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Directors Report of NRB Industrial Bearings Ltd.

Mar 31, 2017

To,

The Members,

NRB Industrial Bearings Limited,

Mumbai - 400 001

The directors submit annual report of NRB Industrial Bearings Limited (the "Company" or "NIBL") along with the audited financial statements for the financial year (FY) ended March 31, 2017. Consolidated performance of the Company and its associates has been referred to wherever required.

1. Financial Overview:

a . A summary of the Company''s Financial Performance during the Financial Year:

(Rs. in Lakhs)

Particulars

2016-17

2015-16

Total Revenue for the Year

4,076.67

4,080.98

Profit/(Loss) before Depreciation, Exceptional Items and Taxes

(697.74)

(1151.16)

Depreciation and Amortization Expenses

764.57

768.60

Profit/(Loss) before Exceptional Item

(1462.31)

(1919.76)

Exceptional Item

-

-

Profit/(Loss) before Tax

(1462.31)

(1919.76)

Tax expenses

NIL

NIL

Balance carried forward to General Reserve

(7662.69)

(6,200.38)

EPS

- Basic

(6.63)

(7.92)

- Diluted

(6.63)

(7.92)

This report of Directors along with its Annexure, Management Discussion and Analysis Report, Corporate Governance Report, Financial Statements along with their Notes are prepared for the period April 1, 2016 to March 31, 2017 (hereinafter referred as financial year).

b. Transfer to Reserves:

No amount has been transferred to reserves, due to accumulated losses.

c. Dividend:

Your Directors do not recommend dividend for the period under review due to losses made during the year.

d. Transfer of Unclaimed Dividend to Investor Education and Protection Fund:

Not applicable as the Company has not declared any dividend in past and neither during the year under review.

e. Public Deposits:

Company has not accepted any public deposit and as such no amount on account of principle or interest on deposit from public was outstanding as on the date of the balance sheet.

f. Material changes and commitment if any affecting the financial position of the Company occurred between the ends of the Financial Year to which this financial statements relate and the date of the report:

There was no material changes and commitments affecting the financial position of the Company occurred between the Financial Year to which this financial statements relate on the date of this report.

2. Operations Overview Overall:

a) Company''s Performance:

Your Company''s turnover stood at Rs. 4,076.66 Lakhs for the financial year ended March 31, 2017 as against Rs. 4,080.98 Lakhs in the previous year. Domestic market conditions remained subdued in Second half of the Financial Year, resulting in no growth in turnover.

Export market continues to grow, Export turnover of your Company for the financial year was Rs. 986.97 Lakhs as against previous year Rs. 905.36 Lakhs.

Operational Overview:

Progress in global economy in 2016 was moderate, However, the year 2017-18 promises healthy growth of Indian economy which will support the core industrial growth leading to increase in demand of your company''s products and expected to accelerate growth in domestic and export market.

The Indian economy has faced traction due to economic measures taken by government in November 2016, resulting in slow down of consumer spending and reduction in investment, which tied up the purchasing power and left behind stillness in Indian economy. Introduction of the Goods and Services Tax (GST) with an intention to simplify the tax structure and transparency in business, will result in favorable growth in all sectors.

The Government has controlled inflation during the year and given a boost the foreign investments in India. During the year Government tried to simplify export/ import procedures by launching Customs Electronic Commerce Interchange Gateway portal thereby simplifying border and documentary compliance procedures. This reform applies to both New Delhi and Mumbai.

With more focus on localized critical product under "Make in India'', your Company has large potential to grow in industrial market.

Your company has strong focus on R&D for new product developments in order to meet the competitive industrial market requirements.

OEM business accounts for 40% of total demand in industrial bearings and this market is characterized by requirements of high quality, stringent delivery norms and cost competitiveness. Estimated OEM market for industrial bearings in India is Rs. 2900 crore with growth rate of 3.5%. The OEM segment have been facing price competitiveness in their markets. Hence this burden is being transferred to their suppliers. The focused segments in OEM business are Textile, Material handling, Pumps & Motors, Compressors & Blowers, Mining, Gear Box, Printing & Industrial electrical. Your company has taken steps forward to be present in all above key OEM segments.

