Your directors have the pleasure in presenting the 39^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 2026.

1. Financial Highlights

Revenue from operations of your Company has increased by
? 132.01 Crore from ? 27,152.14 Crore in 2024-25 to ? 27,284.15
Crore in 2025-26, showing a growth of 0.49 %.

Profit before Tax (PBT) of your Company for the year ended
31^st March 2026 was ? 7,009.17 Crore as compared to
? 6,502.00 Crore for the previous year, registering a growth of
7.80%. Company had elected to exercise the option permitted
under section 115 BAA of the Indian Income Tax Act, 1961 as
introduced by the Taxation Laws (Amendment) ordinance,
2019 dated 20^th September 2019. Pursuant to exercise of such
option of Section 115 BAA, the taxable income under normal
assessment is NIL. Further, after adoption of Section 115
BAA, the Company is outside the scope and applicability of
Minimum Alternate Tax (MAT) provision under section 115 JB
of Income Tax Act. Accordingly, no provision has been made
in the accounts for the FY 2021-22, FY 2022-23, FY 2023-24,
FY 2024-25 and FY 2025-26 as well. Profit After Tax for the year

ending 31^st March 2026 was ? 7,009.17 Crore as compared
to ? 6,502.00 Crore for the previous year, registering a
growth of 7.80%.

Earnings Per Share (EPS) for the financial year ended March
31, 2026, was ? 5.36 per share of face value of ? 10/- each, as
against EPS of ? 4.98 per share in the previous financial year.

Net worth of the Company as on March 31, 2026 stands at
? 56,748.76 Crore. Asset under management (AUM) stood at
? 4,84,616.77 at the end of financial year 2025-26.

2. Dividend

Your Company endeavours to maintain an optimal 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 2025-26, the Board has declared the following
interim dividends:

• First Interim Dividend of 10.5% (i.e., f1.05 per equity
share having face value of f10/- each for FY 2025-26) at
the Board Meeting held on 15^th October 2025, which was
paid on 6^th November 2025.

• Second Interim Dividend of 10.5% (i.e., f1.05 per equity
share having face value of f10/- each for FY 2025-26) at
the Board Meeting held on 9^th March 2026, which was paid
on 24^th March 2026.

Accordingly, the total interim dividend for the financial year
2025-26 amounts to f2.10 per equity share of f10/- each. The
total dividend paid during the FY 2025-26 amounts to ^2,744.39
Crore (1^st Interim Dividend and 2^nd Interim Dividend FY 25-26).

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%20
DISTRIBUTION%20POLICY 2.pdf

The details of unpaid/unclaimed amount of dividend as on 31^st
March 2026 is as follows:

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 in accordance with the
applicable provisions of the Companies Act, 2013. 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 Dividends are 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 declaration of dividend.

Accordingly, 20% of the net profit of the Company amounting
to ? 1,401.83 Crore had been transferred to Reserve Fund u/s
Section 45 - IC of RBI Act, 1934 during the FY 2025-26.

4. Share Capital

As on 31^st March 2026, the Authorized Share Capital of the
Company was ? 25,000 Crore, consisting of 25,000,000,000
Equity Shares of ? 10/- each. The issued and paid-up share
capital of the Company was ? 13,068.506 Crore, consisting of
13,068,506,000 Equity Shares of ? 10/- each.

During FY 2025-26, the Government of India, through the
President of India acting via the Ministry of Railways, undertook
disinvestment of 1.71% of its equity shareholding in the
Company through Offer for Sale (OFS), in compliance with
the guidelines issued by the Department of Investment and
Public Asset Management (DIPAM), SEBI regulations and other
applicable laws and regulation.

Pursuant to completion of the said Offer for Sale, the
shareholding of the Government of India was reduced to 84.65%.

The OFS formed part of the Government's disinvestment
initiative aimed at achieving compliance with minimum public
shareholding norms and strengthening public participation and
market liquidity in the Company.

As on 31^st March 2026, 84.65% of the paid-up equity share
capital of the Company comprising of 11,06,23,96,171 Equity
Shares of ? 10/- each was held by President of India acting
through administrative ministry i.e., Ministry of Railways
(MoR). The balance 15.35% 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 2026.

