XVII. Provisions. Contingent Liabilities and Contingent Assets :
The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated. If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources embodying economic benefits or the amount of such obligation cannot be measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made. Contingent assets are not recognised but disclosed where an inflow of economic benefits is probable.
XVIII. Taxes on Income :a) Current tax:
Current tax is determined on income for the year chargeable to tax in accordance on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Current tax items are recognised in correlation to the underlying transaction either in profit or loss or OCI or directly in equity. The Company has provided for the tax liability based on the significant judgment that the taxation authority will accept the tax treatment.
b) Deferred tax:
Deferred tax is recognised for all the timing differences and is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred tax assets are recognised for all deductible temporary differences, unabsorbed losses and tax credits to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, unabsorbed losses and tax credits will be utilised. Other deferred tax assets are recognized if there is reasonable certainty that there will be sufficient future taxable profit available to realise such assets. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
XIX. Segment reporting:
The Chief Operational Decision Maker (CODM) monitors the operating results of its business Segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Operating segments are reported in a manner consistent with the internal reporting to the CODM.
Accordingly, the Board of Directors of the Company is CODM for the purpose of segment reporting. Refer Note No. 40 for segment information presented.
XX. Leases:
As a Lessee
At inception of a contract, the company assesses whether a contract is, or contains, a lease. A contract is or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the company assesses whether: (i) the contract involves the use of an identified asset (ii) the company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and (iii) the company has the right to direct the use of the asset.
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of Property, Plant and Equipment. In addition, the right-of-use asset is periodically reviewed and if any impairment then adjusted for remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
The lease liability is subsequently measured as given below:
(a) increasing the carrying amount to reflect interest on the lease liability;
(b) reducing the carrying amount to reflect the lease payments made; and
(c) remeasuring the carrying amount to reflect any reassessment or lease modifications.
It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Short-term leases and leases of low-value assets
The Company has elected not to recognise right-to-use assets and lease liabilities for short-term lease that have a lease term of 12 months or less and leases of low-value assets. The Company recognises the lease payments associated with these leases as expense on straight line basis as per the terms of the lease.
XXI. Standards issued but not vet effective
• Ministry of Corporate Affairs (“MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules from time to time. The "MCA" had notified IND AS 117, Insurance Contracts vide notification no. G.S.R 492(E) dated 12/08/2024 subject to further notification by IRDAI. IRDAI has mandated the adoption of Ind AS for insurance companies from 1 April 2026. The company is not in the business of issuing insurance contracts and none of the contracts that the company has issued fall within the scope of Ind AS 117. Accordingly, Ind AS 117, Insurance Contracts, does not have any impact on the financial statements of the company.
• MCA notified amendments to Ind AS 1 vide notification no. G.S.R.549(E) dated 13 August 2025 applicable from 1 April 2026. The amendment removes the carve out for classification of liabilities as current or non-current. The said amendment does not have material impact on the financial statements of the company as the company has met with all the covenants in the contract for borrowings.
The above fair value hierarchy explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost for which fair values are disclosed in the financial statements. To provide the indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments in to three levels prescribed is as under:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilties
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liabilty, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3 - Inputs for the assets or liabilties that are not based on observable market data (unobservable inputs)
There were no transfers between the levels during the year Valuation process
The finance department of the Company includes a team that performs the valuations of financial assets and liabilties required for financial reporting purposes, including level 3 fair values. The fair valuation of level 1 and level 2 classified assets and liabilties are readily available from the quoted pricies in the open market and rates available in secondary market respectively. The valuation method applied for various financial assets and liabilties are as follows-
1. Quoted price in the primary market (NAV) considered for the fair valuation of the current investment i.e Mutual fund. Gain / (loss) on fair valauation is recognised in profit and loss.
2. The carrying amount of trade receivable, trade pable, cash and bank balances, short term loans and advances, statutory/ receivable, short term borrowing, employee dues are considered to be the same as their fair value due to their short-term nature.
37 Financial risk management
The Company has exposure to the following risks arising from financial instruments:
I Credit Risk
II Liquid Risk
III Market Risk
Risk Management Framework
The Company's risk management is governed by policies and approved by the board of directors. Company's identifies, evaluates and hedges financial risks in close co-operation with the Company's operating units. The company has policies for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments.
The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
The audit committee oversees how management monitors compliance with the company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.
Credit Risk I
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to credit risk at the reporting date is primarily from trade receivables and loans to related parties. Credit risk has always been managed by the company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the company grants credit terms in the normal course of business. On account of the adoption of Ind AS 109, the company uses ECL model to assess the impairment loss or gain. The company uses a provision matrix to compute the ECL allowance for trade receivables and unbilled revenues. The provision matrix takes into account available external and internal credit risk factors and the company's experience for customers. The company has assessed that credit risk on loans given is insignificant based on the empirical data.
The credit risk on cash and bank balances and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
The Company reviews trade receivables on periodic basis and makes provision for doubtful debts if collection is doubtful. The Company also calculates the expected credit loss (ECL) for non-collection of receivables. The Company makes additional provision if the ECL amount is higher than the provision made for doubtful debts. In case the ECL amount is lower than the provision made for doubtful debts, the Company retains the provision made for doubtful debts without any adjustment.
The provision for doubtful debts including ECL allowances for non-collection of receivables and delay in collection, on a combined basis, was Rs. 30.96 Lacs as at March, 2026 and Rs. 36.55 Lacs as at March 31, 2025. The movement in allowances for doubtful accounts comprising provision for both non-collection of receivables and delay in collection is as follows:
II Liquid Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.
