Section 172 (1) Statement for the Year Ended 31 March 2026
Section 172 of the Companies Act 2006 requires a Director of a company to act in good faith to promote the success of the company for the benefit of its members as a whole. In doing this, section 172 requires a Director to have regard to the company’s reputation, a range of stakeholders and required resources in addition to shareholders, and to the long-term success of the company.
In the following section we detail the key stakeholders in the company and the resources on which it relies for long-term success. We address the interests of these parties, how we have engaged with them and, where significant decisions have been made during the year, how that engagement has influenced our decisions. In doing this the Directors consider themselves to be fulfilling their duty under section 172 of the Companies Act 2006.
Stakeholders
Having considered these matters, the Directors have concluded that the key factors and stakeholders to consider and the reasons we have considered them are as follows:
Financial stakeholders
Our financial shareholders provide our financial capital which allows us to engage in our principal activity of making long-term loans.
Our shareholder is India Infrastructure Finance Company Limited (IIFCL), which is, itself, owned by the Government of India.
Our other principal financial stakeholders, through holdings of bonds we have issued, are the Reserve Bank of India and the Government of India, which guarantees those bonds. To date we have raised USD 2.5 bn under this arrangement. In addition, banks are other major stakeholders with whom the company places the deposits and/or raises funds.
These stakeholders expect us to facilitate the development of the infrastructure sector through financing as per SIFTI and other Government of India approved schemes.
We engage with our shareholder through providing regular business updates, and the minutes of all our Board meetings are also placed in the Board meetings of our parent company IIFCL and also, through our AGM, which usually all board members attend. We also engage with our bondholder through periodic updates about funds deployed and other information including our audited financial statements and Annual Report.
Customers
Lending to our customers is the reason for our existence as a company. Communications with customers happen throughout the year both formally and informally including both direct communication and discussions through lending consortia. Since lending to infrastructure projects is typically for very long periods, during which the economic and regulatory environment may change, various amendments to the terms of loans may occasionally be required, and the Board considers such requests for modifications on a case to case basis keeping in mind, inter alia, the interest of the company and the impact on the development of the infrastructure sector in India
Employees
The company has only three employees and therefore it is possible to have continuing two-way communication with employees without an extensive formal structure. Engagement with employees and their feedback is almost on an ongoing basis.
Long-term success and high business standards
The company strives to maintain high business standards at all times, as this is key to its relationships with its financial stakeholders and customers. Continuing high business standards are key to its ability to maintain its relationship with the shareholder and bondholder and managing risk and thus to the long-term success of the company.
Impact of views of stakeholders and consideration of resources on decisions made during the year
To illustrate the consideration of the Directors in regard to the stakeholders above, we note below some of the decisions made by the Board during the year and their effect on the parties and matters above.
Equity increase:
Having considered among other things, the effect of the provisions required by IFRS 9 on the company’s equity, it was determined that the company should seek additional equity from its shareholder. The additional equity contributes positively to the perceived stability of the business for customers. During the year, the parent entity approved a proposal for equity infusion aggregating USD 150 million in IIFC (UK) by FY 2027–28, signifying regular and ongoing support from the parent. The Directors believe that the positive cash flow being generated by the company, the support from the Government of India, the Reserve Bank of India and the parent company support the company’s stability and growth.
Decisions relating to employees:
The Directors place strong emphasis on the wellbeing of the Company’s employees and their families. In the context of prospective business expansion and growth opportunities, the Directors are evaluating the Company’s resource requirements and will consider strengthening resources, as and when required.