5. Policy Review

The Company remains committed to upholding a strong
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 their adequacy,
effectiveness and alignment with the regulatory amendments
under the Companies Act, 2013, SEBI (LODR) Regulations,
2015, other applicable laws, regulatory provisions and evolving
business requirements. Further, the Company has updated
various policies, including, among others- the Stakeholder
Engagement Policy, Policy on Responsible Advocacy with
Public and Regulatory Bodies, Equal Opportunity Policy,
Human Rights Policy, and the Integrated Stakeholder Grievance
Redressal Document.

6. Independent Evaluators’ Assessment

6.1 Credit Ratings

6.1.1 Domestic:

During the financial year 2025-26, 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 2025-26, 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.

6.2. Memorandum of Understanding (MoU)

The Company enters into an annual Memorandum of
Understanding (MoU) with the Ministry of Railways (MoR),
Government of India, in accordance with the guidelines
issued by the Department of Public Enterprises (DPE). The
MoU stipulates financial, operational and compliance-related

performance parameters against which the Company's
performance is evaluated annually.

The MoU for FY 2024-25 was executed with the Ministry of
Railways on 14^th September 2023. Based on its performance
against the agreed targets, the Company has been accorded the
rating of “Excellent” by the Department of Public Enterprises
(DPE) for FY 2024-25.

Under the leasing framework for Project Assets, an initial
moratorium period of five years is provided during which
lease rentals are not payable by the Ministry of Railways.
In accordance with the applicable financing arrangement,
finance cost recognized during the moratorium period is
treated as annual disbursement and added to the Assets Under
Management (AUM) of the Company.

During FY 2025-26, the Company recognized disbursements of
H 15,260.24 crore to the Ministry of Railways and H 35,067.68
crore to other entities, totalling to H 50,327.92 crore. Total Funds
available for loan disbursement in the year was H 50,539.23
crore. Balances related to loans outstanding as on 31.03.2026
are as follows:

Balances on Based on self-evaluation, Company's performance
against the key MoU parameters is summarized below:

In addition to the above performance parameters, the Company complied with all the additional compliance parameter prescribed under
the MoU framework for FY 2025-26, as summarised below.:

*To the extent compliance are within the ambit of company.

7. Market Borrowings during 2025-26

The Board of Directors had approved borrowing limit of T 60,000 Crore for FY 2025-26 for meeting the funding requirement of Indian
Railways, if any, new business activities, refinancing of existing loans and for other general corporate purposes.

During FY 2025-26, the Company continued to maintain a diversified and prudent borrowing profile to support its financing requirements
and optimize cost of funds. As per financial statements, during the year Company mobilised resources amounting to T 46,263.69 Crore
through multiple funding instruments, which includes Taxable Bonds aggregating to T 13,575.42 crore (Previous year: T 27,240 Crore),
Rupee Term Loans amounting to T 23,950 crore (Previous year: T 3,500 Crore), 54EC Bonds of T 2,306.21crore (Previous year: T 1,877.30
Crore), and External Commercial Borrowings (ECB) of T 6,432.06 crore. The diversified borrowing mix enabled the Company to maintain
financial flexibility, competitive cost of borrowing and efficient asset-liability management.

The weighted average cost of funds (WACF) for the financial year 2025-26 worked out to 6.55% p.a.

The company had also prepaid high cost long term loan of T 19,091.78 Crore from lower rate borrowings.

8. Disbursements

Company is taking several strategic steps to diversify its lending
portfolio. During the FY 2025-26, 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 2025-26, no fresh
disbursement was made to MoR due to ‘NIL' target
allocation for the year.

Disbursement to Other than MoR: During FY 2025-26, the
Company executed agreements worth T 72,949 crore, marking
a significant scale-up in its diversified infrastructure financing
business. The sanctions comprised T 12,493 crore towards
railways, T 43,614 crore towards Power and T 16,842 towards
fertilizers. Total Disbursements during FY 2025-26 stood at
T 35,067 crore, including T 12,386 towards railways, T 9,516
crore towards Power and T 13,165 towards fertilizers. Through
participation in competitive RfP-based financing processes
across multiple infrastructure sectors, IRFC has established
itself as a credible source of long-term infrastructure finance,
contributing to greater competition and pricing efficiency in
the infrastructure financing market traditionally dominated by
banks and select financial institutions.

