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NBI Industrial Finance Company Ltd. कंपली की लेखा नीति
Mar 31, 2025
1 Corporate Information
N.B.I. Industrial Finance Company Limited ("the Company") is a public company limited by shares, incorporated on 21st
December, 1936 and domiciled in India. Its shares are listed on the National Stock Exchange (NSE). The Company is carrying on
business as a "Non-Banking Financial Company" (NBFC). The Company is engaged mainly in investment in shares in securities
& financial activity. The Company is registered with Reserve Bank of India as NBFC. The Company''s registered office is 21,
Strand Road Kolkata-700001.
The standalone financial statements of the Company as on 31st March, 2025 were approved and authorised for issue by the
Board of Directors on 22nd May, 2025.
2 Basis of Preparation of Financial Statements
2.1 Statementof compliance with Ind AS
These standalone financial statements have been prepared in accordance with the provisions of the Companies Act,
2013 and the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards)
Rules, 2015 (as amended from time to time) issued by Ministry of Corporate Affairs in exercise of the powers conferred
by section 133 of the Companies Act, 2013. In addition, applicable regulations of Reserve Bank of India (RBI) and the
guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) have also been
applied.
2.2 Basis of Preparation of Financial Statements
The standalone financial statements have been prepared on accrual basis under the historical cost convention, except
for certain financial instruments measured at fair value at the end of each reporting period as explained in the
accounting policies below.
The standalone financial statements are presented in Indian Rupees (INR), and all values are rounded to the nearest
lakhs up to two decimals, unless otherwise indicated.
2.3 Use of Estimates
The preparation of standalone financial statements in conformity with the recognition and measurement principles of
IND AS requires management of the Company to make judgments, estimates and assumptions that affect the re ported
amounts of assets and liabilities, disclosures including disclosures of contingent assets and contingent liabilities as at
the date of standalone financial statements and the reported amounts of revenues and expenses during the period.
Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future
periods which are affected.
Key sources of estimation of uncertainty at the date of the standalone financial statements, which may cause a
material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of: fair
valuation of unquoted equity investments, impairment of financial instruments, impairment of property, plant &
equipment, useful lives of property, plant & equipment, provisions and contingent liabilities and long term retirement
benefits.
3 Material accounting policies
3.1 Financial instruments
(i) Classification
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial assets, otherthan equity, are classified into. Financial assets at fairvalue through other comprehensive
income (FVOCI) or fair value through profit and loss account (FVTPL) or at amortised cost. Financial assets that are
equity instruments are classified as FVTPL or FVOCI. Financial liabilities are classified as amortised cost category and
FVTPL.
(ii) Business Model assessment and Solely payments of principal and interest (SPPI) test:
Classification and measurement of financial assets depends on the business model and results of SPPI test. The
Company determines the business model at a level that reflects how groups of financial assets are managed together
to achieve a particular business objective. This assessment includes judgement reflecting all relevant evidence
including:
- How the performance of the business model and the financial assets held within that business model are
evaluated and reported to the entity''s key management personnel
The risks that affect the performance of the business model (and the financial assets held within that business
model) and, in particular, the way those risks are managed
How managers of the business are compensated (for example, whether the compensation is based on the fair
value of the assets managed or on the contractual cash flows collected)
- The expected frequency, value and timing of sales are also important aspects of the Company''s assessment.
If cash flows after initial recognition are realised in a way that is different from the Company''s original expectations, the
Company does not change the classification of the remaining financial assets held in that business model, but
incorporates such information when assessing newly originated or newly purchased financial assets going forward.
(iii) Initial recognition
The classification of financial instruments at initial recognition depends on their contractual terms and the business
model for managing the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and
financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or
financial liabilities at FVTPLare recognised immediately in the Statement of profit or loss.
Financial assets and financial liabilities, with the exception of loans, debt securities and deposits are recognised on the
trade date i.e. when a Company becomes a party to the contractual provisions of the instruments. Loans, debt
securities and deposits are recognised when the funds are transferred to the customers account. Trade receivables are
measured at the transaction price.
(iv) Subsequent measurement
(a) Financial assets at amortised cost:
Financial assets having contractual terms that give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal outstanding and that are held within a business model whose objective is to hold
such assets in order to collect such contractual cash flows are classified in this category. Subsequently these are
measured at amortised cost using effective interest method less any impairment losses.
(b) Debt Instruments at FVOCI
Debt instruments that are measured at FVOCI have contractual terms that give rise on specified dates to cash flows
that are solely payments of principal and interest on principal outstanding and that are held within a business model
whose objective is achieved by both collecting contractual cash flows and selling financial assets. These instruments
largely comprise long-term investments made by the Company.FVOCI debt instruments are subsequently measured at
fair value with gains and losses arising due to changes in fair value recognised in OCI. Interest income and gains and
losses are recognised in profit or loss in the same manner as for financial assets measured at amortised cost. On
derecognition, cumulative gains or losses previously recognised in OCI are reclassified from OCI to profit or loss.
(c) Equity Instruments at FVOCI
These include financial assets that are equity instruments as defined in IND AS 32 "Financial Instruments:
Presentation" and are not held for trading and where the Company''s management has elected to irrevocably
designated the same as Equity instruments at FVOCI upon initial recognition. Subsequently, these are measured at fair
value and changes therein are recognised directly in other comprehensive income, net of applicable income taxes.
Gains and losses on these equity instruments are never recycled to profit or loss.
Dividends from these equity investments are recognised in the statement of profit and loss when the right to receive
the payment has been established.
(d) Fair value through Profit and loss account:
Financial assets are measured at FVTPL unless it is measured at amortised cost or at FVOCI on initial recognition. The
transaction costs directly attributable to the acquisition of financial assets at fair value through profit or loss are
immediately recognised in profit or loss.
(v) Financial Liabilities and equity instruments:
(a) Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the
contractual arrangements entered into and the definitionsof a financial liability and an equity instrument.
(b) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all
of its liabilities. Equity instrumentsare recorded at the proceeds received, net of direct issue costs.
(c) Other Financial Liabilities:
These are measured at amortised cost using effective interest rate.
(vi) Derecognition of Financial assets and Financial liabilities:
The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expires
or ittransfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
(vii) Impairment of financial assets:
The Company recognizes a loss allowance for expected credit losses on a financial asset that is at amortized cost or fair
value through OCI. Loss allowance in respect of financial assets is measured at an amount equal to life time expected
credit losses and is calculated as the difference between their carrying amount and the present value of the expected
future cash flows discounted at the original effective interest rate.
