a) Total provision for inventories as at 31 March 2025 is ^ 67 lakhs (previous year ^ 54 lakhs).
b) Inventories lying with third parties as at 31 March 2025 is ^ Nil lakhs (previous year ^ 6 lakhs).
c) There are no inventories written down to net realisable value as at 31 March 2025 (previous year ^ Nil lakhs)
d) Also refer note 23 for information on assets provided as collateral or security for borrowings or financing facilities availed by the Company.
a) Unbilled dues as at 31 March 2025 is ^ Nil (previous year ^ Nil).
b) Refer note 40(A) and note 40(C) for information about credit risk and market risk of trade receiv ables.
c) No trade or other receivables are due from directors or officers of the Company either severally or jointly with any other person, nor any trade or other receivables are due from firm or private companies respectively in which director is a partner, a director or a member.
d) Trade receivables are not interest bearing and are generally on credit terms in line with respective industry norms i.e. in between 0 to 75 days.
e) During the year, the Company made no write-offs of trade receivables, it does not expect to receive future cash flows or recoveries from trade receivables previously written off.
f) Also refer note 23 for information on assets provided as collateral or security for borrowings or financing facilities availed by the Company.
(ii) Rights attached to equity shares:
a) The Company declares and pays dividend in Indian Rupee. Dividend proposed by the board of directors is subject to approval by shareholders in the ensuing Annual General Meeting. (refer note 41 (B)).
b) The equity shares are not repayable except in the case of a buy back, reduction of capital or winding up in terms of the provision of the Companies Act, 2013.
c) Every member of the Company holding equity shares has a right to attend the General Meeting of the Company and has a right to speak and shall have the right to vote in proportion to his share of the paid-up capital of the Company.
d) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
(iii) Rights attached to preference shares:
The Company has one class of preference share. The preference shares have preferred right on payment of dividend and repayment of capital over equity shareholders. No preference shares are issued / subscribed during the year or as at reporting date.
(iv) Details of allotment of shares for consideration other than cash, allotments of bonus shares and shares bought back during past five years immediately preceeding 31 March 2025:
a) Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash - Nil
b) Aggregate number and class of shares allotted as fully paid up by way of bonus shares - Nil
c) Aggregate number and class of shares bought back - Nil
Nature and purpose -Capital redemption reserve
The Company had issued preference shares in earlier years and accordingly capital redemption reserve has been created pursuant to the Companies Act 2013 and the same will be utilised as per the provisions of the Act.
Retained earnings
Retained earnings represents the profits that the Company has earned till date including gain / (loss) on fair value of defined benefits plans as adjusted for distributions to owners, transfer to other reserves etc.
a) The Company had access to the undrawn borrowing facilities amounting to ^ 545 lakhs at the
end of the reporting year, which is secured by first pari passu charge on the current assets of the Company.
b) Refer note 40(B) and 40(C) for liquidity and market risk.
c) Refer Note no 41 for capital management.
d) Refer note no. 51 for net debt reconciliation.
e) The Company had access to the undrawn borrowing facilities amounting to ^ 545 lakhs at the end of the reporting year, which is secured by first pari passu charge on the current assets of the Company.
f) Refer note 52 for filings made by the Company.
Terms of repayment
i) The loan was repayable in 37 monthly installments of ^ 0.30 lakhs each starting from 31 December 2021.The rate of interest of term loan was 7.73% per annum.
ii) During the current year, the Company has paid 9 monthly installments and there is no default in payment of installments.
a) There are no amounts due for payment to the Investor Education and Protection Fund (IEPF) under Section 125 of the Companies Act, 2013 as at the year end. During the year ^ Nil lakhs (31 March 2024 - ^ 5 lakhs) has been transferred to IEPF.
b) It also includes amount due to related party amounting to ^ 14 lakhs (previous year: ^ 16 lakhs) (refer note 42(II)).
c) For capital commitment disclosure, refer note 43 (b).
