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Indergiri Finance Ltd.

BSE: 531505 Sector: Financials
NSE: N.A. ISIN Code: INE628F01019
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OPEN 2.90
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VOLUME 1000
52-Week high 4.75
52-Week low 2.62
P/E
Mkt Cap.(Rs cr) 1
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Indergiri Finance Ltd. (INDERGIRIFIN) - Auditors Report

Company auditors report

To the Members of Indergiri Finance Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Indergiri Finance Limited("the Company") which comprise the balance sheet as at 31st March 2021 and thestatement of Profit and Loss statement of changes in equity and statement and cash flowsfor the year then ended and notes to the financial statements including significantaccounting policies and other summary of explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2021 and profit changes in equity and its cash flows for theyear ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies

Act 2013. Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of theCompanies Act 2013 and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Key Audit Matters

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

Due to the COVID-19 pandemic the lockdown and other restrictions imposed by theGovernment and Local Administration the audit processes were carried out based on theremote access to the extent available/feasible and necessary records made available by themanagement through digital medium.

Key Audit Matter Auditors' Response
1 Impairment of loans:
Management estimates impairment provision using Expected Credit loss model for the loan exposure. Measurement of loan impairment involves application of significant significant judgments are: Principal audit procedures performed:
? Timely identification and classification of the impaired loans and We examined Board Policy approving methodologies for computation of ECL that address policies procedures and controls for assessing and measuring credit risk on all lending exposures commensurate with the size complexity and risk profile specific to the Company. The parameters and assumptionsused and their rationale and basis are clearly documented.
? Determination of probability of defaults (PD) and estimation of loss given defaults (LGD) based on the value of collaterals and relevant factors. We evaluated the design and operating effectiveness of controls across the processes relevant to ECL including the judgments and estimates.
The estimation of Expected Credit Loss (ECL) on financial instruments involves significant and estimates. Following are points with increased level of audit focus: These controls among others included controls over the allocation of assets into stages including management's monitoring of stage effectiveness model monitoring including the need for post model adjustments model validation credit monitoring multiple economic scenarios individual provisions
? Classification of assets to stage 1 2 or 3 using and production of journal entries and disclosures. criteria in accordance with Ind AS 109 which also include considering the impact of recent RBI's Covid-19 regulatory circulars; We tested the completeness of loans and advances included in the Expected Credit Loss calculations as of 31 March 2021 by reconciling it with the balances as per loan balance register and loan commitment report as on that date.
? Accounting interpretations modeling assumptions and data used to build and run the models; We tested assets in stage 1 2 and 3 on sample basis to verify that they were allocated to the appropriate stage.
? Measurement of individual borrowers' provisions including Covid-19 impact assessment of multiple economic scenarios; For samples of exposure we tested the appropriateness of determining EAD PD and LGD.
? Inputs and Judgments used in determination of management overlay at various asset stages considering the current uncertain economic environment with the range of possible effects unknown to the country arising out of the COVID 19 Pandemic and For exposure determined to be individually impaired we tested a samples of loans and advances and examined management's estimate of future cash flows assessed their reasonableness and checked the resultant provision calculations.
? The disclosures made in financial statements for ECL especially in relation to judgments and estimates by the Management in determination of the ECL. Refer note 33 to the standalone financial statements. We performed an overall assessment of the ECL provision levels at each stage including management's assessment on Covid-19 impact to determine if they were reasonable considering the Company's portfolio risk profile credit risk management practices and the macroeconomic environment.
We assessed the adequacy and appropriateness of disclosures in compliance with the Ind AS 107 in relation to ECL especially in relation to judgments used in estimation of ECL provision.

Our opinion is not qualified in respect of the above matters

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the [information included in the Management report but does notinclude the financial statements and our auditor's report thereon.] Our opinion on thefinancial statements does not cover the other information and we do not express any formof assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.

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

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

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

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

? Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to basis for ouropinion. The risk of not detecting a material misstatement resulting from fraud is higherthan for one resulting from error as fraud may involve collusion forgery intentionalomissions misrepresentations or the override of internal control.

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

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

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

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

? We communicate with those charged with governance regarding among other matters theplanned scope and timing of the findings including any significant that we identifyduring audit and significant our audit.

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

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

Emphasis of Matter

We draw attention to Note 34 to the Financial Statements which describes that thepotential impact of the COVID-19 Pandemic on the Company's standalone financial statementsare dependent on future developments which are highly uncertain. Our opinion is notmodified in respect of this matter.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure "B" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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

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

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

(c) The Balance Sheet the Statement Profit and Loss (including othercompressive income statement of Changes in Equity and statement of the Cash Flow dealtwith by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial 133 of the Act read with Rule 7of the Companies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in termsof Section 164 (2) of the Act.

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

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

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note 29 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe investor education and protection fund by the company.

For S.K.RATHI & CO.
Firm Registration Number: 108724W
Chartered Accountant
(CA Surendra Kumar Rathi)
Partner
Place: Mumbai Membership Number: 031071
Date: 29/06/2021 UDIN: 21031071AAAABS8819

Annexure A- To the Independent Auditors' Report

The Annexure referred to in paragraph 1 under the ‘Report on Other Legal andRegulatory Requirements' our report in the members of Indergiri Finance Limited ("TheCompany") for the year ended on 31st March 2021 We report that:-

(i) (a) The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) Fixed assets have been physically verified by the management at reasonableintervals; and no material discrepancies were noticed on such verification

(c) The company does not hold any immovable property. Hence clause 3(i)(c) about titledeeds of immovable properties is not applicable in the present case.

