Directors Report of Indian Railway Finance Corporation Ltd.

Mar 31, 2025

Your directors have the pleasure in presenting the 38^th Annual Report of the Company along with the Audited Financial Statements, Auditor''s
Report and review of the Accounts by the Comptroller & Auditor General of India for the financial year ended 31^st March 2025.

1. Financial Highlights

(H in Crore)

Particulars	Year ended 31-03-2025	Year ended 31-03-2024
I. Revenue from operations	27,152.14	26,648.63
II. Dividend Income	0.72	0.78
III. Other income	3.55	6.51
IV. Total Revenue (I II III)	27,156.41	26,655.92
V. Expenses
Finance costs	20,495.09	20,101.47
Impairment on financial instruments	0.68	(3.93)
Employee benefit expense	13.51	11.17
Depreciation and amortization expense	5.31	9.44
Other expenses	139.82	125.66
Total Expenses	20,654.41	20,243.81
VI. Profit before tax (IV-V)	6,502.00	6,412.10
VII. Tax expense:
(1) Current tax	-	-
(2) Adjustment for Earlier Years	-	-
(3) Deferred tax	-	-
Total Taxes
VIII.Profit (Loss) for the current Year from continuing operations (VI-VII)	6,502.00	6,412.10
IX. Other Comprehensive Income	(15.67)	40.38

Revenue from operations of your Company has increased
by H 503.51 Crore from H 26,648.63 Crore in 2023- 24 to
H 27,152.14 Crore in 2024-25, showing a growth of 1.89 %.

Profit before Tax (PBT) of your Company for the year ended 31^st
March 2025 was H 6,502.00 Crore as compared to H 6,412.11
Crore for the previous year, registering a growth of 1.40 %.

Company has not made any provision for tax in its books
pursuant to its decision to exercise the option of lower tax
rate permitted u/s 115BAA of the Income Tax Act, 1961, as
introduced by the Taxation Laws (Amendment) Ordinance,
2019 dated 20^th September, 2019. The Company''s taxable
income was nil and it did not have to pay Minimum Alternate
Tax (MAT) with reference to its Book Profit. MAT payable u/s
115 JB was outside the ambit of the Section 115 BAA.

Thus, on adoption of Section 115 BAA of the Income Tax Act,
1961, the Company was outside the scope and applicability

of MAT provisions and there was a zero-tax liability in the
financial year 2024-25.

Profit After Tax for the year ending 31^st March 2025 was
H 6,502.00 Crore as compared to H 6,412.11 Crore for the
previous year, registering a growth of 1.40 %.

Earnings Per Share (EPS) for the financial year ended March
31, 2025, was H 4.98 per share of face value of H 10/- each, as
against EPS of H 4.91 per share in the previous financial year.

Net worth of the Company as on March 31, 2025 stands at
H 52,667.77 Crore

2. Dividend

Your Company seeks to strike a judicious balance between the
return to the shareholders and retaining a reasonable portion
of the profit to maintain a healthy financial leverage with a view
to supporting and sustaining future borrowings and growth.

During FY 2024-25, the Board has declared the following
interim dividends:

• First Interim Dividend of 8% (i.e., H 0.80 per equity share
having face value of H 10/- each for F.Y. 2024-25) at the
Board meeting held on 04^th November 2024, which was
paid on 27^th November 2024.

• Second Interim Dividend of 8% (i.e., H0.80 per equity
share having face value of H 10/- each for F.Y. 2024-25)
at the Board meeting held on 17^th March 2025, which
was paid on 27^th March 2025.

Accordingly, the total interim dividend for the financial year
2024-25 amounts to H 1.60 per equity share of H10/- each.
The total dividend paid during the FY 2024-25 amounts to
H 3,005 Crore (Final Dividend FY 23-24, 1^st Interim Dividend
and 2^nd Interim Dividend FY 24-25).

As per regulation 43A of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (the “Listing
Regulations”), the top 1000 listed companies shall formulate
a Dividend Distribution Policy.

The company has duly adopted the policy to set out the
parameters and circumstances that will be taken into account
by the Board in determining the distribution of dividend
to its shareholders and/or retained profits earned by the
Company. The policy is also available on the Company''s
website at https://irfc.co.in/sites/default/files/inline-files/
DIVIDEND%20DISTRIBUTION%20POLICY 0.pdf.

The details of unpaid/unclaimed amount of dividend as on 31^st
March 2025 is as follows:

Financial Year	Type of Dividend	Amount J in Crore)
2020-21	Interim	0.581
2021-22	Interim	0.376
2021-22	Final	0.277
2022-23	Interim	0.306
2022-23	Final	0.261
2023-24	Interim	0.282
2023-24	Final	0.228
2024-25	Interim	0.237
2024-25	2nd Interim	0.383

Further, Members are requested to note that, dividends if not
encashed for a consecutive period of seven (7) years from
the date of transfer to Unpaid/Unclaimed Dividend Account
of the Company, are liable to be transferred to the Investor
Education and Protection Fund (“IEPF”) authority. The shares
in respect of such unpaid/unclaimed dividends are also liable
to be transferred to the demat account of the IEPF Authority.
In view of this, Members are requested to claim their dividends
from the Company, within the stipulated timeline.

Details of Unpaid/Unclaimed Dividend is also available
on Company''s website at https://irfc.co.in/investors/
financial-information.

3. Grant of "NAVRATNA” Status

IRFC has consistently demonstrated financial stability,
operational efficiency, and strategic foresight, making it one of
the trusted financing arm of the Railways. During Q4, 2024¬
25, the Government through Department of Public Enterprise
(DPE) under the Ministry of Finance has conferred IRFC with
the Prestigious “Navratna” Status. . Now, IRFC is the 26^th
Navratna CPSE amongst the CPSEs.

4. Reserves

As per Section 45 - IC of the RBI Act, 1934, all NBFCs are
required to create a Reserve equivalent to 20% of the net
profit before declaration of dividend.

Accordingly, 20% of the net profit of the Company amounting
to H 1,300.40 Crore had been transferred to Reserve Fund u/s
Section 45 - IC of RBI Act, 1934 during the FY 2024-25.

5. Share Capital

As on 31^st March 2025, the Authorized Share Capital of the
Company was H 25,000 Crore, consisting of 25,000,000,000
Equity Shares of H 10/- each. The issued and paid-up share
capital of the Company was H 13,068.506 Crore, consisting of
13,068,506,000 Equity Shares of H 10/- each.

As on 31^st March 2025, 86.36% of the paid-up equity share
capital of the Company comprising of 11,286,437,000 Equity
Shares of H 10/- each was held by President of India acting
through administrative ministry i.e., Ministry of Railways
(MoR). The balance 13.64% of paid-up equity share capital
was held by public shareholders. During the period under
review, there was no change in authorized and paid-up share
capital of the Company.

Based on market capitalization, the Company ranked
among the top 100 listed companies on both the National
Stock Exchange (NSE) and the BSE Limited (BSE) as on
31^st March 2025.

5.1 Policy Review

The Company continues to place strong emphasis on
maintaining a robust internal policy framework aligned with
its commitment to good governance, ethical conduct, and
regulatory compliance.

During the year under review the Company undertook a
comprehensive review of its policies to ensures that policies
remain aligned and updated in line with regulatory amendments
under the Companies Act, 2013, SEBI (LODR) Regulations,
2015, other applicable laws and regulatory provisions.

6. Independent Evaluators’ Assessment

6.1 Credit Ratings

6.1.1 Domestic:

During the financial year 2024-25, the Company''s long-term
domestic borrowing programme was awarded the highest
credit rating of “CARE AAA/Stable”, “CRISIL AAA/ Stable” and
“ICRA AAA/Stable''''. "The Company also got its short-term
borrowing programme rated, obtaining the highest rating of
“CARE A1 ”, "CRISIL A1 '''' and "ICRA A1 ”

6.1.2 International:

During the financial year 2024-25, three international credit
rating agencies - Standard & Poor''s, Moody''s and Fitch - have
awarded “BBB- with Positive Outlook”, “Baa3 with Stable
Outlook” and “BBB- with Stable Outlook” ratings respectively
to your Company. Besides, the Company obtained an issuer
specific credit rating of “BBB with Stable Outlook” from
the Japanese Credit Rating Agency. Each of the four credit
ratings is equivalent to India''s sovereign rating and is of
investment grade.

6.2. Memorandum of Understanding (MOU) with Ministry of
Railways, Government of India

The Company enters Memorandum of Understanding (MoU)
with Ministry of Railways (MoR) every year wherein Company
is evaluated on various financial and non- financial parameters.
Based on its performance, the Company has been rated
''Excellent'' by the Department of Public Enterprises (DPE) for
the year 2023-24.

The company has executed MoU for Financial Year 2024-25
with MoR on 14^th September, 2023. For leasing of Project
Assets, there is an initial Moratorium period of 5 years and
MoR is not required to pay the lease rent in moratorium period.
Further, during the moratorium period company recognises
on annual basis the finance cost as disbursement which gets
added to the AUM of the company.

During the year 2024-25, the company has accordingly
considered H14,272.72 Crores as disbursement to MoR &
H731.27 Crores to others. Basis above, company has achieved
99.96% in respect of parameter Loans Disbursed to Total
Funds Available. Further, there were no Overdue loans to
Total Loans and NPA to Total Loans. Also, Cost of raising funds
through Bonds as compared to similarly rated CPSEs/ entities
is 13 bps lower.

7. Market Borrowings during 2024-25

The Board of Directors had approved borrowing limit of
H50,000 Crore for FY 2024-25 for meeting the funding
requirement of Indian Railways, if any, new business
activities, refinancing of existing loans and for other general
corporate purposes.

During the FY 2024-25 an amount of H32,617.30 Crore
was raised for committed liabilities, refinancing of existing
loans, retiring high-cost debt and for other general
corporate purposes.

Borrowings during the year include Taxable Bonds worth
H27,240 Crore (Previous year H22,940 Crore), Rupee
Term Loans of H3,500 Crore (previous year H5,980 Crore)
and 54EC bonds of H1,877.30 Crore (previous year
H2,064.34 Crore).

The Company received approval from the Ministry of Finance
for the issuance of 54EC Capital Gain Bonds in October 2017.
In FY 2024-25, the Company mobilized H1,877.30 Crore
through 54EC Bonds.

The company had also prepaid high cost long term loan of
H 29,200 Crore from lower rate borrowings. The average cost
of incremental medium & long-term borrowing during the year
was 7.07% p.a. payable semi-annually.

8. Disbursements

Company is taking several strategic steps to diversify its lending
portfolio. During the FY 2024-25, company started funding
for projects other than MoR under its mandate of financing for
activities having forward and backward linkages with railways.

Disbursement to MoR: During the FY 2024-25, no
disbursement was made to MoR due to ''NIL'' target
allocation for the year.

Disbursement to Other than MoR: Disbursement made
were as follows:

• Disbursed H 31.27 Crore to NTPC under Finance Lease
for Bogie Open Bottom Rapid (BOBR) rakes under
General-Purpose Wagon Investment Scheme (GPWIS) of
MoR to NTPC. This was the company''s maiden project
under its business diversification plan outside MoR.

• Disbursed H 700 Crore to NTPC Renewable Energy
Limited which is having Power Purchase Arrangement
(PPA) signed with MoR for supply of green energy.

Also, during the year under review Company: -

• Has been Declared the lowest bidder to finance
H 3,167 Crore loan for Patratu Vidyut Utpadan Nigam
Limited (PVUNL), a subsidiary of NTPC to finance the
development of the Banhardih Coal Block in Jharkhand
for coal transportation through Indian Railways.

• Signed MoU with REMC Limited (JV of Indian Railways
and RITES to procure economical conventional/
Renewable power for Railways) for collaborating to
explore financing options for the Renewable Energy (RE)

projects to be awarded by REMC Limited for supply of
RE to Indian Railways as well as for collaborating for
financing Thermal/Nuclear /Renewable power projects
set up under captive model through a JV between IR and
other entities.

9. Redemption of Bonds / Repayment of Loans

During the year, the Company redeemed Bonds amounting
to H 2,554.25 Crore and External Commercial Borrowings
(ECB) of H 4,144.22 Crore. The Company also prepaid long
term loans of H 29,200 Crore during the year. The Company
continues to maintain its impeccable track record of servicing
its debt in time.

10. Internal Control Systems & their adequacy

The details are given in Management Discussion and Analysis.

11. RBI Prudential Norms

Your Company is registered as a Systemically Important
Non-Deposit Taking Non- Banking Finance Company with
the Reserve Bank of India. Being a Government NBFC, your
Company was exempted from the prudential norms prescribed
by Reserve Bank of India for NBFC-ND-SI, as contained in the
Master Directions issued vide Notification No. DNBR.008/
CGM(CDS)-2015, dated 27^th March, 2015. The exemption
was withdrawn by Reserve Bank of India from 31^st May, 2018.
However, the Company has obtained exemption from Reserve
Bank of India from the asset classification, income recognition,
credit concentration and provisioning norms on the direct
exposure to Ministry of Railways, Govt. of India vide RBI letter
dated 21^st December, 2018. The Company has also obtained
relaxation in respect of lending limit applicable to Railway
CPSEs from 20% of its owned funds to 100% of its owned
funds. As such, the Company has complied with the applicable
prudential norms.

Liquidity Coverage Ratio (LCR) Exemption:

The company has got an exemption from RBI from applicability
of Liquidity Coverage Ratio (LCR) norms.

Applicability of approvals/acknowledgements previously
given by RBI post issue of RBI Scale Based Master
Directions.

RBI has issued new Master Direction -Reserve Bank of India
(Non-Banking Financial Company -Scale Based Regulation)
Directions, 2023 on 19.10.2023 (referred as RBI Master
Directions dated 19.10.2023 as amended).

RBI has clarified all approvals/acknowledgements given under
Circulars/Directions mentioned in the repealed list as provided
in section XI of ''the new Directions'' shall be deemed as given
under ''the new Directions. Notwithstanding such repeal, any

action taken/purported to have been taken or initiated under
the instructions/guidelines having repealed shall continue to
be guided by the provisions of said instructions/guidelines.

12. Lease Arrangement with the Ministry of Railways

As you are aware, the financial relationship of the Company
with the Ministry of Railways is based on a Financial Lease
arrangement which is regulated by a standard lease agreement.

During the year, lease agreement for the project assets
funded under EBR IF 2018-19 is executed. Also, the process
to execute the lease agreement for EBR IF 2019-20 has been
initiated following the completion of the moratorium, effective
from 24^th March 2025.

13. Resource Mobilization for 2025-26

Board has authorized the Company to borrow funds amounting
to H 60,000 Crore as may be required during FY 2025-26 for
meeting the funding requirement of Indian Railways, if any,
new business activities, Committed Liabilities refinancing of
existing loans and for other general corporate purposes.

14. Management Discussion and Analysis and
Company’s Outlook for the future

Management Discussion and Analysis, forming part of the
Directors'' Report given at ANNEXURE- I.

15. Report on Corporate Governance

The Government considers good corporate governance
practices a sine qua non for sustainable business that aims
at generating long term value for its shareholders and all
other stakeholders. Accordingly, it has been laying increasing
emphasis upon development of best corporate governance
practices amongst Central Public Sector Enterprises (CPSEs).
In pursuance of this philosophy, your Company continues to
comply with the ''Guidelines on Corporate Governance for
Central Public Sector Enterprises'' issued by Government of
India, Department of Public Enterprises (DPE). Your Company''s
Equity as well as Non-Convertible Debt Securities are listed
on the stock exchanges and Company has complied with
Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015. As on 31^st
March 2025, there were 4 (four) Directors on the Board of the
Company. The Board comprises of a Chairman & Managing
Director and CEO, Director (Finance) and Two Government
Nominee Director(s). As on the date of this Report, the
Board of Directors comprised of 5 (Five) Directors, with 2
(Two) Executive Directors, 2 (Two) Non- Executive Directors
(Govt. Nominees) and 1 (One) Non- Official Independent
Director. The Company does not have the prescribed number
of Independent Directors on its Board in compliance of

the Regulation 17(1) (a) of SEBI (LODR) Regulations 2015,
specifying the composition of Board of Directors. Being CPSE,
the power to appoint Directors vests with Government of
India through Ministry of Railways (MoR) and Company has no
role to play in it. The Company has already requested MoR for
appointment of requisite number of Independent Directors.
Report on Corporate Governance is enclosed as ANNEXURE- II
forming part of this report.

16. Business Responsibility & Sustainability Report
(BRSR)

The Business Responsibility & Sustainability Report, as
stipulated under Regulation 34 (2) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015,
is given in ANNEXURE-III and forms part of this Report.

17. Corporate Social Responsibility

Activities relating to Corporate Social Responsibility (CSR)
have become an integral part of Company''s operations.

In terms of Section 135 of the Companies Act, 2013 (the Act),
read with Schedule VII thereof and Companies (Corporate
Social responsibility Policy) Rules, 2014, the Company has
constituted a CSR Committee (the “Committee”) comprising
of Chairman & Managing Director, Director (Finance) and One
Government Nominee Director as on 31^st March 2025. As per
the Act, Company is required to spend at least two (2) percent
of the average of its net profits of the immediately three
preceding financial years on CSR activities. The Department
of Public Enterprises (DPE) has also issued guidelines in this
regard which, inter alia, require the Central Public Sector
Enterprises (CPSEs) to frame a ''CSR and Sustainability Policy''.

The ''CSR and Sustainability Policy'' of the Company is in place
and the same has also been hosted on the website at https://
irfc.co.in/sites/default/files/inline-files/CSR%20POLICY.
pdf. The Company, like in the past, has undertaken activities
for CSR and Sustainable Development, details of which, are
given hereunder:

During the financial year 2024-25, the Company was required
to spend H 125.58 Crore, being 2% of its average net profits
for the last three financial years. The Company has approved
a total of 52 projects with a total outlay of H 125.58 Crore.
Whereas the amount allocated towards ongoing projects
amounting to H 124.47 Crore would be disbursed on receipt
of bills/claims from the implementing agencies in future and
the same amount has been transferred to the ''CSR Unspent
Account'' maintained with Scheduled Bank in terms of
section 135(6) of the Companies Act, 2013. The details of
CSR activities as required under the Companies Act for the
financial year 2024-25 is annexed at ANNEXURE - IV.

CSR Activities proposed for the FY 2025-26

For the financial year 2025-26, the Company would be
required to spend approx. H 128 Crore. The details of all the
projects/ activities will be provided in the next Annual Report.

18. Directors’ Responsibility Statement

As required under Section 134(3)(c) of the Companies Act,
2013, it is confirmed that:

a) In the preparation of the annual accounts for the
year ended 31^st March 2025, the applicable Indian
Accounting Standards have been followed and there are
no material departures;

b) such accounting policies have been re-drafted taking
into account the Ind-AS, judgments and estimates made
are reasonable and prudent, so as to give a true and
fair view of the state of affairs of the Company at the
end of the financial year and of the profit or loss of the
Company for that period;

c) Proper and sufficient care has been taken for maintenance
of adequate accounting records, in accordance with the
provisions of the Companies Act, 2013, for safeguarding
the assets of the Company and for preventing and
detecting fraud or other irregularities; and

d) the Annual accounts have been prepared on ''going
concern'' basis;

e) Had laid down internal financial controls to be followed
by the Company and such internal financial controls are
adequate and operating effectively;

f) Proper systems have been devised to ensure compliance
with the provisions of all applicable laws and that such
systems were adequate and operating effectively.

19. Human Resource Management

At IRFC we believe in a strong value system and best HR
practices to enhance and improve our capabilities and achieve
the organizational objectives.

As of 31^st March 2025, the total manpower of the Company
stood at 45. To strengthen the existing workforce, the
Company inducted two Executives and one Executive on
deputation during the financial year 2024-25. Women
comprised 20% of the total workforce as on 31^st March 2025.

The Company continues to maintain high level of employee
productivity and efficiency as reflected in its low overhead to
turnover ratio of less than 0.10%.

19.1 Women Employees

Your Company provides equal growth opportunities for the
women in line with Govt. of India philosophy on the subject.
Being a lean organization, where Company has 45 employees,
women representation has grown across hierarchical levels.
Thus, Women constituted 20% of its total workforce as
on 31^st March 2025. As per Govt. of India directives and
guidelines from time-to-time, IRFC ensures the welfare of
women employees.

19.2 Information under Sexual Harassment of Women at
Workplace (Prevention, Prohibition & Redressal) Act, 2013

The Company has an Internal Complaints Committee (ICC) to
examine the case related to Sexual Harassment of Women at
Workplace (Prevention, Prohibition & Redressal) Act, 2013.
The complaints received by the committee are being dealt in
line with the provisions of the Act.

Details of complaints in relation to the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013 for the year under review is as follows: -

Sr. No.	Particulars	No. of Complaints
1	Number of Complaints filed during FY 2024-25	Nil
2	Number of Complaints disposed of during FY 2024-25	Nil
3	Number of Complaints pending as on end of the FY 2024-25	Nil

19.3 Training & Human Resource Development

In order to enhance the skills, capabilities and knowledge of
employees, a well-defined Training and Development Policy
for below board level executives and non-executives is in
place. Employee training and development is an essential
element of the Company''s strategy. During the year 2024-25,
the Company imparted training to 45 of its employees through
various training programmes and workshops including inhouse
trainings. These initiatives enabled the Company to achieve
51 training man days/357 Hrs.

19.4 Employee Welfare

The Company takes care of health and well-being of its
employees by reimbursing in-patient and out-patient medical
costs, provision for leaves on medical grounds, rehabilitation
policy in case of death or permanent disability, which are
applicable for all employees.

