SNL Bearings Reports Fiscal Year Results

SNL Bearings Reports Fiscal Year Results SNL Bearings Ltd. (India, BSE: 505827, a publicly-traded subsidiary of NRB Bearings Ltd., India) released financial results for the fiscal year ended March 31, 2006. SNL returned its best results in many years, particularly leaning on in its newfound ability to leverage higher sales into bottom line profits. Sales for the year were up 12%, to Rs 136.4 million (USD $ million) from Rs 122 million ($ million) for the prior year ended March 31, 2005. Less excise taxes, Net Sales for the year were up 11%, to Rs 117 million ($ million) from Rs 105.3 for 2005. Net profit gained dramatically, reversing years of sometimes-massive losses and a slight profit in 2005. Profit for 2006 was Rs 10.6 million ($ million), from only Rs 1.9 million ($ million) in 2005. Shriram Needle Bearing Industries Ltd. was founded in 1983 as a joint venture between INA Bearing (Germany) and Shriram Group (India) to manufacture needle bearings. Today, the company is known as SNL Bearings Ltd. and produces a wide variety of needle roller bearings and loose rollers for automotive, 2-wheeler, truck, and industrial applications. In June 2000, NRB Bearings (formerly Needle Roller Bearings Ltd.) acquired a 69% stake in SNL from its former parent SRF. Three industrial banking groups are the other major shareholders in SNL, with 21% total. SNL's poor performance and accumulated losses have historically been a problem and drag on earnings for NRB. SNL shares traded as high as Rs 43.50 a year ago, but currently trade at approximately Rs 15.50, off the 52-week low of Rs 13.85 set in early July. SNL's dark shadow for NRB is that it continues to show a negative net worth. Accumulated losses of Rs 142 million still exceed SNL's Rs 136 million capitalization, although the gap has narrowed significantly from 2005's accumulated losses of Rs 152 million. The auditors comment on SNL's ability to continue to exist as a going concern states: The auditors have qualified their report for the financial year ended March 31, 2006 expressing their inability to form an opinion whether the going concern assumption used in the preparation of the financial statements is appropriate, in view of the accumulated losses being Rs 141.642 million, in excess of the share capital of Rs 136.115 million. The management believes that the Company is a going concern and will continue to be so in the foreseeable future, having regard to the continuing support of the holding Company and the restructuring process initiated by the management.