Your company''s focus is to increase the distribution network to reach each potential industrial area and ensure the availability of products to all the potential customers. During the year your company has focused on segments such as Metal, Cement, Mining, Textile, Agriculture, and Paper & Pulp to start new avenues of business.

Your Company organized its 4th Dealer Symposium in February 2017, with an objective to strengthen partnership & initiate team building where high performing distributors were felicitated.

Our Focus is to build the brand and develop a quality customers base by participating in exhibitions both at a domestic and international level. Your company participated in the IMTS exhibition in Chicago, North USA in September 2016, which is well known as world''s leading show for Industrial Motions, Drives and Automation which highlights innovation and value added solutions in all the key segments.

Your company in order to enhance the level of Customer satisfaction has initiated implementation of ISO 14001:2015, BS OHSAS 18001:2007 (EHS) standard requirement which focuses on minimizing environmental impacts & provide safe and healthy working environments to prevent injury and occupational health hazard. Company provides training to employees, contractual personnel, vendors & service providers for effective implementation of EHS requirement. The EHS objectives are reviewed by senior management for compliance level, adequacy & continual improvement.

b) Change in nature of business:

The Company manufactures Bearings for Industrial applications.

There has been no change in the nature of business activities of the Company during the year under review.

c) Share Capital:

In 2016-17 the Company further issued and allotted 1,00,00,000 6% Redeemable, Cumulative, Non-convertible Preference shares of Rs.10/- each aggregating to Rs. 10,00,00,000/- (Rupees Ten crores only) to Mr. Trilochan Singh Sahney under private placement. Hence, the existing paid up share capital of your Company as on 31st March, 2017 is Rs. 24,84,61,300/- divided into 2,42,30,650 Equity Shares of Rs. 2/- each and 2,00,00,000 Preference Shares of Rs. 10/- each.

3. Directors and Key managerial personnel:

i. Pursuant to provision of section 149 of Companies Act, 2013 (the Act), Mr. Manish Choksi, Mr. Gaurav Motwane and Mr. Ashish Chugani are the Independent Directors of the company and they have submitted declaration that each of them meets the criteria of independence as provided in Section 149(7) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year.

ii. In accordance with the provisions of the Section 152 Companies Act, 2013 read with applicable Rules, Mrs. Harshbeena Sahney Zaveri (DIN No: 00003948 ), retires by rotation at the ensuing 6th Annual General Meeting and being eligible, offers herself for a re-appointment.

iii. Mr. Kaushal Aggarwal (DIN 00153487) was appointed as Independent director in 4th Annual general meeting held on 7th July, 2015 for the tenure of five consecutive year. He ceased to be a director of the Company w.e.f. 7th August, 2015, hence with pursuant to Section 161(4) of Companies act 2013 Mr. Gaurav Motwane (DIN 00746165) was appointed as an Independent Director in casual vacancy w.e.f. 6th November, 2015.

iv. Pursuant to the provisions of section 203 of the Act, the key managerial personnel of the Company are Mr. Devesh Sign Sahney, Managing Director, Mr. Ratnakar Mehendale, Chief Financial Officer and Mrs. Ratika Gandhi, Company Secretary. There has been no change in the key managerial personnel during the year.

Familiarization Programme for Independent Directors:

The Independent Directors are time to time been provided with detailed understanding of business activities of the Company. All Independent Directors are aware about terms of appointment, duties, responsibilities and expected time commitments.

Each newly appointed Independent Director is taken through a formal induction program including the presentation from the Managing Director and Chief financial officer of Company''s Manufacturing, Marketing, Finance and other important aspects and structures of the Company and its functioning''s.

Evaluation of the Board''s Performance:

As per requirement of Companies Act, 2013 and other applicable rules and regulations, Board has a formal mechanism for evaluating its performance annually based on the criteria laid down by Nomination and Remuneration Committee which included attendance, contribution at the meetings and otherwise, independent judgment, safeguarding of minority shareholders interest, adherence to Code of Conduct and Business ethics, monitoring of regulatory compliance, risk assessment and review of Internal Control Systems etc.

