annual report 2007-2008 - nrb bearings contents particulars page no. notice 03 directors’ report...

ANNUAL REPORT

2007-2008

Directors : TrilochanSinghSahney,Chairman & Managing Director

Dr.P.D.Ojha Dr.(Ms.)KalaSPant HarshbeenaSZaveri KMElavia DeveshSSahney

Bankers : BNPParibas CitibankN.A. CanaraBank

Auditors : A.F.Ferguson&Co.

Solicitors : WadiaGhandy&Co.

Registered Office : Dhannur,15Sir.PMRoad,Fort Mumbai400001

Works : PokhranRoadNo.2,Majiwade Thane400606

E-40,M.I.D.C.IndustrialArea,Chikalthana Aurangabad431010

C-6,AdditionalM.I.D.C.IndustrialArea Jalna431203

E-72,(I)&(II)M.I.D.C.,Waluj Aurangabad431133

A-5,UppalIndustrialEstate Hyderabad500039

PlotNo.33,Sector–II, SIDCULIIEPantnagar UdhamsinghNagar,Uttarakhand263153

Registrar & Share Transfer Agent : MondkarComputersPvt.Ltd. 25,ShakilNiwas,MahakaliCavesRoad Andheri(East),Mumbai400093 Tel:28366620,28207203-05 Fax:28369704,28207207

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CONTENTS

Particulars Page No.

Notice................................................................................................................................ 03

Directors’Report............................................................................................................... 05

AnnexuretoDirectors’Report.......................................................................................... 09

ManagementDiscussion&Analysis................................................................................ 12

CorporateGovernance..................................................................................................... 16

Auditors’CertificateoncomplianceofCorporateGovernance....................................... 22

ShareholdersInformation................................................................................................. 23

ReportoftheAuditors(NRB)............................................................................................ 28

BalanceSheetasat31stMarch2008(NRB)................................................................... 32

Profit&LossAccountfortheyearended31stMarch2008(NRB)................................. 33

CashFlowstatementfortheyearended31stMarch2008(NRB).................................. 34

SchedulestotheAccounts.............................................................................................. 36

BalanceSheetAbstract&Company’sGeneralBusinessProfile.................................... 59

StatementpursuanttoSection212.................................................................................. 61

AbridgedAccountsofSubsidiaryCompany.................................................................... 62

ReportoftheAuditors(Consolidated)............................................................................ 63

BalanceSheetasat31stMarch2008(Consolidated).................................................... 64

Profit&LossAccountfortheyearended31stMarch2008(Consolidated)................... 65

CashFlowstatementfortheyearended31stMarch2008(Consolidated).................... 66

SchedulestotheConsolidatedAccounts........................................................................ 68

3

AGM NOTICE

TheMembers,NRBBEARINGSLIMITED

NOTICEISHEREBYGIVENthatthe43rdAnnualGeneralMeetingofthemembersoftheCompanywillbeheldatMCGhiaHall,KDubashMarg,Mumbai400001onTuesday,5thAugust,2008,at11.00a.m.totransactthefollowingbusiness:

ORDINARY BUSINESS

1. ToreceiveandadopttheAccounts,BalanceSheet,CashFlowStatementsandthereportsoftheDirectorsandAuditorsfortheyearended31stMarch,2008.

2. Todeclareadividendfortheyearended31stMarch,2008.

3. ToappointaDirectorinplaceofMr.KMElaviawhoretiresbyrotationandiseligibleorre-appointment.

4. ToappointaDirectorinplaceofDr.(Ms.)KalaSPantwhoretiresbyrotationandiseligibleforre-appointment.

5. Toconsiderandifthoughtfit,topasswithorwithoutmodifications,thefollowingresolution:

“RESOLVEDTHATM/s. AFFerguson&Co.,CharteredAccountants,Mumbaibeandareherebyre-appointedasAuditorsoftheCompanytoholdofficeuntiltheconclusionofthenextAnnualGeneralMeetingonsuchremunerationplusout-of-pocketexpenses,asmaybemutuallyagreeduponbetweentheBoardofDirectorsandtheAuditors.”

ByOrderoftheBoard S C RanganiJune9,2008 Secretary

Notes1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY

AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY.

Proxies inorder tobeeffective,mustbe receivedby theCompanynot less than48hoursbefore themeeting.

2. TheRegisterofMembersoftheCompanyandTransferBooksthereofwillbeclosedfrom28thJuly,2008to5thAugust,2008(bothdaysinclusive).

3. Thedividendafterdeclaration,willbepaidtothoseshareholderswhosenamestandontheregisterofmemberson28thJuly,2008(inrespectofshareholdersholdingphysicalshares).Thedividendinrespectofsharesheldintheelectronicformwillbepaidtothebeneficialownersoftheshareswhosenamesappearinthelistfurnishedbythedepositoriesforthispurposeason5thAugust,2008.

Membersandallothersconcernedarerequestedtolodgetransferdeeds,changeofaddresscommunication,mandates (if any) with the Company’s Share Transfer Agents M/s. Mondkar Computers Pvt. Ltd., 25,ShakilNiwas,MahakaliCavesRoad,Andheri(East),Mumbai400093before28thJuly,2008inrespectofshareholdersholdingphysicalshares,whileinrespectofsharesheldintheelectronicformsuchdetailsshouldbefurnishedtotherespectivedepositoryparticipants.

4. TheSecuritiesandExchangeBoardofIndiahasmadeitmandatoryforallcompaniestousethebankaccountdetailsfurnishedbythedepositoriesfordepositingdividendthroughElectronicClearingService(ECS)toinvestorswhereverECSandbankdetailsareavailable.IntheabsenceofECSfacilities,thecompanywillprintthebankaccountdetailsifavailable,onthepaymentinstrumentfordistributionofdividend.

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Notes on Directors seeking re-appointment

AsrequiredunderListingAgreement,particularsofDirectorswhoaretobere-appointedaregivenbelow:

1. Mr.KMElavia

Age 62Years

Qualifications B.Com(Hons)FCA

Experience 34yearsofpostqualificationexperience,currentlypartnerM/s.Kalyaniwalla&Mistry,CharteredAccountants

DirectorSince 30.01.2006

ListofotherDirectorships 1.AllcargoGlobalLogisticsLimited2.GoaCarbonLtd3.GroverVineyardsLtd(AlternateDirector)4.SulzerIndiaLtd5.UniAbexAlloyProductsLtd6.UniDeritendLtd7.UniKlingerLtd

MembershipinCommitteesinothercompanies

1.MemberofAuditCommitteeandShareholders’/Investors’GrievanceCommitteeandShareAllotmentTransferCommittee-SulzerIndiaLtd2.ChairmanofAuditCommittee–UniAbexAlloyProductsLtd.3.MemberofAuditCommittee–UnitDeritendLtd.4.ChairmanofAuditCommittee-AllcargoGlobalLogisticsLtd.5.MemberofAuditCommittee-GoaCarbonLtd.

No.ofsharesheld Nil

2. Dr.(Ms.)KalaSPant

Age 73Years

Qualification Bachelors degree in Science followed by post graduation in Statisticsapplied to Economics and Industry and Doctoral Research work byquantitativemethodsinthefieldofbankingandtransport

Experience 42yearstraininginthefieldofManagementandResearchmethodology,Researchintheproblemsoftransport,ports,infrastructurebenefits/costanalysisandbothatmacroandmicrolevel.

DirectorSince 30.09.1997

ListofotherDirectorships 1.TemptationFoodsLtd2.BinaniMetalsLtd

MembershipinCommitteesinothercompanies

ChairmanofAuditCommittee-TemptationFoodsLtd

No.ofsharesheld Nil

ByOrderoftheBoard S C Rangani June9,2008 Secretary

5

DIRECTORS’ REPORT

ToTheMembersNRBBEARINGSLIMITEDMumbai

YourDirectorshavepleasureinpresentingtheirFortythirdAnnualReporttogetherwithAuditedAccountsfortheyearended31stMarch,2008.

1. Financial Results Year ended Yearended 31st March, 2008 31stMarch,2007 Rs. lacs Rs.lacs Profitbeforeprovidingfor Depreciationandtaxation 6980.46 7574.11 Less:Depreciation 1796.84 1582.62 Provisionfortaxation Current 1650.00 1757.57 Deferred 97.37 177.46 FBT 85.00 80.22 Profitaftertaxation 3351.25 3976.24 Add:Balancebroughtforward 915.92 1560.88 4267.17 5537.12 Appropriation: Dividend: Interim - 775.38 Final 1163.07 630.00 Taxondistributedprofits 197.66 215.82 GeneralReserve 335.13 3000.00 Profit&LossAccount 2571.31 915.92 4267.17 5537.12 2. Dividend

Directors recommend dividend of 120% i.e. Rs 2.40/- per equity share of Rs.2/- (145% for previousyear)payabletomembers/beneficialownersaspertheRegisterofMembersasapplicableaggregatingRs.1360.73lacs.

3. Operations

Sales(netofexciseduty)fortheyearended31stMarch,2008wereRs.32142lacsasagainstRs.30311lacsinthepreviousyear,anincreaseof6%.Profitbeforetax(PBT)wasatRs.5184lacsascomparedtoRs.5991lacsin2006-07,downby13.5%.Afterprovidingforcurrentanddeferredtaxes,theProfitaftertax(PAT)wasRs.3351lacs(Rs.3976lacsin2006-07),downby15.7%.

The year 2007-08 was one of mixed experiences. The topline growth was achieved despite decliningdemandfromvarioususersegmentsoftheautoindustry.Margins,however,remainedunderpressureonthebackofsharprisesinthepricesofkeyrawmaterial-steel.

Duringtheyearthecompanyfurtherbuiltupitspositionintheinternationalmarkets,asexportsregisteredagrowthof45%.Withseveralinternationalmarqueesasitscustomers,whohaveenteredintolongtermsupplycontractsandproductdevelopmentinitiativesfortheirnewplatforms,thebenefitswillaccrueinthecomingyears.

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Thecompanyisfocusedonaddressingtheeveremergingchallengesofsourcingbywell-timedbuyingdecisionsandbyenteringintolongtomediumsupplycontracts.Despiteallroundefforts,thecostescalationscouldnotbepassedonwithoutatimelag,buttheeffortsof2007-08areexpectedtobearfruitsin2008-09.Inthemeanwhile,costescalationchallengesaremitigatedbyimprovingprocessefficienciesinmanufacturing,intensifyingR&Deffortstodevelopnewproductsandspeedupcommercialization.

AsrequiredunderthenewAccountingStandards,relatedpartytransactions,calculationsofearningspershare,provisionofdeferredtaxliabilityandconsolidatedaccountsofthecompanyanditssubsidiariesaremadeapartoftheAnnualReport.

4. Public Deposits

Thecompanyhasnottakenfixeddepositsduringtheyear.UnclaimeddepositsaggregatingRs.1,72,000havebeentransferredtotheInvestorEducationProtectionFundontheexpiryof7years.

5. Directors

Mr.KMElaviaandDr.(Ms.)KalaSPantretirebyrotationpursuanttoArticle111oftheArticlesofAssociationandareeligibleforreappointment.

6. Subsidiaries and New Plant

Asof31stMarch,2008thecompanyhastwosubsidiariesviz.SNLBearingsLtd(SNL)andNRBBearings(Thailand)Ltd.Theconsolidatedresultsincludetheworkingofthesesubsidiaries.

Duringtheyear,yourcompanyhasfullycontributedtothesharecapitalofNRBBearings(Thailand)Ltd.,ThaiBaht50million.Thesubsidiarycompanyisexpectedtocommencecommercialproductionduringtheyear.

ThePantnagarplantof thecompany in thestateofUttarakhandwas inaugauratedon7thMay,2008.Theplantwillinter-aliameettherequirementsofTataMotorsandotherOEMslikeBajajAuto,AshokLeylandandHeroHondawhoarealsosettingupmanufacturingplantsintheStateofUttarakhand.

7. Information regarding employees

InformationpursuanttoSection217(2A)oftheCompaniesAct,1956readwiththeCompanies(ParticularsofEmployees),Rules,1975formspartofthisreport.

8. Conservation of energy, technology absorption, foreign exchange earnings and outgo

InformationrequiredasperSection217(1)(e)oftheCompaniesAct,1956readwithCompanies(DisclosureofParticularsintheReportofBoardofDirectors)Rules,1988hasbeengivenintheAnnexureformingpartofthisreport.

9. Industrial Relations

Duringtheyearthecompanymaintainedcordialrelationswiththeworkmen’sunionsatallplants.

10. Safety, Health and Environment

Thecompany’splantsatThane,Aurangabad,Waluj,HyderabadandJalnahavealreadybeenaccreditedtointernationallyrecognizedenvironmentalmanagementsystemsviz.ISO14001:2004andOHSAS:18001:1999andISO/TS:16949:2002.

Thecommitmenttotheenvironmentextendsbeyondlegalcompliancerequirementsandinitiativesareunderwayacross thecompany’s locationswhich includegreeningprogrammes, rainwaterharvesting,vermiculture,treatmentplants,etc.Thecompanyisinfullcompliancewiththeenvironmentalregulationsregardingdisposalofhazardouswaste.

Safetyisaccordedthehighestprioritybythecompany.Aclearsafetypolicy,severaltrainingprogrammesandcommunicationtoolshavebeenputinplace.Projectsarecontinuouslyidentifiedforimprovementsandworkerparticipationandregularvisitsbysafetycommitteememberstounitsintheautosector.TPM

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techniqueslikePokaYoke(mistakeproofing)arebeingimplementedonmachinestominimizeaccidents.Trainingandcompetenceprogrammeareconductedtoeducateandcreateawarenessamongstemployees,theirfamiliesandthecompany’scontractors.

Healthandenvironmentareconsideredaskeyandessentialaspectsonwhichdependsthewelfareoftheemployees.Thecompanystronglyfocusesuponprovidingaconduciveworkenvironmentandhasinstalledwindventilatorstoreducetemperatureswithintheplants.Welfareworkshopsandhealthcheckupsareconductedonregularbasisforallemployees.

11. Corporate social responsibility

Aspartofitseffortstoeducatelocalresidents,thecompanyhasadoptedITI’satJalnaandAmbadaspartofapublicprivatepartnership.AtHyderabadthelocalpolicestationundertheCyberabadCommissioneratehavebeenadoptedforimparting5StrainingandintroductionofQualityCircles.Thecompanyisoneoftheco-sponsorsinaprojectlaunchedbyTERI(TheEnergyandResourcesInstitute,Mumbai)totarget2000childrenfrom20municipalschoolsinandaroundMumbaiinanenvironmenteducationandawarenessproject.

12. Corporate governance

Pursuanttoclause49ofthelistingagreementswiththestockexchanges,aManagementDiscussionandAnalysis,CorporateGovernanceReportandAuditors’CertificateregardingcomplianceofconditionsofCorporateGovernancearemadepartoftheAnnualReport.

TheCodeofConductfordirectorsandSeniorManagementpersonnelofthecompany,asapprovedbytheBoard,hasbeenaffirmedonanannualbasisbyallthedirectorsandtheSeniorManagementpersonneloftheCompany.

TherelevantcertificationonthevariousmattersspecifiedunderparagraphVofclause49hasbeendonebytheManagingDirectorandtheSr.VPFinance&Co.SecretaryoftheCompany.

TheReportandaccountsofthesubsidiarycompaniesareannexedtothisreportalongwiththestatementpursuanttosection212oftheCompaniesAct,1956.Wehaveprovidedtheabridgedbalancesheetandtheabridgedprofitandlossaccountofthesubsidiarycompaniestothemembers.However,inthecontextofmandatoryrequirementtopresentconsolidatedaccounts,whichprovidesmemberswithaconsolidatedpositionoftheCompanyincludingsubsidiaries,atthefirstinstance,membersarebeingprovidedwiththeReportandAccountsoftheCompanytreatingtheseasabridgedaccountsascontemplatedbySection219oftheCompaniesAct,1956.Copiesoftheunabridgedbalancesheet,unabridgedprofitandlossaccountandotherdocumentsannexedtothesameshallbemadeavailableforinspectionattheregisteredofficeofthecompany.MembersdesirousofreceivingthefullReportandAccountsincludingtheReportandAccountsofthesubsidiarywillbeprovidedthesameonreceiptofawrittenrequestfromthem.ThiswillhelpsaveconsiderablecostinconnectionwithprintingandmailingoftheReportandAccounts.

13. Directors’ responsibility statement

InaccordancewiththeCompanies(Amendment)Act,2000,theDirectorsstatethat:

i. inthepreparationofannualaccounts,allapplicableaccountingstandardshavebeenfollowedandproperexplanationrelatingtomaterialdepartures,ifany,havebeenfurnished;

ii. accountingpoliciesaslistedintheSchedule19tothefinancialstatementshavebeenselectedandconsistentlyappliedandreasonableandprudentjudgementsandestimateshavebeenmadesoastogiveatrueandfairviewofthestateofaffairsoftheCompanyason31stMarch,2008andoftheprofitoftheCompanyfortheaccountingyearendedonthatday;

iii. proper and sufficient care for maintenance of adequate accounting records has been taken inaccordancewiththeprovisionsoftheActsoastosafeguardtheassetsoftheCompanyandtopreventanddetectfraudandotherirregularities;

iv. theAnnualAccountshavebeenpreparedonagoingconcernbasis.

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14. Auditors

M/s. A F Ferguson & Co. retire at the ensuing Annual General Meeting and are eligible forre-appointment.

15. Acknowledgement

TheDirectorscommendthecontinuedcommitmentanddedicationofemployeesatalllevels.TheDirectorsalso wish to acknowledge with thanks all other stakeholders for their valuable sustained support andencouragement.ItisthisunityofpurposethatbreedssuccessandyourDirectorslookforwardtoreceivingsimilarsupportandencouragementfromthelargerNRBfamilyintheyearsahead.

OnbehalfoftheBoard

T S SahneyMumbai:June9,2008 Chairman

9

ANNEXURE TO DIRECTORS’ REPORT

Particulars under the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988.

A. Measures taken for Conservation of Energy

Thecompanyhasalwaysbeenconsciousoftheneedforconservationofenergy.Effortsforconservationofenergyinallareasaremadeonacontinuousbasis-maximizinguseofdaylight,usingenergyefficientlamps,optimumutilizationoffurnaces,providingvariablespeeddriveformotorsonmachines,arrestingleakagesincompressedairpipingandelectricalsystemsanduseofalternatefuelinassembly.Themajorareaswherespecificenergyconservationmeasureshavebeenimplementedduringtheyearare:-

• Atallplantsthepowerfactor iscontinuallymonitoredandmaintainedintherangeof0.98to1.00resultinginsubstantialsavingsinenergybillsbywayofrebatesfromtheStateElectricityBoards.

• At Jalna, replacement of old compressor, overhead mercury lamps in the grinding section andreplacementofpumpsinthecompressorcoolingtowerareahaveresultedinannualsavingsofRs.7.75lacs.

• AtWaluj,useofenergyefficientlightsandfittingofvariablefrequencydriveshavegivenanannualsavingsofRs.0.86lacs.

• At Hyderabad, plant installation of energy efficient motors and automatic voltage regulators haveresultedinanannualsavingsofRs.4.61lacs.

• AtThane,severalinitiativeslikeenergyefficientlightingdevices,highemissioncoatingforfurnaces,replacementofcoolantchillerandusageofautomaticvoltagestabilizershaveresultedinanannualsavingsofRs.6.10lacs.

B. Technology Absorption, Research & Development (R & D)

Thecompanyhasacontinuingprogrammetoenhanceitsrangeofproductstomeetthefutureneedsoftheevolvingmarketbyprovidingastrongpropositionforitscustomers.Aspartofthisprogramme,itsengineeringandtechnologydevelopmentcentershavecarriedoutimprovementsasdetailedbelow:

SpecificareasinwhichR&Discarriedoutbythecompany

Mainthrustduringtheyearwason:NewproductdevelopmentStandardisationofmaterialandqualityspecificationsProductivityimprovementApplicationbasedcalculationcapability,simulationandtesting

BenefitsderivedasaresultoftheaboveR&D

TherewasquantumjumpinNewproductdevelopment–72newsizes,specialdoublerowCRBs,largesizethrustneedlebearings,intricatetransmissioncomponents,sealedballbearings.Toimproveproductlife,alternatespecificationsforrawmaterialshavebeenworked out. Lubrication test machines, linear bearing and propeller shaftbearingtestingfacilitiesdeveloped.Automationlinesinneedlefacegrindingandbushassemblylineshavehelpedtoimproveproductivity.TechnicalpapersonBearingfinitesimulation,Dynamicimpactload,metalformingandthrustbearingcontactpublished.

Futureplanofaction Developingcorecompetencytodiversifytheproductrange.Installingacceleratedtestingmachinestoreducetestingtimeandanalyzerformetalandnonmetallicparts.PlanningrapidprototypedevelopmentshopforcompressingNPDtime.

ExpenditureonR&D DuringtheyearanamountofRs.313.34lacshasbeenincurredonrevenueandcapitalaccountforR&Dexpenses.

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C. Foreign exchange earnings and outgo Foreignexchangeearnings Rs.3711.13lacs Foreignexchangeoutgo Rs.5019.49lacsInformationpursuanttoSection217(2A)oftheCompaniesAct,1956readwiththeCompanies(ParticularsofEmployees),Rules,1975.

Name,Qualifications&Designation (Age)Experience

Dateofcomm.ofemplmt.

RemunerationRupees

Lastemployment

Mr.T.S.Sahney,M.AChairman&ManagingDirector

(80)61

17.7.1966 1,34,87,398 -

Ms.H.S.Zaveri,A.B(USA)President

(48)21

01.10.1987 91,90,397 -

Mr.DeveshSSahney,BBA(UK),MBADirector-StrategicSourcing

(40)15

Oct1993 60,87,359 CreditLyonnaisBank,Trainee

Mr.S.C.Rangani,BCom,MMS,ACSSr.VPFinance&Co.Secretary

(59)37

22.02.1993 44,55,863 GM-Finance&SystemsPoyshaInd.Co.Ltd.

Dr.S.M.Singhi,BSc,LLM,PH.d(Law)VPPersonnel

(55)31

15.07.1991 30,65,054 Sr.Manager-HRLloydsSteelIndusLtd

Mr.A.S.Kohli**BE(Mechanical),PGDIMVP-SpecialProjects

(51)30

04.03.1996 19,33,380 GeneralManagerCoventrySpring&Engg.Co.Ltd.

Mr.AsimendraChaudhuriB.Tech.PGDBMSr.VPOperations

(54)30

01.07.2006 41,68,322 Chief(Operations&Tech.Services)TataSteelLtd,BearingsDivn

Mr.RanjanSenBE(Mechanical),PGCGMVPSales&Marketing

46(23)

01.04.2005 31,85,321 GM-WesternRegion(LucasIndia)

Mr.R.MatkarB.E(Mechanical),M.E.(Production)VPProjects&Logistics

55(31)

02.08.2005 27,33,207 VicePresident(SupplyChain&Sourcing)Celetronix(India)

Mr.P.RayB.E(Mechanical)VPEngineering

52(30)

19.07.1999 27,36,842 HeadofDesign&Development(TataSteelLtd,BearingsDivn)

Mr.B.D.Patil*BSc,MLSVPHR

(50)24

29.05.2007 31,72,373 HeadHRModernFoodsLtd,NewDelhi

Mr.MNShintre*BE,MMS,GradICWAVPFinance

(43)21

7.05.2007 31,55,018 VPFinance&ITTataAutocompSystemsLtd.