The diversification-led expansion resulted in improved spreads
and a consistent rise in net interest margin (NIM), while IRFC
maintained its pristine zero NPA status.

9. Redemption of Bonds / Repayment of Loans

As per financial statements, during the year Company
redeemed the Domestic Bonds of T 4,569.73 Crore, 54EC
Bonds of T 842.50 Crore and External Commercial Borrowings
(ECB) of T 1,575.06 Crore. The Company also prepaid long
term loans of T 19,091.78 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 FY 2025-26, no fresh disbursement has
been made to MoR.

Further, IRFC commenced project funding to MoR (Ministry of
Railways) for creation & development of railway infrastructure
projects in October 2015 under finance lease model with
commencement of lease rentals after a gestation period of 5
years. As at 31^st March 2025, the execution of Lease Agreement
for EBR IF 2019-20 was in process. However, during FY 2025-26
based on the mutual discussion between IRFC and MoR, the
gestation period of 5 years was increased by another 1 year for
EBR IF 2019-20 as the assets to be leased under the agreement
were still in final stage of development. Accordingly, the
execution of Lease Agreement for EBR IF 2019-20, EBR_IF 2020¬
21 & EBR_S 2020-21 is under process. The lease agreements
for funding for EBR_IF from FY 2021-22 to FY 2022-23 shall be
executed on completion of moratorium period.

13. Resource Mobilization for 2026-27

Board has authorized the Company to borrow funds amounting
to T 70,000 Crore as may be required during FY 2026-27 for
meeting the funding requirement of Indian Railways, if any,
disbursement for diversification under IRFC 2.0, 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 and other
applicable regulations, to the extent applicable.

As on 31^st March 2026, there were 5 (five) Directors on the Board
of the Company. The Board comprises of a Chairman & Managing
Director and CEO, Director (Finance), 2 (Two) Government
Nominee Director(s) and 1 (One) Non- Official Independent
Director. The Company does not have the prescribed number of
Independent Directors (including independent woman director)
on its Board in compliance of the Regulation 17(1) (a) & 17(1)(b)
of SEBI (LODR) Regulations, 2015, specifying the composition
of Board of Directors. Also, the Board strength remained below
the minimum of six (6) directors as specified under Regulation
17(1) (c) of SEBI (LODR) Regulation, 2015. Being CPSE, the
power to appoint Directors vests with Government of India
(GoI) 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
(including independent woman Director).

As on date of this report there are 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).

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 Non¬
Official Independent Director as on 31^st March 2026. 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_0.
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 2025-26, the Company was required
to spend ? 128.33 Crore, being 2% of its average net profits
for the last three financial years. The Company has approved
a total of 20 projects. Gross amount required to be spent for
the year ended 31^st March 2026 amounting to ? 128.33 crores
against which the Board has approved total CSR projects worth
amounting to ? 125.69 crores. Out of them, ? 8.40 crores were
spent in the same financial year, amount spent in Administrative
Overheads of ? 2.54 crore, amount spent on impact assessment
of ? 0.10 crore, amount of ? 8.58 Crore was transferred to IRFC
Foundation Account before 31^st March 2026, a payment of ?

0.90 crores were disbursed to an implementing agency during
the month of April 2026 and correspondingly ? 110.45 Cr
was transferred to Unspent CSR Account FY 2025-26 and the
same would be disbursed on receipt of bills/ claims from the
implementing agencies. During the FY 2025-26, Company has
sanctioned an additional amount of ? 2.65 crore which will be
carry forwarded and set off against the CSR budget for FY 2026-27
as per CSR Rules. The details of CSR activities as required
under the Companies Act for the financial year 2025-26 is
annexed at ANNEXURE - IV.

