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Indian Railway Finance Corporation Ltd

BSE Code : 543257 | NSE Symbol : IRFC | ISIN:INE053F01010| SECTOR : Finance |

NSE BSE
 
SMC down arrow

23.30

-0.25 (-1.06%) Volume 280564

21-Jan-2022 EOD

Prev. Close

23.55

Open Price

23.50

Bid Price (QTY)

23.30(19992)

Offer Price (QTY)

0.00(0)

 

Today’s High/Low 23.85 - 23.25

52 wk High/Low 26.70 - 20.80

Key Stats

MARKET CAP (RS CR) 30514.96
P/E 5.52
BOOK VALUE (RS) 29.7793214
DIV (%) 10.5
MARKET LOT 1
EPS (TTM) 4.23
PRICE/BOOK 0.784101144762822
DIV YIELD.(%) 4.5
FACE VALUE (RS) 10
DELIVERABLES (%) 32.55
4

News & Announcements

14-Jan-2022

Indian Railway Finance Corporation Ltd - Indian Railway Finance Corporation Limited - Updates

13-Jan-2022

Indian Railway Finance Corporation Ltd - Indian Railway Finance Corporation Limited - Investor Presentation

12-Jan-2022

Indian Railway Finance Corporation Ltd - Indian Railway Finance Corporation Limited - Updates

11-Jan-2022

IRFC upsizes its global medium term programme

21-Jan-2022

IRFC raises USD 500 mn via allotment senior unsecured notes

11-Jan-2022

IRFC upsizes its global medium term programme

10-Nov-2021

Indian Railway Finance Corporation announces appointment of directors

02-Nov-2021

Board of Indian Railway Finance Corp. recommends Interim Dividend

Corporate Actions

Bonus
Splits
Dividends
Rights
Capital Structure
Book Closure
Board Meeting
AGM
EGM
 

Financials

Income Statement

Standalone
Consolidated
 

Peers Comparsion

Select Company Name BSE Code NSE Symbol
Gujarat State Financial Corporation 532160 GUJSTATFIN
Haryana Financial Corporation Ltd 530927
ICICI Ltd (Merged) 500015 ICICI
IFCI Ltd 500106 IFCI
Power Finance Corporation Ltd 532810 PFC
REC Ltd 532955 RECLTD
SCICI Ltd (Merged) 500017 SCICI
Tourism Finance Corporation of India Ltd 526650 TFCILTD

Share Holding

Category No. of shares Percentage
Total Foreign 168882813 1.29
Total Institutions 418956974 3.21
Total Govt Holding 0 0.00
Total Non Promoter Corporate Holding 49917940 0.38
Total Promoters 11286437000 86.36
Total Public & others 1144311773 8.76
Total 13068506000 100
  • Total Foreign
  • Total Institutions
  • Total Govt Holding
  • Total Non Promoter Corporate Holding
  • Total Promoters
  • Total Public & others

About Indian Railway Finance Corporation Ltd

Indian Railway Finance Corporation Limited was incorporated on December 12, 1986, as a public limited company. Thereafter, The Company received a certificate of commencement of business from the RoC on December 23, 1986. The MCA, through its notification dated October 8, 1993, classified the Company as a Public Financial Institution under Section 4(A) of the Companies Act, 1956 (now defined in Section 2(72) of the Companies Act, 2013). Subsequently, The Company was registered with RBI under Section 45-IA of the RBI Act to carry on the business of a non-banking financial institution without accepting public deposits, pursuant to a certificate of registration bearing No.14.00013 dated February 16, 1998. Subsequently, vide a fresh certificate of registration bearing No.14.00013, dated March 17, 2008, RBI classified the Company as a non-deposit accepting asset finance non-banking financial company. Thereafter, the Company was re-classified as an NBFC-ND-IFC by RBI, through a fresh certificate of registration bearing No. B-14.00013, dated November 22, 2010. The Company is the dedicated market borrowing arm of the Indian Railways. Its primary business is financing the acquisition of rolling stock assets, which includes both powered and unpowered vehicles, for example locomotives, coaches, wagons, trucks, flats, electric multiple units, containers, cranes, trollies of all kinds and other items of rolling stock components as enumerated in the Standard Lease Agreement (collectively, 'Rolling Stock Assets'), leasing of railway infrastructure assets and national projects of the Government of India (collectively, 'Project Assets') and lending to other entities under the Ministry of Railways, Government of India ('MoR'). The MoR is responsible for the procurement of Rolling Stock Assets and for the improvement, expansion and maintenance of Project Assets. The Company is responsible for raising the finance necessary for such activities. Over the last three decades, the company has played a significant role in supporting the capacity enhancement of the Indian Railways by financing a proportion of its annual plan outlay. The Union Budget proposed a capital expenditure of Rs. 1,602 billion for the Indian Railways for Fiscal 2020, which was higher than the capital expenditure (revised estimate) of Rs. 1,388.58 billion in Fiscal 2019. The actual capital expenditure of the Indian Railways was Rs. 1,334 billion in Fiscal 2019. In Fiscal 2019, the company financed Rs. 525.35 billion accounting for 39.38% of the actual capital expenditure of the Indian Railways. The Company is wholly-owned by the Government of India acting through the MoR. The Company is registered with the Reserve Bank of India as a NBFC (Systematically Important) and is classified under the category of an 'Infrastructure Finance Company' under Section 45-IA of the Reserve Bank of India Act, 1934. The Company follows a financial leasing model for financing the Rolling Stock Assets. The period of lease with respect to Rolling Stock Assets is typically 30 years comprising a primary period of 15 years followed by a secondary period of 15 years, unless otherwise revised by mutual consent. In terms of the leasing arrangements, the principal amount pertaining to the leased assets is effectively payable during the primary 15 years lease period, along with the weighted average cost of borrowing and a margin determined by the MOR in consultation with the company at the end of each Fiscal. Typically, the weighted average cost of borrowing factors in any expenses incurred by the company with respect to any foreign currency hedging costs and/ or losses (and gains, if any) as well as any hedging costs for interest rate fluctuations. For the second 15 year period, the company charges the Indian Railways a nominal rate which is subject to revision on mutually acceptable terms. The Company also follows a leasing model for Project Assets, which typically provides for lease periods of 30 years.