19.5 Your Company complies with the provisions relating to
Maternity Benefit Act, 1961.

19.6 Sports activities

The Company recognises that employee engagement in
sporting activities plays a vital role in fostering harmony,
inclusiveness, and team spirit within the organisation. As part
of its employee well-being initiatives, the Company continues
to integrate sports and recreational activities into its workplace
culture to support holistic employee development and create
a more vibrant organisational environment. IRFC organized its
Annual Sports Day 2024-25 on March 28, 2025, wherein the
employees of the Company across various departments have
participated in various sports activities that fostered team
spirt and workplace camaraderie.

19.7 Grievance Redressal

To promote fair and equitable employment relationship, a
scheme for Grievance Redressal of employees is also in place
which ensures a time bound redressal of grievances.

20. Auditors
Statutory Auditor

M/s O.P. Totla & Company, Chartered Accountants, have been
appointed as Statutory Auditors by Comptroller & Auditor
General of India to audit the accounts of the Company for the
financial year 2024-25.

The Comptroller & Auditor General of India has undertaken
supplementary audit on accounts of the Company for the year
ended 31^st March 2025 and have Nil comments for the year
ended 31^st March, 2025.

Secretarial Auditor

M/s Akhil Rohatgi and Company, Practicing Company
Secretaries, were appointed as Secretarial Auditors for
carrying out Secretarial Audit of the Company for the Financial
year 2024-25. In terms of Section 204 of the Companies Act,
2013 and Rules made thereunder, they have issued Secretarial
Audit Report for the Financial year 2024-25 and the same is
annexed to this Report as ANNEXURE-V.

21. Debenture Trustees

In compliance with SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015 the details of Debenture
Trustees appointed by the Company for different series
of its bonds / debentures issued from time to time, are
given in Corporate Governance Report which is enclosed
as ANNEXURE-II.

22. Other Disclosures under the applicable provisions
of the Companies Act, 2013

22.1 Number of Meetings of the Board

The details of number of meetings of the Board are
given in Corporate Governance Report which is enclosed
as ANNEXURE-N.

22.2 Certificate of Independence by Independent Director

Independent Directors of the Company have given a
declaration that they meet the criteria of Independence, as
laid down under Section 149 (6) of the Act, SEBI (LODR)
Regulations, 2015 and DPE Guidelines on Corporate
Governance for CPSEs.

Further, the Independent Directors of the Company are
nominated / appointed by the President of India acting
through the administrative ministry, i.e., Ministry of Railways
(MoR). Accordingly, the appointing authority considers the
integrity, expertise and experience of the individual to be
nominated / appointed.

22.3 Material changes, if any, that may affect financial position
of the Company

There were no material changes and commitments affecting
financial position of the Company during the year under
review 01.04.2024 to 31.03.2025

22.4 Information in Corporate Governance Report

Information on composition, terms of reference and number
of meetings of the Board and its Committees held during the
year, establishment of Vigil Mechanism/ Whistle Blower Policy
and weblinks for familiarization Programmes of Directors,
Policy on Related Party Transactions, Remuneration paid to
Functional Directors and Key Managerial Personnel, sitting
fees to Directors and details regarding IEPF etc. have been
provided in the ''Report on Corporate Governance'', prepared
in compliance with the provisions of SEBI (Listing Obligations
& Disclosure Requirements) Regulations, 2015 and DPE
Guidelines on Corporate Governance, 2010, as amended from
time to time, which forms part of this Annual Report.

22.5 Internal financial control systems and their adequacy

The details are given in Management Discussion and Analysis.

22.6 Audit Committee

The details pertaining to the Audit Committee are included
in the Corporate Governance Report, which is enclosed
as ANNEXURE-II.

22.7 Secretarial Standards

Your Company complies with all applicable Secretarial
Standards issued by the Institute of Company
Secretaries of India.

22.8 Certificate on Corporate Governance

The requisite Certificate received from the Secretarial
Auditors of the Company, M/s Akhil Rohatgi and Company,
Practicing Company Secretaries, in respect of compliance with
the conditions of Corporate Governance as stipulated under
Regulation 34(3) read with Clause E of Schedule V of the SEBI
(LODR) Regulations, 2015, is attached as ANNEXURE-VI and
forms part of the Annual Report.

22.9 Risk Management

The details are given in Management Discussion and
Analysis. Further, the Company is having a Risk Management
Committee (“RMC”) of its directors in place, for monitoring
the integrated risks of the Company. The details pertaining to
Risk Management Committee are included in the Corporate
Governance Report, which is enclosed as ANNEXURE-II.

22.10 Risk Based Internal Audit

RBI vide its circular February 3, 2021, had mandated the Risk
Based Internal Audit (RBIA) framework for all non- deposit
taking NBFCs with asset size of H 5000 Crore and above. In
line with the RBI notification, Risk Based Internal Audit (RBIA)
policy has been formulated and approved by the Board of
Directors. RBIA will help the organization to identify the risks
and address them based on the risk priority and direction
provided by the Board. A firm of Chartered Accountant has
been appointed as an expert to assist the Risk Based Internal
Audit. The scope of RBIA is well defined and is very exhaustive
to take care of all functions and business of the Company
depending upon the risk assessment and control environment.
Based on RBIA report, steps are taken at regular intervals to
further strengthen the existing systems and procedures.

22.11 Particulars of loans, guarantees and investments

The particulars of loans, guarantees and investments have
been disclosed in the financial statements.

22.12 Transactions with related parties

The particulars of the transactions with related parties have
been disclosed in the financial statements.

22.13 Stock Options

The Company has not issued any stock options to the Directors
or any employee of the Company.

22.14 Significant and Material Orders passed by the Regulators
or Courts or Tribunals impacting the going concern status
of the Company

There are no significant and/or material orders passed by the
Regulators or Courts or Tribunals impacting the going concern
status of the Company.

22.15 Disclosure under Foreign Exchange Management Act,
1999

The Company is in compliance with the relevant provisions of
the Foreign Exchange Management Act, 1999 pertaining to
external commercial borrowing and derivatives.

22.16 Extract of Annual Return

The extract of Annual Return is given in ANNEXURE-VII which
forms part of this report. After filing of the annual return for
FY 2024- 25 with MCA, the same will be uploaded on website
of the Company at https://irfc.co.in/.

22.17 Code of Business Conduct-Declaration by CEO

Declaration by CEO on compliance of the “Code of
Business Conduct and Ethics for Board Members and
Senior Management” for the year 2024-25 is placed
at ANNEXURE-VIII.

22.18 CEO/CFO Certification

As required under Regulation 17 (8) of the SEBI (LODR)
Regulations, 2015, the Compliance Certificate as specified in
Part B of Schedule II of the said Regulation duly signed by Shri
Manoj Kumar Dubey, Chairman & Managing Director & CEO
and Shri Sunil Kumar Goel, Chief Financial Officer (CFO) was
placed before the Board of Directors in their Meeting held on
28^th April, 2025. The same is enclosed as ANNEXURE-IX.

22.19 Particulars of Employees receiving high remuneration &
other particulars of employees

Since IRFC is a Government Company, provisions of section
197 are not applicable. Hence, the details have not been given.

22.20 Deposits from public

The Company has not accepted any fixed deposits during
the period under review and the Board of Directors has
passed requisite resolution in this regard, in compliance of
RBI guidelines.

22.21 Cost Records

The Central Government has not prescribed the maintenance
of cost records for the products/services of the Company
under the Companies (Cost Records and Audit) Rules, 2014
read with the Companies (Cost Records and Audit) Amendment
Rules, 2014 prescribed by the Central Government under
Section 148 of the Companies Act, 2013. Accordingly, cost
accounts and records are not required to be maintained
by the Company.

22.22 Conservation of Energy, Technology Absorption

Pursuant to the Provision of Section 134(3)(m) of the
Companies Act, 2013, in respect of Conservation of Energy
and Technology absorption, following steps have been taken
by your Company: -

To save power, the Company purchases LED/ LCD monitors
while replacing the old monitors. Employees are encouraged
to keep their gadgets in power saving mode, wherever
possible. The Company now replaces its old electrical items,
gadgets, etc. with power efficient units. The internal lightning
of office by energy- efficient LED lights has helped to
conserve electricity.

22.23 Foreign exchange earnings & outgo

Your Company has put in place Comprehensive Risk
Management policy to manage risks associated with foreign
currency borrowings. The Company enters into hedging
transactions to cover exchange rate and interest rate risk
through various instruments like forwards and swaps. Details
of Foreign exchange earnings & outgo have been given in the
Notes to Accounts.

22.24 Expenditure on R&D

This is not applicable, as IRFC is engaged only in
financing activities.

22.25 Reporting of Frauds by Auditors

During the year under review, neither the statutory auditors
nor the secretarial auditor has reported to the audit
committee, under Section 143(12) of the Companies Act,
2013, any instance of fraud committed against the Company
by its officers or employees, the details of which need to be
mentioned in the Board''s Report.

22.26 Change in nature of Business

There was no change in the nature of business of the Company
during the financial year 2024-25.

22.27 The names of companies which have become or ceased to
be its Subsidiaries, joint ventures or associate companies

There are no Subsidiaries, joint ventures, or associate
companies during the year 2024-25.

22.28 The details of application made or any proceeding
pending under the Insolvency and Bankruptcy Code, 2016
(31 of 2016) during the year along with their status as at
the end of the financial year

There was no application made nor any proceeding pending
under the Insolvency and Bankruptcy Code, 2016 (31 of
2016) against the Company.

22.29 Details of difference between amount of the valuation
done at the time of one time settlement and the valuation
done while taking loan from the Banks or Financial
Institutions along with the reasons thereof.

There was no such instance of either settlement or loan from
Bank or Financial Institution during the year under review.

23. Compliance of MSME Guidelines

Your Company has in place, a Manual for Procurement of
Goods, Services and Works, which provides guidelines to
expedite decision making process by way of consolidating,
simplifying and streamlining the various steps to be
followed in the process of award of contracts from the
procurement of goods, works & services as well as during its
implementation on the ground.

The procurement from MSEs complies to Public Procurement
Policy during the financial year 2024-25 as placed below:

1	Total annual procurement	7.06
2	Target % age of annual procurement (Procurement of Goods & Services through MSEs)	25%
3	Total value of goods and services procured from MSEs (including MSEs owned by SC/ ST entrepreneurs)	6.77
4	Total value of goods and services procured from only MSEs owned by SC/ST entrepreneurs	0.96
5	% age of procurement from MSEs (including MSEs owned by SC/ ST entrepreneurs) out of total procurement	95.91%
6	% age of procurement from only MSEs owned by SC/ ST entrepreneurs out of total procurement	13.60%
7	% age of procurement from Women MSEs	34.52%

24. Vigilance Activities

Ministry of Railways have nominated a part time Chief
Vigilance Officer (CVO). The CVO carries out internal scrutiny
of the activities on random basis to ensure compliance with the
laid down CVC guidelines and procedures. During the vigilance
awareness week preventive vigilance workshops were also
conducted for the benefit of employees of IRFC. These
workshops inter-alia cover contract management, provision
of CDA Rules, compliances of rules and policies, deliberations
of case studies etc., such workshops have ensured that best
ethical practices are followed in the organization.

The Company has observed Vigilance Awareness Week in
2024-25 from 28^th October, 2024 to 3^rd November, 2024, on
the theme “Culture of Integrity for Nation''s Prosperity”, in line
with the circular issued in this regard by the Central Vigilance
Commission. All employees were administered an Integrity
Pledge, to spread awareness about vigilance amongst the
employees, as well as public at large.

25. Official Language

The official language implementation committee of the
Company meets every quarter to monitor and review the
progress made for achieving the targets fixed in Annual
Program issued by the official language department Ministry
of Home Affairs, Government of India. Effective measures
were taken to bring out progressively higher use of Hindi
in day-to-day working of the Company. Hindi workshops /
trainings are regularly organized and for these employees are
sponsored for the trainings/workshops.

Hindi week was observed in your Company from 17^th
September 2024 to 20^th September, 2024 to motivate the
employees for the progressive use of Hindi in their day to¬
day work. Several competitions / programmes were organized
to encourage the employees to work in Hindi and create a
conducive atmosphere. The participants were accordingly
awarded. Further, cash award was also given to employees
making most extensive use of Hindi in their day-to-day official
work under the Government scheme.

The official website of your Company exists in bilingual form
and contains all information of interest to its stakeholders.

26. Presidential Directive

Company has not received any Presidential Directive
during the year.

27. Right to Information Act, 2005

The Government of India''s instructions on Right to Information
Act, 2005 is being complied with. All relevant information has
been hosted on the Company''s website.

28. Changes in Directors & KMP during & after the year
are brought out below:

Being a Government Company, the power to appoint Directors
on the Board of the Company is vested with the President
of India acting through the Ministry of Railways (MoR),
Government of India. Being a CPSE, the remuneration of
Functional Directors, Key Managerial Personnel and other
employees of the Company, including Senior Management
Personnel, is determined as per the extant guidelines on
pay, perquisites, allowances etc. issued by the Department
of Public Enterprises (DPE) and/or Government of India
from time to time. The sitting fee paid to Non- Official/
Independent Directors for attending the meetings of Board
and Committees thereof, are within the limits prescribed under
the Companies Act, 2013. The Government Nominee Director
is not entitled to receive any remuneration or sitting fee from
the Company, as per the norms of Government of India.

Details of remuneration and sitting fees paid to Directors are
appearing in the ''Report on Corporate Governance'' annexed
to this Report.

Pursuant to Section 203 of the Companies Act, 2013, the
Board of Directors of the Company has designated the
Chairman and Managing Director as CEO, Director (Finance),
Group General Manager (Finance) as CFO, and Company
Secretary (CS) as Key Managerial Personnel (KMPs) of the
Company. Being a Government Company, the role of CEO is
being performed by Chairman and Managing Director (CMD)
and the role of CFO is performed by Group General Manager
(Finance) of the Company.

The Changes in Directors & KMP during & after the year are
brought out below: -

1. Ms. Uma Ranade, IRAS, AM (Budget), Railway Board
has been entrusted with the additional charge of post of
Chairman and Managing Director from 27^th March 2024
to 31^st July 2024.

2. Smt. Usha Venugopal, IRAS (2024), has been entrusted
with the additional charge of the post of Chairman &
Managing Director (CMD), IRFC, in addition to her own,
from 01^st August 2024 and relinquished the additional
charge of CMD, IRFC, on 10^th October 2024, following
the appointment of Shri Manoj Kumar Dubey as
Chairman and Managing Director, and also as CEO.

3. Shri. Manoj Kumar Dubey has been appointed as
Chairman and Managing Director, and also as CEO of
the Company/IRFC by Board of Directors for a period
of five years with effect from the date of his assumption
of charge of the post, or until further orders, whichever
is earlier. He assumed charge of the post of CMD, IRFC,
with effect from 10^th October 2024.

4. Shri Bhaskar Choradia (DIN:08975719) has relinquished
the charge of post of EDF/B, Railway Board on 15^th April
2024. Accordingly, he has ceased to hold the office of
Part-time Government Director on the Board of lRFC
w.e.f. 15^th April 2024.

5. Shri. Abhishek Kumar, Executive Director Finance
(Budget), Railway Board, has been appointed as Part¬
time Government Director on the Board of the IRFC/
Company with effect from 29^th May 2024, till he holds
the post of Executive Director Finance (Budget), Railway
Board or further orders whichever is earlier.

6. Shri Vallabhbhai Maneklal Patel, Non -Official Director
(Independent Director) and Smt. Sheela Pandit, Non
-Official Director (Independent Director) ceased to be
Independent Directors of the Company with effect from
9^th November 2024 on completion of their tenure.

7. Shri Vallabhbhai Maneklal Patel (DIN: 07713055) has
been co-opted as Non-official Independent Director on
the Board of the Company w.e.f. 16^th April 2025.

8. Ms. Shelly Verma (DIN: 06629871), who hold the
post of Director (Finance), IRFC has superannuated
from the services of the Company on 30^th April
2025 and accordingly, has ceased to be a Director
and Key Managerial Personnel of IRFC with effect
from 1^st May 2025.

9. Shri Randhir Sahay, IRAS, Executive Director Finance (S),
Railway Board, has been entrusted the additional charge
of the post of Director (Finance) in addition to his own,
with effect from 01^st May 2025 due to superannuation
of Ms. Shelly Verma on 30^th April 2025.

Director(s) retiring & seeking appointment/ reappointment
in the ensuing AGM

In accordance with the provisions of the Companies Act, 2013
and Article 210 of the Articles of Association of the Company,
Shri Abhishek Kumar (DIN: 10644411), Govt. Nominee
Director shall retire by rotation at the ensuing 38^th Annual
General Meeting of the Company and being eligible, offers
himself for re-appointment.

Further, pursuant to Regulation 17(1C) of SEBI Listing
Regulations, the appointment of Shri Manoj Kumar Dubey as
Chairman & Managing Director & CEO, Shri. Randhir Sahay as
Director (Finance) (Addnl. Charge) & CFO and Shri Vallabhbhai
Maneklal Patel as Non-official Independent Director is also
being submitted to the shareholders for approval. The Board
recommends their re-appointment/appointment.

Brief resume and other particulars of Shri Abhishek Kumar,
Shri. Manoj Kumar Dubey, Shri. Randhir Sahay and Shri.
Vallabhbhai Maneklal Patel are annexed to the Notice of AGM
forming part of this Annual Report.

29. Evaluation of Board of Directors/ Independent
Directors

As per the statutory provisions, a listed company is required
to disclose in its Board''s Report, a statement indicating the
manner in which formal annual evaluation of the performance
of the Board, its committees and individual Directors has
been made and the criteria for performance evaluation of its
Independent Directors, as laid down by the Nomination &
Remuneration Committee.

However, the Ministry of Corporate Affairs (“MCA”) vide its
notification dated June 5, 2015, has, inter-alia, exempted
Government companies from the above requirement.
Directors are evaluated by the Ministry or Department of the
Central Government, which is administratively in charge of

the company, as per its own evaluation methodology. Further,
MCA vide notification dated July 5, 2017, also prescribed
that the provisions relating to review of performance of
Independent Directors and evaluation mechanism prescribed
in Schedule IV of the Companies Act, 2013, is not applicable
to Government companies.

Accordingly, being a government company, IRFC is, inter
alia, exempted in terms of the above notifications, as the
evaluation of performance of all members of the Board of
the Company is being done by the administrative ministry i.e.,
the Ministry of Railways and/or by the Department of Public
Enterprises (DPE).

30. ‘Think Green, Go Green’ Initiative

The Companies Act, 2013 permits companies to send
documents like Notice of Annual General Meeting, Annual
Report etc. through electronic means to its members at their
registered email addresses. As a responsible corporate citizen,
the Company has actively supported the implementation of
''Green Initiative'' of the Ministry of Corporate Affairs (MCA)
and effected electronic delivery of Notices and Annual Reports
to shareholders, whose email ids are registered. The intimation
of dividend (interim/ final) is also being sent electronically to
such shareholders. Further, pursuant to Section 108 of the
Companies Act, 2013 read with Rule 20 of the Companies
(Management and Administration) Rules, 2014, the Company
is providing e-voting facility to all members to enable them
to cast their votes electronically in respect of resolutions
set forth in Notice of Annual General Meeting (AGM). The
Company will also be conducting the AGM this year through
video conferencing / other audio-visual means. Members can
refer to the detailed instructions for e-voting and electronic
participation in the AGM, as provided in the Notice of AGM.
Members, who have not registered their e-mail addresses so
far, are requested to register their e-mail addresses with the
Registrar and Share Transfer Agent (R&TA) of the Company or
their respective Depository Participant (DP) and take part in
the green initiative.

31. Acknowledgements

Your Company is grateful to the Ministry of Railways, Ministry
of Finance, Ministry of Corporate Affairs, Public Enterprises
Selection Board, Department of Public Enterprises, National
Informatics Centre, other Departments of the Government,
Securities and Exchange Board of India and the Reserve
Bank of India, for their co-operation, assistance, active and
timely support, and guidance rendered from time to time. The
Company is also thankful to all its Shareholders, Bondholders,
Banks, Financial Institutions, Arrangers, Registrar and Transfer
Agents, Bond Holders Trustees, National Stock Exchange of
India Limited, BSE Limited and other stakeholders for reposing
their confidence and trust in the Company. The Company
looks forward to their continued support for sustaining
its excellent performance levels. The Company expresses
gratitude to the Comptroller & Auditor General of India, the
Statutory Auditors, Secretarial Auditors and the Internal
Auditors for their valuable support and guidance. The Board
of Directors express their deep appreciation in recognition of
the valuable contribution made by the Company''s small team
of officers and employees, which has enabled the Company to
successfully meet the funding targets set by the Ministry of
Railways, while consolidating its position as one of the most
vibrant public financial institutions in the country.

For and on behalf of the Board of Directors

Sd/-

(Manoj Kumar Dubey)

Place: New Delhi Chairman and Managing Director & CEO

Date: 22.07.2025 (DIN: 07518387)

---

Mar 31, 2024

Your directors have the pleasure in presenting the 37^th Annual Report of the Company along with the Audited Financial Statements, Auditor''s Report and review of the Accounts by the Comptroller & Auditor General of India for the financial year ended 31^st March 2024.

1. Financial Highlights

The highlights of financial performance of your Company for the year ended 31^st March 2024 in comparison to the year ended 31^st March 2023 are summarized below:

(H in crores)

Particulars	Year ended 31-03-2024	Year ended 31-03-2023
I. Revenue from operations	26,644.58	23,721.42
II. Dividend Income	0.78	0.56
III. Other income	10.56	40.80
IV Total Revenue (I II III)	26,655.92	23,762.77
V Expenses
Finance costs	20,101.47	17,447.21
Impairment on financial instruments	(3.93)	(2.91)
Employee benefit expense	11.17	13.09
Depreciation and amortization expense	9.44	14.06
Other expenses	125.66	124.16
Total Expenses	20,243.81	17,595.62
VI. Profit before tax (IV-V)	6,412.10	6,167.16
VII. Tax expense:
(1) Current tax	-	-
(2) Adjustment for Earlier Years	-	-
(3) Deferred tax	-	-
Total Taxes
VIII.Profit (Loss) for the current Year from continuing operations (VI-VII)	6,412.10	6,167.16
IX. Other Comprehensive Income	40.38	4.56

Revenue from operations of your Company has increased by H 2,923.16crores from H 23,721.42 crores in 2022- 23 to H 26,644.58 crores in 2023-24, showing a growth of 12.32 %.