Mr.HermanHeinzKamping*DegreeinMech.Engg.VPInternationalBusinessDevelopment

(52)28

11.06.2007 65,78,500 ChiefEngineerAutomotiveTimken,Halle/WestFalen

*Partoftheyear**OnsecondmenttoNRBBearings(Thailand)Ltd,w.e.f.4.10.2007ThenatureofemploymentiscontractualandtermsofremunerationaregovernedunderBoardandMembers’resolutions.Grossremunerationincludessalary,commission,incentivepayment,company’scontributiontoprovidentfund,superannuationandgratuityfunds,allowances,perquisites,asapplicable.

OnbehalfoftheBoard


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CEO/CFO CERTIFICATION

TheManagingDirector (CEO)and theSr.VPFinance&CompanySecretary (CFO)ofNRBBearingsLtd.herebycertifytotheboardthat:

a. wehavereviewedfinancialstatementsandthecashflowstatementfortheyearandthattothebestofourknowledgeandbelief:

(i) thesestatementsdonotcontainanymateriallyuntruestatementoromitanymaterialfactorcontainstatementsthatmightbemisleading;

(ii) thesestatementstogetherpresentatrueandfairviewofthecompany’saffairsandareincompliancewiththeexistingaccountingstandards,applicablelawsandregulations

b. tothebestofourknowledgeandbelieftherearenotransactionsenteredintobythecompanyduringtheyearwhicharefraudulent,illegalorviolativeofthecompany’scodeofconduct.

c. weacceptresponsibilityforestablishingandmaintaininginternalcontrolsforfinancialreportingandthatwehaveevaluatedtheeffectivenessoftheinternalcontrolsystemsofthecompanypertainingtofinancialreportingandwehavedisclosedtotheauditorsandtheAuditCommittee,deficienciesinthedesignoroperationsofinternalcontrols,ifany,ofwhichweareawareandthestepswehavetakenorproposetotaketorectifythesedeficiencies.

d. wehaveindicatedtotheauditorsandtheAuditCommittee:

(i) significantchangesininternalcontroloverfinancialreportingduringtheyear;

(ii) significantchangesinaccountingpoliciesduringtheyearandthatthesamehavebeendisclosedinthenotestothefinancialstatements;and

(iii) therearenoinstancesofsignificantfraudofwhichwehavebecomeawareandtheinvolvementtherein,ifany,ofthemanagementoranemployeehavingasignificantroleinthecompany’sinternalcontrolsystemoverfinancialreporting.

For NRB BEARINGS LTD

T S SAHNEY S C RANGANIMumbai:June9,2008 ManagingDirector(CEO) Sr.VPFinance&Co.Secretary(CFO)

DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE COMPANY’S CODE OF CONDUCT

This is to confirm that the Company has adopted a Code of Conduct for all Board Members and SeniorManagementpersonnelandthesamehasbeenplacedontheCompany’swebsite.AllBoardMembersandSeniorManagementpersonnelhaveaffirmedcompliancewiththeCodeofConductinrespectofthefinancialyearended31stMarch,2008.


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MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS REVIEW

ThecompanyisintheballandrollerbearingbusinessandistheonlymanufacturerinIndiamakingallthebroad types of bearings viz. ball bearings, needle/cylindrical/spherical/tapered/thrust roller bearings. TheannualproductionofthedomesticorganizedsectorisestimatedatRs.2850croresfortheyear2007-08.Yourcompany’smarketshareinthedomesticorganizedsectoris12%.

In2007,evenastheworldeconomyslowedfrom3.9%to3.6%,therewasarobust7.9%growthindevelopingeconomies,offsettingtheslowdowncausedbytheslowerUSdomesticdemand.TheIndianeconomyisexpectedtogrowby8.7%for2008,theglobalfinancialturmoilnotwithstanding.Theeconomybecameatrilliondollareconomy-oneofonly12–throughrobustdomesticconsumption,rupeeappreciationandexportgrowthledbytheservicesectors.

ThedemandforthebearingindustryinIndiaisderivedfromdemandintwousersegments–AutomotiveandIndustrial.Theautomotive industry is the largestusersegment.Notonly is the Indianautomobile industryexpectedtomirrorthegrowthofthecountry’sGDP,theIndianautocomponentindustryisestimatedtobeatasignificantadvantagewithamarketexpectedtoincreasetoUSD40billionby2015–a13foldgrowthinamere8years(ACMAandMckinsey).Indiaisalreadythefastestgrowingmillion-plusautomobilemarketintheworld(exceptChina),yetonly6outof1000Indiansownacar.

Capitalinvestmentsforcreatingfreshcapacitiesandbuildinfrastructuretomeetgrowingdemandaretakingplaceinallsectorsfrompowerandoil/gastoroads,portsandairports.Consideringthecontinuousgrowthintheautomobileindustry,capitalgoodsindustryandtheoverallgrowthintheIndianeconomy,thecompanyexpectsstrongdemandtobesustainedforitsproducts.

Therisingconsumerpricesand interestratesareacauseofconcernandcanslowdownthegrowthrate.Continuedadherencetotheongoingreformprocessandreductionofbudgetdeficitsarevitalforsustaininggrowth.More reforms to improve infrastructurewithin targeted timelinesand theactiveparticipationof theprivatesectorwouldspeeduptheoveralleconomicdevelopmentinthelongrun.

During2007-08, theautomotive industry, the largestconsumerofqualitybearings,haswitnessednegativegrowthinsomesegments.Tabledbelowaregrowthestimatesfor2008-09projectedbythecompany,afterassessingdemandforecastswithallmajorOEMs:

VehicleProduction(Nos)

UserIndustry 2007-08 2006-07 %growth

%growth(2008-09Est)

2-WheelersMotorcycleScooterMopeds

6503,5321074,933

430,827

7112,225943,974379,987

-8.5613.8813.38

421

Total 8026,049 8436,186 -5.20

3-WheelersPassengerCarsMUV/MPVHCV/MCVLCVTractors

500,5921416,480

344,649291,114254,062346,000

556,1241238,032

306,818294,266225,734351,000

-9.9914.4112.33-1.0712.55-1.42

4-46

10216

Total 11,178,946 11,408,160 -2.00

Source:SIAMfor2006-07and2007-08productiondataandcompanyestimates

FINANCIALS

Turnover,netofexciseduty,increasedby6%toRs.32142lacsfromRs.30311lacsin2007-08.Domesticsalesincreasedby2.6%fromRs.27870lacstoRs.28607lacswhileexportsincreasedby45%toRs.3535lacsfromRs.2441lacsin2007-08.

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Thetablebelowsetsforththekeyexpenseitemsasapercentageofnetrevenuesfor2006-07and2007-08.Therelentlessincreaseinglobalsteelpricessharplyincreasedcostsofmaterialsconsumednegatingtheoperationalefficienciesandcostcuttinginitiative.Employeecostsmovedupwardsinsympathywiththemarkettrends,thelowgrowthinvolumesbluntinganyproductivityimprovements.

Percentage of Turnover Year ended March 31

2008 2007

Turnover(netofexciseduty) 32142(100%) 30311(100%)

Expenditure:-Material(Includingchangeinstock)*-EmployeeCost-ManufacturingandOtherexpenses(Net)

46.2316.7215.84

45.0214.8513.96

TotalExpenditure 78.79 73.83

ProfitbeforeDepreciation,InterestandTax 23.41 26.17

Depreciation 5.59 5.22

Interest(Net) 1.69 1.19

ProfitbeforeExceptionalItemsandTax 16.13 19.76*Increaseinthepriceofsteelinputs

Benchmarkedagainstother largeplayers in thedomesticbearings industry,yourcompany’sperformancecontinuestoratefavourably

Ratio/ Year Ended SKF FAG TIMKEN NRB

31.12.2007 31.12.2007 31.12.2007 31.03.2008

OperatingProfit(PBDIT)toNetSales-% 16.91 22.03 20.56 23.41

RONW-PAT/NetWorth 29.47 25.00 15.33 18.55

ROCE-PBT/CapEmployed 44.94 38.33 22.88 17.25

EPS* 30.50 47.85 5.87 6.92

*ForSKF,FAGandTimkenF.V.Rs.10/-pershareandforNRBF.V.Rs.2/-pershare

ECONOMIC VALUE ADDITIONEVA is residual income after charging the company for the cost of capital provided by the lenders andshareholders.Itrepresentsthevalueaddedtotheshareholderbygeneratingoperatingprofitsinexcessofthecostofcapitalemployedinthebusiness.

Rs. In Lacs

EVA 2007-08 2006-07

EBIT 5727 6352

Less:AdjustedTax 1947 2159

NOPAT(NetOperatingProfitlesstax) 3780 4193

Equity 18062 16071

Debt 10792 9120

TotalInvestedCapital 28854 25191

PostTaxCostofDebt% 5.44 3.30

CostofEquity% 10.50 10.50

WeightedAverageCostofCapital%(WACC) 8.61 7.89

WeightedAverageCostofCapital(WACC) 2484 1988

EVA(NOPAT–WACC) 1296 2205Notes:Taxcalculationexcludesdeferredtaxandisadjustedfortaxshieldoninterest.Costofequityisbasedoncostofriskfreereturnequivalenttoyieldonlongtermgovernmentbonds@6%p.a.plusequitypremiumadjustedforcompany’sbetavariant.Theequitypremiumisassumed@9%whilethebetaisconsideredat0.5.

14

Thecompany’sEVA,whichisarealmeasureofshareholders’valuecreation,hasdeclinedduringtheyear,onaccountofthepressureonprofitabilitymargins.

SEGMENT WISE PERFORMANCE

Yourcompanyhasonlyonesignificantreportablesegmentofballandrollerbearingsastheprimarybusinesssegment.Theassetsandliabilitiesofthecompanyareallexpendedtowardsthisbusinesssegment.

OPPORTUNITIES AND THREATS

OPPORTUNITIES

– Roadandinfrastructuredevelopmentprogramsareexpectedtocontinueandwithin5yearstherewillbeimprovedconnectivitytoports,citiesandvillagesthroughanetworkofhighwaysandinterconnectingroads.Asperplanningcommissionestimates,theGovernmenthasplannedinvestmentsofUSD33billionfortheoilandgassector,USD40billionforimprovingroadandrailwayinfrastructure,USD18billionforportsandUSD10billionforairports,aggregatingUSD100billion.Thisinfrastructurespendingwillleadtogrowthinthemanufacturingsectorwiththeconsequentiallinkagetoourindustry.Thiswillgiveimpetustopeoplemovementandtomovementofgoodsbyreducingpertonne-kmtransportationcosts.Furtherwithhigherdisposableincomes,easierfinancingoptionsandchangesinlifestyle,penetrationofpersonalizedtransportisexpectedtoincrease.Avibrantautoindustryofferssizeablemarketopportunitiesforthedomesticbearingsindustry.

Withawideproductrange,thecompanyisinapositiontotakeadvantageofthebuoyancyintheeconomy.Thecompanyhasalreadycreatedmanufacturingfacilitiestomeetthisdemandandwillcontinuetodoso.

– TheincreasingexportsofautomotiveproductsfromIndiaandtheglobalsourcingpolicyofglobalmajorshaveresultedinIndiadevelopingintoamanufacturinghubforautocomponentmanufacturers.Yourcompanyiswellpositionedtobenefitasoverthepastfewyearsithasfocusedonimplementingbest-in-classproductionsystems,technologydevelopment,slashingcostwhileupgradingqualityandscalingupofitsmanufacturingfacilities.Beingalowcostlocationthecompanyalsoseesincreasingopportunitiesforexport.

– AgriculturalGDPofIndiahasgrownby3%duringFY2007-08.Alsothecreditallocationtoagriculturehasbeenincreasedsignificantly.Increasedagri-focusoftheIndianGovernmenthasreflectedinthebudgetforFY2008-09andthelowpenetrationoftractorsinthedomesticmarketprovidessignificantscopeforbusinessexpansion.

– DebtwaivertothetuneofRs.60,000croresannouncedforsmallandmarginalfarmersisexpectedtocreateadditionalliquidityinthehandsofthefarmers.

THREATS

– Unfavourablecommodityprices–unfavourablepricesforsteelbasedinputshavesignificantlyaffectedthemarginsfortheindustry.Thesluggishconditionintheuserautomotiveindustryhasdelayedthepassonofsuchcostincreasestotheendusers.Thecontinuingupwardtrendofglobalcrudepricescouldadverselyimpactthefortunesandtheprofitabilityoftheautomotiveindustry.

– Globalcompetition–withmanyglobalautomajorsenteringIndiawitharangeofproducts,theirsuppliersforautocomponents,includingbearings,haveplansfollowingthemintoIndia,addingtotheMNCsalreadyhavingmanufacturingfacilitiesinIndia.Thedemandfortheautomotiveindustrymayslowdownincaseofanyslacknessintheimplementationofthevariousinfrastructureprojects.Thiswouldadverselyaffectthecompany’sutilizationofresources.

– Spurious/counterfeitproductsuppliescateringmainlytothereplacementmarketwhichaccountsfor25%ofthetotaldemandfortheindustrycontinuestobeamajorthreat.

– Governmentregulations–Reduction incustomdutyon importsandthe implementationofFreeTradeAgreements(FTA)andothersimilargovernmentpoliciescanpotentiallyopentheIndianmarkettomoreimportsatfarlowercostthanpresentlyprevailing,includingfromChinaandEasternEurope.Appreciationoftherupeehasfurthercontributedtocheaperimports,increasingcompetitionfordomesticproducers.

15

– Availabilityoffinanceisoneofthemostsignificantfactorsinfluencingdemandforvehiclesandtractors.Around95%ofcommercialvehiclesandtractors,65%-75%of2wheelersandpassengercarsarefinancedthroughloans.WithRBIintroducingtightmonitorymeasuresbothcostoffinancingandavailabilityhasledtodemanddeclinefortheseproducts.

Tocountertheserisksthecompanyhastakenseveralinitiatives.Tostaycompetitive,thecompanyiscontinuingitsfocusoncostreductionandimportsubstitutionmeasures.Throughfocusonexportsandproductdiversification,theadverseeffectofanyslowdowninthedomesticautomotivemarketwillbeminimized.Thecompanyiswellpositionedtoservethemarketanditscustomerswithlatesttechnologyproductsandstrivestohavetherightproductsontimeandwellaheadofcompetition.Thecompanyremainscommittedtowardscontinuousprocess improvements through implementing TPM and other latest techniques in production, quality andprocessmanagement.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

Basedonthenatureofthebusinessandsizeofoperationsthecompanyhasinplaceadequatesystemsofinternalcontrolanddocumentedprocedurescoveringall financialandoperating functions.Thesecontrolshavebeendesignedtoprovidefor

– Accuraterecordingoftransactionswithinternalchecksandpromptreporting

– Safeguardingassetsfromunauthorizeduseorlosses

– Compliancewithapplicablestatutes,andadherencetomanagementinstructions&policies

– Effectivemanagementofworkingcapital

– Monitoringeconomyandefficiencyofoperations

Externalindependentfirmscarryoutperiodicalauditsatallplantsandofallfunctionsandbringoutdeviationsfromlaiddownprocedures.Theprocessalsoinvolvesreviewofexistingrisksandcontrolsincludingrecommendationstostrengthenbusinessprocesses.Theobservationsarisingoutofauditarereviewed,inthefirstinstancebytherespectiveHODsandplant/functionalheadsandcomplianceisensured.Furthercorrectiveactionplansaredrawnuptobuildbusinessprocesseswhichwilleliminaterepetitionofdeviations.

The highlights of these reports are presented to the Audit Committee, who reviews the significant auditobservationsalongwiththeactionsinitiatedandreportstotheBoardperiodically.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

During theyear, therelationswith theemployeescontinued tobepositive.Thecompanyhasentered intodiscussionswiththeunionsatChikalthane,WalujandThaneplantsasthecurrentsettlementsareexpiring,andhasbeenimpressinguponthemtheneedfortheirco-operationinimprovingproductivitylevelsatallplants,withoutwhichthecompanywouldbeunabletoretainitscompetitiveedgeasaglobalsupplier.

Appreciationoftalent,respectofhumandignityandcelebrationofsuccessiscoretotheNRBHRphilosophy.Weencouragepeopletothinkdifferently.Thecompanyismovingfromameretraininginterventionapproachtoalearningsolutionorientedorganizationwhereeffortsaredirectedtowardsacquiringstrategicfuturecriticalskills.

Wewould like to instillcommitment forperformanceasakeyvalueandcreateamechanismtorecognizeindividualand teamcontributions to theorganisation.The topmanagement ledby thePresident focusonelicitingsynergiesforeffectiveperformancethroughteamengagementinitiatives.ThegoalistobuildonthesharedvisionalreadyarticulatedandcommunicatedasVision2020andMission2010.

Permanentemployeesdirectlyemployedbythecompanycurrentlytotal1456nos.

CAUTIONARY STATEMENT

Statements in thisManagementDiscussionandAnalysisdescribing thecompany’sobjectives,projections,estimatesandexpectationsmayconstitute‘forwardlookingstatements’withinthemeaningofapplicablelawsandregulations.

Actualresultsmaydiffermateriallyfromthoseeitherexpressedorimplied.

16

CORPORATE GOVERNANCE

Yourcompanyhasbeenpracticingtheprinciplesofgoodcorporategovernanceovertheyears.CorporateGovernanceisaboutcommitmenttovaluesandaboutethicalbusinessconduct.GoodCorporateGovernanceshouldprovidesufficienttransparencyovercorporatepolicies,strategiesandthedecisionmakingprocesswhilststrengtheninginternalcontrolsystemsandbuildingrelationshipswithstakeholders,includingemployeesandshareholders.Theadherencetogoodgovernancepracticeshelpsalign interestsofstakeholders,enhanceinvestorconfidence,inturnfacilitatingthecreationofsuperiorvalueonasustainablebasis.

Thecompanyisinfullcompliancewiththerequirementsofclause49oftheListingAgreementwiththeIndianStockExchanges.

1. Board of Directors

(i) Composition:

TheChairmanoftheBoardofNRBisalsoitsManagingDirector.AlldirectorsincludingNon-executiveDirectorsareprofessionallycompetent.Atpresent,theBoardconsistsofsixmembers,ofwhichthreeareNon-executiveDirectors.

ThecompositionandcategoryofDirectorsintheBoardoftheCompanyare:

ExecutiveDirectors(Allfromthepromoterfamily)

Mr.TSSahney,Chairman&ManagingDirector Ms.HSZaveri,President Mr.DSSahney,Director-StrategicSourcing

Non-ExecutiveandindependentDirectors

Dr.PDOjha Dr.(Ms)KalaSPant Mr.KMElavia

(ii) BoardMeetings:

TheBoardoftheCompany,asalsothevariousspecializedcommitteesconstitutedbytheBoard,heldasmanyas23meetingsincluding5meetingsoftheBoardduring2007-08.

The maximum interval between any two meetings was 91 days. The Board held its meetings on10thMay,2007,7thJune,2007,31stJuly,2007,31stOctober,2007and29thJanuary,2008.

(iii) AttendanceofDirectors:

TheoverallattendanceofDirectorswas100%.Theattendanceofwhole-timeDirectorswas100%.

Attendance of Directors At the Board Meetings held during 2007-08 and the last Annual General Meeting

Directors Meetings held during the tenure of the Directors

Meetings Attended

Attendance at the last AGM

(3rd August, 2007)

Share-holding

1Mr.T.S.Sahney 5 5 Yes 2912975

2Dr.P.D.Ojha 5 5 Yes Nil

3Dr.(Ms)KalaSPant 5 5 No Nil

4Ms.H.S.Zaveri 5 5 Yes 1935750

5Mr.D.S.Sahney 5 5 Yes 1752300

6Mr.K.M.Elavia 5 5 Yes Nil

OverallattendanceintheBoardMeetings:100% AGM:83%

17

(iv) OtherDirectorships: NoneoftheDirectorsholdsDirectorshipinmorethan10listedcompanies.

Other Boards of which directors are Members

Srl.No

Name of Directors Details of other Directorships *

Details of Committee Memberships

Details of Chairmanship in

Committee

1 Mr.TSSahney** Nil

2 Dr.PDOjha WeizmannLtd-ChairmanKJMCInvestmentTrustLtd.

3 Dr.(Ms.)KalaSPant TemptationFoodsLtd-ChairmanBinaniMetalsLtd

Chairman-AuditCommittee

4 Ms.HSZaveri** SNLBearingsLtd Member-InvestorGrievances/ShareTransferCommitteeMember-AuditCommittee

5 Mr.DSSahney** NIL NIL

6 Mr.KMElavia GroverVineyardsLtd(AlternateDirector)GoaCarbonLtd

UniAbexAlloyProductsLtd

UniDeritendLtd

UniKlingerLtd

SulzerIndiaLtd

AllcargoGlobalLogisticsLtd

Member-AuditCommittee

Member-AuditCommitteeMember-Shareholder/Investors’GrievanceCommitteeMember-ShareAllotment/TransferCommittee




*ExcludingprivatelimitedcompaniesandcompaniesnotincorporatedinIndia.**Ms.HSZaveriandMr.DSSahneyarethedaughterandsonrespectivelyofMr.TSSahney.

(v) Membership of Board committees:

Noneof theDirectorsholdsmembershipofmorethan10CommitteesofBoardsnor isanyDirectoraChairmanofmorethan5CommitteesofBoards.

(vi) Details of Directors being appointed/reappointed:

Mr. K M Elavia andDr. (Ms.) Kala S Pant retireby rotationandareeligible for reappointment. Theparticularsofthesedirectorsarefurnishedhereunder:

Mr. K M Elavia(62yrs)hasabachelorsdegreeinCommerceandisprofessionallyqualifiedasaCharteredAccountant.Since1974hehasbeenapartnerofKalyaniwalla&Mistry,CharteredAccountantsandhasvastexperienceincorporatemattersbeingadirectorontheboardofvariouspubliclimitedcompanies.HisareasofspecializationareAuditandReview,CorporateFinance(Businessvaluations,mergersandacquisitions,financialrestructuring,foreigndirectinvestment).

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Dr.(Ms.) K S Pant(73yrs)hasabachelorsdegreeinSciencefollowedbypostgraduationinStatisticsappliedtoEconomicsandIndustryandDoctoralResearchworkbyquantitativemethodsinthefieldofbankingandtransport.Shehasspecializedintheapplicationofquantitativetechniquesintheareasofdecisionmakinganalysis,uncertaintyanalysis,infrastructurebenefit/costanalysisespeciallyinthefieldsofbankingandtransport.ShehasservedontheBoardofDirectorsofDenaBankandBankofIndia,hasbeenmemberoftheWesternRegionCommitteeofIDBIandiscurrentlyConsultant/AdvisortoNationalisedBanks/IndustriesandisonthepanelofapprovedConsultantsofFinancialInstitutions.Shehasbeenanomineedirectoronbehalfofvariousinstitutionsinvariouspubliclimitedcompanies.