Independent directors have meet separately during the period of review.

Remuneration Policy:

The Board has framed Nomination and Remuneration policy, which is generally in line with the existing industry practice and applicable laws and is approved by the Nomination & Remuneration Committee and the Board. The main objective of the said policy is to ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate the Directors, KMP and Senior management employees. The remunerations paid to Directors and KMP''s forms part of Corporate Governance Report wherever applicable.

4. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings And Outgo:

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in ''Annexure I'' and is attached to this Report.

5. Statement Concerning Development And Implementation of Risk Management Policy of The Company:

The Board has constituted the Risk Management Committee with pursuant to requirements of the Companies Act, 2013 along with applicable Rules and requirements under Regulation 17 (9) of SEBI (Listing Obligation and Disclosures Requirements) Regulations, 2015, in order to implement and monitor the risk management plan for the Company.

6. Details Of Policy Developed And Implemented By The Company On Its Corporate Social Responsibility Initiatives:

The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable.

7. Particulars of Loans, Guarantees or Investments Made Under Section 186 of Companies Act, 2013:

The particulars of loans, guarantees and investments given by the Company in the year 2016-2017 as per Section 186 of Companies Act, 2013 is stated in the Notes to Account which forms part of this Annual Report.

8. Particulars of Contracts or Arrangements made with Related Parties:

a. RPT transactions:

None of the contracts or arrangements with related parties fall under the scope of Section 188 (1) of Companies Act, 2013 and Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in ''Annexure II'' in Form AOC -2 and the same forms part of this report.

There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large or for which approval of the shareholders is required. All related party transactions are in the ordinary course of business and at arm''s length basis, which are not material in nature. All related party transactions are with the approval of the Audit Committee and periodically placed before the Board for review.

b. Policy on Related Party Transactions:

All Related Party Transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. However, the details of the transactions with Related Party are provided in the Company''s financial statements in accordance with the Accounting Standards. The Company has adopted a policy on ''Related party transactions policy'' and the same has been displayed on the Company''s website: www.nrbindustrialbearings. com.

9 Subsidiaries /Joint Ventures/Associate Companies:

The company has framed a Policy for determining material subsidiaries. However the Company does not have any subsidiary as defined under Companies Act, 2013 at present.

A statement containing salient features of the financial statements of the Company''s joint venture/associate company in Form AOC-1 is attached to the financial statements of the Company.

Company has complied with AS 23, Accounting for Investments in Associates in Consolidated Financial Statements and AS 27, Financial Reporting of Interests in Joint Ventures, respectively, hence company has provide Standalone and Consolidated financials for FY 2016-17.

NRB Industrial Bearings holds 35% equity participation in NRB -IBC Bearings Private Limited which is a joint venture with IBC Industrial Bearings and Components AG, Switzerland. Further with Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014 statement containing the financial statement of subsidiaries/ associate companies/joint ventures is annexed as ''Annexure III'' in form AOC -1.

10. Explanation or comments on qualifications, reservations or adverse remarks or disclaimers made by the auditors and the practicing company secretary in their reports and management''s reply for the same.

There are no qualifications in the Statutory Auditors report and Secretarial Auditor Report of the Company during the period of review.

11. Company''s policy relating to directors appointment, payment of remuneration and discharge of their duties:

The provisions of Section 178(1) relating to constitution of Nomination and Remuneration Committee are applicable to the Company and have constituted proper composition of Board & Independent directors for various committees.

The Nomination and Remuneration Policy recommended by Nomination & Remuneration Committee is duly approved and adopted by the Board of Directors. The said policy is annexed to the report as

''Annexure VIII''.

There is no material pecuniary benefits to Independent directors from Company or any Promoter group.

12. Number of Board Meetings Conducted during the year under review:

The Board met 4(Four) times and 2 (two) circular resolutions were past and one meeting of Independent Directors was held during the financial year, details of which are given in the Corporate Governance Report which forms part of this Annual Report.

