Home  »  Company  »  SKF India  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of SKF India Ltd.

Dec 31, 2014

(A) Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of '' 10 per share. Each shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the equity shareholders are eligible to receive remaining assets of the Company, after distribution of all preferential amounts, in the proportion to their shareholding.

1. Employee benefits: Post-employment benefit plans

(a) Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund, which is a defined contribution plan. The Company has no obligations other than to make the specified contributions in case of employes not covered under SKF Bearings India Limited, Provident Fund Scheme. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to Provident Fund and Superannuation fund is as follows:

(b) Defined benefit plans (1) Gratuity

The Company operates a post-employment defined benefit plan that provides gratuity. The gratuity plan entitles an employee, who has rendered atleast five years of continuous service, to receive between 15 days to one month''s salary for each year of completed service at the time of retirement/exit.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Assumptions regarding future mortality are based on published statistics and mortality tables. The calculation of the defined benefit obligation is sensitive to the mortality assumptions.

The overall expected long-term rate of return on assets is 8.5%. The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories. The return is based exclusively on historical returns, without adjustments.

(2) Provident Fund

The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the administered interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors. The actuary has provided a valuation and based on the below provided assumptions, shortfall recognised in the Statement of Profit and Loss during the year is Nil (previous year Rs. 4.3 million).

(Rs. in million)

December 31, 2014 December 31, 2013

3. Contingent liabilities and commitments (to the extent not provided for) a) Contingent liabilities:

Claims against the Company not acknowledged as debts

(i) Income-tax and Surcharge 42.2 42.2

(ii) Excise duty 156.1 315.1

(iii) Sales tax 78.6 93.9

(iv) Service tax 7.8 117.0

(v) Bills discounted 459.2 249.9

(vi) Others 67.7 55.0

811.6 873.1

During the year the company has received a Transfer pricing order under section 92CA of the Income Tax Act, 1961 ("Act") proposing an adjustment of Rs. 544.1 million to the total income of the company for assessment year 2011-12. Upon receipt of the draft assessment order, the company shall prefer the option to file its objections with Dispute resolution panel under section 144C of the Act. Subsequent to filing of appeal with the Dispute resolution panel, the matter shall be heard and directions shall be issued to the Assessing officer who shall, in conformity with the directions, pass the final order under section 144C(13) of the Act and income tax demand may or may not arise. Given the fact that the company has not received the draft assessment order and that the hearings are pending before the Dispute resolution panel, the management is of the opinion that there is no tax liability against the company as on the balance sheet date.

a. Hedged foreign currency exposures at the year end : Rs. Nil (previous year : Rs. Nil)

(i) Provision for disputed statutory and other matters: This represents provisions made for probable liabilities/claims arising out of pending disputes/litigations with various regulatory authorities and those arising out of commercial transactions with vendors/others. Above provisions are affected by numerous uncertainties and management has taken all efforts to make a best estimate. Timing of outflow of resources will depend upon timing of decision of cases.

(ii) Provision for warranties: A provision is estimated for expected warranty claims in respect of products sold during the year on the basis of a technical evaluation and past experience regarding failure trends of products and costs of rectification or replacement. The timing and amount of cash flows that will arise from these matters will be determined at the time of receipt of claims.

(iii) The provision for other obligations is on account of coupons given on products sold by the Company and other retailers and distributors incentive schemes. The provision for coupons is based on the historic data/estimated figures. The timing and amount of the cash flows that will arise will be determined at the time of receipt of claims from customers, which is generally 12 to 18 months.

4. The net exchange difference arising during the year recognised in the Statement of Profit and Loss is Rs. 65.8 million gain (Previous Year Rs. 62 million loss).

5. Certain employees of SKF India Limited have been granted stock options under AB SKF Performance Share Award Agreement. Pursuant to this, AB SKF has debited Rs. 1.0 million (Previous year Rs. 0.7 million) to its Statement of Profit and Loss.

During the current year, the Company has reimbursed the cost incurred by AB SKF of Rs. 4.6 million (Previous year Rs. 5 million) for stock options granted to certain employees under AB SKF Performance Share Award.

6. Segment reporting (a) Primary Segment

The Company reviewed the disclosure of segmentwise reporting and is of the view that it manufactures Bearings and related components which is a single segment in accordance with Accounting Standard 17, ''Segment Reporting'', issued under Companies (Accounting Standards) Rules, 2006.

7. The Company has facility from banks for working capital / working capital demand loans which are secured by pari passu charge of:

a) all tangible movable properties and assets, both present and future, including stocks of Raw Materials, Semi-finished goods and Finished goods, excluding movable Machinery Spares, Tools and Accessories and Stores and Spares

b) all present and future Book Debts outstanding, Monies receivable, Claims and Bills.

There are no borrowings outstanding as at December 31, 2014 under the above said facility.

