i) Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event and it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability.
A present obligation that arises from past events, where it is either not probable that an outflow of resources will
be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability.
Contingent liabilities are also disclosed when there is a possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Company. Claims against the Company, where the possibility of any outflow of
resources in settlement is remote, are not disclosed as contingent liabilities.
Contingent assets are not recognized in the financial statements since this may result in the recognition of income
that may never be realized. However, when the realization of income is virtually certain, then the related asset is
not a contingent asset and is recognized.
j) Revenue Recognition
i) Interest Income
Interest income is recognised on a time proportion basis taking into account the amount outstanding and the
efffective interest rate (“EIR”).
The EIR is computed:
a. As the rate that exactly discounts estimated future cash receipts through the expected life of the financial
asset to the gross carrying amount of a financial asset.
b. By considering all the contractual terms of the financial instrument (for example, prepayment, extension,
call and similar options) in estimating the cash flows.
c. Including all fees received between parties to the contract that are an integral part of the effective interest
rate, transaction costs, and all other premiums or discounts.
Any subsequent changes in the estimation of the future cash flows is recognised in interest income with the
corresponding adjustment to the carrying amount of the assets.
ii) Dividend Income
Dividend income is recognised:
a. When the right to receive the payment is established,
b. It is probable that the economic benefits associated with the dividend will flow to the entity and
c. The amount of the dividend can be measured reliably.
Dividend Income is disclosed seperately in Statement of Profit and Loss and not as Fair Value Changes on
Financial Assets at FVTPL.
iii) Processing Fees
Fees is recognised when the Company satisfies the performance obligation, at fair value of the consideration
received or receivable based on a five-step model as set out below, unless included in the effective interest
calculation:
Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties
that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.
Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract
with a customer to transfer a good or service to the customer.
Step 3: Determine the transaction price: The transaction price is the amount of consideration to which the
Company expects to be entitled in exchange for transferring promised goods or services to a customer,
excluding amounts collected on behalf of third parties.
Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has
more than one performance obligation, the Company allocates the transaction price to each performance
obligation in an amount that depicts the amount of consideration to which the Company expects to be entitled
in exchange for satisfying each performance obligation.
Step 5: Recognise revenue when (or as) the Company satisfies a performance obligation.
iv) Net gain on Fair value changes
Any differences between the fair values of financial assets classified as FVTPL held by the Company on the
balance sheet date is recognised as an unrealised gain / loss. In cases there is a net gain in the aggregate, the
same is recognised in “Net gains on fair value changes” under Revenue from operations and if there is a net
loss the same is disclosed as “Net loss on fair value changes” under Expenses in the Statement of Profit and
Loss.
Similarly, any realised gain or loss on sale of financial instruments measured at FVTPL and debt instruments
measured at FVOCI is recognised in net gain / loss on fair value changes.
However, Net gain / loss on derecognition of financial instruments classified as amortised cost is presented
separately under the respective head in the Statement of Profit and Loss.
k) Employee benefits
Employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is
provided. A liability is recognized for the amount expected to be paid e.g., under short-term cash bonus, if the
Company has a present legal or constructive obligation to pay this amount as a result of past service provided by
the employee, and the amount of obligation can be estimated reliably.
l) Cash and cash equivalents
Cash and cash equivalents comprise the net amount of short-term, highly liquid investments that are readily
convertible to known amounts of cash (short-term deposits with an original maturity of three months or less) and
are subject to an insignificant risk of change in value, cheques on hand and balances with banks. They are held for
the purposes of meeting short-term cash commitments (rather than for investment or other purposes).
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short- term deposits,
as defined above.
m) Earnings per share:
Basic earnings per share is computed by dividing the net profit after tax attributable to the equity shareholders for
the year by the weighted average number of equity shares outstanding for the year.
Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue
equity shares were exercised or converted during the year. Diluted earnings per share is computed by dividing the
net profit after tax attributable to the equity shareholders for the year by weighted average number of equity shares
considered for deriving basic earnings per share and weighted average number of equity shares that could have
been issued upon conversion of all potential equity shares.
4 Recent Accounting Pronouncements
The Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2025, MCA
has not notified any new standards or amendments to the existing standards applicable to the Company.