The intervening gap between the Meetings was within the period prescribed under Companies Act, 2013 and other stock exchange rules and Regulations. Agenda papers were circulated to the directors in advance for each meeting. All relevant information as required under Schedule II of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 was placed before the Board from time to time.

13. Cost Compliance Report

Cost audit is not applicable to your company but, Companies (Cost Accounting Records) Rules, 2011 dt. June 03, 2011 issued by Ministry of Corporate Affairs is applicable to the Company and that the Company maintains the records in prescribed form for the period under review.

14. Disclosure of composition of Audit committee and Vigil mechanism policy:

Under provisions of Section 177 of the Companies Act, 2013 read with Rule 6 and 7 of the Companies (Meetings of the Board and its Powers) Rules, The Audit Committee consists of the following members:

i Mr. Manish Choksi : Chairman (Independent Director)

ii Mr. Gaurav Motwane : Independent Director

iii Mr. Ashish Chugani : Independent Director

iv Mr. Devesh Sahney : Managing Director

The Company has established a vigil mechanism through the committee, the genuine concerns expressed by the employees and other Directors are taken on records which forms part of annual report as ''Annexure IV''. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of co-employees and the Company.

15. Internal control system:

The Company has an internal control system and conducts Internal Audit. The scope and authority of the Internal Audit function is defined by Audit committee. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. Audit committee evaluates the efficiency and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies.

Audit committee reviews the suggestions and comments given by Internal Auditors and put in process accordingly.

16. Shares :

a. Buy back of securities

The Company has not bought back any of its securities during the year under review.

b. Sweat equity

The Company has not issued any Sweat Equity Shares during the year under review.

c. Bonus shares

No Bonus Shares were issued during the year under review.

d. Employees stock option plan

The Company has not provided any Stock Option Scheme to the employees.

e. Preference Share

In financial year 2016-17, Company has allotted Redeemable, Cumulative, Non-convertible Preference shares to Mr. Trilochan Singh Sahney under private placement for 1,00,00,000 (One Crore) preference shares each having nominal value of Rs. 10/- (Ten Only) amounting to Rs. 10,00,00,000/-(Ten crore only).

17. Auditors :

According to the Directors, there is no adverse remarks made by the Statutory Auditors in their report. Notes to the accounts are self-explanatory to comments/ observations made by the Auditors in their report. Hence, no separate explanation is given.

The Statutory Auditors of the Company are Messrs Deloitte, Haskins & Sells, Chartered Accountants with an ICAI Firm Registration No. 117365W have audited the Financial Statements of the Company for the period April 1, 2016 to March 31, 2017. The Statutory Auditors were appointed by the members of the Company at the 4th Annual General Meeting of the Company held on July 7, 2015 to audit the Financial Accounts of the Company. Their term in the office of Statutory Auditors concludes at the Seventh Annual General Meeting and their appointment is be ratified pursuant to provisions of Section 139 of the Companies Act, 2013 read along with the applicable rules framed there under.

M/s. Deloitte, Haskins & Sells have expressed their willingness to continue as the Statutory Auditors of the Company and vide a letter dated May 27, 2017 have furnished a certificate of their eligibility and consent under section 141 of the Companies Act, 2013 and the rules framed there under to hold the office of Statutory Auditors of the Company for the FY 2017-18.

18. Secretarial Auditor :

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed AJS & Associates proprietor Mr. Ajit Sharma, Practicing Company Secretary to undertake the Secretarial Audit for the Financial Year 2016-17 of the Company. The report forms part of annual report as ''Annexure V''.

According to the Board of Directors, the report does not have any adverse remark.

19. Particulars of employees :

The statement under Section 134(3) (q) and Section 197 (12) of Companies Act, 2013 read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report as ''Annexure VI''.

20. Extract of Annual Return :

The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Form MGT-9 ''Annexure VII'' and is attached to this Annual Report.

21. Corporate Governance :

A separate report of the Board of Directors of the Company on Corporate Governance is included in the Annual Report and the Certificate from M/s AJS & Associates, Practicing Company Secretaries confirming compliance with the requirements of Corporate Governance as stipulated in Schedule V of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 forms part of annual report.