(vii)Remuneration of directors:

Thedetailsoftheremunerationpackageofdirectorsistabledbelow:(Amount in Rs)

Name of Director

Sitting fees

Commission on profits

Salary Contribution to PF & other funds

Perquisites Total

TSSahney - 4500000 4500000 540000 3947398 13487398

HSZaveri - 1710000 3420000 1087902 2972495 9190397

DSSahney - 1200000 2400000 763440 1723919 6087359

PDOjha* 55000 166666 - - - 221666

KSPant* 55000 166666 - - - 221666

KMElavia* 115000 166666 - - - 281666

*[email protected]%,withaceilingofRs.5lacsp.a.asdeterminedbytheBoardofDirectors,willbeapportionedandpayableduring2008-09.

PeriodofContractofChairman: Foraperiodof5yearsw.e.f.1.10.2005to30.9.2010 &ManagingDirector Thecontractmaybeterminatedbyeitherpartygiving theotherpartysixcalendarmonthsnotice

PeriodofContractofPresident: Foraperiodof5yearsw.e.f.1.4.2004to31.3.2009 Thecontractmaybeterminatedbyeitherpartygiving theotherpartythreecalendarmonthsnotice

PeriodofContractofDirector: Foraperiodof5yearsw.e.f.25.5.2006to31.3.2011 (StrategicSourcing) Thecontractmaybeterminatedbyeitherparty givingtheotherpartythreecalendarmonthsnotice

Noseverancefeesarepayabletotheabove.

2. Audit Committee

TheAuditCommitteeofNRBwassetupwaybackinJanuary,2001.TheCommitteeconsistsofthreeNon-executiveDirectorsandisheadedbyDr.PDOjha.TheMembersoftheCommitteehavefairknowledgeofprojectfinance,accountsandcompanylaw.Thecommitteeheld6meetingsduringtheyear,whichwereattendedbyitsmembers.ThemajortermsofreferenceoftheAuditCommitteeasstipulatedinClause49oftheListingAgreementareasfollows:

i. Oversightofthecompany’sfinancialreportingprocessandthedisclosureofitsfinancialinformationtoensurethatthefinancialstatementiscorrect,sufficientandcredible.

ii. Recommendingtotheboard,theappointment,re-appointmentand,ifrequired,thereplacementorremovalofthestatutoryauditorandthefixationofauditfees.

iii. Approvalofpaymenttostatutoryauditorsforanyotherservicesrenderedbythestatutoryauditors.

iv. Reviewing with management the annual financial statements before submission to the Board forapproval, focusing primarily on (i) any changes in accounting policies and practices, (ii) major

19

accountingentriesbasedonexerciseofjudgementbymanagement,(iii)qualificationsindraftauditreport,(iv)significantadjustmentsarisingoutofaudit,(v)mattersrequiredtobeincludedintheDirectors’responsibility statement, (vi) compliance with accounting standards, (vii) compliance with Listingandlegalrequirementsconcerningfinancialstatementsand(viii)anyrelatedpartytransactionsi.e.transactionsoftheCompanyofmaterialnaturewithpromotersorthemanagement,theirsubsidiariesorrelatives,etc.thatmayhavepotentialconflictwiththeinterestsoftheCompanyatlarge.

v. Reviewing,withthemanagement,thequarterlyfinancialstatementsbeforesubmissiontotheboardforapproval.

vi. Reviewingwith themanagement,performanceofstatutoryand internalauditors, theadequacyofinternalcontrolsystems.

vii. Reviewingtheadequacyoftheinternalauditfunctionsincludingthereportingstructurecoverageandfrequencyofinternalaudit.

viii. Discussionwithinternalauditorsofanysignificantfindingsandfollowupthereon

ix. ReviewingthefindingsofanyinternalinvestigationsbytheinternalauditorsintomatterswherethereissuspectedfraudorirregularityorafailureofinternalcontrolsystemsofamaterialnatureandreportingthemattertotheBoard.

x. Discussionwithstatutoryauditorsbeforetheauditcommences,aboutthenatureandscopeofauditaswellaspostauditdiscussionstoascertainanyareaofconcern.

xi. Tolookintothereasonsforsubstantialdefaultsinthepaymenttothedepositors,debentureholders,shareholders(incaseofnon-paymentofdeclareddividends)andcreditors

Attendance of Members at the Meetings of the Audit Committee held during 2007-08

Members Meetingsheld Meetingsattended

Dr.PDOjha(Chairman) 6 6

Dr.(Ms.)KalaSPant 6 6

Mr.KMElavia 6 6

Overallattendance:100%

3. Shareholders/Investors’ Grievances Committee of Directors

TheBoardofDirectorsoftheCompanyhassetupaShareholders/Investors’GrievancesCommitteeofDirectorscomprisingMr.TSSahney,ManagingDirector,Ms.HSZaveri,PresidentandMr.KMElavia(ChairmanoftheCommittee).

TheshareholdersoftheCompanyareservicedbytheinhouseinvestorservicedepartmentandthesharetransferagent-M/s.MondkarComputersPvt.Ltd.ThetransfersreceivedbytheCompanyareprocessedandtransferredonamonthlybasis.Allrequestsfordematerialisationofsharesarelikewiseprocessedandconfirmationthereofisnormallycommunicatedtotheinvestorsanddepositoryparticipantswithin15daysofreceiptthereof.TheCommitteealsomonitorsredressalofinvestors’grievances.

AsrequiredbytheStockExchanges,theCompanyhasappointedMr.SCRangani,CompanySecretary,astheComplianceOfficertomonitorthesharetransferprocessandliaisonwiththeregulatoryauthorities.

Attendance of the Members at the Meetings of the Shareholders/Investors’ Grievances Committee of Directors held during 2007-08

Members MeetingsheldduringthetenureoftheDirector Meetingsattended

Mr.TSSahney 12 9

Ms.HSZaveri 12 12

Mr.KMElavia(Chairman) 12 12

Overallattendance:92%

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4. General Body Meetings

Thelast3AnnualGeneralMeetingsand1ExtraOrdinaryGeneralMeetingoftheCompanywereheldonthefollowingdatesandtimes:

42ndAnnualGeneralMeetingon3rdAugust,2007at11.00amatM.C.GhiaHall,KDubashMarg,Mumbai400001.

No Special Resolutions were passed at the meeting

ExtraOrdinaryGeneralMeetingheldon8thMarch,2007at11.00a.m.atM.C.GhiaHall,KDubashMarg,Mumbai400001.

Special Resolutions passed at the meeting

Alteration in theArticlesofAssociation togiveeffect toSub-divisionofcompany’sequityshares fromRs.10/-toRs.2/-.

41st Annual General Meeting on 11th August, 2006 at 11.00 am at M. C. Ghia Hall, K Dubash Marg,Mumbai400001.


PaymentofcommissiontoNonExecutiveDirectorsAmendmentofArticlesofAssociation

40thAnnualGeneralMeetingon11thAugust, 2005at 11.00amatM.C.GhiaHall,KDubashMarg,Mumbai400001.


Re-appointmentofMr.TSSahneyasManagingDirectorEnhancementinBorrowingPowerstoRs.150crores

TherewerenospecialresolutionspassedbytheCompanythroughpostalballotatthelastmeeting.

5. Disclosures

NeithertheCompanynoranyofitssubsidiarieshasenteredintoanytransactionofmaterialnaturethatmayhaveapotentialconflictwithinterestsoftheCompanyorofitssubsidiaries,withanyoftheDirectorsortheirrelativesduringtheyear2007-08.Neitherhasanynon-compliancewithanyofthelegalprovisionsoflawbeenmadebytheCompanynoranypenaltyorstrictureimposedbytheStockExchangesorSEBIoranyotherstatutoryauthority,onanymatterrelatedtothecapitalmarkets,duringthelast3years.

6. Means of Communication

InformationlikeQuarterlyFinancialResultsandPressReleasesonsignificantdevelopmentsintheCompanythathasbeenmadeavailablefromtimetotimetothePressishostedontheCompany’swebsitewww.nrbbearings.comandhasalsobeensubmittedtostockExchangestoenablethemtoputthemontheirwebsites.TheQuarterlyFinancialResultsarepublishedinEnglish(TimesofIndiaandEconomicTimes)andvernacularnewspapers(MaharashtraTimes).

Asper theamendment toListingAgreementa separatee-mail IDof thegrievance redressaldivision/complianceofficeexclusively for thepurposeof registeringcomplaintsby investors, thecompanyhasalreadydisplayedthee-mailIDonthewebsite.TheemailIDisinvestorcare@nrbbearings.co.in

AReportonManagementDiscussionandAnalysisofAccountshasbeenincludedelsewhereinthisreport.

21

7. General Shareholder Information

ThemandatoryasalsovariousadditionalinformationofinteresttoinvestorsisvoluntarilyfurnishedinthefollowingsectiononInvestorinformationinthisReport.

8. Auditor’s Certificate on Corporate Governance

The Auditor’s Certificate on Compliance of Clause 49 of the Listing Agreement relating to CorporateGovernanceispublishedasanannexuretotheDirectors’Report.

9. Non mandatory recommendations

a. Chairman of the Board – Re:Non-executive Chairman

TheCompanyhasExecutiveChairman,therefore,clause(a)ofnon-mandatoryrequirementsisnotapplicable.

b. Independent Directors’ tenure not exceeding 9 years

Dr.PDOjhaandDr.(Ms.)KSPanthavebothcompletedanaggregatetenureexceeding9years.HoweveritisfeltthattheircontinuationontheBoardisvaluableforthecompanyconsideringtheirwealthofexperienceandexposure.

c. Remuneration Committee

TheCompanyhasdecidednottoproceedwithformationofRemunerationCommitteeatthisstage.

d. Half yearly results to shareholders

Thecompanyforwardshalfyearlyresultstoallitsshareholders.

e. Audit Qualifications

Thefinancialstatementsofthecompanyanditssubsidiariesarenolongerqualified.

f. Training of Board members

TheBoarddiscusses thebusinessmodeland the riskprofileof thecompanyat itsmeetings.NoexternaltraininghasbeenprovidedfortheDirectorsastotheirresponsibilitiesandthebestwaystodischargethem.

g. Mechanism for evaluating non-executive board members

Peergroupevaluationhasnotbeenimplementedfornon-executivedirectors.

h. Whistle Blower Policy

Thecompanyhasdecided that the implementationofawhistleblowerpolicycouldbesubject tomisuse.

22

Auditors’ certificate to the members of NRB Bearings Limited on compliance of the conditions of corporate governance for the year ended 31st March, 2008 under clause 49 of the listing agreements with relevant stock exchanges.

WehaveexaminedthecomplianceoftheconditionsofcorporategovernancebyNRBBearingsLimited,fortheyearendedon31stMarch,2008,asstipulatedinclause49ofthelistingagreementsofthesaidcompanywithrelevantstockexchanges(hereinafterreferredtoasclause49).

Thecomplianceofconditionsofcorporategovernanceistheresponsibilityofthemanagement.Ourexaminationwas limited to a review of procedures and implementation thereof, adopted by the company for ensuringcomplianceoftheconditionsofcorporategovernance.Itisneitheranauditnoranexpressionofopiniononthefinancialstatementsofthecompany.

In our opinion and to the best of our information and according to the explanations given to us and therepresentationsmadebythedirectorsandthemanagement,exceptthatthedelegatedauthorityhasattendedtosharetransferformalitiesonceamonthinsteadofatleastonceinafortnight,wecertifythatthecompanyhascompliedwiththeconditionsofcorporategovernanceasstipulatedinclause49.

Westatethatsuchcomplianceisneitheranassuranceastothefutureviabilityofthecompanynortheefficiencyoreffectivenesswithwhichthemanagementhasconductedtheaffairsofthecompany.

ForA. F. FERGUSON & CO. CharteredAccountants

R. K. HIRANANDANI PartnerMumbai:June9,2008 MembershipNo.36920

23

SHAREHOLDERS’ INFORMATION1. Annual General Meeting DateandTime : 5thAugust,2008at11.00a.m. Venue : MCGhiaHall,KDubashMarg, NearKalaghoda,Fort,Mumbai400001

2. Financial Calendar FinancialreportingforthequarterendingJune30,2008 : LastweekJuly,2008 FinancialreportingforthequarterendingSeptember30,2008 : LastweekOctober,2008 FinancialreportingforthequarterendingDecember31,2008 : LastweekJanuary,2009 FinancialreportingfortheyearendingMarch31,2009 : EndMay,2009 AnnualGeneralMeetingfortheyearendingMarch31,2009 : August,2009

3. Book Closure Date : 28thJulyto5thAugust,2008 (bothdaysinclusive)

4. Dividend Payment Date : 14thAugust,2008

5. Registered Office and Plants : Dhannur,15SirP.M.Road, Fort,Mumbai400001 (Tel)22664160/4998 (Fax)22660412 WebSite:www.nrbbearings.com

PokhranRoadNo.2,Majiwade, Thane400606

E-40,M.I.D.C.IndustrialArea, Chikalthana,Aurangabad431010

C-6,AdditionalM.I.D.C.IndustrialArea Jalna431203

E-72,(I)&(II)M.I.D.C.,Waluj Aurangabad431133

A-5,UppalIndustrialEstate Hyderabad500039

PlotNo.33,Sector–II,SIDCULIIE Pantnagar,UdhamsinghNagar, Uttarakhand263153

6. Unclaimed Dividends

Pursuant toSection205Cof theCompaniesAct,1956,unclaimeddividends remainingunclaimed forsevenyearsfromthedateofdeclarationarerequiredtobetransferredbythecompanytotheInvestorEducation&ProtectionFundestablishedbytheCentralGovernment,andthevariousdatesfortransferofsuchamountsareasunder.

Financial Year Date of Declaration at AGM/BM Due for transfer on

2000-01 1stAugust,2001 29thAugust,2008

2001-02 5thSeptember,2002 13thSeptember,2009

2002-03 13thAugust,2003 20thAugust,2010



2005-06-Interim-Final

30thJanuary,200621stJune,2006

15thFebruary,201318thAugust,2013


27thOctober,20063rdAugust,2007

10thNovember,201314thAugust,2014

Memberswhohavesofarnotencashedtheirdividendwarrantsorhavenotreceivedthedividendwarrantsarerequestedtoseekissueofduplicatewarrants.

24

7. Unclaimed Dividend Amounts

Thefollowingdividendamountscontinuetoremainunclaimedasat31stMarch,2008.

Financial year No.of warrants issued

No. of warrants

unclaimed

% Amount of dividend

Rs. in lacs

Unclaimed dividend

amount Rs.

%

2000-01 3875 161 4.15 387.69 86396 0.22

2001-02 3866 186 4.81 484.61 127790 0.26

2002-03 3781 184 4.87 581.53 135660 0.23

2003-04 2911 146 5.02 726.92 157590 0.22

2004-05 3088 131 4.24 969.23 165730 0.17


33563214

197148

5.874.60

726.92484.61

16842085510

0.230.18


32864683

150228

4.564.87

775.38630.00

129704144095

0.170.23

8. Bank Details

Inordertoprovideprotectionagainstfraudulentencashmentofdividendwarrants,membersarerequestedtoprovide,ifnotprovidedearlier,theirbankaccountnos.,bankaccounttype,names&addressesofbankbranches,quotingfoliono.totheregistrarofthecompany/secretarialdepartmenttoenableustoincorporatethesameonyourdividendwarrants.

9. Bank Details for Demat Shareholding

Whileopeningaccountswithdepositoryparticipants(DPs),shareholdersarerequiredtogivetheirdetailsoftheirbankaccountswhichwillbeusedbythecompanyforprintingondividendwarrantsforremittanceofdividend.HowevermemberswhowishtoreceivedividendinanaccountotherthantheonespecifiedwhileopeningthedepositoryaccountmaynotifytheirDPaboutanychangeinbankaccountdetails.

10. Nomination Facility

Shareholdersofphysicalsharescannominateapersonforthesharesheldbythem.Requisitenominationformshavealreadybeencirculatedbythecompanytotheshareholderswhoareadvisedtoavailofthisfacility.

11. Distribution of Shareholding as on 31st March :

2008 2007

No. of Equity shares

No.of share

holders

% of share

holders

No.of shares

held

% share

holding

No. of share

holders

% of share

holders

No.of shares

held

% share

holding

Upto500 5305 84.139 1079745 2.228 3482 94.955 329081 3.395

501-1000 518 8.215 458541 0.946 84 2.290 69014 0.712

1001-2000 225 3.569 342833 0.708 39 1.064 58470 0.603

2001-3000 94 1.491 241409 0.498 18 0.491 45399 0.468

3001-4000 26 0.412 95660 0.197 5 0.136 18973 0.196

4001-5000 39 0.619 186286 0.385 3 0.082 13916 0.144

5001-10000 30 0.476 217185 0.448 2 0.055 14700 0.152

10001&above 68 1.079 45839641 94.590 34 0.927 9142707 94.330

TOTAL 6305 100.00 48461300 100.00 3667 100.00 9692260 100.00

As on 31st March, 2008 41394755 shares constituting 85.42% of the share capital has beendematerialized

25

The company has entered into agreements with NSDL and CSDL during the year 2000-01 and has been allotted ISN No.INE 349A 01013. SEBI has notified the company shares to be traded only in demat form w.e.f.29th April, 2001.

The company’s equity shares of Rs.10/- each have been split into Rs.2/- each effective 4th April, 2007 and the new ISIN No. is INE 349A01021.

12. Categories of Shareholdings as on 31st March :

2008 2007

Category No.of share

holders

% of share

holders

No.of shares

held

% share

holding

No.of share

holders

% of share

holders

No. of shares

held

% share

holding

Individuals 5931 94.06 19788120 40.82 3399 92.71 3843123 39.66

CorporateBodies

262 4.16 22086513 45.58 172 4.67 4130523 42.62

ForeignCollaborator

– – – – – – – –

NRI/OCBs 98 1.55 96351 0.20 79 2.16 13534 0.13

FI/FII/Banks 8 0.13 4016120 8.29 6 0.16 1291719 13.33

MutualFunds/UTI

6 0.10 2474196 5.11 11 0.30 413361 4.26

TOTAL 6305 100.00 48461300 100.00 3667 100.00 9692260 100.00

13. Share Transfer System

TheInvestorGrievances/ShareTransferCommitteecomprisingofthreedirectorsisauthorizedtoapprovetransferofsharesandthesaidCommitteeapprovetransferofsharesonamonthlybasis.

Sharetransfersinphysicalformarepresentlyregisteredandreturnedwithinaperiodof60daysfromthedateofreceiptincasedocumentsarecompleteinallrespects.

14. Investor Queries/Complaints Handled

Natureofqueries/complaints 2007-08Nos. 2006-07Nos.

Relating to transfers, Transmissionsetc.(includingduplicatesharecertificates,stoptransfer,non-receiptofsharecertificates,deletionofname,rectificationofsharecertificate,indemnitybondforduplicatecertificate,signatureverification)

2 11

Relating to dividends(includingrevalidationofdividendwarrants,non-receiptofdividendwarrantsandbankdetails)

20 24

Relating to change of address 11 14

Others - -

Total 33 49

• Legalproceedingsonsharetransfer,ifany:Therearenomajorlegalproceedingsrelatingtotransferofshares.

• Therearenoshareholdercomplaintsortransferspendingresolution

26

15. Equity History Detailsofequitysharesissuedsinceinception. Date Particularsofissue No.of Totalno.ofshares Equitycapital shares afterissue inRs. 01.06.1965 Issueforcashatpar 10 10 1000 27.01.1966 Issueforcashatpar 6270 6280 628000 27.01.1966 AllotmenttoNadella Withoutpaymentincash 910 7190 719000 16.10.1968 Issueforcashatpar 2810 10000 1000000 31.07.1973 Bonusissue1:1 10000 20000 2000000 24.09.1976 Bonusissue1:1 20000 40000 4000000 14.02.1979 Bonusissue3:4 30000 70000 7000000 22.04.1982 Bonusissue1:1 70000 140000 14000000 03.01.1989 Bonusissue1:2 70000 210000 21000000 02.11.1990 Bonusissue1:2 105000 315000 31500000 14.12.1991 IssueonmergerofSSPW (SahneySteelPressWorks) 760 315760 31576000 04.11.1993 Bonusissue5:3 526266 842026 84202600 03.05.1995 Publicissue 1272000 9692260* 96922600 04.04.2007 Sub-division1:5* 48461300 48461300 96922600 *EquitysharessubdividedintofacevalueofRs.10/-on10.12.1994. *EquitysharessubdividedintofacevalueofRs.2/-on4.4.2007

16. Listing on Stock Exchange at : Equityshares TheBombayStockExchangeLtd.,Mumbai P.J.Towers,DalalStreet,Mumbai400023 NationalStockExchangeofIndiaLtd ExchangePlaza,5thFloor,PlotNo.C/1,GBlock, BandraKurlaComplex,Bandra(E),Mumbai400051

Note:Listingfeesfortheyear2008-09havebeenpaidtotheStockExchange-MumbaiandNationalStockExchange.

17. Stock Codes BombayStockExchange 530367 NationalStockExchange NRBBEARING ISINNo.forequityshareofRs.2/-each INE349A01021

18. Stock Market Data TheStockExchange,MumbaiandNationalStockExchange,Mumbai Monthlyhighandlowquotationsandvolumeofsharestraded

2007-08 MumbaiStockExchange NationalStockExchange Month High(Rs) Low(Rs) Volume High(Rs) Low(Rs) Volume April’07 104.90 82.50 175840 104.15 84.00 487998 May’07 95.00 85.40 346315 95.00 75.00 311086 June’07 96.90 85.00 207128 96.00 85.00 312813 July’07 109.90 86.05 313593 105.00 88.65 685465 August’07 102.00 81.00 65799 101.50 86.55 303481 September’07 99.90 89.10 584411 100.00 89.10 272130 October’07 108.50 87.00 449939 109.00 88.00 407779 November’07 91.50 79.55 88614 92.50 81.00 142998 December’07 104.10 86.30 73789 107.50 87.05 78499 January’08 114.90 62.00 4686518 115.00 62.35 3760760 February’08 87.00 63.55 1071623 94.35 65.10 161420 March’08 82.00 52.10 132422 89.95 47.60 543591 Total 8195991 7468020

27

19. Performance (Indexed):

20. Registrars and Transfer Agents : M/s.MondkarComputersPvt.Ltd. (Sharetransferandcommunicationregarding 25,ShakilNiwas, sharecertificates,dividendsandchangeofaddress) MahakaliCavesRoad Andheri(East),Mumbai400093 (RegisteredwithSEBIasShare TransferAgent-CategoryI)

21. Investor correspondence : The Company Secretary, Tel:022-22664160/4998 NRB Bearings Limited Fax:022-22660412 Dhannur, 15 Sir P. M. Road E-mail:[email protected] Fort, Mumbai 400 001

As per SEBI circular No.MRD/DoP/Dep/SE/Cir-22/06 dated December 18,2006 has advised all listedcompaniestodesignateanemailIDofthegrievanceredressaldivision/complianceofficerexclusivelyforthepurposeofregisteringcomplaintsbyinvestors.ThefollowingistheemailIDdesignatedforthesame.