Management regularly monitors the position of cash and cash equivalents vis-a-vis projections. Assesment of maturity profiles of financial assets and libilities including debt financing plans and maintainance of balance sheet liquidity ratios are considered while reviewing the liquidity position.
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.
Ill Market Risk
Market risk is the risk that the fair value or future cash flow of a financial instrument will fluctuate because of changes in market factors. Market risk comprises three type of risks:
a) Currency Risk
b) Interest Risk
c) Price Risk
a) Currency Risk
The functional currency of the Company is Indian Rupee. The Company is exposed to currency risk on account of payables and receivables in foreign currency. Company is exposed to currency risk on account of payables and receivables in foreign currency. The average exports account for Nil (P.Y. 44.72%) of total sales which perceived to be a major risk. The imports Purchase is Rs. Nil (P.Y. Rs. 47.18 Lacs).
Company does not use derivative financial instruments for trading or speculative purposes.
b) Interest Risk
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company's position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.
According to the Company interest rate risk exposure is only for floating rate borrowings. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates.
c) Price Risk
The company's exposure to price risk arises from investments in mutual funds. The company has not undertaken any risk mitigation measures to reduce the price risk. The table below summarises the impact of increases / decreases of share price of the investments and profit for the period. The analysis is based on the assumption that the market price of those investments in Mutual Funds move by 5% point on either side with all other variables held constant.
38 Capital management
The Company's capital management is intended to maximise the return to shareholders and benefits for other stakeholders for meeting the long-term and short-term goals of the Company; and reduce the cost of capital through the optimization of the capital structure i.e. the debt and equity balance.
The Company monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
40 Contingent liabilities
a. Estimated amount of contract to be executed on Capital Account of Rs. Rs. 640.00 Lacs (P.Y. Nil ) (Against which the Company has paid Rs. 363 Lacs (P.Y.Rs. Nil).
b. Disputed Demand for VAT of Rs. 19.65 Lacs (P.Y. 19.65 Lacs) under Gujarat Value Added Tax Act._
c. Disputed Demand for GST of Rs. Nil Lacs(P.Y. 26.04 Lacs) under Gujarat Value Added Tax Act. Against which company has paid under protest of Rs. Nil (P.Y. 26.04 Lacs), which are shown under "Balance with govt' Auhorities under Other Current Assets"
d. There are certain pending labour & Employees cases against the Company, for which amount is not
_ascertainable._
41 Segment Reporting
The Company's management, consisting of the chief executive officer, the chief financial officer and the manager for corporate planning, monitors the operating results of the below business segments separately for the purpose of making decisions about resource allocation and performance assessment and accordingly, based on the principles for determination of segments given in Indian Accounting Standard 108 "Operating Segments "and in the opinion of management the Co. is primarily engaged in the business of Ball & Roller Bearings. All other activities of the Co. revolve around the main business and as such there is no separate reportable business segment.
The operations of the company are confined to India as well as outside India with export contributing to Nil % (P.Y. 44.08%) of annual turnover. Hence in view of the management India and exports market represents different geographical segment.
46 A.On 30th October 2024, the Office of Foreign Assets Control (OFAC), U.S. Department of the Treasury, designated the Company under Executive Order 14024 and included the Company's name on the Specially Designated Nationals and Blocked Persons (SDN) List, citing allegations relating to export of dual-use equipment classified under the Common High Priority Items List (CHPIL) to entities in Russia. The Company wishes to clarify that the above is OFAC's allegation and the Company strongly contests the basis of such designation. Upon becoming aware of the designation, the Company took immediate steps including:
Intimating the Stock Exchange vide letter Ref. No. Galaxy/SEC/24-25/41 dated 06th November 2024, categorically stating that the Company was "totally unaware of any Roller Bearings being used or associated with sanctioned entities or individuals";
Engaging legal counsel based in the United States specialising in OFAC matters; and
Filing an application with OFAC requesting expedited removal of the Company's name from the SDN List.
As a consequence of the above designation, during the period from 30th October 2024 to 31st March 2026, the Company has been unable to access USD and EURO denominated transactions through official banking channels, which has impacted the Company's export operations and foreign currency transactions.
The matter is currently pending before the relevant authorities. The Company, based on the advice of its legal counsel, believes that it has a strong case for removal from the SDN List; however, the timing and outcome of the proceedings remain uncertain and cannot be predicted with certainty at this stage
B. The Company has engaged the USA based law firm for removal of the Company's designation on the Specially Designated Nationals and Blocked Persons (SDN) List. The Company has incurred a significant and non-recurring expenditure of ^6.70 Crores during the review period (P.Y. ^ 2.14 crores) towards the professional fees in this regard which has been disclosed in "Other Expenses". This has significant adverse impact on the profit for the year.
47 As a consequence of the OFAC designation referred to in Note 46 above, the Company has been unable to exchange Indian Rupees into United States Dollars (USD) and Euro (EUR) through official banking channels, resulting in inability to export goods and realise export proceeds through normal official banking channels during the period from 30th October 2024 to 31st March 2026. This restriction is regulatory and involuntary in nature and does not reflect any operational or liquidity weakness of the Company. For translation purposes, the Company has used the Reserve Bank of India (RBI) reference rate as the closing exchange rate on 31st March 2026, being the most reliable officially available rate, notwithstanding the practical inability to access such rates through official market channels. Exchange differences arising on translation of foreign currency monetary items and settlement of transactions during the year have been recognised in the Profit and Loss in accordance with Ind AS 21.
48 Previous year's figures have been regrouped and rearranged wherever necessary, to make them comparable with those of current year. The impact of such regrouping is not material to the financial statements.
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