8. Related party disclosures

(i) List of Related Parties & relationship:

a) List of related parties where control exists

Sr. No. Name of the Related Party Relationship

1 Aktiebolaget SKF Holding Company

b) Names of the related parties with whom transactions were carried out and description of relationship:

Fellow subsidiary Companies (All under the common control of AB SKF)

1 SKF GmbH, Schweinfurt

2 SKF Industrie S.p.A, Torino

3 SKF Sverige AB

4 SKF USA Inc

5 SKF Argentina S.A., Buenos Aires

6 SKF Uruguay DC

7 SKF Osterreich AG., Steyr

8 Lincoln Helios (India) Limited

9 SKF International AB (Treasury Centre), Goteborg

10 SKF Mekan AB, Katrineholm

11 SKF Multitec AB, Helsingborg

12 SKF Condition Monitoring Centre, Lulea

13 SKF Coupling Systems AB, Hofors

14 SKF Actuators AB, Goteborg

15 SKF Eurotrade AB, Goteborg

16 SKF Sealing Solutions AB (former Sealpool AB), Landskrona

17 SKF Lubrications Systems Germany AG

18 SKF Danmark A/S, Hvidovre

19 SKF (U.K.) Limited, Luton

20 SKF France S.A., Montigny

21 Transrol S.A.S., Chambery

22 RKS S.A.-SKF Slewing Bearings, Avallon

23 SKF Aero France S.A., Saint-Vallier-sur-Rhone

24 SKF Espanola S.A., Madrid

25 RFT S.p.A., Villanova d''Asti

26 SKF Loziska, A.S., Prague

27 SKF Actuation System (Liestal) AG (Magnetic Elektromotoren AG)

28 SKF Bearings Bulgaria EAD

29 SKF European Distribution Centre (EDC), Tongeren

30 SKF USA Inc., Kulpsville/Lansdale, PA

31 SKF de Mexico, S.A. de C.V. Mexico D.F.

32 SKF Latin Trade S.A.

33 SKF del Peru S.A., Lima

34 SKF do Brasil Ltda., Sao Paulo

35 SKF Venezolana S.A., Caracas

36 Polyseal

37 SKF Technologies (India) Private Ltd.,

38 Peer Mechanical Parts Co Ltd

39 SKF Asia Pacific Pte. Ltd (former SKF South East Asia and Pacific Pte. Ltd.), Singapore

40 SKF China Ltd., Hong Kong

41 SKF Bearing Services Taiwan, Taipei

42 SKF Japan Ltd., Tokyo

43 SKF Shanghai Bearings Co. Ltd., Shanghai

44 SKF Korea Ltd, Pusan

45 SKF Bearing Industries (Malaysia) Sdn. Bhd, Nilai

46 SKF Malaysia Sdn. Bhd., Kuala Lumpur

47 Beijing Nankou SKF Railway Bearings Co.Ltd., Beijing

48 SKF Sealing Solutions (WUHU) Co., Ltd (former Anhui CR Seals Co. Ltd.), Anhui

49 P. T. SKF Indonesia, Jakarta

50 SKF China Company Ltd., Shanghai

51 PT Skefindo Primatama, Jakarta

52 SKF Automotive Technologies Co.

53 SKF China Sales

54 SKF Dalian Bearings & Prec. Co.

55 SKF Distribution Shanghai Co. Ltd.

56 Jaeger Industrial Co. Ltd.

57 SKF Actuation system (Pinghu) Co. Ltd. (former Jaeger (Pinghu) Precision Actuatronic Ltd.)

58 ABBA LINEAR TECH CO LTD (Taipei)

59 SKF Australia Pty. Ltd., Melbourne

60 SKF Ukraine (former Lutsk Bearing Plant), Lutsk

61 SKF B.V., Nieuwegein

62 SKF Linearsysteme GmbH, Schweinfurt

63 SKF Sealing Solutions GmbH, Leverkusen-Opladen

64 SKF South Africa (Pty) Ltd., Witfield

65 SKF Sealing Solution Austria GMBH

66 Economos India Private Ltd, New Delhi

67 Corporate office Ann Arbor

68 Ace Hahn

69 SKF Treasury Centre Asia Pacific, Singapore

70 SKF (Thailand) Ltd, Bangkok

71 SKF Philippines, Manila

72 Dalian SKF Wazhou Bearings Co. Ltd., Wafangdian

73 SKF (Jinan) Bearing & Precision Technology Co.. Ltd.

74 ABBA HITECH (SHANGHAI) CO LTD

Key Management Personnel

1 Mr. Shishir Joshipura (Managing Director)

Emloyees'' Benefit plans where there is Significant influence

1 SKF India Limited Provident Fund Scheme

2 SKF Bearings India Limited Superannuation Scheme

3 SKF Bearings India Limited Bangalore Superannuation Scheme

4 SKF Bearings India Limited Employees Gratuity Fund

5 SKF Bearings India Limited Bangalore Employees Gratuity Fund

9. Previous year''s figures have been reclassified, wherever necessary, to conform to this year''s classification.


Dec 31, 2013

1. Provident Fund

The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the administered interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors. The actuary has provided a valuation and based on the below provided assumptions, shortfall recognised in the Statement of Profit and Loss during the year is 4.3 million (previous year '' Nil).

