3.8 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 standalone 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.
3.9 Earnings per share (EPS)
Basic EPS iscalculated by dividing the profit or loss attributable to equity shareholders of the Company by the weighted
average number of equity shares outstanding during theyear.
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 forthe effects of all dilutive potential equity shares.
3.10 Cash-flow statement
Cash flows are reported using the indirect method, whereby profit before tax is adjusted forthe 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, investingand financing activities of the Company are segregated.
Company is an investment and finance company and therefore, purchase and sale of investments are considered as
part of "Cash flow from investing activities" and interest earned (net) and dividend earned are considered as part of
"Cash flow from operating activities".
3.11 Use of estimates, judgements and adjustments
The preparation of the standalone 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 standalone
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 Livesand Impairmentof 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 economicfactors (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 standalone financial statements.
Although there can be no assurance regarding the final outcome of the legal proceedings, the Company does not
expectthem 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 standalone financial statements.
3.12 Recent Accounting Developments
(i) Ind AS 117 -Insurance Contracts
The Ministry of Corporate Affairs ("MCA") issued a notification dated 12 August 2024, notifying the issue of Ind AS 117 'insurance
contracts' and related amendments to other Indian Accounting Standards. Ind AS 117 establishes principles for identification,
recognition, measurement, presentation and disclosure of insurance contracts.
(ii) Ind AS 116-Leases
Ind AS 116 'Leases' has been amended to include additional guidance related to sale and leasebacktransactions.
The above amendments are effective from 01 April 2024 however there is no material impact on the financial statements of the
Company.
6.2. The Company has elected an irrevocable option to designate Its investments in quoted equity instruments through FVOCI, as the said investments are
not held for trading and company continues to invest for long term and remain invested in leaders in sectors, which It believes to have potential to
remain accretive over the long term.
6.3. Of the total dividend recognised during the year from investment in equity share designated at FVOCI * 28.37 lakhs (Previous year * 120.03 lakhs) is
relating to investment derecognised during the period and ^ 1,275.82 lakhs (previous year ^ 1,394.92 lakhs) pertains to investment held at the end of
reporting period.
6.4. During the year, total gain of ^ 2,062.47 lakhs (Previous year ^ 1793.43 lakhs) on investment In equity shares designated at FVOCI have been
transferred to retained earnings on derecognition of related investments after adjusting for tax effect thereon .
The Company Is a Non-Banking Financial Company registered with the Reserve Bank of India On account of Its business activities It is exposed to various financial risk:
associated with financials products such as credit or default risk, market risk, interest rate risk, liquidity risk and inflationary risk. However, the Company has a robus
financial risk management system in place to identify, evaluate, manage and mitigate various risks associated with Its financial products to ensure that desired financia
objectives are met The Company's senior management is responsible for establishing and monitoring the risk management framework within its overall risl
management objectives and strategies, as approved by the Board of Director. Such risk management strategies and objectives are established to identify and analysr
potential risks faced by the Company, set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and assess risl
management performance. Any change in Company's risk management objectives and policies needs prior approval of it's Board of Directors.
Credit risk
This risk is common to all Investors who Invest In bonds and debt instruments and it refers to a situation where a particular bond/debenture Issuer is unable to make ttx
expected principal payment interest rate payment, or both. Similarly, a lender bears the risk that the borrower may default in the payment of contractual interest o
principal on Its debt obligation, or both. The entity continuously monitors defaults of the customers and other counterparties and incorporates this information into it
credit risk control.
Market risk:
Market risk is a form of systematic risk associated with the day-to-day fluctuation in the market prices of shares and securities and such market risk affects aH sec untie1
and investors in the same manner. These daily price fluctuations follows its own broad trends and cycles and are more news and transaction driven rather that
fundamentals and many a times, it may affect the returns from an investment. Market risks majoriy comprises of two types - interest rate risk and other price risk, sue)
as equity price risk and commodity risk. Financial instruments affected by market risks Include borrowings and investments.
Interest rate risk
Interest rate risk is a type of systematic risk that particularly affects fixed rate debt instruments Ike bonds and debentures. The value of the fixed-rate debt instrument
generally decline due to rise In Interest rates and vice versa. The rationale Is that a bond Is a promise of a future stream of payments; an investor will offer less for i
bond that pays-out at a rate lower than the rates offered In the current market. A rising Interest rate scenario also affects the Company's Interest expenetture or
borrowed funds.
The Company monitors the Interest rate scenarios on a regular basis and accordingly takes Investments decisions as whether to invest in fixed rate debt Instruments
shares and securities at a particular point of time.
Price risk
Price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. It arises from financial assets such as investments h
equity instruments, bonds, mutual funds etc. The Company Is exposed to price risk arising mainly from investments canked at FVOCI which are valued using quoted price1
in active markets. A sensitivity analysis demonstrating the impact of the change in market prices of these instruments from the prices existing as at the reporting date fc
given below:
Equity instrument through OCI being a component of other equity would increase/deer ease as a result of gain/loss on equity securities classified as fair value through
Other Comprehensive Income.