CSR Activities proposed for the FY 2026-27

For the financial year 2026-27, the Company would be required
to spend approx. H 132.81 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 2026, 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;

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; and

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 2026, the total manpower of the Company
stood at 59. To strengthen the existing workforce, the Company
inducted 10(ten) Executives and 06 (six) Executives on deputation
during the financial year 2025-26. Women comprised approx.
17% of the total workforce as on 31^st March 2026.

The Company continues to maintain high level of employee
productivity and efficiency as reflected in its low overhead to
turnover ratio of less than 0.19%.

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 employees,
women representation has grown across hierarchical levels.
Thus, Women constituted approx. 17% of its total workforce
as on 31^st March 2026. 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. No

complaints were received during the year under review under
the provisions of the said 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: -

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 2025-26, the Company
imparted training to 57 of its employees through various training
programmes and workshops including inhouse trainings.

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. During the year,
IRFC organized its Annual Sports Day 2025-26 on February 20,
2026, 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(s)

M/s O.P. Totla & Company and M/s KGRS & Co., Chartered
Accountants, have been appointed as Joint Statutory Auditors
by Comptroller & Auditor General of India to audit the accounts
of the Company for the financial year 2025-26 under Section
139 of the Companies Act, 2013, vide its communication
No./ CA.V/COY/CENTRALGOVERNMENT,IRLYFC(1)/124 dated
15^th December 2025.

The Statutory Auditors have issued their Independent Auditor's
Report for the Financial year 2025-26 on 14^th May, 2026.
Pursuant to the observations of the Comptroller and Auditor
General of India, they have issued a revised Independent
Auditor's Report on 16^th July, 2026, which supersedes earlier
Report dated 14^th May, 2026. There is no change in the auditors'
opinion on the financial statements from that expressed in the
earlier report. The Independent Auditor's Report forms part of
this Annual Report.

The Comptroller & Auditor General of India (C&AG) has
undertaken supplementary audit on accounts of the Company
for the year ended 31^st March 2026 and have ‘Nil' comments for
the year ended 31^st March 2026.

Secretarial Auditor

M/s VAP & Associates, Practicing Company Secretaries (Firm
Registration No. S2014UP280200), have been appointed as
Secretarial Auditor of the Company for the Period of (5) five
years commencing from FY 2025-26 to FY 2029-30, pursuant to
the provisions of Section 204 of the Companies Act, 2013 read
with Rule 9 of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 and Regulation 24A of the
Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015. The appointment
was approved by the shareholders at the 38^th Annual General
Meeting of the Company held on 30^th August 2025.

In terms of Section 204 of the Companies Act, 2013 and Rules
made thereunder, M/s VAP & Associates have issued Secretarial
Audit Report for the Financial year 2025-26, which 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-II.

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

i.e. from 1^st April 2025 to 31^st March 2026.

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 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 Auditor
of the Company, M/s VAP & Associates, 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 ? 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, which forms part of
this Annual Report.

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
2025- 26 with MCA, the same will be uploaded on website of
the Company at https://irfc.co.in/investors/annual-return .

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 2025-26 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 and Managing Director & CEO
and Shri Randhir Sahay, Director (Finance) - Additional Charge
& Chief Financial Officer (CFO) was placed before the Board of
Directors in their Meeting held on 14^th May, 2026. 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.

The implementation of digital systems, including e-Office
and ERP, has contributed to energy conservation across the
organisation. Reduced reliance on physical files has led to a
significant decline in paper usage and printing. This has lowered
energy consumption associated with printing and document
handling. The shift to digital workflows has improved efficiency
while supporting sustainable practices.

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 2025-26.

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 2025-26.

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 2025-26 as placed below:

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
2025-26 from 27^th October, 2025 to 02^nd November, 2025,

on the theme “Vigilance: Our Shared Responsibility”, 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 14^th September
2025 to 28^th September, 2025 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 under review.

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

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) 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 Director (Finance)
of the Company.

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

1. 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.

2. Ms. Shelly Verma (DIN: 07935630), 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.

3. Shri Randhir Sahay, (DIN: 10591482), 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.

4. Shri Sunil Kumar Goel, ED(BD), has ceased to be Chief
Financial Officer (CFO) with effect from 25^th June, 2025.

5. Shri Randhir Sahay, Director (Finance), Addl. Charge,
has been appointed as the Chief Financial Officer (CFO),
with effect from 25^th June, 2025 in place of Shri Sunil
Kumar Goel, ED(BD).