(Rs. in million)

December 31, December 31, 2013 2012

2. Contingent liabilities and commitments (to the extent not provided for)

a) Contingent liabilities:

Claims against the Company not acknowledged as debts

(i) Income-tax and Surcharge 42.2 30.6

(ii) Excise duty 315.1 306.3

(iii) Sales tax 93.9 96.2

(iv) Service tax 117.0 116.6

(v) Bills discounted 249.9 6.9

(vi) Others 55.0 54.0

873.1 610.6

b) Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances 184.1 256.5

184.1 256.5

3. Additional disclosures relating to other provisions (as per Accounting Standard 29) (Contd.)

(i) Provision for disputed statutory and other matters: This represents provisions made for probable liabilities/claims arising out of pending disputes/litigations with various regulatory authorities and those arising out of commercial transactions with vendors/ others. Above provisions are affected by numerous uncertainties and management has taken all efforts to make a best estimate. Timing of outflow of resources will depend upon timing of decision of cases.

(ii) Provision for warranties: A provision is estimated for expected warranty claims in respect of products sold during the year on the basis of a technical evaluation and past experience regarding failure trends of products and costs of rectification or replacement. The timing and amount of cash flows that will arise from these matters will be determined at the time of receipt of claims.

(iii) The provision for other obligations is on account of coupons given on products sold by the Company and other retailers and distributors incentive schemes. The provision for coupons is based on the historic data/ estimated figures. The timing and amount of the cash flows that will arise will be determined at the time of receipt of claims from customers.

4. The net exchange difference arising during the year recognised in the Statement of Profit and Loss is Rs. 62 million loss (Previous Year Rs. 22 million loss).

5. Certain employees of SKF India Limited have been granted stock options under AB SKF Performance Share Award Agreement. Pursuant to this, AB SKF has (credited) / debited Rs. 0.7 million (Previous year Rs. (2.6) million) to its Statement of Profit and Loss. During the current year, the Company has reimbursed the cost incurred by AB SKF of Rs. 5 million (Previous year Rs. Nil) for stock options granted to certain employees under AB SKF Performance Share Award.

6. Segment reporting

(a) Primary Segment

The Company reviewed the disclosure of segmentwise reporting and is of the view that it manufactures Bearings and related components which is a single segment in accordance with Accounting Standard 17, ''Segment Reporting'', issued under Companies (Accounting Standards) Rules, 2006.

7. The Company has facility from banks for working capital / working capital demand loans which are secured by pari passu charge of :

a) all tangible movable properties and assets , both present and future, including stocks of Raw Materials, Semi-finished goods and Finished goods,excluding movable Machinery Spares, Tools and Accessories and Stores and Spares.

b) all present and future Book Debts outstanding, Monies receivable, Claims and Bills.

There are no borrowings outstanding as at 31st December 2013 under the above said facility.

8. Related party disclosures

(i) List of Related Parties & relationship:

a) List of related parties where control exists

Sr. No. Name of the Related Party

1 Aktiebolaget SKF

Relationship

Holding Company

b) Names of the related parties with whom transactions were carried out and description of relationship: Fellow subsidiary Companies (All under the common control of AB SKF)

