Accounting Policies of Vishal Bearings Ltd. Company

Mar 31, 2025

2. SIGNIFICANT ACCOUNTING POLICIES

(i) Basis of preparation and Presentation of Financial Statements

The Financial Statements of the Vishal Bearings Limited have been prepared in
compliance with all material aspects with the Indian Accounting standards (‘Ind
AS’) notified under section 133 including the Rules notified under the relevant
provisions of the Companies Act, 2013, (as amended from time to time) and
Presentation and disclosure requirements of Division II of Schedule III to the
Companies Act, 2013, (Ind AS Compliant Schedule III) as amended from time to
time.

The Accounting Policies adopted in the preparation of these financial statements
are consistent for all the period presented.

The Company follows indirect method prescribed in “Ind AS 7 - Statement of Cash
Flows, for presentation of its cash flows.

(ii) Basis of Measurement

The Financial statements of the Company have been prepared on the accrual
basis and going concern on a historical cost convention basis except for certain
financial instruments that are measured at fair value at the end of each reporting
period.

(iii) Functional Currency and rounding of amounts

The Company’s Financial Statements are presented in Indian National Currency
Rupees (INR) which is the functional currency of the Company, and all values are
rounded to the nearest Lakhs (Rs,00,000) except when otherwise indicated.

(iv) Current Vs. Non-Current Classification

All assets and liabilities have been classified as current or non-current as per the
Company’s normal operating cycle and other criteria set out in Schedule III of the
Act. Based on the nature of products/activities and production cycle, the
company has ascertained its operating cycle as a period not exceeding 12 months
for the purpose of classification of its assets and liabilities as current and non-

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An assets treated as current when it is:

• Expected to be realised or intended to be sold or consumed in entity’s
normal operating cycle, or

• Held primarily for the purpose of trading, or

• Expected to be realised within twelve months after the reporting period, or

• Cash or cash equivalent unless restricted from being exchanged or used to
settle a liability for at least twelve months after the reporting period.

A liability is treated as current when it is:

• Expected to be settled in entity’s normal operating cycle, or

• Held primarily for the purpose of trading, or

• Due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at
least twelve months after the reporting period.

All other assets and liabilities are classified as non-current assets and liabilities.

Deferred tax assets and deferred tax liabilities are classified as non-current assets
and non-current liabilities.

(v) Property, Plant and Equipment (including Capital Work-in-Progress) and
Depreciation

Freehold land is carried at historical cost. All other items of property, plant and
equipments are stated at historical cost less depreciation and accumulated
impairment losses, if any. Historical costs include the cost of acquisition inclusive of
all attributable cost of bringing the assets to their working condition.

Subsequent costs incurred for significant parts of an item of PPE, having different
useful lives are accounted for as a separate items(Major Components) of PPE and
other costs are included in the asset’s carrying amount, only when it is possible that
future economic benefits associated with the item will flow to the Company and
the cost of the item can be measured reliably. The carrying amount of any
component accounted for as a separate asset is derecognised when replaced. All
other repairs and maintenance are charged to standalone statement of profit and
loss during the reporting period in which they are incurred.

Capital work in progress is carried at cost, less any recognised impairment loss.
Depreciation of these assets commences when the assets are in the location and
condition necessary for them to be capable of operating in the manner intended
by management use. Advances given towards acquisition or construction of PPE
outstanding at each reporting date are disclosed as Capital Advances under
“Other non-current Assets”.

An item of PPE is de-recognised upon disposal or when no future economic benefits
are expected to arise from the continued use of the asset. Any gain or loss arising
on the disposal or retirement of an item of PPE is determined as the difference
between the sales proceeds and the carrying amount of the asset and is
recognised in the Statement of Profit and Loss.

The cost of assets not ready for intended use, as on the reporting date, is shown
under capital work-in-progress.

Schedule II to the Companies Act, 2013 prescribes useful lives for property, plant
and equipment and allows Companies to use higher/lower useful lives and residual
values if such useful lives and residual values can be technically supported and
justification for difference is disclosed in the standalone financial statements. The
management believes that the depreciation rates currently used fairly reflect its
estimate of the useful lives and residual values of property, plant and equipment.

(vi) Depreciation / Amortization

Depreciation/ amortisation on property, plant and equipments has been provided
as per Written Down Value (WDV) method considering the useful life assessed/
remaining useful life, taking into account the nature of the asset, the estimated use
of the asset on the basis of management’s best estimation of getting economic
benefits from that class of assets.

Leasehold assets are amortised over the period of lease using straight-line method
(SLM) and included in depreciation and amortization in statement of profit and loss
statement.

The estimated useful life is reviewed periodically, with the effect of any changes in
estimate being accounted for on a prospective basis.

Depreciation on additions/disposals during the year has been provided on pro-rata
basis with reference to the Numbers of days utilized.

estimated to be 20 years from the date of put to use, whereas the useful life for
said class of assets as per Schedule II is 15 years.

Gains/losses arising from disposals of assets are measured as the difference
between the net disposal proceeds and the carrying value of the asset on the
date of disposal and are recognised in the statement of profit and loss, in the
period of disposal.

(vii) Investment Properties

Property that is held for long-term rental yields or for capital appreciation or both,
and that is not used by the Company for business purposes, is classified as
investment property. Investment property is measured initially at its cost, including
related transaction costs and where applicable borrowing costs. Subsequent
expenditure is capitalised to the asset’s carrying amount only when it is probable
that future economic benefits associated with the expenditure will flow to the
company and the cost of the item can be measured reliably. All other repairs and
maintenance costs are expensed when incurred. When part of an investment
property is replaced, the carrying amount of the replaced part is derecognised.

Investment properties are depreciated using the straight-line method over their
estimated useful lives. Investment properties generally have a useful life of 25-40
years. The useful life has been determined based on technical evaluation
performed by the management’s expert.

(viii) Leases

Measurement and recognition of leases

The Company assesses at contract inception whether a contract is, or contains, a
lease. A lease is defined as ‘a contract, or part of a contract, that convey the right
to use an asset (the underlying asset) for a period of time in exchange for
consideration’.

To apply this definition, the Company assesses whether the contract meets three
key criteria which are whether:

• The contract contains an identified asset, which is either explicitly identified
in the contract or implicitly specified by being identified at the time the asset
is made available to the Company.

• The Company has the right to obtain substantially all of the economic
benefits from use of the identified asset throughout the period of use,
considering its rights within the defined scope of the contract.

• The Company has the right to direct the use of the identified asset
throughout the period of use. The Company assesses whether it has the right
to direct ‘how and for what purpose’ the asset is being used throughout the
period of use.

Company as a Lessee

The Company’s lease asset classes primarily consist of leases for land, buildings and
machinery. The Company applies a single recognition and measurement
approach for all leases, except for short-term leases and leases of low-value assets.
The Company recognizes lease liabilities to make lease payments and right-of-use
assets representing the right-to-use the underlying assets.

a) Right-of-use assets

The Company recognizes a right-of-use asset at the lease commencement
date, (i.e. the date the underlying assets is available for use).The right-of-use
asset are measured at cost, less any accumulated depreciation/amortization
and accumulated impairment losses, if any and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the
amount of lease liabilities recognized, initial direct costs incurred, and lease
payments made at or before the commencement date less any lease
incentives received.