I. Fair value hierarchy
The fair values of the financial assets and liabilities are included at the amount 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.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows below.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. For example, listed equity instruments that have quoted market price.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the- counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3.
During the periods mentioned above, there have been no transfers amongst the levels of hierarchy.
II. Valuation techniques used to determine fair value
Significant valuation techniques used to value financial instruments include :
The fair values for investment in mutual fund are based on the published NAV's and other financial assets/liabil-ities are based on discounted cash flows using a discount rate determined considering Company's incremental borrowing rate.
The carrying amounts of all the above assets are considered to be approximately equal to the fair value.
Mutual fund investment have been categorised into level 1 (recurring fair value measurement) of fair value hierarchy.
40 Financial risk management
The Company's principal financial liabilities comprise borrowings, lease liabilities, trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include loans, trade and other receivables, investments and cash and cash equivalents and other
bank balances other than cash and cash equivalents that derive directly from its operations.
The Company is exposed to credit risk, liquidity risk and market risk. The Company's senior management oversees the management of these risks.
A Credit risk
The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities (deposits with banks and other financial instruments).
Credit risk management
To manage credit risk, the Company follows a policy of providing 0-75 days credit to the domestic and export customers basis the nature of customers. The credit limit policy is established considering the current economic trends of the industry in which the Company is operating. However, the trade receivables are monitored on a periodic basis for assessing any significant risk of non-recoverability of dues and provision is created accordingly.
Bank balances are held with only high rated banks and majority of other security deposits are placed majorly with government agencies/public sector undertakings.
The Company periodically monitors the recoverability and credit risks of its other financial assets. The Company evaluates 12 months expected credit losses for all the financial assets for which credit risk has not increased significantly. In case credit risk has increased significantly, the Company considers life time expected credit losses for the purpose of impairment provisioning.
The Company has considered financial condition, current economic trends, forward looking macroeconomic information, analysis of historical bad or doubtful receivables and ageing of receivables related to cash and cash equivalents, bank balances, bank and margin deposits, security deposits and other financial assets. In most of the cases, risk is considered low since the counterparties are reputed organisations with no history of default to the Company and no unfavourable forward looking macro economic factors. Wherever applicable, expected credit loss allowance is recorded.
Financial assets (other than trade receivables) are written off (i.e., derecognised) when there is no reasonable expectation of recovery.
B Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. For the Company, liquidity risk arises from obligations on account of financial liabilities -borrowings, lease liabilities, trade payables and other financial liabilities.
The Company's corporate treasury department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management of the Company. Management monitors the Company's net liquidity position through rolling forecasts on the basis of expected cash flows.
C Market risk
Market risk is the risk that the fair value of future cash flow of a financial instrument will fluctuate because of changes in market prices. Market risk comprise three types of risk: foreign currency risk, interest rate risk and price risk.
(i) Foreign currency risk
The Company is exposed to foreign exchange risk on its receivables and payables which are held in USD and EURO. The fluctuation in the exchange rate of INR relative to these currencies may have a material impact on the Company's assets and liabilities.
In respect of the foreign currency transactions, the Company does not hedge the exposures since the management believes that the same is insignificant in nature and also it will be offset to some extent by the corresponding receivables and payables.
Sensitivity to foreign currency risk
The following table demonstrates the sensitivity in USD and EURO with all other variables held constant. The below impact on the Company's profit before tax and other components of equity is based on changes in the fair value of unhedged foreign currency monetary assets and liabilities at balance sheet date:
(ii) Cash flow and fair value interest rate risk
Interest rate risk arises from the sensitivity of the financial liabilities to changes in market rate of interest. The entity's exposure to the risk of changes in market interest rate relates primarily to the current borrowings with floating interest rate. The entity has not availed any current borrowings with floating interest rate during the year.
(iii) Price risk
The Company is exposed to price risk from its investment in mutual fund of ^ 3,448 lakhs (Previous year : ^ 1,422 lakhs) measured at fair value through profit and loss.