1 SKF Actuation System (Liestal) AG (Magnetic Elektromotoren AG)

2 Oy SKF AB, Finland

3 P.T. SKF Indonesia, Indonesia

4 RFT S.p.A.,Italy

5 RKS S.A.-SKF Slewing Bearings, France

6 SKF (China) Sales Co. Ltd., China

7 SKF (Dalian) Bearings and Precision & Co. Ltd.

8 SKF (Thailand) Ltd, Thailand

9 SKF (U.K.) Limited, United Kingdom

10 SKF Actuators AB, Goteborg, Sweden

11 SKF Argentina S. A., Argentina

12 SKF Australia Pty. Ltd., Australia

13 SKF B.V., Netherlands

14 SKF Bearings Bulgaria EAD, Bulgaria

15 SKF Canada Ltd, Scarborough, Ont., Canada

16 SKF China Ltd., China

17 SKF Condition Monitoring Centre (Livingstone) Ltd., UK

18 SKF Coupling Systems AB, Hofors, Sweden

19 SKF de Mexico, S. A. de C. V. Mexico D.F., Mexico

20 SKF del Peru S.A., Peru

21 SKF do Brasil Ltda., Brazil

22 SKF Equipments, France

23 SKF Espanola S.A., Madrid, Spain

24 SKF European Distribution Centre (EDC), Belgium

25 SKF European Financial Service Centre, EFC, Nieuwegein, Netherlands

26 SKF France S.A.,France

27 SKF GmbH, Germany

28 SKF Industries S.p.A, Italy

29 SKF International AB

30 SKF Japan Ltd., Japan

31 SKF Korea Ltd, Korea

32 SKF Linearsysteme GmbH, Germany

33 SKF Malaysia Sdn. Bhd., Kuala Lumpur, Malaysia

34 SKF Osterreich AG., Austria

35 SKF Sealing Solutions AB, Sweden

36 SKF Shanghai Bearings Co. Ltd., China

37 SKF South Africa (Pty) Ltd., South Africa

38 SKF Asia Pacific Pte. Ltd., Singapore

39 SKF Sverige AB, Sweden

40 SKF Technologies India Private Ltd., India

41 SKF USA Inc., Kulpsville/Lansdale, PA, USA

42 SKF Ukraine, Ukraina

43 Transrol S.A.S., Chambery, France

44 SKF Lubrications Systems, France SAS

45 SKF Lubrications Systems, Germany AG ( formerly known as Willy Vogel AG)

46 SKF Mekan AB, Sweden

47 Berger Vogel S.r.l., Italy

48 Polyseal, USA

49 Jaeger Industrial Co., Ltd., Taiwan

50 ABBA LINEAR TECH CO LTD (Taipei), Taiwan

51 Economos India Private Ltd, New Delhi, India

52 SKF Sealing Solutions GmbH, Leverkusen-Opladen, Germany

53 SKF Linear Motion & Precision Technologies, USA

54 SKF Automotive Component Corp., Changwon (Pusan)

55 SKF Bearing Services Taiwan, Taipei

56 SKF Chilena S.A.I.C, Santiago

57 SKF International AB (Treasury Centre), Goteborg

58 SKF Bearing Industries (Malaysia) Sdn. Bhd, Nilai

59 SKF Automotive Technologies Co., China

60 SKF Lubrication Systems Japan Ltd

61 SKF Economos GmbH, Judenburg

62 SKF Actuation system(Pinghu) Co., Ltd (former Jaeger (Pinghu) Precision Actuatronic Ltd)

63 SKF Lubrication Systems USA Inc

64 Beijing Nankou SKF Railway Bearings Co.Ltd., Beijing

65 SKF Hellas S.A., Athens

66 SKF Ball Screws and Services S.p.A. (former Gamfior S.p.A)

67 SKF Automotive Bearings Company Ltd, Shangai

68 SKF Polska S.A., Poznan

69 SKF Uruguay DC

70 Lincoln Helios (India) Limited

71 SKF Lubrication Systems The Netherlands B.V.

72 SKF Condition Monitoring Center (Lulea), Sweden

73 SKF Condition Monitoring Center Inc., San Diego, CA

74 SKF South East Asia (PTE) Ltd, Singapore

75 SKF Thailand Ltd., Bangkok

76 SKF (Shanghai) Automotive Technologies Co. Ltd., China

77 Economos (Quingdao) Seal Tech Co. Ltd., China

78 SKF Denmark A/S., Broendby, Denmark

79 SKF Loziska a.s., Prague, Czech Republic

80 SKF Multitec S.P.A., Torino, Italy

81 SKF Latintrade Inc., Santiago, Colombia

82 SKF Venezoleana S.A., Venezuela

83 SKF Sealing solutions (wuhu) Co. Ltd., Anhui Province, China

84 SKF (Shanghai) Investment Consultancy Co. Ltd., Shanghai, China

85 SKF China (CEPA), Shanghai, China

86 SKF Actuation System (Taipei) Co Ltd, Taipei, Taiwan

87 SARMA, France

88 Societe Vendeennne De Roulements

89 SKF Eurotrade AB, Goteborg, Sweden

90 SKF Aero France S. A., Saint-Vallier-sur-Rhone, France

91 SKF Latin Trade S.A., Chile

92 Peer Mechanical Parts Co. Ltd., China

93 SKF China Company Ltd., Shanghai, China

94 PT Skefindo Primatama, Jakarta, Indonesia

95 SKF Dalian Bearings & Prec. Co. China

96 SKF Distribution Shanghai Co. Ltd., China

97 SNFA Bearing Ltd., Charfield, United Kingdom

98 SKF Sealing Solution Austria GMBH, Austria

Key Management Personnel

1 Mr. Shishir Joshipura (Managing Director)


Dec 31, 2012

(a) Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder on a poll are in proportion to its share of the paid-up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid. Failure to pay any amount called up on shares may lead to forfeiture of the shares. On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

(i) Provision for disputed statutory and other matter: This represents provisions made for probable liabilities/ claims arising out of pending disputes/litigations with various regulatory authorities and those arising out of commercial transactions with vendors/ others. Above provisions are affected by numerous uncertainties and management has taken all efforts to make a best estimate. Timing of outflow of resources will depend upon timing of decision of cases.

(ii) Provision for warranties: A provision is estimated for expected warranty claims in respect of products sold during the year on the basis of a technical evaluation and past experience regarding failure trends of products and costs of rectification or replacement.

(iii) The provision for other obligations is on account of coupons given on products sold by the Company and other retailers and distributors incentive schemes. The provision for coupons is based on the historic data/ estimated figures. The timing and amount of the cash flows that will arise will be determined at the time of receipt of claims from customers.

a Cost of shares of Rs. 500 in various Co-operative Housing Societies, held under Bye-laws of the Society in respect of residential flats are included under ''Buildings''.

b The Company has leased following assets to SKF Technologies India Private Limited under operating lease. The carrying amount of the assets given on operating lease and depreciation thereon for the period are:

Provident Fund

The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the administered interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities during the year ended December 31, 2011.The actuary has accordingly provided a valuation and based on the below provided assumptions, shortfall recognised in the Statement of Profit and Loss during the year is Nil (previous year Rs. 83.5 million).

