To,
The Members of
N. B. I. Industrial Finance Company Limited
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of N. B. I. Industrial Finance
Company Limited ("the Company"), which comprises the Balance Sheet as at 31st
March 2023, the Statement of Profit and Loss (including other comprehensive income).
Statement of Changes in Equity and the Statement of Cash Flows for the year then ended and
notes to the financial statements, including a summary of the significant accounting
policies and other explanatory information (hereinafter referred to as "Financial
Statements").
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid financial statements give the information required by the
Companies Act, 2013 ("the Act") in the manner so required and give a true and
fair view in conformity with Indian Accounting Standard (Ind AS) prescribed under section
133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as
amended, and other accounting principles generally accepted in India, of the state of
affairs of the Company as at 31st March 2023, the profit and other comprehensive income,
statement of changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards on
Auditing ("SAs") specified under Section 143 (10) of the Act. Our
responsibilities under those SAs are further described in the Auditors Responsibilities
for the Audit of the Financial Statements section of our report. We are independent of the
Company in accordance with the Code of Ethics issued by the Institute of Chartered
Accountants of India ("the ICAI") together with the ethical requirements that
are relevant to our audit of the financial statements under the provisions of the Act and
the Rules thereunder, and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the Code of Ethics. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. We
have determined the matters described below to be the key audit matters to be communicated
in our report.
| Sr. No. |
The Key audit matter |
Auditors Response |
| 1. |
Valuation and Existence of Investments - |
We obtained independent confirmation of the number of units held and net asset value
per unit for each of the mutual fund units and market value for shares as at the year-end
date, confirmation of shares and its market value. |
|
We have focused on the valuation and existence of the investments in Equity.
Preference Shares and Mutual Funds because these represent a principal element on the net
assets in the Financial Statements. |
We have also obtained the most recent set of audited financial statements for unquoted
investments. |
|
Refer Note 6 to the Financial Statements. |
|
Information Other than the Financial Statements and Auditors Report Thereon
The Companys management and Board of Directors are responsible for the preparation of
the other information. The other information obtained at the date of this auditors report
is the Directors report but does not include financial statements and our auditors
report thereon.
Our opinion on the financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
Management responsibility forthe financial statements
The Companys Management and Board of Directors are responsible for the matter stated
in Section 134(5} of the Act with respect to preparation of these financial statements
that give a true and fair view of the state of affairs, profit and other comprehensive
income, changes in equity and cash flows of the Company in accordance with IndAS
prescribed under section 133 of the Act and other accounting principles generally accepted
in India. This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding of the assets of the Company
and for preventing and detecting frauds and other irregularities; selection and
application of appropriate accounting policies; making judgments and estimates that are
reasonable and prudent; and design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and presentation of
the financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management and the Board of Directors are
responsible for assessing the ability of the Company to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
Board of Directors are also responsible for overseeing the Companys financial
reporting process.
Auditors Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue
an auditors report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with SAs will
always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, orthe override of internal control;
• Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances. Under section 143(3)(i)
of the Companies Act, 2013, we are also responsible for expressing our opinion on whether
the company has adequate internal financial controls system with reference to the
financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures in the financial statements made by
management.
• Conclude on the appropriateness of managements use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditors
report. However, future events or conditions may cause the Company to cease to continue as
a going concern.
• Evaluate the overall presentation, structure and content of the financial
statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a mannerthat achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that,
individually or in aggregate, makes it probable that the economic decisions of a
reasonably knowledgeable user of the financial statements may be influenced. We consider
quantitative materiality and qualitative factors in (i) planning the scope of our audit
work and in evaluating the results of our work; and (ii) to evaluate the effect of any
identified misstatements in the financial statements
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We describe these matters in our
auditors report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2020 (the Order) issued by
the Central Government of India in terms of section 143 (11) of the Act, we give in the
"Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the
Order.
2. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best
of our knowledge and belief were necessary forthe purposes of myaudit.
b. In our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books.
c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive
Income, the Statement of Change in Equity and the Cash Flow Statement dealt with by this
Report are in agreement with the books of account;
d. In our opinion, the aforesaid financial statements comply with the Indian Accounting
Standards specified under Section 133 of the Act read with Rules made thereunder.
e. On the basis of the written representations received from the directors as on 31st
March 2023 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March 2023 from being appointed as a director in terms of Section
164(2) of the Act.
f. With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report given in Annexure B. Our report expresses an unmodified opinion on the
adequacy and operating effectiveness of the Companys internal financial controls over
financial reporting;
g. With respect to the other matters to be included in the Auditors Report in
accordance with the requirements of section 197(16) of the Act. In our opinion and to the
best of our information and according to the explanations given to us, the remuneration
paid by the Company to its directors during the year is in accordance with the provisions
of section 197 of the Act; and
h. With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in
our opinion and to the best of my information and according to the explanations given to
us:
i. The Company has disclosed the impact of pending litigation on its financial position
in the financial statements - Refer Note 34 to the financial statements.;
ii. The Company did not have any long term contracts including derivative contracts for
which there were any material foreseeable losses;
iii. There were no amount which were required to be transferred during the year ended
31st March 2023 to the Investor Education and Protection Fund by the Company.
iv. As perthe management representation provided, we report,
• no funds have been advanced or loaned or invested by the company to or in any
other person(s) or entities, including foreign entities ("intermediaries"), with
the understanding that the intermediaries shall whether directly or indirectly lend or
invest in other persons or entities identified in any manner by or on behalf of the
company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf
of ultimate beneficiaries.
• no funds have been received by the company from any person(s) or entities
including foreign entities ("Funding Parties") with the understanding that such
company shall whether, directly or indirectly, lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the funding party (ultimate
beneficiaries) or provide guarantee, security orthe like on behalf of the Ultimate
beneficiaries.
• Based on the audit procedures performed, we report that nothing has come to our
notice that has caused us to believe that the representations given by management under
the above sub-clauses contain any material mis-statement.
• As perthe records of the Company no dividend has been declared or paid during
the year. As stated in Note No 39 to the financial statements, the Board of Directors of
the Company have proposed final dividend for the year which is subject to the approval of
the members at the ensuing Annual General Meeting. The dividend declared is in accordance
with section 123 of the Act to the extent it a pplies to the declaration of dividend.
• As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable
for the company only w.e.f. April 1,2023; hence reporting underthis clause is not
applicable.
For Chaturvedi & Co.
Chartered Accountants
Firm Registration: 302137E
NilimaJoshi
Partner
Membership No. 52122
UDIN: 23052122BGXQCC1331
Place: Kolkata
Date : 24/05/2023
Annexure-A to the Independent Auditors Report for the year ended 31st March 2023
[Referred to in para 1 of the heading Report on other legal and regulatory
requirements of our report]
(i) (a) (A) The Company is maintaining proper records showing full particulars,
including quantitative details and situation of property, plant & Equipment.
(B) The company has no intangible assets, hence para 3(i)(a)(B)a of the Order is not
applicable to the Company.
(b) According to the information and explanation given to us and on the basis of our
examination of the records of the company, the Company has a regular programme of physical
verification of its Property, Plant and Equipment by which all Property, Plant and
Equipment are verified every year. In accordance with this programme, all the Property,
Plant and Equipment have been physically verified by the management during the year and no
material discrepancies have been noticed on such verification. In our opinion, this
periodicity of physical verification is reasonable having regard to the size of the
Company and the nature of its assets.
(c) The Company does not have any immovable properties. Accordingly, para 3(i)(c) of
the Order is not applicable to the Company.
(d) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the Company has not revalued its Property,
plant and equipment (including Right-of-use assets) or Intangible assets or both during
theyear.
(e) In our opinion and according to the information and explanations given to us, there
are no proceedings initiated or are pending against the Company for holding any benami
property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.
(ii) (a) The Company has no inventory hence para 3(ii)(a) of the Order is not
applicable to the Company.
(b) According to the information and explanations given to us, the Company has not been
sanctioned working capital limits in excess of five crore rupees at any point of time of
the year in aggregate, from banks or financial institutions on the basis of security of
current assets. Accordingly, the requirement to report on para 3(ii)(b) of the Order is
not applicable to the Company.
(iii) According to the information and explanations given to us and based on the audit
procedures performed by us, we are of the opinion that since the company is in the
business of making investments including granting loans in the normal course of its
business and further, as it has not provided any guarantee or security to companies,
firms, limited liability partnerships or any other parties, the provisions of paragraph
3(iii)(a) to (f) of the Order are not applicable.