22. Management Discussion and Analysis :

The Management Discussion and Analysis Report, as required by Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are already dealt with in various sections of this Report. The Management Discussion and Analysis Report is separately annexed and forms part of this report.

23. Annexure forming part of this Annual Report :

Annexure No.

Particulars

I

Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

II

Form AOC-2 -Related party transactions

III

Form AOC-1 - Joint Ventures details

IV

Vigil mechanism /Whistle Blower policy

V

Secretarial Audit Report for the period under review

VI

Particulars of Employees under Section 134(3) (q) and Section 197(12) of the Companies Act, 2013.

VII

Form MGT-9 - Extract of the Annual Return

VIII

Nomination and Remuneration Policy

24. Cautionary Statement :

Statements in this Report, Management Discussion and Analysis, Corporate Governance, Notice to the Shareholders or elsewhere in this Annual Report, describing the Company''s objectives, projections, estimates and expectations may constitute ''forward looking statement'' within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied in the statement depending on the market conditions and circumstances.

The Company assumes no responsibility in respect of the forward looking statements, which may undergo changes in future on the basis of subsequent developments, information or events.

25. Directors Responsibility Statement

Your Directors wish to inform Members that the Audited Accounts containing Financial Statements for the Financial Year 2016-17 are in conformity with the requirements of the Companies Act, 2013. Your company financial statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present the financial condition and results of operations.

In terms of provisions of Section 134(3) (c) of the Companies Act, 2013, your Directors further confirm as under:

i) Preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) The Directors had prepared the annual accounts on a going concern basis;

v) The Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

vi) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Internal financial controls and compliance systems established and maintained by the Company, work

performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant Board committees, including the audit committee, the board is of the opinion that the Company''s internal financial controls were adequate and effective during FY 2016-17.

26. Appreciation

Your Directors wish to place on records their sincere appreciation to all the Employees of the Company for the efforts, efficient work management, loyal services, commitment and dedication that developed the culture of professionalism. Your Directors also thank and express gratitude to the Company''s Customers, Vendors and Institutions. Your Directors also wishes to express deep sense of gratitude to the all our Bankers, Central and State Governments and their departments and the local authorities for the continued support.

Your Directors register their sincere appreciation to the Share holders of the Company for unstinted support and confidence reposed in the management of the Company.

For and on behalf of Board of Directors,

T. S. Sahney D.S.Sahney

Chairman Managing Director

(00003873) (00003956)

Place: Mumbai

Date: May 29, 2017


Dec 31, 2013

To The Members of NRB Industrial Bearings Limited,

The Directors are presenting the 3rd Annual Report and Audited Statement of Accounts for the Fifteen Months period ended 31st December, 2013.

1. FINANCIAL RESULTS

For the Period For the Period Particulars From 01.10.2012 From 01.04.2012 to 31.12.2013 30.09.2012 Rs. Lacs Rs. Lacs

Sales & Other Income 3,154.97 -

EBITDA (1,041.46) (0.27)

Less :

Provision For :

- Depreciation 693.47 -

- Interest 688.90 -

- Tax (106.12) -

Profit/ Loss After Tax (2,316.90) (0.27)

Surplus brought forward (1.70) (1.43)

Profit available for appropriation - -

Transfer to General Reserve

Balance Carried Forward (2,318.60) (1.70)

2. FINANCIAL/OPERATION PERFORMANCE REVIEW:

The Company had started its operation and has during the year under review, recorded a turnover of Rs.3001.87 lacs. Further, the Company has incurred loss after tax of Rs.2,316.90 lacs.

Your company originally the Industrial Bearings Division was demerged from NRB Bearings Limited on October 1, 2012. Machinery and equipment engaged in production of certain types of Industrial Bearing was shifted from the NRB Bearings Plants. Transfer and installation of these machines was completed by March 2013. Many of the old machines need to be refurbished and this process would be completed in next six months.

Production of Ball and Cylindrical Roller Bearings as also setting up modern tool room, metrology and R&D facilities, has commenced with latest state of art machinery and equipment mainly imported from Europe and installed.

