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.
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