1. The net exchange difference arising during the year recognised in the Statement of Profit and Loss is Rs. 22 million loss (Previous Year Rs. 154 million loss).

2. Certain employees of SKF India Limited have been granted stock options under AB SKF Performance Share Award Agreement. Pursuant to this, AB SKF has (credited) / debited Rs. (2.6) million (Previous year Rs. 12.8 million) to its Statement of Profit and Loss.

During the current year, the Company has reimbursed the cost incurred by AB SKF of Rs. Nil (Previous year Rs. 3 million) for stock options granted to certain employees under AB SKF Performance Share Award 2009.

3. Segment reporting

The Company reviewed the disclosure of segmentwise reporting and is of the view that it manufactures Bearings and related components which is a single segment in accordance with Accounting Standard 17, ''Segment Reporting'', issued under Companies (Accounting Standards) Rules, 2006.

4. The Company has facility from banks for working capital / working capital demand loans which are secured by pari passu charge of :

a) all tangible movable properties and assets, both present and future, including stocks of Raw Materials, Semi-finished goods and Finished goods, excluding movable Machinery Spares, Tools and Accessories and Stores and Spares

b) all present and future Book Debts outstanding, Monies receivable, Claims and Bills. There are no borrowings outstanding as at 31 December 2012 under the above said facility


Dec 31, 2010

(1) The company reviewed the disclosure of segmentwise reporting and is of the view that it manufactures Bearings and related components which is a single segment in accordance with Accounting Standard 17, Segment Reporting, issued under Companies (Accounting Standards) Rules, 2006.

(2) In accordance wih Accounting Standard 18, Related party Disclosures, issued under Companies (Accounting Standards) Rules, 2006, the Company has compiled the required information in the attached table.

(i) List of Related Parties & relationship:

Holding Company

AB SKF (Head Office) Goteborq, Sweden

Sr. Name of the Related Party No.

Affiliate Companies (All under the common control of AB SKF)