The company has recruited young and talented workforce with ITI qualified workman for machine and other operation engineer for operational/supervision. Practical training about product and processes has also been imparted at the company''s Learning Centre.

During the period, business environment remained difficult and operating in such an environment was challenging. The economy has grown at a very slow rate leading to low production and low investment for expansion or new ventures. Distributors are carrying large stocks, leading to lower off - take.

This difficult and challenging environment has resulted into operating losses.

We however, are optimistic for the coming financial period of 15 months, ending 31st March, 2015. We are enlarging our customer base and offering of new products both within India and in overseas. The global economy is steadily growing and surge in demand is expected to result in improved sales turnover and better profitability.

3. DIVIDEND:

Considering the loss made, the Directors of your Company do not recommend any dividend for the period under review.

4. LISTING OF SHARES:

The shares of the company were listed on National Stock Exchange Limited (NSE) and Bombay Stock Exchange (BSE) and got trading permission effective from 9th April, 2013.

5. EXTENSION OF ACCOUNTING YEAR:

The Company got the permission to extend the financial year from the Registrar of Company for three months and extend it up to 31st March 2014 (i.e in aggregate by 6(six) months). The Board of Directors decided to keep the accounting year of 15(fifteen) months starting from 1st October, 2012 and ending on to 31st, December, 2013. As a consequences of the said change the figures in statement of profit and loss figures for current year are of fifteen months ending 31st December, 2013, whereas the comparative figures for previous year are for 6(six) months ending 30th September, 2012.

6. DIRECTORS:

In accordance with the provisions of Companies Act, 1956 and the Articles of Association of the Company, Mr. Trilochan Singh Sahney retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Further, during the period under review, three additional Directors Mr. Shailesh Rajnikant Sheth, Mr. Pankaj Madhav Baliga, and Mr. Daljit Lilaram Mirchandani were appointed on 31st October, 2012. However, on 14th February, 2014, Mr. Daljit Lilaram Mirchandani resigned from Directorship of the company. The Board placed on record its appreciation of the valuable contribution made by Mr. Daljit Lilaram Mirchandani at the Board meeting held and his guidance and conduct of the Audit Committee meetings during his tenure as Chairman of the Audit Committee.

7. SUBSIDIARY COMPANY :

The Company had one wholly owned Subsidiary namely NRB-IBC Bearing Pvt. Limited, which ceased to be the wholly owned subsidiary of the company w.e.f. 9th December, 2013. Therefore the Statement specified in Section 212 of the Companies Act, 1956 relating to Subsidiary Companies are not attached to this report and also the Audited Consolidated financial statements, which form part of the Annual Report as required by the Listing Agreement with the stock exchanges are also not attached.

8. DIRECTORS'' RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors state and confirm as under:

a) That in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

b) That appropriate accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year as on 31st December, 2013 and the profit of the Company for that period;

c) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) That the annual accounts have been prepared on a going concern basis.

9. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT:

Management Discussion and Analysis Report as required under Clause 49(F) of the Listing Agreement is annexed hereto as Annexure-I and forms part of Directors'' Report.

10. CORPORATE GOVERNANCE & COMPLIANCE CERTIFICATE:

A detailed report on corporate governance of the Company as required under Clause 49(VI) of the Listing Agreement is enclosed as Annexure-II. A Practicing Company Secretary has certified compliance with requirement of corporate governance in relation to clause 49 of the Listing Agreement.

11. PUBLIC DEPOSITS:

Your Company has neither invited nor accepted any deposits from public within the meaning of the Companies (Acceptance of Deposits) Rule, 1975, during the last Financial Period.

12. AUDITORS:

M/s. Delloitte Haskins & Sells, Chartered Accountants, Mumbai, the Statutory Auditors, retire at the conclusion of ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office if reappointed.

They have furnished a certificate stating that their re-appointment would be within the limits specified under section 224(IB) of the Companies Act, 1956.

The product "Bearings" is subject to cost audit under the Central Government Rules. M/s Nanabhoy & Co., Cost Accountants, Mumbai have been appointed as the Cost Auditors for period ending 31st March, 2015.

