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IFCI Ltd.

BSE: 500106 Sector: Financials
NSE: IFCI ISIN Code: INE039A01010
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OPEN 13.73
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VOLUME 9990414
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52-Week low 6.82
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OPEN 13.73
CLOSE 13.67
VOLUME 9990414
52-Week high 16.40
52-Week low 6.82
P/E
Mkt Cap.(Rs cr) 3,045
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

IFCI Ltd. (IFCI) - Auditors Report

Company auditors report

To the Members of

IFCI Limited

Report on the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying Standalone Ind AS Financial Statements of IFCI Limited("the Company") which comprises the Balance Sheet as at March 31 2020 theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and Notes to theFinancial Statements including a summary of Significant Accounting Policies and otherexplanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at 31st March 2020 and its Loss itscash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SA's) specifiedunder Section 143(10) of the Companies Act 2013 ("the Act"). Ourresponsibilities under those Standards are further described in "Auditor'sResponsibilities for the Audit of Standalone Financial Statements"section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India ("the ICAI") together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidences obtained by us is sufficient and appropriate to provide areasonable basis for our opinion on the Statement.

Emphasis of Matter:

1. We draw attention to Note No. 42 of the financial statements regarding theprovision of impairment allowance in respect of its loan assets. The basis ofdetermination of impairment allowance which we have relied upon is arrived at a model inaccordance with the accounting policy recognizing probable credit loss based on internallydeveloped statistical models & other historical data which takes into account theeconomic activity and financial conditions including macroeconomic factors.

Due to ongoing COVID-19 higher probability risk factor was noticed and accordingly 15%shock on GDP is taken in the said model for calculating ECL as against weighted average ofbase/best/ worst case scenario +(-)10% resulting in higher provision in ECL Model over thebase case ECL Model. The Financial statements of the Company has not been impacted due tothis change as the provisions as per RBI Prudential Norms (IRACP) are higher which hasbeen accounted for determining the provisions for this year.

2. In accordance with the RBI circular no. "DOR (NBFC).CC.PD.No.109/22.10.106/2019-20" dated 13th March 2020the company has created aprovision as per RBI Prudential Norms (IRACP) which is higher than the ECL Model andaccordingly a sum of Rs.22.98 crore has been taken to "Impairment Reserve".

3. We draw attention to Note No. 44 of the financial statements regarding the entity'simpact of COVID-19 pandemic on its financial statements. Management is of the view thatthere are no reasons to believe that the pandemic will have any significant impact on theability of the entity to continue as a going concern. Nevertheless the impact of pandemicin future period is uncertain and could impact the impairment allowance in future years.

4. We draw attention to Note No. 44.1 where the company is recognizing interest incomein respect of Stage 3 Loan Assets as per Ind AS accounting policy of the company till itis diminished due to repayment/write off/settled. However in case of seventeen borrowalaccounts covered under NCLT the net impact of recognition of interest in these casesamounts to Rs. 331.58 Croreswhich is credited to statement of profit & loss A/c invarious years. In the opinion of the management complete write off will be done on finalsettlement of all these cases and there are sufficient security cover available with thecompany as determined by the resolution professional and hence no reversal of interest isrequired.

