Click it and Unblock the Notifications
Notes to Accounts of NRB Bearings Ltd.
Mar 31, 2025
s. Provisions, contingent liabilities and contingent assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event,
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. If the effect of the time value of money is material,
provisions are discounted using equivalent period government securities interest rate. Unwinding of the discount is
recognised in the standalone statement of profit and loss as a finance cost. Provisions are reviewed at each balance
sheet date and are adjusted to reflect the current best estimate.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which
will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the Company or a present obligation that arises from past events where it is either not probable that
an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. Information
on contingent liabilities is disclosed in the Notes to the standalone financial statements. Contingent assets are not
recognised, but disclosed in the standalone financial statements. However, when the realisation of income is virtually
certain, then the related asset is no longer a contingent asset, but it is recognised as an asset.
t. Employee Benefits
A) Short term employee benefits: All employee benefits payable within twelve months from the end of the period
in which services are rendered are classified as short term employee benefits. Benefits such as salaries, wages, short
term compensated absences, etc. and the expected cost of bonus, ex-gratia are recognised in the period in which the
employee renders the related service.
B) Post employment benefits
i. Defined contribution plans: The Company''s superannuation scheme, state governed provident fund and family
pension scheme are defined contribution plans. The contribution paid/ payable under the schemes, is recognised
during the period in which the employee renders the related service.
Provident Fund and family pension fund contributions are charged to the standalone statement of profit and loss as
incurred. The Company''s contribution to the statutory provident fund and family pension fund is determined based
on a fixed percentage of the eligible employees'' salary and charged to the standalone statement of profit and loss on
accrual basis. The Company does not have any obligation other than the contribution made to the fund administered
by the government.
ii. Gratuity: The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible
employees. The plan is governed by the Payment of Gratuity Act, 1972 and provides lumpsum payment to eligible
employees at retirement, death while in employment or termination of the employment of an amount equivalent to 15
days salary payable for each completed year of service. The Company has established two trusts, one each for its staff
and officers and makes contributions to such funds for funding these plans.
The Company has computed its liability towards future payments of gratuity to employees, on actuarial valuation basis
which is determined based on projected unit credit method and the charge for current year is debited to the standalone
statement of profit and loss. Actuarial gains and losses arising on the measurement of defined benefit obligation and
experience adjustments are charged/ credited to other comprehensive income. All other costs/reversals are recognised
in the standalone statement of profit and loss.
C) Compensated absences: The Company provides for the encashment of leave or leave with pay subject to certain
rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/availment.
The Company makes provision for compensated absences based on an actuarial valuation by an actuary, using the
projected unit credit method. Actuarial gains and losses arising on the measurement of defined benefit obligation is
charged/ credited to the standalone statement of profit and loss. The Company presents the entire leave liablity as a
current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months
after the reporting date.
u. Exceptional Items
When items of income and expense within standalone statement of profit and loss from ordinary activities are of such
size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period,
the nature and amount of such material items are disclosed separately as exceptional items.
v. Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss (excluding other comprehensive income) for
the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the
year. The weighted average number of equity shares outstanding during the year is adjusted for events such as bonus
issue, bonus element in a right issue, shares split and reverse share splits (consolidation of shares) that have changed
the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating
diluted earnings per share, the net profit or loss (excluding other comprehensive income) for the year attributable to
equity share holders and the weighted average number of shares outstanding during the year are adjusted for the
effects of all dilutive potential equity shares.
w. Operating cycle and classification of current and non - current items
Based on the nature of products / activities of the Company and the normal time between acquisition of assets and
their realisation in cash or cash equivalents, the Company has determined its operating cycle as a period not exceeding
12 months for the purpose of classification of its assets and liabilities as current and non-current.
(i) An asset is considered as current when it is:
a. Expected to be realised or intended to be sold or consumed in the normal operating cycle, or
b. Held primarily for the purpose of trading, or
c. Expected to be realised within twelve months after the reporting period, or
d. Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period.
(ii) All other assets are classified as non-current.
(iii) Liability is considered as current when it is:
a. Expected to be settled in the normal operating cycle, or
b. Held primarily for the purpose of trading, or
c. Due to be settled within twelve months after the reporting period, or
d. There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.
(iv) All other liabilities are classified as non-current"
x. Contributed equity
Equity shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
y. Critical estimates and judgements
The preparation of standalone financial statements in conformity with Ind AS requires management to make estimates,
assumptions and exercise judgement in applying the accounting policies that affect the reported amount of assets,
liabilities and disclosure of contingent liabilities at the date of standalone financial statements and the reported amounts
of income and expenses during the year.
The management believes that these estimates are prudent and reasonable and are based upon the management''s
best knowledge of current events and actions. Actual results could differ from these estimates and differences between
actual results and estimates are recognised in the periods in which the results are known or materialised.
This note provides an overview of the areas that involved a comparatively higher degree of judgement or complexity,
and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be
different than those originally assessed.
i) Property, plant and equipment, investment properties and intangible assets:
Property, plant and equipment represents a significant proportion of the asset base of the Company. The charge
in respect of periodic depreciation is derived after determining an estimate of an assets expected useful life and
the expected residual value at the end of its life. The useful lives and residual values of the Company''s assets are
determined by the management at the time the asset is acquired and reviewed periodically, including at each financial
year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which
may impact their life, such as changes in technology.
ii) Income tax:
Significant judgments are involved in determining the provision for income taxes, including the amount expected to be
paid or recovered in connection with uncertain tax positions."
iii) Contingencies:
Management has estimated the possible outflow of resources at the end of each annual reporting financial year, if any,
in respect of contingencies / claim / litigations by / against the Company as it is not possible to predict the outcome of
pending matters with accuracy.
iv) Expected credit loss on financial assets:
On application of Ind AS 109, the impairment provisions of financial assets are based on assumptions about risk of
default and expected timing of collection. The Company uses judgments in making these assumptions and selecting the
inputs to the impairment calculation, based on the Company''s past history of collections, customer''s credit-worthiness,
existing market conditions as well as forward looking estimates at the end of each reporting period.
v) Deferred Taxes:
Deferred tax is recorded on temporary differences between the tax bases of assets and liabilities and their carrying
amounts, at the rates that have been enacted or substantively enacted at the reporting date. The ultimate realisation
of deferred tax assets is dependent upon the generation of future taxable profits during the periods in which those
temporary differences and tax loss carry forwards become deductible. The Company considers the expected reversal of
deferred tax liabilities and projected future taxable income in making this assessment. The amount of the deferred tax
assets considered realisable, however, could be reduced in the near term if estimates of future taxable income during
the carry forward period are reduced.
vi) Impairment of financial assets:
At each balance sheet date, based on historical default rates observed over expected life, existing market conditions
as well as forward looking estimates, the management assesses the expected credit losses on outstanding receivables.
Further, management also considers the factors that may influence the credit risk of its customer base, including the
default risk associated with industry and country in which the customer operates."
vii) Impairment of non financial assets:
Where the carrying amount of an asset or CGU exceeds its recoverable amount (fair value less costs of disposal or its
value in use), the asset is considered impaired and is written down to its recoverable amount. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. In determining fair value
less cost of disposal, recent market transactions are taken into account. If no such transactions can be identified, an
appropriate valuation model is used. These calculations are corroborated by valuation multiples or other available fair
value indicators.
viii) Defined benefit obligation:
The cost of the defined benefit plans, compensated absences and the present value of the defined benefit obligations
are based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making various
assumptions that may differ from actual developments in the future. These include the determination of the discount
rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term
nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed
at each reporting date.
ix) Leases:
Determining the lease term of contracts with renewal and termination options - Company as lessee - Ind AS 116
requires the lessee to determine the lease term as the non-cancellable term of the lease, together with any periods
covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option
to terminate the lease, if it is reasonably certain not to be exercised.
The Company has several lease contracts that include extension and termination options. The Company applies
judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate
the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal
or termination. After the commencement date, the Company reassesses the lease term if there is a significant event
or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to
renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the
leased asset).When it is reasonably certain to exercise extension option and not to exercise termination option, the
Company includes such extended term and ignores termination option in determination of lease term.
The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing
rate (IBR) to measure lease liabilities. The Company has taken indicative rates from its bankers and used them for Ind
AS 116 calculation purposes.
x) Provisions:
Provision is recognised when the Company has a present obligation as a result of past event and it is probable that an
outflow of resources will be required to settle the obligation, in respect of which a reliable estimate cannot be made.
Provisions (excluding retirement obligation and compensated expenses) are not discounted to its present value and
are determined based on best estimate of the amount required to settle obligation at the balance sheet date. These
are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
xi) Fair value measurements:
Management applies valuation techniques to determine fair value of financial assets and liabilities (where active market
quotes are not available). This involves developing estimates and assumptions around volatility and dividend yield etc.
which may affect the value of financial assets and liabilities. Estimates and judgements are continuously evaluated.
These are based on historical experience and other factors including expectation of future events that may have a
financial impact on the Company and that are believed to be reasonable under the circumstances.
xii) Impairments of assets:
In assessing impairment, management estimates the recoverable amounts of each asset (in case of non-financial
assets) based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates
to assumptions about future cash flows and the determination of a suitable discount rate.
xiii) Allowances for slow / Non-moving Inventory and obsolescence:
An allowance for Inventory is recognised for cases where the realisable value is estimated to be lower than the inventory
carrying value. The inventory allowance is an estimate taking into account various factors, including prevailing sales
prices of inventory item and losses associated with usability/ obsolete / slow-moving / redundant inventory items. The
Company has, based on these assessments, made adequate provision in the books.
xiv) Overhead Costing:
Management has applied critical estimates and judgements in the calculation of the Machine Hour Rate (MHR) for
overhead costing. These estimates are based on data received, including machine-wise operating hours, utilized hours,
power consumption, and labour details. Management reviews and adjusts these estimates on monthly basis to ensure
they reflect the most current and reliable information available.
Estimates and judgements are continuously evaluated. These are based on historical experience and other factors
including expectation of future events that may have financial impact on the company and are believed to be reasonable
under the circumstances.
z. Events after report date
Where events occurring after the balance sheet date provide evidence of conditions that existed at the end of the
reporting period, the impact of such events is adjusted within the financial statements. Where the events are indicative
of conditions that arose after the reporting period, the amounts are not adjusted, but are disclosed if those non¬
adjusting events are material.
2 Recent accounting pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended 31 March 2025,
MCA has notified Ind AS 117 - Insurance Contracts and amendments to Ind As 116 - Leases, relating to sale and
lease back transactions, applicable from 1 April 2024. The Company has assessed that there is no significant impact
on its financial statements.
On 9 May 2025, MCA notified the amendments to Ind AS 21 - Effects of Changes in Foreign Exchange Rates. These
amendments aim to provide clearer guidance on assessing currency exchangeability and estimating exchange rates
when currencies are not readily exchangeable. The amendments are effective for annual periods beginning on or
after 1 April 2025. The Company is currently assessing the probable impact of these amendments on its financial
statements.
Notes:
(i) Includes receivables amounting ^ 4 lakhs (31 March 2024 - ^ 4 lakhs) from private company where director
of the Company is also a director.
(ii) No trade or other receivable are due from directors or other officers of the Company either severally or jointly
with any other person.
(iii) The outstanding balances as at 31 March 2025 includes trade receivables amounting to ^ 2,127 lakhs
(31 March 2024: ^ 3,091 lakhs) from customers situated outside India. These balances are pending for
settlement / adjustments and have resulted in delays in remittance of receipts of receivables, beyond the
timeline stipulated by the FED Master Direction No. 16/2015-16, under the Foreign Exchange Management
Act, 1999. The Company is in the process of recovering these outstanding dues however, wherever required,
provision has been made in the books of account. The Company is also in the process of regularising these
defaults with the appropriate authority. Pending conclusion of the aforesaid matter, the amount of penalty,
if any, that may be levied, is not ascertainable. However, management believes that the exposure is not
expected to be material. Accordingly, the accompanying standalone financial statements do not include any
consequential adjustments that may arise due to such delay.
