 and recognized in the financial statements

in respect of Employee Benefit Schemes:

63


(Rs. crore)

Gratuity Leave

Funded Encashment

Un-funded

I. Components of Employer Expense




4. Curtailment Cost/(Credit) – –

5. Settlement Cost/(Credit) – –

6. Past Service Cost – –

7. Actuarial (gain)/loss recognized 0.63 –

8. Expense Recognized in Statement of Profit/Loss 0.95 3.69

II. Actual Returns for the year ended March 31, 2009 0.65 –

III. Net Asset/(Liability) recognized inBalance Sheet as at March 31, 2009

1. Present Value of Defined Benefit Obligation 7.06 –

2. Fair Value on Plan Assets 7.39 –

3. Status (Surplus/Deficit) (0.35) –

4. Unrecognised Past Service Cost – –

5. Net (Asset)/Liability recognized in Balance Sheet (0.19) –

IV. Change in Defined Benefit Obligations (DBO)during year ended March 31, 2009

1. Present Value of Obligation atthe beginning of the year 5.82 5.99



4. Curtailment cost – –

5. Settlement Cost – –

6. Plan Amendments – –

7. Acquisitions – –

8. Actuarial (gain)/loss on Obligations 0.88 –


10. Present Value of Obligation at end of the year 7.06 8.71

V. Change in Fair Value of Assetsduring the year ended March 31, 2009

1. Fair Value of Plan Asset atthe beginning of the year 5.73 –

2. Acquisition Adjustment – –


4. Actuarial (gain)/loss on Plan Asset 0.25 –

5. Contributions 1.36 –


7. Fair Value of Plan Asset at the end of the year 7.41 –

VI. Actuarial Assumptions

1. Mortality Table LIC 1994-96

2. Early Retirement & Disablement Age Related

3. Discount Rate 8.00% 8.00%

4. Inflation Rate 7.00% 5.00%

5. Return on Asset 8.00%

VII. Major Category of Plan Assets as a %of the Total Plan Assets as at March 31, 2009

1. Government Securities 15.61%

2. Special Deposit Scheme – –

3. High Quality Corporate Bonds – –

4. Insurance Companies 84.39% –

5. Cash & Cash Equivalents – –

30. As more than 90% of revenue for the Company comes from a single

segment of financing, segment reporting as required under Accounting

Standard-17, issued by The Institute of Chartered Accountants of India

(ICAI) is not applicable to IFCI.

31. Disclosure of details pertaining to related party transactions in terms of

Accounting Standard-18, issued by The Institute of Chartered

Accountants of India (ICAI) - “Related Party Disclosures” are as under:

i) The details of related party transactions undertaken by the Company

during the year are summarised as follows:

Related Party Relationship

Assets Care Enterprise Ltd (ACE) Associate

Tourism Finance Corporation of India (TFCI) Associate

HIMCON Ltd Associate

NITCON Ltd Associate

HARDICON Ltd Associate

(Rs. crore)

Type of Transaction ACE TFCI HIM NIT HARDI

(year ended 31.03.2009) CON CON CON

Infusion of Equity 3.77 7.36 – 0.04 –

Rent & Maintenance

received by IFCI 0.18 0.57 – – –

Salaries/Other Estt. Exp.

paid by IFCI for employees

deputed by IFCI, recovered/

recoverable from them 0.19 – – – –

Employees deputed by IFCI

as at 31.03.2009 (No.) 1 – – – –

Employees posted by IFCI

as at 31.03.2009 (No.) 1 – – – –

Professional Fee paid by IFCI – – 0.07 0.03 0.05

ii) Key Managerial Personnel of the Company during the year:

– Shri Atul Kumar Rai, Chief Executive Officer & Managing Director

– Shri Sujit K Mandal, Whole Time Director (w.e.f. 01.11.2008)

32. Earnings per share (EPS)

(Rs. crore)

For the year ended 31.03.2009 31.03.2008

I. Computation for Basic EPS

(a) Profit Computation for Equity Shareholders



Net profit for Equity Shareholders 657.73 1,012.33

(b) Weighted Average Number of EquityShares outstanding during the year 76,24,13,497 66,40,31,855

II. Computation for Diluted EPS

(a) Profit Computation for EquityShareholders (incl. potential shareholders)



Add: Interest on Convertible Debentures 35.05 35.05

Net profit for equity shareholders(incl. potential shareholders) 692.78 1,047.37

(b) Weighted Average Number of EquityShares outstanding during the year incl.Convertible Debentures held by LIC/GoIassuming conversion priceas per SEBI Guidelines 150,16,94,913 115,23,42,213

III. Earnings Per Share(Weighted Average, not annualised)

Basic (Rs.) 8.63 15.25

Diluted (Rs.) 4.61 9.09

33(a)Provisions of Accounting Standard-19, issued by The Institute of CharteredAccountants of India (ICAI) - “Leases” are not applicable as the Companyhas not entered into leasing transaction on or after April 01, 2001.

