8.1 The cost of inventories recognised as an expense during the year was Rs. In Lakhs Nil. (As at March 31, 2024: RS. In Lakhs Nil)
8.2 The cost of inventories recognised as an expenses includes Rs. In Lakhs Nil (during 2023-24 Rs. In Lakhs Nil) in respect of write-down of inventory to net realisable value, and has been reduced by Rs. In Lakhs Nil (during 2023-24 : Rs. In Lakhs Nil) in respect of the reversal of such write-down.
8.3 Inventory of Raw Material includes Material in Transit as on 31-03-2025 of Rs. In Lakhs Nil (as on 31-03-2024 Rs. In Lakhs Nil).
8.4 Inventory of Finished Stock Includes Goods in Transit- as on 31-03-2025 Rs.ln Lakhs Nil (as on 31-03-2024 Rs. In Lakhs
mill._
(c) The company has only one class of shares referred to as Equity shares having face value of Rs. 10/-. Each Holder of equity share is entitled to 1 vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholder.
Retained earnings: The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the separate financial statements of the Company and also considering the requirements of the Companies Act, 2013.
General Reserve: General Reserve is created from time to time by transfer of profits from retained earnings for appropriation purposes. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.
Other Comprehensive Income: The remeasurement gain / (loss) on net defined benefit plans is recognised in Other Comprehensive Income net of tax.
19.2 The company has not entered in to any transaction with companies struck off under section 248 of the Companies
_Act,2013._
19.3 Under the Micro, Small and Medium Enterprises Development Act, 2006, {MSMED} which came in to force from 02.10.2006, certain disclosers are required to be made relating to Micro, Small and Medium enterprises. On the basis of the information and records available with management, outstanding dues to the Micro and Small enterprise as defined in the MSMED Act, 2006 are disclosed as below and this has been reiled upon by the Auditor.:
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 forthe asset or liabilty, either directly (i.e. as prices ) or indirectly (i.e. derived from prices)
Level 3 - In puts 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 valuation 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 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.
I Credit Risk
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. In Lakhs 36.55 as at March, 2025 and Rs. In Lakhs 3.27 as at March 31, 2024. 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 44.72 % (P.Y. 73.36%) of total sales which perceived to be a major risk. The imports Purchase is Rs. In Lakhs 47.18 (P.Y. Rs. In Lakhs 199.09).
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.
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. In Lakhs Nil (P.Y. Rs. In Lakhs 332.00) (Against which the Company has paid Rs. In Lakhs Nil (P.Y.Rs. In Lakhs 159.41).
b. Disputed Demand for VAT of Rs. In Lakhs 19.55 (P.Y. Rs. In Lakhs 27.8S) under Gujarat Value Added Tax Act.
c. Disputed Demand for GST of Rs. In Lakhs 26.04 (P.Y. Rs. In Lakhs 26.04) under Gujarat Value Added Tax Act. Against which company has paid under protest of Rs. In
Lakhs 26.04 (P.Y. Rs, In Lakhs 26.04), 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 103 "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 44.08 % (P.Y. 74.73%) of annual turnover. Hence in view of the management India and exports market represents different geographical segment.
Reason for material Variance :
1. Details given to Bank are based on unaudited books of accounts immediately after the end of each quarter, hence due to clerical mistake there are difference occurred.
2. Year End Difference in Debtors and Stock is due to IMP AS 115 Effect given for reversal of Sales form books._
46 On October 30, 2024, OFAC sanctioned the Company under E.O. 14024 for exporting high priority dual-use equipment to Russia (i.e., goods on the "Common High Priority Items List" or "CHPIL”), This designation resulted in Galaxy Bearing Limited being placed on Office of Foreign Assets Control (OFAC's) List of Specially Designated Nationals and Blocked Persons ("SDN List"). OFAC mentioned that the Company has contributed or provided, directly or indirectly, funds, goods, technology, or services by, to, or for the benefit of any individual or entity appearing on OFAC's SDN List.
The Company took immediate action upon learning of the sanctions and given intimation to Stock Exchange via Ref. No. Galaxy/SEC/24-25/41 dated November 06, 2024 with repect to Company's name features in the sanctions list of the United States Department of Treasury published on 30th October, 2024 and stated that Company was "totally unaware of any Roller Bearings being used or associated with sanctioned entities or individuals.
During the period 30th October'2024 to 3Lst March 2025, the Company was unable to access USD & EURO through the official market due to OFAC Sanctioned. The company is in the process of removal of its name from the sanctions list of the United States Department of Treasury Published and has appointed a legal advisor for the purpose.
47 Borrowing cost attributable to the acquistion or construction of Qualifying Assets amounting to Rs. In Lakhs 17.50 (Previous Year Rs. In Lakhs 2.37) is capitalized by the company.
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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