Liquidity risk:
Liquidity refers to the readiness of the Company to sell and realise its financial assets. Liquidity risk is one of the most critical risk factors for Companies which is into the
business of investments in shares and securities it is the risk of not being able to realise the true price of a financial asset, or is not being able to sel the financial asset al
all because of non-avadability of buyer Unwillingness to lend or restricted lending by Banks and Financial Institutions may also lead to liquidity concerns for the entities.
The Company maintains a well diversified portfolio of investments in shares and securities . A dedicated team of market experts are monitoring the markets on a
continuous basis, which advises the management for timely purchase or sale of securities. The management ensures to manage its cash flows and asset liabAty patterns
to ensure that the financial obligations are satisfied in timely manner.
Inflationary risk:
Inflationary or purchasing power risk refers to the variation m investor returns caused by inflation. It is the risk that results in increase of the prices of goods and services
which results In decrease of purchasing power of money, and likely negatively Impact the value of Investments. The two Important sources of Inflation are rising costs of
production and excess demand for goods and services in relation to their supply. Inflation and interest rate risks are closely related as interest rates generally go up with
inflation.
The Company closely monitors the inflation data and analyses the reasons for wide fluctuations thereof and Its effect on various sectors and businesses. The main
objective is to avoid inflationary risk and accordingly invest in securities and debt instruments that provides higher returns as compared to the inflation in long-term.
Note 34-Caoltal management
For the purpose of Company's capital management, capital includes issued equity share capital, other equity reserves and borrowed capital less cash and cash
equivalents. The primary objective of capital management is to maintain an efficient capital structure to reduce the cost of capital, support corporate expansion
strategies and to maximize shareholder's value.
The entity manages Its capital structure and makes adjustments in light of changes In economic conditions and the requirements of the financial covenants. To maintain
or adjust the capital structure, the entity may adjust the cfividend payment to shareholders, return capital to shareholders or issue new shares. The entity monitors
capital using a gearing ratio, which is net debt divided by total capital plus net debt. The entity's policy is to keep an optimum gearing ratio. The entity includes within net
debt, interest bearing loans and borrowings less cash and cash equivalents.
Th* company has raviawad all Its pending litigations and procaadlngs and has mad* adequate provisions wharavar raqulrad and disclosed fh* contingent liabilities
wherever applicable, in its financial statements. The company does not reasonably expect the outcome of theses proceedings to have a material Impact on Its financial
statements.
Note 36
(i) The Scheme of Amalgamation of Western India Commercial Co Limited (Transferor Company) into N.B.I. Industrial Finance Company Limited (Transferee Company)
(the “Scheme"), both carrying on the business as a Non-Banking Financial Company (NBFC), was sanctioned by the Hon'bie National Company Law Tribunal (NCLT) vide
Its order dated November 28, 2024 (Kofcata Bench). Upon filing of the said order(s) by the respective companies with the Registrar of Companies and compliance with
the other conditions of the Scheme, same has become effective on December 18,2024 and has been given effect from the appointed date, Le. April 1.2022.“
The amalgamation has been accounted as prescribed in the Scheme in accordance with "Pooling of Interest method" as laid down in Appendix C - "Business
Combinations of entities under common control" of Ind AS 103, Le., "Business Combinations", notified under Section 133 of the Companies Act, 2013 read with
Companies (Indbn Accounting Standards) Rules, 2015. Accordingly, the following accounting treatment has been followed to gfve effect to the merger
a) The assets, liabilities and reserves of the Transferor Company have been Incorporated In the financial statements at the carrying values as appearing In the financial
statement of the Transferor Company.
bIntercompany investments held by the Transferee Company In the Transferor Company stand cancelled.
(ii) In consideration of the amalgamation, the shareholders of the Transferor Company (other than for shares already held by the Transferee Company in the Transferor
Company), whose names appear in the register of members as on the Record Date, or their respective heirs, executors, administrators or other legal representatives or
the successorv-irvtitle as the case may be, shall be eligible to receive 94 (ninety four) fully paid up equity shares of face value of INR 5/- each of the Transferee Company
for every 3 (three) ftfly paid up equity shares of face value of INR 100/- each of the Transferor Company held by such shareholder. Accordingly. 4,98.044 equity shares of
Rs. 5 each has been allotted to erstwhile shareholders of Transferor Company in the ratio stated above.
(Hi) Pursuant to the Scheme becoming effective, the defiat amounting to Rs. 8.07 Lakhs, arising on account of ret value of assets, liabilities, reserves of
theTransferor Company acquired and recorded by the Transferee company, over the sum of
a) face of new equity shares issued and allotted to the shareholders of the Transferor Company (ia.,, 4,96,044 equity shares of Rs. 5 each) and
b) the value of investments cancelled <l.e, 2106 equity shares of Rs 100 each), has been adjusted in capital reserves account to the extent of available
balance and balance has been shown as Capital reserve on amalgamation In the financial statements of the Transferee Company
(iv) The financial information in these financial statements in respect of prior period have been restated as if a business combination had occurred from
the appointed date i e. 1st April 2022.