1 SKF Acuation System (Liestal) AG (Magnetic Elektromotoren AG)

2 Oy SKF AB, Finland

3 P.T. SKF Indonesia, Indonesia

4 RFT S.p.A., Italy

5 RKS S.A.TSKF Slewing Bearings, France

6 SKF (China) Sales Co. Ltd., China

7 SKF (Dalian) Bearings and Precision & Co. Ltd.

8 SKF (Thailand) Ltd, Thailand

9 SKF (U.K.) Limited, United Kingdom

10 SKF Actuators AB, Goteborg, Sweden

11 SKF Argentina S.A., Argentina

12 SKF Australia Pty. Ltd., Australia

13 SKF B.V., Netherlands

14 SKF Bearings Bulgaria EAD, Bulgaria

15 SKF Canada Ltd, Scarborough, Ont. Canada

16 SKF China Ltd., China

17 SKF Condiion Monioring Cenre (Livingsone) Ltd, UK

18 SKF Coupling Systems AB, Hofors, Sweden

19 SKF de Mexico, S. A. de C. V. Mexico D.F., Mexico

20 SKF del Peru S.A., Peru

21 SKF do Brasil Ltda., Brazil

22 SKF Equipements, France

23 SKF Espanola S.A., Madrid, Spain

24 SKF European Distribution Centre (EDC), Belgium

25 SKF European Financial Service Cenre, EFC, Nieuwegein, Netherlands

26 SKF France S.A., France

27 SKF GmbH, Germany

28 SKF Industrie S.p.A, Italy

29 SKF International AB

30 SKF Japan Ltd., Japan

31 SKF Korea Ltd, Korea

32 SKF Linearsysteme GmbH, Germany

33 SKF Malaysia Sdn. Bhd. Malaysia

34 SKF Osterreich AG., Austria

35 SKF Philippines Inc., Philippines

36 SKF Sealing Solutions (WUHU) CO., LTD, China

37 SKF Sealing Solutions AB, Sweden

38 SKF Shanghai Bearings Co. Ltd., China

39 SKF South Africa (Pty) Ltd., South Africa

40 SKF Asia Pacific Pte. Ltd., Singapore

41 SKF Sverige AB, Sweden

42 SKF Technologies India Pvt. Ltd., India

43 SKF USA Inc., Kulpsville/Lansdale, PA, USA

44 SKF Venezolana S.A., Caracas, Venezuela

45 SKF Ukraine, Ukraina

46 Transrol S.A.S., Chambery, France

47 SKF Lubrications Systems, France SAS

48 SKF Lubrications Systems, Germany AG

49 SKF Mekan AB, Sweden

50 Berger Vogel S.r.l., Italy

51 Polyseal, USA

52 Jaeger Industrial Co., Ltd., Taiwan

53 ABBA LINEAR TECH CO LTD (Taipei), Taiwan

54 SKF Engineering and Research Service B.V., Nieuwegein, Netherlands

55 Economos India Private Ltd, New Delhi, India

56 SKF Sealing Soluions GmbH, Leverkusent Opladen, Germany

57 SKF Aero France S.A., SaintValliertsurtRhone, France

58 SKF Linear Motion & Precision Technologies, USA

59 SKF NV/SA, Belgium

60 SKF Auomoive Componen Corp., Changwon (Pusan)

61 SKF Bearing Services Taiwan, Taipei

62 SKF Chilena S.A.I.C, Santiago

63 SKF International AB (Treasury Centre), Goteborg

64 SKF Bearing Industries (Malaysia) Sdn. Bhd, Nilai

65 SKF Automotive Technologies Co.

66 SKF Lubrication Systems Japan Ltd

67 SKF Economos GmbH, Judenburg

68 SKF Acuaion sysem(Pinghu) Co., Ld (former Jaeger (Pinghu) Precision Actuatronic Ltd)

69 SKF Lubrication Systems USA Inc

70 Beijing Nankou SKF Railway Bearings Co.Ld., Beijing

71 SKF Hellas S.A., Ahens

Key Management Personnel

1 Mr. Rakesh Makhija (upto December 31, 2009)

2 Mr. Shishir Joshipura (w.e.f December 1, 2009)

(Rs. in Million) December 31, December 31, 2010 2009 (3) Contingent Liabilities

Claims against the Company not acknowledged as debts

(i) Income-tax and Surtax 4.5 4.5

(ii) Excise duty 9.2 9.2

(iii) Service Tax 15.0 14.3

(iv) Others 147.7 31.4

176.4 59.4

(i) The provision for Disputed Stautory Matters are on account of legal matters, where the Company anicipates probable outflow. The amount of provision is based on esimate made by the Company considering the facts and circumstances of each case. The timing and amount of cash flows that will arise from these matters will be determined by the relevant authorities only on settlement of these cases.

(ii) The provision for warranty and coupons (included in Other Obligations) is on account of warranties/coupons given on products sold by the Company. The provision is based on the historical data/ estimated figures. The timing and amount of the cash flows that will arise from these matters will be determined at the time of receipt of claims from customers.

(iii) Other Obligations also includes provisions on account of disputes pertaining to rent wih previous landlords. The timing and amount of cash flows that will arise from these matters will be determined by the relevant authoriies only on settlement of these cases.

Figures in light print are in respect of the Previous Year.

Notes:

(i) The consumption in value has been reported on the basis of Opening Stock plus Purchases less Closing Stock and includes the adjusment of excesses and shortages as ascertained on physical count and wrie-off of obsolete and unserviceable raw materials and components.

(ii) The consumption in value shown above is net of sale of raw material on high sea to suppliers to NIL (Previous year Rs. 124.7 mio).

(iii) The consumption in value shown above is a balancing figure based on total consumption shown in Profit & Loss Account.

(12) Information for each class of goods :

(i) Installed capacity is per annum, as certified by the management.

(ii) Production includes quantities used for internal consumption.

(iii) Licensed capacity has not been shown as the industry has been delicensed.

(4) a) The provision for taxation is net of reversal of excess provision for earlier years Rs. 4.1 Million (Previous Year Rs. 3.9 Million).

b) The provision for taxation is inclusive of short provision for earlier year Rs. Nil (Previous year Rs. 0.04 Million).

c) The provision for deferred taxaion is inclusive of short provision for earlier years Rs. 5.0 Million (Previous Year Rs. 3.9 Million).

d) The provision for Fringe Benefit Tax (FBT) is net of reversal of excess provision for earlier years Rs. Nil (Previous Year Rs. 4.0 Million).

(5) Micro, Small and Medium Enterprises Development Act, 2006 CMSMED Act):

The Company has amounts due to suppliers under Micro, Small and Medium Enerprises Development Act (MSMED Ac) as at December 31, 2010

(6) The net exchange difference arising during the year recognised in the Profit and Loss Account is Rs. 7.2 Million gain (Previous Year Rs. 14.8 Million Loss).

(7) During the current year, certain employees of SKF India Limited have been granted stock options under AB SKF Performance Share Award Agreement. Pursuant to this, AB SKF has debited Rs. 7.1 mio (Previous year Rs. 0.2 mio) to its Profit and Loss Account.

(8) The Company has facility from banks for working capital / working capital demand loans which are secured by pari passu charge of :

a) all tangible movable properties and assets, both present and future, including stocks of Raw Materials, Se-itfinished goods and Finished goods, excluding movable Machinery Spares, Tools and Accessories and Stores and Spares

b) all present and future Book Debts outstanding, Monies receivable, Claims and Bills

(9) During the year ended December 31, 2009 the company had announced a Voluntary Reirement Scheme for its employees. An amount of Rs.7.6 Million incurred as VRS compensation under this scheme has been charged to the Profit and Loss Account for the year ended December 31, 2009

(10) Prior years figures have been regrouped wherever necessary to conform to current years classification.


Dec 31, 2009

(1) The company reviewed the disclosure of segmentwise reporting and is of the view that it manufactures Bearings and related components which is a single segment in accordance with Accounting Standard 17, ‘Segment Reporting’, issued under Companies (Accounting Standards) Rules, 2006.

(2) In accordance with Accounting Standard 18, ‘Related Party Disclosures’, issued under Companies (Accounting Standards) Rules, 2006, the Company has compiled the required information in the attached table.

