SNL Delists from Delhi Stock Exchange

SNL Bearings Ltd. -- Shriram Needle Bearing Industries Ltd. (India, BSE: 505827, a publicly-traded division of NRB Bearings Ltd.) has delisted its shares from the Delhi Stock Exchange. The company's shares on the Bombay Stock Exchange have plummeted in recent weeks, from a 52-week high in August of nearly Rs 44 per share to recently Rs 29.50 per share. SNL is now reporting second quarter 2005 results, for the period July through September 2005. Sales were Rs 33.3 million, up from Rs 32.8 million in 2004. Net profit for the quarter was Rs 1.4 million, from Rs 300,000 in 2004. 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, SNL 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 SNL from its former parent SRF. NRB is itself 26% owned by Timken. As they did in 2004, SNL's auditors once again in 2005 have warned about prospects for the company's future: The auditors have qualified their report for the financial year ended March 31, 2005 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 152.238 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. NRB's year-end financials also contained the following caveat regarding SNL, although NRB still considers SNL a viable business. The company has investments of Rs. 1174.72 lacs (as at 31.03.2005 : Rs. 1174.72 lacs), comprising 2,484,176 equity shares of Rs.10 each and 1,000,000 preference shares of s.100 each, in SNL Bearings Limited (SNL), a subsidiary company. The company has also granted to SNL advances and loans of Rs. 1250 lacs (as at 31.03.2005 : Rs. 1250.00 lacs). SNL has accumulated losses in excess of its share capital. This matter had been referred to by the statutory auditors as a subject matter of qualification in their audit report. In the opinion of the management, having regard to the long term prospects of SNL and the efforts being made to improve its financial position, no provision for the loss is considered necessary. During the year ended 31st March, 2005 the subsidiary company has made a net profit of Rs.35 lacs. No reason was given for SNL's Delhi exchange delisting; however, a number of companies have chosen to focus their attention on the much busier and more liquid Bombay Stock Exchange (BSE), including former owner SRF.