(ii) Company has inventory in electronic mode hence verification of inventory has beendone through demat statements at reasonable intervals by the management and no materialdiscrepancies were noticed.

(iii) The company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013.

(a) as the company has not granted any loans to parties covered under section 189clause 3(iii)(a) which deals with terms and conditions of the grant of such loans is notapplicable;

(b) as the company has not granted any loans to parties covered under section 189clause 3(iii)(b) which deals with schedule of repayment of principal and payment ofinterest is not applicable;

(c) as the company has not granted any loans to parties covered under section 189 thequestion of amount being overdue does not arise;

(iv) In our opinion and according to the information and explanations given to us theCompany has not granted any loans or provided any guarantee or security to the partiescovered under Section 185 and hence provisions of Clause 3(iv) of the aforesaid Order inthis regard are not applicable to the Company. Further the Company has complied withprovision of Section 186 of the Act in respect of the investments made by it.

(v) In our opinion and according to the information and explanations given to us TheCompany has not accepted any deposits. Hence clause 3(v) which deals with directivesissued by the Reserve Bank of India and the provisions of sections 73 to 76 or any otherrelevant provisions of the Companies Act 2013 and the rules framed there under are notapplicable

(vi) In our opinion and according to the information and explanations given to us theCompany is not required to maintain cost records pursuant to the Rules made by the CentralGovernment for the maintenance of cost records under sub-section (l) of section 148 of theCompanies Act.

(vii) According to the records of the Company the Company is generally regular indepositing with appropriate authorities undisputed statutory dues including providentfund employees' state insurance income-tax sales tax wealth tax duty of customs dutyof excise value added tax or cess and other statutory dues applicable to it. Noundisputed amounts payable in respect of provident fund employees' state insuranceincome-tax sales tax wealth tax duty of customs duty of excise value added tax orcess and other statutory dues were outstanding as at 31-03-2021 for a period of morethan six months from the date they became payable.

a) According to the records of the Company and information and explanations given to usno dues of income tax sales tax wealth tax service tax duty of customs duty ofexcise value added tax or cess that have not been deposited on account of any disputesexcept as follows:

Name of the Statue Nature of Dispute Amount Rs in lakhs Amount paid under Protest (Rs in lakhs) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 1.73 0.35 AY 2011-12 C.I.T. (Appeals) -9 Mumbai Dt.26/02/2019
Income Tax Act 1961 Income Tax 9.47 1.42 AY 2014-15 C.I.T. (Appeals) -9 Mumbai Dt.07/01/2017
Income Tax Act 1961 Income Tax 9.32 Nil AY 2012-13 CIT(A) 20 Mumbai

(viii) Based on our audit procedures and according to the information and explanationsgiven to us by the management we are of the opinion that the Company has not defaulted inrepayment of dues to financial institutions and bank.

(ix) Based on our audit procedures and according to the information and explanationsgiven to us by the management the Company has not raised any money during the year underreview.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor we have been informed of any such case by themanagement.

(xi) Managerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct; (xii) The company is not a Nidhi Company. Hence clause 3(xii) will not be applicable

(xiii) The Company has entered into the transaction with the related parties incompliance with the provisions of the Section 177 and 188 of the Act. The details of suchrelated party transactions have been disclosed in the standalone financial statements asrequired under Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

Name of Related Party Designation

1. L. N. Sharma Director

Nature of Payments Amount
1 Basic Remuneration 144000
2 Attire Allowance 36000
3 Medical Reimbursement 15000
4 Conveyance 19200
5 Education Allowance 2400
6 House Rent Allowance 72000
7 Others 71400

(xiv)The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review and henceprovisions of Clause 3(xiv) of the aforesaid Order are not applicable to the Company. (xv)The Company has not entered into any non-cash transactions with its directors or thepersons connected with him and hence provisions of Clause 3(xv) of the aforesaid Order arenot applicable to the Company.

(xvi) The company is registered under section 45-IA of the Reserve Bank of India Act1934 and the registration is enforced for the same.

For S.K.RATHI & CO.
Firm Registration Number: 108724W
Chartered Accountant
(CA Surendra Kumar Rathi)
Partner
Place: Mumbai Membership Number: 031071
Date: 29/06/2021 UDIN: 21031071AAAABS8819

Annexure B- to the Independent Auditor's Report

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

We have audited the internal financial controls over financial reporting of IndergiriFinance Limited ("the Company") as of March 31 2021 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial

We conducted our audit in accordance with the Guidance Note and the Standards onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was and if such controls operated effectively in all material respects.

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

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

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting operating effectively as at March 312021 based on the internal and such internal financial control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note issued by the Institute of Chartered Accountants ofIndia.

For S.K.RATHI & CO.
Firm Registration Number: 108724W
Chartered Accountant
(CA Surendra Kumar Rathi)
Partner
Place: Mumbai Membership Number: 031071
Date: 29/06/2021 UDIN: 21031071AAAABS8819

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