[email protected]

22. Details on use of public funds obtained in the last three years : No funds have been raised from public in the last three years.23. Outstanding GDR/Warrants and convertible bonds, conversion date and likely impact on Equity : The company has no outstanding GDR/Warrants and/or convertible bonds.24. Financial ratios

2007-08 2006-07 2005-06 2004-05

Netearnings(Rs.lacs) 3351.25 3976.24 3401.54 2729.21

Cashearnings(Rs.lacs) 5148.09 5558.86 4682.33 3832.30

EPS(Rs)** 6.92 8.20 7.02 5.63

CEPS(Rs.)** 10.62 11.38 9.66 7.91

Dividendpershare(Rs.) 2.40 2.90 2.50 2.00

Dividendpayout(%) 40.60 40.77 40.61 40.49

Bookvaluepershare(Rs.) 37.27 33.16 28.30 24.14

Pricetoearnings* 11.42 12.18 14.30 8.13

Pricetocashearnings* 7.44 8.68 10.39 5.79

Pricetobookvalue* 2.12 2.86 3.55 1.90

*Stockpriceason31stMarch,2008–Rs.79.00(closingprice) **EPS/CEPS/dividendpershare/bookvaluehavebeenadjustedtofacevalueRs.2/-pershare

30.04.07 31.05.07 29.06.07 31.07.07 31.08.07 28.09.07 31.10.07 30.11.07 31.12.07 31.01.08 29.02.08 31.03.08

NRB 104.90 95.00 96.90 109.90 102.00 99.90 108.50 91.50 104.10 114.90 87.00 79.00

SENSEX 13872.37 14544.46 14650.51 15550.99 15318.60 17291.10 19837.99 19363.19 20286.99 17648.71 17578.72 16086.83

NR

BP

RIC

E

SE

NS

Ex

28

AUDITORS’ REPORT TO THE MEMBERS OF NRB BEARINGS LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2008

1. WehaveauditedtheattachedbalancesheetofNRBBearingsLimited,asat31stMarch,2008,andalsotheprofitandlossaccountandthecashflowstatementofthecompanyfortheyearendedonthatdate,annexedthereto.Thesefinancialstatementsaretheresponsibilityofthecompany’smanagement.Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.

2. Weconductedouraudit inaccordancewiththeauditingstandardsgenerallyaccepted in India.TheseStandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.Webelievethatourauditprovidesareasonablebasisforouropinion.

3. AsrequiredbytheCompanies(Auditor’sReport)Order,2003,issuedbytheCentralGovernmentofIndiaintermsofsub-section(4A)ofsection227oftheCompaniesAct,1956,weencloseintheAnnexure,astatementonthemattersspecifiedinparagraphs4and5ofthesaidOrder.

4. FurthertoourcommentsintheAnnexurereferredtoinparagraph3above,wereportthat:

(i) Wehaveobtainedalltheinformationandexplanations,whichtothebestofourknowledgeandbeliefwerenecessaryforthepurposesofouraudit.

(ii) Inouropinion,properbooksofaccountasrequiredbylawhavebeenkeptbythecompanysofarasappearsfromourexaminationofthosebooks.

(iii)Thebalancesheet,profitandlossaccountandcashflowstatementdealtwithbythisreportareinagreementwiththebooksofaccount.

(iv)Inouropinion,thebalancesheet,profitandlossaccountandcashflowstatementdealtwithbythisreportcomplywith theaccountingstandards referred to insub-section (3C)ofsection211of theCompaniesAct,1956.

(v) Onthebasisofthewrittenrepresentationsreceivedfromthedirectors,ason31stMarch,2008,andtakenonrecordbytheBoardofDirectors,wereportthatnoneofthedirectorsisdisqualifiedason31stMarch,2008frombeingappointedasadirectorintermsofclause(g)ofsub-section(1)ofsection274oftheCompaniesAct,1956.

(vi) Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,thesaidaccountsgivetheinformationrequiredbytheCompaniesAct,1956,inthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia:

(a) inthecaseofthebalancesheet,ofthestateofaffairsofthecompanyasat31stMarch,2008;

(b) inthecaseoftheprofitandlossaccount,oftheprofitfortheyearendedonthatdate;and

(c) inthecaseofthecashflowstatementofthecashflowsfortheyearendedonthatdate.



29

ANNEXURE TO THE AUDITORS’ REPORT TO THE MEMBERS OF NRB BEARINGS LIMITED ON THE ACCOUNTS

FOR THE YEAR ENDED 31ST MARCH, 2008(referred to in paragraph 3 of our report of even date)

(i) (a) Thecompanyhasgenerallymaintainedproperrecordsshowingfullparticularsincludingquantitativedetailsandsituationoffixedassets.

(b) Thefixedassetshavebeenphysicallyverifiedbythemanagementduringtheyearaccordingtotheregularprogrammeofverificationwhichisonceintwoyears.Inouropinion,thefrequencyofverificationisreasonablehavingregardtothesizeofthecompanyandthenatureofitsassets.Tothebestofourknowledge,nomaterialdiscrepancieswerenoticedonsuchverification.

(c) Therearenofixedassetsdisposedoffduringtheyearandthereforethequestionofreportingonclause4(i)(c)oftheCompanies(Auditor’sReport)Order,2003(hereinafterreferredtoasthesaidOrder)doesnotarise.

(ii) (a) Theinventoryhasbeenphysicallyverifiedduringtheyearbythemanagement.Inouropinion,thefrequencyofverificationisreasonable.

(b) Theproceduresofphysicalverificationof inventoriesfollowedbythemanagementarereasonableandadequateinrelationtothesizeofthecompanyandthenatureofitsbusiness.

(c) Thecompanyismaintainingproperrecordsofinventory.Thediscrepanciesnoticedonverificationbetweenthephysicalstocksandthebookrecordswerenotmaterial.

(iii) (a) The company has granted loans to SNL Bearings Limited (a subsidiary) covered in the registermaintainedundersection301oftheCompaniesAct,1956(hereinafterreferredtoastheAct).ThemaximumamountinvolvedduringtheyearwasRs.1050.00lacsandtheyear-endbalanceofsuchloanswasRs.650.00lacs.Thecompanyhasnotgrantedanyloans,securedorunsecured,toothercompanies,firmsorotherpartiescoveredinthesaidregister.

(b) Accordingtotheinformationandexplanationsgiventous,inouropinion,therateofinterestandothertermsandconditionsonwhichloanshavebeengrantedarenot,primafacie,prejudicialtotheinterestofthecompany.

(c) Asexplainedtous,theprincipalamountsoftheloansarebeingrepaidasstipulated/renewedonduedates;thatcompanyisregularinthepaymentofinterest.

(d) Havingregardtotheexplanationgiventousthatthebalanceprincipalamountsoftheloansarebeingrenewed,thereisnooverdueamountofmorethanrupeesonelac.

(e) Thecompanyhasnottakenanyloans,securedorunsecured,fromcompanies,firmsorotherpartiescoveredinthesaidregister.Accordingly,thequestionofreportingonclauses4(iii)(e),(f)and(g)ofthesaidOrderdoesnotarise.

(iv) Inouropinionandaccordingtotheinformationandexplanationsgiventous,thereisanadequateinternalcontrolsystemcommensuratewiththesizeofthecompanyandthenatureofitsbusinesswithregardtopurchaseofinventory,fixedassetsandwithregardtosaleofgoods.Thereisnosaleofservices.Duringthecourseofouraudit,wehavenotobservedanycontinuingfailuretocorrectmajorweaknessininternalcontrolsystem.

(v) (a) Accordingtotheinformationandexplanationsgiventous,weareoftheopinionthattheparticularsofcontractsorarrangementsreferredtoinsection301oftheActhavebeenenteredintheregisterrequiredtobemaintainedunderthatsection.

(b) Accordingtotheinformationandexplanationsgiventous,thetransactionsinpursuanceofcontractsorarrangementsenteredinthesaidregister,madewithSNLBearingsLimited,areofaspecialnatureforwhichtherearenoalternativesourcesoranysimilartransactionswithotherparties.Intheabsenceofprevailingmarketpricesofsuchtransactionsbeingproducedtous,weareunabletoformanopiniononthereasonablenessofpricespaid/received.

30

ANNEXURE TO THE AUDITORS’ REPORT TO THE MEMBERS OF NRB BEARINGS LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2008 (referred to in paragraph 3 of our report of even date) (contd.)

(vi) Thecompanyhasnotacceptedanydepositsfromthepublictowhichtheprovisionsofsections58A,58AAoranyotherrelevantprovisionsoftheActandtheCompanies(AcceptanceofDeposits)Rules,1975wouldapply.NoorderhasbeenpassedbytheCompanyLawBoardorNationalCompanyLawTribunalorReserveBankofIndiaoranyCourtoranyotherTribunal.

(vii) Inouropinion,thecompanyhasaninternalauditsystemcommensuratewithitssizeandthenatureofitsbusiness.

(viii) Wehavebroadlyreviewed,withoutcarryingoutadetailedexamination,thebooksofaccountmaintainedbythecompanypursuanttotheOrdermadebytheCentralGovernmentforthemaintenanceofcostrecordsundersection209(1)(d)oftheActandareoftheopinionthatprimafacietheprescribedaccountsandrecordshavebeenmaintained.Weareinformedthatthecoststatementsasattheendofthefinancialyearareunderpreparation.

(ix) (a) Accordingtotherecordsofthecompany,thecompanyhasbeengenerallyregularindepositingwiththeappropriateauthorities,undisputedstatutoryduesincludingprovidentfund,investoreducationandprotectionfund,employees’stateinsurance,income-tax,salestax,wealth-tax,servicetax,customsduty,exciseduty,cessandothermaterialstatutoryduesapplicabletoit,thoughtherehasbeenaslightdelayinafewcases.

(b) Accordingtotheinformationandexplanationsgiventous,noundisputedamountspayableinrespectofincome-tax,salestax,wealth-tax,servicetax,customsduty,excisedutyandcesswereinarrears,asat31stMarch,2008,foraperiodofmorethansixmonthsfromthedatetheybecamepayable.

(c)Accordingtotheinformationandexplanationsgiventous,therearenoduesofincome-tax,salestax,wealth-tax,servicetax,customsduty,excisedutyandcesswhichhavenotbeendepositedonaccountofanydispute,exceptasstatedbelow:

Sr.No.

Natureofthedues

Amount(Rs.inlacs)

Periodtowhichtheamountrelates

Forumwheredisputeispending

1. TheBombaySalesTaxAct,1959

SalesTax 21.83 F.Y.1996-1997and1998-1999 DeputyCommissioner(Appeals)

2. TheCentralSalesTaxAct,1956

SalesTax 24.18 F.Y.1996-1997and1998-1999 DeputyCommissioner(Appeals)

3. TheCustomsAct,1962

CustomDuty,PenaltyandFine

138.87 F.Y.1993-1994 SupremeCourt

(x) Thecompanydoesnothaveanyaccumulatedlossesattheendofthefinancialyear.Also,thecompanyhasnotincurredcashlossesduringthefinancialyearcoveredbyourauditandintheimmediatelyprecedingfinancialyear.

(xi) Inouropinionandaccordingtotheinformationandexplanationsgiventous,thecompanyhasnotdefaultedinrepaymentofduestobanks.Thecompanyhasnottakenanyloansfromfinancialinstitutionsnorhasitissuedanydebentures.

(xii) Accordingtotheinformationandexplanationsgiventous,thecompanyhasnotgrantedanyloansandadvancesonthebasisofsecuritybywayofpledgeofshares,debenturesandothersecurities.

(xiii) Thecompanyisnotachitfundoranidhi/mutualbenefitfund/society.Therefore,theprovisionsofclause4(xiii)ofthesaidOrderarenotapplicabletothecompany.

31

(xiv) Thecompanyisnotdealingortradinginshares,securities,debenturesandotherinvestments.Accordingly,theprovisionsofclause4(xiv)ofthesaidOrderarenotapplicabletothecompany.

(xv) Inouropinionandaccordingtotheinformationandexplanationsgiventous,thetermsandconditionsonwhichthecompanyhasgivenguaranteesforloanstakenbyothersfrombanksorfinancialinstitutionsarenotprejudicialtotheinterestofthecompany.

(xvi) Inouropinionandaccordingtotheinformationandexplanationsgiventous,thetermloanshavebeenappliedforthepurposeforwhichtheywereraised.

(xvii) Accordingtotheinformationandexplanationsgiventousandonanoverallexaminationofthebalancesheetofthecompany,wereportthatnofundsraisedonshort-termbasishavebeenusedforlong-terminvestment.

(xviii) Thecompanyhasnotmadeanypreferentialallotmentofsharestopartiesandcompaniescoveredintheregistermaintainedundersection301oftheAct.Accordingly,thequestionofreportingonwhetherthepriceatwhichsuchshareshavebeenissuedisprejudicialtotheinterestofthecompanydoesnotarise.

(xix) Thecompanyhasnotissuedanydebentures.Accordingly,thequestionofcreatingasecurityorchargefordebenturesdoesnotarise.

(xx) Thecompanyhasnotraisedanymoneybypublicissuesduringtheyear.Accordingly,thequestionofdisclosureofenduseofsuchmoniesdoesnotarise.

(xxi) Accordingtothe informationandexplanationsgiventous,nofraudonorbythecompanyhasbeennoticedorreportedduringthecourseofouraudit.



32

BALANCE SHEET AS AT 31ST MARCH, 2008 Schedule As at Asat No. 31.03.2008 31.03.2007 Rs.lacs Rs.lacs Rs.lacs Rs.lacsI. SOURCES OF FUNDS: 1) Shareholders’funds: a) Sharecapital 1 969.23 969.23 b) Reservesandsurplus 2 17092.60 15102.08 18061.83 16071.31 2) Loanfunds: a) Securedloans 3 4371.62 5304.71 b) Unsecuredloans 4 6420.53 3815.33 10792.15 9120.04 3) Deferredtaxliability(net) (seeNote12onSchedule20) 1193.37 1096.00 Total 30047.35 26287.35 II. APPLICATION OF FUNDS: 1) Fixedassets: 5 a) Grossblock 31732.06 26822.55 b) Less:depreciation 16124.17 14327.33 c) Netblock 15607.89 12495.22 d) Capitalworkinprogressand advancesforcapitalexpenditure 464.56 256.08 16072.45 12751.30 2) Investments 6 1781.45 1337.59 3) Currentassets,loansandadvances: a) Inventories 7 8285.79 6899.79 b) Sundrydebtors 8 8445.08 7237.93 c) Cashandbankbalances 9 596.31 340.13 d) Loansandadvances 10 2311.75 2589.83 19638.93 17067.68 Less:Currentliabilitiesandprovisions: a) Currentliabilities 11 5783.85 3897.78 b) Provisions 12 1661.63 971.44 7445.48 4869.22 Netcurrentassets 12193.45 12198.46 Total 30047.35 26287.35 Significantaccountingpolicies 19 Notestotheaccounts 20

Perourreportattached ForandonbehalfoftheBoardofDirectors

For A. F. FERGUSON & CO. T. S. Sahney P. D. Ojha K. S. PantCharteredAccountants ManagingDirector

H. S. Zaveri K. M. Elavia

R. K. HIRANANDANI S. C. Rangani D. S. SahneyPartner Sr.VPFinance&Co.Secretary Directors

Mumbai:June9,2008 Mumbai:June9,2008

33



H. S. Zaveri K. M. ElaviaR. K. HIRANANDANI Partner S. C. Rangani D. S. Sahney Sr.VPFinance&Co.Secretary Directors


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008 Schedule Year ended Yearended No. 31.03.2008 31.03.2007 Rs.lacs Rs.lacs Rs.lacs Rs.lacsINCOMESales(Gross) 36956.50 34996.67Less:Exciseduty 4814.13 4685.86 32142.37 30310.81Otherincome 13 705.32 449.66 32847.69 30760.47Increase/(Decrease)instockof work-in-progressandfinishedgoods 14 865.70 873.63 33713.39 31634.10 EXPENDITURE Rawmaterials,componentsand packingmaterialsconsumed 10593.80 10074.23Storesandsparesconsumed 3190.12 2939.07Processingcharges 1941.40 1504.02Powerandfuel 1316.71 1268.54Employeecosts 15 5373.01 4502.25Repairs 16 570.52 431.24Otherexpenses 17 3204.02 2980.38Depreciation 5 1796.84 1582.62Interest(net) 18 543.35 360.26 28529.77 25642.61 PROFIT BEFORE TAX 5183.62 5991.49Provisionfortaxation -Currenttax 1650.00 1825.00-Inrespectofearlieryears - (67.43)-Deferredtax 97.37 177.46 1747.37 1935.03-Fringebenefittax 85.00 80.22 1832.37 2015.25PROFIT AFTER TAX 3351.25 3976.24Add:Balanceboughtforward 915.92 1560.88 AVAILABLE FOR APPROPRIATIONS 4267.17 5537.12LESS: APPROPRIATIONS: InterimDividend - 775.38 Proposedfinaldividend 1163.07 630.00 Additionalincome-taxondistributedprofits 197.66 215.82 Transfertogeneralreserve 335.13 3000.00 1695.86 4621.20 BALANCE CARRIED TO BALANCE SHEET 2571.31 915.92 Significantaccountingpolicies 19 Notestotheaccounts 20 Basic,aswellasdiluted,earningsperequityshare (Nominalvalueperequityshare:Rs.2) [seeNote10onSchedule20] Rs.6.92 Rs.8.20

34

Year ended Yearended 31.03.2008 31.03.2007 Rs.lacs Rs.lacs Rs.lacs Rs.lacs A. CASHFLOWFROMOPERATINGACTIVITIES:

NETPROFITBEFORETAx 5183.62 5991.49

Adjustmentsfor:

Depreciation 1796.84 1582.62

Foreignexchange(gain)-unrealised (235.88) (20.48)

Interest(income)/expenditure(net) 543.35 360.26

Dividendincome (8.18) (11.75)

Profit/(Loss)onsaleoffixedassets(net) - (18.23)

Profitonsaleofcurrentinvestments(net) (3.50) (3.74)

Provisionfordoubtfuldebts 106.22 2.80

Provisionforcompensatedabsences 3.58 2.73

Salestaxprovisionnolongerrequiredwrittenback - (49.75) 2202.43 1844.46

OPERATINGPROFITBEFOREWORKINGCAPITAL CHANGESANDOTHERADJUSTMENTS 7386.05 7835.95

Changesin:

-Tradeandotherreceivables (1045.13) (1845.93)

-Inventories (1386.00) (1035.00)

-Tradepayables 1833.18 390.93

(597.95) (2490.00) NETCASHGENERATEDFROMOPERATIONS 6788.10 5345.95

Directtaxespaid(netofrefund) (1589.89) (1797.17) NETCASHFROMOPERATINGACTIVITIES 5198.21 3548.78 B. CASHFLOWFROMINVESTINGACTIVITIES:

Purchaseoffixedassets(includingadjustmentsonaccountof capitaladvances) (5117.99) (3865.46)

Saleoffixedassets - 28.39

Purchaseofinvestments (2853.39) (2956.97)

Saleofinvestments 2856.89 3361.58

Dividendincome 8.18 11.75

Interestincome 92.10 95.06

Investmentinasubsidiarycompany (443.86) (155.78) NETCASHUSEDININVESTINGACTIVITIES (5458.07) (3481.43)

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2008

35

Year ended Yearended 31.03.2008 31.03.2007 Rs.lacs Rs.lacs Rs.lacs Rs.lacs C. CASHFLOWFROMFINANCINGACTIVITIES: Proceedsfromborrowings 16433.60 5399.75 Repaymentofborrowings (13744.51) (4313.33) (Decrease)/Increaseincashcredit (784.46) 490.90 Interestpaid (651.45) (444.63) Dividendpaid (630.07) (1262.74) Additionalincome-taxondistributedprofits (107.07) (176.72) NETCASHGENERATEDFROM/USEDINFINANCINGACTIVITIES 516.04 (306.77) NETINCREASE/(DECREASE)INCASHANDCASH EQUIVALENTS(A+B+C) 256.18 (239.42)

CASHANDCASHEQUIVALENTSASAT THECOMMENCEMENTOFTHEYEAR thecomponentsbeing: Cashonhand 6.13 9.78 Chequesonhand 233.47 182.22 Balanceswithbanksoncurrentaccounts 100.53 387.55 340.13 579.55

CASHANDCASHEQUIVALENTSASAT THEENDOFTHEYEAR thecomponentsbeing: Cashonhand 8.20 6.13 Chequesonhand 275.04 233.47 Balanceswithbanksoncurrentaccounts 313.07 100.53 596.31 340.13 NETINCREASE/(DECREASE)ASDISCLOSEDABOVE 256.18 (239.42) Note: 1.Figuresinbracketsrepresentdeductions/outflows. 2.Previousyear’sfigureshavebeenregroupedwherevernecessary.




R. K. HIRANANDANI S. C. Rangani D. S. SahneyPartner Sr.VPFinance&Co.Secretary Directors


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2008 (contd.)

36

As at Asat 31.03.2008 31.03.2007 Rs.lacs Rs.lacs Rs.lacs Rs.lacs Schedule 1 - Share capital

Authorised:

5,00,00,000EquitysharesofRs.2each 1000.00 1000.00(Previousyear:1,00,00,000EquitySharesofRs.10each)(SeeNote10onSchedule20)

Issuedandsubscribed:

48,461,300EquitysharesofRs.2eachfullypaid-up 969.23 969.23(Previousyear:96,92,260EquitysharesofRs.10eachfullypaid-up) (SeeNote10onSchedule20)

Oftheabove:

i) 45,500EquitysharesofRs.2each(Previousyear:9,100EquitySharesofRs.10each) havebeenallottedasfullypaid-uppursuanttocontractswithoutpaymentshavingbeen receivedincash.

ii) 41,563,300EquitysharesofRs.2each(Previousyear:83,12,660EquitysharesofRs.10each)havebeenallottedasfullypaid-upbywayofbonussharesbycapitalisationofgeneralreserveandcapitalreserve.

iii) 38,000EquitysharesofRs.2each(Previousyear:7,600EquitysharesofRs.10each)areallottedtothemembersoferstwhileSahneySteelandPressWorksLimited onitsamalgamationwiththecompanyon01.04.1991.

Perbalancesheet 969.23 969.23

Schedule 2 - Reserves and surplus

Capitalreserve:

Perlastbalancesheet 25.00 25.00

Sharepremium:


Generalreserve:


Add:Transferredfromprofitandlossaccount 335.13 3000.00 13281.35 12946.22Surplusbeingbalanceinprofitandlossaccount 2571.31 915.92 Perbalancesheet 17092.60 15102.08

SCHEDULES 1 TO 12 ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2008

37

As at Asat 31.03.2008 31.03.2007 Rs.lacs Rs.lacs Schedule 3 - Secured loans

FromBanks:

i) CashCredit 64.64 849.10

ii) TermloansinForeignCurrency 4296.16 4419.26 [repayablewithinoneyearRs.1835.88lacs. (asat31.03.2007:Rs.1473.09lacs)]

iii)Termloan 10.82 36.35 [payablewithinoneyearRs.4.44lacs (asat31.03.2007:Rs.25.75lacs)] Perbalancesheet 4371.62 5304.71 1. CashCredittakenfrombanksaresecuredbyhypothecationof

inventoriesandbookdebts.