(viii) Reclassification of Financial assets:
The Company does not re-dassify its financial assets subsequent to their initial recognition, apart from the exceptional
circumstances when the Company changes its business model for managing such financial assets. The Company does
not re-classify its financial liabilities.
3.2 Determination of fair value:
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
The fair value of a financial instrument on initial recognition is normally the transaction price (fair value of the
consideration given or received). Subsequent to initial recognition, the Company determines the fair value of financial
instruments that are quoted in active markets using the quoted bid prices (financial assets held) or quoted ask prices
(financial liabilities held) and using valuation techniques for other instruments. Valuation techniques include
discounted cash flow method and othervaluation models.
3.3 Impairment of non-financial assets
The Company assesses at each reporting date to determine if there is any indication of impairment, based on
internal/external factors. If any such indication exists, then an impairment review is undertaken and the recoverable
amount is calculated as the higher of fairvalue less costs of disposal and the asset''s value in use.
3.4 Revenue Recognition
Revenue is recognised to the extent it is probable that the economic benefits will flow to the company and the revenue
can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fairvalue of the
consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes
or duties collected on behalf of the government.
3.5 Recognition of Dividend Income,Interest Income
Dividends
Dividend income is recognised when the Company''s right to receive the payment is established, which is generally
when shareholders approve the dividend.
Interest Income
For all debt instruments measured either at amortised cost or at fair value through other comprehensive income,
interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated
future cash payments or receipts over the expected life of the financial instrument or a shorter period, where
appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. When
calculating the effective interest rate, the Company estimates the expected cash flows by considering all the
contractual terms of the financial instrument but does not consider the expected credit losses. Interest income is
included in finance income in the statement of profit and loss.
3.6 Employee Benefits Expenses
(i) Short Term Employee Benefits
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered
by employees are recognised during the year when the employees render the service. These benefits include
performance incentive and compensated absences, which are expected to occur within twelve months after the end
of the period in which the employee renders the related service.
(ii) Defined contribution schemes
A defined contribution plan is a post-employment benefit plan under which the Company pays specified monthly
contributions to Provident Fund. The Company''s contribution is recognized as an expense in the Statement of Profit
and Loss during the period in which the employee renders the related service.
(iii) Gratuity
Liability with regard to long-term employee benefits is provided for on the basis of an actuarial valuation at the Balance
Sheet date. Actuarial gain / loss is recognised immediately in the statement of other comprehensive income.
3.7 Taxes
Income tax expense represents the sum of current taxand deferred tax.
(i) Current Tax
The current tax is based on taxable profit for the year under the Income Tax Act, 1961. Current tax assets and liabilities
are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and
laws that are enacted or substantively enacted atthe Balance Sheet date.
(ii) Deferred tax
Deferred tax is recognized on all temporary differences between the tax bases of assets and liabilitiesand their carrying
amounts in the Company''s standalone financial statements except when the deferred tax arises from the initial
recognition of goodwill or initial recognition of an asset or liability in a transaction that is not a business combination
and affects neither the accounting nor taxable profits or loss at the time of transaction Deferred tax assets and
liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the
asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the Balance Sheet
date.
Deferred tax assets are recognized for deductible temporary differences, the carry forward of unused tax credits and
unused tax losses to the extent it is probable that future taxable profits will be available against which the deductible
temporary difference, the carryforward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets (including MAT credit available) is reviewed at each reporting date and is
adjusted to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of
the asset to be recovered.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and
the Company intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax are recognised in the Statement of Profit and Loss, except when the same relate to items that
are recognised in Other Comprehensive Income or directly in Equity, in which case, the current and deferred tax
relating tosuch items are also recognised in Other Comprehensive Income or directly in Equity respectively.
Mar 31, 2024
3. Material accounting policies
3.1 Financial instruments
i) Classification
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets, other than equity, are classified into, Financial assets at fair value through other comprehensive income (FVOCI) or fair value through profit and loss account (FVTPL) or at amortised cost. Financial assets that are equity instruments are classified as FVTPL or FVOCI. Financial liabilities are classified as amortised cost category and FVTPL.
ii) Business Model assessment and Solely payments of principal and interest (SPPI) test:
Classification and measurement of financial assets depends on the business model and results of SPPI test. The Company determines the business model at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. This assessment includes judgement reflecting all relevant evidence including:
- How the performance of the business model and the financial assets held within that business model are evaluated and reported to the entityâs key management personnel
- The risks that affect the performance of the business model (and the financial assets held within that business model) and, in particular, the way those risks are managed
- How managers of the business are compensated (for example, whether the compensation is based on the fair value of the assets managed or on the contractual cash flows collected)
- The expected frequency, value and timing of sales are also important aspects of the Companyâs assessment.
If cash flows after initial recognition are realised in a way that is different from the Companyâs original expectations, the Company does not change the classification of the remaining financial assets held in that business model, but incorporates such information when assessing newly originated or newly purchased financial assets going forward.
iii) Initial recognition
The classification of financial instruments at initial recognition depends on their contractual terms and the business model for managing the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in the Statement of profit or loss.
Financial assets and financial liabilities, with the exception of loans, debt securities and deposits are recognised on the trade date i.e. when a Company becomes a party to the contractual provisions of the instruments. Loans, debt securities and deposits are recognised when the funds are transferred to the customers account. Trade receivables are measured at the transaction price.
iv) Subsequent measurement
(a) Financial assets at amortised cost:
Financial assets having contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding and that are held within a business model whose objective is to hold such assets in order to collect such contractual cash flows are classified in this category. Subsequently these are measured at amortised cost using effective interest method less any impairment losses.
(b) Debt Instruments at FVOCI
Debt instruments that are measured at FVOCI have contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on principal outstanding and that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets. These instruments largely comprise long-term investments made by the Company.FVOCI debt instruments are subsequently measured at fair value with gains and losses arising due to changes in fair value recognised in OCI. Interest income and gains and losses are recognised in profit or loss in the same manner as for financial assets measured at amortised cost. On derecognition, cumulative gains or losses previously recognised in OCI are reclassified from OCI to profit or loss.
(c) Equity Instruments at FVOCI
These include financial assets that are equity instruments as defined in IND AS 32 âFinancial Instruments: Presentationâ and are not held for trading and where the Companyâs management has elected to irrevocably designated the same as Equity instruments at FVOCI upon initial recognition. Subsequently, these are measured at fair value and changes therein are recognised directly in other comprehensive income, net of applicable income taxes.