5 Significant accounting judgements, estimates and assumptions
The preparation of financial statements in conformity with the Ind AS requires the management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the
accompanying disclosure and the disclosure of contingent liabilities, at the end of the reporting period. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and future periods are affected. Although these estimates are based on the
management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could
result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting
policies that have the most significant effect on the amounts recognized in the financial statements is included in the
following notes:
Critical judgements in applying accounting polices :
i) Fair value of financial instruments
The fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under
current market conditions (i.e., an exit price) regardless of whether that price is directly observable or estimated
using another valuation technique. When the fair values of financial assets and financial liabilities recorded in the
balance sheet cannot be derived from active markets, they are determined using a variety of valuation techniques
that include the use of valuation models. The inputs to these models are taken from observable markets where
possible, but where this is not feasible, estimation is required in establishing fair values. Judgements and estimates
include considerations of liquidity and model inputs related to items such as credit risk (both own and counterparty),
funding value adjustments, correlation and volatility.
ii) Impairment of Non-Financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any
indication exists, the company estimates the asset’s recoverable amount. An asset’s recoverable amount is higher
of an asset’s fair value less cost of disposal and its value in use. Where the carrying amount exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount.
iii) Provision and contingent liabilities
The Company operates in a regulatory and legal environment that, by nature, has a heightened element of litigation
risk inherent to its operations. As a result, it is involved in various litigation, arbitration and regulatory investigations
and proceedings in the ordinary course of its business.
When the Company can reliably measure the outflow of economic benefits in relation to a specific case and
considers such outflows to be probable, the Company records a provision against the case. Where the probability
of outflow is considered to be remote, or probable, but a reliable estimate cannot be made, a contingent liability is
disclosed.
Given the subjectivity and uncertainty of determining the probability and amount of losses, the Company takes
into account a number of factors including legal advice, the stage of the matter and historical evidence from similar
incidents. Significant judgment is required to conclude on these estimates.
iv) Provisions for Income Taxes
Significant judgements are involved in determining the provision for income taxes including judgement on whether
tax positions are probable of being sustained in tax assessments. A tax assessment can involve complex issues,
which can only be resolved over extended time periods.
Estimates and judgements are continually evaluated. They are based on historical experience and other factors,
including expectation of future events that may have a financial impact on the Company and that are believed to
be reasonable under the circumstances.
39 Undisclosed Income
The company has no unrecorded transactions in books of accounts that has been surrendered or disclosed as income
during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant
provisions of the Income Tax Act, 1961).
40 Details of Crypto currency or Virtual currency
The Company has not traded or invested in Crypto currency or Virtual Currency during reporting periods.
41 Segment Reporting - Disclosures under Ind AS 108 - “Operating Segment”:
The Company operates mainly in the business segment of fund based financing activity. All other activities revolve
around the main business. Further, all activities are carried out within India. As such, there are no separate reportable
segments as per the provisions of IND AS 108 on ‘Operating Segments’.
Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices
- will affect the Company’s income or the value of its holdings of financial instruments. Market risk is attributable to
all market risk sensitive financial instruments. The Company is exposed to market risk primarily related to investment
in equity of other companies, which is very negligible amount. Market risk owing to interest rate changes may affect
the compay’s operation but since it’s in the business of lending, higher interest cost can be passed on to the ultimate
borrower.
Interest rate risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is
the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash
flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because
of fluctuations in the interest rates. Company has not invested in any interest rate bearing instruments except bank fixed
deposits.
* Deposits have no lock in period and hence are repayable on demand.
B. Measurement of fair values
Valuation techniques and significant unobservable inputs
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity
instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is
valued using the closing price as at the reporting period.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates.
If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3. This is the case for loan granted and securty deposits given included in level 3.
The carrying amounts of trade receivables, trade payables, capital creditors and cash and cash equivalents are considered
to be the same as their fair values, due to their short-term nature.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
46 Financial instruments - Fair values and risk management
Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails
to meet its contractual obligations, and arises principally from the Company’s recovery of loan granted. Credit risk
is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of
customers to which the Company grants credit terms in the normal course of business. The Company establishes an
impairment that represents its estimate of incurred losses in respect of loans.
Loans
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The
demographics of the customer, including the default risk of the country in which the customer operates, also has an
influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and
continuously monitoring the creditworthiness of customers.
Te Company’s internal credit rating grades on Days Past Due(DPD) basis:
Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine
incurred and expected credit losses. Historical trends of impairment of loans do not reflect any significant credit losses.
Given that the macro economic indicators affecting customers of the Company have not undergone any substantial
change, the Company expects the historical trend of minimal credit losses to continue.
(i) Impairment assessment
The references below show where the Company’s impairment assessment and measurement approach is set out in this
report. It should be read in conjunction with the Summary of significant accounting policies.
The Company’s definition and assessment of default.
- How the Company defines, calculates and monitors the probability of default, exposure at default and loss given default
- When the Company considers there has been a significant increase in credit risk of an exposure.
- The Company’s policy of segmenting financial assets where ECL is assessed on a collective basis.
- Te details of the ECL calculations and categorisation of loans for stage 1, stage 2 and stage 3 assets.