(iv) Trade receivables are non interest bearing and are generally on credit terms in line with respective industry
norms.
(v) The Company has writen off trade receivables amounting to ^ 248 lakhs (31 March 2024 - ^ 274 lakhs) and it
does not expect to receive future cash flows or recoveries from trade receivables previously written off. Also
refer note 44(a).
(vi) Refer note 44 for information about credit risk and market risk of trade receivables.
(vii) Refer note 27 and note 48 for information about assets pledged as security for current borrowings.
(i) The carrying amounts of financial and non financial assets as security for secured borrowings are disclosed
in Note 48.
(ii) Packing credit loan amounting to ^ Nil lakhs (31 March 2024 - ^ 7,508 lakhs) is secured by first pari passu
hypothecation charge on all the existing and future current assets of the Company. The weighted average
interest rate on packing credit loan is 5.15% (31 March 2024 - 6.21%).
(iii) Working capital demand loan amounting to ^ 4,866 lakhs (31 March 2024 - ^ 0 lakhs) is secured by way of
mortgage of a residential property of the Company situated in Mumbai. The weighted average interest rate
on working capital demand loan is 8.22% (31 March 2024 - 6.21%).
(iv) Buyer''s credit amounting to ^ 1,372 lakhs (31 March 2024 - ^ Nil lakhs) is secured by way of bank
guarantees. The weighted average interest rate on buyer''s credit is 4.69% (31 March 2024 - Nil %).
(v) The statement of monthly current assets filed by the Company with banks are in agreement with the books
of account.
(vi) Refer note 44 for liquidity risk and market risk.
(vii) Refer note 45 for capital management.
(viii) Refer note 46 for net debt reconciliation.
(i) Refer note 44 for information about liquidity risk and market risk of trade payables.
(ii) Trade payables are non-interest bearing and are settled in line with respective industry norms.
(iii) From total trade payables mentioned above, payables against unbilled dues are ^ 1,634 lakhs (31 March
2024 - ^ 1603 lakhs).
(iv) The outstanding balances as at 31 March 2025 includes trade payables amounting to ^ 301 lakhs (31
March 2024: ^ 191 lakhs), to vendors situated outside India. These balances are pending for settlement
/ adjustments and have resulted in delays in payments of payables, beyond the timeline stipulated by the
FED Master Direction No. 17/ 2016-17, under the Foreign Exchange Management Act, 1999. The Company
is in the process of making the payment for outstanding payables. The Company is also in the process of
regularising these defaults with the appropriate authority. Pending conclusion of the aforesaid matter, the
amount of penalty, if any, that may be levied, is not ascertainable. However, management believes that the
exposure is not expected to be material. Accordingly, the standalone financial statements do not include any
consequential adjustments that may arise due to such delay.
(v) Dues to micro enterprise and small enterprise
The Company has certain dues to suppliers registered as Micro enterprise and small enterprise under Micro,
Small and Medium Enterprises Development Act, 2006 (''MSMED Act''). The disclosures pursuant to the said
MSMED Act are as follows:
Notes
(i) The Committee of Directors, constituted by the Board, at its meeting held on 28 January 2023 had approved
the execution of the share purchase agreement with its wholly owned Subsidiary "NRB Holdings Limited"
for transfer of 100% of its share holding in the Company''s other wholly owned subsidiary, "NRB Bearing
(Thailand) Limited" at a consideration of ^ 4,708 lakhs, as a result of which, the latter has become wholly
owned step down subsidiary of the Company w.e.f. 1 April 2023. The Company had recognised a surplus of
^ 2,295 lakhs on such transfer of shareholding which is classified as an exceptional gain for year ended 31
March 2024.
(ii) A fire incident had occurred at one of the Company''s plant situated at Waluj, Aurangabad on 8 May 2023,
wherein the Company had made an assessment of loss amounting to ^ 2,076 lakhs with respect to the
damage caused to inventories, plant and equipments and other accessories, buildings, and other civil
structures. The Company believes it has adequate insurance coverage to cover these losses.
During the year ended 31 March 2025, the Insurance Company has disbursed a total amount of ^ 750
lakhs as an interim payment against plant and equipments and other accessories, buildings and other civil
structures (31 March 2024: ^ 3,051 lakhs i.e., ^ 1,801 lakhs as final payment against inventories and ^
1,250 lakhs as an interim payment against plant and equipments and other accessories, buildings and other
civil structures), which is classified as an exceptional gain for the year ended 31 March 2025.
Additionally, the management of the Company has filed a claim with the surveyor to recover operational
losses caused due to fire. The same is under discussion and the claim will be recognised when the
recoverability is reasonably ascertained.
(iii) The Board of Directors at its meeting held on 22 January 2022 had approved sale/transfer/disposal of
freehold land and building situated at 2nd Pokhran Road, Majiwade, Thane-400 610, Maharashtra. During
the year ended 31 March 2024, the Company disposed the said freehold land and building having WDV
of ^ 53 lakhs at an agreed consideration of ^ 19,605 lakhs adjusted by incidental expenses of ^ 1,784
lakhs (being stamp duty and brokerage expenses) resulting into a net gain (pre-tax) of ^ 17,768 lakhs. The
related tax liability on this gain was ^ 2,689 lakhs and consequently the post tax gain amounted to ^ 15,079
lakhs, which forms part of profit after tax. These gains were classified as an exceptional item for the year
ended 31 March 2024.
(iv) The Committee of Directors at its meeting held on 20 January 2025 have approved the execution of an
Inter-Company Agreement (''Agreement'') dated 20 January 2025 between the Company and NRB Industrial
Bearings Limited (NIBL), a related party, which mainly covers the following:
(a) As per the scheme of demerger dated 24 August 2012 executed between the Company and NIBL,
NIBL presently uses the marks "NRB Industrial" and "NRB Industrial Bearings" in which the word
"NRB" is used in a red color combination, stylization, font and pattern. NIBL shall be entitled to the
continued usage of the same in terms of the scheme of demerger and the word ''NRB" attached to
Industrial only in red colour specified in the scheme of demerger, strictly in the manner, font, styling
and colour in accordance with the terms detailed in the Agreement and with related restrictions at all
times. At any point of time, if there is a change of control of NIBL, the aforesaid right to use shall be
discontinued and shall be revoked in accordance with the terms detailed in the Agreement;
(b) immediate release by NIBL of the right to use the immovable property of the Company situated at 2nd
and 3rd floor, Dhannur, 15 Sir P M Road, Fort, Mumbai 400 001 along with granting vacant possession
of the same and the shifting of their registered office by NIBL, in accordance with the terms detailed
in the Agreement; and
(c) non-solicitation of each other''s employees by both entities in accordance with the terms detailed in the
Agreement.
Further, the Company has also received an intimation of a proposed realignment of shares within the
"Promoter / Promoter Group" as contemplated under the Memorandum Recording Family Settlement dated
20 January 2025 that would result in the realignment of shares held in the Company and a realignment
of the beneficial interest in the Trilochan Singh Sahney Trust 1 which holds shares in the Company. Such
change is not expected to have any impact on the statement of the Company for the current period or the
subsequent period in which such transactions would be executed.
The Company has made a payment to NIBL of ^ 5,512 lakhs on 14 February 2025, upon completion of
conditions precedent as specified in the Agreement, which is classified as an exceptional loss for the year
ended 31 March 2025.
(v) During the year ended 31 March 2025, the Company had reversed the input tax credit amounting to ^ 394
lakhs and ^ 33 lakhs on account of loss of inventories due to fire and brokerage paid for sale of land and
building at Thane respectively. These credits have been reversed under section 16 of the CGST Act, 2017
from the available balances in the electronic credit ledger while filing the Goods and Services Tax (GST)
annual return for the financial year 2023-24, which are classified as an exceptional loss for the year ended
31 March 2025.
Note - The carrying value of trade receivables, cash and cash equivalents, bank balance other than cash and cash equivalents,
loans, other current financial assets, borrowings, lease liabilities, trade payables, other current financial labilities are considered to be
approximately equal to the fair value.
(*) Net of impairment, if any
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 standalone 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:
(i) The fair values for investments in equity instrument and mutual fund are based on the quoted market prices.
Fair values of security deposits, loans are based on discounted cash flows using a discount rate determined
considering Company''s incremental borrowing rate. Non current borrowings are fair valued using effective interest
rates.
(ii) Fair valuation of interest rate swap and foreign currency option contracts are calculated on the basis of estimated
mid-market levels, estimated bid-side or offer side levels, or on the basis of indicative bid or offer or unwind prices
or on such other appropriate basis. It is derived from other proprietary or other pricing models based on certain
assumptions.
(iii) Fair valuation of forward exchange contracts are determined using forward exchange rates at the balance sheet
date.
(iv) The carrying value of trade receivables, cash and cash equivalents, bank balance other than cash and cash
equivalents, loans, other current financial assets, borrowings, lease liabilities, trade payables, other current
financial labilities are considered to be approximately equal to the fair value and hence they have not been
disclosed under tables above.
III. Valuation process
The finance department performs the calculations of financial assets and liabilities required for financial reporting
purposes. This team reports directly to the chief financial officer (CFO). Discussions of valuation processes and results
are held between the CFO and the finance team at least once every three months, in line with the quarterly reporting
periods.
44 Financial risk management
The Company''s principal financial liabilities comprise borrowings, 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 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
Trade receivables
To manage credit risk, the Company follows a policy based on industry norms. 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.
Other financial assets
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 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.
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, trade payables and other financial liabilities.
Liquidity risk management
The Company''s corporate finance 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.
Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash
flows.
The table below summarises the maturity profile of the Company''s financial liabilities based on contractual
undiscounted payments (except lease liabilities) at each reporting date:
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises three types of risk: Foreign currency risk, interest rate risk and
price risk.
(1) Foreign currency risk
The Company is exposed to foreign exchange risk on their receivables, payables which are held in USD, EUR, Thai
Baht, CHF and JPY. The Company''s exposure arises mainly on import of raw material and capital items and export of
finished goods. The Company follows a policy of matching of import and export exposures (natural hedge) to reduce
the net exposure in any foreign currency. Whenever the natural hedge is not available or is not fully covering the
foreign currency exposure of the Company, management uses certain derivative instruments to manage its exposure
to the foreign currency risk. Foreign currency transactions are managed within approved policy parameters. The
Company uses forward contracts, options and cross currency swap to hedge its exposure to foreign currency risk.
The Company designates certain derivatives as hedging instruments in respect of foreign currency risk as cash flow
hedges.
Hedge ineffectiveness is determined at the inception of the hedge relationship, and through periodic prospective
effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging
instrument. The economic relationship and hedge effectiveness are based on the qualitative factors and the use of
a hypothetical derivative where appropriate.
The Company has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk and notional
amount of the hedging instruments are identical to the hedged items.
(2) Cash flow and fair value interest rate risk
The Company''s interest rate risk is mainly due to the borrowing acquired at floating interest rate. The Company''s
policy is to maintain most of its borrowing at fixed rate using interest rate swaps to hedge the exposure. During the
year ended 31 March 2025 and 31 March 2024, the Company''s borrowing at variable rate were mainly denominated
in INR and USD.
The fixed rate borrowings are carried at amortised cost, hence they are not subject to interest rate risk since the
carrying amount and future cash flows will not fluctuate because of change in market interest rates.
45 Capital management
(i) Risk management
The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern
and to optimise returns to its shareholders.
The capital structure of the Company is based on management''s judgement of the appropriate balance of key
elements in order to meet its strategic and day-to-day needs. Management considers the amount of capital in
proportion to risk and manages the capital structure in light of changes in economic conditions and the risk
characteristics of the underlying assets.
The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to
maintain investor, creditors and market confidence and to sustain future development and growth of its business.