41 Capital management (A) Risk management
The Company's objectives when managing capital are to:
• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders; and
• maintain an optimal capital structure to reduce the cost of capital.
The Company monitors its capital by using gearing ratio, which is net debt divided by total equity. Net debt includes non-current and current borrowings net of cash and cash equivalents. Total equity comprises of equity share capital, securities premium, general reserve, other comprehensive income and retained earnings.
(III) Salary and employee benefits
The KMPs are covered under Company's gratuity policy, compensated absences policy and bonus policy along with other eligible employees of the Company. proportionate amount of gratuity and compensated absences expenses and provision for gratuity and compensated absences, which are measured on an actuarial basis are not mentioned in the aforementioned disclosures as these are computed for the Company as a whole.
43 Contingent liabilities and commitmentsA. Contingent liabilities (claims against the company not acknowledged as debt)
(i) The Company had received an Order dated 6 September 2004 from the Employees Provident Fund Organisation raising a demand of ^ 161 lakhs including interest of ^ 47 lakhs for default in making payment of Employees Provident Fund and allied dues for the period April, 1986 to February, 2003. The Company had made contributions to the 'SNL Officers Provident Fund Trust' and 'SNL Employee's Provident Fund Trust', being Trusts formed by the Company in earlier years; these Trusts have net assets of ^ 172 lakhs and ^ 24 lakhs respectively as at 31 March 2024 as reflected in their audited balance sheets. As per the order, the existence of the said Trusts and the act of switching over from Employees trust to the Officers trust on salary exceeding the statutory limit fixed by the Employees Provident Fund and Miscellaneous Provisions Act, 1952, have been considered violative of the said Act. The authorities had attached one of the Company's bank account and had recovered an amount of ^ 3 lakhs in an earlier year. The Company had contested the above demand and filed a writ petition in the High Court of Jharkhand, Ranchi. Consequent to the interim order of the High Court, the Company had paid ^ 112 lakhs during the financial year 2024-25 as deposit, subject to the outcome of the writ petition. The Company denies all the allegations made against it since the Company had made the necessary applications to grant exemption to the Trusts which was neither granted nor rejected in spite of several reminders from time to time. In view of the facts of the case, the Company does not expect any liability in this regard.
(ii) The Honourable Supreme Court, had passed a judgment on 28 February 2019 in relation to inclusion of certain allowances within the scope of "Basic wages" for the purpose of determining contribution to provident fund under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The Company had been advised to wait for further clarifications in this matter in order to reasonably assess the impact on its financial statements, if any. Accordingly, the applicability of the judgement to the Company, with respect to the period and the nature of allowances to be covered, and resultant impact on the past provident fund liability, cannot be reasonably ascertained, at present. From November 2020, the Company has started making the deduction and payment of provident fund basis the revised definition of "basic wages". For the period 1 April 2019 to 31 October 2020 the Company has recognised a provision of ^ 14 lakhs as per the revised definition, for which it is awaiting further clarifications before depositing the same with the authorities.
(iii) Other money for which the company is contingently liable - Income tax matters For Assessment Year 2017-18:
Income tax demand raised of ^ 26 lakhs under Section 143(3) of the IT Act for AY 2017-18 for non collection of Tax Collected at Source (TCS) and double disallowance of loss on sale of property, plant and equipment. This dispute is pending at the forum of Assistant Commissioner of Income Tax - Mumbai. In view of the facts of the case, the Company does not expect any liability in this regard.
(iv) Sales tax demand against the non submission of C forms / Value Added Tax (VAT) forms for the financial year 2011-12 and 2012-13 is ^ 15 lakhs. This dispute is pending at the forum of Deputy Commissioner of Commercial Taxes. In view of the facts of the case, the Company does not expect any liability in this regard.