Indian Railway Finance Corporation Ltd Chairman Speech

Indian Railway Finance Corporation Ltd Company History

Indian Railway Finance Corporation Limited was incorporated on December 12, 1986, as a public limited company. Thereafter, The Company received a certificate of commencement of business from the RoC on December 23, 1986. The MCA, through its notification dated October 8, 1993, classified the Company as a Public Financial Institution under Section 4(A) of the Companies Act, 1956 (now defined in Section 2(72) of the Companies Act, 2013). Subsequently, The Company was registered with RBI under Section 45-IA of the RBI Act to carry on the business of a non-banking financial institution without accepting public deposits, pursuant to a certificate of registration bearing No.14.00013 dated February 16, 1998. Subsequently, vide a fresh certificate of registration bearing No.14.00013, dated March 17, 2008, RBI classified the Company as a non-deposit accepting asset finance non-banking financial company. Thereafter, the Company was re-classified as an NBFC-ND-IFC by RBI, through a fresh certificate of registration bearing No. B-14.00013, dated November 22, 2010. The Company is the dedicated market borrowing arm of the Indian Railways. Its primary business is financing the acquisition of rolling stock assets, which includes both powered and unpowered vehicles, for example locomotives, coaches, wagons, trucks, flats, electric multiple units, containers, cranes, trollies of all kinds and other items of rolling stock components as enumerated in the Standard Lease Agreement (collectively, 'Rolling Stock Assets'), leasing of railway infrastructure assets and national projects of the Government of India (collectively, 'Project Assets') and lending to other entities under the Ministry of Railways, Government of India ('MoR'). The MoR is responsible for the procurement of Rolling Stock Assets and for the improvement, expansion and maintenance of Project Assets. The Company is responsible for raising the finance necessary for such activities. Over the last three decades, the company has played a significant role in supporting the capacity enhancement of the Indian Railways by financing a proportion of its annual plan outlay. The Union Budget proposed a capital expenditure of Rs. 1,602 billion for the Indian Railways for Fiscal 2020, which was higher than the capital expenditure (revised estimate) of Rs. 1,388.58 billion in Fiscal 2019. The actual capital expenditure of the Indian Railways was Rs. 1,334 billion in Fiscal 2019. In Fiscal 2019, the company financed Rs. 525.35 billion accounting for 39.38% of the actual capital expenditure of the Indian Railways. The Company is wholly-owned by the Government of India acting through the MoR. The Company is registered with the Reserve Bank of India as a NBFC (Systematically Important) and is classified under the category of an 'Infrastructure Finance Company' under Section 45-IA of the Reserve Bank of India Act, 1934. The Company follows a financial leasing model for financing the Rolling Stock Assets. The period of lease with respect to Rolling Stock Assets is typically 30 years comprising a primary period of 15 years followed by a secondary period of 15 years, unless otherwise revised by mutual consent. In terms of the leasing arrangements, the principal amount pertaining to the leased assets is effectively payable during the primary 15 years lease period, along with the weighted average cost of borrowing and a margin determined by the MOR in consultation with the company at the end of each Fiscal. Typically, the weighted average cost of borrowing factors in any expenses incurred by the company with respect to any foreign currency hedging costs and/ or losses (and gains, if any) as well as any hedging costs for interest rate fluctuations. For the second 15 year period, the company charges the Indian Railways a nominal rate which is subject to revision on mutually acceptable terms. The Company also follows a leasing model for Project Assets, which typically provides for lease periods of 30 years.