Profit before Tax (PBT) of your Company for the year ended 31^st March 2024 was H 6,412.10 crores as compared to H 6167.16 crores for the previous year, registering a growth of 3.97 %.

Company has not made any provision for tax in its books pursuant to its decision to exercise the option of lower tax rate permitted u/s 115BAA of the Income Tax Act, 1961, as introduced by the Taxation Laws (Amendment) Ordinance, 2019 dated 20^th September, 2019. The Company''s taxable income was nil and it did not have to pay Minimum Alternate Tax (MAT) with reference to its Book Profit. MAT payable u/s 115 JB was outside the ambit of the Section 115 BAA.

Thus, on adoption of Section 115 BAA of the Income Tax Act, 1961, the Company was outside the scope and applicability of MAT provisions and there was a zero-tax liability in the financial year 2023-24.

Profit After Tax for the year ending 31^st March 2024 was H 6,412.10 crores as compared to H 6,167.16 crores for the previous year, registering a growth of 3.97 %.

2. Dividend

Your Company seeks to strike a judicious balance between the return to the shareholders and retaining a reasonable portion of the profit to maintain a healthy financial leverage with a view to supporting and sustaining future borrowings and growth.

Board of Directors, in its meeting held on 2^nd November 2023, has declared the Interim Dividend @ 8.0% i.e., H 0.80/- per equity share having face value of H 10/- each for F.Y 2023-24, which was paid on 23^rd November, 2023.

Further, the Board of Directors in its meeting held on 20^th May 2024 has also recommended the Final Dividend @ 7% i.e., H 0.70/- per equity share having a face value of H 10/-each, which is subject to approval of the shareholders at the ensuing Annual General Meeting. If approved, the total dividend for the financial year 2023-24 would amount to H 1.50/- per equity share of H 10/- each. The total dividend payout for the financial year 2023-24 including the proposed Final Dividend, would amount to H 1,960.28 crores.

As per regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”), the top 500 listed companies shall formulate a Dividend Distribution Policy.

Accordingly, the policy was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retained profits earned by the Company. The policy is also available on the Company''s website at https://irfc.co.in/sites/default/files/ inline-files/Dividend-Distribution-Policy.pdf.

The details of unpaid/unclaimed amount of dividend as on 31^st March 2024 is as follows:

Financial Year	Type of	Amount
	Dividend	(H in Crore)
2020-21	Interim	0.581
2021-22	Interim	0.377
2021-22	Final	0.278
2022-23	Interim	0.307
2022-23	Final	0.268
2023-24	Interim	0.298

Further, Members are requested to note that, dividends if not encashed for a consecutive period of seven (7) years from the date of transfer to Unpaid/Unclaimed Dividend Account of the Company, are liable to be transferred to the Investor Education and Protection Fund ("IEPF") authority. The shares in respect of such unpaid/unclaimed dividends are also liable to be transferred to the demat account of the IEPF Authority. In view of this, Members are requested to claim their dividends from the Company, within the stipulated timeline.

Details of Unpaid/Unclaimed Dividend is also available on Company''s website at https://irfc.co.in/investors/ financial-information.

3 Reserves

As per Section 45 - IC of the RBI Act, 1934, all NBFCs are required to create a Reserve equivalent to 20% of the net profit before payment of dividend.

Accordingly, 20% of the net profit of the Company amounting to H 1,282.42 crores had been transferred to Reserve Fund u/s Section 45 - IC of RBI Act, 1934.

4 Share Capital

As on 31^st March 2024, the Authorized Share Capital of the Company was H 25,000 crores, consisting of 25,000,000,000 Equity Shares of H 10/- each. The issued and paid-up share capital of the Company was H 13,068.506 crores, consisting of 13,068,506,000 Equity Shares of H 10/- each.

As on 31^st March 2024, 86.36% of the paid-up equity share capital of the Company comprising of 11,286,437,000 Equity Shares of H 10/- each were held by President of India acting through administrative ministry i.e., Ministry of Railways (MoR). The balance 13.64% of paid-up equity share capital was held by public. During the period under review there is no change in authorized and paid-up share capital of the Company.

Based on market capitalization Company is in the list of top 100 listed companies on both stock exchanges i.e., NSE and BSE as on 31^st March 2024.

5 Independent Evaluators’ Assessment

5.1 Credit Ratings

5.1.1 Domestic:

During the financial year 2023-24, the Company''s long-term domestic borrowing programme was awarded the highest credit rating of “CARE AAA/Stable”, “CRISIL AAA/ Stable” and “ICRAAAA/Stable”. ‘‘The Company also got its shortterm borrowing programme rated, obtaining the highest rating of “CARE A1 ” and ‘‘ICRA A1 ''''.

5.1.2 International:

During the financial year 2023-24, three international credit rating agencies - Standard & Poor''s, Moody''s and Fitch - have awarded “BBB- with Stable Outlook”, “Baa3 with Stable Outlook” and “BBB- with Stable Outlook” ratings respectively to your Company. Besides, the Company obtained an issuer specific credit rating of “BBB with Stable Outlook” from the Japanese Credit Rating Agency. Each of the four credit ratings is equivalent to India''s sovereign rating and is of investment grade.

5.2. Memorandum of Understanding (MOU) with Ministry of Railways, Government of India

The Company enters Memorandum of Understanding (MoU) with Ministry of Railways (MoR) every year wherein Company is evaluated on various financial and nonfinancial parameters. Based on its performance, the Company has been rated ‘Excellent'' by the Department of Public Enterprises (DPE) for the year 2022-23.

The company has executed MoU for Financial Year 2023-24 with MoR on 14^th September, 2023. For leasing of Project Assets, there is an initial Moratorium period of 5 years and MoR is not required to pay the lease rent in moratorium period. Further, during the moratorium period company recognises on annual basis the finance cost as disbursement which gets added to the AUM of the company.

During the year 2023-24, the company has accordingly considered Rs. 16,705.20 crores as disbursement. Basis above, company has achieved 99.99% in respect of parameter Loans Disbursed to Total Funds Available. Further, there were no Overdue loans to Total Loans and NPA to Total Loans. Also, Cost of raising funds through Bonds as compared to similarly rated CPSEs/ entities is 12 bps lower.

6 Market Borrowings during 2023-24

The Board of Directors had approved borrowing limit of H 50,000 crores for FY 2023-24 for meeting the funding requirement of Indian Railways, if any, new business activities, refinancing of existing loans and for other general corporate purposes.

Borrowings during the year include Taxable Bonds worth H 22,940 crores (Previous year H 21,558.70 crores), Rupee Term Loans of H 5,980 crores (previous year H 22,274.46 crores) and 54EC bonds of H 2,064.34 crores (previous year H 1,729.61 crores).

Company had received approval of Ministry of Finance for issue of 54EC Capital Gain Bonds in October 2017, since then, Company is making all endeavors to increase its market share in 54EC Bond market. In 2023-24, Company mobilized around H 2064.34 crores through 54EC Bond as against H 1,729.61 crores, registering a growth of 19.35%.

The company had refinanced Higher rate long term loan of H 18,200.00 Cr. with lower rate long Term loan and Bonds. The average cost of borrowing made during the year was approximately 7.27% p.a.

7 Redemption of Bonds / Repayment of Loans

During the year, the Company redeemed Bonds amounting to H 16,174.46 crores. The Company also repaid long term

loans from Banks of H 18,200 crores during the year. The Company continues to maintain its impeccable track record of servicing its debt in time.

8 Internal Control Systems & their adequacy

The details are given in Management Discussion and Analysis.

9 RBI Prudential Norms

Your Company is registered as a Systemically Important Non-Deposit Taking Non- Banking Finance Company with the Reserve Bank of India. Being a Government NBFC, your Company was exempted from the prudential norms prescribed by Reserve Bank of India for NBFC-ND-SI, as contained in the Master Directions issued vide Notification No. DNBR.008/CGM(CDS)-2015, dated 27^th March, 2015. The exemption was withdrawn by Reserve Bank of India from 31^st May, 2018. However, the Company has obtained exemption from Reserve Bank of India from the asset classification, income recognition, credit concentration and provisioning norms on the direct exposure to Ministry of Railways, Govt. of India vide RBI letter dated 21^st December, 2018. The Company has also obtained relaxation in respect of lending limit applicable to Railway CPSEs from 20% of its owned funds to 100% of its owned funds. As such, the Company has complied with the applicable prudential norms.

Liquidity Coverage Ratio (LCR) Exemption:

RBI vide circular dated 4.11.2019 issued the guidelines covering liquidity risk management for NBFCs, wherein RBI introduced Liquidity Coverage Ratio (LCR) applicable on all non- deposits taking NBFCs with asset size of more than H 5,000 crores. The company has got an exemption from RBI from applicability of Liquidity Coverage Ratio (LCR) norms.

Applicability of approvals/acknowledgements previously given by RBI post issue of RBI Scale Based Master Directions.

RBI has issued new Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 on 19.10.2023 (referred as RBI Master Directions dated 19.10.2023).

RBI has clarified all approvals/acknowledgements given under Circulars/Directions mentioned in the repealed list as provided in section XI of ‘the new Directions'' shall be deemed as given under ‘the new Directions''. Notwithstanding such repeal, any action taken/purported to have been taken or initiated under the instructions/guidelines having repealed shall continue to be guided by the provisions of said instructions/guidelines.

10 Lease Arrangement with the Ministry of Railways

As you are aware, the financial relationship of the Company with the Ministry of Railways is based on a Financial Lease arrangement which is regulated by a standard lease agreement.

During the year, Company has executed the Lease Agreements for rolling stock assets leased for the FY 202223 and for the Project Assets funded during FY 2017- 18 (EBR-IF) after completion of moratorium period.

11 Resource Mobilization for 2024-25

Board has authorized the Company to borrow funds amounting to H 50,000 Crores as may be required during FY 2024-25 for meeting the funding requirement of Indian Railways, if any, new business activities, Committed Liabilities refinancing of existing loans and for other general corporate purposes.

12 Management Discussion and Analysis and Company''s Outlook for the future

Management Discussion and Analysis, forming part of the Directors'' Report given at ANNEXURE- I.

13 Report on Corporate Governance

The Government considers good corporate governance practices a sine qua non for sustainable business that aims at generating long term value for its shareholders and all other stakeholders. Accordingly, it has been laying increasing emphasis upon development of best corporate governance practices amongst Central Public Sector Enterprises (CPSEs). In pursuance of this philosophy, your Company continues to comply with the ‘Guidelines on Corporate Governance for Central Public Sector Enterprises'' issued by Government of India, Department of Public Enterprises (DPE). Your Company''s Equity as well as Non-Convertible Debt Securities are listed on the stock exchanges and Company has complied with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. As on 31^st March 2024, there were 6 (Six) Directors on the Board of the Company. The Board comprises of a Chairman & Managing Director (Addl. Charge),Director (Finance), Two Non-Official/ Independent Director(s) and Two Government Nominee Director(s). As on the date of this Report, the Board of Directors comprised of Six (6) Directors, with Two Executive Director, Two NonExecutive Directors (Govt. Nominees) and Two Non- Official/ Independent Directors. The Company does not have the prescribed number of Independent Directors on its Board in compliance of the Regulation 17(1) (a) of SEBI (LODR) Regulations 2015, specifying the composition of Board of Directors. Being CPSE, the power to appoint Directors

vests with Government of India through Ministry of Railways (MoR) and Company has no role to play in it. The Company has already requested MoR for appointment of requisite number of Independent Directors. Report on Corporate Governance is enclosed as ANNEXURE- II forming part of this report.

14 Business Responsibility & Sustainability Report (BRSR)

The Business Responsibility & Sustainability Report, as stipulated under Regulation 34 (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is given in ANNEXURE-III and forms part of this Report.

15 Corporate Social Responsibility

Activities relating to Corporate Social Responsibility (CSR) have become an integral part of Company''s operations.

In terms of Section 135 of the Companies Act, 2013 (the Act), read with Schedule VII thereof and Companies (Corporate Social responsibility Policy) Rules, 2014, the Company has constituted a CSR Committee (the “Committee”) comprising of two (2) Independent Director(s) and Director (Finance) with the Independent Director as the Chairman of the Committee as on 31^st March 2024. As per the Act, Company is required to spend at least two (2) percent of the average of its net profits of the immediately three preceding financial years on CSR activities. The Department of Public Enterprises (DPE) has also issued guidelines in this regard which, inter alia, require the Central Public Sector Enterprises (CPSEs) to frame a ‘CSR and Sustainability Policy''.

The ‘CSR and Sustainability Policy'' of the Company is in place and the same has also been hosted on the website at https://irfc.co.in/sites/default/files/inline-files/CSR-Policy. pdf. The Company, like in the past, has undertaken activities for CSR and Sustainable Development, details of which, are given hereunder: -

During the financial year 2023-24, the Company was required to spend H 112.27 crores, being 2% of its average net profits for the last three financial years. The Company has approved a total of 16 projects with a total outlay of H 80.94 crores and the remaining balance disbursed against H 22.33 crores to PM CARES Fund, H 4.5 crores each towards Swacch Bharat Kosh and Clean Ganga Fund. Whereas the amount allocated towards 16 projects amounting to H 80.94 crores would be disbursed on receipt of bills/claims from the implementing agencies in future and the same amount has been transferred to the ‘CSR Unspent Account'' maintained with Scheduled Bank in terms of section 135(6) of the Companies Act, 2013. The details of CSR activities as required under the Companies Act for the financial year 2023-24 is annexed at ANNEXURE - IV.

CSR Activities proposed for the FY 2024-25

For the financial year 2024-25, the Company would be required to spend approx. H 125.58 crores. The details of all the projects/ activities will be provided in the next Annual Report.

16 Directors’ Responsibility Statement

As required under Section 134(3)(c) of the Companies Act, 2013, it is confirmed that:

a) In the preparation of the annual accounts for the year ended 31^st March 2024, the applicable Indian Accounting Standards have been followed and there are no material departures;

b) such accounting policies have been re-drafted taking into account the Ind-AS, judgments and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

c) Proper and sufficient care has been taken for maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud or other irregularities; and

d) the Annual accounts have been prepared on ‘going concern'' basis;

e) The laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

17 Human Resource Management

At IRFC we believe in a strong value system and best HR practices to enhance and improve our capabilities and achieve the organizational objectives.

As on 31^st March 2024, total Manpower of the Company stood at 42. To infuse fresh Manpower in the existing Manpower pool of the Company, 4 Executives was inducted in the Company during FY-2023-24 through Campus Recruitment. Women constituted 21.43% of its total workforce as on 31^st March, 2024.

The Company continues to maintain high level of employee productivity and efficiency as reflected in its low overhead to turnover ratio of less than 0.09%.

17.1 Women Employees

Your Company provides equal growth opportunities for the women in line with Govt. of India philosophy on the subject. Being a lean organization, where Company has 42 employees, women representation has grown across hierarchical levels. Thus, Women constituted 21.43% of its total workforce as on 31^st March 2024. As per Govt. of India directives and guidelines from time-to-time, IRFC ensures the welfare of women employees.

17.2 Information under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

The Company has an Internal Complaints Committee (ICC) to examine the case related to Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. The complaints received by the committee are being dealt in line with the provisions of the Act. During the FY 2023-24, no complaint has been received.

17.3 Training & Human Resource Development

In order to enhance the skills, capabilities and knowledge of employees, a well-defined Training and Development Policy for below board level executives and non-executives is in place. Employee training and development is an essential element of the Company''s strategy. During the year 202324, the Company imparted training to 41 of its employees to various training programmes and workshops including inhouse trainings. These initiatives enabled the Company to achieve 87 training man days/ 694 Hrs.

17.4 Employee Welfare

The Company takes care of health and well-being of its employees by reimbursing in-patient and out-patient medical costs, provision for leaves on medical grounds, rehabilitation policy in case of death or permanent disability, which are applicable for all employees.

17.5 Grievance Redressal

To promote fair and equitable employment relationship, a scheme for Grievance Redressal of employees is also in place which ensures a time bound redressal of grievances.

18 Auditors

M/s O.P Totla & Company, Chartered Accountants, have been appointed as Statutory Auditors by Comptroller & Auditor General of India to audit the accounts of the Company for the financial year 2023-24.

The Comptroller & Auditor General of India has undertaken supplementary audit on accounts of the Company for the year ended 31^st March 2024. The comments of C&AG have been received and management reply there to is placed as

Annexure to comments of C&AG in the Annual Report for the year 2023-24.

Secretarial Audit for the financial year 2023-24 under Section 204 of the Act has been conducted by M/s Akhil Rohatgi and Company, Practicing Company Secretaries.

19 Debenture Trustees

In compliance with SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 the details of Debenture Trustees appointed by the Company for different series of its bonds / debentures issued from time to time, are given in Corporate Governance Report which is enclosed as ANNEXURE-II.

20 Other Disclosures under the applicable provisions of the Companies Act, 2013

20.1 Number of Meetings of the Board

The details of number of meetings of the Board are given in Corporate Governance Report which is enclosed as ANNEXURE-II.

20.2 Certificate of Independence by Independent Director

Independent Directors of the Company have given a declaration that they meet the criteria of Independence, as laid down under Section 149 (6) of the Act, SEBI (LODR) Regulations, 2015 and DPE Guidelines on Corporate Governance for CPSEs.

Further, the Independent Directors of the Company are nominated / appointed by the President of India acting through the administrative ministry, i.e., Ministry of Railways (MoR). Accordingly, the appointing authority considers the integrity, expertise and experience of the individual to be nominated / appointed.

20.3 Material changes, if any, that may affect financial position of the Company

There are no material changes which will affect financial position of the Company.

20.4 Information in Corporate Governance Report

Information on composition, terms of reference and number of meetings of the Board and its Committees held during the year, establishment of Vigil Mechanism/ Whistle Blower Policy and weblinks for familiarization Programmes of Directors, Policy on Related Party Transactions, Policy for determining Material Subsidiaries, compensation to Key Managerial Personnel, sitting fees to Directors and details regarding IEPF etc. have been provided in the ‘Report on Corporate Governance'', prepared in compliance with the provisions of SEBI (Listing Obligations & Disclosure

Requirements) Regulations, 2015 and DPE Guidelines on Corporate Governance, 2010, as amended from time to time, which forms part of this Annual Report.

20.5 Internal financial control systems and their adequacy

The details are given in Management Discussion and Analysis.

20.6 Audit Committee

The details pertaining to the Audit Committee are included in the Corporate Governance Report, which is enclosed as ANNEXURE-II.

20.7 Secretarial Auditors’ Report

M/s Akhil Rohatgi and Company, Practicing Company Secretaries was appointed as the Secretarial Auditors of the Company for the FY 2023-24 by the Board of Directors of the Company. Secretarial Audit Report is placed at ANNEXURE-V.

20.8 Secretarial Standards

Your Company complies with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

20.9 Certificate on Corporate Governance

M/s Akhil Rohatgi and Company, Practicing Company Secretaries has issued certificate on Corporate Governance, placed at ANNEXURE-VI.

20.10 Risk Management

The details are given in Management Discussion and Analysis. Further, the Company is having a Risk Management Committee (“RMC”) of its directors in place, for monitoring the integrated risks of the Company. The details pertaining to RMC Committee are included in the Corporate Governance Report, which is enclosed as ANNEXURE-II.

20.11 Risk Based Internal Audit

RBI vide its circular February 3, 2021, had mandated the Risk Based Internal Audit (RBIA) framework for all nondeposit taking NBFCs with asset size of H 5000 crores and above. In line with the RBI notification, Risk Based Internal Audit (RBIA) policy has been formulated and approved by the Board of Directors. RBIA will help the organization to identify the risks and address them based on the risk priority and direction provided by the Board. A firm of Chartered Accountant has been appointed as an expert to assist the Risk Based Internal Audit. The scope of RBIA is well defined and is very exhaustive to take care of all functions and business of the Company depending upon the risk assessment and control environment. Based on RBIA report, steps are taken at regular intervals to further strengthen the existing systems and procedures.

20.12 Particulars of loans, guarantees and investments

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

20.13 Transactions with related parties

The particulars of the transactions with related parties have been disclosed in the financial statements.

20.14 Stock Options

The Company has not issued any stock options to the Directors or any employee of the Company.

20.15 Significant and Material Orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company

There are no significant and/or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company.

20.16 Disclosure under Foreign Exchange Management Act, 1999

The Company is in compliance with the relevant provisions of the Foreign Exchange Management Act, 1999 pertaining to external commercial borrowing and derivatives.

20.17 Extract of Annual Return

The extract of Annual Return is given in ANNEXURE-VII which forms part of this report. After filing of the annual return for FY 2023- 24 with MCA, the same will be uploaded on website of the Company at https://irfc.co.in/.

20.18 Code of Business Conduct-Declaration by CEO

Declaration by CEO on compliance of the “Code of Business Conduct and Ethics for Board Members and Senior Management” for the year 2023-24 is placed at ANNEXURE-VIII.

20.19 CEO/CFO Certification

As required by Regulation 17 (8) of the SEBI (LODR) Regulations, 2015, the Compliance Certificate as specified in Part B of Schedule II of the said Regulation duly signed by Ms.Uma Ranade, Chairman & Managing Director (Addl. Charge), CEO and Shri Sunil Kumar Goel, Chief Financial Officer (CFO) was placed before the Board of Directors in their Meeting held on 20^th May 2024. The same is enclosed as ANNEXURE-IX.