2. TermLoansinForeigncurrency(ii)aresecuredbyhypothecationof/chargeonthecompany’sfixedassetsacquiredfromproceedsoftheloan.

3. TermLoan(iii)issecuredbyhypothecationof/chargeoncompany’svehiclesspecificallypurchasedundertheloan.

Schedule 4 - Unsecured loans

a. Commercialpaper[maximumamountraisedduringtheyear Rs.2500.00lacs(yearended31.03.2007:Rs.1500.00lacs)] - 1500.00

b. Temporaryoverdraftfromabank - 7.72

c. Shorttermloansfrombanks 3000.00 1000.00

d. Shorttermloanfrombankinforeigncurrency 2022.94 -

e. Otherloansandadvances FromSICOMLimited

InterestfreeSalestaxloan [repayablewithinoneyearRs.47.00lacs (asat31.03.2007:Rs.50.89lacs)] 1397.59 1307.61 Perbalancesheet 6420.53 3815.33

SCHEDULES 1 TO 12 ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2008 (contd.)

38

Schedule 5 - Fixed assets

GROSS BLOCK - AT COST DEPRECIATION NET BLOCK

Description

Opening Balance

As at 01.04.07

Additions Deduc- tions

Closing Balance

As at 31.03.08

Opening Balance

As at 01.04.07

For the year

On deduc-

tions

Closing Balance

As at 31.03.08

As at 31.03.08

As at 31.03.07

Rs. lacs Rs. lacs Rs. lacs Rs. lacs Rs. lacs Rs. lacs Rs. lacs Rs. lacs Rs. lacs Rs. lacs

A. Tangible Assets

Freehold land

Leasehold land

Buildings and flats

Plant and machinery

Furniture, fixtures and equipment

Electrical installations

Vehicles

60.00

21.59

1988.42

22551.65

1063.49

686.48

321.45

-

25.87

989.36

3512.98

196.79

52.13

104.17

-

-

-

-

-

-

-

60.00

47.46

2977.78

26064.63

1260.28

738.61

425.62

-

4.06

766.80

12263.28

753.60

332.36

128.13

-

0.51

62.18

1570.97

65.82

33.95

32.00

-

-

-

-

-

-

-

-

4.57

828.98

13834.25

819.42

366.31

160.13

60.00

42.89

2148.80

12230.38

440.86

372.30

265.49

60.00

17.53

1221.62

10288.37

309.89

354.12

193.32

Sub Total (A) 26693.08 4881.30 - 31574.38 14248.23 1765.43 - 16013.66 15560.72 12444.85

B. Intangible Assets

Computer software 129.47 28.21 - 157.68 79.10 31.41 - 110.51 47.17 50.37

Sub Total (B)

Total (A) + (B)

Previous year

129.47 28.21 - 157.68 79.10 31.41 - 110.51 47.17 50.37

26822.55 4909.51 - 31732.06 14327.33 1796.84 - 16124.17 15607.89

218.01

12495.22

81.9422702.92 4133.40 13.77 26822.55 12748.32 1582.62 3.61 14327.33

Capital work-in-progress

Advances for capital expenditure

Per balance sheet

246.55 174.14

464.56 256.08

16072.45 12751.30

Notes:

i.Buildingsandflatsinclude;

a. SharesinrespectofresidentialpremisesofacostofRs.2.25lacsinaco-operativesocietywhichisintheprocessofbeingtransferredinthenameofthecompany.

b. CostofsharesofanaggregatefacevalueofRs.2750inco-operativehousingsocietiesviz.5sharesofRs.250eachinVileParleVatikaCo-operativeHousingSocietyLimited,5sharesofRs.50eachinEdenwoodsCypressHouseCo-operativeHousingSocietyLimitedand5sharesofRs.250eachinTheGaneshVillaCo-operativeHousingSocietyLimited.

ii.AlsoreferNote3(b)onSchedule20


39

As at Asat 31.03.2008 31.03.2007 Rs. lacs Rs. lacs Rs.lacs Rs.lacs Schedule 6 - Investments Longterm(atcost) A. Non-trade(unquoted) 1. Shares: 21stCenturyBatteryLimited 10,000EquitysharesofRs.10eachfullypaid-up 1.00 1.00 2. Inamutualfund: DSPMerrilLynchEquityFund 50,000unitsofRs.10eachfullypaid-up 5.00 5.00 6.00 6.00B. Trade[quoted] Shares: i. IndusindBankLimited 8,541EquitysharesofRs.10eachfullypaid-up 0.98 0.98 ii. EicherMotorsLimited 600EquitysharesofRs.10eachfullypaid-up 0.06 0.06 iii. HeroHondaMotorsLimited 6,250EquitysharesofRs.2eachfullypaid-up 0.05 0.05 1.09 1.09C. Insubsidiarycompanies Quoted Shares: SNLBearingsLimited 24,84,176EquitysharesofRs.10eachfullypaid-up 174.72 174.72 Unquoted Shares: SNLBearingsLimited 10,00,0006%Cumulativeredeemablepreference sharesofRs.100eachfullypaid-up 1000.00 1000.00 NRBBearings(Thailand)Limited 49,99,994SharesofTHB10eachfullypaid-up 599.64 155.78 (asat31.03.2007:THB2.50paid-up) Perbalancesheet 1781.45 1337.59 Aggregateamountofquotedinvestments[marketvalueRs.594.15lacs(asat31.03.2007:Rs.619.37lacs)] 175.81 175.81Aggregateamountofunquotedinvestments 1605.64 1161.78 1781.45 1337.59 Investmentsinmutualfundspurchasedandsoldduringtheyearotherthanshownabove: Cost of acquisition (Rs. in lacs)

1. BirlaCashPlus-Instl.prem.-Growth 1000.00 79,54,414units 2. BirlaCashPlus-Instl.premium-Dailydividend 1853.39 1,84,97,852units


40

As at Asat 31.03.2008 31.03.2007 Rs. lacs Rs. lacs Rs.lacs Rs.lacs

Schedule 7 - Inventories Storesandspareparts(atcost) 505.50 514.46

Stock-in-trade(atlowerofcostandnetrealisablevalue, ascertifiedbytheManagingDirector)

Rawmaterials,boughtoutcomponentsand packingmaterials 2285.88 1756.62

Manufacturedcomponents 605.31 626.33

Work-in-progress 1766.74 1648.65

Finishedgoods 3122.36 2353.73 7780.29 6385.33 Perbalancesheet 8285.79 6899.79

Schedule 8 - Sundry debtors

Oversixmonths

Secured,consideredgood 4.50 -

Unsecured,consideredgood 477.01 383.13

Unsecured,considereddoubtful 263.37 157.15 744.88 540.28

Others

Secured,consideredgood 37.81 20.08

Unsecured,consideredgood 7925.76 6834.72 7963.57 6854.80 8708.45 7395.08

Provisionfordoubtfuldebts 263.37 157.15 Perbalancesheet 8445.08 7237.93

Schedule 9 - Cash and bank balances

Cashonhand 8.20 6.13

Chequesonhand 275.04 233.47

Withscheduledbanks

Oncurrentaccounts 313.07 100.53 Perbalancesheet 596.31 340.13


41

As at Asat 31.03.2008 31.03.2007 Rs. lacs Rs. lacs Rs.lacs Rs.lacs Schedule 10 - Loans and advances

(Unsecured,consideredgood)

Advancesandloanstosubsidiarycompanies 676.66 1067.56

Advancesrecoverableincashorin kindorforvaluetobereceived 1175.38 1135.42

Incometaxespaidlessprovisionsthereagainst(otherthandeferredtax) 51.81 133.97

Balancewithcentralexcise 407.90 252.88 Perbalancesheet 2311.75 2589.83

Schedule 11 - Current liabilities

Sundrycreditors

- duetomicroenterprisesandsmall enterprises(seenote5) - -

- duetoothers 5146.95 3570.67

5146.95 3570.67

Securitydeposits 572.24 246.38

LiabilitytowardsInvestorsEducationandProtectionFund underSection205CoftheCompaniesAct,1956

- unpaiddividends(notdue) 12.01 12.08

- unclaimedfixeddeposits 1.72 1.72

Interestaccruedbutnotdueonloans 50.93 66.93 Perbalancesheet 5783.85 3897.78

Schedule 12 - Provisions

Taxationlesspaymentsthereagainst(otherthandeferredtax) 62.95 -

Fringebenefittax(netofpayments) 8.50 8.50

Proposedfinaldividend 1163.07 630.00

Additionalincome-taxondistributedprofits 197.66 107.07

Gratuity 1.00 1.00

Compensatedabsences 228.45 224.87 Perbalancesheet 1661.63 971.44

SCHEDULES 1 TO 12 ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2008

42

Year ended Yearended 31.03.2008 31.03.2007 Rs. lacs Rs. lacs Rs.lacs Rs.lacs Schedule 13 - Other income

Saleofscrap 361.09 234.42

Agencycommission 95.98 81.42

Dividendfrominvestments

Trade-Longterm 1.29 1.27

Otherthantrade-Longterm 3.50 3.50 4.79 4.77

Otherthantrade-Current 3.39 6.98 8.18 11.75

Profitonsaleofcurrentinvestments(net) 3.50 3.74

ProfitonSaleofFixedAssets(net) - 18.23

Rent 74.65 40.31

Salestaxprovisionnolongerrequiredwrittenback - 49.75

Foreignexchangegain(net) 145.37 -

Miscellaneous 16.55 10.04 Perprofitandlossaccount 705.32 449.66

Schedule 14 - Increase/(Decrease) in stock of work-in-progress and finished goods

Openingstocks: Manufacturedcomponents 626.33 530.06 Work-in-progress 1648.65 1208.27 Finishedgoods 2353.73 2016.75 4628.71 3755.08Closingstocks: Manufacturedcomponents 605.31 626.33 Work-in-progress 1766.74 1648.65 Finishedgoods 3122.36 2353.73 5494.41 4628.71 Perprofitandlossaccount 865.70 873.63

Schedule 15 - Employee costsSalaries,wagesandbonus 4219.03 3457.89Gratuity 108.53 146.21Company’scontributiontoprovidentfund andotherfunds 347.60 274.83Staffwelfare 697.85 623.32 Perprofitandlossaccount 5373.01 4502.25

SCHEDULES 13 TO 18 ANNEXED TO AND FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008

43

Year ended Yearended 31.03.2008 31.03.2007 Rs. lacs Rs. lacs Rs.lacs Rs.lacs Schedule 16 - RepairsPlantandmachinery 298.40 191.60Buildings 152.27 144.59Others 119.85 95.05 Perprofitandlossaccount 570.52 431.24

Schedule 17 - Other expensesInsurance 72.42 74.70Rent 15.06 19.93Ratesandtaxes 117.64 153.73Legalandprofessionalfees 203.35 176.01Directors’fees 2.25 2.35Commissiononsales 144.06 157.98Travellingandconveyance 480.65 513.32Postage,telephoneandfax 96.76 90.39Bankcharges 49.51 50.40Cashdiscountonsales 36.33 36.19Advertisementandpublicity 77.98 53.79Forwardingcharges 502.66 436.85

Turnoverrebate/Initiatives 207.99 124.55Baddebtswrittenoff - 48.52Less:Provisionthereagainst - 48.52 - -Provisionfordoubtfuldebts 106.22 51.32Leaserent 68.20 47.35ERPImplementationandotherITexpenses 69.33 157.37ExcisedutyonIncreaseinstockoffinishedgoods 121.08 63.60Miscellaneous 832.53 770.55 Perprofitandlossaccount 3204.02 2980.38

Schedule 18 - Interest (Net)Onfixedloans 571.26 436.09Onothers 64.19 19.23 635.45 455.32Less:Interestincome(Gross)onInter-corporatedeposits 92.10 95.06[TaxdeductedatsourceRs.20.87lacs (31.03.2007:Rs.21.33lacs)] 543.35 360.26

SCHEDULES 13 TO 18 ANNEXED TO AND FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008

44

Schedule 19 - Significant accounting policies annexed to and forming part of the balance sheet as at 31st March, 2008 and the profit and loss account for the year ended on that date

1. Basis of accounting

The financialstatementsarepreparedunderhistoricalcostconventiononanaccrualbasisandare inaccordancewiththerequirementsoftheCompaniesAct,1956,andcomplywiththeAccountingStandardsreferredtoinsub-section(3C)ofsection211ofthesaidAct.

2. Fixed assets and depreciation

(a) Allfixedassetsarestatedatcostofacquisition,includinganyattributablecostforbringingtheassettoitsworkingconditionforitsintendeduselessaccumulateddepreciation.

(b) Depreciationfortheyearhasbeenprovidedonthestraightlinemethod,inthemannerandattheratesprescribedinSchedulexIVtotheCompaniesAct,1956,exceptthatleaseholdlandisamortisedovertheperiodoftheleaseandcomputersoftwareisamortisedoveraperiodof36months.

(c) AlsoseeNote9below.

3. Foreign currency transactions

(a) Transactions in foreigncurrenciesare recordedat theexchange rateprevailingon thedateof thetransaction.Inrespectofmonetaryitemsdenominatedinforeigncurrencies,exchangedifferencesarisingoutofsettlementoronconversionattheclosingratearerecognisedintheprofitandlossaccount.

(b) Swaptransactionsareenteredbythecompanytohedgeitsexposureagainstmovementsinforeignexchangeratesandinterestrates.

(c) Gains/lossesarisingonswaptransactionsarerecognizedintheprofitandlossaccount.

4. Investments

Long-terminvestmentsarestatedatcostlessprovisionfordiminutioninthevalueofinvestments,ifany.Currentinvestmentsarestatedatlowerofcostandfairvalue.

5. Inventories

(a) Storesandsparepartsarevaluedatcost.Costisdeterminedonthebasisofweightedaveragemethod.

(b) Stock-in-tradecomprisingofrawmaterials,boughtoutcomponents&packingmaterials,manufacturedcomponents,work-in-progressandfinishedgoodsarevaluedatthelowerofcostandnetrealisablevalue.Materialcostsincludedinthevaluationofstock-in-tradearedeterminedonthebasisofweightedaveragemethod.Costsofconversionandothercostsaredeterminedonthebasisofstandardcostmethod adjusted for variances between standard costs and actual costs, unless such costs arespecificallyidentifiable,inwhichcasetheyareincludedinthevaluationatactuals.

6. Employee benefits

(a) Shorttermemployeebenefitsarerecognisedasanexpenseattheundiscountedamountintheprofitandlossaccountoftheyearinwhichtherelatedserviceisrendered.

(b) Longtermbenefits:

(i) DefinedContributionPlans:

1. ProvidentandFamilyPensionFund

The eligible employees of the company are entitled to receive post employment benefits inrespectofprovidentandfamilypensionfund,inwhichbothemployeesandthecompanymakemonthly contributions at a specified percentage of the employees’ eligible salary (currently12%ofemployees’eligiblesalary).ThecontributionsaremadetotheRegionalProvidentFundCommissionerandtheCentralProvidentFundundertheStatePensionScheme.ProvidentFundandFamilyPensionFundareclassifiedasDefinedContributionPlansasthecompanyhasnofurtherobligationsbeyondmakingthecontribution.

45

2. Superannuation

The eligible employees of the company are entitled to receive post employment benefits inrespectofsuperannuationscheme,inwhichthecompanymakesquarterlycontributionsat15%ofemployees’eligiblesalary.Thecontributionsaremadetoaninsurancecompanyonbehalfofthetrustmanagedbythecompany(currentlyHDFCStandardLifeInsuranceCompanyLimited).SuperannuationschemeisclassifiedasDefinedContributionPlanastheCompanyhasnofurtherobligationsbeyondmakingthecontribution.

TheCompany’scontributionstoDefinedContributionPlansarechargedtoprofitandlossaccountasincurred.

(ii) DefinedBenefitPlans:

1. Gratuity

TheCompanyhasanobligationtowardsgratuity,adefinedbenefitretirementplancoveringeligibleemployees.Theplanprovidesalumpsumpaymenttovestedemployeesatretirement,deathwhileinemploymentoronterminationofemploymentofanamountequivalentto15dayssalarypayableforeachcompletedyearofserviceatanaverageoflasttenmonthssalary.Vestingoccursuponcompletionoffiveyearsofservice.TheCompanyhasarrangementswiththeLifeInsuranceCorporationofIndia(LIC)andaprivateinsurancecompanyforfuturepaymentsofgratuitiesonbehalfof the trustsestablished for thispurpose.TheCompanyaccounts forgratuitybenefitspayableinfuturebasedonanindependentactuarialvaluationasattheyearend.Actuarialgainsandlossesarerecognisedintheprofitandlossaccount.

2. Compensatedabsences

TheCompanyprovidesforencashmentofleaveorleavewithpaysubjecttocertainrules.Theemployeesareentitledtoaccumulateleavesubjecttocertainlimitsforfutureencashment/availment.Theliabilityisprovidedbasedonthenumberofdaysofunutilisedleaveateachbalancesheetdateonthebasisofanindependentactuarialvaluation.Actuarialgainsandlossesarerecognisedintheprofitandlossaccount.

7. Voluntary retirement compensation

Voluntaryretirementcompensationisfullyexpensedintheyearinwhichtheliabilityisincurred.

8. Research and development expenditure

Capitalexpenditureonresearchanddevelopmentistreatedinthesamewayasotherfixedassets.Revenueexpenditureiswrittenoffintheyearinwhichitisincurred.

9. Borrowing costs

Borrowingcosts thataredirectlyattributable to theacquisitionorconstructionofqualifyingassetsarecapitalised.Aqualifyingassetisanassetthatnecessarilytakessubstantialperiodoftimetogetreadyforitsintendeduse.Otherborrowingcostsarerecognisedasanexpenseintheperiodinwhichtheyareincurred.

10. Taxation

Taxationexpensescomprisecurrenttax,deferredtaxandfringebenefittax.

(a) CurrenttaxistheamountoftaxpayableonthetaxableincomefortheyearasdeterminedinaccordancewiththeprovisionsoftheIncome-taxAct,1961.

(b) Deferredtaxisrecognizedontimingdifferencesbetweentaxableincomeandaccountingincomethatoriginateinoneperiodandarecapableofreversalinoneormoresubsequentperiods.

(c) FringebenefittaxistheamountoftaxpayableonthevalueofbenefitsprovidedtoemployeesfortheyearasdeterminedinaccordancewiththeprovisionsoftheIncome-taxAct,1961.

46

As at Asat 31.03.2008 31.03.2007 Rs. lacs Rs.lacs1. Contingent liabilities not provided for: a) IncomeTax 27.63 27.63 b) Salestax 46.01 149.98 c) Customsduty 158.87 158.87 d) Bankguarantees 5.50 5.75 e) Billsdiscounted 113.72 74.00 f) Corporateguaranteesissuedonbehalfof subsidiarycompanies. 498.93 210.00

TheCompanyisinfurtherappealinrespectofmattersstatedina)toc)above.2. a. Uncalledliabilityofsharespartlypaidina subsidiarycompanyincorporatedoutsideIndia, statedattheexchangerateprevailingasattheyearend -- 506.25 b. Estimatedamountofcontractsremaining tobeexecutedoncapitalaccountandnot providedfor(netofadvances) 555.82 2197.78 Year ended Yearended 31.03.2008 31.03.2007 Rs. lacs Rs.lacs3. a) Theamountofexchangedifferences(net): i) (credited)/debitedtotheprofitandlossaccountis (145.37) 6.09 ii) addedto/(deductedfrom)thecarrying amountoffixedassetsis -- (2.67) b) ConsequenttoTheCompanies(AccountingStandards)Rules,2006effective1stApril,2007,exchange

differencesonaccountof revaluationof foreigncurrency loanstakenfor thepurposeofacquiringfixedassetsisrecognizedasincome/expensewhichuntilthepreviousyearwasadjustedtothecostoffixedassets.Accordingly,profitforthecurrentyearishigherbyRs.174.93lacsonaccountofsuchexchangedifferencesreflectedinotherincome.

4. ThecompanyhasinvestmentsofRs.1174.72lacs(asat31.03.2007:Rs.1174.72lacs)comprising2484176EquitysharesofRs.10eachand10000006%CumulativeredeemablepreferencesharesofRs.100/-each,inSNLBearingsLimited(SNL),asubsidiarycompany.ThecompanyhasalsograntedtoSNL,advancesandloansofRs.650.00lacs(asat31.03.2007:Rs.1050.00lacs).AlthoughSNLhassubstantialaccumulatedlosses,intheopinionofthemanagement,havingregardtothelongtermprospectsofSNLandtheeffortsbeingmadetoturnarounditsfinancialpositionandperformance,noprovisionforthelossisconsiderednecessary.

5. TherearenoamountsduetothesupplierscoveredunderMicro,SmallandMediumEnterprisesDevelopmentAct,2006;thisinformationtakesintoaccountonlythosesupplierswhohaverespondedtotheenquiriesmadebytheCompanyforthispurpose.Thishasbeenrelieduponbytheauditors.

Schedule 20 - Notes annexed to and forming part of the balance sheet as at 31st March, 2008 and the profit and loss account for the year ended on that date

47

Year ended Yearended 31.3.2008 31.3.2007 Rs. in lacs Rs.inlacs6. ExpenditureonResearchandDevelopment: a) chargedtotheprofitandlossaccount 200.41 163.65 b) capitalizedtofixedassets 112.93 10.03

7. Asthecompany’sactivityfallswithinasinglesegmentviz.bearingsandthesalessubstantiallybeinginthedomesticmarket,thedisclosurerequirementsofAccountingStandard17“SegmentReporting”,isnotapplicable.

8. Related party disclosures

(i) Names of related parties and nature of relationship where control exists

(a) SNLBearingsLimited–subsidiarycompany

(b) NRBBearings(Thailand)Limited-subsidiarycompany

(c) Mr.T.S.Sahney,ChairmanandManagingDirector–individualhavingsubstantialinterestinthevotingpowerandthepowertodirectbyagreement,thefinancialandoperatingpoliciesofthecompany.

48

(ii) Transactionswithrelatedparties

Name of the related party and description

of relationship

Nature of transaction Volume of transactions

Rs. lacs

Receivable As at

31.03.2008 Rs. lacs

Payable As at

31.03.2008 Rs. lacs

SNL Bearings Limited,referredin(i)(a)above

ICDsrepaid

InterestreceivedonICDs

Saleofrawmaterials

Leaserentpaid

Purchaseofrawmaterialsetc.andfinishedgoods

PurchaseofPlantandMachinery

SaleofFixedAssets

400.00 (200.00)

92.10(95.06)

13.45(36.35)

24.50(28.00)

858.80(655.24)

273.96(119.16)

-(12.92)

650.00(1050.00)

-(-)

-(-)

-(-)

-(-)

247.43(47.63)

Outstandingguarantees

GuaranteesgivenbyNRB -(-)

210.00(210.00)

NRB Bearings (Thailand) Limited.,referredin(i)(b)above

InvestmentinSharecapital

Advancesgiven

443.86(155.78)

9.10(17.56)

26.66(17.56)

Outstandingguarantees

GuaranteesgivenbyNRB 288.93(-)

288.93(-)

Key management personnel

-Mr.T.S.Sahney[alsotheindividualreferredin(i)(c)above]

-Ms.H.S.Zaveri–WholetimeDirector

-Mr.D.S.Sahney–WholetimeDirector

Remuneration

134.88(92.83)

91.90(61.26)

60.87(32.60)

-

(-)

74.10

(53.12)

New Indo Trading Co.afirmwheretheindividualreferredin(i)(c)aboveisapartner

Servicechargespaid 4.20(4.20)

-(-)

1.41(1.41)

49

8. (contd.)