Our Opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Sl. No. Key Audit Matters How our matter was addressed in the audit
1. Impairment of Loan Assets - Expected Credit Loss (ECL) Our Audit Procedure includes: We have obtained an understanding
[Refer Note No. 53 to the Standalone Financial Statements read with accounting policy No. 6(b)] of the guidelines as specified in Ind AS 109 "Financial Instruments" various regulatory updates and the Company's internal instructions and procedures in respect of the expected credit loss and adopted the following audit procedures:
The most significant areas where we identified greater levels of management judgment are:
• ECL model-Impairment loss measurement requires use of statistical models to estimate the Probabilities of Default (PD) Loss Given Default (LGD) and Exposure at Default (E AD). The se models are key driver to measure ECL. 1. Evaluation and understanding of the key internal control mechanisms with respect to the loan assets assessment of the loan impairment including assessment of relevant data quality and review of the real data entered.
• Individually assessed classification of various Stages-the carrying value of loans and advances to borrowers may be materially misstated if individual impairments are not appropriately identified and estimated. 2. Verification/review of do cum entati on s op erati on s/ performance of Loan asset accounts on test check basis of the large and stressed loan assets to ascertain any overdue unsatisfactory conduct or weakness in any loan asset account.
The effect of these matters is that as part of our risk assessment we determined that the value of ECL has a high degree of estimation uncertainty with a potential range of reasonable outcomes greater than our materiality for the financial statements as a whole. 3. Review of the reports of the internal audit and any other audit/inspection mechanisms to ascertain the loan assets having any adverse indication/ comments and review of the control mechanisms of the Company to ensure the proper classification of such loan assets and expected credit loss thereof.
In the event of any improper application of assumptions the carrying value of loan assets could be materially misstated either individually or collectively. In view of the significance of the amount of loan assets in the standalone Financial Statements the impairment of loan assets thereon has been considered as Key Audit Matter in our audit. 4. The accuracy of critical data elements input into the system used for computation of PD and LGD. 5. The completeness and accuracy of data flows from source systems into the ECL calculation. 6. Independent assessment of all Loan assets based on IRACP norms of RBI. Our results: We considered the credit impairment charge and provision recognized and the related disclosures to be acceptable & satisfactory However the model adopted is required to be reviewed in the light of present circumstances.
2. Valuation of financial instruments at Fair Value [Refer Note No.52 to the Standalone Financial Statements read with accounting policy No. 6(b)] Company enters into derivative contracts in accordance with RBI guidelines to manage its currency and interest rate risk. These derivative contracts are categorized at FVTPL and certain derivative contracts are designated under cash flow hedge (Hedge Accounting). We consider the valuation of the derivative financial instruments and hedge accounting as a key audit matter due to its material exposure and the fact that the inappropriate application of these requirements could lead to a material effect on the income statement. Our Audit Procedure includes: We involved our team to review the management's underlying assumptions in estimating the fair valuation arrived at for those financial derivative contracts and the possible outcome of the underlying contracts accruing any profit or loss to the company. Our team also considered general market practices and other underlying assumptions in arriving at such fair valuation of the financial derivative contracts as outstanding/ pending for settlement as on March 31 2020. Assessing whether the financial statement disclosures appropriately reflect the Company's exposure to derivatives valuation risks with reference to the requirements of the prevailing accounting standards and Reserve Bank of India Guidelines. Our results: We did not find any material misstatement in measuring derivative contracts at fair value and the related disclosures to be acceptable & satisfactory.
3. Valuation of investments in Subsidiaries and Associates The carrying value of the Company's investment in subsidiaries represents 33% of the Company's total net worth. Due to the materiality of the investment in the context of the parent Company's financial statements and the market risk related with recoverability of investments this was considered to be the area of focus during the course of Company's audits Hence it was considered as a key Audit matter in our Report. Our Audit procedure includes: Review of financial statements of all subsidiaries and associates. Our results: We did not find any material risk in recoverability of the investments and the valuation of the investments has been done on fair value.
4. Assessment of Information Technology (IT) Our Audit procedure includes:
The key financial accounting and reporting processes are highly dependent on the automated controls over the Company's IT systems. There is a risk that improper segregation of duties or user access management controls (in relation to key financial accounting and reporting systems) may undermine our ability to place some reliance thereon in our audit. Evaluated sample of key controls operating over the information/input in relation to financial accounting and reporting systems. Our results:
We have considered this as key audit matter as any control lapses validation failures incorrect input data and wrong extraction of data may result in wrong reporting of data to the management and regulators. We did not find any material deficiencies as per our analysis of reports emanating from IT systems on Financial Accounting and reporting.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position and financial performanceincluding other comprehensive income cash flow and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theentity's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the entity or to cease operations or has no realisticalternative but to do so.

The Board of Directors are also responsible for overseeing the entity's financialreporting process.

Auditor's Responsibilities for the Audit of Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

- Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

- Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

- Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

- Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 (‘the Order')issued by the Central Government of India in terms of subsection (11) of section 143 ofthe Act we give in the Annexure "A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required under section 143(5) of the Companies Act 2013 we enclose herewith asper Annexure "B" our report for the Company on the directions andsub-directions (Part A and Part B respectively) issued by the Comptroller & AuditorGeneral of India.

3. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet and the Statement of Profit and Loss the Cash Flow Statement andStatement of change in Equity dealt with by this Report are in agreement with the books ofaccount;

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors taken onrecord by the Board of Directors none of the directors is disqualified as on March 312020 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure "C"; and

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

(j) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note No. 35.2 to the financial statements;

(jj) The Company has made appropriate adjustment in the Profit & Loss Account asrequired under the applicable law and accounting standards for material foreseeablelosses if any on long-term contracts including derivative contracts - Refer Note No. 52to the financial statements;

(jjj) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For M/s M.K. Aggarwal & Co.
Chartered Accountants
Firm Registration No: 01411N
CA Atul Aggarwal
Place: New Delhi Partner
Date: June 26 2020 Membership No.: 099374

Annexure A referred to in paragraph 1 of Report on Other Legal and RegulatoryRequirements of our report of even date on standalone financial statements

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets other than flats paintings lands andleased plant and machinery having gross block of Rs.197.92 crores which have been fullydepreciated in the earlier years.

(b) As explained to us the management carries out the physical verification of fixedassets once in a year during the year. However no physical verification was conductedduring the year due to COVID-19 being restriction on movement. In our opinion however thefrequency of physical verification is reasonable having regard to the size of the companyand nature of its assets.

(c) According to information and explanations given to us the records examined by usand based on the examination of conveyance deeds/ registered sale deed provided to us wereport that the title deeds of all immovable properties are held in the name of thecompany.

(ii) The Company is a Non-Banking Financial Company accordingly it does not holdany inventory. Thus clause 3(ii) of the Companies (Auditor's Report) Order 2016 is notapplicable.

(ii) As explained to us and verified from books and records the Company has notgranted any loans secured or unsecured to Companies firms or other parties covered inthe register maintained under Section 189 of the Companies Act 2013. Further clauses3(iii) (a) (b) and (c) of the Companies (Auditor's Report) Order 2016 are not applicableto the Company.

(iv) The Company has not given any loans investment guarantees and securities whichmay be covered under section 185 and 186 of the Companies Act 2013.

(v) According to the information provided and explanations given to us the Company hasnot accepted any deposits from the public during the year within the meaning of Section 73to 76 or any other relevant provision of the Companies Act 2013 and the Companies(Acceptance of Deposits) Rules 2014.

(vi) The Central Government has not prescribed the maintenance of cost records underSub-section 1 of Section 148 of the Act for any of the services rendered by the Company.Accordingly clause 3(vi) of the Companies (Auditor's Report) Order 2016 is notapplicable to the Company.

(vii) In respect of statutory dues on the basis of information and explanations givento us and on the basis of our examination of the records of the company we report that:

(a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax ServiceTax Goods & Service Tax and other material statutory dues as applicable to it andthere is no undisputed amount payable in respect of aforesaid dues outstanding for aperiod of more than six months from the date they become payable as on 31 March 2020 asper the accounts of the Company.

(b) Wherever any dues/demand has been raised by any statutory authority and has beendisputed by the Company the same has been duly deposited under contest except infollowing cases:

Name of the Statute nature of disputed dues Amount (in crore) Year to which demand relates Forum where dispute is pending
The Income- Tax Act 1961 $ Income Tax 0.35 A.Y 1998-99 High Court
The Income- Tax Act 1961 $ Interest 0.04 A.Y 2008-09 ITAT
The Income- Tax Act 1961 $ Income Tax 0.11 A.Y 2009-10 ITAT
The Income- Tax Act 1961 $ Interest 0.02 A.Y 2010-11 ITAT
The Income- Tax Act 1961 $ Income Tax 1.47 A.Y 2011-12 ITAT
The Income- Tax Act 1961$ Penalty 1.23 A.Y 2015-16 ITAT
The Income- Tax Act 1961 $ Income Tax 2.61 A.Y 2016-17 CIT(A)
Finance Act 1994 (Service Tax)# * Service Tax and Penalty demanded 10.82 FY 2004-05 to FY 2007-08 CESTAT New Delhi*
Finance Act 1994 (Service Tax) # * Service Tax and Penalty demanded 3.63 FY 2008-09 to FY 2010-11 CESTAT New Delhi*
Finance Act 1994 (Service Tax) # * Service Tax and Penalty demanded 1.12 FY 2005-06 to FY 2007-08 CESTAT Bangalore*
Finance Act 1994 (Service Tax) * Service Tax and Penalty demanded 0.59 FY 2006-07 to FY 2010-11 CESTAT New Delhi*
Finance Act 1994 (Service Tax) Service Tax and Penalty demanded 1.80 FY 2008-09 to FY 2010-11 CESTAT New Delhi
Finance Act 1994 (Service Tax) * Service Tax and Penalty demanded 1.61 FY 2008-09 to FY 2010-11 CESTAT New Delhi*

$ Income tax matters as disputed/unpaid as appearing in e-filing portal of Income taxdepartment as on 31 March 2020. IFCI is under litigation with Income tax department onaccount of demand on the company for various assessment years including the aboveresulting in appeals by either parties mostly by the Income tax department against theorder passed in favour of the company.