The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.
(v) Salaries and employer benefits
The KMP''s are covered under the Company''s gratuity policy, leave encashment 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 determined actuarially are not mentioned in the
aforementioned disclosures as these are computed for the Company as a whole.
48 Collateral / Security pledged
The carrying amount of assets pledged as security for current and non-current borrowings of the Company are as
follows:
Notes -
(i) The Company is contesting all of the above demands in respect of Income tax, Sales tax, Value added tax
and Local body tax and the management believes that its positions are likely to be upheld at the appellate
stage. No expense has been accrued in the standalone financial statements for the aforesaid demands. The
management believes that the ultimate outcome of these proceedings are not expected to have a material
adverse effect on the Company''s financial position and results of operations and hence no provision has been
made in this regard.
(ii) The above disclosure has been made on the basis of information available with the Company.
(iii) 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.
(iv) The amounts disclosed above represent the best possible estimates arrived at on the basis of the available
information and do not include any penalty payable.
(v) The guarantee given towards the borrowings availed by the subsidiary company was for the purpose of local
sourcing of capital goods and working capital purposes.
(xii) 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.
(c) Other long term benefits:
Compensated absences recognised in the standalone statement of profit and loss for the current year, under the
Note 36 - Employee benefits expense, is ^ 161 lakhs (31 March 2024: ^ 197 lakhs). Liability towards provision for
compensated absences as at 31 March 2025 of ^ 941 lakhs (31 March 2024 - ^ 907 lakhs).
Note - The liability of ^ 941 lakhs (31 March 2024 - ^ 907 lakhs) is classified as "Current" in accordance with the
guidance note issued by the Institute of Chartered Accountants of India on schedule III to the Companies Act,
2013.
51 Ind AS 116- Lease
Company as a lessee
The Company''s lease asset primarily consist of lease for building and flats on leasehold land and vehicles. The
Company has recognised ^ 136 lakhs (31 March 2024 - ^ 153 lakhs) as rental expenses during the year which
pertains to short term leases / low value assets (refer note 39).
The weighted average incremental borrowing rate applied to lease liabilities is 10% (31 March 2024 - 10%)
Information about leases for which the Company is a lessee are presented below -
55 Disclosure for struck off companies
The Company does not have any transactions and outstanding balances for the current year and previous year
with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act,
1956.
56 Other regulatory information
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending
against the Company for holding any Benami property.
(ii) The Company has not traded or invested in Crypto currency or Virtual Currency.
(iii) The Company has not received any fund from any person(s) or entity(ies), 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 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 on behalf of the Ultimate Beneficiaries,
(iv) The Company has not made any such transaction which is not recorded in the books of account that has
been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act,
1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
(v) The Company has not been declared a wilful defaulter by any bank.
(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) The Company has complied with the number of layers prescribed under section 2(87) of the Act.
(viii) The Company has not entered into any scheme of arrangement in terms of section 230 to 237 of the Act for
the year ended 31 March 2025 and 31 March 2024.
(ix) 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.
(x) There are no charges which are yet to be registered with the ROC beyond the statutory period as at 31
March 2025.
(xi) The Ministry of Corporate Affairs (MCA) has prescribed a 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.
During the year ended 31 March 2025 and 31 March 2024, the audit trail (edit log) feature for any direct
changes made at the database level was not enabled for the accounting software used for maintenance of
books of account. However, the audit trail (edit log) at the application level for the accounting software was
enabled and operating for all relevant transactions recorded in the software.
57 Segment reporting
In accordance with Ind AS 108 - ''Operating Segment'', the Company has opted to present segment information
as a part of the consolidated financial statements of the Company and its subsidiaries. Therefore, no separate
disclosure on segment information is given in these standalone financial statements.
58 Earnings per share
The earnings per equity share is computed by dividing the net profit attributable to the equity shareholders for the
year by weighted average number of equity shares outstanding during the year.
Note -
The Company does not have any outstanding dilutive potential equity shares as at 31 March 2025 and 31 March
2024. Consequently, basic and diluted earnings per share of the Company remain the same.
This is the summary of material accounting policies and other explanatory
information referred to in our audit report of even date
For Walker Chandiok & Co LLP For and on behalf of the Board of Directors
Chartered Accountants
Firm''s Registration No. 001076N / N500013 A*ank ^ H*^*⢠^.ven ^ C-Ra"gani
Chairman Vice Chairman and Non-Executive Director
DIN : 00017767 Managing Director DIN : 00209069
Bharat Shetty DIN : 00003948
Partner Raman Malhotra Kishor Talreja
Membership No.: 106815 Chief Financial Officer Company Secretary
Place : Mumbai Place : Mumbai
Date : 14 May 2025 Date : 14 May 2025
Mar 31, 2024
t. Provisions, contingent liabilities and contingent assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, 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. If the effect of the time value of money is material, provisions are discounted using equivalent period government securities interest rate. Unwinding of the discount is recognised in the standalone statement of profit and loss as a finance cost. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. Information on contingent liabilities is disclosed in the Notes to the standalone financial statements. Contingent assets are not recognised, but disclosed in the standalone financial statements. However, when the realisation of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognised as an asset.
u. Employee benefits
A) Short term employee benefits: All employee benefits payable within twelve months from the end of the period in which services are rendered are classified as short term employee benefits. Benefits such as salaries, wages, short term compensated absences, etc. and the expected cost of bonus, ex-gratia are recognised in the period in which the employee renders the related service.
B) Post employment benefits
i. Defined contribution plans: The company''s superannuation scheme, state governed provident fund and family pension scheme are defined contribution plans. The contribution paid/ payable under the schemes, is recognised during the period in which the employee renders the related service.
Provident Fund and family pension fund are charged to the standalone statement of profit and loss as incurred.
The Company''s contribution to the statutory provident fund and family pension fund is determined based on a fixed percentage of the eligible employees'' salary and charged to the standalone statement of profit and loss on accrual basis. The Company does not have any obligation other than the contribution made to the fund administered by the government.
ii. Gratuity: The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan is governed by the Payment of Gratuity Act, 1972 and provides lumpsum payment to eligible employees at retirement, death while in employment or termination of the employment of an amount equivalent to 15 days salary payable for each completed year of service. The Company has established two trusts, one each for its staff and officers and makes contributions to such funds for funding these plans.
The Company has computed its liability towards future payments of gratuity to employees, on actuarial valuation basis which is determined based on project unit credit method and the charge for current year is debited to the standalone statement of profit and loss. Actuarial gains and losses arising on the measurement of defined benefit obligation and experience adjustments are charged/ credited to other comprehensive income. All other costs/reversals are recognised in the standalone statement of profit and loss.
C) Compensated absences: The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/ ailment. The Company makes provision for compensated absences based on an actuarial valuation by an actuary, using the projected unit credit method. Actuarial gains and losses arising on the measurement of defined benefit obligation is charged/ credited to the Statement of Profit and loss. The Company presents the entire leave as a current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date.
v. Exceptional Items
When items of income and expense within standalone statement of profit and loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such material items are disclosed separately as exceptional items.
w. Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss (excluding other comprehensive income) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events such as bonus issue, bonus element in a right issue, shares split and reverse share splits (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss (excluding other comprehensive income) for the year attributable to equity share holders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
x. Operating cycle and classification of current and non - current items
Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as a period not exceeding 12 months for the purpose of classification of its assets and liabilities as current and non-current.
(i) An asset is considered as current when it is:
a. Expected to be realised or intended to be sold or consumed in the normal operating cycle, or
b. Held primarily for the purpose of trading, or
c. Expected to be realised within twelve months after the reporting period, or
d. Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.
(ii) All other assets are classified as non-current.
(iii) Liability is considered as current when it is:
a. Expected to be settled in the normal operating cycle, or
b. Held primarily for the purpose of trading, or
c. Due to be settled within twelve months after the reporting period, or
d. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
(iv) All other liabilities are classified as non-current.
y. Contributed equity
Equity shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
z. Critical estimates and judgements
The preparation of standalone financial statements in conformity with Ind AS which requires management to make estimates, assumptions and exercise judgement in applying the accounting policies that affect the reported amount of assets, liabilities and disclosure of contingent liabilities at the date of standalone financial statements and the reported amounts of income and expenses during the year.
The management believes that these estimates are prudent and reasonable and are based upon the management''s best knowledge of current events and actions. Actual results could differ from these estimates and differences between actual results and estimates are recognised in the periods in which the results are known or materialised.
This note provides an overview of the areas that involved a comparatively higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.
i) Property, plant and equipment, investment properties and intangible assets:
Property, plant and equipment represents a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an assets expected useful life and the expected residual value at the end of its life. The useful lives and residual values of the Company''s assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.
ii) Income tax:
Significant judgments are involved in determining the provision for income taxes, including the amount expected to be paid or recovered in connection with uncertain tax positions.
iii) Contingencies:
Management has estimated the possible outflow of resources at the end of each annual reporting financial year, if any, in respect of contingencies / claim / litigations by / against the Company as it is not possible to predict the outcome of pending matters with accuracy.
iv) Expected credit loss on financial assets:
On application of Ind AS 109, the impairment provisions of financial assets are based on assumptions about risk of default and expected timing of collection. The Company uses judgments in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history of collections, customer''s credit-worthiness, existing market conditions as well as forward looking estimates at the end of each reporting period.
v) Deferred Taxes:
Deferred tax is recorded on temporary differences between the tax bases of assets and liabilities and their carrying amounts, at the rates that have been enacted or substantively enacted at the reporting date. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable profits during the periods in which those temporary differences and tax loss carry forwards become deductible. The Company considers the expected reversal of deferred tax liabilities and projected future taxable income in making this assessment. The amount of the deferred tax assets considered realisable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.
vi) Impairment of financial assets:
At each balance sheet date, based on historical default rates observed over expected life, existing market conditions as well as forward looking estimates, the management assesses the expected credit losses on outstanding receivables. Further, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with industry and country in which the customer operates.
vii) Impairment of non financial assets:
Where the carrying amount of an asset or CGU exceeds its recoverable amount (fair value less costs of disposal or its value in use), the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less cost of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples or other available fair value indicators.
viii) Defined benefit obligation:
The cost of the defined benefit plans, compensated absences and the present value of the defined benefit obligations are based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term
nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
ix) Leases:
Determining the lease term of contracts with renewal and termination options - Company as lessee Ind AS 116 requires the lessee to determine the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.
The Company has several lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise
or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).When it is reasonably certain to exercise extension option and not to exercise termination option, the Company includes such extended term and ignore termination option in determination of lease term.
The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The Company has taken indicative rates from its bankers and used them for Ind AS 116 calculation purposes.
x) Provisions:
Provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can me made. Provisions (excluding retirement obligation and compensated expenses) are not discounted to its present value and are determined based on best estimate required to settle obligation at the balance sheet date. These are reviewed at
each balance sheet date adjusted to reflect the current best estimates.
xi) Fair value measurements:
Management applies valuation techniques to determine fair value of financial assets and liabilities (where active market quotes are not available). This involves developing estimates and assumptions around volatility and dividend yield etc. which may affect the value of financial assets and liabilities. Estimates and judgements are continuously evaluated. These are based on historical experience and other factors including expectation of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
xii) Impairments of assets:
In assessing impairment, management estimates the recoverable amounts of each asset (in case of nonfinancial assets) based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future cash flows and the determination of a suitable discount rate.
xiii) Allowances for slow / Non-moving Inventory and obsolescence:
An allowance for Inventory is recognised for cases where the realisable value is estimated to be lower than the inventory carrying value. The inventory allowance is an estimate taking into account various factors, including prevailing sales prices of inventory item and losses associated with usability/ obsolete / slow-moving / redundant inventory items. The Company has, based on these assessments, made adequate provision in the books.
xiv) Overhead Costing:
Management has applied critical estimates and judgements in the calculation of the Machine Hour Rate (MHR) for overhead costing. These estimates are based on data received, including machine-wise operating hours, utilized hours, power consumption, and labour details. Management reviews and adjusts these estimates on monthly basis to ensure they reflect the most current and reliable information available.