(iii) Additionaldisclosurepursuant toCircularCRD/GEN/2003/1datedFebruary6,2003ofTheStockExchange,Mumbai.

Name Balance as at Maximum amount outstanding 31st March, 2008 during the year ended 31st March, 2008 Rs.lacs Rs.lacs Loansandadvancesinthe natureofloanstosubsidiary companies- a) SNLBearingsLimited 650.00 1050.00 (1050.00) (1250.00) b) NRBBearings(Thailand)Limited 26.66 26.66 (17.56) (17.56)Notes:i) Figuresinbracketsareinrespectofthepreviousyear.

ii) Noamountspertainingtorelatedpartieshavebeenprovidedforasdoubtfuldebts.Further,no amountshaveeitherbeenwrittenofforwrittenbackduringtheyear.

iii)Dividendpaidhasnotbeenconsideredbythecompanyasatransactionfallingunderthepurview ofAccountingStandard18“RelatedPartyDisclosures”.

9. Thecompanyhastakencertainplantandmachinery,equipmentandvehiclesonoperatinglease.Leaserentalschargedtotheprofitandlossaccountfortheyearended31stMarch,2008aggregatedRs.68.20lacs(fortheyearended31.03.2007:Rs.47.35lacs).Theminimumleasepaymentstobemadeinfutureasattheyearend,inrespectofnon-cancellableleasesareasfollows:

(Rs. in lacs)

(i) Foraperiodnotlaterthanoneyear 44.81 (47.35)

(ii)Foraperiodlaterthanoneyearand 80.87 notlaterthanfiveyears (9.68)

(iii)Foraperiodlaterthanfiveyears - (-)

Figuresinbracketsareinrespectofthepreviousyear

10. Values used in calculating Earnings Per Share

Year ended Yearended 31.03.2008 31.03.2007 (i) Numerator:Profitaftertax(Rs.inlacs) 3351.25 3976.24

(ii)Denominator:NumberofEquityshares 48,461,300 48,461,300 Witheffectfrom4thApril,2007(i.e.therecorddate),thefacevalueoftheequityshareshasbeensub-divided

toRs.2eachfromRs.10each.However,forthepurposeofcalculatingearningspershareinrespectofthepreviousyear,thefacevalueperequitysharehasbeenconsideredatRs.2.

50

Year ended Yearended 31.03.2008 31.03.2007 Rs. lacs Rs.lacs11 (a)Directors’ remuneration* Whole-timedirectors

Salary 103.20 65.53

Commission 74.10 48.12

Contributiontoprovidentfundandotherfunds 23.91 13.30

Otherperquisites 86.44 59.74 Non-wholetimedirectors 287.65 186.69

Directors’fees 2.25 2.35

Commission 5.00 5.00 294.90 194.04

*excludinggratuitycontributedandcompensated absencesprovided,onaglobalbasis.

(b)CommissionpayabletotheDirectors:

Profitbeforetax 5183.62 5991.49

Add:i)Whole-timeDirectors’remuneration 287.65 186.69

ii)Directors’sittingfees 2.25 2.35

iii)Commissiontonon-wholetimeDirectors 5.00 5.00

iv)Provisionfordoubtfuldebts 106.22 51.32 5584.74 6236.85

Less:Baddebtswrittenoffagainst provisionfordoubtfuldebtsmade inearlieryears - 48.52 Netprofit 5584.74 6188.33

CommissionpayabletotheManagingDirectorandthe twowhole-timedirectors(attherateof1%ofnetprofits toeachofthem,limitedtooneyear’ssalaryinrespect oftheManagingDirectorandsixmonth’ssalaryin respectofthetwowhole-timedirectors) 74.10 48.12 Commissiontonon–wholetimedirectors(not exceeding0.125%ofnetprofits,determinedby theBoardofDirectorsatRs.5lacs) 5.00 5.00

51

12 Componentsofdeferredtax: Rs.lacs

Nature of timing difference Deferred tax asset/(liability)

As at 31.03.2007

Credit/(charge) for the year

Deferred tax asset/(liability)

As at 31.03.2008

(a) Deferred tax liability

Depreciation (1247.83) (116.97) (1364.80)

Sub–total (1247.83) (116.97) (1364.80)

(b) Deferred tax asset

Provisionfordoubtfuldebts

Provisionforcompensatedabsences

Voluntaryretirementcompensation

53.43

76.43

21.97

36.09

1.22

(17.71)

89.52

77.65

4.26

Sub-total 151.83 19.60 171.43

Netamount (1096.00) (97.37) 1193.37

Year ended Yearended 31.03.2008 31.03.2007 Rs. lacs Rs.lacs13. Details of Auditors’ remuneration: (excludingservicetax)

Auditfees 14.00 12.00

Reportundersection44ABof theIncome-taxAct,1961 2.00 1.75

Taxationmatters 1.55 0.65

Otherservices 8.00 7.40

Reimbursementofexpenses 0.14 0.04

52

14. Raw materials, components and packing materials consumed:

Year ended Yearended 31.03.2008 31.03.2007 Unit Quantity Value Quantity Value Rs. lacs Rs.lacs Raw materials:

Steel Tonnes 9154 7291.24 8955 7532.43

Brass “ 162 224.86 165 160.95 Sub-total 7516.10 7693.38 Components Nos.in000s 111727 2395.96 82471 1774.46 Sub-total 2395.96 1774.46 Packing materials * 681.74 * 606.39

*diversequantitativeunits Grandtotal 10593.80 10074.23

Ofwhich % Value % Value Rs.lacs Rs.lacs

Imported 26 2719.15 26 2625.99

Indigenous 74 7874.65 74 7448.24 Total 100 10593.80 100 10074.23

Note:Consumptionincludesadjustmentofexcess/shortageascertainedonphysicalcount.

15 Stores and spares consumed:

Year ended Yearended 31.03.2008 31.03.2007 % Value % Value Rs. lacs Rs.lacs

Imported 10 328.49 11 323.82

Indigenous 90 2861.63 89 2615.25 100 3190.12 100 2939.07

53

16. Capacity and Production:

Unit

Installed capacity (per annum)

Production

As at 31.03.2008

Asat31.03.2007

Year ended 31.03.2008

Yearended31.03.2007

LooseNeedleRollers Nos.in000s 3429120 3429120 2336622 2205930

NeedleRollerBushesandCages

“ 52294 47294 43037 37186

BallandRollerBearings “ 28930 26020 21963 19609

AutomobileComponents “ 4500 4000 3137 3473

Notes: i) Licencedcapacityhasnotbeenshownastheindustryhasbeendelicensed. ii) InstalledcapacityisascertifiedbytheChairmanandManagingDirectorandhasbeenacceptedby

theauditorswithoutverification,thisbeingatechnicalmatter. iii) Productionincludesfollowingquantitiesproducedforcaptiveconsumption: (a) LooseNeedleRollers–1308297Nos.inthousands(fortheyearended31.03.2007:1167870

Nos.inthousands) (b)NeedleRollerBushesandCages–916Nos.inthousands(fortheyearended31.03.2007:

936Nos.inthousands)

17. Sales (net of excise duty):

Unit

Year ended 31.03.2008

Yearended31.03.2007

Quantity Value Rs.lacs

Quantity ValueRs.lacs

LooseNeedleRollers Nos.in000s 1046488 1812.41 1066375 1573.39


“ 41234 11616.50 36248 10653.14

BallandRollerBearings “ 20324 17146.50 19699 16348.79

AutomobileComponents “ 3119 1566.96 3357 1735.49

Total 32142.37 30310.81

Note: ThecompanysometimessellsmanufacturedcomponentsofNeedleRollerBushesandCages, andNeedleRollerBearings.Thequantitiesofsuchcomponentshavenotbeenincludedinthe relevantgroups.However,thevalueshownundertherelevantgroupsisinclusiveofthevalueof suchcomponents.

54

18. Closing stock of finished goods:

UnitAs at 31.03.2008 Asat31.03.2007 Asat31.03.2006

Quantity Value Rs.lacs



LooseNeedleRollers Nos.in000s 127439 210.32 145602 211.04 173917 244.81


“ 5095 808.52 4208 765.79 4206 522.13

BallandRollerBearings “ 3123 1939.53 1484 1226.71 1574 1144.74

AutomobileComponents “ 401 163.99 383 150.19 267 105.07

Total 3122.36 2353.73 2016.75

Notes: (1) Stocksareafteradjustmentsforexcess/shortageonphysicalcountandwriteoffofobsolete andslowmovingitems.

(2) ThecompanyalsosellsmanufacturedcomponentsofNeedleRollerBushesandCagesand NeedleRollerBearings.Thequantitiesofsuchcomponentshavenotbeenincludedinthe relevantgroups.However,thevaluesshownundertherelevantgroupsareinclusiveofthe valuesofsuchcomponents.

Year ended Yearended 31.03.2008 31.03.2007 Rs.lacs Rs.lacs19 C.I.F. value of imports:

i) Rawmaterialsandcomponents 2383.93 2345.74

ii)Storesandspares 401.74 421.30

iii)Capitalgoods 1882.22 2734.16

20. Expenditure in foreign currency:

i) Foreigntravel 74.48 130.57

ii)Commissiononexports 5.52 10.19

iii)Interest 264.38 286.29

iv)Others 7.22 9.26

55

21. Earnings in foreign exchange: Year ended Yearended 31.03.2008 31.03.2007 Rs.lacs Rs.lacs i) ExportofgoodscalculatedonF.O.B.basis 3534.68 2441.24

ii) Reimbursementofinsuranceandfreightonexports 80.47 47.56

iii)Agencycommission 95.98 81.42

22. Financial and Derivative Instruments

i) ForwardExchangeContractsenteredintobytheCompanythatareoutstandingasat31stMarch,2008.

Currency Amountinforeigncurrency Buy/Sell CrossCurrency

USD –(750,000)

–Buy

–INR

JPY –(10,000,000)

–Buy

–USD

TheseForwardForeignExchangeContractsareenteredintoforhedgingpurposesandnotforspeculationpurposes.

ii) a) Hedgeagainstfluctuationsininterestrate:

No.ofcontracts : - : (1)

PrincipalamountinUSDollars : - (2,250,000)

Equivalentrupeesatyearendrate : - (980.44lacs)

b) Hedgeagainstfluctuationsinexchangerates:

No.ofcontracts : 2 (1)

PrincipalamountinUSDollars : 1,500,000 (2,250,000)

Equivalentrupeesatyearendrate : 694.80lacs (1042.20lacs)

PrincipalamountinYen : 413,243,475 (crosscurrencyhedgeinUSDollars) (-)

Equivalentdollarsatyearendrate : 3,880,220 (-)

56

iii) Foreign currency exposures that have not been hedged by a derivative instrument or otherwiseoutstandingasat31.03.2008:

a) Amountsreceivableinforeigncurrency:

Purpose Currency Amount EquivalentRs.lacsasattheyearend

Exportofgoods USD 155,946(111,957)

62.13(48.57)

EURO 1,592,496(1,120,765)

1002.16(647.35)

CHF -(7,111)

-(2.53)

GBP 9,777(7,324)

7.76(6.24)

b) Amountspayableinforeigncurrency:


Importofgoods YEN 120,894,627(69,005,593)

483.34(255.18)

EURO 373,806(443,792)

235.39(258.11)

USD 81,923(84,692)

32.65(36.90)

CHF 16,325(2,025)

6.53(0.73)

GBP -(215)

-(0.18)

CapitalImports JPY 117,300,775(-)

468.97(-)

Loanspayable USD 14,113,005(7,000,000)

5624.30(3050.25)

Interestpayable USD 77,666(103,543)

30.95(44.56)

JPY 938,879(-)

3.72(-)

iv) Figuresinbracketsarethecorrespondingfiguresinrespectofthepreviousyear.

23. EffectiveApril1,2007,theCompanyadoptedtherevisedAccountingStandard15“EmployeeBenefits”.Pursuanttotheadoption,noadjustmentwasrequiredtobemadetoGeneralReserveascontemplatedunderthetransitionalprovisionsofthesaidstandard.Thisbeingthefirstyearofimplementation,previousyearfiguresarenotgiven.

1. Defined Contribution plans

ContributiontoDefinedContributionPlans,recognizedinthestatementofprofitandlossaccountfortheyear,underemployeecostsinschedule15areasunder:

Rs.in Lacs i) Employer’sContributiontoProvidentFund 124.85

ii) Employer’sContributiontoFamilyPensionFund 106.38

iii) Employer’sContributiontoSuperannuationFund 62.41

57

2. Defined Benefit Plan

a) Gratuity – as per actuarial valuation as on 31st March, 2008 (based on Projected UnitBenefitMethod)

Officers’Rs.inLacs

StaffRs.inLacs

TotalRs.inLacs

i)Componentsofemployerexpenses

a)CurrnetServicecost

b)Interestcost

c)Expectedreturnonplanassets

d)ActuarialLosses/(Gains)

Total expenses recognised in Profit and Loss Account

16.09

15.93

(15.81)

26.78

42.99

19.50

36.82

(42.54)

51.76

65.54

35.59

52.75

(58.35)

78.54

108.53

ii)ActualContributionandBenefitPaymentsforyearended31stMarch,2008

a)Actualbenefitpayments

b)ActualContributions

35.53

10.00

25.86

100.00

61.39

110.00

iii)Netasset/(liability)recognisedinbalancesheetason31stMarch,2008

a)DefinedBenefitObligation

b)Planassets

Net asset/(liability) recognised in balance sheet

(225.37)

196.90

(28.47)

(528.75)

554.16

25.41

(754.12)

751.06

(3.06)

iv)ChangeinDefinedBenefitObligations(DBO)duringtheyearended31stMarch,2008

a)PresentValueofDBOatbeginingofyear

b)CurrentServicecost

c)Interestcost

d)ActuarialLosses/(Gains)

e)Benefitspaid

Present Value of DBO at the end of year

200.82

16.09

15.93

28.06

(35.53)

225.37

453.69

19.50

36.82

44.60

(25.86)

528.75

654.51

35.59

52.75

72.66

(61.39)

754.12

v)ChangeinFairValueofAssetsduringtheyearended31stMarch,2008

a)Planassetsatbeginingofyear

b)Annualreturnonplanassets

c)ActualCompanycontributions

d)Benefitspaid

Plan assets at the end of year

205.33

17.10

10.00

(35.53)

196.90

444.64

35.38

100.00

(25.86)

554.16

649.97

52.48

110.00

(61.39)

751.06

58

Officers’Rs.inLacs

StaffRs.inLacs

TotalRs.inLacs

vi)Contributionexpectedtobepaidnextyear 22.54 35.91 58.45

vii)ActuarialAssumptions

a)DiscountRate

b)ExpectedrateofreturnonPlanassets

c)Salaryescalation

d)MortalityTable

8.00%

8.00%

4.00%

LIC(1994-96)Ultimate

8.00%

8.00%

3.00%


8.00%

8.00%

3%-4%


viii)MajorCategoriesofplanassets-InsurerManagedFunds 100.00% 100.00% 100.00%

Notes: a) Theexpectedrateofreturnonplanassetsisbasedonmarketexpectation,atthebeginningoftheyear,forreturnsovertheentirelifeoftherelatedobligation.

b) Theassumptionof future salary increases, considered inactuarial valuation, takeaccountofinflation, seniority, promotion and other relevant factors, such as supply and demand in theemploymentmarket.

c) Compensatedabsencesrecognizedinthestatementofprofitandlossaccountfortheyear,underemployeecostinschedule15,isRs.38.07lacs.

24. Previousyear’sfigureshavebeenregroupedwherevernecessary.

SignaturetoSchedule1to20

ForandonbehalfoftheBoardofDirectors

T. S. Sahney P. D. Ojha K. S. Pant ManagingDirector


S. C. Rangani D. S. Sahney Sr.VPFinance&Co.Secretary Directors

Mumbai:June9,2008

59

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

(+forProfit,-forLoss)

+-

- - - 1 3 2 5 1 1 1

- - - N I L - - -

I. Registration Details

RegistrationNo. StateCode

BalanceSheetDate

DateMonthYear

II. Capital Raised During the year (Amount in Rs. )

PublicIssue RightIssue

BonusIssue PrivatePlacement

III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)

TotalLiabilities TotalAssets

SourcesofFund Paid-UpCapital Reserves&Surplus

SecuredLoans UnsecuredLoans

DeferredTaxLiability

ApplicationofFunds NetFixedAssets Investments

NetCurrentAssets MiscellaneousExpenses

AccumulatedLosses

IV. Performance of Company (Amount in Rs. Thousands)

TurnOver TotalExpenditure

ProfitbeforeTax ProfitafterTax

EarningPerShareinRs. DividendRate%

- - - - 969 2 3 - - 1 70 9 2 60

3 1 0 3 2 0 0 8

- - - 4 3 7 1 62 - - - 6 4 2 0 53

- - 3 0 0 4 7 3 5 - - 3 0 0 4 7 3 5

- - 1 6 0 7 2 4 5 - - - 1 7 8 14 5

- - 1 21 9 3 4 5 - - - N I L - - -

- - 3 2 8 4 7 6 9

+-

- - 2 76 6 4 0 7

- - - 5 1 8 36 2 - - - 3 3 51 25

- - - - - 6 . 9 2 - - - - - - 1 20

- - - 1 1 9 3 3 7

- - - N I L - - -

- - - N I L - - - - - - N I L - - -

- - - N I L - - -

60

V. Generic Names of Three Principal Products/ Services of Company (as per monetary terms)

ItemCodeNo. (ITCCode)

Product Description


Product Description


Product Description

- - - - - 8 4 8 2 1 0 . 0 0

- - - - - 84 8 2 4 0.. 00

- - - - 8 4 8 2 5 4 . 0 0

CYL I NDR I CA L ROL L ER - -

BA L L BE AR I NGS - - - - - - - - - -

BEA R I NGS - - - - - - - - - - - -

NEE DL E ROL L ER - - - - - - - - - - -

BEA R I NGS - - - - - - - - - - - - - - - -





Mumbai:June9,2008

61

STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANIES SNL BEARINGS LTD AND NRB BEARINGS (THAILAND)LTD

SNL BEARINGS LTD NRB BEARINGS (THAILAND) LTD 31stMarch,2008 31stMarch,2008

A. TheFinancialYearoftheSubsidiaryCompany

B. (a) NumberofSharesheldby 2484176EquitySharesof 4,999,994EquitySharesof HoldingCompanyattheendof Rs.10/-eachfully ThaiBaht10/-each, thefinancialyearofthe paidup ThaiBaht10eachfullypaidup SubsidiaryCompany

(b) Extentofholding 68.78% 100.00%

C. Thenetaggregateofprofit/(loss)oftheSubsidiary sofarasitconcernsthemembersoftheHolding CompanyandnotdealtwithintheAccountsofthe HoldingCompany

(a) Forthefinancialyearended31stMarch,2008 Rs.276.06lacs (9160.91)THB’000

(b)Forthepreviousfinancialyear Rs.214.25lacs (708.32)THB’000

D. Profitdealtwithorlossesprovidedforinthe AccountsoftheHoldingCompany

(a) Forthefinancialyearended31stMarch,2008 Nil Nil

(b)Forallpreviousfinancialyears Nil Nil




Mumbai:June9,2008

62

ABRIDGED ACCOUNTS OF SUBSIDIARY COMPANIES

SNL BEARINGS LIMITED

ABRIDGED BALANCE SHEET AS ON 31ST MARCH

2008 2007Liabilities

Capital 1361.15 1361.15

Reserves&Surplus 15.03 15.03

Loanfunds 717.93 1054.65

Otherliabilitiesandprovisions 200.05 177.64 Total 2294.16 2608.47

Assets

Fixedassets(net) 385.60 624.89

Currentassets 982.45 781.41

Profit&lossaccount 926.11 1202.17 Total 2294.16 2608.47

ABRIDGED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH

2008 2007Income

Sales(Net) 1555.84 1437.86Otherincome 44.69 49.67Stocksincrease/(decrease) (9.17) 16.27 Total 1591.36 1503.80

Expenditure

Materialsconsumed 521.33 509.25Operatingexpenses 177.88 164.64Adm.&otherexps 445.66 423.99Depreciation 74.24 87.64Interest 94.16 102.66 Total 1313.27 1288.18

Profit/(Loss)beforetax 278.09 215.62Provisionfortaxation 2.03 1.37Profit/(Loss)aftertax 276.06 214.25

ABRIDGED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH

2008 2007IncomeSales(Net) Otherincome 52.40 -Stocksincrease/(decrease) - - Total 52.40 -

Expenditure

Materialsconsumed - -Operatingexpenses - -

Adm.&otherexps 7658.21 708.32Depreciation 1529.54 -Interest 25.56 - Total 9213.31 708.32

Profit/(Loss)beforetax (9160.91) (708.32)Provisionfortaxation - -Profit/(Loss)aftertax (9160.91) (708.32)

NRB BEARINGS (THAILAND) LTD.

ABRIDGED BALANCE SHEET AS ON 31ST MARCH

2008 2007Liabilities

Capital 50000.00 12500.00

Reserves&Surplus - -

Loanfunds 6587.98 439.82

Otherliabilitiesandprovisions 516.82 1227.78 Total 57105.80 14167.60

Assets

Fixedassets(net) 46196.72 -

Currentassets 1038.85 13459.28

Profit&lossaccount 9869.23 708.32 Total 57104.80 14167.60

Rs. Lacs

THB’000

63

AUDITORS’ REPORT TO THE BOARD OF DIRECTORS OF NRB BEARINGS LIMITED ON THE CONSOLIDATED FINANCIAL STATEMENTS OF NRB BEARINGS LIMITED AND ITS SUBSIDIARIES FOR THE YEAR ENDED 31ST MARCH, 2008

1. WehaveauditedtheattachedconsolidatedbalancesheetofNRBBearingsLimited,theparentcompany,anditssubsidiaries[collectivelyreferredtoas̀ thegroup’]asat31stMarch,2008,andalsotheconsolidatedprofitandlossaccountandtheconsolidatedcashflowstatementfortheyearendedonthatdate,bothannexedthereto.Thesefinancialstatementsaretheresponsibilityoftheparentcompany’smanagementandhavebeenpreparedbythemanagementonthebasisofseparatefinancialstatementsoftheparentcompanyanditssubsidiaries.Ourresponsibilityistoexpressanopinionontheseconsolidatedfinancialstatementsbasedonouraudit.

2. Weconductedouraudit inaccordancewiththeauditingstandardsgenerallyaccepted in India.Thesestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludes,examiningonatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.Webelievethatourauditprovidesareasonablebasisforouropinion.