(v) Detailed calcination of capital reserve on account of amalgamation as per Ind AS 103 is annexed herewith
Nof 37
Particulars required under paragraph 31 of Master Direction Reserve Bank of India (Non-Banking Financial Company-Scale Based Regulation) Directions, 2023 are given
in annexure appended hereto
Note 38
The Company entered into cancellable lease arrangements for certain accommodations. Terms of such lease include upto three month's notice by either party for
cancellation, option for renewal on mutually agreed terms and there are no restrictions Imposed by such lease arrangements. The Company has applied the ‘short -term
lease* exemptions for these leases. Rental expenses incurred are disclosed in Note 25 as Rent.
Nota 39: Other statutory Information:
(I) The company has not advanced or given loan or invested funds to any other persons) or entrtyfies), including foreign entitles (Intermediaries) with the understanding
that the Intermediary shall
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Group (Ultimate Beneficiaries) or
(b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(ii) The Company has not received any fund from any person(s) or entityfies), including foreign entities (Funding Party) with the understanding (whether recorded in
writing or otherwise) that the Company shall:
(a) directly or indirectly lend or Invest In other persons or entitles Identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(iii) As per Master Data of Ministry of Corporate Affairs, there are three old charges outstanding in the name of the Company, records of which are not traceable. The
Company is taking necessary steps to have the same removed or satisfied as the case may be.
Other than the above disclosures, the remaining other disclosures as prescribed in Amended Division III of Schedule III read with section 129 of Companies Act 2013
are either Nil or Not Applicable to the company for the current period.
Note:
(i) A “significant instrument/pro duct* is defined as a single instmment/product of group of similar instruments/products which in aggregate amount to more than 1% of
the NBFC-NDSI's, NSFC-Ds total liabilities and 10% for other non-depostt taking NBFCs.
(ii) Total liabilities has been computed as total assets less equity share capital less reserve & surplus and computed basis extant regulatory AIM guidelines.
(**) Figures are based on gross borrowing outstanding and does not includes accrued interest and other Irad AS adjustments.
The Board of Directors of the Company have an overall responsibility and oversight for the management of all the risks, including liquidity risk, to which the Company is
exposed lo in the course of conducting its business. The Board approves the governance structure, policies, strategy and the risk limits for the management of liquidity
risk. The Board of Directors approves the constitution of the Risk Management Committee (RMC) for the effective supervision, evaluation, monitoring and review of
various aspects and types ol risks, including liquidity risk, faced by the Company. The meetings of RMC are held at quarterly interval, further, the Board of Directors also
approves constitution of Asset Liability Committee (ALCO), which functions as the strategic decision-making body for the asset liability management of the Company
from rtsk-retum perspective and within the risk appetite and guard-rails approved by the Board. The main objective of ALCO is to assist the Board and BMC In effective
discharge of the responsibilities of asset liability management, market risk management, liquidity and interest rate risk management and also to ensure adherence to risk
toierartee/limlfes set up by the Board. ALCO provides guidance and directions In terms of Interest rate, liquidity, finding sources, and investment of surplus funds. ALCO
meetings are held once in a Quarterly or more frequently as warranted from time to time. The minutes of ALCO meetings are placed before the RMC and the Board of
Directors in its next meeting for its perusal/ approval/ ratification.
Note 46
Disclosure with regard to dues to micro enterprises and small enterprises
(i) The Ministry of micro, small and medium enterprises has issued an office memorandum dated 2b August 2008 which recommends that the micro and small enterprises
should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with
the 'Micro, Small and Medium Enterprise Development Act, 2006 ('the Act'). Accordingly, the disclosure in respect of the amounts payable to such enterprises has beer
made in the financial statements based on the information received and available with the Company.
(ii) Based on the information / documents available with the company, no interest provisions / payments has to be made by the Company to micro enterprises and small
enterprises creditors and thus, no related disclosures as required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 are made in these
accounts.
Now 47:
Figures for the previous period have been regrouped and reclassified to conform to the classification of current period wherever necessary,
in terms of our report attached
For R.Kothari& Co LLP For and on behalf of the Board of Directors
chartered Accountants
Firm Registration No. 307069E / E300266
Ashok Bhandari Tapas Kumar Bhattacharya
Chairman Director
CA. Kailash Chandra Soni DIN-00012210 DIN-00711665
Partner
Membership No 057620
place: Kolkata
Sundrapandtyapuram
Date : 22nd May 2025 Plchumanl Kumar Asblsh Fed la
Manager & CFQ Company Secretary
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