20.20 Particulars of Employees receiving high remuneration & other particulars of employees

Since IRFC is a Government Company, provisions of Section 197 are not applicable to it. Hence, the details have not been given.

20.21 Deposits from public

The Company has not accepted any fixed deposits during the period under review and the Board of Directors has passed requisite resolution in this regard, in compliance of RBI guidelines.

20.22 Cost Records

The Central Government has not prescribed the maintenance of cost records for the products/services of the Company under the Companies (Cost Records and Audit) Rules, 2014 read with the Companies (Cost Records and Audit) Amendment Rules, 2014 prescribed by the Central Government under Section 148 of the Companies Act, 2013. Accordingly, cost accounts and records are not required to be maintained by the Company.

20.23 Conservation of Energy, Technology Absorption

Pursuant to the Provision of Section 134(3)(m) of the Companies Act, 2013, in respect of Conservation of Energy and Technology absorption, following steps have been taken by your Company: -

To save power, the Company purchases LED/ LCD monitors while replacing the old monitors. Employees are encouraged to keep their gadgets in power saving mode, wherever possible. The Company now replaces its old electrical items, gadgets, etc. with power efficient units. The internal lightning of office by energy- efficient LED lights has helped to conserve electricity.

20.24 Foreign exchange earnings & outgo

Your Company has put in place Comprehensive Risk Management policy to manage risks associated with foreign currency borrowings. The Company enters into hedging transactions to cover exchange rate and interest rate risk through various instruments like forwards and swaps. Details of Foreign exchange earnings & outgo have been given in the Notes to Accounts.

20.25 Expenditure on R&D

This is not applicable, as IRFC is engaged only in financing activities.

20.26 Reporting of Frauds by Auditors

During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143(12) of the Companies Act, 2013, any instance of fraud committed against the Company by its officers or employees, the details of which need to be mentioned in the Board''s Report.

20.27 Change in nature of Business

There was no change in the nature of business of the Company during the financial year 2023-24.

20.28 The names of companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies

There are no Subsidiaries, joint ventures, or associate companies during the year 2023-24.

20.29 The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year

There was no application made nor any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) against the Company.

21 Compliance of MSME Guidelines

Your Company has in place, a Manual for Procurement of Goods, Services and Works, which provides guidelines to expedite decision making process by way of consolidating, simplifying and streamlining the various steps to be followed in the process of award of contracts from the procurement of goods, works & services as well as during its implementation on the ground.

The procurement from MSEs complies to Public Procurement Policy during the financial year 2023-24 as placed below:

(H in crores)

1	Total annual procurement	8.19
2	Target % age of annual procurement	25%
3	Total value of goods and services procured from MSEs (including MSEs owned by SC/ ST entrepreneurs)	6.35
4	Total value of goods and services procured from only MSEs owned by SC/ ST entrepreneurs	1.99
5	% age of procurement from MSMEs (including MSEs owned by SC/ ST entrepreneurs) out of total procurement	77.52%
6	% age of procurement from only MSEs owned by SC/ ST entrepreneurs out of total procurement	24.31%
7	% age of procurement from Women MSEs	22.09%

22 Vigilance Activities

Ministry of Railways have nominated a part time Chief Vigilance Officer (CVO). The CVO carries out internal scrutiny of the activities on random basis to ensure compliance with the laid down CVC guidelines and procedures. During the vigilance awareness week preventive vigilance workshops were also conducted for the benefit of employees of IRFC. These workshops inter-alia cover contract management, provision of CDA Rules, compliances of rules and policies,

deliberations of case studies etc., such workshops have ensured that best ethical practices are followed in the organization.

The Company has observed Vigilance Awareness Week in 2023-24 from 30^th October, 2023 to 5^th November, 2023, on the theme “Say No to Corruption, Commit to the Nation”, in line with the circular issued in this regard by the Central Vigilance Commission. All employees were administered an Integrity Pledge, to spread awareness about vigilance amongst the employees, as well as public at large.

23 Official Language

The official language implementation committee of the Company meets every quarter to monitor and review the progress made for achieving the targets fixed in Annual Program issued by the official language department Ministry of Home Affairs, Government of India. Effective measures were taken to bring out progressively higher use of Hindi in day-to-day working of the Company. Hindi workshops / trainings are regularly organized and for these employees are sponsored for the trainings/workshops.

Hindi week was observed in your Company from 18^th September 2023 to 22^nd September, 2023 to motivate the employees for the progressive use of Hindi in their day to- day work. Several competitions / programmes were organized to encourage the employees to work in Hindi and create a conducive atmosphere. The participants were accordingly awarded. Further, cash award was also given to employees making most extensive use of Hindi in their day-to-day official work under the Government scheme.

The official website of your Company exists in bilingual form and contains all information of interest to its stakeholders.

24 Presidential Directive

Company has not received any Presidential Directive during the year.

25 Right to Information Act, 2005

The Government of India''s instructions on Right to Information Act, 2005 is being complied with. All relevant information has been hosted on the Company''s website.

26 Board of Directors and Key Managerial Personnel

Being a Government Company, the power to appoint Directors on the Board of the Company is vested with the President of India acting through the Ministry of Railways (MoR), Government of India. The remuneration of Directors and employees of the Company is fixed as per the extant Guidelines issued by Department of Public Enterprises

(DPE), from time to time. The sitting fee paid to Non- Official/ Independent Directors for attending the meetings of Board and Committees thereof, are within the limits prescribed under the Companies Act, 2013. The Government Nominee Director is not entitled to receive any remuneration or sitting fee from the Company, as per the norms of Government of India. Details of remuneration and sitting fees paid to Directors are appearing in the ‘Report on Corporate Governance'' annexed to this Report.

Further, being a CPSE, the remuneration of Functional Directors, Key Managerial Personnel and other employees of the Company, including Senior Management Personnel, is determined as per the extant guidelines on pay, perquisites, allowances etc. issued by the Department of Public Enterprises (DPE) and/or Government of India from time to time.

Pursuant to Section 203 of the Companies Act, 2013, the Board of Directors of the Company has designated the Chairman and Managing Director as CEO, Director (Finance), Group General Manager (Finance) as CFO, and Company Secretary (CS) as Key Managerial Personnel (KMPs) of the Company. Being a Government Company, the role of CEO is being performed by Chairman and Managing Director (CMD) and the role of CFO is performed by Group General Manager (Finance) of the Company.

The following changes have taken place in the composition of the Key Managerial Personnel: -

1. Ms. Uma Ranade, IRAS, AM (Budget), Railway Board has been entrusted with the additional charge of post of Chairman and Managing Director w.e.f. the date of assumption of charge of the post till the date of her superannuation i.e. 31.07.2024, or till a regularly selected incumbent joins the post, or until further orders, whichever is the earlies and accordingly she has been designated as Chairman and Managing Director (Addl. Charge), CEO of the Company.

2. Ministry of Railways (MoR), Government of India vide order no 2018/E(0)11/40/19 dated 26.03.2024 has communicated the Pre-mature termination of the additional charge arrangement for the post of CMD/ IRFC made in favour of Ms. Shelly Verma, Director (Finance), IRFC.

3. Shri Bhaskar Choradia (DIN:08975719) has relinquished the charge of post of EDF/B, Railway Board on 15.04.2024. Accordingly, he has ceased to hold the office of Part-time Government Director on the Board of lRFC w.e.f. forenoon of 15.04.2024.

4. Ministry of Railways, Government of India vide its order No. 2022/PL/57/10 dated 20.05.2024 has

communicated the appointment of Shri. Abhishek Kumar, Executive Director Finance (Budget), Railway Board, as Part- time Government Director on the Board of the IRFC/Company with immediate effect, till he holds the post of Executive Director Finance (Budget), Railway Board or further orders whichever is earlier.

Director(s) retiring & seeking appointment/ reappointment in the ensuing AGM

In accordance with the provisions of the Companies Act, 2013 and Article 210 of the Articles of Association of the Company, Shri Baldeo Purushartha (DIN:07570116), Govt. Nominee Director shall retire by rotation at the ensuing 37^th Annual General Meeting of the Company and being eligible, offers himself for re-appointment. The Board of Directors recommends his re-appointment. Brief resume and other particulars of Shri Baldeo Purushartha is annexed to the Notice of AGM.

27 Evaluation of Board of Directors/ Independent Directors

As per the statutory provisions, a listed company is required to disclose in its Board''s Report, a statement indicating the manner in which formal annual evaluation of the performance of the Board, its committees and individual Directors has been made and the criteria for performance evaluation of its Independent Directors, as laid down by the Nomination & Remuneration Committee.

However, the Ministry of Corporate Affairs (“MCA”) vide its notification dated June 5, 2015, has, inter-alia, exempted Government companies from the above requirement. Directors are evaluated by the Ministry or Department of the Central Government, which is administratively in charge of the company, as per its own evaluation methodology. Further, MCA vide notification dated July 5, 2017, also prescribed that the provisions relating to review of performance of Independent Directors and evaluation mechanism prescribed in Schedule IV of the Companies Act, 2013, is not applicable to Government companies.

Accordingly, being a government company, IRFC is, interalia, exempted in terms of the above notifications, as the evaluation of performance of all members of the Board of the Company is being done by the administrative ministry i.e., the Ministry of Railways and/or by the Department of Public Enterprises (DPE).

28 ‘Think Green, Go Green’ Initiative

The Companies Act, 2013 permits companies to send documents like Notice of Annual General Meeting, Annual Report etc. through electronic means to its members at their registered email addresses. As a responsible corporate citizen, the Company has actively supported the implementation of ‘Green Initiative'' of the Ministry of Corporate Affairs (MCA) and

effected electronic delivery of Notices and Annual Reports to shareholders, whose email ids are registered. The intimation of dividend (interim/ final) is also being sent electronically to such shareholders. Further, pursuant to Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014, the Company is providing e-voting facility to all members to enable them to cast their votes electronically in respect of resolutions set forth in postal ballot and Annual General Meeting (AGM). The Company will also be conducting the AGM this year through video conferencing / other audio-visual means. Members can refer to the detailed instructions for e-voting and electronic participation in the AGM, as provided in the Notice of AGM. Members, who have not registered their e-mail addresses so far, are requested to register their e-mail addresses with the Registrar and Share Transfer Agent (R&TA) of the Company or their respective Depository Participant (DP) and take part in the green initiative.

29 Acknowledgements

Your Company is grateful to the Ministry of Railways, Ministry of Finance, Ministry of Corporate Affairs, Public Enterprises Selection Board, Department of Public Enterprises, National Informatics Centre, other Departments of the Government, Securities and Exchange Board of India and the Reserve Bank of India, for their co-operation, assistance, active

and timely support, and guidance rendered from time to time. The Company is also thankful to all its Shareholders, Bondholders, Banks, Financial Institutions, Arrangers, Registrar and Transfer Agents, Bond Holders Trustees, National Stock Exchange of India Limited, BSE Limited, Life Insurance Corporation of India and other stakeholders for reposing their confidence and trust in the Company. The Company looks forward to their continued support for sustaining its excellent performance levels. The Company expresses gratitude to the Comptroller & Auditor General of India, the Statutory Auditors, Secretarial Auditors and the Internal Auditors for their valuable support and guidance. The Board of Directors express their deep appreciation in recognition of the valuable contribution made by the Company''s small team of officers and employees, which has enabled the Company to successfully meet the funding targets set by the Ministry of Railways, while consolidating its position as one of the most vibrant public financial institutions in the country.

For and on behalf of the Board of Directors

Sd/-

(Uma Ranade)

Chairman & Managing Director Place: New Delhi (Addl. Charge)

Date: 29.07.2024 (DIN: 10565537)

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Mar 31, 2023

Your directors have the pleasure in presenting the 36^th Annual Report of the Company along with the Audited Financial Statements, Auditor''s Report and review of the Accounts by the Comptroller & Auditor General of India for the financial year ended 31^st March 2023.

1. Financial Highlights

The highlights of financial performance of your Company for the year ended 31^st March 2023 in comparison to the year ended 31^st March 2022 are summarized below:

(H in Crores)
Particulars	Year ended 31-03-2023	Year ended 31-03-2022
I. Revenue from operations	23,891.28	20,298.27
II. Dividend Income	0.56	0.10
III. Other income	40.80	2.33
IV Total Revenue (I II III)	23,932.63	20,301.60
V. Expenses
Finance costs	17,447.21	14,074.78
Impairment on financial instruments	(2.91)	0.46
Employee benefit expense	13.09	10.75
Depreciation and amortization expense & Impairment	14.06	14.03
Other expenses	124.16	111.43
Total Expenses	17,595.62	14,211.44
VI. Profit before tax (IV-V)	6,337.01	6,090.16
VII. Tax expense:
(1) Current tax	-	-
(2) Adjustment for Earlier Years	-	0.32
(3) Deferred tax	-	-
Total Taxes	-	0.32
VIII.Profit (Loss) for the current Year from continuing operations (VI-VII)	6,337.01	6,089.84
IX. Other Comprehensive Income	4.56	(0.50)

Revenue from operations of your Company has increased by H 3,593.01 crores from H 20,298.27 crores in 2021- 22 to H 23,891.28 crores in 2022-23, showing a growth of 17.70 %.

Profit before Tax (PBT) of your Company for the year ended 31^st March 2023 was H 6,337.01 crores as compared to H 6,090.16 crores for the previous year, registering a growth of

4.05 %.

Company has not made any provision for tax in its books pursuant to its decision to exercise the option of lower tax rate permitted u/s 115BAA of the Income Tax Act, 1961, as introduced by the Taxation Laws (Amendment) Ordinance, 2019 dated 20^th September, 2019. The Company''s taxable income was nil and it did not have to pay Minimum Alternate Tax (MAT) with reference to its Book Profit. MAT payable u/s 115 JB was outside the ambit of the Section 115 BAA.

Thus, on adoption of Section 115 BAA of the Income Tax Act, 1961, the Company was outside the scope and applicability of MAT provisions and there was a zero-tax liability in the financial year 2022-23.

Profit After Tax for the year ending 31^st March 2023 was H 6,337.01 crores as compared to H 6,089.84 crores for the previous year, registering a growth of 4.06 %.

2. Dividend

Your Company seeks to strike a judicious balance between the return to the shareholders and retaining a reasonable portion of the profit to maintain a healthy financial leverage with a view to supporting and sustaining future borrowings and growth.

Board of Directors, in its meeting held on 10^th November 2022, has declared the Interim Dividend @ 8.0% i.e., H

0. 80/- per equity share having face value of H 10/- each for F.Y 2022-23, which was paid on 5^th December 2022.

Further, the Board of Directors in its meeting held on 25^th May 2023 has also recommended the Final Dividend @ 7%

1. e., H 0.70/- per equity share having a face value of H 10/-each, which is subject to approval of the shareholders at the ensuing Annual General Meeting. If approved, the total dividend for the financial year 2022-23 would amount to H 1.50/- per equity share of H 10/- each. The total dividend pay- out for the financial year 2022-23 including the proposed Final Dividend, would amount to H 1,960.28 crores.

As per regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”), the top 500 listed companies shall formulate a Dividend Distribution Policy.

Accordingly, the policy was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retained profits earned by the Company. The policy is also available on the Company''s website at https://irfc.co.in/sites/default/ files/inline-files/ Dividend-Distribution-Policy.pdf.

The details of unpaid/unclaimed amount of dividend as on 31^st March 2023 is as follows: -

Financial Year	Type of Dividend	Amount (in J Crores)
2020-21	Interim	0.584
2021-22	Interim	0.380
2021-22	Final	0.283
2022-23	Interim	0.313

Further, Members are requested to note that, dividends if not encashed for a consecutive period of seven (7) years from the date of transfer to Unpaid/Unclaimed Dividend Account of the Company, are liable to be transferred to the Investor Education and Protection Fund ("IEPF") authority. The shares in respect of such unpaid/unclaimed dividends are also liable to be transferred to the demat account of the IEPF Authority. In view of this, Members are requested to claim their dividends from the Company, within the stipulated timeline.

Details of Unpaid/Unclaimed Dividend is also available on Company''s website at https://irfc.co.in/index.php/investors/ financial-information.

3 Reserves

As per Section 45 - IC of the RBI Act, 1934, all NBFCs are required to create a Reserve equivalent to 20% of the net profit before payment of dividend.

Accordingly, 20% of the net profit of the Company amounting to H 1,267.40 crores had been transferred to Reserve Fund u/s Section 45 - IC of RBI Act, 1934.

4 Share Capital

As on 31^st March 2023, the Authorized Share Capital of the Company was H 25,000 crores, consisting of 25,000,000,000 crores Equity Shares of H 10/- each. The issued and paid-up share capital of the Company was H 13,068.506 crores, consisting of 13,06,85,06,000 Equity Shares of H 10/- each.

As on 31^st March 2023, 86.36% of the paid-up equity share capital of the Company comprising of 11,28,64,37,000 Equity Shares of H 10/- each were held by President of India acting through administrative ministry i.e., Ministry of Railways (MoR). The balance 13.64% of paid-up equity share capital was held by public. During the period under review there is no change in authorized and paid-up share capital of the Company.

Based on market capitalization of Company, it is in the list of top 500 listed companies on both stock exchanges i.e., NSE and BSE as on 31^st March 2023.

5 Independent Evaluators’ Assessment

5.1. Credit Ratings

5.1.1 Domestic: During the financial year 2022-23, the Company''s long-term domestic borrowing programme was awarded the highest credit rating of “CRISIL AAA/ Stable”, “ICRA AAA/Stable and “CARE AAA/Stable.

The Company also got its short-term borrowing programme rated, obtaining the highest rating of “CRISIL A1 '''', “ICRA A1 '''', and “CARE A1 ”.

5.1.2 International: During the financial year 2022-23, three international credit rating agencies - Standard & Poor''s, Fitch and Moody''s - have awarded “BBB with Stable Outlook”, “BBB- with Stable Outlook” and “Baa3 with Stable Outlook” ratings respectively to your Company. Besides, the Company obtained an issuer specific credit rating of “BBB with Stable Outlook” from the Japanese Credit Rating Agency. Each of the four credit ratings is equivalent to India''s sovereign rating and is of investment grade.

5.2. Memorandum of Understanding (MOU) with Ministry of Railways, Government of India

The Company enters Memorandum of Understanding (MoU) with Ministry of Railways (MoR) every year wherein Company is evaluated on various financial and non-financial parameters. Based on its performance, the Company has been rated ''Excellent'' by the Department of Public Enterprises (DPE) for the year 2021-22.

The company has executed MoU for Financial Year 2022-23 with MoR on 15^th November, 2022. In respect of parameters relating to Loans Disbursed to Total Funds Available, Company has achieved 99.64%, there were no Overdue loans to Total Loans and NPA to Total Loans. Further, Cost of raising funds through Bonds as compared to similarly rated CPSEs/ entities is 17 bps lower.

6 Market Borrowings during 2022-23

As per the demands made by MoR, IRFC made a disbursement of H 32,392.63 crores comprising of H 17,000 crores for funding of Rolling Stock and H 15,392.63 crores (including GST under reverse charge mechanism) for financing of Railway Projects under EBR-IF.

Borrowings during the year include Taxable Bonds worth H 21,558.70 crores (Previous year 19,847.90 crores), Rupee Term Loans of H 22,274.46 crores (previous year H 42,900 crores) and 54EC bonds of H 1,729.61 crores (previous year H 1,161.01 crores). The weighted average cost of the pool of borrowings made by Company during the year 2022-23 for rolling stock worked out to 7.51 % p.a (semi-annual) as against 6.62% (semi-Annual) during the previous year 2021- 22 and WACC for project assets under EBR-IF worked out to 7.52% for FY 2022-23 as against 6.43% (semi-Annual) during the previous year 2021-22.

Company had received approval of Ministry of Finance for issue of 54EC Capital Gain Bonds in October 2017, since then, Company is making all endeavors to increase its market share in 54EC Bond market. In 2022-23, Company mobilized around H 1,729.61 crores through 54EC Bond as against H 1,161.01 crores, registering a growth of 48.97%.

7 Redemption of Bonds / Repayment of Loans

During the year, the Company redeemed Bonds amounting to H 5,944.55 crores. The Company also repaid long term loans from Banks of H 9,187.18 crores during the year. The Company continues to maintain its impeccable track record of servicing its debt in time.

8 Internal Control Systems & their adequacy

The details are given in Management Discussion and Analysis.

9 RBI Prudential Norms

Your Company is registered as a Systemically Important Non-Deposit Taking Non- Banking Finance Company with the Reserve Bank of India. Being a Government NBFC, your Company was exempted from the prudential norms

prescribed by Reserve Bank of India for NBFC-ND-SI, as contained in the Master Directions issued vide Notification No. DNBR.008/CGM(CDS)-2015, dated 27^th March, 2015.

The exemption was withdrawn by Reserve Bank of India from 31^st May, 2018. However, the Company has obtained exemption from Reserve Bank of India from the asset classification, income recognition, credit concentration and provisioning norms on the direct exposure to Ministry of Railways, Govt. of India vide RBI letter dated 21^st December, 2018. The Company has also obtained relaxation in respect of lending limit applicable to Railway CPSEs from 20% of its owned funds to 100% of its owned funds. As such, the Company has complied with the applicable prudential norms.

Liquidity Coverage Ratio (LCR) Exemption:

RBI vide circular dated 4.11.2019 issued the guidelines covering liquidity risk management for NBFCs, wherein RBI introduced Liquidity Coverage Ratio (LCR) applicable on all non- deposits taking NBFCs with asset size of more than H 5,000 crores.

The company has got an exemption from RBI from applicability of Liquidity Coverage Ratio (LCR) norms.