(i) List of Related Parties & relationship:

Sr. No. Name of the Related Party

Holding Company

AB SKF (Head Office) Goteborg, Sweden

Affiliate Companies (All under the common control of AB SKF)

1 SKF Actuation System (Liestal) AG (Magnetic Elektromotoren AG)

2 Oy SKF AB, Finland

3 P.T. SKF Indonesia, Indonesia

4. RFT S.p.A., Italy

5 RKS S.A.-SKF Slewing Bearings, France

6 SKF (China) Sales Co. Ltd., China

7 SKF (Dalian) Bearings and Precision & Co. Ltd.

8 SKF (Thailand) Ltd, Thailand

9 SKF (U.K.) Limited, United Kingdom

10 SKF Actuators AB, Goteborg Sweden

11 SKF Argentina S.A., Argentina

12 SKF Australia Pty. Ltd., Australia

13 SKF B.V., Netherlands

14 SKF Ball Screws and Services S.p.A, Italy (Formerly Gamfior S.p.A.)

15 SKF Bearings Bulgaria, Bulgaria

16 SKF Canada Ltd, Scarborough, Ont., Canada

17 SKF China Ltd., China

18 SKF Condition Monitoring Centre (Livingstone) Ltd, UK

19 SKF Coupling Systems AB, Hofors, Sweden

20 SKF de Mexico, Mexico

21 SKF del Peru S.A., Peru

22 SKF do Brasil Ltda., Brazil

23 SKF Equipements, France

24 SKF Espanola S.A., Madrid, Spain

25 SKF European Distribution Centre (EDC), Belgium

26 SKF European Financial Service Centre, EFC, Nieuwegein, Netherlands

27 SKF France S.A., France

28 SKF GmbH, Germany

29 SKF Industrie S.p.A, Italy

30 SKF International AB

31 SKF Japan Ltd., Japan

32 SKF Korea Ltd, Korea

33 SKF Linersystem GmbH, Germany

34 SKF Malaysia Sdn. Bhd. Malaysia

35 SKF Osterreich AG., Austria

36 SKF Philippines Inc., Philippines

37 SKF Sealing Solutions (WUHU) CO., LTD, China

38 SKF Sealing Solutions AB, Sweden

39 SKF Shanghai Bearings Co. Ltd., China

40 SKF South Africa (Pty) Ltd., South Africa

41 SKF Asia Pacific Pte. Ltd., Singapore

42 SKF Sverige AB, Sweden

43 SKF Technologies India Pvt. Ltd., India

44 SKF USA Inc., USA

45 SKF Venezolana S.A., Caracas, Venezuela

46 SKF, Ukraina

47 SKF-NEWZEALAND

48 Transrol S.A.S., Chambéry, France

49 SKF Lubrications Systems France SAS

50 SKF Lubrications Systems Germany AG

51 SKF Mekan AB, Sweden

52 Berger Vogel S.r.l., Italy

53 Polyseal, USA

54 Jaeger Industrial Co., Ltd., Taiwan

55 ABBA LINEAR TECH CO LTD (Taipei), Taiwan

56 SKF Engineering and Research Service B.V., Nieuwegein, Netherlands

57 SNFA Bearing Ltd, Charfield, United Kingdom

58 Economos India Private Ltd, New Delhi, India

59 SKF Sealing Solutions GmbH, Leverkusen- Opladen, Germany

60 SKF Aero France S.A., Saint-Vallier-sur-Rhone, France

61 SKF Linear Motion & Precision Technologies, USA

62 SKF NV/SA, Belgium

Key Management Personnel

1 Mr.Rakesh Makhija (upto December 31, 2009)

2 Mr. Shishir Joshipura (w.e.f December 1, 2009)

(3) a) The provision for taxation is net of reversal of excess provision for earlier years Rs. 3.9 mio (Previous Year Rs.0.1 mio).

b) The provision for taxation is inclusive of short provision for earlier year Rs. 0.04 mio (Previous year Rs. 4.6 mio).

c) The provision for deferred taxation is inclusive of short provision for earlier years Rs 3.9 mio (Previous Year Rs. 5.0 mio Excess provision).

d) The provision for Fringe Benefit Tax (FBT) is net of reversal of excess provision for earlier years Rs 4.0 mio (Previous Year Rs.8.8 mio).

(4A) The net exchange difference arising during the year recognised in the Profit and Loss account is Rs 14.8 mio Loss (Previous Year Rs 94.3 mio loss).

(4B) During the current year, certain employees of SKF India Limited have been granted stock options under AB SKF Performance Share Award Agreement. Pursuant to this, AB SKF has debited Rs 0.2 mio (Previous year Rs. 1.1 mio) to its Profit and Loss Account.

(5) The Company has facility from banks for working capital / working capital demand loans which are secured by pari passu charge of :

a) all tangible movable properties and assets, both present and future, including stocks of Raw Materials, Semi-finished goods and Finished goods, excluding movable Machinery Spares, Tools and Accessories and Stores and Spares

b) all present and future Book Debts outstanding, Monies receivable, Claims and Bills

(6) During the year ended December 31, 2009 the company announced a Voluntary Retirement Scheme for its employees. An amount of Rs. 167.6 Million incurred as VRS compensation under this scheme has been charged to the profit & loss account for the year ended December 31, 2009.