(ii) Definition of default
The Company considers a Financial instrument defaulted and therefore stage 3 (credit-impaired) for ECL calculations
in all cases when the borrower becomes 90 days past due on its contractual payments.
As a part of a qualitative assessment of whether a customer is in default, the Company also considers a variety of
instances that may indicate unlikeliness to pay. When such events occur, the Company carefully considers whether
the event should result in treating the customer as defaulted and therefore assessed as stage 3 for ECL calculations or
whether stage 2 is appropriate. Such events include:
- The borrower requesting emergency funding from the Company.
- A material decrease in the underlying collateral value where the recovery of the loan is expected from the sale of the
collateral.
- A covenant breach not waived by the Company.
- The debtor (or any legal entity within the debtor’s Company) filing for bankruptcy application/protection.
- All the facilities of a borrower are treated as stage 3 when one of his facility becomes 90 days past due i.e. credit
impaired.
- The restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise.
(iii) Exposure at Default (EAD)
The exposure at default (EAD) represents the gross carrying amount of the financial instruments subject to the
impairment calculation, addressing both the ability to increase its exposure while approaching default and potential
early repayments too.
To calculate the EAD for a Stage 1 loan, the Company assesses the possible default events within 12 months for the
calculation of the 12 months ECL.
For stage 2 and stage 3 financial assets, the exposure at default is considered for events over the lifetime of the
instruments.
In case of undrawn loan commitments, a credit conversion factor of 100% is applied for expected drawdown.
(iv) Loss Given Default (LGD)
LGD is an estimate of the loss arising in case where a default occurs. It is based on the difference between the contractual
cash flows due and those that the Company would expect to receive, including from the realisation of any security.
(v) Significant increase in credit risk (SICR)
The Company continuously monitors all assets subject to ECLs in order to determine whether an instrument or a
portfolio of instruments is subject to 12 month ECL or lifetime ECL. The Company assesses whether there has been an
event which could cause a significant increase in the credit risk of the underlying asset or the customers ability to pay
and accordingly change the 12 month ECL to a lifetime ECL.
In certain cases, the Company may also consider that events explained in note (ii) are a significant increase in credit
risk as opposed to a default. Regardless of the above, if contractual payments are more than 30 days past due, the credit
risk is deemed to have increased significantly since initial recognition.
47 Capital Management
The Company maintains an actively managed capital base to cover risks inherent in the business which includes issued
equity capital, share premium and all other equity reserves attributable to equity holders of the Company.
The primary objectives of the Company’s capital management policy are to ensure that the Company complies with
externally imposed capital requirements and maintains strong credit ratings and healthy capital ratios in order to support
its business and to maximise shareholder value.
The Company manages its capital structure and makes adjustments to it according to changes in economic conditions
and the risk characteristics of its activities. In order to maintain or adjust the capital structure, the Company may adjust
the amount of dividend payment to shareholders, return capital to shareholders or issue capital securities. No changes
have been made to the objectives, policies and processes from the previous years except those incorporated on account
of regulatory amendments. However, they are under constant review by the Board.
e) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
f) The Company does not have any subsidiary or associate company. Therefore, the provisions of Rule 2 of the
Companies (Restriction on Number of Layers) Rules, 2017, which limit the number of layers of subsidiaries for
certain classes of holding companies, are not applicable to the Company.
g) Utilisation of Borrowed funds and share premium
The Company has not advanced or loaned or invested funds to any other person (s)or entity (ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:
a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Company (Ultimate Beneficiaries) or
b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
h) The Company has not received any fund from any person (s)or entity (ies), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:
a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party (Ultimate Beneficiaries) or
b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
i) The Company does not have any open unhedge foreign currency exposure.
j) The Company has not received any compliants.
54 In accordance with the Reserve Bank of India’s Scale Based Regulation 2021, on or before 31 March 2025 the
Company was required to achieve Net Owned Funds (NOF) of INR 50,000 (in Thousands). Due to the provisioning
and accumulated losses, Company’s NOF as at March 31, 2025 has fallen below required threshold, which is a pre¬
requisite to undertake non-banking financial activities. The Company has initiated steps to increase its capital by way
of rights issue for which Board meeting has been called on 20 August 2025.
For and on behalf of the Board of Directors
Indergiri Finance Limitied
For Sampat & Mehta Mohit Agarwal Shanker Wunnava
Chartered Accountants (Director) (Managing Director &
Firm Registration no. 109031W (DIN: 08774184) Chief Financial Officer)
(DIN:08561822)
Sanjay Rambhia Ramjeet Yadav
Partner (Company Secretary)
Membership Number: 046265 (M. No. A50581)
Place : Mumbai Place : Mumbai
Date : 14th July, 2025 Date : 14th July, 2025
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