13. AUDITORS'' REPORT:

Trie Auditors'' Report to the members together with Audited Accounts for the Fifteen months period ended 31st December, 2013 and notes thereon are attached, which are self-explanatory except on the given below matters on which they have drawn attention to:

(i) Note 41 to the Financial Statement: The Company has paid and debited to the Statement of Profit and Loss, managerial remuneration of Rs. 79.51 lacs to the Managing Director which is subject to the approval of the Central Government.

The Board noted that the requisite application has already made to the Central Government in this behalf and is confident that the same will be favorably considered as the scheme of Demerger provided that the terms and conditions of the employees joining from the Demerging company would be on the terms not less favorable than their previous employment

(ii) Note 45 of the Financial Statements: The Company had placed Inter Corporate Deposit with the company covered under Section 295 of the Companies Act, 1956 without obtaining previous approval of the Central Government. The Company will be application to the Central Government for approval of the deposit placed.

** The Board noted that the Inter corporate Deposit was placed for a short period of 30 days out of temporary surplus funds available with the company. The Inter corporate Deposit has been repaid with the interest on the due date.

14. PARTICULARS OF EMPLOYEES:

Information as per section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended is as follows:

Name Mr. Devesh Singh Sahney

Date of Birth 17.11.1968

Qualification Bachelors of Arts degree (Business Administration & Economics) from Richmond College, London and Master in business Administration (General Management) from the Asian Institute of Management (Philippines)

Experience 21 Years

Director Since May 2001

Date of Commencement of Employment 1st October, 2012

* Remuneration Rs. 79.51 Lacs

Last Employment NRB Bearings Limited

* Remuneration includes the basic salary and allowances.

15. PERSONNEL:

The employer-employee relations throughout the year were very cordial. The company enjoys a healthy working atmosphere that inspires the employees to put their best foot forward in achieving a high-sustainable growth. The Directors also wish to place on record the support and confidence reposed in the management by the employees. Total quality in every sphere of activities, employee training and development continues to be on the top priority of your management.

16. RESEARCH AND DEVELOPMENT:

Since the market scenario and technologies are changing rapidly, Research and Development (R&D) is important to ensure that company increases its market share, The company always attempts to use the latest and advanced technology in production process. Keeping pace with the technological developments, the company keeps on adding sophisticated equipments with focus on automation to minimize manual intervention in the manufacturing process thereby ensuring better quality of the final products.

17. INDUSTRIAL RELATIONS:

During the year the company maintained cordial relations with the workmen''s unions at plants.

18. SAFETY, HEALTH AND ENVIRONMENT:

The company committed for establishing and maintaining a safe working environment that promotes the health and performance of all our employees as well as taking active measures to protect the environment. The commitment to the environment extends beyond legal compliance requirements and initiatives are underway across the company''s locations to minimize the consumption of natural resources and reducing waste and emissions and include greening programmes, rainwater harvesting, vermiculture, treatment plants, etc.

Safety is accorded the highest priority by the company. The Safety Policy inter alia ensures safety of public, employees, plant, equipment and business associates, ensuring compliance with all statutory rules and regulations on an ongoing basis. Several training programmes and communication tools have been put in place. Special initiatives are being taken up such as mock drills, up gradation of Fire protection systems, encouraging reporting of near-miss incidents. All plants are striving to achieve "Accident Reduction".

19. CORPORATE SOCIAL RESPONSIBILITY:

Your company firmly believes in "inclusive growth"- improving the quality of life of the people we touch and in communities where we operate. However, the company has not undertaken any work in this area, being the first year of operation with focus on project implementation.

21. ACKNOWLEDGEMENT:

Your Directors look to the future with confidence and place on record their appreciation for the co-operation and assistance received from investors, customers, business associates, bankers, vendors as well as regulatory and government authorities. Your Directors also thank the employees at all levels who, through their dedication, co-operation, support and smart work have enabled the Company to implement the project and commercial production in good time.

By Order of the Board of Directors

For NRB Industrial Bearings Limited

Sd/-

Place: Mumbai Devesh Singh Sahney

Date: 28th February, 2014 Managing Director

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