Estimates and judgements are continuously evaluated. These are based on historical experience and other factors includes expectation of future events that may have financial impact on the company and are believed to be reasonable under the circumstances.
aa. Events after report date
Where events occurring after the balance sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Where the events are indicative of conditions that arose after the reporting period, the amounts are not adjusted, but are disclosed if those non-adjusting events are material.
2. Recent accounting pronouncements
The Ministry of Corporate Affairs had vide notification dated 23 March 2022 notified Companies (Indian Accounting Standards) Amendment Rules, 2022 which amended certain accounting standards, and are effective 1 April 2022. These amendments did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods, as below:
i. Ind AS 1 - Presentation of Financial Statements:
The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements. The Company does not expect this amendment to have any significant impact in its standalone financial statements.
ii. Ind AS 12 - Income Taxes:
The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The Company is evaluating the impact, if any, in its standalone financial statements.
iii. Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors:
The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are "monetary amounts in standalone financial statements that are subject to measurement uncertainty". Entities develop accounting estimates if accounting policies require items in standalone financial statements to be measured in a way that involves measurement uncertainty. The Company does not expect this amendment to have any significant impact in its standalone financial statements.
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 standalone 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 undermeath the table.
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:
(i) The fair values for investments in equity instrument are based on the quoted market prices and mutual fund are based on the net assets value. Fair values of security deposits, loans are based on discounted cash flows using a discount rate determined considering Company''s incremental borrowing rate. Non current borrowings are fair valued using effective interest rates.
(ii) Fair valuation of interest rate swap and foreign currency option contracts are calculated on the basis of estimated mid-market levels, estimated bid-side or offer side levels, or on the basis of indicative bid or offer or unwind prices or on such other appropriate basis. It is derived from other proprietary or other pricing models based on certain assumptions.
(iii) Fair valuation of forward exchange contracts are determined using forward exchange rates at the balance sheet date.
(iv) The carrying value of trade receivables, cash and cash equivalents, bank balance other than cash and cash equivalents, loans, other current financial assets, short term borrowings, lease liabilities, trade payables, other current financial labilities are considered to be approximately equal to the fair value and hence they have not been disclosed under tables below.
III. Valuation process
The finance department performs the calculations of financial assets and liabilities required for financial reporting purposes. This team reports directly to the chief financial officer (CFO). Discussions of valuation processes and results are held between the CFO and the finance team at least once every three months, in line with the quarterly reporting periods.
46. Financial risk management
The Company''s principal financial liabilities comprise borrowings, 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 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 30-180 days credit on the basis of 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.
Other financial assets
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 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.
(c) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises 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 their receivables, payables which are held in USD, EUR, Thai Baht, CHF and JPY. The Company''s exposure arises mainly on import of raw material and capital items and export of finished goods. The Company follows a policy of matching of import and export exposures (natural hedge) to reduce the net exposure in any foreign currency. Whenever the natural hedge is not available or is not fully covering the foreign currency exposure of the Company, management uses certain derivative instruments to manage its exposure to the foreign currency risk. Foreign currency transactions are managed within approved policy parameters. The Company uses forward contracts, options and cross currency swap to hedge its exposure to foreign currency risk. The Company designates certain derivatives as hedging instruments in respect of foreign currency risk as cash flow hedges.
Hedge ineffectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The economic relationship and hedge effectiveness are based on the qualitative factors and the use of a hypothetical derivative where appropriate.
The Company has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk and notional amount of the hedging instruments are identical to the hedged items.
(2) Cash flow and fair value interest rate risk
The Company''s interest rate risk is mainly due to the borrowing acquired at floating interest rate. The Company''s policy is to maintain most of its borrowing at fixed rate using interest rate swaps to hedge the exposure. During the year ended 31 March 2024 and 31 March 2023, the Company''s borrowing at variable rate were denominated in INR.
The fixed rate borrowings are carried at amortised cost, hence they are not subject to interest rate risk since the carrying amount and future cash flows will not fluctuate because of change in market interest rates.
47. Capital management (i) Risk management
The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to its shareholders.
The capital structure of the Company is based on management''s judgement of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. Management considers the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets.
The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.
58. Other regulatory information
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company has not traded or invested in Crypto currency or Virtual Currency.
(iii) The Company has not received any fund from any person(s) or entity(ies), 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 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 on behalf of the Ultimate Beneficiaries,
(iv) The Company has not made any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
(v) The Company has not been declared a wilful defaulter by any bank.
(vi) The Company has sanctioned borrowings / facilities from bank on the basis security of current assets. The quarterly returns or statements of current assets filed by the Company with bank are in agreement with the books of account.
(vii) The Company has complied with the number of layers prescribed under section 2(87) of the Act.
(viii) The Company has not entered into any scheme of arrangement in terms of section 230 to 237 of the Act for the year ended 31 March 2024 and 31 March 2023.
(ix) 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.
(x) There are no charges which are yet to be registered with the ROC beyond the statutory period as at 31 March 2024.
(xi) 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 uses accounting software for maintaining its books of account, shall 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.
During the current year, the audit trail (edit log) feature for any direct changes made at the database level was not enabled for the accounting software used for maintenance of books of account. However, the audit trail (edit log) at the application level for the accounting software was enabled and operating for all relevant transactions recorded in the software.
61 Previous year comparatives
The figures for previous year have been regrouped/recast/rearranged to render them comparable with the figures of the current year, which are not considered material to these standalone financial statements.
62 Authorisation of standalone financial statements
The standalone financial statements as at and for the year ended 31 March 2024 were approved by the Board of Directors on 27 May 2024.
This is the summary of material accounting policies and other explanatory information referred to in our audit report of even date
For Walker Chandiok & Co LLP For and on behalf of the Board of Directors
Chartered Accountante Tashwinder Singh Harshbeena Zaveri S. C. Rangani
Rrm Registration IMo. 001076N / Chairman Vice Chairman and Managing Director Director
N500013 DIN : 06572282 DIN : 00003948 DIN : 00209069
Adi P. Sethna Raman Malhotra Shruti Joshi Place : Mumbai
partner Chief Financial Officer Company Secretary Date : 27 May 2024
Membership No.: 108840
Place : Mumbai Date : 27 May 2024
Mar 31, 2023
Provisions, Contingent Liabilities and contingent Assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event,
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. If the effect of the time value of money is material,
provisions are discounted using equivalent period government securities interest rate. Unwinding of the discount is
recognised in the standalone statement of profit and loss as a finance cost. Provisions are reviewed at each balance
sheet date and are adjusted to reflect the current best estimate.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which
will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the Company or a present obligation that arises from past events where it is either not probable that
an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. Information
on contingent liabilities is disclosed in the Notes to the standalone financial statements. Contingent assets are not
recognised, but disclosed in the standalone financial statements. However, when the realisation of income is virtually
certain, then the related asset is no longer a contingent asset, but it is recognised as an asset.
A) Short term employee benefits: All employee benefits payable within twelve months from the end of the period
in which services are rendered are classified as short term employee benefits. Benefits such as salaries, wages, short
term compensated absences, etc. and the expected cost of bonus, ex-gratia are recognised in the period in which the
employee renders the related service.
i. Defined contribution plans: The company''s superannuation scheme, state governed provident fund and family
pension scheme are defined contribution plans. The contribution paid/ payable under the schemes, is recognised
during the period in which the employee renders the related service.
Provident Fund and family pension fund are charged to the standalone statement of profit and loss as incurred.
The Company''s contribution to the statutory provident fund and family pension fund is determined based on a fixed
percentage of the eligible employees'' salary and charged to the standalone statement of profit and loss on accrual
basis. The Company does not have any obligation other than the contribution made to the fund administered by the
government.
ii. Gratuity: The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible
employees. The plan is governed by the Payment of Gratuity Act, 1972 and provides lumpsum payment to eligible
employees at retirement, death while in employment or termination of the employment of an amount equivalent to 15
days salary payable for each completed year of service. The Company has established two trusts, one each for its staff
and officers and makes contributions to such funds for funding these plans.
The Company has computed its liability towards future payments of gratuity to employees, on actuarial valuation basis
which is determined based on project unit credit method and the charge for current year is debited to the standalone
statement of profit and loss. Actuarial gains and losses arising on the measurement of defined benefit obligation and
experience adjustments are charged/ credited to other comprehensive income. All other costs/reversals are recognised
in the standalone statement of profit and loss.
C) Compensated absences: The Company provides for the encashment of leave or leave with pay subject to
certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/ailment.
The Company makes provision for compensated absences based on an actuarial valuation by an actuary, using the
projected unit credit method. Actuarial gains and losses arising on the measurement of defined benefit obligation is
charged/ credited to the Statement of Profit and loss. The Company presents the entire leave as a current liability in
the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting
date.
u. Exceptional Items
When items of income and expense within standalone statement of profit and loss from ordinary activities are of such
size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period,
the nature and amount of such material items are disclosed separately as exceptional items.
v. Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss (excluding other comprehensive income) for
the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the
year. The weighted average number of equity shares outstanding during the year is adjusted for events such as bonus
issue, bonus element in a right issue, shares split and reverse share splits (consolidation of shares) that have changed
the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating
diluted earnings per share, the net profit or loss (excluding other comprehensive income) for the year attributable to
equity share holders and the weighted average number of shares outstanding during the year are adjusted for the
effects of all dilutive potential equity shares.
w. Operating cycle and classification of current and non - current items
Based on the nature of products / activities of the Company and the normal time between acquisition of assets and
their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the
purpose of classification of its assets and liabilities as current and non-current.
(i) An asset is considered as current when it is:
a. Expected to be realised or intended to be sold or consumed in the normal operating cycle, or
b. Held primarily for the purpose of trading, or
c. Expected to be realised within twelve months after the reporting period, or
d. Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.
(ii) All other assets are classified as non-current.
(iii) Liability is considered as current when it is:
a. Expected to be settled in the normal operating cycle, or
b. Held primarily for the purpose of trading, or
c. Due to be settled within twelve months after the reporting period, or
d. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period.
(iv) All other liabilities are classified as non-current.
x. Contributed equity
Equity shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
y. Export Incentives
Export entitlement from government authority are recognised in the profit or loss as other operating revenue when the
right to receive is established as per the terms of the scheme in respect of the exports made by the Company with no
future related cost and where there is no significant uncertainty regarding the ultimate collection of the relevant export
proceeds.
z. Critical estimates and judgements
The preparation of standalone financial statements in conformity with Ind AS which requires management to make
estimates, assumptions and exercise judgement in applying the accounting policies that affect the reported amount of
assets, liabilities and disclosure of contingent liabilities at the date of standalone financial statements and the reported
amounts of income and expenses during the year.
The management believes that these estimates are prudent and reasonable and are based upon the management''s
best knowledge of current events and actions. Actual results could differ from these estimates and differences between
actual results and estimates are recognised in the periods in which the results are known or materialised.
This note provides an overview of the areas that involved a comparatively higher degree of judgement or complexity,
and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be
different than those originally assessed.
i) Property, plant and equipment, Investment properties and Intangible assets:
Property, plant and equipment represents a significant proportion of the asset base of the Company. The change
in respect of periodic depreciation is derived after determining an estimate of an assets expected useful life and
the expected residual value at the end of its life. The useful lives and residual values of the Company''s assets are
determined by the management at the time the asset is acquired and reviewed periodically, including at each financial
year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which
may impact their life, such as changes in technology.
ii) Income Tax:
Significant judgments are involved in determining the provision for income taxes, including the amount expected to be
paid or recovered in connection with uncertain tax positions.
iii) Contingencies:
Management has estimated the possible outflow of resources at the end of each annual reporting financial year, if any,
in respect of contingencies / claim / litigations by / against the Company as it is not possible to predict the outcome of
pending matters with accuracy.
iv) Expected credit loss on financial assets:
On application of Ind AS 109, the impairment provisions of financial assets are based on assumptions about risk of
default and expected timing of collection. The Company uses judgments in making these assumptions and selecting the
inputs to the impairment calculation, based on the Company''s past history of collections, customer''s credit-worthiness,
existing market conditions as well as forward looking estimates at the end of each reporting period.