Right-of-use assets are depreciated on a straight-line basis over the shorter of
the lease term and the estimated useful lives of the assets. The useful life of
Right-of-use assets 20 years.

b) Lease Liabilities

At the commencement date of the lease, the Company recognizes lease
liabilities measured at the present value of lease payments to be made over
the lease term. The lease payments include fixed payments (including in
substance fixed payments) less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and amounts expected to be
paid under residual value guarantees.

The lease payments also include the exercise price of a purchase option
reasonably certain to be exercised by the Company and payments of
penalties for terminating the lease, if the lease term reflects the Company
exercising the option to terminate. Variable lease payments that do not
depend on an index or a rate are recognized as expenses in the period in
which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses the
interest rate implicit in the lease or, if not readily determinable, using the
incremental borrowing rates in the country of domicile of the leases. After the
commencement date, the amount of lease liabilities is increased to reflect
the accretion of interest and reduced for the lease payments made. In
addition, the carrying amount of lease liabilities is re-measured, if there is a
modification, a change in the lease term, a change in the lease payments
(e.g. changes to future payments resulting from a change in an index or rate
used to determine such lease payments) or a change in the assessment of an
option to purchase the underlying asset.

c) Short-term leases and leases of low-value assets

The Company has elected to account for short-term leases (12 Months or less)
and leases of low-value assets using the exemption / practical expedient
given under “Ind AS 116 - Leases”. Instead of recognising a right-of-use asset
and lease liability, the payments in relation to these are recognised as an
expense in profit or loss on a straight-line basis over the lease term or on
another systematic basis if that basis is more representative of the pattern of
the Company’s benefit.

Company as a Lessor

Leases for which the Company is a lessor are classified as finance or operating

lease. Lease income from operating leases where the Company is a lessor is

recognised in income on a straight-line basis over the lease term unless the receipts
are structured to increase in line with expected general inflation to compensate for
the expected inflationary cost increases. The respective leased assets are included
in the balance sheet based on their nature.

(ix) Intangible Assets and amortization

Intangible assets are carried at cost less accumulated amortisation and
accumulated impairment losses, if any. Cost includes expenditure that is directly
attributable to the acquisition of the intangible assets.

Identifiable intangible assets are recognised when it is probable that future
economic benefits attributed to the asset will flow to the Company and the cost of
the asset can be reliably measured. Intangible assets with definite useful lives are
amortised on a straight-line basis so as to reflect the pattern in which the asset’s
economic benefits are consumed.

Gains or losses arising from de-recognition of an intangible asset are measured as
the difference between the net disposal proceeds and the carrying amount of the
asset on date of disposal and are recognised in the statement of profit and loss
when the asset is derecognised. Amortisation is provided pro rata from the date of
addition or upto the date of disposal, as the case may be.

(x) Assets held-for-sale

Non-current assets or disposal groups comprising of assets and liabilities are
classified as ‘held for sale; when all the following criteria are met -

i) If carrying amount will be recovered principally through a sale transaction
rather than through continuing use.

ii) Available for immediate sale in present condition

iii) Sale must be highly probable (>90%)

a. Management committed to a plan to sell with necessary approval

b. Active program to find a buyer initiated

c. Assets actively marketed for sale at reasonable price to its current fair
value

d. Significant changes to plan are unlikely

e. The sale transaction is expected to be completed within one year

Assets held for sale are measured at the lower of their carrying amount and the
fair value less costs to sell. Assets classified as held for sale are presented
separately in the balance sheet and are not depreciated post such
classification.

(xi) Impairment of Financial and Non-Financial Assets
In case of financial assets

The impairment provisions for Financial Assets are based on assumptions about risk
of default and expected cash loss rates. The Company uses judgement in making
these assumptions and selecting the inputs to the impairment calculation, based on
Company’s past history, existing market conditions as well as forward-looking
estimates at the end of each reporting period.

In case of non-financial assets

The carrying amounts of non-financial assets are reviewed at each reporting date
to determine if there is any indication of impairment based on internal/external

factors. Assessment of indication of impairment of an asset is made at the year end.
An impairment loss is recognized wherever the carrying amount of an assets or cash
generated units (CGU’s) exceeds its recoverable amount. The recoverable amount
the assets is the greater of the asset’s net selling price and its value in use,
Impairment loss is recognised in the statement of profit and loss.

In assessing value in use, the Company measures its ‘value in use’ on the basis of
estimated discounted cash flows of projections based on current prices. After
impairment, depreciation is provided on the revised carrying amount of the asset
over its remaining useful life.

If the recoverable amount of an asset increases in subsequent periods, the
previously recognized impairment loss may be reversed, but only to the extent that
the asset’s carrying amount does not exceed its recoverable amount. However, the
carrying value after reversal is not increased beyond the carrying value that would
have prevailed by charging usual depreciation / amortisation if there were no
impairment.

If there is a change in the circumstances that led to the recognition of the
impairment loss, and the recoverable amount of the CGU increases in subsequent
periods, the impairment loss can be reversed.

The management has tested for impairment for the assets that are subject to
potential impairment by comparing the asset’s recoverable amount with it’s
carrying amount. However, no impairment losses occurred.

(xii) Inventories

Raw material and components:

Inventories comprise of all costs of purchase, conversion and other costs incurred in
bringing the inventories to their present location and condition. Trade discount,
rebates and other similar items are deducted in determining the cost of purchase.

Raw materials are valued at the lower of cost or net realisable value. Cost is
ascertained on a moving weighted average basis, except for goods in transit which
is ascertained on a specific identification basis.

Work-in-progress (“WIP”) and Finished goods f“FG”V.

Inventories of Work-in-progress (WIP) and finished goods (FG) are carried at the
lower of cost or net realizable value. Cost of work-in-progress and finished goods,
comprises material, labour and production overheads. Fixed production overheads
are allocated on the basis of normal capacity of production facilities.

Net realisable value of work-in-progress and finished goods is determined with
reference to the estimated selling price less estimated cost of completion and
estimated costs necessary to make the sale of related finished goods as
applicable.

Stores, spares and tools

Stores, spares and tools other than obsolete and slow-moving items are carried at
cost.

(xiii) Foreign Currency Transactions
Initial Recognition

The functional currency of the Company is Indian National Rupee (INR) which is also
the presentation currency. All other currencies are accounted for as foreign

currency. Transactions denominated in foreign currencies are initially recorded at
the exchange rate prevailing at the date of transaction.

Conversion

In the financial statements of the Company, transactions in currencies other than
the functional currency are translated into the functional currency at the exchange
Rates ruling at the date of the transaction. Monetary assets and liabilities
denominated in other currencies are translated into the functional currency at
exchange rates prevailing on the reporting date. Non-monetary assets and
liabilities denominated in other currencies and measured at historical cost or fair
value are translated at the exchange rates prevailing on the dates on which such
values were determined.