10 Lease Arrangement with the Ministry of Railways (2022-23)

As you are aware, the financial relationship of the Company with the Ministry of Railways is based on a Financial Lease arrangement which is regulated by a standard lease agreement.

The weighted average cost of the pool of incremental borrowings for the FY 2022-23 of Rolling stock assets is at 7.51% p.a. (Semi-Annual) and Project Assets under the head EBR-IF is at 7.52% (Semi-Annual).

During the year, Company has executed the Lease Agreements for the Project Assets funded during FY 2016- 17 (EBR-IF) and FY 2019-20 (National Projects) after completion of moratorium period.

11 Resource Mobilization for 2023-24

Board has authorized the Company to borrow funds amounting to H 50,000 Crores as may be required during FY 2023-24 for meeting the funding requirement of Indian Railways, if any, new business activities, refinancing of existing loans and for other general corporate purposes.

12 Management Discussion and Analysis and Company''s Outlook for the future

Management Discussion and Analysis, forming part of the Directors'' Report given at ANNEXURE- I.

13 Report on Corporate Governance

The Government considers good corporate governance practices a sine qua non for sustainable business that aims at generating long term value for its shareholders and all other stakeholders. Accordingly, it has been laying increasing emphasis upon development of best corporate governance practices amongst Central Public Sector Enterprises (CPSEs). In pursuance of this philosophy, your Company continues to comply with the ‘Guidelines on Corporate Governance for Central Public Sector Enterprises'' issued by Government of India, Department of Public Enterprises (DPE). Your Company''s Equity as well as Non-Convertible Debt Securities are listed on the stock exchanges and Company has complied with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. As on 31^st March 2023, there were 5 (Five) Directors on the Board of the Company. The Board comprises of a Chairman & Managing Director (Addl. Charge) & Director (Finance), Two Non-Official/ Independent Director(s) and Two Government Nominee Director(s). As on the date of this Report, the Board of Directors comprised of Five (5) Directors, with one Executive Director, Two NonExecutive Directors (Govt. Nominees) and Two Non- Official/ Independent Directors. The Company does not have the prescribed number of Independent Directors on its Board in compliance of the Regulation 17(1) (a) of SEBI (LODR) Regulations 2015, specifying the composition of Board of Directors. Being CPSE, the power to appoint Directors vests with Government of India through Ministry of Railways (MoR) and Company has no role to play in it. The Company has already requested MoR for appointment of requisite number of Independent Directors. Report on Corporate Governance is enclosed as ANNEXURE- II forming part of this report.

14 Business Responsibility & Sustainability Report (BRSR)

The Business Responsibility & Sustainability Report, as stipulated under Regulation 34 (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is given in ANNEXURE-III and forms part of this Report.

15 Corporate Social Responsibility

Activities relating to Corporate Social Responsibility (CSR) have become an integral part of Company''s operations.

In terms of Section 135 of the Companies Act, 2013 (the Act), read with Schedule VII thereof and Companies (Corporate Social responsibility Policy) Rules, 2014, the Company has constituted a CSR Committee (the “Committee”) comprising of two (2) Independent Director(s) and Chairman & Managing Director (Addl. Charge) & Director (Finance) with the Independent Director as the Chairman of the Committee as on 31^st March 2023. As per the Act, Company is required to spend at least two (2) percent of the average of its net

profits of the immediately three preceding financial years on CSR activities. The Department of Public Enterprises (DPE) has also issued guidelines in this regard which, inter alia, require the Central Public Sector Enterprises (CPSEs) to frame a ‘CSR and Sustainability Policy''.

The ‘CSR and Sustainability Policy'' of the Company is in place and the same has also been hosted on the website at https://irfc.co.in/sites/default/files/inline-files/CSR-Policy. pdf. The Company, like in the past, has undertaken activities for CSR and Sustainable Development, details of which, are given hereunder: -

During the financial year 2022-23, the Company was required to spend H 91.31 crores, being 2% of its average net profits for the last three financial years. The Company has approved a total of 16 projects with a total outlay of H 59.00 crores and the remaining balance disbursed against H 30.31 crores to PM CARES Fund, H 1.00 crores to Swacch Bharat Kosh and H 1.00 crores to Clean Ganga Fund. Whereas the amount allocated towards 16 projects amounting to H 59.00 crores would be disbursed on receipt of bills/claims from the implementing agencies in future and the same amount has been transferred to the ‘CSR Unspent Account'' maintained with Scheduled Bank in terms of section 135(6) of the Companies Act, 2013. The details of CSR activities as required under the Companies Act for the financial year 2022-23 is annexed at ANNEXURE - IV.

CSR Activities proposed for the FY 2023-24

For the financial year 2023-24, the Company would be required to spend approx. H 112.27 crores. The details of all the projects/ activities will be provided in the next Annual Report.

16 Directors’ Responsibility Statement

As required under Section 134(3)(c) of the Companies Act, 2013, it is confirmed that:

a) In the preparation of the annual accounts for the year ended 31^st March 2023, the applicable Indian Accounting Standards have been followed and there are no material departures;

b) such accounting policies have been re-drafted taking into account the Ind-AS, judgments and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

c) Proper and sufficient care has been taken for maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud or other irregularities; and

d) the Annual accounts have been prepared on ‘going concern'' basis.

e) The laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively.

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

17 Human Resource Management

At IRFC we believe in a strong value system and best HR practices to enhance and improve our capabilities and achieve the organizational objectives.

As on 31^st March 2023, total Manpower of the Company stood at 41. To infuse fresh Manpower in the existing Manpower pool of the Company, 4 Executives and 3 Non-Executives were inducted in the Company during FY-2022-23 through Direct and Campus Recruitment. Women constituted 19.51% of its total workforce as on 31^st March, 2023.

The Company continues to maintain high level of employee productivity and efficiency as reflected in its low overhead to turnover ratio of less than 0.12%.

17.1 Women Employees

Your Company provides equal growth opportunities for the women in line with Govt. of India philosophy on the subject. Being a lean organization, where Company has 41 employees, women representation has grown across hierarchical levels. Thus, Women constituted 19.51% of its total workforce as on 31^st March 2023. As per Govt. of India directives and guidelines from time-to-time, IRFC ensures the welfare of women employees.

17.2 Information under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

The Company has an Internal Complaints Committee (ICC) to examine the case related to Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. The complaints received by the committee are being dealt in line with the provisions of the Act. During the FY 2022-23, no complaint has been received.

17.3 Training & Human Resource Development

In order to enhance the skills, capabilities and knowledge of employees, a well-defined Training and Development Policy for below board level executives and non-executives is in place. Employee training and development is an essential element of the Company''s

strategy. During the year 2022-23, the Company imparted training to 20 of its employees to various training programmes and workshops including inhouse trainings. These initiatives enabled the Company to achieve 95 training man days/ 912 Hrs.

17.4 Employee Welfare

The Company takes care of health and well-being of its employees by reimbursing in-patient and out-patient medical costs, provision for leaves on medical grounds, rehabilitation policy in case of death or permanent disability, which are applicable for all employees.

17.5 Grievance Redressal

To promote fair and equitable employment relationship, a scheme for Grievance Redressal of employees is also in place which ensures a time bound redressal of grievances.

18 Auditors

M/s KBDS & Company, Chartered Accountants, have been appointed as Statutory Auditors by Comptroller & Auditor General of India to audit the accounts of the Company for the financial year 2022-23.

The Comptroller & Auditor General of India has undertaken supplementary audit on accounts of the Company for the year ended 31^st March 2023. The comments of C&AG have been received and management reply there to is placed as Annexure to comments of C&AG in the Annual Report for the year 2022-23.

Secretarial Audit for the financial year 2022-23 under Section 204 of the Act has been conducted by M/s Akhil Rohatgi and Company, Practicing Company Secretaries.

19 Debenture Trustees

In compliance with SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 the details of Debenture Trustees appointed by the Company for different series of its bonds / debentures issued from time to time, are given in Corporate Governance Report which is enclosed as ANNEXURE-II.

20 Other Disclosures under the applicable provisions of the Companies Act, 2013

20.1 Number of Meetings of the Board

The details of number of meetings of the Board are given in Corporate Governance Report which is enclosed as ANNEXURE-II.

20.2 Certificate of Independence by Independent Director

Independent Directors of the Company have given a declaration that they meet the criteria of Independence, as laid down under Section 149 (6) of the Act, SEBI (LODR) Regulations, 2015 and DPE Guidelines on Corporate Governance for CPSEs.

Further, the Independent Directors of the Company are nominated / appointed by the President of India acting through the administrative ministry, i.e., Ministry of Railways (MoR). Accordingly, the appointing authority considers the integrity, expertise and experience of the individual to be nominated / appointed.

20.3 Material changes, if any, that may affect financial position of the Company

There are no material changes which will affect financial position of the Company.

20.4 Information in Corporate Governance Report

Information on composition, terms of reference and number of meetings of the Board and its Committees held during the year, establishment of Vigil Mechanism/ Whistle Blower Policy and weblinks for familiarization Programmes of Directors, Policy on Related Party Transactions, Policy for determining Material Subsidiaries, compensation to Key Managerial Personnel, sitting fees to Directors and details regarding IEPF etc. have been provided in the ‘Report on Corporate Governance'', prepared in compliance with the provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and DPE Guidelines on Corporate Governance, 2010, as amended from time to time, which forms part of this Annual Report.

20.5 Internal financial control systems and their adequacy

The details are given in Management Discussion and Analysis.

20.6 Audit Committee

The details pertaining to the Audit Committee are included in the Corporate Governance Report, which is enclosed as ANNEXURE-II.

20.7 Secretarial Auditors’ Report

M/s Akhil Rohatgi and Company, Practicing Company Secretaries was appointed as the Secretarial Auditors of the Company for the FY 2022-23 by the Board of Directors of the Company. Secretarial Audit Report is placed at ANNEXURE-V.

20.8 Secretarial Standards

Your Company complies with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

20.9 Certificate on Corporate Governance

M/s Akhil Rohatgi and Company, Practicing Company Secretaries has issued certificate on Corporate Governance, placed at ANNEXURE-VI.

20.10 Risk Management

The details are given in Management Discussion and Analysis. Further, the Company is having a Risk Management Committee (“RMC”) of its directors in place, for monitoring the integrated risks of the Company. The details pertaining to RMC Committee are included in the Corporate Governance Report, which is enclosed as ANNEXURE-II.

20.11 Risk Based Internal Audit

RBI vide its circular February 3, 2021, had mandated the Risk Based Internal Audit (RBIA) framework for all non- deposit taking NBFCs with asset size of H 5000 crores and above. In line with the RBI notification, Risk Based Internal Audit (RBIA) policy has been formulated and approved by the Board of Directors. RBIA will help the organization to identify the risks and address them based on the risk priority and direction provided by the Board. A firm of Chartered Accountant has been appointed as an expert to assist the Risk Based Internal Audit. The scope of RBIA is well defined and is very exhaustive to take care of all functions and business of the Company depending upon the risk assessment and control environment. Based on RBIA report, steps are taken at regular intervals to further strengthen the existing systems and procedures.

20.12 Particulars of loans, guarantees and investments

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

20.13 Transactions with related parties

The particulars of the transactions with related parties have been disclosed in the financial statements.

20.14 Stock Options

The Company has not issued any stock options to the Directors or any employee of the Company.

20.15 Significant and Material Orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company

There are no significant and/or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company.

20.16 Disclosure under Foreign Exchange Management Act, 1999

The Company is in compliance with the relevant provisions of the Foreign Exchange Management Act, 1999 pertaining to external commercial borrowing and derivatives.

20.17 Extract of Annual Return

The extract of Annual Return is given in ANNEXURE-VII which forms part of this report. After filing of the annual return for FY 2022- 23 with MCA, the same will be uploaded on website of the Company at https://irfc. co.in/.

20.18 Code of Business Conduct-Declaration by CEO

Declaration by CEO on compliance of the “Code of Business Conduct and Ethics for Board Members and Senior Management” for the year 2022-23 is placed at ANNEXURE-VIII.

20.19 CEO/CFO Certification

As required by Regulation 17 (8) of the SEBI (LODR) Regulations, 2015, the Compliance Certificate as specified in Part B of Schedule II of the said Regulation duly signed by Ms. Shelly Verma, Chairman & Managing Director (Addl. Charge), CEO & Director (Finance) and Shri Sunil Kumar Goel, Chief Financial Officer (CFO) was placed before the Board of Directors in their Meeting held on 25^th May 2023. The same is enclosed as ANNEXURE-IX.

20.20 Particulars of Employees receiving high emuneration & other particulars of employees

Since IRFC is a Government Company, provisions of Section 197 are not applicable to it. Hence, the details have not been given.

20.21 Deposits from public

The Company has not accepted any fixed deposits during the period under review and the Board of Directors has passed requisite resolution in this regard, in compliance of RBI guidelines.

20.22 Cost Records

The Central Government has not prescribed the maintenance of cost records for the products/services

of the Company under the Companies (Cost Records and Audit) Rules, 2014 read with the Companies (Cost Records and Audit) Amendment Rules, 2014 prescribed by the Central Government under Section 148 of the Companies Act, 2013. Accordingly, cost accounts and records are not required to be maintained by the Company.

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

Pursuant to the Provision of Section 134(3)(m) of the Companies Act, 2013, in respect of Conservation of Energy and Technology absorption, following steps have been taken by your Company: -

To save power, the Company purchases LED/ LCD monitors while replacing the old monitors. Employees are encouraged to keep their gadgets in power saving mode, wherever possible. The Company now replaces its old electrical items, gadgets, etc. with power efficient units. The internal lightning of office by energy- efficient LED lights has helped to conserve electricity.

20.24 Foreign exchange earnings & outgo

Your Company has put in place Comprehensive Risk Management policy to manage risks associated with foreign currency borrowings. The Company enters into hedging transactions to cover exchange rate and interest rate risk through various instruments like forwards and swaps. Details of Foreign exchange earnings & outgo have been given in the Notes to Accounts.

20.25 LIBOR Transition

ISDA (International Swaps and Derivatives Association), the globally recognized statutory body governing the global derivative deals and benchmark transitions, had come up with the ISDA 2020 IBOR Fallbacks Protocol (commonly referred to as Fallback Protocol) to move all the legacy contracts from existing benchmarks to new benchmarks under the Interest Rate Benchmark Reform. For USD LIBOR benchmark to be transitioned with effect from 30^th June 2023, the Alternative Reference Rates Committee (ARRC) set up by the Federal Reserve Bank had recommended the Secured Overnight Financing Rate (SOFR) as the new benchmark as against USD LIBOR.

IRFC is currently having three facilities of SBI Bahrain USD 300 million, SBI Hong Kong USD 1 bn and SBI Hong Kong USD 2 bn having interest payment exposure in USD LIBOR which have been transitioned from USD LIBOR to SOFR. Such transition has been undertaken by signing a bilateral Amendment and Restated agreement for each of the three facilities rather than signing the ISDA IBOR Fallback Protocol. IRFC has also executed the revised term sheets with all the relevant hedge counterparties being impacted by such transition and accordingly the exposure has been suitably shifted from USD LIBOR to SOFR.

There were two other facilities of AFLAC to the tune of JPY 15 billion (equivalent to USD 183 million) for which IRFC entered into a Cross Currency Swap resulting in exposure to USD LIBOR which was further hedged by taking an Interest Rate Swap. This USD LIBOR exposure has also been transitioned to SOFR by signing the ISDA IBOR Fallback Protocol.

20.26 Expenditure on R&D

This is not applicable, as IRFC is engaged only in financing activities.

20.27 Captial Commitment

IRFC has entered into a lease agreement with RLDA for allotment of 6019 sq mtr of office space with total value of the lease premium amounting to H 195.52 crores out of which H 48.88 crores is paid and balance of H 146.64 crores is yet to be paid.

IRFC entered into a contract with M/S RailTel Limited for implementation of ERP amounting to H 20.81 crores payment for this is yet to be made, IRFC has also appointed M/s KPMG for providing consultancy service for implementation of ERP at a total cost of H 0.79 crores, out of which H 0.16 crores is paid and balance amount of H 0.64 crores is yet to be paid.

20.28 Reporting of Frauds by Auditors

During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143(12) of the Companies Act, 2013, any instance of fraud committed against the Company by its officers or employees, the details of which need to be mentioned in the Board''s Report.

20.29 Change in nature of Business

There was no change in the nature of business of the Company during the financial year 2022-23.

20.30 The names of companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies

There are no Subsidiaries, joint ventures, or associate companies during the year 2022-23.

20.31 The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year

There was no application made nor any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) against the Company.

21 Compliance of MSME Guidelines

Your Company has in place, a Manual for Procurement of Goods, Services and Works, which provides guidelines to expedite decision making process by way of consolidating, simplifying and streamlining the various steps to be followed in the process of award of contracts from the procurement of goods, works & services as well as during its implementation on the ground.

The procurement from MSMEs complies to Public Procurement Policy during the financial year 2022-23 as placed below:

(H in Crores)
1 Total annual procurement	12.47
2 Target % age of annual procurement	31.25%
3 Total value of goods and services procured from MSMEs (including MSMEs owned by SC/ST entrepreneurs)	4.25
4 Total value of goods and services procured from only MSMEs owned by SC/ST entrepreneurs	Nil
5 % age of procurement from MSMEs (including MSMEs owned by SC/ ST entrepreneurs) out of total procurement	34.09%
6 % age of procurement from only MSMEs owned by SC/ ST entrepreneurs out of total procurement	Nil
7 % age of procurement from Women MSMEs	15.04%

22 Vigilance Activities

Ministry of Railways have nominated a part time Chief Vigilance Officer (CVO). The CVO carries out internal scrutiny of the activities on random basis to ensure compliance with the laid down CVC guidelines and procedures. During the vigilance awareness week preventive vigilance workshops were also conducted for the benefit of employees of IRFC. These workshops inter-alia covers contract management, provision of CDA Rules, compliances of rules and policies, deliberations of case studies etc., such workshops have ensured that best ethical practices are followed in the organization.

The Company has observed Vigilance Awareness Week in 2022-23 from October 31,2022 to November 6, 2022, on the theme “Corruption free India for a developed Nation”, in line with the circular issued in this regard by the Central Vigilance Commission. All employees were administered an Integrity Pledge, to spread awareness about vigilance amongst the employees, as well as public at large.

23 Official Language

The official language implementation committee of the Company meets every quarter to monitor and review the progress made for achieving the targets fixed in Annual Program issued by the official language department Ministry of Home Affairs, Government of India. Effective measures were taken to bring out progressively higher use of Hindi in day-to-day working of the Company. Hindi workshops / trainings are regularly organized and for these employees are sponsored for the trainings/workshops.

Hindi week was observed in your Company from 14^th September 2022 to 29^th September, 2022 to motivate the employees for the progressive use of Hindi in their day to- day work. Several competitions / programmes were organized to encourage the employees to work in Hindi and create a conducive atmosphere. The participants were accordingly awarded. Further, cash award was also given to employees making most extensive use of Hindi in their day to day official work under the Government scheme.

The official website of your Company exists in fully bilingual form and contains all information of interest to its stakeholders.

24 Presidential Directive

Presidential Directive No.2023/PL/47/3 dated 29^th May 2023 has been received for insertion of new article in articles of Association of the Company.

25 Right to Information Act, 2005

The Government of India''s instructions on Right to Information Act, 2005 is being complied with. All relevant information has been hosted on the Company''s website.

26 Board of Directors and Key Managerial Personnel

Being a Government Company, the power to appoint Directors on the Board of the Company is vested with the President of India acting through the Ministry of Railways (MoR), Government of India. The remuneration of Directors and employees of the Company is fixed as per the extant Guidelines issued by Department of Public Enterprises (DPE), from time to time. The sitting fee paid to Non- Official/ Independent Directors for attending the meetings of Board and Committees thereof, are within the limits prescribed under the Companies Act, 2013. The Government Nominee Director is not entitled to receive any remuneration or sitting fee from the Company, as per the norms of Government of India. Details of remuneration and sitting fees paid to Directors are appearing in the ‘Report on Corporate Governance'' annexed to this Report.

Further, being a CPSE, the remuneration of Functional Directors, Key Managerial Personnel and other employees of the Company, including Senior Management Personnel, is determined as per the extant guidelines on pay, perquisites, allowances etc. issued by the Department of Public Enterprises (DPE) and/or Government of India from time to time.

Pursuant to Section 203 of the Companies Act, 2013, the Board of Directors of the Company has designated the Chairman and Managing Director as CEO, Group General Manager (Finance) as CFO, and Company Secretary (CS) as Key Managerial Personnel (KMPs) of the Company. Being a Government Company, the role of CEO is being performed by Chairman and Managing Director (CMD) and the role of CFO is performed by Group General Manager (Finance) of the Company.

The following changes have taken place in the composition of the Key Managerial Personnel: -

1. Ms. Shelly Verma, Director (Finance) has been entrusted with the additional charge of post of Chairman and Managing Director for a period of 1 year w.e.f. 15^th October 2022 and accordingly she has been designated as Chairman and Managing Director (Addl. Charge), CEO & Director (Finance) of the Company.

2. Shri Sunil Kumar Goel, Group General Manager (Finance) is designated as Chief Financial Officer (CFO) and KMP of the Company, w.e.f. 25^th May 2023.

3. Ministry of Railways, vide order no 2018/E(O)II/40/19 dated 6^th May 2023 has communicated the pre-mature termination of the services of Shri Amitabh Banerjee from the post of CMD, Indian Railway Finance Corporation Limited (IRFC) w.e.f. 15^th October 2022.

4. Appointment of Shri Vallabhbhai Maneklal Patel (DIN: 07713055) has been regularized in the 35^th AGM of the Company held on 23^rd September, 2022 who was appointed as an Additional Director (Non- Official/ Independent Director) of the Company as per Ministry of Railways (MoR) order no. 2019/PL/57/22 dated 9^th November 2021 with effect from 10^th November 2021, under Section 161 of the Co''s Act, 2013.