3. WedidnotauditthefinancialstatementsofasubsidiarywhosefinancialstatementsreflecttotalassetsofRs.604.47lacsasat31stMarch,2008,andrevenuesofRs.0.68lacsandnetcashoutflowofRs.169.57lacsfortheyearendedonthatdate.Thesefinancialstatementsandotherfinancialinformationisauditedbyotherauditorswhosereportshavebeenfurnishedtousbythemanagement,andouropinionisbasedsolelyonthereportoftheotherauditor.

4. We report that the consolidated financial statements have been prepared by the parent company’smanagementinaccordancewiththerequirementsofAccountingStandard21,‘ConsolidatedFinancialStatements’,notifiedundertheCompaniesAct,1956.

5. OnthebasisoftheinformationandexplanationsgiventousandontheconsiderationoftheseparateauditreportsonindividualauditedfinancialstatementsofNRBBearingsLimitedanditssubsidiaries,weareoftheopinionthatthesaidconsolidatedfinancialstatementsgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia:

(i) inthecaseoftheconsolidatedbalancesheet,ofstateofaffairsofthegroupasat31stMarch,2008;

(ii) inthecaseoftheconsolidatedprofitandlossaccount,oftheprofitfortheyearendedonthatdate;and

(iii) inthecaseofconsolidatedcashflowstatement,ofthecashflowsfortheyearendedonthatdate.

For A. F. FERGUSON & CO. CharteredAccountants


64

NRB BEARINGS LIMITED - CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2008 Schedule As at Asat No. 31.03.2008 31.03.2007 Rs.lacs Rs.lacs Rs.lacs Rs.lacs I. SOURCES OF FUNDS: 1) Shareholders’funds: a) Sharecapital 1 969.23 969.23 b) Reservesandsurplus 2 16359.82 14312.66 Minorityinterest (i) Sharecapital 112.74 112.74 (ii) Reservesandsurplus (284.44) (370.61) Adjustedagainstmajorityinterest (171.70) (257.87) 16188.12 14054.79 17157.35 15024.02 2) Loanfunds: a) Securedloans 3 4490.74 5309.36 b) Unsecuredloans 4 6425.73 3815.33 10916.47 9124.69 3) Deferredtaxliability(net) (seeNote10onSchedule20) 1193.37 1096.00 Total 29267.19 25244.71 II. APPLICATION OF FUNDS: 1) Fixedassets: 5 a) Grossblock 33969.56 28650.11 b) Less:depreciation 17449.24 15580.09 c) Netblock 16520.32 13070.02 d) Capitalworkinprogressandadvances forcapitalexpenditure 464.56 256.08 16984.88 13326.10 2) Investments 6 7.09 7.09 3) Currentassets,loansandadvances: a) Inventories 7 8712.57 7313.33 b) Sundrydebtors 8 8684.48 7457.35 c) Cashandbankbalances 9 616.39 557.27 d) Loansandadvances 10 1697.15 1587.77 19710.59 16915.72 Less:Currentliabilitiesandprovisions: a) Currentliabilities 11 5754.42 4015.42 b) Provisions 12 1680.95 988.78 7435.37 5004.20 Netcurrentassets 12275.22 11911.52 Total 29267.19 25244.71 Significantaccountingpolicies 19 Notestotheconsolidatedaccounts 20



H. S. Zaveri K. M. Elavia R. K. HIRANANDANI S. C. Rangani D. S. SahneyPartner Sr.VPFinance&Co.Secretary DirectorsMumbai::June9,2008 Mumbai:June9,2008

65

NRB BEARINGS LIMITED - CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008 Schedule Year ended Yearended No. 31.03.2008 31.03.2007 Rs.lacs Rs.lacs Rs.lacs Rs.lacs INCOMESales(Gross) 37794.10 35863.52Less:Exciseduty 4934.89 4816.22 32859.21 31047.30Otherincome 13 727.61 471.33 33586.82 31518.63Increase/(Decrease)instockofwork-in-progressandfinishedgoods 14 856.53 889.90 34443.35 32408.53 EXPENDITURERawmaterials,componentsand packingmaterialsconsumed 10185.33 9790.55Storesandsparesconsumed 3291.23 3033.69Processingcharges 1953.57 1515.72Powerandfuel 1440.77 1364.77Employeecosts 15 5797.35 4824.38Repairs 16 624.34 499.65Otherexpenses 17 3330.16 3063.81Depreciation 5 1883.85 1664.98Interest(net) 18 637.84 462.92 29144.44 26220.47 PROFIT BEFORE TAX 5298.91 6188.06Provisionfortaxation-Currenttax 1650.00 1825.00-Inrespectofearlieryears - (67.43)-Deferredtax 97.37 177.46 1747.37 1935.03-Fringebenefittax 87.03 81.59 1834.40 2016.62

PROFIT AFTER TAX 3464.51 4171.44Parentcompany’sshare 3378.34 4104.54Minority 86.17 66.90Add:Balancebroughtforward 93.27 609.93 AVAILABLE FOR APPROPRIATIONS 3471.61 4714.47LESS:APPROPRIATIONS: InterimDividend - 775.38 Proposedfinaldividend 1163.07 630.00 Additionalincome-taxondistributedprofits 197.66 215.82 Transfertogeneralreserve 335.13 3000.00 1695.86 4621.20BALANCE CARRIED TO CONSOLIDATED BALANCE SHEET 1775.75 93.27 Significantaccountingpolicies 19Notestotheconsolidatedaccounts 20Basic,aswellasdiluted,earningsperequityshare(Nominalvalueperequityshare:Rs.2)[seeNote9onSchedule20] Rs.7.15 Rs.8.61Perourreportattached ForandonbehalfoftheBoardofDirectors


H. S. Zaveri K. M. Elavia R. K. HIRANANDANI S. C. Rangani D. S. SahneyPartner Sr.VPFinance&Co.Secretary DirectorsMumbai:June9,2008 Mumbai:June9,2008

66

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2008

Year ended Yearended 31.03.2008 31.03.2007 Rs.lacs Rs.lacs Rs.lacs Rs.lacsA. CASHFLOWFROMOPERATINGACTIVITIES:

NETPROFITBEFORETAx 5298.91 6188.06

Adjustmentsfor: Depreciation 1883.85 1664.98 Foreignexchangegainunrealised (235.88) (20.49) Interestexpenditure(net) 637.84 462.92 Dividendincome (8.18) (11.75) Profitonsaleoffixedassets(net) (2.14) (18.23) Profitonsaleofcurrentinvestments (3.50) (3.74) Provisionforcompensatedabsences 5.46 2.94 Provisionfor(writebackof)doubtfuldebts 114.57 (5.20) Foreigncurrencytranslation 29.55 13.08 Salestaxprovisionnolongerrequiredwrittenback - (49.75) 2421.57 2034.76 7720.48 8222.82 OPERATINGPROFITBEFOREWORKINGCAPITALCHANGES ANDOTHERADJUSTMENTS Changesin: -Tradeandotherreceivables (1460.92) (1885.94) -Inventories (1399.24) (1028.84) -Tradepayables 1685.79 370.51 (1174.37) (2544.27) NETCASHGENERATEDFROMOPERATIONS 6546.11 5678.55 Directtaxespaid(netofrefund) (1591.82) (1798.69) NETCASHFROMOPERATINGACTIVITIES 4954.29 3879.86 B. CASHFLOWFROMINVESTINGACTIVITIES: Purchaseoffixedassets(includingadjustmentsonaccountof capitaladvances) (5548.58) (3876.83) Saleoffixedassets 8.09 28.39 Purchaseofinvestments (2853.39) (2956.98) Saleofinvestments 2856.89 3361.59 Dividendincome 8.18 11.75 NETCASHUSEDININVESTINGACTIVITIES (5528.81) (3432.08)

C. CASHFLOWFROMFINANCINGACTIVITIES: Proceedsfromborrowings 16457.78 5404.40 Repaymentofborrowings (13713.78) (4347.83) (Decrease)/Increaseincashcredit (719.70) 369.93 Interestpaid (653.52) (461.55) Dividendpaid (630.07) (1262.74) AdditionalIncometaxondistributedprofits (107.07) (176.72) NETCASHFROM/(USEDIN)FINANCINGACTIVITIES 633.64 (474.51) NETINCREASE/(DECREASE)INCASHANDCASH EQUIVALENTS(A+B+C) 59.12 (26.73)

67

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2008 (contd.)

Year ended Yearended 31.03.2008 31.03.2007 Rs.lacs Rs.lacs Rs.lacs Rs.lacs CASHANDCASHEQUIVALENTSASAT THECOMMENCEMENTOFTHEYEAR

thecomponentsbeing:



Balanceswithbanksoncurrentaccounts 136.08 391.75

Remittanceintransit 181.58 - 557.27 584.00

CASHANDCASHEQUIVALENTSASAT THEENDOFTHEYEAR

thecomponentsbeing:



Remittanceintransit - 181.58

Balanceswithbanksoncurrentaccounts 330.00 136.08

Balanceswithbanksonfixeddepositaccount 3.11 - 616.39 557.27 NETINCREASE/(DECREASE)ASDISCLOSEDABOVE 59.12 (26.73) Notes: 1. Figuresinbracketsrepresentdeductions/outflows. 2. Previousyear’sfigureshavebeenregroupedwherevernecessary. Perourreportattachedtotheconsolidatedbalancesheet





68

SCHEDULES 1 TO 12 ANNEXED TO AND FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2008

As at Asat 31.03.2008 31.03.2007 Rs.lacs Rs.lacsSchedule 1 - Share capital

Authorised:

5,00,00,000EquitysharesofRs.2each

(Previousyear:1,00,00,000EquitysharesofRs.10each) 1000.00 1000.00(SeeNote9onSchedule20) Issuedandsubscribed:

48,461,300EquitysharesofRs.2eachfullypaid-up 969.23 969.23(Previousyear:96,92,260EquitysharesofRs.10eachfullypaid-up)(SeeNote9onSchedule20)

Oftheabove:

i) 45,500EquitysharesofRs.2each(Previousyear:9,100Equity shares of Rs.10 each) have been allotted as fully paid-up pursuanttocontractswithoutpaymentshavingbeenreceived incash.

ii) 41,563,300EquitysharesofRs.2each(Previousyear:83,12,660 EquitysharesofRs.10each)havebeenallottedas fullypaid upbywayofbonusshares.

iii) 38,000EquitysharesofRs.2each(Previousyear:7,600Equity sharesofRs.10each)areallottedtothemembersoferstwhile SahneySteelandPressWorksLimitedonitsamalgamationwith thecompanyon01.04.1991. Perconsolidatedbalancesheet 969.23 969.23

Schedule 2 - Reserves and surplus

Capitalreserve:


Capitalreservearisingonconsolidation:


Sharepremium:


Generalreserve:


Add:Transferredfromconsolidatedprofitandlossaccount 335.13 3000.00 13281.37 12946.24Foreigncurrencytranslationreserve:Perlastbalancesheet 13.08 -Add:Arisingduringtheyear 29.55 13.08 42.63 13.08Surplusbeingbalanceinconsolidatedprofitandlossaccount 1775.75 93.27 Perconsolidatedbalancesheet 16359.82 14312.66

69

As at Asat 31.03.2008 31.03.2007 Rs.lacs Rs.lacsSchedule 3 - Secured loans

FromBanks:

i) Cashcredits 129.40 849.10

ii) TermloaninForeignCurrency 4296.16 4419.26

iii) Termloan 65.18 41.00 Perconsolidatedbalancesheet 4490.74 5309.36

1. Cashcreditstakenfrombanksaresecuredbyhypothecationofinventoriesandbookdebts.Further,loantakenbythesubsidiaryisguaranteedbytheparentcompany.

2. TermloaninForeignCurrency(ii)issecuredbyhypothecationof/chargeonthecompany’sfixedassetsacquiredfromproceedsoftheloan

3. Termloan(iii)issecuredbyhypothecationof/chargeoncompany’svehiclesspecificallypurchasedundertheloan.Further,loantakenbythesubsidiaryisguaranteedbytheparentcompany.

Schedule 4 - Unsecured loans

a. Commercialpaper - 1500.00

b. Temporaryoverdraftfromabank 5.20 7.72

c. Shorttermloansfrombanks 3000.00 1000.00

d. Shorttermloanfrombankinforeigncurrency 2022.94 -

e. Otherloansandadvances

FromSICOMLimited InterestfreeSalestaxloan 1397.59 1307.61

Perconsolidatedbalancesheet 6425.73 3815.33

SCHEDULES 1 TO 12 ANNEXED TO AND FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2008 (contd.)

70

Schedule 5 - Fixed Assets

GROSS BLOCK - AT COST DEPRECIATION NET BLOCKDescription Opening

Balance As at

01.04.07

Additions Deduc-tions

Closing Balance

As at 31.03.08

Opening Balance

As at 01.04.07

For the year

On deduc-

tions

Closing Balance

As at 31.03.08

As at 31.03.08

As at 31.03.07

Rs.lacs Rs.lacs Rs.lacs Rs.lacs Rs.lacs Rs.lacs Rs.lacs Rs.lacs Rs.lacs Rs.lacs

A. Tangible Assets

Freehold land

Leasehold land

Buildings and flats

Plant and machinery

Furniture, fixtures and equipment

Electrical installations

Vehicles

60.00

21.59

2172.90

24063.69

1102.49

758.99

340.98

133.78

25.87

1416.46

3321.60

232.14

72.55

109.03

-

-

-

16.39

-

-

4.26

193.78

47.46

3589.36

27368.90

1334.63

831.54

445.75

-

4.06

822.12

13390.27

775.81

369.27

139.46

-

0.51

81.90

1623.93

72.42

39.73

33.91

-

-

-

13.34

-

-

1.36

-

4.57

904.02

15000.86

848.23

409.00

172.01

193.78

42.89

2685.34

12368.04

486.40

422.54

273.74

60.00

17.53

1350.78

10673.42

326.68

389.72

201.52

Sub Total (A) 28520.64 5311.43 20.65 33811.42 15500.99 1852.40 14.70 17338.69 16472.73 13019.65

B. Intangible Assets

Computer software 129.47 28.67 - 158.14 79.10 31.45 - 110.55 47.59 50.37

Sub Total (B) 129.47 28.67 - 158.14 79.10 31.45 - 110.55 47.59 50.37

Total (A) + (B) 28650.11 5340.10 20.65 33969.56 15580.09 1883.85 14.70 17449.24 16520.32

218.01

13070.02

81.94

Previous year 24519.11 4144.77 13.77 28650.11 13918.72 1664.98 3.61 15580.09

Capital Work in Progress

Advances for capital expenditure

Perconsolidatedbalancesheet

246.55 174.14

464.56 256.08

16984.88 13326.10

Notes: i) Buildingsandflatsinclude;

a. SharesinrespectofresidentialpremisesofacostofRs.2.25lacsinaco-operativesocietywhichisintheprocessofbeingtransferredinthenameofthecompany.

b. CostofsharesofanaggregatefacevalueofRs.2750inco-operativehousingsocietiesviz.5sharesofRs.250eachinVileParleVatikaCo-operativeHousingSocietyLimited,5sharesofRs.50eachinEdenwoodsCypressHouseCo-operativeHousingSocietyLimitedand5sharesonRs.250eachinTheGaneshVillaCo-operativeHousingSocietyLimited.

ii) AlsoreferNote4(b)onSchedule20.


71

As at Asat 31.03.2008 31.03.2007 Rs.lacs Rs.lacsSchedule 6 - Investments I. Longterm(atcost)A. Non-trade(unquoted) 1. Shares 1.00 1.00 2. Mutualfund 5.00 5.00 6.00 6.00B. Trade(quoted) Shares 1.09 1.09 Perconsolidatedbalancesheet 7.09 7.09

Aggregateamountofquotedinvestments[marketvalueRs.51.36lacs 1.09 1.09(asat31.03.2007:Rs.47.89lacs)]Aggregateamountofunquotedinvestments 6.00 6.00 7.09 7.09

Schedule 7 - InventoriesStoresandspareparts(atcost) 583.87 577.95Stock-in-trade(atlowerofcostandnetrealisablevalue, ascertifiedbytheManagingDirector) Rawmaterials,boughtoutcomponentsand packingmaterials 2364.06 1827.27 Manufacturedcomponents 605.31 626.33 Work-in-progress 1924.61 1775.94 Finishedgoods 3234.72 2505.84 8128.70 6735.38 Perconsolidatedbalancesheet 8712.57 7313.33 Schedule 8 - Sundry debtors OversixmonthsSecured,consideredgood 4.50 - Unsecured,consideredgood 479.60 393.64 Unsecured,considereddoubtful 307.27 192.70 791.37 586.34OthersSecured,consideredgood 37.81 - Unsecured,consideredgood 8162.57 7063.71 8200.38 7063.71 8991.75 7650.05Provisionfordoubtfuldebts 307.27 192.70 Perconsolidatedbalancesheet 8684.48 7457.35


72

As at Asat 31.03.2008 31.03.2007 Rs.lacs Rs.lacsSchedule 9 - Cash and bank balancesCashonhand 8.24 6.14Chequesonhand 275.04 233.47Remittancesintransit - 181.58Withbanks: Oncurrentaccounts 330.00 136.08 Onfixeddepositaccount 3.11 - Perconsolidatedbalancesheet 616.39 557.27

Schedule 10 - Loans and advances(Unsecured,consideredgood)Advancesrecoverableincashorinkindorforvaluetobereceived 1219.01 1177.56Incometaxespaidlessprovisionsthereagainst 61.81 143.97(otherthandeferredtax)Balancewithcentralexcise 416.33 266.24 Perconsolidatedbalancesheet 1697.15 1587.77

Schedule 11 - Current liabilities

Sundrycreditors -duetomicroenterprisesandsmallenterprises - - (seenote5) -duetoothers 5113.70 3684.81 5113.70 3684.81Securitydeposits 575.65 249.79LiabilitytowardsInvestorsEducationandProtection FundunderSection205CoftheCompaniesAct,1956 -unpaiddividends(notdue) 12.01 12.08 -unclaimedfixeddeposits 1.72 1.72Interestaccruedbutnotdueonloans 51.34 67.02 Perconsolidatedbalancesheet 5754.42 4015.42 Schedule 12 - Provisions

Taxationlesspaymentsthereagainst 62.95 -(otherthandeferredtax)

Fringebenefittax(netofpayments) 8.70 8.60

Proposedfinaldividend 1163.07 630.00

Additionalincome-taxondistributedprofits 197.66 107.07

Gratuity 1.00 1.00

Compensatedabsences 247.57 242.11 Perconsolidatedbalancesheet 1680.95 988.78

SCHEDULES 1 TO 12 ANNEXED TO AND FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2008

73

Year ended Yearended 31.03.2008 31.03.2007 Rs.lacs Rs.lacsSchedule 13 - Other income

Saleofscrap 380.13 251.83

Agencycommission 95.98 81.42

Dividendfrominvestments

Trade-Longterm 1.29 1.27

Otherthantrade-Longterm 3.50 3.50 4.79 4.77

Otherthantrade-Current 3.39 6.98 8.18 11.75Profitonsaleofcurrentinvestments(net) 3.50 3.74

Profitonsaleoffixedassets(net) 2.14 18.23

Rent 74.65 40.31

Salestaxprovisionnolongerrequiredwrittenback - 49.75

Foreignexchangegain(net) 145.37 -

Miscellaneous 17.66 14.30 Perconsolidatedprofitandlossaccount 727.61 471.33

Schedule 14 - Increase/(Decrease) in stock of work-in-progress and finished goods Openingstocks: Manufacturedcomponents 626.33 530.06


Finishedgoods 2505.84 2171.05 4908.11 4018.21Closingstocks:

Manufacturedcomponents 605.31 626.33


Finishedgoods 3234.72 2505.84 5764.64 4908.11 Perconsolidatedprofitandlossaccount 856.53 889.90

SCHEDULES 13 TO 18 ANNEXED TO AND FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008

74

Year ended Yearended 31.03.2008 31.03.2007 Rs.lacs Rs.lacsSchedule 15 - Employee costsSalaries,wagesandbonus 4546.23 3718.50Gratuity 145.82 157.18Company’scontributiontoprovidentfund andotherfunds 379.17 297.04Staffwelfare 726.13 651.66 Perconsolidatedprofitandlossaccount 5797.35 4824.38

Schedule 16 - RepairsPlantandmachinery 342.53 249.30Buildings 156.88 146.06Others 124.93 104.29 Perconsolidatedprofitandlossaccount 624.34 499.65

Schedule 17 - Other expensesInsurance 75.43 77.88Rent 24.73 24.55Ratesandtaxes 118.99 162.77Legalandprofessionalfees 226.69 190.94Directors’fees 3.55 2.91Commissiononsales 146.20 162.37Travellingandconveyance 505.82 531.92Postage,telephoneandfax 101.73 95.88Bankcharges 50.84 52.09Cashdiscountonsales 36.33 36.19Advertisementandpublicity 77.98 53.79Forwardingcharges 511.20 445.54Turnoverrebate 207.99 124.55Baddebtswrittenoff 3.62 71.55Less:Provisionthereagainst 3.62 – 71.55 –

Provisionfordoubtfuldebts 118.19 66.35Leaserent 43.70 19.35ERPimplementationandotherITexpenses 69.33 157.37Excisedutyonincreaseinstockoffinishedgoods 115.58 60.65Miscellaneous 895.88 798.71 Perconsolidatedprofitandlossaccount 3330.16 3063.81

Schedule 18 - Interest Onfixedloans 572.20 436.18Onothers 65.64 26.74 Perconsolidatedprofitandlossaccount 637.84 462.92

SCHEDULES 13 TO 18 ANNEXED TO AND FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008 (contd.)

75

Schedule 19 - Significant accounting policies annexed to and forming part of the consolidated balance sheet as at 31st March, 2008 and the consolidated profit and loss account for the year ended on that date

1. Basisofpreparation

TheconsolidatedfinancialstatementsarepreparedunderhistoricalcostconventiononanaccrualbasisandareinaccordancewithAccountingStandard21–“ConsolidatedFinancialStatements”.

2. Fixedassetsanddepreciation

(a) Allfixedassetsarestatedatcostofacquisition,includinganyattributablecostforbringingtheassettoitsworkingconditionforitsintendeduselessaccumulateddepreciation.

(b) Depreciationfortheyearhasbeenprovidedonthestraightlinemethod,inthemannerandattheratesprescribedinSchedulexIVtotheCompaniesAct,1956,exceptthatleaseholdlandisamortisedovertheperiodoftheleaseandcomputersoftwareisamortisedoveraperiodof36months.

(c) DepreciationfortheyearhasbeenprovidedonstraightlinemethodovertheestimatedusefullifeoftheassetsconcernedbyNRBBearings(Thailand)Limitedwhereprincipalannualratesusedare5%forbuildingsand20%forallotherassets.

(d)AlsoseeNote9below.

3. Foreigncurrencytransactions

(a) Transactions in foreigncurrenciesarerecordedat theexchangerateprevailingonthedateof thetransaction.Inrespectofmonetaryitemsdenominatedinforeigncurrencies,exchangedifferencesarisingoutofsettlementoronconversionattheclosingratearerecognisedintheconsolidatedprofitandlossaccount.