Indian Railway Finance Corporation Ltd Directors Reports

Dear Shareholders,

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:

Rs. In Million

Particulars Year ended 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 Rs. 23,494.55 million from H 1,34,210.17 million in 2019-20 to Rs. 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 Rs. 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 Rs.13,721.93 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 2020-21, 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 Rs. 29,300 Crore, financing of Railway Projects under EBR-IF to the tune of Rs. 28,000 Crore and meeting the debt financing requirements of RVNL amounting to Rs. 700 crore. During the last quarter of the financial year 2020-21, the target was revised and Rs. 1,04,369.00 crore including Rs. 29,480.56 crore towards Rolling Stock, Rs. 21,839.68 crore towards EBR-IF, Rs. 51,619.07 Cr towards project assets under EBR-S and Rs. 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 Rs. 70,471.96 crore. The cumulative funding to Railway Sector has crossed Rs. 4.44 lakh crore mark.

The total Capital Outlay (Capital Expenditure) of MoR for the year 2020-21 was Rs.1,55,161 crore out of which IRFC's disbursement against the same was significant at Rs. 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 Rs. 21,537.70 crore (Previous year Rs. 30,046.83 crore including LIC Bonds Rs. 4300 crore), External Commercial Borrowings (ECB) of Rs. 29,586.95 crore (previous year Rs.13,783.85 Crore) at exchange rate prevailing on the draw down date, Rupee Term Loans of Rs. 52,401.75 crore (previous year Rs. 25,789.00 Crore) and 54EC bonds of Rs. 842.60 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 Rs. 10,263.91 crore (including call option exercised for Rs. 3,000 crore) and External Commercial Borrowings (ECB) of H 22.51 crore. The Company also redeemed long term loans from Banks of Rs. 3,625 crore and Commercial Paper with face value of Rs. 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 Rs. 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 Rs. 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 Rs. 65,258 crore which includes Rs. 30,300 crore for funding of Rolling Stock assets and funding of Railway projects to the extent of Rs.34,258 crore. A target of Rs. 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 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, 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 Rs. 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 Rs. 61.28 crore, against which, the Company has disbursed a sum of Rs. 41.51 crore, including contribution towards Armed Forces Flag Day Fund (AFFDF) for Rs. 1 Crore, contribution to PM CARES

Fund for Rs. 30 crore and H 10.51 Crore for construction of 105 Public Toilets and the balance amount of Rs. 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 Rs. 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 2020-21 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:

Rs. 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 procurement

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

   

Indian Railway Finance Corporation Ltd Company Background

Amitabh BanerjeeAmitabh Banerjee
Incorporation Year1986
Registered OfficeUG Flr East Tower NBCC Place,Pragati Vihar Lodhi Road
New Delhi,New Delhi-110003
Telephone91-11-24369766 / 24368068,Managing Director
Fax91-11-24369770
Company SecretaryVijay Babulal Shirode
AuditorK B D S & Co
Face Value10
Market Lot1
ListingBSE,NSE,
Registrar

Indian Railway Finance Corporation Ltd Company Management

Director NameDirector DesignationYear
Amitabh BanerjeeChairman & Managing Director2021
Shelly VermaDirector (Finance) & CFO2021
Baldeo PurusharthaGovt Director-Part Time2021
Bhaskar ChoradiaGovt Director-Part Time2021
Vijay Babulal ShirodeCompany Secretary2021
Patel Vallabhbhai ManeklalNon Official Independent Direc2021
Sheela PanditNon Official Independent Direc2021

Indian Railway Finance Corporation Ltd Listing Information

Listing Information
BSE_500
BSE_200
BSEDOLLEX
BSE_PSU
CNX500
BSEMID
CNXMIDCAP
BSEIPO
CNX200
BSEINFRA
BSECPSE
BSEALLCAP
BSEFINANCE
MID150
LMI250
MSL400
NFTYLM250
NFTYMC150
NFTYMSC400
NF500M5025

Indian Railway Finance Corporation Ltd Finished Product

Product NameUnit Installed
Capacity
Production
Quantity
Sales
Quantity
Sales
Value
Lease Income Rs.0009410.0091
Interest Income Rs.0001721.7986
Dividend Rs.0000.5138
Gain on Assets Securitization Rs.0000

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