(7) Prior year’s figures have been regrouped wherever necessary to conform to current year’s classification.

1.0 BALANCE SHEET

1.1 SHARE CAPITAL

The authorised share capital of the Company is Rs. 527 million divided into 52.7 million equity shares. The Swedish holding company AB SKF along with its subsidiaries holds 53.6% of issued and paid-up capital. The capital structure of the Company has remained unchanged since 2006. The company has only one class of shares-equity share of Rs. 10 each.

1.2 RESERVES & SURPLUS

Around 90 per cent of the reserves & surplus comprises of balance in general reserve and profit & loss account which is built out of retained earnings. The balance consist of Share Premium collected from shareholders. The ratio of paid up share capital and reserves & surplus at the end of the year 2009 is 07:93. The total shareholder funds of the Company increased to Rs. 7147 million as of December 31, 2009 from Rs. 6452 million from the previous year.

1.3 LOAN FUNDS

Your Company continues to remain a zero debt company with no long-term borrowings from financial institutions or utilisation of working capital facilities from banks. The negligible amount outstanding pertains to the public deposit taken in the past years which have not been claimed by the depositor holder on maturity. The Company discontinued accepting fixed deposits from Public and Shareholders in the year 2001.

1.4 FIXED ASSETS

During the year, the Company has invested Rs. 628.7 million towards the addition to fixed assets as compared to addition of Rs. 367.1 million in the previous year. The increase in capital expenditure is mainly due to expenditure incurred in acquisition of land for expansion and on plant and machinery as ongoing capacity augmentation programme at manufacturing units. The fixed assets turnover ratio of 6.1 as on 31st December, 2009 reflects utilisation of assets.

1.5 DEFERRED TAX ASSETS

The Company accounts for deferred tax in compliance with the Accounting Standard 22 issued by ICAI. The Company has recognized deferred tax assets of Rs. 31.1 million during the year.

1.6 INVENTORIES

Total Inventory at the end of year decreased by Rs. 424.5 million as compared to the previous year. All major components of stock including raw material, stores & spares and finished goods has shown a reduction due to better utilization of inventories. The inventory of finished goods, as on 31st December, 2009 represents 27 days average sales for the year as compared to 29 days in previous year.

1.7 RECEVIABLES

Sundry debtors at the year end amount to Rs. 2162.9 million after making provision for doubtful debts. Company has a policy in place which requires provision for all debts outstanding for more than six months. The receivable turnover ratio of 7.3 indicates average credit period of 50 days as against 48 days for the previous year.

1.8 CASH AND BANK BALANCES

The cash and cash equivalents at Rs. 2892.6 million at the end of the year is higher by 50.7 per cent from the previous year reflecting the sound liquidity of the Company. The entire amount of deposit has been kept as fixed deposit with various banks.

1.9 LOANS AND ADVANCES

Loans & Advances all considered good are either towards inter-corporate loan, or advance for value and services to be received / adjustable in future and include loans / advance for contractual deposits, prepaid expenses and advance income tax.

1.10 CURRENT LIABILITIES AND PROVISIONS

Current liabilities represent money the Company owes to suppliers and others in normal course of business. Sundry creditors represent amount payable to vendors for supply of direct and indirect materials, liabilities for excise, sales tax, other expenses, etc. Provisions as at the year-end consist mainly of provisions for taxes, gratuity & leave encashment as per the estimation required under Accounting Standards and proposed dividend.

2.0 PROFIT AND LOSS ACCOUNT

2.1 SALES

Turnover net of excise duty was marginally lower during the year in view of the depressed market arising out of global financial meltdown. The ratio of domestic to export sales during the year is 93:07. The substantial part of domestic sales is made through direct supply to OEM’s, distributors and stockists, which are spread across the country. The export sales are mainly to the SKF Group companies which are present in more than 130 countries.

2.2 MANUFACTURING & OTHER EXPENSES

The major component under this head consist of material cost (including traded goods) 73 per cent, employee cost (10.3 per cent) and rest comprises of various other manufacturing, selling and administration expenses.

2.3 PROFIT BEFORE TAX

Profit before provision for income tax at Rs. 1431 million as a percentage of net sales is 9.1 per cent for the year when compared to 12 per cent for the previous year.

2.4 PROFIT AFTER TAX

Profit after tax (PAT) for the year Rs. 942.5 million is lower by 26 per cent as compared to Rs. 1276.6 million in the previous year. PAT as per cent to sales is at 6 per cent as compared to 7.9 per cent in the previous year.

2.5 APPROPRIATIONS

Proposed dividend of Rs. 210.9 million represents the dividend recommended to the shareholders by the Board of Directors. This will be paid after the Annual General Meeting, upon approval by the shareholders. The total incidence of dividend distributed including tax thereon is Rs. 246.7 million for the year. The payout on account of dividend distribution is 26.2 per cent of profit after tax as compared to 21.8 per cent in the previous year.

Find IFSC