Gains and losses on these equity instruments are never recycled to profit or loss.
Dividends from these equity investments are recognised in the statement of profit and loss when the right to receive the payment has been established.
(d) Fair value through Profit and loss account:
Financial assets are measured at FVTPL unless it is measured at amortised cost or at FVOCI on initial recognition. The transaction costs directly attributable to the acquisition of financial assets at fair value through profit or loss are immediately recognised in profit or loss.
v) Financial Liabilities and equity instruments:
(a) Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered Into and the definitions of a financial liability and an equity instrument.
(b) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
(c) Other Financial Liabilities:
These are measured at amortised cost using effective interest rate.
vi) Derecognition of Financial assets and Financial liabilities:
The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
v") Impairment of financial assets:
The Company recognizes a loss allowance for expected credit losses on a financial asset that is at amortized cost or fair value through OCI. Loss allowance in respect of financial assets is measured at an amount equal to life time expected credit losses and is calculated as the difference between their carrying amount and the present value of the expected future cash flows discounted at the original effective interest rate.
viii) Reclassification of Financial assets:
The Company does not re-classify its financial assets subsequent to their initial recognition, apart from the exceptional circumstances when the Company changes its business model for managing such financial assets. The Company does not re-classify its financial liabilities.
3.2 Determination of fair value:
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The fair value of a financial instrument on initial recognition is normally the transaction price (fair value of the consideration given or received). Subsequent to initial recognition, the Company determines the fair value of financial instruments that are quoted in active markets using the quoted bid prices (financial assets held) or quoted ask prices (financial liabilities held) and using valuation techniques for other instruments. Valuation techniques include discounted cash flow method and other valuation models.
3.3 Impairment of non-financial assets
The Company assesses at each reporting date to determine if there is any indication of impairment, based on internal/external factors. If any such indication exists, then an impairment review is undertaken and the recoverable amount is calculated as the higher of fair value less costs of disposal and the asset''s value in use.
3.4 Employee Benefits Expenses
i) Short Term Employee Benefits
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences, which are expected to occur within twelve months after the end of the period in which the employee renders the related service.
¦'') Defined contribution schemes
A defined contribution plan is a post-employment benefit plan under which the Company pays specified monthly contributions to Provident Fund. The Company''s contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
¦¦¦) Gratuity
Liability with regard to long-term employee benefits is provided for on the basis of an actuarial valuation at the Balance Sheet date. Actuarial gain / loss is recognised immediately in the statement of other comprehensive income.
35 Taxes
Income tax expense represents the sum of current tax and deferred tax.
¦) CurrentTax
The current tax is based on taxable profit for the year under the Income Tax Act, 1961. Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date.
¦¦) Deferred tax
Deferred tax is recognized on all temporary differences between the tax bases of assets and liabilities and their carrying amounts in the Company''s financial statements except when the deferred tax arises from the initial recognition of goodwill or initial recognition of an asset or liability in a transaction that is not a business combination and affects neither the accounting nor taxable profits or loss at the time of transaction Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the Balance Sheet date.
Deferred tax assets are recognized for deductible temporary differences, the carry forward of unused tax credits and unused tax losses to the extent it is probable that future taxable profits will be available against which the deductible temporary difference, the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets (including MAT credit available) is reviewed at each reporting date and is adjusted to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax are recognised in the Statement of Profit and Loss, except when the same relate to items that are recognised in Other Comprehensive Income or directly in Equity, in which case, the current and deferred tax relating to such items are also recognised in Other Comprehensive Income or directly in Equity respectively.
Mar 31, 2023
1. Corporate Information
N.B.I. Industrial Finance Company Limited ("the Company") is a public company limited by shares, incorporated on 21st December, 1936 and domiciled in India. Its shares are listed on the National Stock Exchange (NSE). The Company is carrying on business as a "Non-Banking Financial Company" (NBFC). The Company is engaged mainly in investment in shares in securities & financial activity. The Company is registered with Reserve Bank of India as NBFC. The Companyâs registered office is 21, Strand Road Kolkata - 700 001.
The financial statements of the Company as on 31st March, 2023 were approved and authorised for issue by the Board of Directors on 24th May, 2023.
2. Basis of Preparation of Financial Statements
2- 1 Statement of compliance with Ind AS
These financial statements have been prepared in accordance with Indian Accounting Standards (referred to as "Ind AS") prescribed under section 133 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.
2.2 Basis of Preparation of Financial Statements
"The financial statements have been prepared on accrual basis under the historical cost convention, except for certain financial instruments measured at fair value at the end of each reporting period as explained in the accounting policies below.
The financial statements are presented in Indian Rupees (INR), and all values are rounded to the nearest lacs, unless otherwise indicated."
2.3 Use of Estimates
The preparation of financial statements in conformity with the recognition and measurement principles of IND AS requires management of the Company to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures including disclosures of contingent assets and contingent liabilities as at the date of financial statements and the reported amounts of revenues and expenses during the period. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods which are affected.
Key sources of estimation of uncertainty at the date of the financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of: fair valuation of unquoted equity investments, impairment of financial instruments, impairment of property, plant & equipment, useful lives of property, plant & equipment, provisions and contingent liabilities and long term retirement benefits.
3. Significant accounting policies
3.1 Financial instruments
i) Classification
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets, other than equity, are classified into, Financial assets at fair value through other comprehensive income (FVOCI) or fair value through profit and loss account (FVTPL) or at amortised cost. Financial assets that are equity instruments are classified as FVTPL or FVOCI. Financial liabilities are classified as amortised cost category and FVTPL.
¦¦) Business Model assessment and Solely payments of principal and interest (SPPI) test:
Classification and measurement of financial assets depends on the business model and results of SPPI test. The Company determines the business model at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. This assessment includes judgement reflecting al! relevant evidence including:
- How the performance of the business model and the financial assets held within that business model are evaluated and reported to the entityâs key management personnel
- The risks that affect the performance of the business model (and the financial assets held within that business model) and, in particular, the way those risks are managed
- How managers of the business are compensated (for example, whether the compensation is based on the fairvalue of the assets managed oron the contractual cash flows collected)
- The expected frequency, value and timing of sales are also important aspects of the Companyâs assessment.