Exchange Differences

All the foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation of monetary assets and liabilities denominated
in foreign currencies are recognised in the Statement of Profit and Loss in the year in
which they arise, except The gain or loss arising on translation of non-monetary
items measured at fair value is treated in line with the recognition of the gain or loss
on the change in fair value of the item (i.e. translation differences on items whose
fair value gain or loss is recognised in other comprehensive income (“OCI”) or
standalone statement profit and loss are also recognised in OCI or profit and loss,
respectively).

Foreign currency translation differences relating to liabilities incurred for purchasing
of fixed assets from foreign countries are adjusted in the carrying cost of fixed asset
for differences up to the stage where assets are is in the location and condition
necessary for it to be capable of operating in the manner intended by
management use. whereas differences arising thereafter to be recognized in the
profit and loss account.

(xiv) Revenue Recognition

Sale of goods/rendering of services (Including Revenue from contracts with
customers)

The company’s revenue from contracts with customers is mainly from the sale of
Revenue from contracts with customers is recognised when control of the goods or
services are transferred to the customer at an amount that reflects the
consideration to which the Company expects to be entitled in exchange for those
goods or services and as per terms of contract, which usually on dispatch/ delivery
of the goods or services.

The company considers whether there are other promises in the contract that are
concluded as separate performance obligations to which a portion of the
transaction price needs to be allocated. In determining the transaction price for
the sale of goods, the company considers the effects of variable consideration, the
existence of significant financing components, non-cash consideration, and
consideration payable to the customer (if any).

Revenue is recognised net of discounts, volume rebates, outgoing sales taxes/
goods and service tax and other indirect taxes. Revenues from sale of by-products
are included in revenue.

Variable Consideration:

This includes discounts, incentives, volume rebates, etc... If the consideration in a
contract includes a variable amount, the Company estimates the amount of
consideration to which it will be entitled in exchange for transferring the goods to
the customer. The variable consideration is estimated at the time of completion of
performance obligation and constrained until it is highly probable that a significant
revenue reversal in the amount of cumulative revenue recognised will not occur
when the associated uncertainty with the variable consideration is subsequently
resolved.

Contract Balances

Contract Assets: A Contract asset is the right to consideration in exchange for
goods or services transferred to the customer. If the Company performs its
obligation by transferring goods or services to a customer before the customer pays
consideration or before payment is due, a contract asset is recognised for the
earned consideration that is conditional.

Contract Liability: A contract liability is the obligation to transfer goods or services to
a customer for which the Company has received consideration (or an amount of
consideration is due) from the customer. If a customer pays consideration before
the Company transfers goods or services to the customer, a contract liability is
recognised when the payment is made or the payment is due (whichever is earlier).
Contract liabilities are recognised as revenue when the Company performs under
the contract.

As these are contracts that the company expects, and has the ability, to fulfil
through delivery of a non-financial item, these are presented as advance from
customers and are recognised as revenue as and when control of respective
commodities is transferred to customers under the agreements. The portion of the
advance where either the company does not have a unilateral right to defer
settlement beyond 12 months or expects settlement within 12 months from the
balance sheet date is classified as current liability.

Sales Return can be made by Customers having contractual right to return goods
only when authorized by the Company. An estimate is made of goods that will be
returned and a liability is recognized for this amount using best estimate based on
accumulated experience.

Interest Income

Interest income from the debt instruments is recognised, by reference to the
amortised cost and at the effective interest rate applicable.

Dividend Income

Dividend are recognised in standalone statement of profit or loss only when the
right to receive payment is established, provided it is probable that the economic
benefits associated with the dividend will flow to the Company, and the amount of
the dividend can be measured reliably.

Power generation Income

Power generation income is recognised net of power consumption expense (or
expense is net off power generation income), on the basis of electrical units
generated and eligible for captive consumption or captive consumed or sold as
shown in the power generation reports issued by the concerned authorities.

Insurance Claim

Receipt of insurance claim booked as income on settlement of claim and right to
Receive the same is established. When the company receives insurance claim for
an asset destroyed or damaged, amount adjusted from WDV of asset or from
purchase cost of new asset.

(xv) 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, and 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) Long-term employee benefits:

Compensated absences which are not expected to occur within twelve months
after the end of the period in which the employee renders the related service are
recognised as a liability at the present value of the estimated future cash outflows
expected to be made by the Company in respect of services provided by
employees up to the balance sheet date.

C) Post employment benefits:

i. Defined Contribution Plans:

The company’s provident funds 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 is determined
based on a Specific percentage of the eligible employees’ salary and
contributions are charged to the standalone statement of profit and loss of
the year, when the contributions to the respective funds are due. The
Company does not have any obligation other than the contribution payable
to the respective funds.

ii. Defined Benefits Plans:

All employees are covered under Employees’ Group Gratuity Scheme,
which is a defined benefit plan.

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 contributes to a fund maintained with an Insurance Company
on the basis of the year end liability towards future payments of gratuity to
employees, on actuarial valuation basis and the charge for current year is
debited to the standalone statement of profit and loss. Actuarial gains or
losses arising on the measurement of defined benefit obligation and
experience adjustments are charged to other comprehensive income. All
other costs/reversals are recognised in the standalone statement of profit
and loss.

iii. Bonus:

The Company provides a bonus to its those employees which are eligible for
entitlement of bonus as per the Payment of Bonus Act,1965 and treatment of
bonus expenses is charged to the statement of profit and loss account on an
accrual basis.

(xvi) Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one
entity and a financial liability or equity instrument of another entity.

A) Financial Assets

Initial recognition and measurement

Financial assets are recognized initially at fair value (either through other
comprehensive income or through statement of profit and loss), and those
measured at amortised cost.

Transaction costs that are directly attributable to the acquisition of financial
assets (other than financial assets not recorded at fair value through profit
and loss) are added to the fair value of financial assets. Transaction costs
directly attributable to the acquisition of financial assets at fair value through
profit and loss are recognised immediately in Statement of Profit and Loss.

The classification depends on the Company’s business model for managing
the financial assets and the contractual terms of the cash flows.

Subsequent measurement

For the purposes of subsequent measurement, financial assets are classified
into below categories:

• Financial assets at amortized cost;

• Financial assets including derivatives at fair value through profit or loss (FVTPL)

• Financial assets at fair value through other comprehensive income (FVTOCI)

Financial assets are not reclassified subsequent to their initial recognition,
except if and in the period the Company changes its business model for
managing financial assets.

(i) Financial assets at amortized cost:

After initial recognition, financial assets are subsequently measured at
amortized cost using effective interest rate (EIR) method, if it meets both of the
following conditions and is not designated as at FVTPL:

• The financial asset is held within a business where the objective is to hold
these assets in order to collect contractual cash flows; and

• The contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal
amount outstanding.

This category is the most relevant to the company. Amortised cost is
calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortisation is
included in finance income in the profit or loss. The losses arising from
impairment are recognised in the profit or loss.