# Stay order has been received against the amount disputed and not deposited.

*IFCI has filed application/declarations under Sabka Vishwas (Legal Dispute Resolution)Scheme 2019 for settlement of these Disputes. However the final discharge certificatesare still pending to be issued by the designated tax authorities.

(viii) According to information and explanations given to us and on the basis ofour examination of the records of the Company the Company has not defaulted in repaymentof loans or borrowing to a financial institution bank Government or dues to debentureholders.

(ix) According to the information provided and explanations given to us no moneyhas been raised by way of initial public offer or further public offer (including debtinstruments) and the term loans. During the year the Government of India has infused a sumof Rs.200 crores towards share capital which is pending allotment. The Company hassubsequently allotted 20 crore number of equity shares @ Rs.10 each to the President ofIndia (Government of India) on May 21 2020.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or any fraud on the Company by its officers andemployees has been noticed or reported during the year.

(xi) According to the information and explanations given to us and in terms of GSR 463(E) dated June 05 2015 issued by the Ministry of Corporate Affairs the provisions ofsection 197 pertaining to managerial remuneration do not apply to a government company.Accordingly paragraph 3(xi) of the Order is not applicable.

(xii) According to information and explanations given to us the Company is not aNidhi Company. Hence the Nidhi Rules 2014 are not applicable to the Company.Accordingly clause 3(xii) of the Companies (Auditor's Report) Order 2016 is notapplicable to the Company.

(xiii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company transactions with the related parties arein compliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableAccounting Standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(xv) The Company has not entered into any non-cash transactions with directors orpersons connected with them which are covered under Section 192 of Companies Act 2013.

(xvi) The Company is a Non-Banking Finance Company and has obtained registrationunder section 45-IA of the Reserve Bank of India Act 1934. The Company has been grantedcertificate of registration to commence/carry on the business of non-banking financialinstitution without accepting pubic deposits on August 18 2009 vide registration No. isB-14.00009.

For M/s M. K. Aggarwal & Co.
Chartered Accountants
Firm Registration No: 01411N
CA Atul Aggarwal
Place: New Delhi Partner
Date: June 26 2020 Membership No. 099374

Annexure B referred to in paragraph 2 of Report on Other Legal and RegulatoryRequirements of our report of even date of standalone financial statements. part A -Directions

Sl. No. Directions Reply
1 Whether the company has system in place to process all the accounting transactions through IT system? If yes the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications if any may be stated. Yes the accounting transactions process through IT system. The income tax computation and deferred tax computation have been done manually on MS excel however the accounting entries for both is passed through IT system only.
2. Whether there is any restructuring of an existing There is no restructuring of loans during the year under reference.
loan or cases of waiver/write off of debts/loans/ interest etc. made by a lender to the company due to There are no cases of waiver/write off of debts/loans/interest etc. made by a lender to the company due to the company's inability to repay the loan.
the company's inability to repay the loan? If yes the financial impact may be stated. However according to the information and explanations provided to us by the Company there are case(s) of waiver/ write-off of debts/ loan/ interest etc. The details of such write-off/waiver are as under:

 

Sl. No. Nature of Dues No. of cases Amount (in crore)
A. Waiver/Write-off/ Technical write-off of loans 22 2217.40
B. Debtors write-offs 20 11.66

 

It was informed that the waiver/write-off is decided on case to case basis with due assessment of the possibility of recovery/realization in each case considering the available security status of the borrower/investee and pending litigation. The outstanding in technical write-offs/ waiver cases was fully provided for in the books of accounts to the extent of the amount of write-off/ waiver.
3. Whether funds received/receivable for specific schemes from Central/State agencies were properly accounted for/utilized as per its term and conditions? List the cases of deviation. Yes the funds received for Credit Enhancement Guarantee Scheme For Scheduled Castes have been properly accounted for and utilized as per terms and conditions of the scheme.

