1 Material accounting policies

This note provides a list of the material accounting
policies adopted in the preparation of these financial
statements. These policies have been consistently
applied to all the years presented, unless otherwise
stated.

1.1 Basis of preparation

i) Compliance with Ind AS

The financial statements comply in all material
aspects with Indian Accounting Standards
(Ind AS) notified under Section 133 of the
Companies Act, 2013 (the Act) [Companies
(Indian Accounting Standards) Rules, 2015] and
other relevant provisions of the act and relevant
amendment and rules issued thereafter.

ii) Historical cost convention

The financial statements have been prepared
on a historical cost basis, except for the
following:

a) certain financial assets and liabilities that
are measured at fair value;

b) assets held for sale - measured at fair value
less cost to sell;

c) defined benefit plans - plan assets
measured at fair value;

The standalone financial statements for the year
ended March 31, 2025 were authorised for issue
in accordance with the resolution of the Board of
Directors directors on May 15, 2025.

1.2 Segment reporting

Operating segments are reported in a manner
consistent with the internal reporting provided to the
chief operating decision maker. The chief operating
decision maker, who is responsible for allocating
resources and assessing performance of segments,
has been identified as the Board of Directors.

1.3 Foreign currency translation

i) Functional and presentation currency

Items included in the financial statements of
the company are measured using the currency
of the primary economic environment in which
the entity operates (‘the functional currency').
The Financial statements are presented in Indian

Rupee (INR) which is the Company's functional
and presentation currency.

ii) Transactions and balances

Foreign currency transactions are translated into
the functional currency using the exchange rates
at the dates of the transactions. 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 at year end exchange rates are
recognised in profit or loss.

All other foreign exchange gains and losses are
presented in the statement of profit and loss on a
net basis within other expenses.

Non-monetary items that are measured in
terms of historical cost in a foreign currency are
translated using the exchange rates at the dates
of the initial transactions.

1.4 Revenue recognition

Revenue is recognized when a customer obtains
control of a promised good or service and thus has
the ability to direct the use and obtain the benefits
from the good or service in an amount that reflects
the consideration to which the entity expects to be
entitled in exchange for those goods and services.

Revenue recognition policy

The Company has following streams of revenue:

(i) Sale of goods

(ii) Sale of Services

If a contract is separated into more than one
performance obligation, the Company allocates the
total transaction price to each performance obligation
in an amount based on the estimated relative
standalone selling prices of the promised goods or
services underlying each performance obligation.

Revenue towards satisfaction of a performance
obligation is measured at the amount of transaction
price (net of variable consideration) allocated to that
performance obligation. The transaction price of
goods sold and services rendered is net of variable
consideration on account of various discounts and
schemes offered by the Company as part of the
contract.

The Company assesses for the timing of revenue
recognition in case of each distinct performance
obligation. The Company first assesses whether the
revenue can be recognized over time as it performs if
any of the following criteria is met:

(a) The customer simultaneously consumes the
benefits as the Company performs, or

(b) The customer controls the work-in-progress, or

(c) The Company's performance does not create
an asset with alternative use to the Company
and the Company has right to payment for
performance completed till date.

I f none of the criteria above are met, the Company
recognized revenue at a point-in-time. The point-in¬
time is determined when the control of the goods or
services is transferred which is generally determined
based on when the significant risks and rewards of
ownership are transferred to the customer. Apart
from this, the Company also considers its present
right to payment, the legal title to the goods, the
physical possession and the customer acceptance in
determining the point in time where control has been
transferred.

Contracts are modified to account for changes
in contract specifications and requirements. The
Company considers contract modifications to exist
when the modification either creates new or changes
the existing enforceable rights and obligations. Most
of the contract modifications are for goods or services
that are not distinct from the existing contract due
to the significant integration service provided in the
context of the contract and are accounted for as if
they were part of that existing contract. The effect of a
contract modification on the transaction price and our
measure of progress for the performance obligation
to which it relates, is recognized as an adjustment
to revenue (either as an increase in or a reduction of
revenue) on a cumulative catch-up basis.

Revenue recognized at a point-in-time

For sale of products and sale of services, revenue is
recognized at point in time when control of goods is
transferred and service is rendered to the customer
- based on delivery terms, payment terms, customer
acceptance and other indicators of control as
mentioned above.