If cash flows after initial recognition are realised in a way that is different from the Companyâs original expectations, the Company does not change the classification of the remaining financial assets held in that business model, but incorporates such information when assessing newly originated or newly purchased financial assets going forward.
iii) Initial recognition
The classification of financial instruments at initial recognition depends on their contractual terms and the business model for managing the instruments.
Financial assets and financial liabilities are initially measured at fairvalue. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in the Statement of profit or loss.
Financial assets and financial liabilities, with the exception of loans, debt securities and deposits are recognised on the trade date i.e. when a Company becomes a party to the contractual provisions of the instruments. Loans, debt securities and deposits are recognised when the funds are transferred to the customers account. Trade receivables are measured at the transaction price.
iv) Subsequent measurement
(a) Financial assets at amortised cost:
Financial assets having contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding and that are held within a business model whose objective is to hold such assets in order to collect such contractual cash flows are classified in this category. Subsequently these are measured at amortised cost using effective interest method less any impairment losses.
(b) Debt Instruments at FVOCI
Debt instruments that are measured at FVOCI have contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on principal outstanding and that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets. These instruments largely comprise long-term investments made by the Company.FVOCI debt instruments are subsequently measured at fair value with gains and losses arising due to changes in fair value recognised in OCI. Interest income and gains and losses are recognised in profit or loss in the same manner as for financial assets measured at amortised cost. On derecognition, cumulative gains or losses previously recognised in OCI are reclassified from OCI to profit or loss.
(c) Equity Instruments at FVOCI
These include financial assets that are equity instruments as defined in IND AS 32 âFinancial Instruments: Presentationâ and are not held for trading and where the Companyâs management has elected to irrevocably designated the same as Equity instruments at FVOCI upon initial recognition. Subsequently, these are measured at fair value and changes therein are recognised directly in other comprehensive income, net of applicable income taxes.
Gains and losses on these equity instruments are never recycled to profit or loss.
Dividends from these equity investments are recognised in the statement of profit and loss when the right to receive the payment has been established.
(d) Fair value through Profit and loss account:
Financial assets are measured at FVTPL unless it is measured at amortised cost or at FVOCI on initial recognition. The transaction costs directly attributable to the acquisition of financial assets at fair value through profit or loss are immediately recognised in profit or loss.
v) Financial Liabilities and equity instruments:
(a) Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
(b) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
(c) Other Financial Liabilities:
These are measured at amortised cost using effective interest rate.
vi) Derecognition of Financial assets and Financial liabilities:
The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
vii) Impairment of financial assets:
The Company recognizes a loss allowance for expected credit losses on a financial asset that is at amortized cost or fair value through OCI. Loss allowance in respect of financial assets is measured at an amount equal to life time expected credit losses and is calculated as the difference between their carrying amount and the present value of the expected future cash flows discounted at the original effective interest rate.
viii) Reclassification of Financial assets:
The Company does not re-classify its financial assets subsequent to their initial recognition, apart from the exceptional circumstances when the Company changes its business model for managing such financial assets. The Company does not re-classify its financial liabilities.
3.2 Determination of fairvalue:
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The fairvalue of a financial instrument on initial recognition is normally the transaction price (fair value of the consideration given or received). Subsequent to initial recognition, the Company determines the fairvalue of financial instruments that are quoted in active markets using the quoted bid prices (financial assets held) or quoted ask prices (financial liabilities held) and using valuation techniques for other instruments. Valuation techniques include discounted cash flow method and othervaluation models.
3.3 Cash and cash equivalents
Cash and cash equivalent comprise of cash at banks & on hand term deposits with original maturity of less than three months, which are subject to insignificant risk of changes in values.
3.4 Property, plant and equipment (PPE)
PPE are stated at cost (including incidental expenses directly attributable to bringing the asset to its working condition for its intended use) less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Subsequent expenditure related to PPE is capitalised only when it is probable that future economic benefits associated with these will flow to the Company and the cost of item can be measured reliably. Other repairs and maintenance costs are expensed off as and when incurred.
Advances paid towards the acquisition of PPE, outstanding at each reporting date are shown under other non-financial assets. The cost of property, plant and equipment not ready for its intended use at each reporting date are disclosed as capital work-in-progress.
Subsequent expenditure related to the asset are added to its carrying amount or recognised as a separate asset only if it increases the future benefits of the existing asset, beyond its previously assessed standards of performance and cost can be measured reliably. Other repairs and maintenance costs are expensed off as and when incurred.
Property plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognised in other income expense in the statement of profit and loss in the year the asset is derecognised.
3.5 Depreciation
Depreciation on Property, Plant and Equipment is provided on written down value method (WDV) to write down their residual values over their estimated useful life specified in Schedule II of the Companies Act, 2013. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate. Changes in the expected useful life are accounted for by changing the amortisation period or methodology, as appropriate, and treated as changes in accounting estimates.
3.6 Impairment of non-financial assets
The Company assesses at each reporting date to determine if there is any indication of impairment, based on internal/external factors. If any such indication exists, then an impairment review is undertaken and the recoverable amount is calculated as the higher of fair value less costs of disposal and the asset''s value in use.
3.7 Employee Benefits Expenses
i) Short Term Employee Benefits
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences, which are expected to occur within twelve months after the end of the period in which the employee renders the related service.
ii) Defined contribution schemes
A defined contribution plan is a post-employment benefit plan under which the Company pays specified monthly contributions to Provident Fund. The Company''s contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
iii) Gratuity
Liability with regard to long-term employee benefits is provided for on the basis of an actuarial valuation at the Balance Sheet date. Actuarial gain / loss is recognised immediately in the statement of other comprehensive income.
3.8 Taxes
Income tax expense represents the sum of current tax and deferred tax.
i) Current Tax
The current tax is based on taxable profit for the year under the Income Tax Act, 1961. Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date.
ii) Deferred tax
Deferred tax is recognized on all temporary differences between the tax bases of assets and liabilities and their carrying amounts in the Company''s financial statements except when the deferred tax arises from the initial recognition of goodwill or initial recognition of an asset or liability in a transaction that is not a business combination and affects neither the accounting nor taxable profits or loss at the time of transaction Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the Balance Sheet date.
Deferred tax assets are recognized for deductible temporary differences, the carry forward of unused tax credits and unused tax losses to the extent it is probable that future taxable profits will be available against which the deductible temporary difference, the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets (including MAT credit available) is reviewed at each reporting date and is adjusted to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax are recognised in the Statement of Profit and Loss, except when the same relate to items that are recognised in Other Comprehensive Income or directly in Equity, in which case, the current and deferred tax relating to such items are also recognised in Other Comprehensive Income or directly in Equity respectively.
