Indergiri Finance Ltd Management Discussions

This Management Discussion and Analysis Report contains forward-looking statements which are based on certain assumptions, risks, uncertainties and expectations of future events. The actual results, performance or achievements can differ materially from those projected in any such statements depending on various factors including: the demand supply conditions, change in government regulations, tax regimes, economic development within the country and abroad and such other incidental factors over which, the Company does not have any direct control. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on basis of any subsequent developments, information or events.

This Report is framed in compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

Non-Banking Financial Companies play a vital role in the financial sector of our economy along with other financial institutions. They largely extend support to the Micro, Small and Medium Enterprises (MSMEs) which get benefitted due to their strategic operational techniques coupled with lower costs of delivery, lower restrictions on customers etc. Over the years, NBFCs have emerged as an alternate choice and at times the first choice for several customers who need short term/ medium term financing. The NBFCs work under strict regulations of the RBI and reach out to even those sectors which the Banks cannot reach.

Non-Banking Finance Companies (NBFCs) are an integral part of the Indian financial ecosystem. NBFCs reach out to millions of individuals and Micro, Small and Medium Enterprises across the country having no or limited access to secured and unsecured credit lines by commercial banks and other development financial institutions. NBFCs integrate such people and firms with the financial mainstream of our economy. NBFCs are able to develop a ground-level understanding of their customers profile and their credit needs and provide innovative and customised products to satisfy their clients needs and so they are a preferred source of credit line compared to traditional banks. They have a niche particularly in the low income/ asset segment of individuals and corporates and also among the first-time seekers of credit who have not borrowed from any financial institution in the past. NBFCs thrive well in those areas too where banking and institutional credit financial services have limited ground presence.

Based on the Reports of the Economic Survey for 2024-2025, depending on how global, economic and political developments affect it, Indias GDP is expected to increase by 6.8 to 7 percent in 2025-2026.

The Indian economy has succeeded in keeping its growth trajectory higher and inflation rate lower than the global average, despite the fact that the global economy is struggling due to a number of issues, The Micro, Small, and Medium Enterprises (MSME) sectors average loan growth from January to November 2023 was over 30.5 percent, which is extraordinarily strong and indicates a promising prospect for rising output and employment in the nation.

Additionally, the central governments capital expenditures (capex) grew by 63.4 percent in the first eight months of the Financial Year 2023-24, which boosted the Indian economy this year. Further, compared to the previous year, the housing markets inventory overhang has significantly decreased thanks to the return of migrant workers to the building industry. The manufacturing and service sectors have benefited from an increase in exports.

Due to a recovery in contact-intensive activities like trade, lodging and transportation, private consumption as a percentage of GDP has recovered dramatically.

The International Monetary Fund (IMF) claims that the outlook is still uncertain due to the turmoil in the financial sector and high inflation. These issues have now become more or less perennial, and there is little hope that they will return to normal in the foreseeable future.

The IMF projects that the world economy may continue to grow at 3.2 percent during 2024 and 2025, at the same pace as in 2023. Global inflation is forecast to decline steadily, from 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies. Core inflation is generally projected to decline more gradually. The global economy has been surprisingly resilient, despite significant central bank interest rate hikes to restore price stability.

All this is going to give impetus to the Indian economy and service sector, in particular. The Company expects to benefit from the favourable economic outlook for the Indian and global economy.

The Company operates in single business segment i.e. NBFC. As the Company is only in one line of business, product wise disclosure of performance is not required to be made.

The Management of the Company is looking for a steady growth of the Company and aims at maximising the shareholders wealth by way of earning maximum profits at low investment costs. The Company is cautiously optimistic in its outlook for the year 2025-2026. The outlook for the business of the Company is also discussed in the Directors Report.

The Company is providing financial, corporate and management consultancy and undertakes wide spectrum of activities and therefore has a well-diversified portfolio of services provided. Currently, there are no risks faced by the Company.

The Company has an Internal Control System, commensurate with the size and nature of its operations. During the year, controls were tested and no material weakness in design and operation were observed. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance of corporate policies.

A detailed discussion on financial performance with respect to operational performance has been presented in the Directors Report.

The Company regards its human resources as amongst its most valuable assets and proactively reviews policies and processes by creating a work environment that encourages initiative, provides challenges and opportunities and recognises the performance and potential of its employees attracting and retaining the best manpower available by providing high degree of motivation. Your Company believes in trust, transparency & teamwork to improve employees productivity at all levels.

The details of the applicable key financial ratios are given in Notes to the Financial Statements.

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time). The details of accounting treatment are given in Significant Accounting policies at note no. 1, 2 & 3 of the Financial Statements.