(v) The Company's factory building is constructed on leasehold land, lessor being SBL Industries Limited, which is under liquidation with its assets under control of the Official Liquidator. For most part of the land, the lease is valid till year 2081, while on some portion of the land, lease had expired, although Company continues to retain possession as monthly lessee. In the FY 2018-19, the Company had filed an application with the Hon'ble High Court requesting to be impleaded as a party. Based on past precedent, there is a reasonable possibility that the Company would be able to use the building for its entire balance useful life. Thus, possibility of any financial impact in the books of account appears to be remote and impairment may not be required.
B. Capital and other commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for as at 31 March 2025 is ^ 22 lakhs (31 March 2024: ^ Nil).
For lease commitments, refer note 49(v).
Notes:
1. The above disclosure has been made on the basis of information available with the Company.
2. It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above, pending resolution of the respective proceedings.
3. The amounts disclosed above represents the best possible estimates arrived at on the basis of the available information and do not include any penalty payable.
(1) Gratuity (funded scheme)
In accordance with Indian Accounting Standard 19, actuarial valuation was carried out in respect of the aforesaid defined benefit plan of gratuity based on the following assumptions:-
The sensitivity analysis below have been determined based on a method that extrapolates the impact on net defined benefit obligation as a result of reasonable changes in an assumption occurring at the end of the reporting period while holding all other assumption constant. In practice it is unlikely to occur independent of each other and change in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
(xi) General descriptions of significant defined plans:
The Company operates gratuity plan wherein every employee is entitled to the benefit as per scheme of the Company, for each completed year of service. The same is payable on retirement or termination whichever is earlier. The benefit vests only after five years of continuous service. The scheme is funded with an insurance company in the form of qualifying insurance policy.
The sensitivity analysis below have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in an assumption occurring at the end of the reporting period while holding all other assumptions constant. In practice it is unlikely to occur independent of each other and change in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
The liablity of ^ 53 lakhs (previous year: ^ 52 lakhs) is classified as current in accordance with the guidance note issued by ICAI on Schedule III to the Companies Act 2013.
45 Segment reporting
a) Primary segment: business segment
The Company is primarily engaged in manufacturing of bearings and other activities having similar economic characteristics, primarily operating within India and regularly reviewed by the Chief Operating Decision Maker for assessment of Company's performance and resource allocation. For the purpose of disclosure of segment information as per Ind AS 108 "Operating Segments", the Company considers these operations as a single business segment as all the product groups are mainly having similar risks and returns.
The information relating to revenue from external customers and location of non-current assets of its single business segment has been disclosed as below:
52 Other statutory information
i. The Company does not have any transactions and outstanding balances during the current as well as previous year with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
ii. The Company has not been declared a willful defaulter by any bank.
iii. The Company does not have any benami property, where any proceedings are initiated or are pending against the Company for holding any benami property.
iv. The Company has not traded or invested in crypto currency or virtual currency during the financial year.
v. The Company has not received any fund from any person or entiy including foreign entities (funding party) with the understanding (whether recording in writing or otherwise) that the Company shall:
a. 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
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiary.
vi. The Company has sanctioned borrowings/facilities from bank on the basis of security of current assets. The monthly returns or statements of current assets filed by the Company with bank are in agreement with the books of account.
vii. During the year, the Company has not disclosed or surrendered, any income other than the income recognised in the books of account in the tax assessments under Income Tax Act, 1961.
viii. The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) to any other person or entity, including foreign entity (Intermediaries') with the understanding (whether recorded in writing or otherwise) 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 Company ('Ultimate Beneficiaries') or
b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
ix. The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules, 2021 requiring companies, which use accounting software for maintaining their books of account, to use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
The Company has used an accounting software Microsoft dynamic navision 2016 for maintaining its books of account which has a feature of recording audit trail (edit log) facility. The audit trail (edit log) is enabled at the application level, however the audit trail feature was not enabled throughout the year at database level.
53 Authorisation of financial statements
The financial statements as at and for the year ended 31 March 2025 were approved by Board of Directors on 27 April 2025.
This is a summary of material accounting policies and other explanatory information referred to in our audit report of even date.
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