5. Appointment of Smt. Sheela Pandit (DIN: 09403193) has been regularized in the 35^th AGM of the Company held on 23^rd September, 2022 who was appointed as an Additional Director (Non- Official/Independent Director) of the Company as per Ministry of Railways (MoR) order no. 2019/PL/57/22 dated 9^th November 2021 with effect from 22^nd November 2021, under Section 161 of the Co''s Act, 2013.

Director(s) retiring & seeking appointment/ reappointment in the ensuing AGM

In accordance with the provisions of the Companies Act, 2013 and Article 210 of the Articles of Association of the Company, Shri Bhaskar Choradia (DIN:08975719), Govt. Nominee Director shall retire by rotation at the ensuing 36^th Annual General Meeting of the Company and being eligible, offers himself for re-appointment. The Board of Directors recommends his re-appointment. Brief resume and other particulars of Shri. Bhaskar Choradia is annexed to the Notice of AGM.

27 Evaluation of Board of Directors/ Independent Directors

As per the statutory provisions, a listed company is required to disclose in its Board''s Report, a statement indicating the manner in which formal annual evaluation of the performance of the Board, its committees and individual Directors has been made and the criteria for performance evaluation of its Independent Directors, as laid down by the Nomination & Remuneration Committee.

However, the Ministry of Corporate Affairs (“MCA”) vide its notification dated June 5, 2015, has, inter-alia, exempted Government companies from the above requirement. Directors are evaluated by the Ministry or Department of the Central Government, which is administratively in charge of the company, as per its own evaluation methodology. Further, MCA vide notification dated July 5, 2017, also prescribed that the provisions relating to review of performance of Independent Directors and evaluation mechanism prescribed in Schedule IV of the Companies Act, 2013, is not applicable to Government companies.

Accordingly, being a Government company, IRFC is, interalia, exempted in terms of the above notifications, as the evaluation of performance of all members of the Board of the Company is being done by the administrative ministry i.e., the Ministry of Railways and/or by the Department of Public Enterprises (DPE).

28 ‘Think Green, Go Green’ Initiative

The Companies Act, 2013 permits companies to send documents like Notice of Annual General Meeting, Annual Report etc. through electronic means to its members at their registered email addresses. As a responsible corporate citizen, the Company has actively supported the implementation of ‘Green Initiative'' of the Ministry of Corporate Affairs (MCA) and effected electronic delivery of Notices and Annual Reports to shareholders, whose email ids are registered. The intimation of dividend (interim/ final) is also being sent electronically to such shareholders. Further, pursuant to Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014, the Company is providing

e-voting facility to all members to enable them to cast their votes electronically in respect of resolutions set forth in postal ballot and Annual General Meeting (AGM). The Company will also be conducting the AGM this year through video conferencing / other audio-visual means. Members can refer to the detailed instructions for e-voting and electronic participation in the AGM, as provided in the Notice of AGM. Members, who have not registered their e-mail addresses so far, are requested to register their e-mail addresses with the Registrar and Share Transfer Agent (R&TA) of the Company or their respective Depository Participant (DP) and take part in the green initiative.

29 Acknowledgements

Your Company is grateful to the Ministry of Railways, Ministry of Finance, Ministry of Corporate Affairs, Public Enterprises Selection Board, Department of Public Enterprises, National Informatics Centre, other Departments of the Government, Securities and Exchange Board of India and the Reserve Bank of India, for their co-operation, assistance, active and timely support, and guidance rendered from time to time. The Company is also thankful to all its Shareholders, Bondholders, Banks, Financial Institutions, Arrangers, Registrar and Transfer Agents, Bond Holders Trustees, National Stock Exchange of India Limited, BSE Limited, Life Insurance Corporation of India and other stakeholders for reposing their confidence and trust in the Company. The Company looks forward to their continued support for sustaining its excellent performance levels. The Company expresses gratitude to the Comptroller & Auditor General of India, the Statutory Auditors, Secretarial Auditors and the Internal Auditors for their valuable support and guidance. The Board of Directors express their deep appreciation in recognition of the valuable contribution made by the Company''s small team of officers and employees, which has enabled the Company to successfully meet the funding targets set by the Ministry of Railways, while consolidating its position as one of the most vibrant public financial institutions in the country.

For and on behalf of the Board of Directors

Sd/-

(Shelly Verma)

Chairman & Managing Director (Addl. Charge) & Director (Finance) (DIN: 07935630)

Place : New Delhi

Date : 11^th August, 2023

---

Mar 31, 2022

Your directors have the pleasure in presenting the 35th Annual Report of the Company along with the Audited Financial Statements, Auditor''s Report and review of the Accounts by the Comptroller & Auditor General of India for the financial year ended 31st March 2022.

1. Financial Highlights

The highlights of financial performance of your Company for the year ended 31st March 2022 in comparison to the year ended 31st March 2021 are summarized below:

(H In Million)
Particulars	Year ended 31-03-2022	Year ended 31-03-2021
I. Revenue from operations	2,02,982.68	1,57,702.21
II. Dividend Income	9.96	2.51
III. Other income	23.33	3.90
IV. Total Revenue (I II III)	2,03,015.97	1,57,708.62
V. Expenses
Finance costs	1,40,747.82	1,12,370.53
Impairment on financial instruments	4.61	27.15
Employee benefit expense	107.48	78.47
Depreciation and amortization expense	140.25	44.32
Other expenses	1,114.26	1,026.84
Total Expenses	1,42,114.42	1,13,547.31
VI. Profit before tax (IV-V)	60,901.55	44,161.31
VII. Tax expense:
(1) Current tax		-
(2) Adjustment for Earlier Years	3.19	-
(3) Deferred tax		-
Total Taxes	3.19	-
VIII. Profit (Loss) for the current Year from continuing operations (VI-VII)	60,898.36	44,161.31
IX. Other Comprehensive Income	(5.00)	14.76

Revenue from operations of your Company has increased by H 45,280.47 million from H 1,57,702.21 million in 2020- 21 to H 2,02,982.68 million in 2021-22 , showing a growth of 28.71 %.

Profit before Tax (PBT) of your Company for the year ended 31st March 2022 was H 60,901.55 million as compared to H 44,161.31 million for the previous year, registering a growth of 37.91%.

Company has not made any provision for tax in its books pursuant to its decision to exercise the option of lower tax rate permitted u/s 115BAA of the Income Tax Act, 1961, as

introduced by the Taxation Laws (Amendment) Ordinance, 2019 dated 20th September, 2019. The Company''s taxable income was nil and it did not have to pay Minimum Alternate Tax (MAT) with reference to its Book Profit. MAT payable u/s 115 JB was outside the ambit of the Section 115 BAA. Thus, on adoption of Section 115 BAA of the Income Tax Act, 1961, the Company was outside the scope and applicability of MAT provisions and there was a zero-tax liability in the financial year 2021-22.

Profit After Tax for the year ending 31st March 2022 was H 60,898.36 million as compared to H 44,161.31 million for the previous year, registering a healthy growth of 37.90%.

2.1 Dividend

Your Company seeks to strike a judicious balance between the return to the shareholders and retaining a reasonable portion of the profit to maintain a healthy financial leverage with a view to supporting and sustaining future borrowings and growth.

Board of Directors, in their meeting held on 01st November 2021, had declared the Interim Dividend @ 7.7% i.e., H 0.77/- per equity share having face value of H 10/- each for F.Y 2021- 22, which was paid on 23rd November 2021.

Further, the Board of Directors in its meeting held on 20th May 2022 has also recommended a Final Dividend @ 6.3% i.e., H 0.63/- per equity share having face value of H 10/-each, which is subject to approval of the shareholders at the ensuing Annual General Meeting. If approved, the total dividend for the financial year 2021-22 would amount to H 1.4/- per equity share of H 10/- each. The total dividend payout for the financial year 2021-22, including the proposed Final Dividend, would amount to H 1,829.60 crore.

As per regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations), the top 500 listed companies shall formulate a Dividend Distribution Policy. Accordingly, the policy was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retained profits earned by the Company. The policy is also available on the Company''s website https://irfc.co.in/wp-content/ uploads/2022/05/Dividend-Distribution-Policy.pdf

The unclaimed interim dividend amount for the FY 2020-21 as on 31st March 2022 was H 5.92 million and unclaimed interim dividend amount for the FY 2021-22 as on 31st March 2022 was H 4.04 million.

Further, Members are requested to note that, dividends if not encashed for a consecutive period of seven (7) years from the date of transfer to Unpaid Dividend Account of the Company, are liable to be transferred to the Investor Education and Protection Fund ("IEPF"). The shares in respect of such unclaimed dividends are also liable to be transferred to the demat account of the IEPF Authority. In view of this, Members are requested to claim their dividends from the Company, within the stipulated timeline.

Details of Unpaid/Unclaimed Dividend is available on Company''s website at https://irfc.co.in/investors-2/

2.2 Reserves

As per Section 45 - IC of the RBI Act, 1934, all NBFCs are required to create a Reserve equivalent to 20% of the net

profit before payment of dividend. RBI granted exemption to Government NBFCs from compliance of provisions of Section 45 - IC of the RBI Act, 1934. However, the exemption has been withdrawn by RBI w.e.f. 31st May 2018. Accordingly, 20% of the net profit of the Company amounting to H 12,179.67 Million had been transferred to Reserve Fund u/s Section 45 - IC of RBI Act, 1934.

Out of the remaining amount of profit, the sum of H 38,661.55 Mn has been kept in Retained Earnings after meeting a sum H 10,062.75 Mn towards Interim Dividend for FY 2021-22.

3. Share Capital

As on 31st March 2022, the Authorized Share Capital of the Company was H 25,000 crore, consisting of 25,000,000,000 crore Equity Shares of H 10/- each. The Issued and Paid-Up Share Capital of the Company was H 13,068.506 crore, consisting of 13,068,506,000 Equity Shares of H 10/- each.

As on 31st March 2022, 86.36% of the paid-up equity share capital of the Company comprising of 11,28,64,37,000 Equity Shares of H 10/- each were held by President of India acting through administrative ministry i.e., Ministry of Railways (MoR). The balance 13.64% of paid-up equity share capital was held by public. During the period under review there is no change in authorized and paid-up share capital of the Company.

Based on market capitalization of Company, it is in the list of top 500 listed companies as on 31st March 2022.

4. Independent Evaluators’ Assessment 4.1. Credit Ratings

4.1.1 Domestic: During the financial year 2021-22, the Company''s long-term domestic borrowing programme was awarded the highest credit rating of “CRISIL AAA/ Stable”, “[ICRA] AAA (Stable)” and “CARE AAA [Triple A]” by CRISIL, ICRA and CARE respectively. The Company also got its short-term borrowing programme rated, obtaining the highest rating of ‘‘CRISIL A1 '''', ‘‘[ICRA] A1 '''', and “CARE A1 [A One Plus]” by CRISIL, ICRA and CARE.

4.1.2 International: During the financial year 2021-22, three international credit rating agencies - Standard & Poor''s, Fitch and Moody''s - have awarded “BBB- with Stable Outlook”, “BBB- with Negative Outlook” and “Baa3 with Stable Outlook” ratings respectively to your Company. Besides, the Company obtained an issuer specific credit rating of “BBB with Stable Outlook” from the Japanese Credit Rating Agency. Each of the four credit ratings is equivalent to India''s sovereign rating and is of investment grade.

4.2. Memorandum of Understanding (MOU) with Ministry of Railways, Government of India

The Company enters Memorandum of Understanding (MoU) with Ministry of Railways (MoR) every year wherein Company is evaluated on various financial and non-financial parameters. Based on its performance, the Company has been rated ‘Excellent'' by the Department of Public Enterprises (DPE) with a score of 91.24 (Excellent) for the year 2020-21.

The company has executed MoU for Financial Year 2021-22 with MoR on 19th January, 2022. In respect of parameters relating to Loans Disbursed to Total Funds Available, Company has achieved 99.91%, there were no Overdue loans to Total Loans and NPA to Total Loans. Further, Cost of raising funds through Bonds as compared to similarly rated CPSEs/ entities is 15 bps lower as compared to Reuters benchmark.

5. Market Borrowings during 2021-22

During the year, Company was assigned a target of H 65,258 crores comprising of H 30,300 Crore for funding of Rolling Stock, H 34,258 Crore for financing of Railway Projects under EBR-IF and H 700 Crores to meet the debt financing requirements of RVNL. The total disbursement for FY 202122 was H 60,683.41 Crores comprising of H 28,100 Crore for funding of Rolling Stock, H 31,883.41 Crore for financing of Railway Projects under EBR-IF and H 700 Crores to meet the debt financing requirements of RVNL. The cumulative funding to Railway Sector has crossed H 5.04 lakh crore mark.

Borrowings during the year include Taxable Bonds worth H 19,847.90 crore (Previous year 27,727.70 crore), External Commercial Borrowings (ECB) of H 12,004.17 crore (previous year H 29,586.95 Crore) at exchange rate prevailing on the draw down date, Rupee Term Loans of H 42,900 crore (previous year H 52,401.75 Crore) and 54EC bonds of H 1,161.01 crore (previous year H 842.60 crore). The weighted average cost of the pool of borrowings made by Company during the year 2021-22 worked out to 6.42% (semi-annual) as against 6.51% (semi-Annual) during the previous year 2020-21.

The Company was able to achieve this feat through constant monitoring of the markets, proper timing of its borrowings and appropriate selection of instruments.

During the year, the Company constantly diversified its borrowing portfolio to meet the target of borrowings mandated by MoR at the most competitive rates and terms. In its endeavor towards diversification of its borrowing portfolio following transactions in regard to the ECB borrowings were undertaken: -

• Green Bonds: Funds to the extent of USD 500 Million, at a fixed coupon of 3.57% per annum payable semiannually. H 3,729.935 Cr under IRFC''s USD 7 bn GMTN programme. IRFC has become the first CPSE in the country to list its offshore bonds exclusively at stock exchanges established in the GIFT City, Gandhinagar.

• Green Loan (Offshore loan): In regard to offshore loan, IRFC raised JPY loan equivalent to USD 1.10 bn/INR 8,274.23 Cr comprising of two tranches of USD 700 mn and USD 400 mn having tenor of 10 years and 7 years respectively.

Company had received approval of Ministry of Finance for issue of 54EC Capital Gain Bonds in October 2017, since then, Company is making all endeavors to increase its market share in 54EC Bond market. In 2021-22, Company mobilized around H 1,161.01 crore through 54EC Bond.

6. Redemption of Bonds / Repayment of Loans

During the year, the Company repaid Bonds amounting to H 10,715.84 crore (and External Commercial Borrowings (ECB) of H 22.41 crore. The Company also redeemed long term loans from Banks of H 4,582 crore and Commercial Paper with face value of H 2,900 crore during the year.

The Company continues to maintain its impeccable track record of servicing its debt in time and there has not been a single instance of default during the year.

7. Internal Financial Control Systems & their adequacy

The details are given in Management Discussion and Analysis.

8. RBI Prudential Norms

Your Company is registered as a Systemically Important Non-Deposit Taking Non- Banking Finance Company with the Reserve Bank of India. Being a Government NBFC, your Company was exempted from the prudential norms prescribed by Reserve Bank of India for NBFC-ND-SI, as contained in the Master Directions issued vide Notification No. DNBR.008/CGM(CDS)-2015, dated 27th March, 2015.

However, the exemption was withdrawn by Reserve Bank of India from 31st May, 2018. However, the Company has obtained exemption from Reserve Bank of India from the asset classification, income recognition, credit concentration and provisioning norms on the direct exposure to Ministry of Railways, Govt. of India vide RBI letter dated 21st December, 2018 . The Company has also obtained relaxation in respect of lending limit applicable to Railway CPSEs from 20% of its owned funds to 100% of its owned funds. As such, the Company has complied with the applicable prudential norms.

12. Impact of Global Health Pandemic COVID-19

The outbreak of coronavirus (COVID -19) pandemic globally and in India is causing disturbance and slowdown of economic activity. The Company has adopted measures to curb the spread of infection in order to protect the health of its employees and ensure business continuity with minimal disruption.

The Company has evaluated the impact of this pandemic on its business operations and based on its review and current indicators of future economic conditions, there is no significant impact on its financial results. However, the impact assessment of COVID-19 is a continuing process given the uncertainties associated with its nature and duration and accordingly the impact may be different from that estimated as at the date of approval of these financial results. The Company will continue monitoring any material changes to future economic conditions.

13. Report on Corporate Governance

The Government considers good corporate governance practices a sine qua non for sustainable business that aims at generating long term value for its shareholders and all other stakeholders. Accordingly, it has been laying increasing emphasis upon development of best corporate governance practices amongst Central Public Sector Enterprises (CPSEs). In pursuance of this philosophy, your Company continues to comply with the ‘Guidelines on Corporate Governance for Central Public Sector Enterprises'' issued by Government of India, Department of Public Enterprises (DPE). Your Company''s Equity as well as Non-Convertible Debt Securities are listed on the stock exchanges and Company has complied with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. As on 31st March 2022, the Board of Directors comprised of Six (6) Directors, with two Executive Directors, Two Non-Executive Directors (Govt. Nominees) and Two Non- Official/ Independent Directors. The Company is not having the prescribed number of Independent Directors in compliance of the Regulation 17 (1) (a) of SEBI (LODR) Regulations 2015, specifying the composition of Board of Directors. The power to appoint Directors vests with Government of India through Ministry of Railways (MoR) and Company has no role to play in it. The Company has already requested MoR for appointment of requisite number of Independent Directors. Report on Corporate Governance is enclosed as ANNEXURE- II forming part of this report.

14. Business Responsibility Report

The Business Responsibility Report, as stipulated under Regulation 34 (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is given in ANNEXURE-III and forms part of this Report.

Liquidity Coverage Ratio (LCR) Exemption:

RBI vide circular dated 4.11.2019 issued the guidelines covering liquidity risk management for NBFCs, wherein RBI introduced Liquidity Coverage Ratio (LCR) applicable on all non- deposits taking NBFCs with asset size of more than H 5,000 crore. The guidelines aim to maintain a liquidity buffer in terms of LCR by ensuring that they have sufficient High Quality Liquid Asset (HQLA) to survive any acute liquidity stress scenario lasting for next 30 days. As per the guideline, LCR is represented by stock of High- Quality Liquid Assets (HQLA) divided by Total Net Cash Outflows (stressed outflow less stressed inflows) over the next 30 calendar days. HQLAs are defined by RBI as the liquid assets that can be readily sold or immediately convertible into cash at little / no loss of value or can be used as collateral to obtain funds in stress situations.

The company has got an exemption from RBI from applicability of Liquidity Coverage Ratio (LCR) norms.

9. Lease Arrangement with the Ministry of Railways (2021-22)

As you are aware, the financial relationship of the Company with the Ministry of Railways is based on a Financial Lease arrangement which is regulated by a standard lease agreement. In respect of the incremental rolling stock assets acquired during 2021-22 through IRFC funding, lease rentals have been fixed at H 52.5935 per thousand per half (PTPH) year over a primary lease tenor of 15 years. The cost (IRR) to Ministry of Railways is 7.02% p.a. payable semi-annually as compared to 7.11% last year, down by 9 bps.

During the current year, Company has executed the Lease Agreement for the first time for Project Assets funded during FY 2015-16 (EBR-IF) and FY 2018-19 (National Projects) after completion of moratorium period.

10. Resource Mobilization for 2022-23

For the year 2022-23, the annual funding target for IRFC has been fixed at H 66,500 crore which includes H 31,000 crore for funding of Rolling Stock assets and funding of Railway projects to the extent of H 35,500 crore.

The Company is confident of meeting the challenge and hopeful to raise the required amount during the year through a judicious mix of Bonds, Loans and External Commercial Borrowings, etc., at the most competitive rates and terms.

11. Management Discussion and Analysis and Company''s Outlook for the future

Management Discussion and Analysis, forming part of the Directors'' Report given at ANNEXURE I.

Activities relating to Corporate Social Responsibility (CSR) have become an integral part of Company''s operations.

In terms of Section 135 of the Companies Act, 2013 (the Act), read with Schedule VII thereof and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a CSR Committee (the Committee) comprising of Chairman & Managing Director, Director Finance, and Independent Director. Under the Act, the Company is required to spend at least two percent of the average of its net profits of the immediately three preceding financial years on CSR activities. The Department of Public Enterprises (DPE) has also issued guidelines in this regard which, inter alia, require the Central Public Sector Enterprises (CPSEs) to frame a ‘CSR and Sustainability Policy''.

The ‘CSR and Sustainability Policy'' of the Company is in place and the same has also been hosted on its website. The Company, like in the past, has undertaken activities for Sustainable Development and CSR, details of which, are given hereunder: -

During the financial year 2021-22, the Company was required to spend H 70.06 crore, being 2% of its average net profits of the last three financial years, against which, the Company approved total 24 projects with total outlay of H 70.06 crore, against which, the Company has disbursed a sum of H 45.02 crore, including H 38.91 crore contribution to PM CARES Fund, H 3 crore to Clean Ganga Fund, H 2 crore to Swacch Bharat Kosh, H 0.996 crore contribution towards Armed Forces Flag Day Fund (AFFDF) Rs 0.1128 crore towards ongoing project of skill training of 500 persons with disabilities and the balance amount of H 25.04 crore would be disbursed on receipt of bills/claims from the implementing agencies in future. CSR Unspent amount of H 25.04 crore relating to the ongoing projects of the financial year 2021-22, has since been transferred to the ‘CSR Unspent Account'' maintained with Scheduled Bank in terms of section 135(6) of the Companies Act, 2013. The Company is committed to promoting Health and Nutrition as the theme for focused intervention as mandated by Department of Public Enterprises for the Financial Year 2021-22.