3.9 Provisions, contingent liabilities and contingent assets
Provisions are recognised when the enterprise has a present obligation (legal or constructive) as a result of past events, 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.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare, cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
3.10 Earnings per share (EPS)
"Basic EPS is calculated by dividing the profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year.
Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding for the effects of all dilutive potential equity shares."
3.11 Cash-flow statement
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.
3.12 Leases
i) Arrangements where the Company is the lessee
The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
At the date of commencement of the lease, the Company recognises a Right-of-use Asset and a corresponding Lease Liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (''short-term leases'') and low value leases. For these short-term and low value leases, the Company recognises the rent as an operating expense in the Statement of Profit and Loss.
Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. Right-of-use Assets and Lease Liabilities includes these options when it is reasonably certain that they will be exercised.
The Right-of-use Assets are initially recognised at cost, which comprises the initial amount of the lease liabilities i.e. present value of future lease payments adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses. The lease payments are discounted using the incremental borrowing rates. Lease liabilities are remeasured with a corresponding adjustment to the related Right-of-use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
Right-of-use Assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.
ii) Arrangements where the Company is the lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
The lease rentals under such agreements are recognised in the Statement of Profit and Loss as per the terms of the lease.
3.13 Use of estimates, judgements and adjustments
The preparation of the financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses, and disclosures of contingent assets and liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed in the paragraphs that follow.
i) Useful Economic Lives and Impairment of Other Assets
The estimated useful life of property, plant and equipment (PPE) is based on a number of factors including the effects of obsolescence, usage of the asset and other economic factors (such as known technological advances).
The Company reviews the useful life of PPE at the end of each reporting date and any changes could affect the depreciation rates prospectively.
The Company also reviews its property, plant and equipment for possible impairment if there are events or changes in circumstances that indicate that the carrying value of the assets may not be recoverable. In assessing the property, plant and equipment for impairment, factors leading to significant reduction in profits, such as the Company''s business plans and changes in regulatory environment are taken into consideration.
ii) Contingencies and Commitments
In the normal course of business, contingent liabilities may arise from litigation, taxation and other claims against the Company. Where an outflow of funds is believed to be probable and a reliable estimate of the outcome of the dispute can be made based on management''s assessment of specific circumstances of each dispute and relevant external advice, management provides for its best estimate of the liability. Such liabilities are disclosed in the notes but are not provided for in the financial statements.
Although there can be no assurance regarding the final outcome of the legal proceedings, the Company does not expect them to have a materially adverse impact on the Company''s financial position or profitability.
iii) Fair Value Measurements and Valuation Processes
Some of the Company''s assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in the notes to the financial statements.
iv) Recognition of Deferred Tax Assets For Carried Forward Tax Losses and Unused Tax Credit
The extent to which deferred tax assets can be recognised based on an assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilised. In addition significant judgement is required in assessing the impact of any legal or economic limits.
3.14 Recent Accounting Developments
The Ministry of Corporate Affairs ("MCA") has vide notification dated March 31,2023 notified Companies (Indian Accounting Standards) Amendment Rules,2023 which amends certain accounting standards. These amendments are not expected to have any material impact on the Company.
Mar 31, 2021
1. Corporate Information
N.B.I. Industrial Finance Company Limited (âthe Companyâ) is a public company limited by shares, incorporated on 21st December, 1936 and domiciled in India. Its shares are listed on the National Stock Exchange (NSE). The Company is carrying on business as a âNonBanking Financial Companyâ (NBFC). The Company is engaged mainly in investment in shares in securities & financial activity. The Company is registered with Reserve Bank of India as NBFC. The Company''s registered office is 21, Strand Road Kolkata - 700 001.
2. Basis of Preparation of Financial Statements a. Statement of compliance
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under section 133 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time, and other provisions of the Companies Act, 2013 (âthe Actâ).
For all periods up to and including the year ended 31st March, 2019, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP or previous GAAP). The financial statements for the year ended 31st March, 2021 are the first financials of the Company prepared in accordance with Ind AS. The date of transition to Ind AS is 1st April, 2019.
The financial statements have been prepared on historical cost convention and on an accrual method of accounting, except for certain financial assets and liabilities that are measured at fair value/ amortised cost. (Refer note 3.3 below). The financial statements are presented in Indian Rupees (INR) which is also its functional currency.
3. SIGNIFICANT ACCOUNTING POLICIES3.1. Recognition of interest income
Interest income for all financial instruments measured at fair value through profit or loss (FVTPL) is recognised using the contractual interest rate.
3.2. Recognition of Dividend Income
Dividend income (including from Investments measured at FVTOCI) is recognised when the Company''s right to receive the payment is established. This is established when it is probable that the economic benefits associated with the dividend will flow to the entity and the amount of the dividend can be measured reliably.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
(i) Financial Assets -0 Recognition And Initial Measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction costs directly attributable to the acquisition of financial assets at fair value through profit or loss are recognised immediately in the Statement of Profit and Loss.
0 Classification and Subsequent Measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
¦ Debt Instruments at Amortized Cost;
¦ Debt Instruments at Fair Value Through Other Comprehensive Income (FVOCI);
¦ Debt Instruments at Fair Value Through Profit or Loss (FVTPL); and
¦ Equity Instruments measured at Fair Value Through Other Comprehensive Income (FVOCI).
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
o Debt Instruments at Amortized Cost: A debt instrument is measured at the amortized cost if both the following conditions are met:
¦ The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows; and
¦ The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method.
o Debt Instruments at FVOCI: A debt instrument is measured at the FVOCI if both of the following conditions are met:
¦ The objective of the business model is achieved by collecting contractual cash flows and selling the financial assets; and
¦ The asset''s contractual cash flows represent SPPI.
Debt instruments meeting these criteria are measured initially at fair value plus transaction costs. They are subsequently measured at fair value with any gains or losses arising on remeasurement recognized in Other Comprehensive Income. However, the interest income, losses & reversals, and foreign exchange gains and losses are recognised in the Statement of Profit and Loss. Interest calculated using the EIR (Effective Rate Interest) method is recognized in the Statement of Profit and Loss as investment income.
o Measured at FVTPL: FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as amortized cost or as FVOCI, is classified as FVTPL. In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVOCI criteria, as FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.