(ii) Financial assets including derivatives at fair value through profit or loss
(FVTPL)

Any Financial instrument, which does not meet the criteria for categorisation
as at amortised cost or as Fair value through other comprehensive income, is
classified as at Fair value through profit or loss. The transaction costs directly
attributable to the acquisition of financial assets classified at fair value through
profit or loss are immediately recognised in the Statement of Profit and Loss.

In addition In addition, the Company may elect to designate a debt
instrument, which otherwise meets amortised cost or FVOCI criteria, as at
FVTPL. However, such election is allowed only if doing so reduces or eliminates
a measurement or recognition inconsistency (referred to as ‘accounting
mismatch’). The Company has not designated any debt instrument at FVTPL.

(iii) Financial assets at fair value through Other Comprehensive Income
(FVTOCI)

Financial assets are measured at fair value through Other Comprehensive
Income if these financial assets met following criteria;

•Financial assets are held within a business whose objective is achieved by
both collecting contractual cash flows and selling financial assets and

•Contractual terms of the financial asset give rise to cash flows on specified
dates that are ‘solely payments of principal and interest’(SPPI) on the
principal amount outstanding.

Debt Instruments

Debt instruments included in FVTOCI category are measured initially as well as
at each reporting date at fair value. Movement in fair value is recognized in
OCI. However, interest income, impairment losses and reversals and foreign
exchange gain or loss are recognised in the statement of profit and loss.

On derecognition of the asset, cumulative gain or loss previously recognised
in other comprehensive income is reclassified from the equity to statement of
profit and loss.

Equity Instruments

Upon initial recognition, the company has opted an irrevocable option to
measure the equity instruments at fair value through other comprehensive
income (not to be reclassifiable to statement of profit or loss). The company
subsequently measures all its equity investments as equity instruments
designated at fair value through OCI. The classification is determined on an
instrument-by-instrument basis. Gains and losses on these financial assets are
never reclassified to profit or loss.

Dividends are recognised as other income in the statement of profit and loss
when the right of payment has been established, except when the company
benefits from such proceeds as a recovery of part of the cost of the financial
asset, in which case, such gains are recorded in OCI. Equity instruments
designated at fair value through OCI are not subject to impairment
assessment.

Derecognition

A financial asset in its entirely, (or where applicable, a part of a financial
assets) is primarily derecognized (i.e. removed from the company’s balance
sheet) when;

• The right to receive cash flows from the assets has expired or,

• The company has transferred its right to receive cash flows from the asset or
retains the contractual rights to receive the cash flows of the assets has
assumed an obligation to pay the received cash flows in full without
material delay to a third party and the Company has transferred
substantially all risks and rewards of the asset or has transferred control of the
asset to a third party.

Where the entity has not transferred substantially all risks and rewards of
ownership of the financial asset, the financial asset will not be derecognised.

Where the Company has neither transferred a financial asset nor retains
substantially all risks and rewards of ownership of the financial asset, the
financial asset is derecognised. Where the Company retains control of the
financial asset, the asset is continued to be recognised to the extent of
continuing involvement in the financial asset.

On derecognition of a financial asset in it’s entirely, the differences between
the carrying amounts at the date of derecognition and the consideration
received is recognized in the Statement of Profit and Loss.

B) Financial Liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at
amortised cost or fair value through profit or loss (FVTPL). A financial liability is
classified as at FVTPL when the company intends to hold the same for trading
or is a derivative or it is designated as such on initial recognition.

The Company’s financial liabilities include trade payables and other
payables.

Equity instruments issued by the Company are classified as equity in
accordance with the substance of the contractual arrangements and the
definitions of a financial liability and an equity instrument. An equity instrument
is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities.

The Company recognises a liability to pay dividend to equity holders of the
company when the distribution is authorised, and the distribution is no longer
at the discretion of the Company. As per the corporate laws in India, a
distribution with respect to interim dividend is authorised when it is approved
by the board of directors of the Company and final dividend is authorised
when it is approved by the shareholders. A corresponding amount is
recognised directly in equity.

Derecognition

A financial liability is derecognized when the obligation under the liability is
discharged or cancelled or expired. When an existing financial liability is
replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange
or modification is treated as the derecognition of the original liability and the
recognition of a new liability. The difference in the respective amounts is
recognised in the Statement of Profit and Loss.

C) Offsetting of Financial Instruments

Financial assets and liabilities are offset and the net amount is reported in the
balance sheet where there is a legally enforceable right to offset the
recognised amounts and there is an intention to settle on a net basis or realise
the asset and settle the liability simultaneously. The legally enforceable right
must not be contingent on future events and must be enforceable in the
normal course of business and in the event of default, insolvency or
bankruptcy of the company or the counterparty.

(xvii) Borrowing Costs

General and specific borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended use or sale are
capitalized as a part of the cost of the assets. Where surplus funds are available
out of money borrowed specifically to finance a qualifying capital project, the
income generated from such short-term investments is deducted from the total
capitalised borrowing cost. All other borrowing costs are recognised as an
expense in statement of profit and loss in the period in which they are incurred.

The Capitalisation of interest on borrowings related to construction or
development projects is ceased when substantially all the activities that are
necessary to make the assets ready for their intended use are complete or when
delays occur outside of the normal course of business.

(xviii) Income Taxes

Tax expense comprises current and deferred tax.

Current Tax:

The income tax expense or credit for the period (current tax) is the tax payable
on the current period’s taxable income based on the applicable income tax
rate and laws that have been enacted or substantively enacted by the
reporting date and includes any adjustment to tax payable in respect of
previous years

Deferred Tax:

Deferred tax is recognised using balance sheet method, on all temporary
differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax base used in the computation of taxable
profit. Deferred tax liabilities are generally recognised for all taxable temporary
differences.

Such deferred tax assets and liabilities are not recognised if the temporary
difference arises from the initial recognition of assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax assets are recognised only to the extent that it is more likely than
not that they will be recovered.

The carrying amount of deferred tax assets is reviewed at the end of each
reporting period and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the deferred tax
assets to be recovered. Unrecognised deferred tax assets are re-assessed at
each reporting date and are recognised to the extent that it has become
probable that future taxable profits will allow the deferred tax asset to be
recovered.

Deferred income tax is determined using tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period and are
expected to apply in the period in which the deferred income tax liability is
settled or the deferred income tax asset realized.

The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Company
expects, at the end of the reporting period, to recover or settle the carrying
amount of its assets and liabilities.

Deferred tax assets include Minimum Alternate Tax (MAT) credit in accordance
with the tax laws in India, which is likely to give future economic benefits in the
form of availability of set off against future income tax liability. Accordingly, MAT
credit is recognised as deferred tax asset in the Balance sheet when the asset
can be measured reliably and it is probable that the future economic benefit
associated with the asset will be realised.

Deferred tax assets and liabilities are offset when there is a legally enforceable
right to offset current tax assets and liabilities and when the deferred tax
balances relate to the same taxation authority. Current tax assets and tax
liabilities are offset where the company has a legally enforceable right to offset
and intends either to settle on a net basis, or to realise the assets and settle the
liability simultaneously.