(iv) According to the information and explanations given to us and based on the audit
procedures performed by us, the Company being a Non-banking Finance company, provisions of
section 185 and 186 of the Act is not applicable. Thus paragraph 3(iv) of the Order is not
applicable.
(v) According to the information and explanations given to us and based on the audit
procedures performed by us, the Company has not accepted any deposits from the public
during the yearto which the directives issued by the Reserve Bank of India and the
provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules
framed thereunder apply. Thus paragraph 3(v) of the Order is not applicable to the
Company.
(vi) According to the information and explanations given to us the Central Government
has not prescribed the maintenance of cost records under sub section (1) of section 148 of
the Act for any of the services rendered by the Company. Thus paragraph 3(vi) of the Order
is not applicable.
(vii) (a) According to the information and explanations given to us and on the basis of
our examination of records of the Company, in respect of amounts deducted / accrued in the
books of account, the Company is generally regular in depositing undisputed statutory dues
including Goods and Services Tax, provident fund, employees state insurance, income-tax,
sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any
other statutory dues, as applicable to the Company. There are no undisputed statutory dues
payable in respect of above statues outstanding as at 31st March 2023 for a period of more
than six months from the date they became payable.
(b) According to information and explanations given to us and on the basis of our
examination of the records of the Company, there are no dues of income tax. Goods &
service tax, cess etc. which have not been deposited as at 31 March, 2023 on account of
any dispute except:
| Name of the Statute |
Nature of Dues |
Amount (Rs, In Lacs) |
Periods to which amount relates |
Forum where the dispute is pending |
| Income Tax Act, 1961 |
Income Tax Penalty including |
21.9s |
A.Y 2018-2019 CFY 2017-2018) |
CIT (A) |
(viii) According to information and explanation given to us and on the basis of our
examination of the records of the Company, the Company has not surrendered or disclosed
any transaction, previously unrecorded in the books of account, in the tax assessments
under the Income Tax Act, 1961 as income during the year. Accordingly, the requirement to
report on para 3(viii) of the Order is not applicable to the Company.
(ix) (a) According to the information and explanations given to us and based on the
audit procedures performed by us, the Company does not have any loan or other borrowing,
hence there is no requirement to report under clause (ix)(a) of the Order.
(b) According to the information and explanations given to us and based on the audit
procedures performed by us, the Company has not been declared will full defaulter by any
bankorfinancial institution or other lender.
(c) The company has not raised any funds byway of term loan, hence para 3(ix)(c) of the
Order is not applicable to the Company.
(d) As no funds have been raised during the year, hence no reporting is required under
para 3(ix)(d) of the Order.
(e) According to the information and explanations given to us and on an overall
examination of the financial statements of the Company, we report that the Company does
not have any subsidiary, associate or joint venture. Accordingly, the requirement to
report on paragraph 3(ix)(e) and (f) of the Order are not applicable to the Company.
(x) (a) According to the information and explanation given to us and based on the audit
procedures performed by us, the Company has not raised any money during the year by way of
further public offer (including debt instruments). Hence reporting under clause (x)(a) of
the Order is not applicable to the Company.
(b) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the Company has not made any preferential
allotment or private placement of shares or convertible debentures during the year. Hence
reporting under paragraph 3(x)(b) of the Order is not applicable to the Company.
(xi) (a) Based on the examination of the books and records of the Company and according
to the information and explanation given to us, considering the principles of materiality
outlined in the Standards on Auditing, we report that no fraud by the Company or on the
Company has been noticed or reported duringthe course of audit.
(b) According to the information and explanations given to us, no report under
subsection (12) of section 143 of the Companies Act, 2013 has been filed in Form ADT-4 as
prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central
Government, during theyearand upto the date of this report
(c) According to the information and explanation given to us, there were no whistle
blower complaints received by the Company during the year while determining the nature,
timing and extent of our audit procedures.
(xii) According to the information and explanations given to us, the Company is not a
Nidhi Company. Accordingly, clause (xii) of the Order is not applicable.
(xiii) According to the information and explanation given to us and based on the audit
procedures performed by us, transactions with the related parties are in compliance with
section 177 and 188 of the Act where applicable and the details have been disclosed in the
financial statements, as required by the applicable accounting standards.
(xiv) In our opinion the Company has an adequate internal audit system commensurate
with the size and the nature of its business and report of the Internal Auditors have been
considered by us.