Equity Instruments measured at FVOCI: All equity investments in scope of Ind AS - 109 are measured at fair value. Equity instruments which are, held for trading are classified as FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in Other Comprehensive Income subsequent changes in the fair value. The Company makes such election on an instrument-by instrument basis. The classification is made on initial recognition and is irrevocable. In case the Company decides to classify an equity instrument as FVOCI, then all fair value changes on the instrument are recognized in the Other Comprehensive Income. There is no reclassification of the amounts from Other Comprehensive Income to profit or loss, even on sale of investment. Dividends on investments are credited to profit or loss.
o Equity Investments: Investments in subsidiaries, associates and joint ventures are carried at cost less accumulated impairment, if any.
0 Derecognition
The Company derecognizes a financial asset on trade date only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
0 Impairment of Financial Assets
The Company assesses at the end of the reporting period whether a financial asset or a group of financial assets is impaired. Ind AS - 109 requires expected credit losses to be measured through a loss allowance. The Company recognises lifetime expected losses for all contract assets and/ or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.
0 Recognition And Initial Measurement
Financial liabilities are initially measured at fair value. All financial liabilities are recognised initially at fair value and, in the case of financial liabilities at amortised cost, net of directly attributable transaction costs.
The Company''s financial liabilities include trade and other payables and borrowings including bank overdrafts and derivative financial instruments.
0 Subsequent Measurement
Financial liabilities are measured subsequently at amortized cost or FVTPL.
A financial liability is classified as FVTPL if it is classified as held for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR (Effective Rate Interest) method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR (Effective Rate Interest) amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in profit or loss.
0 Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.
0 Offsetting Financial Instruments
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.
3.4. Cash and cash equivalents
Cash and cash equivalent comprise cash at banks and on hand, term deposits with original maturity of less than three months from the date of acquisition. Term deposits held with bank, with original maturity of more than three months but less than twelve months is a part of bank balance other than cash and cash equivalents.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short- term deposits, as defined above, net of outstanding bank overdrafts if any, as they are considered an integral part of the Company''s cash management.
3.5. Property, plant and equipment (PPE)
PPE are stated at cost (including incidental expenses directly attributable to bringing the asset to its working condition for its intended use) less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Subsequent expenditure related to PPE is capitalised only when it is probable that future economic benefits associated with these will flow to the Company and the cost of item can be measured reliably. Other repairs and maintenance costs are expensed off as and when incurred.
Advances paid towards the acquisition of PPE, outstanding at each reporting date are shown under other non-financial assets. The cost of property, plant and equipment not ready for its intended use at each reporting date are disclosed as capital work-in-progress. Subsequent expenditure related to the asset are added to its carrying amount or recognised as a separate asset only if it increases the future benefits of the existing asset, beyond its previously assessed standards of performance and cost can be measured reliably. Other repairs and maintenance costs are expensed off as and when incurred.
Property plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognised in other income / expense in the statement of profit and loss in the year the asset is derecognised.
Depreciation on Property, Plant and Equipment is provided on written down value method (WDV) to write down their residual values over their estimated useful life specified in Schedule II of the Companies Act, 2013.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate. Changes in the expected useful life are accounted for by changing the amortisation period or methodology, as appropriate, and treated as changes in accounting estimates.
3.7. Impairment of non-financial assets
The Company assesses at each reporting date to determine if there is any indication of impairment, based on internal/external factors. If any such indication exists, then an impairment review is undertaken and the recoverable amount is calculated as the higher of fair value less costs of disposal and the asset''s value in use.
3.8. Employee Benefits Expenses3.8.1. Short Term Employee Benefits
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences, which are expected to occur within twelve months after the end of the period in which the employee renders the related service.
3.8.2. Defined contribution schemes
A defined contribution plan is a post-employment benefit plan under which the Company pays specified monthly contributions to Provident Fund. The Company''s contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Income tax expense represents the sum of current tax and deferred tax.
The current tax is based on taxable profit for the year under the Income Tax Act, 1961. Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date.
Deferred tax is recognized on all temporary differences between the tax bases of assets and liabilities and their carrying amounts in the Company''s financial statements except when the deferred tax arises from the initial recognition of goodwill or initial recognition of an asset or liability in a transaction that is not a business combination and affects neither the accounting nor taxable profits or loss at the time of transaction. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the Balance Sheet date.
Deferred tax assets are recognized for deductible temporary differences, the carry forward of
unused tax credits and unused tax losses to the extent it is probable that future taxable profits will be available against which the deductible temporary difference, the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets (including MAT credit available) is reviewed at each reporting date and is adjusted to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.
Current and deferred tax are recognised in the Statement of Profit and Loss, except when the same relate to items that are recognised in Other Comprehensive Income or directly in Equity, in which case, the current and deferred tax relating to such items are also recognised in Other Comprehensive Income or directly in Equity respectively.
3.10. Provisions, Contingent Liabilities and assets
Provisions are recognised when the enterprise has a present obligation (legal or constructive) as a result of past events, 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.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation.
A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
Basic EPS is calculated by dividing the profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders
of the Company by the weighted average number of equity shares outstanding for the effects of all dilutive potential equity shares.
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.
3.13 USE OF ESTIMATES, JUDGEMENTSANDADJUSTMENT
The preparation of the financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses, and disclosures of contingent assets and liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed in the paragraphs that follow.
(i) Useful Economic Lives and Impairment of Other Assets
The estimated useful life of property, plant and equipment (PPE) is based on a number of factors including the effects of obsolescence, usage of the asset and other economic factors (such as known technological advances).
The Company reviews the useful life of PPE at the end of each reporting date and any changes could affect the depreciation rates prospectively.
The Company also reviews its property, plant and equipment for possible impairment if there are events or changes in circumstances that indicate that the carrying value of the assets may not be recoverable. In assessing the property, plant and equipment for impairment, factors leading to significant reduction in profits, such as the Company''s business plans and changes in regulatory environment are taken into consideration.
(ii) Contingencies and Commitments
In the normal course of business, contingent liabilities may arise from litigation, taxation and other claims against the Company. Where an outflow of funds is believed to be probable
and a reliable estimate of the outcome of the dispute can be made based on management''s assessment of specific circumstances of each dispute and relevant external advice, management provides for its best estimate of the liability. Such liabilities are disclosed in the notes but are not provided for in the financial statements.