Deferred tax is recorded on temporary differences between the tax bases of assets and liabilities and their carrying
amounts, at the rates that have been enacted or substantively enacted at the reporting date. The ultimate realisation
of deferred tax assets is dependent upon the generation of future taxable profits during the periods in which those
temporary differences and tax loss carry forwards become deductible. The Company considers the expected reversal of
deferred tax liabilities and projected future taxable income in making this assessment. The amount of the deferred tax
assets considered realisable, however, could be reduced in the near term if estimates of future taxable income during
the carry forward period are reduced.
vi) Impairment of financial assets:
At each balance sheet date, based on historical default rates observed over expected life, existing market conditions
as well as forward looking estimates, the management assesses the expected credit losses on outstanding receivables.
Further, management also considers the factors that may influence the credit risk of its customer base, including the
default risk associated with industry and country in which the customer operates."
vii) Impairment of non financial assets:
Where the carrying amount of an asset or CGU exceeds its recoverable amount (fair value less costs of disposal or its
value in use), the asset is considered impaired and is written down to its recoverable amount. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. In determining fair value
less cost of disposal, recent market transactions are taken into account. If no such transactions can be identified, an
appropriate valuation model is used. These calculations are corroborated by valuation multiples or other available fair
value indicators.
viii) Defined benefit obligation:
The cost of the defined benefit plans, compensated absences and the present value of the defined benefit obligations
are based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making various
assumptions that may differ from actual developments in the future. These include the determination of the discount
rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term
nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed
at each reporting date.
ix) Leases:
Determining the lease term of contracts with renewal and termination options - Company as lessee Ind AS 116
requires the lessee to determine the lease term as the non-cancellable term of the lease, together with any periods
covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option
to terminate the lease, if it is reasonably certain not to be exercised.
The Company has several lease contracts that include extension and termination options. The Company applies
judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate
the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal
or termination. After the commencement date, the Company reassesses the lease term if there is a significant event
or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to
renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the
leased asset).When it is reasonably certain to exercise extension option and not to exercise termination option, the
Company includes such extended term and ignore termination option in determination of lease term.
The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing
rate (IBR) to measure lease liabilities. The Company has taken indicative rates from its bankers and used them for Ind
AS 116 calculation purposes.
x) Provisions:
Provision is recognised when the Company has a present obligation as a result of past event and it is probable that
an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can me made.
Provisions (excluding retirement obligation and compensated expenses) are not discounted to its present value and
are determined based on best estimate required to settle obligation at the balance sheet date. These are reviewed at
each balance sheet date adjusted to reflect the current best estimates.
Management applies valuation techniques to determine fair value of financial assets and liabilities (where active market
quotes are not available). This involves developing estimates and assumptions around volatility and dividend yield etc.
which may affect the value of financial assets and liabilities. Estimates and judgements are continuously evaluated.
These are based on historical experience and other factors including expectation of future events that may have a
financial impact on the Company and that are believed to be reasonable under the circumstances.
xii) Impairments of assets:
In assessing impairment, management estimates the recoverable amounts of each asset (in case of non-financial
assets) based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates
to assumptions about future cash flows and the determination of a suitable discount rate.
2 Recent accounting pronouncements
The Ministry of Corporate Affairs had vide notification dated 23 March 2022 notified Companies (Indian Accounting
Standards) Amendment Rules, 2022 which amended certain accounting standards, and are effective 1 April 2022.
These amendments did not have any impact on the amounts recognised in prior periods and are not expected to
significantly affect the current or future periods, as below :
i. Ind AS 1 - Presentation of Financial Statements:
The amendments require companies to disclose their material accounting policies rather than their significant
accounting policies. Accounting policy information, together with other information, is material when it can reasonably
be expected to influence decisions of primary users of general purpose financial statements. The Company does not
expect this amendment to have any significant impact in its standalone financial statements."
The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning
obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind
AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to
equal taxable and deductible temporary differences. The Company is evaluating the impact, if any, in its standalone
financial statements.
iii. Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors:
The amendments will help entities to distinguish between accounting policies and accounting estimates. The
definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the
new definition, accounting estimates are "monetary amounts in standalone financial statements that are subject to
measurement uncertainty". Entities develop accounting estimates if accounting policies require items in standalone
financial statements to be measured in a way that involves measurement uncertainty. The Company does not expect
this amendment to have any significant impact in its standalone financial statements.
Mar 31, 2018
1 Corporate Information
NRB Bearings Limited (âthe Companyâ) is a public limited company domiciled and incorporated in India in 1965. The registered and corporate office of the company is situated at Dhannur, 15, Sir P. M. Road, Fort, Mumbai 400 001, Maharashtra. The company is engaged in the manufacture of ball and roller bearings.
The separate financial statements were authorised for issue in accordance with the resolution of the directors on 21 May 2018.
Basis of Preparation
The Company has prepared its financial statements to comply in all material respects with the provisions of the Companies Act, 2013 (the Act) and rules framed thereunder and the guidelines issued by Securities and Exchange Board of India. In accordance with the notification issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 under Section 133 of the Act, with effect from 1 April 2017. Till 31 March 2017, the Company used to prepare its financial statements as per Companies (Accounting Standards) Rules, 2014 (Previous GAAP) read with rule 7 and other relevant provisions of the Act. These are the first Ind AS Financial Statements of the Company. The transition from Previous GAAP to Ind AS has been accounted for in accordance with Ind AS 101 âFirst Time Adoption of Indian Accounting Standardsâ, with 1 April 2016 being the transition date and balance for the comparative period have been restated accordingly. AS per Ind As 101, the Company has presented a reconciliation of its transition Previous GAAP to Ind AS of its total equity as at 1 April 2016 and 31 March 2017 and reconciliation of total comprehensive income and cash flow for the year ended 31 March 2017. Please refer note 48 for detailed information on the transition.
The financial statements have been prepared on a historical cost convention and accrual basis, except for the following assets and liabilities:
i) Certain financial assets and liabilities that are measured at fair value
ii) Defined benefit plans-plan assets measured at fair value
2.1 Estimation of fair value of investment properties:
The fair valuation is based on current prices in the active market for similar properties. The main inputs used are quantum, area, location, demand, age of building and trend of fair market rent, ready reckoner rate etc. This fair value is based on valuations performed by an accredited independent valuer. The fair value measurement is categorised in level 2 fair value hierarchy.
2.2 The carrying value as at 1 April, 2016 as per previous GAAP of the Investment Properties is considered as a deemed cost on the date of transition.
(ii) Rights attached to equity shares:
a) Right to receive dividend as may be approved by the Board / Annual General Meeting.
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 provisions 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 on a show of hands, has one vote if he is present in person and on a poll shall have the right to vote in proportion to his share of the paid-up capital of the Company.
Nature and purpose of reserves
i) Capital Redemption Reserve
It is created on account of merger and the same will be utilised in accordance with the provision of Companies Act 2013
ii) Securities Premium Reserve
Securities premium is used to record the premium received on issue of shares. The amount will be utilised in accordance with the provisions of the Companies Act, 2013
iii) Debenture Redemption Reserve
The Company had issued non convertible debentures and accordingly Debenture redemption reserve is required to be created pursuant to the Companies (Share capital and debentures) Rules 2014. The same will be utilised in accordance with the provision of Companies Act 2013
iv) General Reserve
General Reserve is created from time to time by way of transfer of profits from retained earnings for appropriation purpose. This reserve is a distributable reserve.
v) Retained Earnings
Retained earnings represents the accumulated profits / losses made by the Company over the years.
vi) Fair Value Gain on Equity Instruments through OCI
The Company has elected to recognise changes in the fair value of equity investments in Other Comprehensive Income. These changes are accumulated within the FVOCI equity investment reserves within equity and will be transferred to retained earnings on derecognition of these equity instruments.
The Company has not received any intimation from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/ payable as required under the said Act have been made on the basis of information available with the Company. Management believes that figures for disclosure, if any, will not be significant.
Footnotes:
i. There is no amount outstanding and due as at the balance sheet date to be credited to the Investor Education and Protection Fund.
ii. Represents interim dividend declared by the Board of Directors at their meeting dated 20 March 2018.
Note:
Excise duty on sales was included under Revenue from operations and disclosed separately under Expenses upto 30 June 2017. Post implementation of Goods and Services Tax (GST) from 1 July 2017, revenue from operations is reported net of GST and hence to that extent sale of products for the year end 31 March 2018 are not comparable.
I. Fair value hierarchy
The fair value of the financial assets and liabilities is included at the amount that would be received on selling an asset or paid on transferring a liability in an orderly transaction between market participants on 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 value is 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 underneath the table.
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, contingent consideration and indemnification asset 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 value for investment in equity instrument and mutual fund is based on the quoted market prices. Fair value of security deposits, loans is based on discounted cash flows using a discount rate determined considering companyâs incremental borrowing rate. Non current borrowings are fair valued using effective interest rates.
Fair valuation of interest rate swap and foreign currency option contracts are calculated on the basis of estimated mid-market levels, estimated bid-side or offer side levels, or on the basis of indicative bid or offer or unwind prices or on such other appropriate basis. It is derived from other proprietary or other pricing models based on certain assumptions.
Fair valuation of forward exchange contracts is determined using forward exchange rates on the balance sheet date.
The carrying amounts of Trade receivables, cash and cash equivalent, other bank balances, current investments, short term loans, other current financial assets, short term borrowings, trade payables, other current financial liabilities are considered to be approximately equal to the fair value.
III. Valuation Process
The finance department performs the calculations of financial assets and liabilities required for financial reporting purposes. This team reports directly to the chief financial officer (CFO). Discussions of valuation processes and results are held at least once every three months, in line with the quarterly reporting periods.
3 Financial risk management
The Companyâs principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include loans, trade and other receivables, investments and cash and cash equivalents that are derived directly from its operations.
The Company is exposed to credit risk, market risk and liquidity risk. The Companyâs 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 0-90 days credit on the basis of nature of customers. The credit limit policy is established considering the current economic trends of the industry and geographies in which the company is operating.
However, the trade receivables are monitored on a periodic basis for assessing any significant risk of nonrecoverability of dues and provision is created accordingly.
Bank balances and deposits are held with only high rated banks and majority of other security deposits are placed majorly with government agencies/public sector undertakings. .
B Liquidity risk
Liquidity risk is the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. This risk arises from obligations on account of the Companyâs financial liabilities such as borrowings, trade payables etc.
The Companyâs corporate finance department is responsible for liquidity and funding management and settlement. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Companyâs net liquidity position through rolling forecasts on the basis of expected cash flows.
The table below summarises the maturity profile of the Companyâs financial liabilities based on contractual undiscounted payments at each reporting date:
C Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises 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 their receivables, payables and other financial obligations which are denominated in USD, EUR, Thai Baht, CHF and JPY. The fluctuation in the exchange rate of INR relative to these currencies may have a material impact on the companyâs assets and liabilities.
Foreign currency risk management
In respect of the foreign currency transactions, the company hedges substantial exposure via forward contracts and foreign currency options, remaining exposures are unhedged since the management believes that the same is insignificant in nature and also it will be offset by the corresponding receivables and payables which will be in the nature of natural hedge.