Current and deferred tax is recognised in standalone statement of profit and
loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also
recognised in other comprehensive income or directly in equity, respectively.

(xix) Cash and Cash Equivalents

For the purpose of presentation in the standalone statement of cash flows, cash
and cash equivalents includes cash on hand, deposits held at call with financial
institutions, other short-term, highly liquid investments with original maturities of
three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value, and bank
overdrafts.

---

Mar 31, 2024

1. CORPORATE INFORMATION

Vishal Bearings Ltd. (‘the company”) having its manufacturing facilities at Shapar (Veraval), Rajkot, is presently engaged in the business of manufacturing Bearing Rollers, earning Job work Income & Wind Power Generation.

The equity shares of Vishal Bearings Limited (Scrip Code 539398) listed under BSE SME Platform were migrated and admitted to dealings on the Mainboard Platform of BSE in the list of "B" Group w.e.f. 31st May 2021 vide BSE Notice No. 20210527-5 dated 27th May 2021.

2. SIGNIFICANT ACCOUNTING POLICIES(i) Basis of preparation

These financial statements are prepared to comply in all material aspects with Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 (the Act) read with Companies (Indian Accounting Standards) Rules, 2015; and other relevant provisions of Companies Act, 2013 and the rules made thereunder.

The financial statements are prepared on accrual basis and going concern basis of accounting under historical cost convention in accordance with generally accepted accounting principles in India and the relevant provisions of the Companies Act, 2013 including Indian Accounting Standards notified thereunder, except for certain financial assets liabilities measured at fair value. The accounting policies adopted in the preparation of financial statements are consistent with those of the previous year unless otherwise stated.

(ii) Use of Estimates

The preparation and presentation of financial statements requires the management to make estimates, judgements and assumptions that affect the amounts of assets and liabilities reported as on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Accounting estimates could change from period to period. Actual results could differ from these estimates. Appropriate changes in estimates are made as and when the Management becomes aware of the changes in the circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which the changes are made and if material, their effects are disclosed in the notes to the financial statements.

Information about significant areas of estimation, uncertainty, and critical judgements in applying accounting policies that may have significant impact on the amounts recognized in the financial statements are as below:

* Useful lives of property, plant & equipment

* Measurement of defined benefit obligations

* Provisions & contingencies

(iii) Property, Plant & Equipment

All the items of property, plant & equipment are stated at historical cost net of recoverable taxes, less accumulated depreciation and impairment loss, if any. The cost of an Property, Plant & Equipment comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into its present location and the condition necessary for it to be capable of operating in the manner intended by the management, and also taking into account the initial estimate of any decommissioning obligation, if any, and Borrowing Costs for the assets that necessarily take a substantial period of time to get ready for their intended use. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.

The estimated useful lives of assets are in accordance with Schedule II of the Companies Act, 2013.

Gains or losses arising from de-recognition / disposal of a Property, Plant and Equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognized / disposed off.

(iv) Depreciation / Amortization

The company has charged depreciation on Property, Plant & Equipments on Written Down Value (WDV) method on the basis of useful life / remaining useful life and in the manner as prescribed in, Part C, Schedule II of the Companies Act, 2013. Depreciation of additions/disposals during the year has been provided on pro-rata basis with reference to the nos. of days utilized.

Depreciation on additions/ disposals during the year has been provided on a prorata basis.

Details of useful life of an asset and its residual value estimated by the management:

Type of Asset	Useful Life as per management''s estimate
Factory Building	30 Years
Plant & Machinery *	20 Years
Furnace	15 Years
Electrification	15 Years
Furniture & Fixtures	10 Years
Computers	3 Years
Computer Software	6 Years
Refrigerator	5 Years
EPBX System	15 Years
Air Conditioner	5 Years
Fax Machine	15 Years
Water Filter	15 Years
Mobile & Telephone	15 Years
CCTV System	15 Years
Weighing Scale Machine	15 Years
Motor Cars	8 Years
Motorcycles	10 Years
Windmill Plant & Machinery	22 Years

In none of the cases, residual value of an asset is more than five per cent of original cost of the asset.

* For this class of asset, based on internal assessment and independent technical evaluation carried out by chartered engineer, the useful life is estimated to be 20 Years from the date of it put to use, whereas the useful life for the said class of asset as per Schedule II is 15 Years.

(v) Impairment of Assets

At each balance sheet date, the company reviews the carrying amounts of its assets to determine whether there is any indication that those assets suffered any impairment loss. If any such indication exists or when annual impairment testing for an asset is required, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. An impairment loss, if any, is recognised in the Statement of Profit and Loss to the extent, asset’s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset’s fair value less cost of disposal and value in use.

(vi) Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial Assets

Initial Recognition and Measurement

A financial asset is recognized in the balance sheet when the Company becomes party to the contractual provisions of the instrument. At initial recognition, the company measures a financial asset taking into account transactions cost that are directly attributable to the acquisition or issue of the financial asset.

Subsequent Measurement

(a) Financial Assets measured at Amortised Cost (AC)

A Financial Asset is measured at Amortised Cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the Financial Asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(b) Financial Assets measured at Fair Value through Other Comprehensive Income (FVTOCI)

A Financial Asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling Financial Assets and the contractual terms of the Financial Asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(c) Financial Assets measured at Fair Value Through Profit or Loss (FVTPL)

Financial Assets which are not classified in any of the above categories are measured at FVTPL.

INVENTORIES

Inventories of Raw Materials, Semi-Finished Goods, Finished Goods and Waste & Scrap are stated at cost or net realisable value, whichever is lower. Cost comprises all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Due allowance is estimated and

made for defective and obsolete items, wherever necessary, based on the past experience of the Company.

TRADE RECEIVABLES

Trade receivables are amounts due from customers for the sale of goods or services performed in the ordinary course of business. Trade receivables are initially recognized at their transaction amount which is considered to be its fair value and are classified as current assets as it is expected to be received within the normal operating cycle of the business.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand, and fixed deposits, that are readily convertible to know amounts of cash, and which are subject to an insignificant risk of change in value.

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals, or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Cash flows from operating, investing, and financing activities of the Company are segregated, accordingly.

NON-CURRENT INVESTMENTS

Quoted investments, being investments in Mutual Funds (not held for sale) are measured at fair value through Other Comprehensive Income.

Unquoted investments, being shares of co-operative society (not held for sale) are valued at cost in the absence of any independent market value available for the same. Also, the realizable value of the said shares in co-operative bank is equal to its face value only whenever the same gets transferred. Hence the same are valued at cost only.

TRADE PAYABLES

Trade payables are amounts due to vendors for purchase of goods or services acquired in the ordinary course of business and are classified as current liabilities to the extent it is expected to be paid within the normal operating cycle of the business.

(vii) Provisions, contingent liabilities, and contingent assets

A provision is recognised when the company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. Contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize contingent liability but discloses its existence in the financial statements.