Although there can be no assurance regarding the final outcome of the legal proceedings, the Company does not expect them to have a materially adverse impact on the Company''s financial position or profitability.
(iii) Fair Value Measurements and Valuation Processes
Some of the Company''s assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company engages third party valuers, where required, to perform the valuation. Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in the notes to the financial statements.
(iv) Recognition of Deferred Tax Assets For Carried Forward Tax Losses and Unused Tax Credit
The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilised. In addition significant judgement is required in assessing the impact of any legal or economic limits.
Mar 31, 2018
NOTES TO THE FINANCIAL STATEMENTS
NOTE-1
SIGNIFICANT ACCOUNTING POLICIES
a) Basis of preparation
i These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards specified under Section 133 of the Companies Act, 2013 (''the Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014 and the other relevant provisions of the Act (to the extent notified) and the guidelines issued by the Reserve Bank of India (''RBI'') as applicable to a Non-Banking Finance Company (''NBFC).
ii The Company has classified all its assets / liabilities into current / non-current based on the time frame of 12 months from the date of financial statements. Accordingly, assets/liabilities expected to be realized /settled within 12 months from the date of financial statements are classified as current and other assets/ liabilities are classified as non- current.
b) Fixed Assets and Depreciation :
i Tangible Assets are stated at cost of acquisition and subsequent improvements thereto including taxes, duties and other incidental expenses related to acquisition net of accumulated depreciation.
ii DEPRECIATION on Tangible Assets is provided on written down value basis over estimated useful life of the assets in accordance with Schedule II to the Act.
c) Investments
Investments intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and market/fair value category- wise basis. Long-term investments are carried at cost. Provision for diminution in value of long term investments, other than temporary, shall be made.
d) Recognition of Income and Expenditure
Revenues/Incomes and Costs/Expenditure are generally accounted on accrual basis, as they are earned or incurred. Dividend income is recognized when the right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.
e) Accounting for Taxes on Income:
Provision for current tax is made in accordance with the Income tax laws prevailing for the relevant assessment year.
Deferred Tax for timing difference between tax profits and book profits is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet Date. Deferred tax assets are recognized to the extent there is reasonably certainty that these assets can be realized in future. Deferred tax assets are reviewed as at each Balance Sheet date to re- assess realization.
|
NOTE 2 SHARE CAPITAL |
As at 31st March, 2018 |
As at 31st March, 2017 |
||
|
Rs. |
Rs. |
|||
|
Authorised : |
||||
|
2,00,00,000 (1,00,00,000) Equity Shares of Rs. 5/- each ( Previous year Rs. 10/- each ) |
100,000,000 |
100,000,000 |
||
|
100,000,000 |
100,000,000 |
|||
|
Issued: |
||||
|
2,459,058 ( 1,229,529) Equity Shares of Rs. 5/- each ( Previous year year Rs. 10/- each ) |
12,295,290 |
12,295,290 |
||
|
12,295,290 |
12,295,290 |
|||
|
Subscribed & Fully Paid : |
||||
|
2,456,806 ( 1228,403) Equity Shares of Rs. 5/- each fully paid up ( Previous year Rs. 10/- each ) |
12,284,030 |
12,284,030 |
||
|
12,284,030 |
12,284,030 |
|||
|
a) Reconciliation of the number of Equity shares outstanding |
||||
|
Equity shares |
Nos. |
Rs. |
Nos. |
Rs. |
|
Balance as at the beginning of the year |
1,228,403 |
12,284,030 |
1,228,403 |
12,284,030 |
|
Balance as at the end of the year *(consequent upon change of Face value from Rs.10/- to to Rs.5/- per share ) |
2456806* |
12,284,030 |
1,228,403 |
12,284,030 |
b) Rights, preferences and restrictions attached to shares
The Company has only one class of equity shares having a par value of Rs. 5/- per share ( previous year year Rs. 10/- each). Each holder of equity share is entitled to one vote per share. Dividend, if any, proposed by the Board of Directors is subject to approval of the shareholders in the ensuing AGM. In the event of liquidation of the company, the holders of equity shares will be entitled to any of the remaining assets of the company after distribution of all preferential amounts in proportion to the no. of equity shares held by them
c) Details of shareholders holding more than 5% Equity shares in the company
|
S.No. |
Name |
No. of Shares held** |
No. of Shares held |
|
1 |
Shree Capital Services Ltd. |
472000 |
236000 |
|
2 |
Digvijay Finlease Ltd. |
471478 |
235739 |
|
3 |
Shri Benu Gopal Bangur |
200 |
104100 |
|
4 |
The Didwana Investment Co. Ltd. |
130788 |
65394 |
|
5 |
Asish Creations Pvt Ltd |
124478 |
62239 |
|
6 |
Shri Prashant Bangur* |
208000 |
0 |
|
7 |
Man-Made Fibers Pvt. Ltd. |
131900 |
65950 |
|
* |
Beneficial interest in 2,08,000 Equity Shares is held by Shree Venkatesh Ayurvedic Aushdhalaya. |
||
|
** |
(consequent upon change of Face value from Rs. 10/- to Rs. 5/- per share |
d) No shares have been allotted during the period of five years immediately preceding March 31, 2018 pursuant to contracts without payment received in cash or by way of bonus shares and there has been no buy back during the said period.
Mar 31, 2016
a) Basis of preparation
i These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards specified under Section 133 of the Companies Act, 2013 (''the Act1) read with Rule 7 of the Companies (Accounts) Rules, 2014 and the other relevant provisions of the Act (to the extent notified) and the guidelines issued by the Reserve Bank of India (''RBI'') as applicable to a Nonbanking Finance Company (''NBFC).
ii The Company has classified all its assets / liabilities into current / non-current based on the time frame of 12 months from the date of financial statements. Accordingly, assets/liabilities expected to be realized /settled within 12 months from the date of financial statements are classified as current and other assets/ liabilities are classified as non- current.
b) Fixed Assets and Depreciation :
i Tangible Assets are stated at cost of acquisition and subsequent improvements thereto including taxes, duties and other incidental expenses related to acquisition net of accumulated depreciation.
ii DEPRECIATION on Tangible Assets is provided on written down value basis over estimated useful life of the assets in accordance with Schedule II to the Act. (Refer Note 22&23)
c) Investments
Investments intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and market/fair value category- wise basis. Long-term investments are carried at cost. Provision for diminution in value of long term investments, other than temporary, shall be made.
d) Recognition of Income and Expenditure
Revenues/Incomes and Costs/Expenditure are generally accounted on accrual basis, as they are earned or incurred. Dividend income is recognized when the right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.
e) Accounting for Taxes on Income:
Provision for current tax is made in accordance with the Income tax laws prevailing for the relevant assessment year.