Part B - Sub-Directions

Sl. No. Sub-D irections Reply
1. Investments Whether the titles of ownership in respect of CGS/SGS/ Bonds/Debentures etc. are available in physical/de-mat form and these in aggregate agree with the respective amounts shown in the Company's books of accounts? If According to the information and explanations provided by the Company and based on audit procedures performed by us the titles of ownership in respect of CGS/ SGS/ Bonds/ Debentures etc. are available in physical/de-mat form and these in aggregate agree with the respective amounts shown in the Company's books of accounts except for the cases mentioned below:
not details may be stated. (a) Where shares are lying in Demat or physical form but not accounted for in the books of accounts to the extent identified on test check basis.

 

Sl. No Company Name Mode No of shares
1. ACC LTD. Demat 80
2. Reliance Industries Ltd Demat 4664
3. Tata Motors Limited Demat 600
4. Tata Steel Limited Demat 300
5. Asian Hotels (East) Ltd. Demat 265
6. Asian Hotels (North) Ltd. Demat 265
7. Asian Hotels (West) Ltd. Demat 265
8. Bengal & Assam Company Ltd Demat 23
9. Bhilwara Technical Textiles Ltd Demat 958
10. Birla Precision Technology Ltd Demat 13
11. Cimmco Ltd Demat 24550
12. Coromandel International Ltd Demat 69220
13. E I D Parry (India) Ltd. Demat 430
14. Eveready Industries India Ltd. Demat 200
15. Excel Glasses Ltd Demat 50
16. Gabriel India Ltd. Parwanoo Demat 3500
17. GKW LTD Demat 110
18. Graphite India Ltd Demat 366
19. Gujarat Sidhee Cement Ltd Demat 275
20. HEG LTD Demat 1785
21. Hi-Tech Gears Ltd Demat 2700
22. Indian Metals & FerroAlloys Ltd. Demat 89
23. ITC LTD Demat 67
24. J.K. Cement Ltd Demat 20
25. Larsen & Toubro Ltd Demat 1125
26. National Organic Chemical Industries Ltd Demat 130
27. Ponni Sugars & Chemicals Ltd Demat 64800
28. Rainbow Denim Ltd Demat 40
29. Rajasthan Spg & Wvg Mills Ltd (Rswm Limited) Demat 383
30. Reliance Capital Ltd Demat 223
31. Reliance Communications Ltd Demat 4482
32. Reliance Infrastructure Ltd Demat 335
33. Reliance Power Ltd Demat 1120
34. Tata Power Co. Ltd Demat 900
35. Titagarh Wagons Ltd. Demat 25
36. Ultratech Cement Ltd Demat 100
37. Winsome Textile Industries Ltd Demat 200
38. Zenith Ltd Demat 38
39. Aditya Birla Capital Ltd Demat 194
40. Aditya Birla Fashion And Retail Limited Demat 483
41. Banswara Syntex Limited Demat 100
42. Core Education & Technologies Ltd Demat 3
43. Era Infra Engineering Ltd Demat 27
44. Grasim Industries Limited Demat 139
45. Indian Seamless Enterprises Demat 1028
46. Jaykay Enterprises Limited Demat 100
47. Kama Holdings Limited Demat 150
48. Reliance Home Finance Ltd Demat 223
49. Western India Shipyard Ltd Demat 30
50. Ansal Hotel Physical 4727750
51. Aryavastra plywoods Ltd. Physical 60000
52. Bhilwara Processors Physical 209998
53. Biotech Synergy Physical 440000
54. BR Foods Physical 350000
55. Cimmco Ltd. Physical 2860
56. DCM Shree Ram Physical 16016
57. Depro Foods Physical 1320
58. Essar Coated Steel Ltd. Physical 753000
59. Excelsior Plants Co. Ltd. Physical 51998
60. Flower and Tissue India Ltd. Physical 500000
61. Ganesh banzoplast Ltd. Physical 3888889
62. Gian Agra Industries Ltd. Physical 1995
63. Globe United Physical 3958
64. Golden Polymarbles Ltd. Physical 380000
65. Hind Food Ltd. Physical 300000
66. Hindal Co. India Physical 116
67. Jauss Polymers Ltd. Physical 11000
68. JCT Ltd. Physical 500315
69. ]K Paper Limited Physical 27813
70. Kinzle India Samay Ltd. Physical 123400
71. Maharastra Steel Ltd. Physical 2995
72. MM Polytex Ltd. Physical 100000
73. Modi Alkalies and Chemicals Physical 784590
74. Mohta Electro Steel Physical 18361
75. MP Plywood Physical 25000
76. Naina Semiconductor Ltd Physical 509481
77. ORDe Textiles Physical 20000
78. Orrissa Synthetics Ltd. Physical 100
79. Oshi Foods Ltd. Physical 210000
80. Perfect Drugs Ltd. Physical 400000
81. Pratibha Syntex Ltd. Physical 1250000
82. Punjab Fibre Ltd. Physical 87076
83. Punsuni Frine and Components Ltd. Physical 220000
84. Saurashtra Chemicals Ltd. Physical 1107024
85. Shama Forge Physical 24863
86. Shama Forge (Pref Shares) Physical 7495
87. Siel Ltd. Physical 336348
88. Siel Sugar Ltd. Physical 300
89. Standard Woolens Physical 50000
90. Tridev Duplex Board Pvt. Ltd. Physical 200000
91. Tripati Woolens Physical 59789
92. Usha Forging and Stamping Physical 45000
93. Usha Forging and Stamping (Pref) Physical 1968
94. Rain Industries Ltd. Physical 115000
95. Usha Spinning and Weaving Mill Ltd. Physical 2783