CSR Activities proposed for the FY 2022-23

For the financial year 2022-23, the Company would be required to spend about H 91.31 crore. The details of all the projects / activities would be provided in the next Annual Report.

The details of CSR activities for the financial year 202122 as required under the Companies Act are given in the ANNEXURE - IV.

16. Directors’ Responsibility Statement

As required under Section 134(3)(c) of the Companies Act, 2013, it is confirmed that:

a) In the preparation of the annual accounts for the year ended 31st March 2022, the applicable Indian Accounting Standards have been followed and there are no material departures;

b) such accounting policies have been re-drafted taking into account the Ind-AS, judgments and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

c) Proper and sufficient care has been taken for maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud or other irregularities; and

d) the Annual accounts have been prepared on ‘going concern'' basis.

e) The laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively.

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

17. Human Resource Management

The details are given in Management Discussion and Analysis.

18. Auditors

M/s KBDS & Company, Chartered Accountants, have been appointed as Statutory Auditors by Comptroller & Auditor General of India to audit the accounts of the Company for the financial year 2021-22.

The Comptroller & Auditor General of India has undertaken supplementary audit on accounts of the Company for the year ended 31st March 2022. The comments of C&AG have been received and management reply thereto is placed as Annexure to Comments of C&AG in the Annual Report for the year 2021-22.

Secretarial Audit for the financial year 2021-22 under Section 204 of the Act has been conducted by M/s Navneet K Arora & Co LLP, Company Secretaries.

19. Other Disclosures under the applicable provisions of the Companies Act, 2013

19.1 Number of Meetings of the Board

The details of number of meetings of the Board are given in Corporate Governance Report which is enclosed as ANNEXURE-II.

19.2 Certificate of Independence by Independent Director

Independent Directors, have given a declaration that they meet the criteria of Independence, as laid down under Section 149 (6) of the Act, SEBI (LODR) Regulations, 2015 and DPE Guidelines on Corporate Governance for CPSEs.

19.3 Material changes, if any, that may affect financial position of the Company

There are no material changes which will affect financial position of the Company.

19.4 Internal financial control systems and their adequacy

The details are given in Management Discussion and Analysis.

19.5 Audit Committee

The details pertaining to Audit Committee are included in the Corporate Governance Report, which is enclosed as ANNEXURE-II.

19.6 Secretarial Auditors’ Report

M/s Navneet K Arora & Co LLP, Company Secretaries was appointed as the Secretarial Auditors of the Company for the FY 2021-22 by the Board of Directors of the Company. Secretarial Audit Report is placed at ANNEXURE V.

19.7 Certificate on Corporate Governance

M/s Navneet K Arora & Co LLP, Company Secretaries in Practice has issued certificate on Corporate Governance, placed at ANNEXURE VI.

19.8 Risk Management

The details are given in Management Discussion and Analysis.

19.9 Particulars of loans, guarantees and investments

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

19.10 Transactions with related parties

The particulars of the transactions with related parties have been disclosed in the financial statements.

19.11 Significant and Material Orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company

There are no significant and/or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company.

19.12 Disclosure under Foreign Exchange Management Act, 1999

The Company is in compliance with the relevant provisions of the Foreign Exchange Management Act, 1999 pertaining to external commercial borrowing and derivatives.

19.13 Extract of Annual Return

As provided under Section 92(3) of the Act, the extract of Annual Return is given in ANNEXURE-VII in the prescribed Form MGT-9, which forms part of this report.

19.14 Code of Business Conduct-Declaration by the Chairman & Managing Director (CEO)

Declaration by CEO on compliance of the “Code of Business Conduct and Ethics for Board Members and Senior Management” for the year 2021-22 is placed at ANNEXURE VIII.

19.15 CEO/CFO Certification

As required by Regulation 17 (8) of the SEBI (LODR) Regulations, 2015, the Compliance Certificate as specified in Part B of Schedule II of the said Regulation duly signed by Shri Amitabh Banerjee, Chairman & Managing Director (CEO) and Ms. Shelly Verma, Director Finance (CFO) was placed before the Board of Directors in their Meeting held on 20th May 2022. The same is enclosed as ANNEXURE-IX.

19.16 Particulars of Employees receiving high remuneration & other particulars of employees

Since IRFC is a Government Company, provisions of Section 197 are not applicable to it. Hence, the details have not been given.

21. Vigilance Activities

Ministry of Railways have nominated a part time Chief Vigilance Officer (CVO). The CVO carries out internal scrutiny of the activities on random basis to ensure compliance with the laid down CVC guidelines and procedures. During the vigilance awareness week in 2021-22, preventive vigilance workshops were conducted for the benefit of employees of IRFC. These workshops inter-alia covers contract

19.17 Deposits from public

As in the past, the Company has not accepted any fixed deposits during the period under review.

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

Pursuant to the Provision of Section 134(3)(m) of the Companies Act, 2013, in respect of Conservation of Energy and Technology absorption, following steps have been taken by your Company: -

To save power, the Company now purchases LED / LCD monitors while replacing the old monitors. Employees are encouraged to keep their gadgets in power saving mode, wherever possible. The Company now replaces its old electrical items, gadgets, etc. with power efficient units. The internal lightning of office by energy- efficient LED lights has helped to conserve electricity.

19.19 Foreign exchange earnings & outgo

Your Company has put in place Risk Management policy to manage risks associated with foreign currency borrowings. The Company enters into hedging transactions to cover exchange rate and interest rate risk through various instruments like forwards, options and swaps. Details of Foreign exchange earnings & outgo have been given in the Notes.

19.20 Expenditure on R&D

This is not applicable, as IRFC is engaged only in financing activities.

19.21 Reporting of Frauds by Auditors

During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143(12) of the Companies Act, 2013, any instance of fraud committed against the Company by its officers or employees, the details of which need to be mentioned in the Board''s Report.

19.22 Change in nature of Business

There was no change in the nature of business of the Company during the financial year 2021-22.

19.23 The names of companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies

There are no Subsidiaries, joint ventures, or associate companies during the year 2021-22.

19.24 The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year

There was no application made nor any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) against the Company.

20. Compliance of MSME Guidelines

Your Company has in place, a Manual for Procurement of Goods, Services and Works, which provides guidelines to expedite decision making process by way of consolidating, simplifying and streamlining the various steps to be followed in the process of award of contracts from the procurement of goods, works & services as well as during its implementation on the ground.

The procurement from MSMEs complies to Public Procurement Policy during the financial year 2021-22 as placed below:

(H In Million)
1 Total annual procurement	127.77
2 Target %age of annual procurement	31.94
3 Total value of goods and services procured from MSEs (including MSEs owned by SC/ST entrepreneurs)	45.05
4 Total value of goods and services procured from only MSEs owned by SC/ST entrepreneurs
5 % age of procurement from MSEs (including MSEs owned by SC/ ST entrepreneurs) out of total procurement	35.26%
6 % age of procurement from only MSEs owned by SC/ ST entrepreneurs out of total procurement
7 % age of procurement from Women MSEs	4.95%

management, provision of CDA Rules, compliances of rules and policies, deliberations of case studies etc., such workshops have ensured that best ethical practices are followed in the organization.

During the year 2017-18, one complaint was received by the CVC with allegations of misconduct for which investigations have been carried out and memorandum of charge has been issued.

22. Official Language

The official language implementation committee of the Company meets every quarter to monitor and review the progress made for achieving the targets fixed in Annual Program issued by the official language department Ministry of Home Affairs, Government of India. Effective measures were taken to bring out progressively higher use of Hindi in day-to-day working of the Company. Hindi workshops / trainings are regularly organized and for these employees are sponsored for the trainings/workshops.

Hindi week / Pakhwada was observed in your Company from 13th September 2021 to 17th September, 2021 to motivate the employees for the progressive use of Hindi in their day- to-day work. Several competitions / programmes were organized to encourage the employees to work in Hindi and create a conducive atmosphere. The participants were accordingly awarded. Further, cash award was also given to employees making most extensive use of Hindi in their day to day official work under the Government scheme.

The official website of your Company exists in fully bilingual form and contains all information of interest to its stakeholders.

23. Presidential Directive

Company has not received any Presidential Directive during the year.

24. Right to Information Act, 2005

The Government of India''s instructions on Right to Information Act, 2005 is being complied with. All relevant information has been hosted on the Company''s website.

25. Women Employees

Your Company provides equal growth opportunities for the women in line with Govt. of India philosophy on the subject. Being a lean organization, where Company has 37 employees, women representation has grown across hierarchical levels. Thus, Women constituted 21.62% of its total workforce as on 31st March 2022. As per Govt. of India

directives and guidelines from time-to-time, IRFC ensures the welfare of women employees.

26. Information under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

The Company has an internal complaints committee (ICC) to examine the case related to Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. The complaints received by the committee are being dealt in line with the provisions in the Act. During the FY 2021-22, no complaint has been reported.

27. Board of Directors and Key Managerial Personnel

Being a Government Company, the power to appoint Directors on the Board of the Company is vested with the President of India acting through the Ministry of Railways (MoR), Government of India. The remuneration of Directors and employees of the Company is fixed as per the extant Guidelines issued by Department of Public Enterprises (DPE), from time to time. The sitting fee paid to Non- Official/ Independent Directors for attending the meetings of Board and Committees thereof, are within the limits prescribed under the Companies Act, 2013. The Government Nominee Director is not entitled to receive any remuneration or sitting fee from the Company, as per the norms of Government of India. Details of remuneration and sitting fees paid to Directors are appearing in the ‘Report on Corporate Governance'' annexed to this Report.

Pursuant to Section 203 of the Companies Act, 2013, the Board of Directors of the Company has designated the Chairman and Managing Director (CMD) as CEO, Director (Finance) as CFO, and Company Secretary as Key Managerial Personnel (KMPs) of the Company. The role of CEO is being performed by CMD and the role of CFO is performed by Director (Finance) of the Company.

During the financial year 2021-22, following changes have taken place in the composition of the Board of Directors.

1. Shri Vallabhbhai Maneklal Patel has been appointed as Non- Official/ Independent Director through Resolution by Circulation w.e.f 10th November 2021 vide Ministry of Railways, Government of India''s order No. 2019/ PL/57/22 dated 9th November 2021.

2. Smt. Sheela Pandit has been appointed as Non- Official/ Independent Director through Resolution by Circulation w.e.f 22nd November 2021 vide Ministry of Railways, Government of India''s order No. 2019/PL/57/22 dated 9th November 2021.

3. Shri Ashok Kumar Singhal ceased to be Independent Director of the Company with effect from 20th July 2021 due to completion of his tenure.

Board of Directors place on record appreciation of the services rendered and contributions made by Shri Ashok Kumar Singhal, Independent Director of the Company during his tenure.

In accordance with the provisions of the Companies Act, 2013 and Article 91 (iv) of the Articles of Association of the Company, Ms. Shelly Verma (DIN: 07935630), Director Finance shall retire by rotation at the ensuing 35th Annual General Meeting of the Company and being eligible, offers herself for re-appointment. The Board of Directors recommends her re-appointment. Brief resume and other particulars of Ms. Shelly Verma is annexed to the Notice of AGM.

28. Evaluation of Board of Directors / Independent Directors

As per the statutory provisions, a listed company is required to disclose in its Board''s Report, a statement indicating the manner in which formal annual evaluation of the performance of the Board, its committees and individual Directors has been made and the criteria for performance evaluation of its Independent Directors, as laid down by the Nomination & Remuneration Committee.

However, the Ministry of Corporate Affairs vide its notification dated June 5, 2015, has, inter-alia, exempted Government companies from the above requirement, in case the Directors are evaluated by the Ministry or Department of the Central Government which is administratively in charge of the company, as per its own evaluation methodology. Further, MCA vide notification dated July 5, 2017, also prescribed that the provisions relating to review of performance of Independent Directors and evaluation mechanism prescribed in Schedule IV of the Companies Act, 2013, is not applicable to Government companies.

Accordingly, being a Government company, IRFC is, inter-alia, exempted in terms of the above notifications, as the

evaluation of performance of all members of the Board of the Company is being done by the administrative ministry i.e., the Ministry of Railways and/or by the Department of Public Enterprises (DPE).

29. Acknowledgements

Your Company is grateful to the Ministry of Railways, Ministry of Finance, Ministry of Corporate Affairs, Public Enterprises Selection Board, Department of Public Enterprises, National Informatics Centre, other Departments of the Government, Securities and Exchange Board of India and the Reserve Bank of India, for their co-operation, assistance, active and timely support, and guidance rendered from time to time. The Company is also thankful to all its Shareholders, Bondholders, Banks, Financial Institutions, Arrangers, Registrar and Transfer Agents, Bond Holders Trustees, National Stock Exchange of India Limited, BSE Limited, Life Insurance Corporation of India and other stakeholders for reposing their confidence and trust in the Company. The Company looks forward to their continued support for sustaining its excellent performance levels. The Company expresses gratitude to the Comptroller & Auditor General of India, the Statutory Auditors, Secretarial Auditors and the Internal Auditors for their valuable support and guidance.

The Board of Directors express their deep appreciation in recognition of the valuable contribution made by the Company''s small team of officers and employees, which has enabled the Company to successfully meet the funding targets set by the Ministry of Railways, while consolidating its position as one of the most vibrant public financial institutions in the country.

For and on behalf of Board of Directors

Sd/-

(Amitabh Banerjee)

Place: New Delhi Chairman & Managing Director

Date: 10th August, 2022 DIN: 03351975

---

Mar 31, 2021

Your directors have the pleasure in presenting the 34th Annual Report of the Company along with the Audited Financial Statements, Auditor’s Report and Review of the Accounts by the Comptroller & Auditor General of India for the financial year ended 31st March, 2021.

1. Financial Highlights

The highlights of financial performance of your Company for the year ended 31st March, 2021 are summarised below:

J In Million
	Particulars	Yearended 31-03-2021	Year ended 31-03-2020
I.	Revenue from operations	1,57,704.72	1,34,210.17
II	Other income	3.90	0.73
III.	Total Revenue (I II)	1,57,708.62	1,34,210.90
IV.	Expenses
	Finance costs	1,12,370.53	1,01,626.62
	Impairment on financial instruments	27.15	21.41
	Employee benefit expense	78.47	62.65
	Depreciation and amortization expense	44.32	4.58
	Other expenses	1026.84	574.68
	Total Expenses	1,13,547.31	1,02,289.94
V.	Profit before tax (III-IV)	44,161.31	31,920.96
VI.	Tax expense:
	(1) Current tax	-	-
	(2) Tax for Earlier Years	-	-
	(3) Deferred tax	-	-
	Total Taxes	-	-
VII.	Profit (Loss) for the current Year from continuing operations (V-VI)	44,161.31	31,920.96
VIII.	Other Comprehensive Income	14.76	(5.52)

Revenue from operations of your Company has increased by H 23,494.55 million from H 1,34,210.17 million in 2019-20 to H 1,57,704.72 million in 2020-21, showing a growth of 17.51%.

Profit before Tax (PBT) of your Company for the year ending 31st March 2021 was H 44,161.31 million as compared to H 31,920.96 million for the previous year, registering a growth of 38.34%.

Profit after Tax (PAT) for the year ending 31st March, 2021 was H 44,161.31 million which is the same as that of Profit Before Tax (PBT), as the Company has not made any provision for tax in its books pursuant to its decision to exercise the option of lower tax rate permitted u/s 115BAA of the Income Tax Act, 1961, as introduced by the Taxation Laws (Amendment) Ordinance, 2019 dated 20th September, 2019. The Company’s taxable

income was nil and it did not have to pay Minimum Alternate Tax (MAT) with reference to its Book Profit. MAT payable u/s 115 JB was outside the ambit of the Section 115 BAA. Thus, on adoption of Section 115 BAA of the Income Tax Act, 1961, the Company was outside the scope and applicability of MAT provisions and there was a zero-tax liability in the financial year 2020-21. Profit After Tax for the year ending 31st March, 2021 was H 44,161.31 million as compared to H 31,920.96 million for the previous year, up by an impressive 38.34%. This has enabled the Company to augment its net worth.

2. Dividend

Your Company seeks to strike a judicious balance between the return to the shareholders and retaining a reasonable portion of the profit to maintain a healthy

financial leverage with a view to supporting and sustaining future borrowings and growth.

It was decided that interim dividend of H13,721.93 Mn paid for FY 2020-21 which works out to 31.07% of PAT for FY 2020-21, shall be the full and final dividend for FY 2020-21. Details of Unpaid Interim Dividend 2020-21 is available at https://irfc.nic.in/wp-content/ uploads/2021/07/Interim-Dividend-2020-21.pdf

As per regulation 43A of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (the Listing Regulations), the top 500 listed companies shall formulate a Dividend Distribution Policy. Accordingly, the policy was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retained profits earned by the Company. The policy is also available on the Company’s website: https://irfc.nic.in/wp-content/ uploads/2020/06/Dividend-Distribution-Policy.

3. Reserves

As per Section 45 - IC of the RBI Act, 1934, all NBFCs are required to create a Reserve equivalent to 20% of the net profit before payment of dividend. RBI granted exemption to Government NBFCs from compliance of provisions of Section 45 - IC of the RBI Act, 1934. However, the exemption has been withdrawn by RBI w.e.f. 31st May, 2018. Accordingly, 20% of the net profit of the Company amounting to H 8,832.22 Mn has been transferred to Reserve Fund u/s Section 45 - IC of RBI Act, 1934.

Out of the remaining amount of profit, the sum of H 14,980.12 Mn has been kept in Retained Earnings after meeting a sum of H 5,000 Mn towards final dividend for FY 2019-20 and H 13,721.93 Mn Interim & Final Dividend for the FY 2020-21.

4. Share Capital

The Government of India announced the divestment in Company’s shares in the financial year 2017-18. Accordingly, Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, appointed DAM Capital Advisors Limited, HSBC Securities and Capital Markets (India) Private Limited, ICICI Securities Limited and SBI Capital Markets Limited as Book Running Lead Managers (BRLMs) and Khaitan & Co and Squire Patton Boggs, Singapore LLP as Legal Advisors for offer for sale of 5% of its present holdings by the Promoters (i.e., Government of India) to the public and additional offering of 10% through Initial Public Offerings (IPO) to the public. IPO got an encouraging

response from investors and was oversubscribed 3.8 times by QIB, 2.7 times by Non-Institutional Investors and 3.7 times by Retail Investors leading to overall subscription of 3.5 times. It is the first time, a Public Sector Enterprise has provided allocation to anchor investors in an issue. The Offer size was H 4,663.38 Cr consisting of primary issuance of 1,18,80,46,000 shares worth H 3,088.92 Cr and an Offer for Sale (OFS) of

59.40.23.000 equity shares worth H 1,544.46 Cr. Equity shares got listed on 29th January, 2021 on BSE Limited and National Stock Exchange of India Limited. Listing of equity shares will enhance the company visibility and brand image and provide liquidity to the shareholders. Listing will also provide a public market for the equity shares in India. Post IPO, the President of India holds

11.28.64.37.000 equity shares i.e. 86.36% of the paid up equity share capital of the Company. Based on current market capitalization of Company, it is in the list of top 500 listed companies as on 31st March 2021.

5. Independent Evaluators’ Assessment

5.1. Credit Ratings

Domestic: During the financial year 2020-21, the Company’s long-term domestic borrowing programme was awarded the highest credit rating of “CRISIL AAA/Stable”, “[ICRA] AAA (Stable)” and “CARE AAA [Triple A]” by CRISIL, ICRA and CARE respectively. The Company also got its short-term borrowing programme rated, obtaining the highest rating of ‘‘CRISIL A1 ’’, ‘‘[ICRA] A1 ’’, and “CARE A1 [A One Plus]” by CRISIL, ICRA and CARE.

International: During the financial year 202021, three international credit rating agencies - Standard & Poor’s, Fitch and Moody’s - have awarded “BBB- with Stable Outlook”, “BBB- with Negative Outlook” and “Baa3 with Negative Outlook” ratings respectively to your Company. Besides, the Company obtained an issuer specific credit rating of “BBB with Stable Outlook” from Japanese Credit Rating Agency. Each of the four credit ratings is equivalent to India’s sovereign rating and is of investment grade.

5.2. Memorandum of Understanding (MOU) with Ministry of Railways, Government of India

The Company enters into Memorandum of Understanding (MoU) with Ministry of Railways (MoR) every year wherein Company is evaluated on various financial and non-financial parameters. MoU rating for the year 2019-20 is yet to be declared by the Department of Public Enterprises (DPE). Based on its performance, the Company has

been rated ‘Excellent’ by the Department of Public Enterprises (DPE) with a score of 91.82 (Excellent) for the year 2018-19.

6. Market Borrowings during 2020-21

The Company was initially assigned a borrowing target of H 58,000 Crore including funding of Rolling stock to the extent of H 29,300 Crore, financing of Railway Projects under EBR-IF to the tune of H 28,000 Crore and meeting the debt financing requirements of RVNL amounting to H 700 crore. During the last quarter of the financial year 2020-21, the target was revised and H 1,04,369.00 crore including H 29,480.56 crore towards Rolling Stock, H 21,839.68 crore towards EBR-IF, H 51,619.07 Cr towards project assets under EBR-S and H 1,429.69 crore towards debt financing requirement of RVNL were disbursed respectively. This was the highest ever borrowing target for any financial year in the history of the Company and was an increase of 48.45% over the previous year’s target of H 70,471.96 crore. The cumulative funding to Railway Sector has crossed H 4.44 lakh crore mark.

The total Capital Outlay (Capital Expenditure) of MoR for the year 2020-21 was H1,55,161 crore out of which IRFC’s disbursement against the same was significant at H 1,04,369.00 crore which constitutes 67.43% of total capital outlay for the year 2020-21.