1.5 Income tax

The income tax expense or credit for the period is the
tax payable on the current period's taxable income
based on the applicable income tax rate adjusted
by changes in deferred tax assets and liabilities
attributable to temporary differences.

The current income tax is calculated on the basis of
the tax laws enacted or substantively enacted by the
end of the reporting period. Management periodically
evaluates position taken in tax return under applicable
tax regulations which is subject to interpretation. It
establishes appropriate tax provisions on likely tax
liabilities for the accounting period.

Deferred income tax is provided in full, using the
liability method, on temporary differences arising
between the tax bases of assets and liabilities and
their carrying amounts in the financial statements.
Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted
by the end of the reporting period and are assumed to
continue to apply when the related deferred income
tax asset is realised or the deferred income tax liability
is settled.

Deferred tax assets are recognised for all deductible
temporary differences and unused tax losses only
if it is probable that future taxable amounts will be
available to utilise those temporary differences and
losses.

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 entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or
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.

1.6 Impairment of assets

Assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss
is recognised for the amount by which the asset's
carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset's
fair value less costs of disposal and value in use.
For the purposes of assessing impairment, assets
are grouped at the lowest levels for which there are
separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or
groups of assets (cash-generating units). Non financial
assets that suffered an impairment are reviewed for
possible reversal of the impairment at the end of each
reporting period.

1.7 Cash and cash equivalents

For the purpose of presentation in the 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. Bank overdrafts are
shown within borrowings in current liabilities in the
balance sheet.

1.8 Trade receivables

Trade receivables are amounts due from customers
for goods sold or services performed in the
ordinary course of business. Trade receivables are
recognised initially at the amount of consideration
that is unconditional unless they contain significant
financing components, when they are recognised at
fair value. The company holds the trade receivables
with the objective of collecting the contractual cash
flows and therefore measures them subsequently at
amortised cost using the effective interest method,
less loss allowance.

1.9 Inventories

Raw materials and stores, work in progress, traded
and finished goods are stated at the lower of cost
and net realisable value. Cost of raw materials and
traded goods comprises cost of purchases. Cost of
work-in-progress and finished goods comprises direct
materials, direct labour and an appropriate proportion
of variable and fixed overhead expenditure, the latter
being allocated on the basis of normal operating
capacity. Cost of inventories also include all other
costs incurred in bringing the inventories to their
present location and condition. Costs are assigned
to individual items of inventory on the basis of first-
in first-out basis. Costs of purchased inventory are
determined after deducting rebates and discounts.
Net realisable value is the estimated selling price in the
ordinary course of business less the estimated costs
of completion and the estimated costs necessary to
make the sale.

1.10 Financial assets and financial liabilities

Financial assets and financial liabilities are
recognized in the balance sheets when the Company
becomes a party to the contractual provisions of
a financial instrument. Financial instruments are
initially recorded at fair value, which is normally equal
to transaction price. Transaction costs are included
in the initial measurement of financial assets and
liabilities that are not subsequently measured at fair
value through the income statement.

Financial assets categorized as loans and receivables
are measured at amortized cost using the effective
interest method. Impairment losses (primarily
allowance for doubtful accounts) are recognized
if management believes that sufficient objective
evidence exists indicating that the asset may not
be recovered. For disclosure purposes, fair values
have been calculated using valuation techniques,
mainly discounted cash flow analyses based on
observable market data. For current receivables and
liabilities (such as trade receivables and payables)
the carrying amount is considered to correspond to
fair value.

Where discounted cash flow techniques are used,
the future cash flows are determined (if not stated
explicit in the contract) based on the best assessment
by management and discounted using the market
interest rate for similar instruments. Financial
liabilities are measured at amortized cost using the
effective interest method.

Financial assets are derecognized when the
contractual rights to the cash flow have expired or
been transferred together with substantially all risks
and rewards. Financial liabilities are derecognized
when they are extinguished.

Investment in government securities that are held
for collection of contractual cash flows where those
cash flows represent solely payments of principal
and interest are measured at amortised cost. Interest
income from these financial assets is included in
finance income using the effective interest rate
method. When calculating the effective interest rate,
the company estimates the expected cash flows by
considering all the contractual terms of the financial
instrument (for example, prepayment extension,
call and similar options) but does not consider the
expected credit losses.