Sensitivity to foreign currency risk
The following table demonstrates the sensitivity in above currencies with all other variables held constant. The below impact on the Companyâs profit before tax is based on changes in the fair value of unhedged foreign currency monetary assets and liabilities at balance sheet date:
Sensitivity analysis to foreign currency risk includes an exposure to foreign exchange fluctuations on long term foreign currency loans of $37 lakhs equivalent to Rs. 2,404.72 lakhs (31 March 2017 - $82.42 lakhs equivalent to Rs. 5,343.75 lakhs) that have been capitalised into the cost of the related assets and are expected to impact profit or loss over a period of 7 to 11 years in the form of adjustment to the depreciation charge.
(ii) Cash flow and fair value interest rate risk
The companyâs interest rate risk is mainly due to the long term borrowing acquired at floating interest rate. The Companyâs policy is to maintain most of its borrowing at fixed rate using interest rate swaps to hedge the exposure. During the year ended 31 March 2018 and 31 March 2017, the Companyâs borrowing at variable rate were mainly denominated in USD.
The fixed rate borrowing is carried at amortised cost, hence it is not subject to interest rate risk since the carrying amount and future cash flows will not fluctuate because of change in market interest rates.
(iii) Price Risk
The Company is exposed to price risk from its investment in equity instruments measured at fair value through other comprehensive income and mutual fund measured at fair value through profit and loss.
4 Capital Management
A Risk management
The Companyâs objectives when managing capital are to
- safeguard itâs ability to continue as a going concern, so that it 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 bank balances and total equity comprises of equity share capital, security premium, general reserve, other comprehensive income and retained earnings.
C Loan covenants
With respect to the borrowings, there are standard covenants in the loan agreements between the lenders and the Company. These covenants are monitored by the Company on a regular basis. There has been no default on the financial convenants or on the loans by the Company.
Dividends not recognised at the end of the reporting period
In addition to the above dividends, since year end the directors have recommended the payment of a final dividend of Rs. 1.2 per fully paid equity share (31 March 2017 - Rs. Nil). This proposed dividend is subject to the approval of shareholders in the ensuing annual general meeting.
5 Related Party Disclosure:
As per Ind AS 24 âRelated party Disclosuresâ, disclosure of transactions with the related parties as defined in the Accounting Standard are given below:
Footnote:
i) No amounts pertaining to related parties have been provided for as doubtful debts. Further, no amounts have either been written off or written back during the year.
ii) Dividend paid/received has not been considered by the Company as a transaction falling under the purview of Accounting Standard 18 âRelated Party Disclosuresâ.
iii) The guarantee given towards the borrowings availed by the subsidiary company was for the purpose of local sourcing of capital goods.
6 Employee benefits
As per Indian Accounting Standard-19 âEmployee Benefitsâ, the disclosure of Employee benefits as defined in the Standard are given below:
(B) Defined Benefit Plan :
(1) Contribution to Gratuity fund (funded scheme)
In accordance with Indian Accounting Standard 19, actuarial valuation was done in respect of the aforesaid defined benefit plan of gratuity based on the following assumptions:-
x Senstivity Analysis:
Significant actuarial assumptions for the detemination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The results of sensitivity analysis is given below:
xii General descriptions of Significant Defined plans:
The Company operates a 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 a qualifying insurance policy.
xiii Other Long Term Benefits:
Compensated absences recognized in the Statement of profit and loss for the current year, under the employee cost in Note 34, is Rs. 175.65 lakhs (31 March 2017 Rs. 139.44 lakhs).
7 Segment reporting
In accordance with Ind AS 108- âOperating Segmentâ, segment information has been given in the Consolidated Financial Statements of the Company, therefore, no separate disclosure on Segment information is given in these Financial Statements.
8 First time adoption of Ind AS A First Ind AS Financial statements
These are the Companyâs first separate financial statements prepared in accordance with Ind AS applicable as at 31 March 2018.
The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2014 and other relevant provisions of the Act (previous GAAP or Indian GAAP).
An explanation of how the transition from previous GAAP to Ind AS has affected the companyâs financial position, financial performance and cash flows is as follows:
i) Optional exemptions availed Deemed cost
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind aS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 Investment Property.
Accordingly, the company has elected to measure all of its property, plant and equipment, intangible assets and investment property at their previous GAAP carrying value.
Business combinations
Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combination prior to the transition date.
The company has availed the business combination exemption on first time adoption of Ind AS and accordingly the business combinations prior to date of transition have not been restated to the accounting prescribed under Ind AS 103 - Business combinations.
The company applies the requirements of Ind AS 103 - Business combinations to business combinations occurring after the date of transition to Ind AS
Investment in subsidiaries
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its subsidiaries as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition.
Accordingly, the company has elected to measure all of its investments in subsidiaries at their previous GAAP carrying value.
Long term foreign currency monetary items
A first time adopter may continue the policy adopted for accounting for exchange differences arising from translations of long-term foreign currency monetory items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP.
Accordingly, the company has elected to continue the current accoounting policy adopted for accounting of exchange differences arising from translation of long-term foreign currency monetory items.
ii) Mandatory exceptions applied Estimates
An entityâs estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP except where Ind AS required a different basis for estimates as compared to the previous GAAP.
De-recognition offinancial assets and liabilities
Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a firsttime adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entityâs choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.
The company has applied the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
The company has classified its financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
Government loans
As per Ind AS 101, If a first-time adopter did not, under its previous GAAP, recognise and measure a government loan at a below-market rate of interest on a basis consistent with Ind AS requirements, it shall use its previous GAAP carrying amount of the loan at the date of transition to Ind AS the carrying amount of the loan in the opening Ind AS balance sheet. An entity shall apply Ind AS 101 to the measurement of such loans after the date of transition to Ind AS.
The Company has applied the above exeption for itâs deferred sales tax loan and accounted the loan at itâs previous GAAP carrying value.
9 Lease rentals
The Company has taken certain vehicles on operating lease. Lease rental charged to the statement of profit and loss for the year ended 31 March 2018 Rs. 69.30 lakhs (31 March 2017 - Rs. 69.30 lakhs). The minimum lease payments to be made in future as at the year end, in respect of non-cancellable lease are follows:
Note:
The Company does not have any outstanding dilutive potential equity shares as at 31 March 2018 and 31 March 2017. Consequently, basic and diluted earnings per share of the Company remains the same.
Notes 1 to 51 form an integral part of the financial statements
This is the summary of significant accounting policies and other explanatory information referred to in our report of even date.
Mar 31, 2017
1. Rights attached to equity shares:
2. Right to receive dividend as may be approved by the Board / Annual General Meeting.
3. The equity shares are not repayable except in the case of a buy back, reduction of capital or winding up in terms of the provisions of the Companies Act, 2013.
4. 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 on a show of hands, has one vote if he is present in person and on a poll shall have the right to vote in proportion to his share of the paid- up capital of the Company.
5- Disclosures under the Micro, Small and Medium Enterprises Development Act, 2006:
6. No amounts were due and outstanding to suppliers as at the end of the accounting year on account of Principal and Interest.
7. No interest was paid during the year in terms of section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 and no amount was paid to the supplier beyond the appointed day.
8. No amount of interest is due and payable for the period of delay in making payment but without adding the interest specified under the Micro, Small and Medium Enterprises Development Act, 2006.
9. No interest was accrued and unpaid at the end of the accounting year.
10. No further interest remaining due and payable even in the succeeding years for the purpose of disallowance of a deductible expenditure under section 23 of the Micro, Small and Medium Enterprises Development Act, 2006
The above information regarding Micro, Small and Medium Enterprises has been determined on the basis of information available with the Company and has been relied upon by the Auditors.
11. Segment reporting
The Company has a single reportable business segment namely bearings for the purpose of Accounting Standard 17 on Segment Reporting.
Footnote:
12. Figures in brackets are in respect of the previous year.
13. No amounts pertaining to related parties have been provided for as doubtful debts. Further, no amounts have either been written off or written back during the year.
14. Dividend paid/received has not been considered by the Company as a transaction falling under the purview of Accounting Standard 18 "Related Party Disclosures".
15.- Lease Rentals
The Company has taken certain vehicles on operating lease. Lease rental charged to the statement of profit and loss for the year ended 31.03.2017 aggregated Rs. 69.30 lakhs (for the year ended 31.03.2016: Rs.75.39 lakhs). The minimum lease payments to be made in future as at the year end, in respect of non-cancellable lease are follows:
16. The expected rate of return on plan assets is based on the average long term rate of return expected on investments of the fund during the estimated term of obligation.
17. The assumption of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion, increment and other relevant factors.
18. The discount rate is based on prevailing market yield of government of India security as at the Balance sheet date for the estimated term of the obligation.
19. Compensated Expenses
20. Compensated Expenses recognized in the statement of profit and loss for the year, under employee benefit expense, is Rs.139.44 lakhs (for the year ended 31.03.2016 : Rs. 157.97 lakhs).
21. Pursuant to the notification issued by the Central Government extending the applicability of amendment to Accounting Standard 11 on ''The Effects of Changes in Foreign Exchange Rates'' up to March 31, 2020, which provides an option for adjustment of foreign exchange gain / loss arising on long term foreign currency borrowings against the carrying value of related fixed assets, the Company has continued to exercise the option and has adjusted exchange loss aggregating Rs. 4.99 lakhs (for the year ended 31.03.2016 : Rs. 503.90 lakhs) against the carrying value of fixed assets. The balance amount, based on aforesaid adjustments, of plant and machinery to be amortized, as at the year-end, aggregates Rs. 1436.14 lakhs (for the year ended 31.03.2016 : Rs. 1639.76 lakhs).
22. Specified Bank Notes (SBNs) and other denominations held and transacted during the period from November 8, 2016 to December 30, 2016, is given below as per MCA notification G.S.R 308(E) dated March 30, 2017:
23. Previous year figures have been regrouped / re-stated wherever necessary.
Mar 31, 2016
i) Rights attached to equity shares:
a) Right to receive dividend as may be approved by the Board / Annual General Meeting.
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 provisions 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 on a show of hands, has one vote if he is present in person and on a
poll shall have the right to vote in proportion to his share of the paid- up capital of the Company.
Footnote:
The Company had in its Board meeting dated 22nd May, 2014, accepted the proposal of its Subsidiary to change the
redemption terms of Preference Shares, earlier scheduled to be fully redeemed on 18th June, 2014. As per the revised
terms, Rs. 150 lacs was redeemed on 18th June, 2014 and the balance of Rs 50 lacs will be redeemed equally over
the period of two years on 18th June, 2015 and 18th June, 2016 with an enhanced coupon rate of 11% p.a. effective
18th June, 2014 till its redemption. Accordingly, investment of Rs 25 lacs in Preference Shares of Subsidiary is classified
as Current.
NOTE 1- Disclosures under the Micro, Small and Medium Enterprises Development Act, 2006:
a) No amounts were due and outstanding to suppliers as at the end of the accounting year on account of Principal
and Interest.
b) No interest was paid during the year in terms of section 16 of the Micro, Small and Medium Enterprises
Development Act, 2006 and no amount was paid to the supplier beyond the appointed day.
c) No amount of interest is due and payable for the period of delay in making payment but without adding the
interest specified under the Micro, Small and Medium Enterprises Development Act, 2006
d) No interest was accrued and unpaid at the end of the accounting year.
e) No further interest remaining due and payable even in the succeeding years for the purpose of disallowance of a
deductible expenditure under section 23 of the Micro, Small and Medium Enterprises Development Act, 2006
The above information regarding Micro, Small and Medium Enterprises has been determined on the basis of information
available with the Company.
Footnote:
i) Figures in brackets are in respect of the previous year.
ii) No amounts pertaining to related parties have been provided for as doubtful debts. Further, no amounts have either
been written off or written back during the year except as disclosed above.
iii) Dividend paid/received has not been considered by the Company as a transaction falling under the purview of
Accounting Standard 18 "Related Party Disclosures".