Borrowings during the year include Taxable Bonds worth H 21,537.70 crore (Previous year H30,046.83 crore including LIC Bonds H4300 crore), External Commercial Borrowings (ECB) of H 29,586.95 crore (previous year H13,783.85 Crore) at exchange rate prevailing on the draw down date, Rupee Term Loans of H 52,401.75 crore (previous year H25,789.00 Crore) and 54EC bonds of H842.60 crore (previous year H852.28 crore). The weighted average cost of the pool of borrowings made by Company during the year 2020-21 worked out to 6.51% (semi-annual) as against 7.36% (semi-Annual) during the previous year 2019-20.

The Company was able to achieve this feat through constant monitoring of the markets, proper timing of its borrowings and appropriate selection of instruments.

During the year, the Company constantly diversified its borrowing portfolio to meet the target of borrowings mandated by MoR at the most competitive rates and terms. In its endeavor towards further diversification of its borrowing portfolio, the Company upsized its USD 2 bn GMTN programme to USD 4 bn GMTN programme. The 144A/Reg S bonds under the USD 4 bn GMTN Programme were issued with the principal size of USD 750 mn at a coupon rate of 2.80%, priced lower

than the secondary yield curve prevalent at that point of time.

Company also raised USD 3 bn through Syndicated Foreign currency denominated USD loan from SBI, Hong Kong. The drawal comprised two loans of USD 1 bn for a tenor of 10 years on unsecured basis and USD 2 bn for a tenor of 7 years on partially secured basis. Both the loans were linked to 6-month USD Libor and have since been drawn in three tranches of USD 1 bn each. Further, Company also raised JPY equivalent to USD 325 Mn through Syndicated JPY Loan from SMBC. The loan was linked to 6-month JPY Libor and has since been drawn. In effect, the total ECB borrowings for FY 21 logged a total sum of USD 4.075 Bn during the FY 2020- 21.

Company had received approval of Ministry of Finance for issue of 54EC Capital Gain Bonds in October 2017, since then, Company is making all endeavors to increase its market share in 54EC Bond market. In 2020-21, Company mobilized around H842.60 crore through 54EC Bond.

7. Redemption of Bonds / Repayment of Loans

During the year, the Company repaid Bonds amounting to H 10,263.91 crore (including call option exercised for H 3,000 crore) and External Commercial Borrowings (ECB) of H 22.51 crore. The Company also redeemed long term loans from Banks of H 3,625 crore and Commercial Paper with face value of H 6,425 crore during the year.

The Company continues to maintain its impeccable track record of servicing its debt in time and there has not been a single instance of default during the year.

8. Internal Financial Control Systems & their adequacy

The details are given in Management Discussion and Analysis.

9. RBI Prudential Norms

Your Company is registered as a Systemically Important Non-Deposit Taking Non- Banking Finance Company with the Reserve Bank of India. Being a Government NBFC, your Company was exempted from the prudential norms prescribed by Reserve Bank of India for NBFC-ND-SI, as contained in the Master Directions issued vide Notification No. DNBR.008/ CGM(CDS)-2015, dated 27th March, 2015. However, the exemption was withdrawn by Reserve Bank of India from 31st May, 2018. As such, the Company has complied with the applicable prudential norms.

The Company has obtained exemption from Reserve Bank of India from the asset classification, income recognition, credit concentration and provisioning norms on the direct exposure to Ministry of Railways, Govt. of India. The Company has also obtained relaxation in respect of lending limit applicable to Railway CPSEs from 20% of its owned funds to 100% of its owned funds.

Liquidity Coverage Ratio (LCR) Exemption:

RBI vide circular dated 4.11.2019 issued the guidelines covering liquidity risk management for NBFCs, wherein RBI introduced Liquidity Coverage Ratio (LCR) applicable on all non- deposits taking NBFCs with asset size of more than H 5,000 crore. The guidelines aim to maintain a liquidity buffer in terms of LCR by ensuring that they have sufficient High Quality Liquid Asset (HQLA) to survive any acute liquidity stress scenario lasting for next 30 days. As per the guideline, LCR is represented by stock of High- Quality Liquid Assets (HQLA) divided by Total Net Cash Outflows (stressed outflow less stressed inflows) over the next 30 calendar days. HQLAs are defined by RBI as the liquid assets that can be readily sold or immediately convertible into cash at little / no loss of value or can be used as collateral to obtain funds in stress situations.

The company has got an exemption from RBI from applicability of Liquidity Coverage Ratio (LCR) norms.

10. Lease Arrangement with the Ministry of Railways (2020-21)

As you are aware, the financial relationship of the Company with the Ministry of Railways is based on a Financial Lease arrangement which is regulated by a standard lease agreement. In respect of the incremental rolling stock assets acquired during 2020-21 through IRFC funding, lease rentals have been fixed at H 52.8672 per thousand per half year (PTPH) over a primary lease tenor of 15 years. The cost (IRR) to Ministry of Railways is 7.11% p.a. payable semi-annually as compared to 7.77% last year, down by 66 bps. Viewed in the context of significant increase in the annual borrowing target by 47% as compared to last year and huge uncertainty prevailing in the market caused by COVID-19 pandemic during the FY 2020-21, the pricing is considered very attractive for the Ministry.

11. Resource Mobilisation for 2021-22

For the year 2021-22, the annual borrowing target for IRFC has been fixed at H 65,258 crore which includes H 30,300 crore for funding of Rolling Stock assets and funding of Railway projects to the extent of H34,258

crore. A target of H 700 crore for meeting the debt funding requirements of RVNL has also been given.

The Company is confident of meeting the challenge and hopeful to raise the required amount during the year through a judicious mix of Bonds, Loans and External Commercial Borrowings, etc., at the most competitive rates and terms.

12. Management Discussion and Analysis and Company''s Outlook for the future

Management Discussion and Analysis, forming part of the Directors’ Report given at ANNEXURE I.

13. Impact of Global Health Pandemic COVID-19

The outbreak of Coronavirus (COVID-19) pandemic globally and in India is causing significant disturbance and slowdown of economic activity. The Company has adopted measures to curb the spread of infection in order to protect the health of employees and ensure business continuity with minimal disruption.

The Company has evaluated impact of this pandemic on its business operations and based on its review and current indicators of future economic conditions, there is no significant impact on its financial results. However, the impact assessment of COVID-19 is a continuing process, given the uncertainties associated with its nature and duration and accordingly, the impact may be different from that estimated as at the date of approval of these financial statements. The Company will continue monitoring any material change to future economic conditions.

14. Report on Corporate Governance

The Government considers good corporate governance practices a sine qua non for sustainable business that aims at generating long term value for its shareholders and all other stakeholders. Accordingly, it has been laying increasing emphasis upon development of best corporate governance practices amongst Central Public Sector Enterprises (CPSEs). In pursuance of this philosophy, your Company continues to comply with the ‘Guidelines on Corporate Governance for Central Public Sector Enterprises’ issued by Government of India, Department of Public Enterprises (DPE) in May, 2010. A few items in those Guidelines, which your Company is not in a position to adopt mainly because they do not apply to it, have been outlined, together with reasons for non-compliance thereof, in the Report on Corporate Governance. Your Company’s Equity as well as NonConvertible Debt Securities are listed on the stock exchanges and Company has complied with Securities

and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. As on 31st March, 2021, the Board of Directors is comprised of five Directors, with two Executive Directors, Two Non-Executive Directors (Govt. Nominees) and one Independent Director. The Company is not having the prescribed number of Independent Directors in compliance of the Regulations 17 (1) (a) of SEBI (LODR) Regulations 2015, specifying the composition of Board of Directors. Also, due to the absence of Independent Director(s), the composition of Audit Committee, Nomination and Remuneration Committee are also not in consonance with the Regulation 18 & 19 of SEBI (LODR) Regulations 2015. The power to appoint Directors vests with Government of India through Ministry of Railways (MoR) and Company has no role to play in it. The Company has already requested MoR for appointment of requisite number of Independent Directors. Report on Corporate Governance is enclosed as ANNEXURE- II forming part of this report.

15. Business Responsibility Report

The Business Responsibility Report, as stipulated under Regulation 34 (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is given in ANNEXURE-III and forms part of this Report.

16. Corporate Social Responsibility

Activities relating to Corporate Social Responsibility (CSR) have become an integral part of Company’s operations.

In terms of Section 135 of the Companies Act, 2013 (the Act), read with Schedule VII thereof and also the CSR Rules, the Company has constituted a CSR Committee (the Committee) comprising Independent Director, the Chairman & Managing Director and Director Finance, with the Independent Director as the Chairman of the Committee. Under the Act, the Company is required to spend at least two percent of the average of its net profits of the immediately three preceding financial years on CSR activities. The Department of Public Enterprises (DPE) has also issued guidelines in this regard which, inter alia, require the Central Public Sector Enterprises (CPSEs) to frame a ‘CSR and Sustainability Policy’.

The ‘CSR and Sustainability Policy’ of the Company is in place and the same has also been hosted on its website. The Company, like in the past, has undertaken activities for Sustainable Development and CSR, details of which, are given hereunder: -

During the financial year 2020-21, the Company was required to spend H 61.23 crore, being 2% of its average net profits of the last three financial years, against which, the Company approved total 6 projects with total outlay of H 61.28 crore, against which, the Company has disbursed a sum of H 41.51 crore, including contribution towards Armed Forces Flag Day Fund (AFFDF) for H 1 Crore, contribution to PM CARES Fund for H 30 crore and H 10.51 Crore for construction of 105 Public Toilets and the balance amount of H 19.77 crore would be disbursed on receipt of bills/claims from the implementing agencies in future. As per the latest amendment made effective w.e.f. 22.01.2021, CSR Unspent amount of H 19.77 crore relating to the ongoing projects of the financial year 2020-21, has since been transferred to the ‘CSR Unspent Account’ maintained with Scheduled Bank in terms of section 135(6) of the Companies Act, 2013. The Company is committed to promoting Health and Nutrition as the theme for focused intervention as mandated by Department of Public Enterprises for the Financial Year 2020-21. The Company has also approved a project towards cold-chain storage equipments for Delhi (State) in support of COVID-19 vaccination programme of the Government of India.

CSR Activities proposed for the FY 2021-22

For the financial year 2021-22, the Company would be required to spend about H 70.06 crore. The details of all the projects / activities would be provided in the next Annual Report.

The details of CSR activities for the financial year 202021 as required under the Companies Act are given in the ANNEXURE - IV.

17. Directors’ Responsibility Statement

As required under Section 134(3)(c) of the Companies Act, 2013, it is confirmed that:

a) In the preparation of the annual accounts, the applicable Indian Accounting Standards have been followed and there are no material departures;

b) Accounting policies have been re-drafted taking into account the Ind-AS, judgments and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

c) Proper and sufficient care has been taken for maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the

Company and for preventing and detecting fraud or other irregularities; and

d) Annual accounts have been prepared on ‘going concern’ basis.

e) The laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively.

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

18. Human Resource Management

The details are given in Management Discussion and Analysis.

19. Auditors

M/s KBDS & Company, Chartered Accountants, have been appointed as Statutory Auditors by Comptroller & Auditor General of India to audit the accounts of the Company for the year 2020-21.

The Comptroller & Auditor General of India has undertaken supplementary audit on accounts of the Company for the year ended 31st March, 2021 and have had no comments upon or supplements to the Auditors’ Report under Section 143(6) of the Companies Act, 2013.

Secretarial Audit under Section 204 of the Act has been conducted by M/s Navneet K Arora & Co LLP, Company Secretaries, the existing Secretarial Auditors.

20. Other Disclosures under the applicable provisions of the Companies Act, 2013

20.1. Number of Meetings of the Board

The details are given in Corporate Governance Report which is enclosed as ANNEXURE-II.

20.2. Certificate of Independence by Independent Director

Smt. Aditi Sengupta Ray, Shri Chetan Venugopal and Shri Ashok Kumar Singhal, Independent Directors, have given a declaration that they meet the criteria of Independence, as laid down under Section 149 (6) of the Act.

20.3. Material changes, if any, that may affect financial position of the Company

There are no material changes which will affect financial position of the Company.

20.4. Internal financial control systems and their adequacy

This has been discussed in Para 8.

20.5. Audit Committee

The details pertaining to Audit Committee are included in the Corporate Governance Report, which is enclosed as ANNEXURE-II.

20.6. Secretarial Auditors’ Report

M/s Navneet K Arora & Co LLP, Company Secretaries was appointed as the Secretarial Auditors of the Company for the FY 2020-21 by the Board of Directors of the Company. Secretarial Audit Report is placed at ANNEXURE V.

The observations of the Secretarial Auditor and reply of the management on the observations, for the FY 2020-21 along with copy of the audit report is annexed with Annual Report.

20.7 Certificate on Corporate Governance

M/s Navneet K Arora & Co LLP, Company Secretaries has issued certificate on Corporate Governance, placed at ANNEXURE VI.

20.8 Risk Management

The details are given in Management Discussion and Analysis.

20.9 Particulars of loans, guarantees and investments

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

20.10 Transactions with related parties

None of the transactions with related parties falls under the scope of Section 188(1) of the Act.

20.11 Significant and Material Orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company

There are no significant and/or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company.

20.12 Disclosure under Foreign Exchange Management Act, 1999

The Company is in compliance with the relevant provisions of the Foreign Exchange Management Act, 1999 pertaining to external commercial borrowing and derivatives.

20.13 Extract of Annual Return

As provided under Section 92(3) of the Act, the extract of Annual Return is given in ANNEXURE-VII in the prescribed Form MGT-9, which forms part of this report.

20.14 Code of Business Conduct-Declaration by the Chairman & Managing Director (CEO)

Declaration by CEO on compliance of the “Code of Business Conduct and Ethics for Board Members and Senior Management” for the year 2020-2021 is placed at ANNEXURE VIII.

20.15 CEO/CFO Certification

As required by Regulation 17 (8) of the SEBI (LODR) Regulations, 2015, the Compliance Certificate as specified in Part B of Schedule II of the said Regulation duly signed by Shri Amitabh Banerjee, Chairman & Managing Director (CEO) and Ms. Shelly Verma, Director Finance (CFO) was placed before the Board of Directors in their Meeting held on 29th June, 2021. The same is enclosed as ANNEXURE-IX

20.16 Particulars of Employees receiving high remuneration & other particulars of employees

Since IRFC is a Government Company, provisions of Section 197 are not applicable to it. Hence, the details have not been given.

20.17 Deposits from public

As in the past, the Company has not accepted any fixed deposits during the period under review.

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

Pursuant to the Provision of Section 134(3) (m) of the Companies Act, 2013, in respect of Conservation of Energy and Technology absorption, following steps have been taken by your Company: -

To save power, the Company now purchases LED / LCD monitors while replacing the old monitors. Employees are encouraged to keep their gadgets

in power saving mode, wherever possible. The Company now replaces its old electrical items, gadgets, etc. with power efficient units.

20.19 Foreign exchange earnings & outgo

The Company did not have any foreign exchange earnings during the year. Details of foreign exchange outgo have been given in the Notes on Accounts.

20.20 Expenditure on R&D

This is not applicable, as IRFC is engaged only in financial activities.

20.21 Reporting of Frauds by Auditors

During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143(12) of the Companies Act, 2013, any instance of fraud committed against the Company by its officers or employees, the details of which need to be mentioned in the Board’s Report.

21. Compliance of MSME Guidelines

Your Company has in place, a Manual for Procurement of Goods, Services and Works, which provides guidelines to expedite decision making process by way of consolidating, simplifying and streamlining the various steps to be followed in the process of award of contracts from the procurement of goods, works & services as well as during its implementation on the ground.

The procurement from MSMEs is in compliance to Public Procurement Policy during the financial year 2020-21 as placed below:

J In Million
Sl. No.	Particulars	2020-21
1	Total annual procurement	88.78
2	Target %age of annual procurement	22.19
3	Total value of goods and services procured from MSEs (including MSEs owned by SC/ST entrepreneurs)	39.28
4	Total value of goods and services procured from only MSEs owned by SC/ST entrepreneurs

5	% age of procurement from MSEs (including MSEs owned by SC/ST entrepreneurs) out of total procurement	44.24%
6	% age of procurement from	—
	only MSEs owned by SC/ST
	entrepreneurs out of total

22. Vigilance Activities

Considering the lean staff strength and nature of operations, the vigilance activities of the Company are being looked after by a Part-time Chief Vigilance Officer (CVO) nominated by the Ministry of Railways. The CVO carries out internal scrutiny of the activities on a random basis to ensure compliance with the laid down CVC guidelines and procedures.

During the year 2017-18, one complaint was received by the CVC with allegations of misconduct for which investigations have been carried out and memorandum of charge has been issued.

23. Official Language

The Company is committed to achieving extensive use of Hindi in transaction of its official business, and in the process also bring about compliance with provisions of Official Language Act and Official Language Policy of the Government of India. Considerable efforts were made to achieve the targets set under Annual Programme issued by Department of Official Language, Government of India. Provisions of Section 3(3) of the Official Language Act were fully complied with. Effective measures were taken to bring about progressively higher use of Hindi in day-to-day working of the Company. Ensuring more intensive use of bilingual / Hindi software, purchase of sufficient number of Hindi books, periodicals and journals for the office library in keeping with improving readership, and holding workshops to promote awareness and use of Hindi as official language formed core of the approach in the matter, even as the biggest driver has been a sense of pride inculcated amongst constituents of the Company in transacting their official work in Hindi.

During the year under review, three quarterly meetings of the Official Language Implementation Committee of the Company were held. Also, four Hindi Workshops were organised to give hands-on exposure to participants on various facets of use of Hindi in discharge of their official duties. As in the previous years, Hindi Week was celebrated, carrying out a variety of activities. Awards were given to employees making

most extensive use of Hindi in their day-to-day official work. Awards were also given to winners of the Hindi Poem recitation competition.

On 21st August, 2020, the ‘Parliamentary Committee on Official Language’ had carried out an inspection to assess the extent of use of Hindi and compliance with the Rajbhasha Guidelines in the Company. The Committee had appreciated the use of Hindi in the Company.

The official website of your Company exists in fully bilingual form, and contains all information of interest to its stakeholders.

24. Presidential Approval

Following Presidential Approval was received during the year:-

Presidential Approval No. 2010/PL/47/5 dated 28th September, 2020 for alteration of certain articles of Articles of Association of the Company and substitution of Clause V of Memorandum of Association.

25. Right to Information Act, 2005

The Company follows Government instructions issued in pursuance of Right to Information Act, 2005, and has designated Public Information Officer and Appellate Authority under the Act. All relevant information has been hosted on the Company’s website also.

26. Women Employees

Your Company has a very small organizational setup. As on 31st March, 2021, Company has 29 employees in all, out of which there are 6 women employees in the executive cadre. Thus, women employees constitute 20.69 % of the total employee strength at present and the Company would endeavour to further improve the number as and when opportunity arises.

27. Information under sexual harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013

No case of sexual harassment at the work place was reported in the last financial year.

The Company has an Internal Complaint Committee where women employees can register their complaints against sexual harassment.

28. Board of Directors and Key Managerial Personnel

Since the last Annual General Meeting in 30th September, 2020, following changes have taken place in the composition of the Board of Directors.

1. Shri Anand Prakash, EDF/B, Railway Board / Nominee Director on the Board of the Company with effect from 22nd July, 2020 to 26th October, 2020.

2. Smt. Aditi Sengupta Ray, Independent Director on the Board of the Company with effect from 19th September, 2017 to 18th September, 2020.

3. Shri Chetan Venugopal, Independent Director on the Board of the Company with effect from 8th March, 2018 to 7th March, 2021.

4. Shri Ashok Kumar Singhal, Independent Director on the Board of the Company with effect from 20th July, 2018 to 19th July, 2021.

5. Shri Bhaskar Choradia, EDF/B, Railway Board / Nominee Director on the Board of the Company with effect from 27th November, 2020.

Directors place on record their appreciation of the services rendered and contributions made by Mrs. Manjula Rangarajan, Financial Commissioner (Railways), nominated as Chairperson / IRFC, Shri Vijay Kumar, Financial Commissioner (Railways), additional charge as Managing Director / IRFC, Shri Niraj Kumar, Director Finance / IRFC, Dr. Kumar Vinay Pratap, Nominee Director / IRFC and Shri Kishore J. Devani, Independent Director / IRFC of the Company during their tenure.

Pursuant to Section 203 of the Companies Act, 2013, Director Finance, also designated as CFO and Company Secretary, have been designated as Key Managerial Personnel of the Company.

29. Acknowledgements

Your Company is grateful to the Ministry of Railways, Ministry of Finance, Ministry of Corporate Affairs, Public Enterprises Selection Board, Department of Public Enterprises, National Informatics Centre, other Departments of the Government, Securities and Exchange Board of India and the Reserve Bank of India, for their co-operation, assistance, active and timely support, and guidance rendered from time to time. The Company is also thankful to all its Bondholders, Banks, Financial Institutions, Arrangers, Registrar and Transfer Agents, Bond Holders Trustees, National Stock Exchange, Bombay Stock Exchange and Life Insurance Corporation of India for reposing their confidence and trust in the Company. The Company looks forward to their continued support for sustaining its excellent performance levels. The Company expresses gratitude to the Comptroller & Auditor General of India, the Statutory Auditors and the Internal Auditors for their valuable support and guidance.

The Board of Directors express their deep appreciation in recognition of the valuable contribution made by the Company’s small team of officers and employees, which has enabled the Company to successfully meet the increasing level of funding targets set by the Ministry of Railways, while consolidating its position as one of the most vibrant public financial institutions in the country.

For and on behalf of Board of Directors

Sd/-

(Shri Amitabh Banerjee)

Place: New Delhi Chairman & Managing Director

Date: 13th August, 2021 DIN: 03315975