As per management with some exceptions these shares have been transferred by theCompany in the past and the beneficiaries did not get these shares transferred owing tovarious reasons. The historical values of the above shares are not ascertainable.

(b) Where shares are accounted in the books of Account but are not available in Demator physical form to the extent identified on test check basis.

Sl. No Company Name No of shares
1. Ajanta Textiles Ltd (Pref Shares) 38219
2. BST MFG Ltd (Pref Shares) 9920
3. Chemco Steels Ltd 500000
4. Digvijay Synthetics Ltd (Pref Shares) 170000
5. Echon Industries Ltd 1400000
6. G.R. Solvents & Allied Industries Ltd 125000
7. Graham Firth Steel Products (I) Ltd 3
8. Hermonite Associates Ltd 130000
9. Hindustan Agro Chemicals Ltd 19300
10. I C Textiles Ltd (Pref Shares) 952394
11. LML Ltd (Pref Shares) 2150912
12. Minerva Holding Ltd 120
13. Modern Syntex (I) Ltd 6000000
14. Morepen Laboratories Ltd(Pref Shares) 87373
15. Munak Chemicals Ltd 6
16. Nutech Packaging Ltd 525000
17. OCM India Ltd 589743
18. Parasrampuria Synthetics Ltd (Pref Shares) 1389450
19. Poddar Udyog Ltd (Pref Shares) 18000
20. Pooja Granites And Marbles Pvt Ltd 276000
21. Prag Bosmi Synthetics Ltd (Pref Shares) 2614577
22. Puni Steel Machine Tools Pvt Ltd (Pref Shares) 150000
23. Samcor Glass Ltd 2000000
24. Shree Maheswar Hydel Power Company Ltd. 8387028
25. Southern Wind Farms Pvt. Ltd. 100000
26. Steel & Allied Products Ltd (Pref Shares) 5980
27 Triveni Metal Tubes Ltd (Pref Shares) 449
28 West Bengal Consultancy Orgn. Ltd 12700
29 YUIL Measure (I) Ltd (Pref Shares) 39500

 

2. Loans There is a system of assessment of realisable value of securities available for loan portfolio including restructured rescheduled renegotiated loans and is updated on quarterly basis.
In respect of provisioning requirement of all restructured rescheduled renegotiated loan-whether a system of periodical assessment of realisable value of securities available against all such loans is in place and adequate provision has been created during the year? Any deficiencies in this regard if any may be suitably commented upon along with financial impact.
However valuation exercise is undertaken on periodical basis or as and when warranted by the circumstances.
In view of adoption of Ind AS norms the financial accounts of the company are drawn as per Ind AS. Resulting into non-adherence to IRAC norms of RBI. Impairment in the assets have been calculated in accordance with Ind AS by calculating Expected Credit Loss (ECL) in case of loans as per accounting policy of the company.
For M/s M. K. Aggarwal & Co.
Chartered Accountants
Firm Registration No: 01411N
CA Atul Aggarwal
Place: New Delhi Partner
Date: June 26 2020 Membership No. 099374

Annexure C referred to in paragraph 3 of Report on Other Legal and RegulatoryRequirements of our report of even date on standalone financial statements:

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of IFCILimited ("the Company") as of March 31 2020 in conjunction with our audit ofthe financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2020 so far as ourexamination has revealed regarding internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.

For M/s M. K. Aggarwal & Co.
Chartered Accountants
Firm Registration No: 01411N
CA Atul Aggarwal
Place: New Delhi Partner
Date: June 26 2020 Membership No. 099374

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