NOTE 34 - Lease Rentals
The Company has taken certain vehicles on operating lease. Lease rental charged to the statement of Profit and loss for
the year ended 31.03.2016 aggregated Rs. 75.39 lacs (for the year ended 31.03.2015: Rs. 73.13 lacs). The minimum lease
payments to be made in future as at the year end, in respect of non-cancellable lease are follows:
These Forward Foreign Exchange Contracts are entered into for hedging purposes and not for speculation purposes
ii) Interest rate swaps to hedge against fluctuations in interest rate changes: No. of contracts: 2 (as at 31.3.2015: 2)
iii) Foreign currency exposures that have not been hedged by a derivative instrument or otherwise outstanding as at
31.03.2016:
Footnotes:
(i) The expected rate of return on plan assets is based on the average long term rate of return expected on
investments of the fund during the estimated term of obligation.
(ii) The assumption of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion, increment and other relevant factors.
(iii) The discount rate is based on prevailing market yield of Government of India security as at the Balance sheet
date for the estimated term of the obligation.
b) Compensated Expenses
(i) Compensated Expenses recognized in the statement of Profit and loss for the year, under employee benefit
expense, is Rs. 157.97 lacs (for the year ended 31.03.2015 : Rs. 196.54 lacs).
NOTE 2-
Pursuant to the notification issued by the Central Government extending the applicability of amendment to Accounting
Standard 11 on ''The Effects of Changes in Foreign Exchange Rates'' upto March 31, 2020, which provides an option
for adjustment of foreign exchange gain / loss arising on long term foreign currency borrowings against the carrying
value of related fixed assets, the Company has continued to exercise the option and has adjusted exchange loss
aggregating Rs. 503.90 lacs (for the year ended 31.03.2015 : Rs. 389.35 lacs) against the carrying value of fixed
assets. The balance amount, based on aforesaid adjustments, of plant and machinery to be amortized, as at the year-
end, aggregates Rs. 1639.76 lacs (Previous year Rs. 1309.82 lacs).
NOTE 3-
Previous year''s figures have been regrouped / re-stated wherever necessary.
Mar 31, 2015
1. Corporate Information:
NRB Bearings Limited incorporated in 1965, is engaged in the
manufacture of ball and roller bearings.
As at As at
31.03.2015 31.03.2014
Rs. lacs Rs. lacs
NOTE 2 - Contingent liabilities not
provided for:
a) Income Tax 1388.62 1077.66
b) Sales Tax 316.30 230.25
c) Customs Duty 158.87 158.87
d) Bank guarantees 96.29 37.56
e) Stand by letter of credit given to
bank on behalf of a subsidiary Company 271.94 606.79
f) Corporate guarantees issued on behalf
of subsidiary
companies / group Company 5406.59 7481.38
The Company is in further appeal in respect of matters stated in a) to
c) above
NOTE 3 - Segment reporting
The Company has a single reportable business segment namely bearings
for the purpose of Accounting Standard 17 on Segment Reporting.
Footnote:
i) Figures in brackets are in respect of the previous year.
ii) No amounts pertaining to related parties have been provided for as
doubtful debts. Further, no amounts have either been written off or
written back during the year except as disclosed above.
iii) Dividend paid/received has not been considered by the Company as a
transaction falling under the purview of Accounting Standard 18
"Related Party Disclosures".
NOTE 4 - Lease Rentals
The Company has taken certain vehicles on operating lease. Lease rental
charged to the statement of profit and loss for the year ended
31.03.2015 aggregated Rs. 73.13 lacs (for the year ended 31.03.2014:
Rs. 64.73 lacs ). The minimum lease payments to be made in future as at
the year end, in respect of non-cancellable lease are follows:
Footnotes:
(i) The expected rate of return on plan assets is based on the average
long term rate of return expected on investments of the fund during the
estimated term of obligation.
(ii) The assumption of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion, increment
and other relevant factors.
(iii) The discount rate is based on prevailing market yield of
government of India security as at the Balance sheet date for the
estimated term of the obligation.
b) Compensated Expenses
(i) Compensated Expenses recognised in the statement of profit and loss
for the year, under employee benefit expense, is Rs. 196.54 lacs (for
the year ended 31.03.2014 : Rs. 85.33 lacs).
NOTE 5
Pursuant to the notification issued by the Central Government extending
the applicability of amendment to Accounting Standard 11 on ''The
Effects of Changes in Foreign Exchange Rates'' upto 31st March, 2020,
which provides an option for adjustment of foreign exchange gain / loss
arising on long term foreign currency borrowings against the carrying
value of related fixed assets, the Company has continued to exercise
the option and has adjusted exchange loss aggregating Rs. 389.35 lacs
(for the year ended 31.03.2014 : Rs. 519.38 lacs) against the carrying
value of fixed assets. The balance amount, based on aforesaid
adjustments, of plant and machinery to be amortised, as at the year-
end, aggregates Rs. 1309.82 lacs (Previous year Rs. 1042.05 lacs).
The depreciation and amortistation expense in the Statement of Profit
and Loss for the year is lower by Rs. 703.81 lacs consequent to the
change in the useful life of the assets.
NOTE 6
The Company has an investment of Rs. 1640.56 lacs in equity shares of
NRB Bearings (Thailand) Limited (NRB, Thailand) a wholly owned
subsidiary, whose net worth has eroded as per the latest audited
financial statements as at 31st March 2015. To strengthen the
operations and financial health of NRB, Thailand, the Company has
initiated several measures to increase sales (via new customer
acquisition and increased penetration of the existing customer base)
and improve cash flows. Significant efforts are being implemented to
mine synergies between the Company and NRB, Thailand thus improving
efficiencies and profitability of NRB, Thailand. The Company is
committed to NRB, Thailand as a key investment to achieve its overall
growth plan. Therefore, in view of the Management, the diminution in
value of investments in NRB, Thailand is temporary.
NOTE 7
Previous year''s figures have been regrouped / re-stated wherever
necessary.
Mar 31, 2013
1. Corporate Information:
NRB Bearings Limited incorporated in 1965, is engaged in the
manufacture of ball and roller bearings.
NOTE 2 - Segment reporting
The Company has a single reportable business segment namely bearings
for the purpose of Accounting Standard 17 on Segment Reporting.
NOTE 3 - Lease Rentals
The company has taken certain vehicles on operating lease. Lease rental
charged to the statement of profit and loss for the year ended
31.03.2013 aggregated Rs. 67.76 lacs (for the year ended 31.03.2012:
Rs. 44.72 lacs ). The minimum lease payments to be made in future as at
the year end, in respect of non-cancellable lease are follows:
NOTE 4 - Financial and Derivative Instruments
i) Forward Exchange Contracts entered into by the company that are
outstanding as at 31st March, 2013:
These Forward Foreign Exchange Contracts are entered into for hedging
purposes and not for speculation purposes
ii) Currency Swap transaction to hedge against fluctuations in exchange
rates:
iii) Interest rate swaps to hedge against fluctuations in interest rate
changes: No. of contracts: 3 (as at 31.3.2012: 4)
iv) Foreign currency exposures that have not been hedged by a
derivative instrument or other wise outstanding as at 31.03.2013:
v) Figures in brackets are the corresponding figures in respect of the
previous year.
NOTE 5
The scheme of arrangement for the demerger of industrial bearings
undertaking of the Company into NRB Industrial Bearings Limited (NIBL)
was approved by the Hon''ble high court vide its order dated 24th August
2011 on getting requisite approvals and completion of necessary
formalities.
Consequent to the vesting of the industrial bearings undertaking of the
Company in terms of the scheme, the financial statement of the Company
for the year ended 31 March 2013 do not include the operations of the
industrial bearings for the six months from 1 October 2012 to 31 March
2013 and therefore are strictly not comparable with the figures of the
previous year ended 31 March 2012.
All the assets and liabilities relating to industrial bearings business
of the Company on the appointed date have been transferred to NIBL on a
going concern basis. The excess of assets over liabilities relating to
industrial bearings business as on 1st October 2012 being the appointed
and effective date, have been adjusted in terms of the scheme against
the General reserve amounting to Rs. 6184.78 lacs.
Further as per the scheme, NIBL has allotted to the shareholders of the
Company, fully paid up equity shares in the ratio of one share for
every four shares held in NRB Bearings Limited as on record date 26th
October, 2012.
NOTE 6
On 19th April, 2011, the Board of Directors approved the scheme of
arrangement under applicable sections of Companies Act, 1956, the
merger of Trilochan Investments Company Private Limited (TICPL)
(formerly known as Trilochan Sahney Finance and Holdings Private
Limited) and the Company with effect from 1st October, 2011 viz.
appointed date. The same was approved by the Hon''ble High Court of
Judicature at Bombay on 13th January, 2012 and filed with the Registrar
of Companies on 2nd February, 2012 viz. effective date.
Consequent to the merger, accounted under pooling of interests method,
the Company has cancelled Nil (as at 31.3.2012: 37755640) equity shares
of the Company held by TICPL and equivalent number of equity shares
have been issued to equity shareholders of TICPL namely, Trilochan
Singh Sahney Trust 1 (held by the trustee in his individual name) as
consideration for the merger.
The assets taken over of TICPL, an investment Company comprise of
investments in equity shares of NRB Bearings Limited of Rs. Nil (as at
31.3.2012: 6785.63 lacs), bank balance of Rs. Nil (as at 31.3.2012: Rs.
24.58 lacs) and liabilities of Rs. Nil (as at 31.3.2012: Rs. 24.58
lacs). The reserves of TICPL namely, general reserve of Rs. Nil (as at
31.3.2012: Rs. 6172.64 lacs), securities premium of Rs. Nil (as at
31.3.2012: Rs. 601.89 lacs) and capital redemption reserve of Rs. Nil
(as at 31.3.2012: Rs. 11.10 lacs) have been accounted for at their
respective book values. The value of investments of Rs. Nil (as at
31.3.2012: Rs. 6785.63 lacs) have been adjusted against general reserve
resulting in net adjustment of Rs. Nil (as at 31.3.2012: Rs. 612.99
lacs).
NOTE 7
The company has entered into a joint venture agreement with
Schneeberger Holding AG, Switzerland to act as its exclusive agent in
India and has formed a joint venture company with effect from 15th
February, 2008 for which NRB Bearings Limited has contributed towards
its share capital on 14th May, 2008. With effect from, 1st October,
2012 the joint venture is transferred to NRB Industrial Bearings
Limited under the scheme of demerger (refer note 42). The proportionate
share in assets, liabilities, income & expenditure of the joint venture
company as on 30th September, 2012 is given below :
NOTE 8
Previous year''s figures have been regrouped / re-stated wherever
necessary.
Mar 31, 2012
1. Corporate Information:
NRB Bearings Limited incorporated in 1965, is engaged in the
manufacture of ball and roller bearings.
i) Rights attached to equity shares:
a) Right to receive dividend as may be approved by the Board / Annual
General Meeting.
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 provisions of
the Companies Act, 1956.
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
on a show of hands, has one vote if he is present in person and on a
poll shall have the right to vote in proportion to his share of the
paid-up capital of the company.
Footnotes:
i) 200, 11.5% privately placed non-convertible debentures of Rs.
1,000,000 each, redeemable at par, on 31st May, 2014. ii) Details of
repayment of Loans
iii) For the amount of current maturities of long term borrowings,
refer note 10 - Other current liabilities.
Footnote:
There are no amounts due to the suppliers covered under Micro, Small
and Medium Enterprise Development Act, 2006; this information takes
into account only those suppliers who have responded to the enquiries
made by the Company for this purpose. This has been relied upon by
auditors.
i. Refer footnote ii(a) and ii(c) in note 5 - Long term borrowings for
details of security
ii. There is no amount outstanding and due as at the balance sheet
date to be credited to the Investor Education and Protection Fund.