Contingent liabilities are disclosed by way of notes to the accounts.

Contingent assets are not recognized.

(viii) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

Sales of Goods:

Sales are recognised when significant risks and rewards of ownership of goods have been passed to the buyer.

Job work Income:

Revenue is recognised on the basis of completion of services being provided. Power Generation Income:

Power generation income is recognised on the basis of electrical units generated and eligible for captive consumption or captive consumed or sold as shown in the power generation reports issued by the concerned authorities. Power generation income is booked as the per unit electricity rate, being paid by the company / actually sold by the company.

Interest:

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividend:

Dividend Income is recognised when the Company’s right to receive the amount has been established.

Insurance Claim:

Receipt of insurance claim booked as income on settlement of claim and right to receive the same is established.

(ix) Retirement Benefits and other employee benefits

Defined Contribution Plans:

Defined contribution to provident fund is charged to the profit and loss account on accrual basis.

Defined Benefit Plans:

Provision for gratuity liability is provided based on actuarial valuation made at the end of the financial year.

Leave encashment expenditure is charged to profit and loss account at the time of leave encashed and paid, if any. Bonus expenditure is charged to profit and loss account on an accrual basis.

(x) Foreign Currency Transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising on settlement of transactions is recognised as income or expense in the year in which they arise.

Monetary assets and liabilities related to foreign currency transactions outstanding at the balance sheet date are translated at the exchange rate prevailing on that date and the net gain or loss is recognized in the profit and loss account.

Foreign currency translation differences relating to liabilities incurred for purchasing of fixed assets from foreign countries are adjusted in the carrying cost of fixed asset

for differences up to the year-end in the year of acquisition, whereas differences arising thereafter to be recognized in the profit and loss account. All other foreign currency gains or losses are recognized in the profit and loss account.

(xi) Leasing

At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short term and low value leases, the Company recognizes the lease payments as an operating expense on a straightline basis over the term of the lease.

Certain lease arrangements include the option to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities include these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any leas incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

(xii) Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for intended use. Costs incurred in raising funds are amortized equally over the period for which the funds are acquired. All other borrowing costs are charged to the profit and loss account.

(xiii) Taxes on Income

Tax expenses comprise Current Tax and deferred tax charge or credit.

Current Tax:

Provision for current tax is made based on tax liability computed after considering tax allowances and exemptions, in accordance with the provisions of The Income Tax Act, 1961.

Deferred Tax:

Deferred tax assets and liability are recognized, on timing differences, being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets arising mainly on account of brought forward losses, unabsorbed depreciation, and minimum alternate tax under tax laws, are recognised, only if there is a virtual certainty of its realization, supported by convincing evidence. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed to reassure realization. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

(xiv) Earnings/(Loss) per Share

Basic earnings/(loss) per share are calculated by dividing the net profit / (loss) for the period attributable to equity shareholders by the weighted average number of equities shares outstanding during the period. The weighted average number of equities shares outstanding during the period are adjusted for any bonus shares

issued during the year and after the balance sheet date but before the date the financial statements are approved by the board of directors.

(xv) Government Grants & Assistance

This includes cash subsidy being received from State Government and District Industries Centre (DIC) for Property, Plant & Equipments being non-repayable grouped under Capital Reserve transferred to retained earnings on the date of transition.

(xvi) Segment Reporting

In accordance with Accounting Standard-17 - “Segment Reporting” issued by the Institute of Chartered Accountants of India; the Company has identified its business segment as "Manufacturing of Bearing Rollers & Other Allied Activities". There are no other primary reportable segments applicable to the company. The major and material activities of the company are restricted to only one geographical segment i.e. India, hence the secondary segment disclosures are also not applicable.

(xvii) De-recognition

The Company derecognizes a Financial Asset when the contractual rights to the cashflow from the Financial Asset expire or it transfers the Financial Asset, and the transfer qualifies for de-recognition under Ind AS 109. A Financial liability (or a part of a financial liability) is derecognized from the Company’s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.

(xviii) Offsetting

Financial Assets and Financial Liabilities are offset, and the net amount is presented in the balance sheet when, and only when, the Company has a legally enforceable right to set off the amount and it intends, either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

---

Mar 31, 2023

1. CORPORATE INFORMATION

Vishal Bearings Ltd. (‘the company”) having its manufacturing facilities at Shapar (Veraval), Rajkot, is presently engaged in the business of manufacturing Bearing Rollers, earning Job work Income & Wind Power Generation.

The equity shares of Vishal Bearings Limited (Scrip Code 539398) listed under BSE SME Platform were migrated and admitted to dealings on the Mainboard Platform of BSE in the list of "B" Group w.e.f. 31st May 2021 vide BSE Notice No. 20210527-5 dated 27th May 2021.

2. SIGNIFICANT ACCOUNTING POLICIES(i) Basis of preparation

These financial statements are prepared to comply in all material aspects with Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 (the Act) read with Companies (Indian Accounting Standards) Rules, 2015; and other relevant provisions of Companies Act, 2013 and the rules made thereunder.

The financial statements are prepared on accrual basis and going concern basis of accounting under historical cost convention in accordance with generally accepted accounting principles in India and the relevant provisions of the Companies Act, 2013 including Indian Accounting Standards notified thereunder, except for certain financial assets liabilities measured at fair value. The accounting policies adopted in the preparation of financial statements are consistent with those of the previous year unless otherwise stated.

(ii) Use of Estimates

The preparation and presentation of financial statements requires the management to make estimates, judgements and assumptions that affect the amounts of assets and liabilities reported as on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Accounting estimates can change from period to period. Actual results could differ from these estimates. Appropriate changes in estimates are made as and when the Management becomes aware of the changes in the circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which the changes are made and if material, their effects are disclosed in the notes to the financial statements.

Information about significant areas of estimation, uncertainty, and critical judgements in applying accounting policies that may have significant impact on the amounts recognized in the financial statements are as below:

* Useful lives of property, plant & equipment

* Measurement of defined benefit obligations

* Provisions & contingencies

(iii) Property, Plant & Equipment

All the items of property, plant & equipment are stated at historical cost net of recoverable taxes, less accumulated depreciation, and impairment loss, if any. The

cost of an Property, Plant & Equipment comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into its present location and the condition necessary for it to be capable of operating in the manner intended by the management, and also taking into account the initial estimate of any decommissioning obligation, if any, and Borrowing Costs for the assets that necessarily take a substantial period of time to get ready for their intended use. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.

The estimated useful lives of assets are in accordance with Schedule II of the Companies Act, 2013.

Gains or losses arising from de-recognition / disposal of a Property, Plant and Equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognized / disposed off.

(iv) Depreciation / Amortization

The company has charged depreciation on Property, Plant & Equipments on Written Down Value (WDV) method on the basis of useful life / remaining useful life and in the manner as prescribed in, Part C, Schedule II of the Companies Act, 2013. Depreciation of additions/disposals during the year has been provided on pro-rata basis with reference to the nos. of days utilized.

Depreciation on additions/ disposals during the year has been provided on a prorata basis.