(b) Swaptransactionsareenteredbythegrouptohedgeitsexposureagainstmovements inforeignexchangeratesandinterestrates.

(c) Gains/lossesarisingonswaptransactionsarerecognizedintheprofitandlossaccount.

4. Investments

Long-terminvestmentsarestatedatcostlessprovisionfordiminutioninthevalueofinvestments,ifany.Currentinvestmentsarestatedatlowerofcostandfairvalue.

5. Inventories

(a) Storesandsparepartsarevaluedatcost.Costisdeterminedonthebasisofweightedaveragemethod.

(b) Stock-in-tradecomprisingofrawmaterials,boughtoutcomponents&packingmaterials,manufacturedcomponents,work-in-progressandfinishedgoodsarevaluedatthelowerofcostandnetrealisablevalue.Materialcostsincludedinthevaluationofstock-in-tradearedeterminedonthebasisofweightedaveragemethod.Costsofconversionandothercostsaredeterminedonthebasisofstandardcostmethod adjusted for variances between standard costs and actual costs, unless such costs arespecificallyidentifiable,inwhichcasetheyareincludedinthevaluationatactuals.

6. Employeebenefits

(a) Shorttermemployeebenefitsarerecognisedasanexpenseattheundiscountedamountintheprofitandlossaccountoftheyearinwhichtherelatedserviceisrendered.

(b) Longtermbenefits:

(i) DefinedContributionPlans:

1.ProvidentandFamilyPensionFund

The eligible employees of the group are entitled to receive post employment benefits inrespectofprovidentand familypension fund, inwhichbothemployeesand thegroupmake

76

monthly contributions at a specified percentage of the employees’ eligible salary (currently12%ofemployees’eligiblesalary).ThecontributionsaremadetotheRegionalProvidentFundCommissioner or Provident Fund Trust as applicable and the Central Provident Fund undertheStatePensionScheme.ProvidentFundandFamilyPensionFundareclassifiedasDefinedContributionPlansasthegrouphasnofurtherobligationsbeyondmakingthecontribution.

2. Superannuation

Theeligibleemployeesofthegroupareentitledtoreceivepostemploymentbenefitsinrespectofsuperannuationscheme,inwhichthegroupmakesquarterlycontributionsat15%ofemployees’eligiblesalary.Thecontributionsaremadetoaninsurancecompanyonbehalfofthetrustmanagedbythegroup(currentlyHDFCStandardLifeInsuranceCompanyLimited).SuperannuationschemeisclassifiedasDefinedContributionPlanastheGrouphasnofurtherobligationsbeyondmakingthecontribution.

TheGroup’scontributionstoDefinedContributionPlansarechargedtoprofitandlossaccountasincurred.

(ii) DefinedBenefitPlans:

1. Gratuity

TheGrouphasanobligationtowardsgratuity,adefinedbenefitretirementplancoveringeligibleemployees.Theplanprovidesalumpsumpaymenttovestedemployeesatretirement,deathwhileinemploymentoronterminationofemploymentofanamountequivalentto15dayssalarypayable foreachcompletedyearofservice.Vestingoccursuponcompletionof fiveyearsofservice.TheGrouphasarrangementswiththeLifeInsuranceCorporationofIndia(LIC)andaprivateinsurancecompanyforfuturepaymentsofgratuitiesonbehalfofthetrustsestablishedforthispurpose.TheGroupaccountsforgratuitybenefitspayableinfuturebasedonanindependentactuarialvaluation.Actuarialgainsandlossesarerecognisedintheprofitandlossaccount.

2. Compensatedabsences

The Group provides for encashment of leave or leave with pay subject to certain rules. Theemployees are entitled to accumulate leave subject to certain limits for future encashment/availment.The liability isprovidedbasedon thenumberofdaysof unutilised leaveateachbalancesheetdateonthebasisofanindependentactuarialvaluation.Actuarialgainsandlossesarerecognisedintheprofitandlossaccount.

7. VoluntaryRetirementCompensation

VoluntaryRetirementCompensationisfullyexpensedintheyearinwhichtheliabilityisincurred.

8. Researchanddevelopmentexpenditure

Capitalexpenditureonresearchanddevelopmentistreatedinthesamewayasotherfixedassets.Revenueexpenditureiswrittenoffintheyearinwhichitisincurred.

9. Borrowingcosts

Borrowingcoststhataredirectlyattributabletotheacquisitionorconstructionofqualifyingassetsarecapitalised.Aqualifyingassetisanassetthatnecessarilytakessubstantialperiodoftimetogetreadyforitsintendeduse.Otherborrowingcostsarerecognisedasanexpenseintheperiodinwhichtheyareincurred.

10. Taxation

Taxationexpensescomprisecurrenttax,deferredtaxandfringebenefittax.

(a) CurrenttaxistheamountoftaxpayableonthetaxableincomefortheyearasdeterminedinaccordancewiththeprovisionsoftheIncome-taxAct,1961.

(b) Deferredtaxisrecognizedontimingdifferencesbetweentaxableincomeandaccountingincomethatoriginateinoneperiodandarecapableofreversalinoneormoresubsequentperiods.

(c) FringebenefittaxistheamountoftaxpayableonthevalueofbenefitsprovidedtoemployeesfortheyearasdeterminedinaccordancewiththeprovisionsoftheIncome-taxAct,1961.

77

Schedule 20 - Notes annexed to and forming part of the consolidated balance sheet as at 31st March, 2008 and the consolidated profit and loss account for the year ended on that date

1 a. Theseconsolidated financial statementscomprise theconsolidationof the financial statementsofNRBBearingsLimited,theparentcompanyandthefinancialstatementsofSNLBearingsLimited,asubsidiary incorporatedinIndia(extentofshareholding–68.78%)andNRBBearings(Thailand)Limited,asubsidiaryincorporatedinThailand(extentofshareholding–100%),togetherreferredtoas‘thegroup’.

b. Theconsolidatedfinancialstatementsinclude,inrespectofNRBBearings(Thailand)Limited,totalassetsofRs.604.47lacsasat31stMarch,2008andtotalrevenuesofRs.0.68lacandnetcashoutflowsofRs.169.57lacsfortheyearendedonthatdate,derivedfromtheauditedfinancialstatementsasprovidedbythemanagementofthesubsidiary.

c. Incaseoftheforeignsubsidiary,namely,NRBBearings(Thailand)Limited,revenueitemsareconvertedattheaverageexchangerateprevailingduringtheperiod.Allassetsandliabilitiesareconvertedattheexchangerateprevailingasattheendoftheyear.ExchangedifferencearisingonconsolidationisrecognizedasForeignCurrencyTranslationReserve.

As at Asat 31.03.2008 31.03.2007 Rs. lacs Rs.lacs2. Contingent liabilities not provided for: a) Income-tax 27.63 27.63

b) Salestax 46.01 149.98

c) Customsduty 158.87 158.87

d) Bankguarantees 5.50 5.75

e) Billsdiscounted 113.72 74.00

f) Corporateguaranteesissued,infavourofBanksforoverdraftfacilitiesavailedbysubsidiarycompanies 498.93 210.00

Thegroupisinfurtherappealinrespectofmattersstatedina)toc)above.

g) TheIndiansubsidiaryhadreceivedanOrderdated6thSeptember,2004fromtheEmployeesProvidentFundOrganisationraisingademandofRs.161.36lacsincludinginterestofRs.46.73lacsfordefaultinmakingpaymentofEmployeesProvidentFundandalliedduesfortheperiodApril,1986toFebruary,2003.TheIndiansubsidiaryhasbeenmakingcontributionstothe‘SNLOfficersProvidentFundTrust’and‘SNLEmployee’sProvidentFundTrust’,beingTrustsformedbytheIndiansubsidiaryinearlieryears;theseTrustshavenetassetsofRs.89.17lacsandRs.49.66lacsrespectivelyasat31stMarch,2007asreflectedintheirauditedbalancesheets.Aspertheorder,theexistenceofthesaidTrustsandtheactofswitchingoverfromEmployees’trusttotheOfficers’trustonsalaryexceedingthestatutorylimit fixed by the Employees Provident Fund and Miscellaneous Act,1952, have been consideredviolativeoftheAct.TheauthoritieshadattachedoneofthebankaccountsoftheIndiansubsidiaryandhadrecoveredanamountofRs.2.75lacsinanearlieryear.TheIndiansubsidiaryhascontestedtheabovedemandandonawritpetitionfiledbytheIndiansubsidiaryintheHighCourtofJharkhand,Ranchi,theHighCourthasdirectedtheauthoritiesnottotakecoercivestepstillthedisposalofthepetition.TheIndiansubsidiarydeniesalltheallegationsmadeagainstitsincetheIndiansubsidiaryhadmadethenecessaryapplicationstograntexemptiontotheTrustswhichwasneithergrantednorrejectedinspiteofseveralremindersfromtimetotime.Inviewofthefactsofthecase,thegroupdoesnotexpectanyliabilityinthisregard.

h) ProvidendfundmattersinrespectofcontractLabourers:Rs.Nil(asat31.03.2007:Rs.43.78lacs).

i) Providentfundandothermattersinrespectofworkers:Rs.5.05lacs(asat31.03.2007:Rs.5.05lacs)

78

As at Asat 31.03.2008 31.03.2007 Rs.lacs Rs.lacs

3. Estimatedamountofcontractsremainingtobeexecutedon 934.31 2781.37 capitalaccountandnotprovidedfor(netofadvances)

4. a) Theamountofexchangedifferences(net):

i) (credited)/debitedtotheconsolidatedprofitandlossaccountis (143.89) 4.85

ii) addedto/deductedfromcarryingamountoffixedassetsis (2.67)

b) Consequent to The Companies (Accounting Standards) Rules, 2006 effective1stApril,2007,exchangedifferencesonaccountofrevaluation of foreign currency loans taken for the purpose of acquiring fixed assets is recognized as income/expense which until the previous year was adjusted to the cost of fixed assets. Accordingly, profit for the current year is higher by Rs.174.93 lacs on account of such exchange differencesreflectedinotherincome.

5. TherearenoamountsduetothesupplierscoveredunderMicro,Smalland MediumEnterprisesDevelopmentAct,2006;thisinformationtakesintoaccount onlythosesupplierswhohaverespondedtotheenquiriesmadebytheGroupfor thispurpose.Thishasbeenrelieduponbytheauditors.

6. ExpenditureonResearchandDevelopment:

a) chargedtotheprofitandlossaccount 200.41 163.65

b) capitalizedtofixedassets 112.93 10.03

7. Relatedpartydisclosures

i) Names of related parties and nature of relationship where control exists

Mr.T.S.Sahney,ChairmanandManagingDirector– individualhaving substantialinterestinvotingpowerandthepowertodirectbyagreement,thefinancialandoperatingpoliciesoftheparentcompany.

79

ii) Transactions with related parties

Name of the related party and description of relationship

Nature of transaction

Volume of transactions

Rs.lacs

Receivable As at

31.03.2008 Rs.lacs

Payable As at

31.03.2008Rs.lacs

Key management personnel -Mr.T.S.Sahney[alsotheindividualreferredin(i)above]

-Ms.H.S.Zaveri–Whole-timeDirector(alsodirectorinsubsidiarycompanies)

-Mr.D.S.Sahney-Whole-timeDirector(alsodirectorinsubsidiarycompanies)

Directorsofsubsidiarycompanies:

-Mr.M.N.Hoda

-Mr.S.C.Rangani

-Mr.J.S.Maini

-Mr.V.S.Iyer

-Mr.ASKohli(from5thOctober,2007)

Remuneration

RemunerationandDirectorfees

Remuneration

Directorsfees

Remuneration

134.88(92.83)

92.27(61.45)

60.87(32.60)

0.18(0.08)

0.10(0.04)

0.20(0.04)

0.45(0.21)

18.39(-)

-(-)

74.10

(53.12)

New Indo Trading Co.afirmwheretheindividualreferredin(i)aboveisapartner

Servicechargespaid 4.20(4.20)

-(-)

1.41(1.41)

Notes: i) Figuresinbracketsareinrespectofpreviousyear. ii) Noamountspertainingtorelatedpartieshavebeenprovidedforasdoubtfuldebts.Further,no

amountshavebeenwrittenofforwrittenbackduringtheyear. iii)Dividendpaidhasnotbeenconsideredbythegroupasatransactionfallingunderthepurview

ofAccountingStandard18“RelatedPartyDisclosures”.

8. Thegrouphastakencertainplantandmachineryonoperatinglease.Leaserentalschargedtotheprofitandlossaccountfortheyearended31stMarch,2008aggregatedRs.43.70lacs(fortheyearended31.03.2007:Rs.19.35lacs).Theminimumleasepaymentstobemadeinfutureasattheyearendareasfollows:

(Rs. In lacs) (i)Foraperiodnotlaterthanoneyear 44.81 (19.35) (ii)Foraperiodlaterthanoneyearand 80.87 notlaterthanfiveyears (9.68) (iii)Foraperiodlaterthanfiveyears - (-) Figuresinbracketsareinrespectofthepreviousyear

}

}

80

9.ValuesusedincalculatingEarningsPerShare Year ended Yearended 31.03.2008 31.03.2007

(a)Numerator:Profitaftertax(Rs.inlacs) 3464.51 4171.44

(b)Denominator:NumberofEquityshares 484,61,300 484,61,300

Witheffectfrom4thApril,2007(i.e.therecorddate),thefacevalueoftheequitysharesoftheparentcompanyhasbeensub-dividedtoRs.2eachfromRs.10each.Accordingly,forthepurposeofcalculatingearningspershareinrespectofthepreviousyear,thefacevalueperequitysharehasbeenconsideredatRs.2.

10. Components of deferred tax: Rs.lacs

Natureoftimingdifference Deferredtaxasset/(liability)

Asat31.03.2007

Credit/(Charge)fortheyear

Deferredtaxasset/(liability)

Asat31.03.2008

(a) Deferred tax liabilityDepreciation (1390.64) (78.00) (1468.64)

Sub–total (1390.64) (78.00) (1468.64)

(b) Deferred tax assetProvisionfordoubtfuldebtsProvisionforcompensatedabsencesVoluntaryretirementcompensationCarryforwardbusinessloss*

65.4076.4321.97

130.84

39.041.22

(17.71)(41.92)

104.4477.654.26

88.92

Sub–total 294.64 (19.37) 275.27

Netamount (1096.00) (97.37) (1193.37)

*recognisedtotheextentofbalanceindeferredtaxliabilityinrespectoftheIndiansubsidiarycompany

Year ended Yearended 31.03.2008 31.03.2007 Rs. lacs Rs.lacs11. Directors’ remuneration* Whole-timedirectors

Salary 121.59 65.53

Commission 74.10 48.12

Contributiontoprovidentfund 23.91 13.30 andotherfunds

Otherperquisites 86.44 59.74 NonWhole-timedirectors 306.04 186.69 Directors’fees 3.55 2.91

Commission 5.00 5.00 *excludinggratuitycontributedandcompensatoryabsences 314.59 194.60 provided,onaglobalbasis

81

Year ended Yearended 31.03.2008 31.03.2007 Rs. lacs Rs.lacs12. Details of Auditors’ remuneration: (excludingservicetax)

Auditfees 15.93 13.75

Reportundersection44ABofthe Income-taxAct,1961 2.60 2.35

Taxationmatters 1.55 0.65

Otherservices 9.50 8.90

Reimbursementofexpenses 0.25 0.04

13. Asthegroup’sactivityfallswithinasinglesegmentviz.bearingsandthesalessubstantiallybeinginthedomesticmarket, thedisclosure requirementsofAccountingStandard17 “SegmentReporting” isnotapplicable.

14.Financial and Derivative Instruments

i) ForwardExchangeContractsenteredintobytheGroupthatareoutstandingasat31stMarch,2008.

Currency Amount in foreign currency Buy/Sell Cross Currency

USD –(750,000)

–Buy

–INR

JPY –(10,000,000)

–Buy

–USD

These Forward Foreign Exchange Contracts are entered into for hedging purposes and not forspeculationpurposes.

ii) a) Hedgeagainstfluctuationsininterestrate:

No.ofcontracts : – (1)

PrincipalamountinUSDollars : – (2,250,000)

Equivalentrupeesatyearendrate : – (980.44lacs)

b) Hedgeagainstfluctuationsinexchangerates :

No.ofcontracts : 2 (1)

PrincipalamountinUSDollars : 1,500,000 (2,250,000)

Equivalentrupeesatyearendrate : 694.80lacs (1042.20lacs)

PrincipalamountinYen : 413,243,475 (crosscurrencyhedgeinUSDollars) (–)

Equivalentdollarsatyearendrate : 3,880,220 (–)

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iii) Foreign currency exposures that have not been hedged by a derivative instrument or otherwise outstandingasat31.03.2008:

a) Amountsreceivableinforeigncurrency:


Exportofgoods USD 155,946(111,957)

62.13(48.57)

EURO 1,597,396(1,121,016)

1005.25(647.49)

CHF -(7,111)

-(2.53)

GBP 9,777(7,324)

7.76(6.24)

b) Amountspayableinforeigncurrency:


Importofgoods YEN 120,894,627(69,005,593)

483.34(255.18)

EURO 426,577(475,003)

268.66(276.26)

USD 81,923(84,692)

32.65(36.90)

CHF 16,325(2,025)

6.53(0.73)

GBP -(215)

-(0.18)

CapitalImports JPY 117,300,775(-)

468.97(-)

Loanspayable USD 14,113,005(7,000,000)

5624.30(3050.25)

Interestpayable USD 77,666(103,543)

30.95(44.56)

JPY 938,879(-)

3.72(-)

Figuresinbracketsarethecorrespondingfiguresinrespectofthepreviousyear.

83

15.Effective1stApril,2007, thegroupadoptedtherevisedAccountingStandard15“EmployeeBenefits”.Pursuanttotheadoption,noadjustmentwasrequiredtobemadetoGeneralReserveascontemplatedundertransitionalprovisionsofthesaidstandard.Thisbeingthefirstyearofimplementationofthesaidstandard,previousyearfiguresarenotgiven.

1. DefinedBenefitplan

a)Gratuity–asperactuarialvaluation(unlessotherwisestated)ason31stMarch,2008(basedonProjectedUnitBenefitMethod)

Rs. In Lacs

i)Componentsofemployerexpensesa)CurrentServicecostb)Interestcostc)Expectedreturnonplanassetsd)ActuarialLosses/(Gains)e)AdjustmentonconsolidationrelatingtotheIndiansubsidiary Total expenses recognised in Profit and Loss Account

38.53 58.08

(61.24)79.80 30.65

145.82

ii)ActualContributionandBenefitPaymentsforyearended31stMarch,2008a)Actualbenefitpaymentsb)ActualContributions

66.01

114.23

iii)Netasset/(liability)recognisedinbalancesheetason31stMarch,2008a)DefinedBenefitObligationb)Planassets Net asset/(liability) recognised in balance sheet

(825.83)

789.71 (36.12)

iv)ChangeinDefinedBenefitObligations(DBO)duringtheyearended31stMarch,2008a)PresentValueofDBOatbeginningofyearb)CurrentServicecostc)Interestcostd)Actuariallosses/(gains)e)Benefitspaid Present Value of DBO at the end of year

721.31 38.53 58.08 73.92

(66.01)825.83

v)ChangeinFairValueofAssetsduringtheyearended31stMarch,2008a)Planassetsatbeginningofyearb)Annualreturnonplanassetsd)ActualGroupcontributionse)BenefitspaidPlan assets at the end of year

686.12 55.37

114.23 (66.01)789.71

vi)Contributionexpectedtobepaidnextyear 58.45

vii)ActuarialAssumptions

a)DiscountRate 8.00%- 8.50%

b)ExpectedrateofreturnonPlanassets 8.00%

c)Salaryescalation 3% - 4%

d)MortalityTable LIC (1994-96) Ultimate

viii)MajorCategoriesofplanassets-InsurerManagedFunds 100%

Notes:

i) Theexpectedrateofreturnonplanassetsisbasedonmarketexpectation,atthebeginningoftheyear,forreturnsovertheentirelifeoftherelatedobligation.

ii) Theassumptionof future salary increases, considered inactuarial valuation, takeaccountofinflation,seniority,factors,suchassupplyanddemandintheemploymentmarket.

84

b) CompensatedExpensesrecognizedinthestatementofprofitandlossaccountunderemployeecost,inschedule15isRs.40.94lacs.

2. DefinedContributionplans

ContributiontoDefinedContributionPlan,recognizedinthestatementofprofitandlossaccountunderemployeecost,inschedule15fortheyearareasunder:

Rs.in Lacs

i) Employer’sContributiontoProvidentFund 137.68

ii) Employer’sContributiontoFamilyPensionFund 117.93

iii)Employer’sContributiontoSuperannuationFund 62.41

16.Previousyear’sfigureshavebeenregroupedwherevernecessary.

SignaturetoSchedule1to20





85

A D M I S S I O N S L I P

Iherebyrecordmypresenceatthe43rdAnnualGeneralMeetingofmembersoftheCompanyheldatMCGhiaHall,KDubashMarg,Mumbai400001onTuesday5thAugust,2008at11.00a.m.

DPId* FolioNo.

ClientId* No.ofshares

NameofMember/Proxy..................................................................................................................................................................................... (whowillattendthemeeting)

SignatureofMember/Proxy...............................................................................................................................................................................(whowillattendthemeeting)

1. Pleasecompleteandhandovertheslipattheentrance.2. PleasequoteFOLIONUMBERclearly.

*Applicableforinvestorsholdingsharesinelectronicform

NRB BEARINGS LIMITEDRegistered Office:Dhannur,15,SirP.M.Road,Fort,Mumbai-400001.

P R O X Y F O R M

I/We....................................................................................................................................................................................................................

of........................................................................................................................................................................................................................

inthedistrictof............................................................................................. beingmember(s)ofNRBBEARINGSLIMITED,herebyappoint

Shri/Smt./Miss....................................................................................................................................................................................................

of........................................................................................................................................................................................................................

inthedistrictof...................................................................................................................................................................................................

orfailinghim/herShri/Smt./Miss........................................................................................................................................................................

of........................................................................................................................................................................................................................

inthedistrictof...................................................................................................................................................................................................

asmy/ourproxytoattendandvoteforme/usonmy/ourbehalfatthe43rdAnnualGeneralMeetingofmembersoftheCompanyheldatMCGhiaHall,KDubashMarg,Mumbai400001onTuesday5thAugust,2008at11.00a.m

Name................................................................................... Signedon............................ at..........

DPId* FolioNo.

ClientId* No.ofshares

Address ............................................................................. Signature........................................

........................................................................

*Applicableforinvestorsholdingsharesinelectronicform

NRB BEARINGS LIMITEDRegistered Office:Dhannur,15,SirP.M.Road,Fort,Mumbai-400001.

Notes: 1. TheproxyneedNOTbeamember. 2. THEPROxYFORM,DULYSIGNEDACROSSAREVENUESTAMPSHOULDREACHTHECOMPANY’SCORPORATEOFFICEATLEAST

48HOURSBEFORETHETIMEOFTHEMEETING. 3. Theproxyformshouldbefilledincompletelyincluding‘FolioNo.’and‘Address’.

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