Note 1 - Contingent liabilities not provided for:
As at As at
31.03.2012 31.03.2011
Rs. Lacs Rs. Lacs
a) Income Tax 1035.04 812.00
b) Sales Tax 118.08 118.08
c) Customs Duty 158.87 158.87
d) Bank guarantees 7.75 3.75
e) Stand by letter of credit given to bank on
behalf of a subsidiary company 1119.36 981.20
f) Corporate guarantees issued on behalf of
subsidiary companies 2082.86 1899.85
The Company is in further appeal in respect of
matters stated in a) to c) above
NOTE 2 - Segment reporting
The Company has a single reportable business segment namely bearings
for the purpose of Accounting Standard 17 on Segment Reporting.
Footnote:
i) Figures in brackets are in respect of the previous year.
ii) No amounts pertaining to related parties have been provided for as
doubtful debts. Further, no amounts have either been written off or
written back during the year.
iii) Dividend paid has not been considered by the company as a
transaction falling under the purview of Accounting Standard 18
"Related Party Disclosures".
iii) Interest rate swaps to hedge against fluctuations in interest rate
changes: No. of contracts: 4 (as at 31.3.2011: 1)
Footnotes:
(i) The expected rate of return on plan assets is based on the average
long term rate of return expected on investments of the fund during the
estimated term of obligation.
(ii) The assumption of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion, increment
and other relevant factors.
(iii) The discount rate is based on prevailing market yield of
Government of India security as at the Balance sheet date for the
estimated term of the obligation.
b) Compensated Expenses recognised in the statement of proft and loss
for the year, under employee benefit expense, is Rs. 261.25 lacs (for
the year ended 31.03.2011 : Rs 218.64 lacs).
NOTE 3 -
On 19th April, 2011, the Board of Directors approved the scheme of
arrangement under applicable sections of Companies Act, 1956, the
merger of Trilochan Investments Company Private Limited (TICPL)
(formerly known as Trilochan Sahney Finance and Holdings Private
Limited) and the Company with effect from 1st October, 2011 viz
appointed date. The same was approved by the Hon'ble High Court of
Judicature at Bombay on 13th January, 2012 and fled with the Registrar
of Companies on 2nd February, 2012 viz. effective date.
Consequent to the merger, accounted under pooling of interests method,
the Company has cancelled 37755640 equity shares of the Company held by
TICPL and equivalent number of equity shares have been issued to equity
shareholders of TICPL namely, Trilochan Singh Sahney Trust 1 (held by
the trustee in his individual name) as consideration for the merger.
The consequent change in the register of members has been made
subsequent to 31st March, 2012 on receipt of approval from stock
exchanges.
The assets taken over of TICPL, an investment Company comprise of
investments in equity shares of NRB Bearings Limited of Rs. 6785.63
lacs, bank balance of Rs. 24.58 lacs and liabilities of Rs. 24.58 lacs.
The reserves of TICPL namely, general reserve of Rs. 6172.64 lacs,
securities premium of Rs. 601.89 lacs and capital redemption reserve of
Rs. 11.10 lacs have been accounted for at their respective book values.
The value of investments of Rs. 6785.63 lacs have been adjusted against
general reserve resulting in net adjustment of Rs. 612.99 lacs.
NOTE 4 -
The board of directors in its meeting held on 12th October, 2011
approved the demerger of the industrial bearings undertaking of the
Company into NRB Industrial Bearings Limited (NIBL), a wholly owned
subsidiary incorporated to carry out the business of manufacturing and
selling industrial bearings under the Scheme of Arrangement (the
scheme), subsequently also approved by the shareholders on 3rd
February, 2012 in an extra ordinary general meeting convened by the
court. The said scheme is subject to statutory and contractual
approvals, as may be required. Upon the scheme becoming effective, in
consideration of the transfer and vesting of the industrial bearings
undertaking in to NIBL, NIBL will allot to all shareholders of NRB
Bearings Limited, fully paid up equity shares in the ratio of one share
for every four shares held in NRB Bearings Limited. The appointed date
for the scheme is 1st October, 2012.
Considering the industrial bearings undertaking's in significant scale of
operations as compared to the Company's total operations, the demerger
of the industrial bearings undertaking will not have a material impact
on the Company's financials.
There are no capital commitment nor contingent liabilities.
Figures in brackets are the corresponding figures in respect of the
previous year.
# net after deducting shareholders' funds.
NOTE 5 -
The Revised Schedule VI has become effective from 1 April, 2011 for the
preparation of financial statements. This has significantly impacted the
disclosure and presentation made in the financial statements. Previous
year's figures have been regrouped wherever necessary.
Mar 31, 2011
As at As at
31.03.2011 31.03.2010
Rs. lacs Rs.lacs
1. Contingent liabilities not provided for:
a) Income Tax 812.00 378.92
b) Sales tax 118.08 118.08
c) Customs duty 158.87 158.87
d) Bank guarantees 3.75 13.15
e) Stand by letter of credit given to bank on
behalf of a subsidiary company 981.20
f) Corporate guarantees issued on behalf of
subsidiary companies. 1899.85 1770.28
The Company is in further appeal in respect of matters stated in a) to
c) above.
2. There are no amounts due to the suppliers covered under Micro, Small
and Medium Enterprises Development Act, 2006; this information takes
into account only those suppliers who have responded to the enquiries
made by the Company for this purpose. This has been relied upon by the
auditors.
3. As the company's activity falls within a single segment viz.
bearings and the sales substantially being in the domestic market, the
disclosure requirements of Accounting Standard 17 "Segment Reporting"
is not applicable.
4. Related party disclosures
(i) Names of related parties and nature of relationship
Sr.
no Names of related parties Nature of relationship
(a) SNL Bearings Limited Subsidiary company
(b) NRB Bearings (Thailand)
Limited Subsidiary company
(c) Schneeberger India Private
Limited A Joint Venture of the Company
(d) Mr. T. S. Sahney, Individual having substantial
interest in the voting
Executive Chairman power and the power to direct by
agreement, the financial and
operating policies of the company.
(e) Ms. H. S.Zaveri, Managing
Director Key management personnel
(f) Mr. D. S. Sahney, Key management personnel
Whole time Director
(g) New Indo Trading Company A firm where executive chairman
is a partner
(h) Mrs. H. K. Sahney Relative of executive chairman
9. Values used in calculating Earnings Per Share
The Company has allotted bonus shares in the ratio of 1:1 based on the
shareholdings as per record date of 6th September, 2010 by capitalising
the Share Premium Account. This has resulted in increase in issued and
paid up equity share capital from Rs. 969.23 lacs to Rs. 1938.45 lacs.
Accordingly, the Earnings Per Share for the year ended 31st March, 2010
have been restated to give the effect of bonus shares in accordance
with Accounting Standard 20 (AS 20) - 'Earnings per share'.
b) Compensated absenses recognised in the statement of profit and loss
account for the year, under employee cost, in Schedule 15, is Rs
218.64. Lacs (for the year ended 31.03.2010 : Rs. 112.86 Lacs).
5. Previous year's figures have been regrouped wherever necessary.
Mar 31, 2010
1. Contingent Liabilities
Contingent liabilities are disclosed in the notes on accounts.
Provision is made in the accounts if it becomes probable that an
outflow of resources embodying economic benefits will be required to
settle the obligation.
As at As at
31.03.2010 31.03.2009
Rs. lacs Rs.lacs
1. Contingent liabilities not
provided for:
a) Income Tax 378.92 60.25
b) Sales tax 118.08 46.01
c) Customs duty 158.87 158.87
d) Bank guarantees 13.15 8.00
e) Corporate guarantees issued
on behalf of subsidiary companies. 1770.28 1973.56
The Company is in further appeal in
respect of matters stated in a) to
c) above.
2. Estimated amount of contracts
remaining to be executed on capital
account and not
provided for (net of advances) 625.77 1542.17
Year ended Year ended
31.03.2010 31.03.2009
Rs. lacs Rs.lacs
3. a) The amount of exchange
differences (net): i) (credited)
/ debited to the profit and
loss account is (170.67) 971.26
ii) added to/(deducted from) the
carrying amount of fixed assets is (153.01) 555.14
b) Pursuant to the option available under the Companies (Accounting
Standards) Amendment Rules, 2009, the Company had with effect from 1st
April, 2007 changed its accounting policy wherein exchange differences
arising on long term foreign currency monetary items relating to
acquisition of depreciable capital asset has been added to or deducted
from the cost of the asset and depreciated over its balance useful
life. This had in the previous year resulted in reduction in general
reserve by Rs. 130.66 lacs (net of deferred tax Rs. 67.21 lacs).
4. The company has investments of Rs. 1174.72 lacs (as at 31.03.2009
Rs.1174.72 lacs) comprising 2484176 Equity shares of Rs.10 each and
1000000 6% Cumulative redeemable preference shares of Rs.100 each, in
SNL Bearings Limited (SNL), a subsidiary company. The company has also
granted to SNL, advances and loans of Rs.300.00 lacs (as at 31.03.2009:
Rs.300.00 lacs). Although SNL has substantial accumulated losses, in
the opinion of the management, having regard to the long term prospects
of SNL and the efforts being made to turnaround its financial position
and performance, no provision for the loss is considered necessary.
5. There are no amounts due to the suppliers covered under Micro,
Small and Medium Enterprises Development Act, 2006; this information
takes into account only those suppliers who have responded to the
enquiries made by the Company for this purpose. This has been relied
upon by the auditors.
Year ended Year ended
31.03.2010 31.03.2009
Rs. lacs Rs.lacs
6. Expenditure on Research and
Development:
a) charged to the profit and loss
account 283.53 251.11
b) capitalized to fixed assets 35.10 44.72
7. As the companys activity falls within a single segment viz.
bearings and the sales substantially being in the domestic market, the
disclosure requirements of Accounting Standard 17 "Segment Reporting",
is not applicable.
8. Related party disclosures
(i) Names of related parties and nature of relationship where control
exists
(a) SNL Bearings Limited - subsidiary company
(b) NRB Bearings (Thailand) Limited - subsidiary company
(c) Mr. T. S. Sahney, Chairman and Managing Director - individual
having substantial interest in the voting power and the power to direct
by agreement, the financial and operating policies of the company.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on NRB Bearings Ltd.
-
NRB Bearings Ltd. Tools
- Bulk Deals
-
NRB Bearings Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- Bonus
- BSE Price History
- NSE Price History
-
NRB Bearings Ltd. Key Financial Ratios
- Ratios
-
NRB Bearings Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
NRB Bearings Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
NRB Bearings Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
NRB Bearings Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
-
Stocks To Buy Today, Dec 19: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Stocks To Buy Today, Dec 18: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday -
Stocks To Buy Today, Dec 17: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
Stocks To Buy Today, Dec 16: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
India Stock Market Weekly Review: Nifty and Sensex Fall as Caution Spreads -
Stocks To Buy Today, Dec 15: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday
-
Stocks To Buy Today, Dec 12: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Market Outlook 2026: Kotak Securities Sees Nifty 50 at 30,000; THESE 4 Sectors Lead Rally, Gold To Stay Strong -
Stocks To Buy Today, Dec 10: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
D-Street Bleeds For 2nd Day! Sensex Slumps 678 Pts; Nifty Cracks 25,800; Why Stock Market Is Falling Today? -
Stocks To Buy Today, Dec 9: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
Stocks To Buy Today, Dec 8: Top 4 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday -
Stock Market Alert! Major Pre-Open Session Change From Dec 8: Full Timings, Rules & All You Need To Know -
Bank Nifty Surges: RBI’s 25 bps Rate Cut Triggers Strong Upside in Major Banking Stocks -
Closing Bell: Sensex Ends 158 pts Higher, Nifty Climbs Above 26,000; Hero MotoCorp, HAL Up 2% Each -
Stocks To Buy Today, Dec 4: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday
-
Block for 8 hours
-
Block for 12 hours
-
Block for 24 hours
-
Don't block
Sign in with Google- Male
- Female
- Others
- Under 18
- 18 to 25
- 26 to 35
- 36 to 45
- 45 to 55
- 55+