33(b) (i) The Company has entered into lease agreement for Office premises attwo centers. Some of the significant terms and conditions of thearrangements are:

• Agreement may generally be terminated by either party on servinga notice period.

• The lease arrangements are generally renewed on expiry of leaseperiod subject to mutual agreement.

• The Company shall not sublet, assign or part with the possessionof the premises without prior written consent of lessor.

(ii) Rent in respect of above is charged to Profit & Loss Account.

(iii) The year-wise break up of future minimum lease payments in respectof leased premises are as under:

(Rs. crore)

Particulars 2008-09 2007-08

Minimum Lease payments duringFY 2008-09 (in r/o IFCI Ltd)

a) Not later than one year 0.14 –

b) Later than one year but not later than five years 0.10 –

c) Later than five years – –

34. Current Tax represents primarily Minimum Alternate Tax (MAT), as reducedby the MAT Credit Entitlement, which, the Company is confident, that itwould be in position to utilize against normal tax within the periodspecified under Income Tax Act. 1961.

64


35. In terms of Accounting Standard-22, issued by The Institute of CharteredAccountants of India (ICAI) - “Accounting for Taxes on Income”, DeferredTax Asset as at March 31, 2009 and March 31, 2008 works out as under:

(Rs. crore)

As at 31.03.2009 31.03.2008

Unabsorbed Business Loss 251.03 358.50

Unabsorbed Depreciation 58.07 58.07

Provision against Loans/Advances & other Assets 1,463.14 1,673.33

Timing difference in Depreciable Assets (57.34) (65.53)

Other Timing Differences 11.97 13.05

Deferred Tax Assets (Net) 1,726.79* 2,037.42#

* Includes Rs.0.08 crore on account of amalgamation of IFIN with C.R.Finance & Securities Pvt Ltd

# Includes opening balance of IFCI Factors that became subsidiary duringthe year

For the current year, Deferred Tax charge of Rs.310.55 crore has been chargedin the accounts.

36. Fixed Assets possessed by the Company are treated as ‘Corporate Assets’and not ‘Cash Generating Units’ as defined by Accounting Standard-28issued by The Institute of Chartered Accountants of India (ICAI) -“Impairment of Assets”. As on March 31, 2009, there were no events orchanges in circumstances which indicate any impairment in the assets.

37. Movement in Provisions, in terms of Accounting Standard-29, issued by

The Institute of Chartered Accountants of India (ICAI) - “Provisions,Contingent Liabilities and Contingent Assets” in respect of IFCI is given asunder:

(Rs. crore)

Opening Addition/ Deduction/ ClosingBalance Transfer Transfer Balance

Leave Encashment 5.55 2.80 – 8.35

Income Tax 270.96 111.37 – 382.33

Fringe Benefit Tax 1.36 4.77 – 6.13

Assets 4,894.09 105.27 723.67 4,275.69

38. The additional information in respect of IFCI in terms of RBI Circular isgiven in IFCI’s stand alone Balance Sheet.

39. Total value of outstanding Currency Swaps was US$ 9.45 million againstINR and EUR 40.80 million against USD (Previous Year-US$ 11.5 millionagainst INR and EUR 29.9 million against USD) equivalent to Rs.323.98 crore(Previous Year-Rs.236.25 crore), whereas total value of outstanding ForexDeals other than Currency Swaps was USD 3.5 million against INR and EUR16 million against USD equivalent to Rs.124.03 crore (Previous Year-US$ 10million and EUR 20 million).

40. Foreign Currency exposure that is not hedged by derivative instrument orotherwise is US$ 0.01 million and EUR 0.02 million, equivalent to Rs.0.16crore.

41. Previous year figures have been re-grouped/re-arranged wherever necessaryto conform to the current year’s presentation.

In terms of our report of even date For and on behalf of BoardFor RAY & RAYChartered Accountants

PRAKASH P MALLYA SANJEEV KUMAR JINDAL P G MURALIDHARANChairman of the Board Director Director

ANIL P VERMA USHA SANGWAN TEJINDER SINGH LASCHAR K RAGHURAMAN SHOBHIT MAHAJANPartner Director Director Director Director

K NARASIMHA MURTHY S SHABBEER PASHA ATUL KUMAR RAI SUJIT K MANDALDirector Director CEO & Managing Director Whole Time Director

Place: New Delhi JAVED YUNUS S SETHEE N K DUGGAL RUPA SARKARDated: June 27, 2009 Executive Director Chief Finance Officer Chief General Manager Company Secretary

M. No. 90408

Signatories to all Schedules I to XX

ifci annual report 2008-09

Documents