To
The CEO,
Protominds

The Software Application – FiNiCS developed by Protominds is an extremely useful resource to compute the fair value of severeal financial instruments, including the computation of Expected Credit Loss as per the requirements of the Accounting Standards for Fair Value and Financial Instruments. The software application is hosted on the cloud and we use the same for computing the fair value of loan portfolio of a large auto finance company and other such financing companies. For each loans cash flows are generated taking into account the probability of default and the loss given default. Such cash flows are discounted with the appropriate rate that covers the risk free rate and the entity specific credit spread.

CA Athindranath,
Yoganad & Ram
Chartered Accountants
Chennai, India
Membership No. 206712
25th August 2019

DETAILS:

Accounting Standard: Ind AS 109 (Exact replica of IFRS 9)
Location: India
Client: Large Automobile Financing Company
Purpose: Fair Value of Loan portfolio that is measured at Fair Value Through Other Comprehensive Income (FVOCI)
Methodology: Discounted cash flows using the Probability of Default and Loss Given Default discounted at the appropriate discount rate
Loan portfolio Value: INR 86 Billion (USD 1.2 Billion)
Loan portfolio Size: 67K auto loans