6. Shri Baldeo Purushartha (DIN: 07570116), ceased
to be a Part-time Government Nominee Director
of the Company with effect from 4^th December
2025, pursuant to the Ministry of Railways,
Government of India, Order No. 2022/PL/57/10 dated
3^rd December 2025, received on 4^th December 2025.

7. Shri Alok Tiwari (DIN: 11409207) , Joint Secretary,
Infrastructure Finance Secretariat, Department of
Economic Affairs has been appointed as Part-time
Government Nominee Director on the Board of IRFC w.e.f.
05^th December 2025 in place of Shri Baldeo Purushartha,
till he holds the post of Joint Secretary, Infrastructure

Finance Secretariat, Department of Economic Affairs or
further orders, whichever is earlier.

8. Shri Vallabhbhai Maneklal Patel (DIN: 07713055), Non
-Official Director (Independent Director) ceased to be
Independent Director of the Company/IRFC with effect
from 15^th April 2026 upon completion of his tenure.

9. Shri Alok Tiwari (DIN: 11409207) ceased to be a Part¬
time Government Nominee Director of the Company
with effect from 7^th May 2026, pursuant to the Ministry of
Railways, Government of India, Order No. 2022/PL/57/10
dated 6^th May 2026.

10. Ms. Laya Madduri (DIN: 11704330) , Joint Secretary,
Infrastructure Finance Secretariat, Department of
Economic Affairs has been appointed as Part-time
Government Nominee Director on the Board of IRFC w.e.f.
07^th May 2026 vide Ministry of Railways, Government of
India, Order No. 2022/PL/57/10 dated 6^th May 2026 in
place of Shri Alok Tiwari, till she holds the post of Joint
Secretary, Infrastructure Finance Secretariat, Department
of Economic Affairs or further orders, whichever is earlier.

11. As per the Ministry of Railways (MOR), Government
of India Order No. 2024/E(O)II/40/1 dated 29^th June
2026, the Board has co-opted Dr. Ranjay Choudhary
(DIN:11796981) as an Additional Director designated
as Director (Finance) on the Board of the Company for
a period of five (5) years with effect from the date of his
assumption of charge of the post i.e. 30^th June 2026.

Accordingly, upon the assumption of charge by Shri Ranjay
Choudhary as Director (Finance)/IRFC, Shri Randhir
Sahay relinquished the additional charge of the post of
Director (Finance) and the office of Chief Financial Officer
(CFO) of the Company with effect from 30^th June, 2026.

12. Ms. Deepa Kotnis, Executive Director (Finance)/IRFC,
has been appointed as the Chief Financial Officer (CFO)
and Key Managerial Personnel (KMP) of the Company with
effect from 30^th June, 2026.

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, Ms. Laya
Madduri (DIN: 11704330), Govt. Nominee Director shall retire by
rotation at the ensuing 39^th Annual General Meeting of the Company
and being eligible, offers herself for re-appointment.

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 have
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.

The Company continues to strengthen its paperless initiatives
by promoting digital documentation and online approval
systems, thereby ensuring efficient governance, reduced paper
consumption, and sustainable operational practices.

Additionally, the Company encourages shareholders to
dematerialise their shareholding and opt for electronic
communication, thereby contributing to sustainable and
efficient capital market practices.

This initiative reflects the Company's commitment towards
sustainability and responsible corporate practices.

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
appreciation for the dedication, commitment, and valuable
contributions of the Company's officers and employees. Their
unwavering efforts have enabled the Company to strengthen
its position as one of the leading public financial institutions
in the country and advance its strategic transformation under
the IRFC 2.0 vision, marked by diversification into new sectors
and expansion of its business portfolio, thereby creating a
stronger foundation for sustainable growth and long-term
value creation.

For and on behalf of the Board of Directors

Sd/-

(Manoj Kumar Dubey)

Place: New Delhi Chairman and Managing Director & CEO

Date: 30^th July 2026 (DIN: 07518387)