1.11 Property, plant and equipment (PPE), Investment
Properties and Intangible assets

Freehold land is carried at historical cost. All other
items of property, plant and equipment are stated
at historical cost less depreciation. Historical cost
includes expenditure that is directly attributable to
the acquisition of the items.

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 carrying amount of any
component accounted for as a separate asset is
derecognised when replaced. All other repairs and
maintenance are charged to profit or loss during the
reporting period in which they are incurred.

Depreciation is calculated using the straight-line
method to allocate the cost of the assets, net of their
residual values, over the estimated useful lives.

Gains and losses on disposals are determined by
comparing proceeds with carrying amount. These are
included in profit or loss within other income.

The useful lives have been determined based on
technical evaluation done by the management's
expert which are higher than those specified by
Schedule II to the Companies Act, 2013, in order to
reflect the actual usage of the assets. The residual
values are not more than 5% of the original cost of the
asset.

An asset's carrying amount is written down
immediately to its recoverable amount if the asset's
carrying amount is greater than its estimated
recoverable amount.

Investment Properties

Property that is held for long-term rental yields or for
capital appreciation or both, and that is not occupied
by the company, 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 33
years. The useful life has been determined based on
technical evaluation performed by the management's
expert.

Intangible assets

I ntangible assets are stated at initial cost less any
accumulated amortization and any impairment.

Amortization is made on a straight line basis over the
estimated useful lives and begins once the asset is
ready for its intended use. The useful lives are based
to a large extent on historical experience, the expected
application, as well as other individual characteristics
of the asset. The useful lives are:

• Software in use - 3 years

1.12 Leases

a) As lessee

Leases are recognized as a right-of-use asset
and a corresponding liability at the date at
which the leased asset is available for use by the
Company. Contracts may contain both lease and
non-lease components. The Company allocates
the consideration in the contract to the lease and
non-lease components based on their relative
stand-alone prices. However, for leases of real
estate for which the Company is a lessee, it has
elected not to separate lease and non-lease
components and instead accounts for these as
a single lease component.

Assets and liabilities arising from a lease are
initially measured on a present value basis.
Lease liabilities include the net present value of
the following lease payments:

• fixed payments (including in-substance
fixed payments), less any lease incentives
receivable

• variable lease payment that are based on
an index or a rate, initially measured using
the index or rate as at the commencement
date

• amounts expected to be payable by
the Company under residual value
guarantees

• the exercise price of a purchase option if the
Company is reasonably certain to exercise
that option, and

• payments of penalties for terminating the
lease, if the lease term reflects the Company
exercising that option.

Lease payments to be made under reasonably
certain extension options are also included
in the measurement of the liability. The lease
payments are discounted using the interest rate
implicit in the lease. If that rate cannot be readily
determined, the lessee's incremental borrowing
rate is used, being the rate that the lessee would
have to pay to borrow the funds necessary to
obtain an asset of similar value to the right-of-

use asset in a similar economic environment
with similar terms, security and conditions.

To determine the incremental borrowing rate, the
Company:

• where possible, uses recent third-party
financing received by the individual lessee
as a starting point, adjusted to reflect
changes in financing conditions since third
party financing was received

• uses a build-up approach that starts with a
risk-free interest rate adjusted for credit risk
for leases held by ‘SKF India Limited, which
does not have recent third party financing,
and

• makes adjustments specific to the lease,
e.g. term, country, currency and security.

If a readily observable amortising loan rate is
available to the individual lessee (through recent
financing or market data) which has a similar
payment profile to the lease, then the Company
use that rate as a starting point to determine the
incremental borrowing rate.

The Company is exposed to potential future
increases in variable lease payments based on an
index or rate, which are not included in the lease
liability until they take effect. When adjustments
to lease payments based on an index or rate
take effect, the lease liability is reassessed and
adjusted against the right-of-use asset.

Lease payments are allocated between principal
and finance cost. The finance cost is charged
to profit or loss over the lease period so as to
produce a constant periodic rate of interest on
the remaining balance of the liability for each
period.

Variable lease payments that depend on sales
are recognised in profit or loss in the period in
which the condition that triggers those payments
occurs.

Right-of-use assets are measured at cost
comprising the following:

• t he amount of the initial measurement of
lease liability.

• any lease payments made at or before
the commencement date less any lease
incentives received

• any initial direct costs, and restoration
costs.