Deferred Tax for timing difference between tax profits and book profits is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet Date. Deferred tax assets are recognized to the extent there is reasonably certainty that these assets can be realized in future. Deferred tax assets are reviewed as at each Balance Sheet date to re- assess realization.
Mar 31, 2014
NOTE-1
SIGNIFICANT ACCOUNTING POLICIES
a) Basis of preparation
i. The financial statement are prepared under the historical cost convention and in accordance with the accounting principles generally accepted in India and comply with the accounting standards notified by the Central Government of India under the Companies (Accounting Standards ) Rules 2006, relevant provision of the Companies Act, 1956 and other guidelines issued by the Reserve Bank of India (RBI) as applicable to a Non- Banking Finance Company.
ii. The Company has classified all its assets / liabilities into current / noncurrent based on the time frame of 12 months from the date of Financial Statements. Accordingly, assets/liabilities expected to be realized/ settled within 12 months from the date of financial statement are classified as current and other assets / liabilities are classified as current and other assets/ liabilities are classified as non-current.
b) Fixed Assets and Depreciation
Fixed Assets are stated at cost of acquisition less accumulated depreciation. Depreciation on fixed assets is provided on the written down value method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.
c) Investments
Investment intended to be held for not more than a year are classified as current investments. All other investments are classified as long âterm investments. Current investments are carried at lower of cost and market/fair value category-wise basis. Long term investments are carried at cost. Provision for diminution in value of long term investments, other than temporary, shall be made.
d) Recognition of Income and Expenditure
Revenue/Incomes and Cost/Expenditure are generally accounted on accrual basis, as they are earned or incurred. Dividend income is recognized when the right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.
e) Accounting for Taxes on Income
Provision for current tax is made in accordance with the Income tax laws prevailing for the relevant assessment year.
Deferred Tax for timing deference between tax profits is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet Date. Deferred tax assets are recognized to the extent there is reasonably certainty that these assets can be realized in future. Deferred tax assets are reviewed as at each Balance Sheet date to re-assess realization.
b) Rights, preferences and restrictions attached to shares
The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity share is entitled to one vote per share. Dividend, if any, proposed by the board of directors is subject to approval of the shareholders in the ensuing AGM. In the event of liquidation of the company, the holders of equity shares will be entitled to any of the remaining assets of the company after distribution of all preferential amounts in proportion to the no. of equity shares held by them.
Mar 31, 2013
a) Basis of preparation
i. The financial statement are prepared under the historical cost conversion and in accordance with the accounting principles generally accepted in India and comply with the accounting standards notified by the Central Government of India under the Companies (Accounting Standards) Rules 2006, relevant provisions of the Companies Act, 1956 and other guidelines issued by the Reserve Bank of India (RBI) as applicable to a Non Banking Finance Company.
ii. The Company has classified all its assets/ liabilities into current/ noncurrent based on the time frame of 12 months from the date of financial statements. Accordingly, assets/ liabilities expected to be realized / settled within 12 months from the date of financial statements are classified as current and other assets /liabilities are classified as non- current.
b) Fixed Assets and Depreciation :
Fixed Assets are stated at cost of acquisition less accumulated depreciation. Depreciation on Fixed assets is provided on the written down value method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.
c) Investments
Investments intended to be held for not more than a year are classified as current investments. All other investments are classified as long âterm investments. Current investments are carried at lower of cost and market /fair value category âwise basis. Long term investments are carried at cost. Provision for diminution in value of long term investments, other than temporary, shall be made.
d) Recognition of Income and Expenditure
Revenue/Income and Cash/ Expenditure are generally accounted on accrual basis, as they are earned or incurred. Dividend income is recognized when the right to receive is established, Interest income is recognize on proportion basis taking into account the amount outstanding and rate applicable.
e) Accounting for taxes on Income:
Provision for current tax is made in accordance with the Income tax laws prevailing for the relevant assessment year.
Deferred Tax for timing difference between tax profits and book profits is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet Date. Deferred tax assets are recognized to the extent there is reasonably certainty that these assets can be realized in future. Deferred tax assets are reviewed as at each Balance Sheet date to re- assess realization.
Mar 31, 2012
a) Basis of preparation
i. The financial statements are prepared under the historical cost convention and in accordance with the accounting principles generally accepted in India and comply with the accounting standards notified by the Central Government of India under the Companies (Accounting Standards) Rules 2006, relevant provisions of the Companies Act, 1956 and other guidelines issued by the Reserve Bank of India (RBI) as applicable to a Non-Banking Finance Company.
ii. (a) During the year ended 31sâ March, 2012, the Revised Schedule VI notified under the Companies Act, 1956 has become applicable to the company for preparation and presentation of financial statements. The adoption of revised Schedule VI does not impact the recognition and measurement principles followed for preparation of the financial statements. However, it has significant impact on the presentation and disclosures made in financial statements.
(b) Pursuant to applicability of Revised Schedule VI on presentation of financial statements for the financial year ended March 31, 2012; the Company has classified all its assets / liabilities into current / non-current based on the time frame of 12 months from the date of financial statements. Accordingly, assets/ liabilities expected to be realized /settled within 12 months from the date of financial statements are classified as current and other assets/ liabilities are classified as non- current.
b) Fixed Assets and Depreciation:
Fixed Assets are stated at cost of acquisition less accumulated depreciation. Depreciation on fixed assets is provided on the written down value method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.
c) Investments
Investments intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and market/fair value category- wise basis. Long-term investments are carried at cost. Provision for diminution in value of long term investments, other than temporary, shall be made.
d) Recognition of Income and Expenditure
Revenues/Incomes and Costs/Expenditure are generally accounted on accrual basis, as they are earned or incurred. Dividend income is recognized when the right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.
e) Accounting for Taxes on Income:
Provision for current tax is made in accordance with the Income tax laws prevailing for the relevant assessment year.
Deferred Tax for timing difference between tax profits and book profits is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet Date. Deferred tax assets are recognized to the extent there is reasonably certainty that these assets can be realized in future. Deferred tax assets are reviewed as at each Balance Sheet date to re- assess realization.
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