Benara bearings & Pistons Limited has submitted revised audited financial results for the year ended 31st March 2025, reporting significant financial challenges with auditors issuing a disclaimer of opinion due to multiple material concerns.

Financial Performance Overview

The company reported a consolidated net loss of ₹2815.50 lakhs for FY25, substantially higher than the previous year's loss of ₹317.32 lakhs. Total income declined to ₹1106.88 lakhs from ₹1550.45 lakhs in FY24, while total expenditure increased to ₹2878.07 lakhs from ₹1888.55 lakhs.

Auditor Disclaimer and Key Concerns

The statutory auditors, Agrawal Jain and Gupta, issued a disclaimer of opinion highlighting eight major areas of concern that prevented them from providing audit assurance on the financial statements.

Inventory and Asset Valuation Issues

The auditors expressed inability to obtain sufficient evidence regarding physical inventory worth ₹1849.75 lakhs as at 31st March 2025. During the year, the company wrote off slow-moving inventory amounting to ₹864.29 lakhs that had not been traded for more than one year. Management is undertaking reconciliation exercises for remaining slow-moving inventory with plans for reprocessing or melting where feasible.

Additionally, concerns were raised about the recoverability of non-current assets amounting to ₹979.01 lakhs and long-term loans and advances of ₹1099.90 lakhs, with auditors unable to determine potential adjustments required.

Debt Settlement Negotiations

The company is negotiating one-time settlement (OTS) arrangements with various lenders for short-term borrowings of ₹5242.18 lakhs. Due to continued defaults, these loan accounts have been classified as Non-Performing Assets (NPAs) by banks and financial institutions. The company has not provided interest on these loans during the year pending settlement finalization.

Balance Sheet Position

The company's financial position deteriorated significantly with negative net worth of ₹974.43 lakhs compared to positive ₹1841.16 lakhs in the previous year. Total assets decreased to ₹5856.44 lakhs from ₹8502.72 lakhs.

Outstanding Statutory Demands

The company faces substantial statutory demands totaling ₹6061.55 lakhs, comprising income tax demands of ₹5150.47 lakhs and GST demands of ₹911.07 lakhs. Management is contesting these demands through appeals and believes a significant portion may not be sustainable on merits.

Going Concern Uncertainty

The auditors highlighted material uncertainty about the company's ability to continue as a going concern, noting cash losses of ₹1665.78 lakhs during FY25 and negative net worth. Despite these conditions, the financial statements have been prepared on a going concern basis.

Management Response

The board of directors approved these results at a meeting held on 28th July 2025. The company noted that the revised submission contains no changes to the financial results, with only the statement of impact of audit qualifications being added as required under SEBI regulations.

Benara Bearings and Pistons Limited, a manufacturer of auto components, has reported a substantial net loss of ₹2,748.22 crore, a significant increase from the ₹312.73 crore loss in the previous year. This deterioration in financial performance comes amid serious concerns raised by auditors and ongoing financial restructuring efforts.

Financial Performance and Auditor Concerns

The company's financial results have been met with a disclaimer of opinion from the auditors, who cited multiple concerns:

1. Inventory Verification: Inability to verify physical inventory worth ₹1,849.75 crore.
2. Asset Recoverability: Questionable recoverability of non-current assets worth ₹979.02 crore.
3. Non-Performing Assets: Short-term borrowings of ₹5,167.61 crore classified as non-performing assets.

Revenue declined to ₹1,091.52 crore from ₹1,505.19 crore in the previous year, further exacerbating the company's financial woes.

Financial Restructuring Efforts

Benara Bearings is actively working on restructuring its financial obligations:

1. One-Time Settlement Negotiations: The company is negotiating one-time settlements with lenders, including a ₹3,000.00 crore settlement with Axis Bank and Bandhan Bank against outstanding dues of ₹5,138.00 crore.

2. Negative Net Worth: The company's net worth has turned negative at ₹836.81 crore, raising concerns about its financial stability.

Tax Demands and Liabilities

The company faces significant tax liabilities:

These substantial tax demands further complicate the company's financial situation.

Management Changes

In response to these financial challenges, Benara Bearings has undertaken several strategic moves:

1. Company Secretary Resignation: Akash Ashokkumar Bhandari has resigned from his position as Company Secretary.

2. New CFO Appointment: The company has appointed Dileep Kumar as its new Chief Financial Officer, signaling a potential shift in financial strategy and management.

3. IPO Objective Changes: The board has approved changes to the company's IPO objectives through a postal ballot, though specific details of these changes were not disclosed.

Outlook

Benara Bearings and Pistons Limited faces significant challenges as it navigates through this period of severe financial distress. The disclaimer of opinion from auditors, substantial increase in losses, and the massive tax demands underscore the critical nature of the company's current situation.

The ongoing negotiations for one-time settlements with lenders and the implementation of new strategies by the refreshed management team will be crucial in determining the company's path forward. Investors and stakeholders will be closely watching these developments and the company's ability to address the concerns raised by auditors.

The success of these efforts will be vital in determining whether Benara Bearings can overcome its current financial difficulties and return to a stable financial footing.