Details of useful life of an asset and its residual value estimated by the management:

Type of Asset	Useful Life as per management''s estimate
Factory Building	30 Years
Plant & Machinery *	20 Years
Furnace	15 Years
Electrification	15 Years
Furniture & Fixtures	10 Years
Computers	3 Years
Computer Software	6 Years
Refrigerator	5 Years
EPBX System	15 Years
Air Conditioner	5 Years
Fax Machine	15 Years
Water Filter	15 Years
Mobile & Telephone	15 Years
CCTV System	15 Years
Weighing Scale Machine	15 Years
Motor Cars	8 Years
Motorcycles	10 Years
Windmill Plant & Machinery	22 Years

In none of the cases, residual value of an asset is more than five per cent of original cost of the asset.

* For this class of asset, based on internal assessment and independent technical evaluation carried out by chartered engineer, the useful life is estimated to be 20 Years from the date of it put to use, whereas the useful life for the said class of asset as per Schedule II is 15 Years.

(v) Impairment of Assets

At each balance sheet date, the company reviews the carrying amounts of its assets to determine whether there is any indication that those assets suffered any impairment loss. If any such indication exists or when annual impairment testing for an asset is required, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. An impairment loss, if any, is recognised in the Statement of Profit and Loss to the extent, asset’s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset’s fair value less cost of disposal and value in use.

(vi) Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial Assets

Initial Recognition and Measurement

A financial asset is recognized in the balance sheet when the Company becomes party to the contractual provisions of the instrument. At initial recognition, the company measures a financial asset taking into account transactions cost that are directly attributable to the acquisition or issue of the financial asset.

Subsequent Measurement

(a) Financial Assets measured at Amortised Cost (AC)

A Financial Asset is measured at Amortised Cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the Financial Asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(b) Financial Assets measured at Fair Value through Other Comprehensive Income (FVTOCI)

A Financial Asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling Financial Assets and the contractual terms of the Financial Asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(c) Financial Assets measured at Fair Value Through Profit or Loss (FVTPL)

Financial Assets which are not classified in any of the above categories are measured at FVTPL.

Inventories

Inventories of Raw Materials, Semi-Finished Goods, Finished Goods and Waste & Scrap are stated at cost or net realisable value, whichever is lower. Cost comprises all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the Company.

Trade Receivables

Trade receivables are amounts due from customers for the sale of goods or services performed in the ordinary course of business. Trade receivables are initially recognized at their transaction amount which is considered to be its fair value and are classified as current assets as it is expected to be received within the normal operating cycle of the business.

Cash and Cash Equivalents

Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand, and fixed deposits, that are readily convertible to know amounts of cash, and which are subject to an insignificant risk of change in value.

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals, or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Cash flows from operating, investing, and financing activities of the Company are segregated, accordingly.

Non-Current Investments

Quoted investments, being investments in Mutual Funds (not held for sale) are measured at fair value through Other Comprehensive Income.

Unquoted investments, being shares of co-operative society (not held for sale) are valued at cost in the absence of any independent market value available for the same. Also, the realizable value of the said shares in co-operative bank is equal to its face value only whenever the same gets transferred. Hence the same are valued at cost only.

Trade Payables

Trade payables are amounts due to vendors for purchase of goods or services acquired in the ordinary course of business and are classified as current liabilities to the extent it is expected to be paid within the normal operating cycle of the business.

(vii) Provisions, contingent liabilities, and contingent assets

A provision is recognised when the company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. Contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize contingent liability but discloses its existence in the financial statements.

Contingent liabilities are disclosed by way of notes to the accounts.

Contingent assets are not recognized.

(viii) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

Sales of Goods:

Sales are recognised when significant risks and rewards of ownership of goods have been passed to the buyer.

Job work Income:

Revenue is recognised on the basis of completion of services being provided. Power Generation Income:

Power generation income is recognised on the basis of electrical units generated and eligible for captive consumption or captive consumed or sold as shown in the power generation reports issued by the concerned authorities. Power generation income is booked as the per unit electricity rate, being paid by the company / actually sold by the company.

Interest:

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividend:

Dividend Income is recognised when the Company’s right to receive the amount has been established.

Insurance Claim:

Receipt of insurance claim booked as income on settlement of claim and right to receive the same is established.

(ix) Retirement Benefits and other employee benefits

Defined Contribution Plans:

Defined contribution to provident fund is charged to the profit and loss account on accrual basis.

Defined Benefit Plans:

Provision for gratuity liability is provided based on actuarial valuation made at the end of the financial year.

Leave encashment expenditure is charged to profit and loss account at the time of leave encashed and paid, if any. Bonus expenditure is charged to profit and loss account on an accrual basis.

(x) Foreign Currency Transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising on settlement of transactions is recognised as income or expense in the year in which they arise.

Monetary assets and liabilities related to foreign currency transactions outstanding at the balance sheet date are translated at the exchange rate prevailing on that date and the net gain or loss is recognized in the profit and loss account.

Foreign currency translation differences relating to liabilities incurred for purchasing of fixed assets from foreign countries are adjusted in the carrying cost of fixed asset for differences up to the year-end in the year of acquisition, whereas differences arising thereafter to be recognized in the profit and loss account. All other foreign currency gain or losses are recognized in the profit and loss account.

(xi) Leasing

At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short term and low value leases, the Company recognizes the lease payments as an operating expense on a straightline basis over the term of the lease.

Certain lease arrangements include the option to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities include these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any leas incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

(xii) Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for intended use. Costs incurred in raising funds are amortized equally over the period for which the funds are acquired. All other borrowing costs are charged to the profit and loss account.

(xiii) Taxes on Income

Tax expenses comprise Current Tax and deferred tax charge or credit.

Current Tax:

Provision for current tax is made based on tax liability computed after considering tax allowances and exemptions, in accordance with the provisions of The Income Tax Act, 1961.

Deferred Tax:

Deferred tax assets and liability are recognized, on timing differences, being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets arising mainly on account of brought forward losses, unabsorbed depreciation, and minimum alternate tax under tax laws, are recognised, only if there is a virtual certainty of its realization, supported by convincing evidence. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed to reassure realization. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

(xiv) Earnings/(Loss) per Share

Basic earnings/(loss) per share are calculated by dividing the net profit / (loss) for the period attributable to equity shareholders by the weighted average number of equities shares outstanding during the period. The weighted average number of equities shares outstanding during the period are adjusted for any bonus shares issued during the year and after the balance sheet date but before the date the financial statements are approved by the board of directors.

(xv) Government Grants & Assistance

This includes cash subsidy being received from State Government and District Industries Centre (DIC) for Property, Plant & Equipments being non-repayable grouped under Capital Reserve transferred to retained earnings on the date of transition.

(xvi) Segment Reporting

In accordance with Accounting Standard-17 - “Segment Reporting” issued by the Institute of Chartered Accountants of India; the Company has identified its business segment as "Manufacturing of Bearing Rollers & Other Allied Activities". There are no other primary reportable segments applicable to the company. The major and material activities of the company are restricted to only one geographical segment i.e. India, hence the secondary segment disclosures are also not applicable.