(xv) In our opinion and according to the information and explanation given to us, the
Company has not entered into any non-cash transactions with its directors or persons
connected to its directors and hence, the provisions of Section 192 of the Companies Act,
2013 are not applicable to the Company.
(xvi) (a) The Company has obtained registration under Section 45-IA of the Reserve Bank
of India Act, 1934.
(b) According to the information and explanation given to us and based on the audit
procedures performed by us, the Company has not conducted any Non-Banking Financial or
Housing Finance activities without a valid Certificate of Registration (COR) from the
Reserve Bank of India as per the Reserve Bank of India Act, 1934. Hence reporting under
paragraph 3(xvi)(b) of the Order is not applicable.
(c) The Company is not a Core Investment Company (CIC) as defined in the regulations
made by the Reserve Bank of India. Hence reporting under paragraph 3(xvi)(c) of the Order
is not applicable.
(d) According to the information and explanation given to us, none of the group
companies are CIC and hence reporting under paragraph 3(xvi)(d) of the Order is not
applicable.
(xvii) The Company has not incurred any cash losses in the financial year and in the
immediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors during the year and
hence reporting under clause (xviii) of the order is not applicable.
(xix) According to the information and explanation given to us and on the basis of the
financial ratios, ageing and expected dates of realisation of financial assets and payment
of financial liabilities, other information accompanying the financial statements, our
knowledge of the Board of Directors and management plans and based on our examination of
the evidence supporting the assumptions, nothing has come to our attention, which causes
us to believe that any material uncertainty exists as on the date of the audit report that
the company is not capable of meeting its liabilities existing at the date of balance
sheet as and when they fall due within a period of one year from the balance sheet date.
We further state that this is not an assurance as to the future viability of the Company.
We further state that our reporting is based on the facts up to the date of the audit
report and we neither give any guarantee norany assurance thatall liabilities falling due
within a period of oneyearfrom the balance sheet date, will get discharged by the Company
as and when they fall due.
(xx) In our opinion and according to the information and explanation given to us, with
respect to obligations under Corporate social responsibility (CSR), the company is not
required to spend towards CSR based on criteria as specified under section 134(5) of the
act during the year and there are no such ongoing projects and unspent amount related to
it, hence no reporting is required to be reported under the clause (xx)(a) and (xx)(b) of
the order.
(xxi) The preparation of consolidated financial statements is not applicable to the
Company. Hence reporting under paragraph (xxi) of the Order is not applicable to the
Company.
For Chaturvedi & Co.
Chartered Accountants
Firm Registration: 302137E
NilimaJoshi
Partner
Membership No. 52122
UDIN: 23052122BGXQCC1331
Place: Kolkata
Date : 24/05/2023
Annexure B to the Independent Auditors Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act") [Referred to in para 2(f) of the
heading Report on other legal and regulatory requirements of our report]
Opinion
We have audited the internal financial controls over financial reporting of N. B. I.
Industrial Finance Company Limited (the Company) as of 31st March 2023 in conjunction
with our audit ofthefinancial statements ofthe Company fortheyearthen ended.
In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at 31st March 2023, based on the
internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India (the "Guidance Note").
Managements and Board of Directors Responsibility for Internal Financial Controls
The Companys management and Board of Directors are responsible for establishing and
maintaining internal financial controls based on the internal control over financial
reporting criteria established by the Company considering the essential components of
internal control stated in the Guidance Note. These responsibilities include the design,
implementation and maintenance of adequate internal financial controls that were operating
effectively for ensuring the orderly and efficient conduct of its business, including
adherence to companys policies, the safeguarding of its assets, the prevention and
detection of frauds and errors, the accuracy and completeness ofthe accounting records,
and the timely preparation of reliable financial information, as required undertheAct.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
(the Guidance Note) and the Standards on Auditing, issued by ICAI and deemed to be
prescribed under section 143(10) of the Act, to the extent applicable to an audit of
internal financial controls. Those Standards and the Guidance Note require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether adequate internal financial controls over financial reporting was
established and maintained and if such controls operated effectively in all material
respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of
management and directors of the Company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the
Companys assets that could have a material effect on thefinancial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
For Chaturvedi & Co.
Chartered Accountants
Firm Registration: 302137E
NilimaJoshi
Partner
Membership No. 52122
UDIN: 23052122BGXQCC1331
Place: Kolkata
Date : 24/05/2023
+91-9892691696