(xvii) De-recognition

The Company derecognizes a Financial Asset when the contractual rights to the cashflow from the Financial Asset expire or it transfers the Financial Asset, and the transfer qualifies for de-recognition under Ind AS 109. A Financial liability (or a part of a financial liability) is derecognized from the Company’s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.

(xviii) Offsetting

Financial Assets and Financial Liabilities are offset, and the net amount is presented in the balance sheet when, and only when, the Company has a legally enforceable right to set off the amount and it intends, either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

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Mar 31, 2018

1. SIGNIFICANT ACCOUNTING POLICIES

(i) Basis of preparation

These financial statements are prepared in accordance with Schedule III of the Companies Act, 2013 and under the historical cost basis of accounting and evaluated on a going concern basis, with revenues and expenses accounted for on their accrual to comply in all material aspects with the applicable accounting principles and applicable Accounting Standards notified under section 133 of the Companies Act, 2013 (The Act) read with rule 7 of Companies (Accounts) Rules, 2014. The accounting policies have been consistently applied by the Company; and the accounting policies not referred to otherwise, are in conformity with Indian Generally Accepted Accounting Principles (‘Indian GAAP’).

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year unless otherwise stated.

(ii) Use of Estimates:

The preparation of financial statements requires estimates and assumptions to be made that affect the reported balances of assets as on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Accounting estimates could change from period to period. Actual results could differ from these estimates. Appropriate changes in estimates are made as and when the Management becomes aware of the changes in the circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which the changes are made and if material, their effects are disclosed in the notes to the financial statements.

(iii) Revenue Recognition:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

Sales of Goods:

Sales are recognised when significant risks and rewards of ownership of goods have been passed to the buyer.

Power Generation Income:

Power generation income is recognised on the basis of electrical units generated and eligible for captive consumption or captive consumed or sold as shown in the power generation reports issued by the concerned authorities. Power generation income is booked as the per unit electricity rate, being paid by the company / actually sold by the company.

Interest:

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Jobwork Income:

Revenue is recognised on the basis of completion of services being provided.

(iv) Tangible Fixed Assets

Fixed assets are stated at their cost of acquisition plus all expenditure incurred for bringing the assets to their present location and condition including the installation costs, net of modvat / cenvat / other credits and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including specific financing cost till assets put to use, net charges on foreign exchange contracts and adjustment arising from foreign exchange rate variations attributable to the fixed assets are capitalised.

(v) Depreciation / Amortization

The company has charged depreciation on fixed assets on Written Down Value (WDV) method on the basis of useful life / remaining useful life and in the manner as prescribed in, Part C, Schedule II of the Companies Act, 2013. Depreciation on additions/ disposals during the year has been provided on pro-rata basis with reference to the nos. of days utilized.

Depreciation on additions/ disposals during the year has been provided on pro-rata basis.

In none of the case, residual value of an asset is more than five per cent of original cost of the asset.

* For this class of asset, based on internal assessment and independent technical evaluation carried out by chartered engineer, the useful life is estimated to be 20 Years from the date of its put to use, whereas the useful life for the said class of asset as per Schedule II is 15 Years.

(vi) Inventories

Inventories of Raw Materials, Semi-Finished Goods, Finished Goods and Waste & Scrap are stated at cost or net realisable value, whichever is lower. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. The excise duty in respect of closing inventory of finished goods is included as part of finished goods. Cost formula used is ‘Average cost’. Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the Company.

(vii) Retirement Benefits and other employee benefits Defined Contribution Plans

Defined contribution to provident fund is charged to the profit and loss account on accrual basis.

Defined Benefit Plans

Provision for gratuity liability is provided based on actuarial valuation made at the end of the financial year.

Leave encashment expenditure is charged to profit and loss account at the time of leave encashed and paid, if any. Bonus expenditure is charged to profit and loss account on accrual basis.

(viii) Foreign Currency Transactions:

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.

Foreign currency current assets and current liabilities outstanding at the balance sheet date are translated at the exchange rate prevailing on that date and the net gain or loss is recognized in the profit and loss account.

Foreign currency translation differences relating to liabilities incurred for purchasing of fixed assets from foreign countries are adjusted in the carrying cost of fixed asset for differences up to the year-end in the year of acquisition, whereas differences arising thereafter to be recognized in the profit and loss account. All other foreign currency gain or losses are recognized in the profit and loss account.

(ix) Operating Lease

Assets acquired as leases where a significant portion of risk and rewards of ownership are retained by the lessor are classified as operating lease. Lease rentals being income or expense are booked to the profit and loss account as incurred.

Initial direct costs in respect of the lease acquired are expenses off in the year in which such costs are incurred.

(x) Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Costs incurred in raising funds are amortised equally over the period for which the funds are acquired. All other borrowing costs are charged to profit and loss account.

(xi) Taxes on Income

Tax expenses comprise Current Tax / Minimum Alternate Tax (MAT) and deferred tax charge or credit.

Current Tax: Provision for current tax / Minimum Alternate Tax (MAT) is made based on tax liability computed after considering tax allowances and exemptions, in accordance with the provisions of The Income Tax Act, 1961.

Deferred Tax: Deferred tax assets and liability is recognized, on timing differences, being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets arising mainly on account of brought forward losses, unabsorbed depreciation and minimum alternate tax under tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed to reassure realisation. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

(xii) Earnings/(Loss) per Share

Basic earnings/(loss) per share are calculated by dividing the net profit / (loss) for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for any bonus shares issued during the year and also after the balance sheet date but before the date the financial statements are approved by the board of directors.

(xiii) Provisions, contingent liabilities and contingent assets

A provision is recognised when the company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.

Contingent liabilities are disclosed by way of notes to the accounts.

Contingent assets are not recognized.

(xiv) Investments

Investments being Non-Current Investments consists investments made in equity oriented mutual funds (quoted) and shares in co-operative banks (non-quoted). Investments are stated at cost of acquisition. Provision for diminution in the value of long term investments is made only if such decline is other than temporary.

(xv) Cash and Cash Equivalents

Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand, cheques on hand and short-term investments with an original maturity of three months or less.

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Cash flows from operating, investing and financing activities of the Company are segregated, accordingly.

(xvi) Government Grants & Assistance

This includes cash subsidy being received from State Government and District Industries Centre (DIC) for fixed assets being non-repayable is grouped under Capital Reserve.

(xvii) Segment Reporting

In accordance with Accounting Standard-17 - “Segment Reporting” issued by the Institute of Chartered Accountants of India, the Company has identified its business segment as “Manufacturing of Bearing Rollers & Other Allied Activities”. There are no other primary reportable segments applicable to the company. The major and material activities of the company are restricted to only one geographical segment i.e. India, hence the secondary segment disclosures are also not applicable.

(xviii) Share Issue Expenses

Portion of share issue expenses being incurred for raising the money through initial public offer for working capital purpose, are charged to profit and loss account in the relevant year.