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Directors Report of SKF India Ltd.

Dec 31, 2014

To the Members,

The Directors of your Company are pleased to present the 54th Annual Report, with the statement of the audited accounts for the financial year ended on December 31, 2014.

The Ministry of Corporate Affairs vide Circular No. 08/2014 dated April 4, 2014 clarified that the financial statements and the documents required to be attached thereto, the auditor''s and director''s report in respect of the financial year under reference shall continue to be governed by the relevant provisions of the Companies Act, 1956, schedules and rules made there under.

FINANCIAL RESULTS

Year ended Year ended Dec 31, 2014 Dec 31, 2013 Rs. in million Rs. in million

Net Sales & Services 23726.4 22464.4

Other Income 1198.9 919.0

Total Income 24925.3 23383.4

Operating Expenditure 21324.1 20137.7

Depreciation 539.5 494.4

Exceptional items - 221.0

Profit Before Tax 3061.7 2530.3

Provision for taxation 1034 863.1

Profit After Tax 2027.7 1667.2

Balance brought forward from last year 5847.9 5646.5

Profit available for appropriation 7875.6 7313.7

The appropriations are as follows:

Interim Dividend 395.5 -

Tax on Interim Dividend 67.2 -

Proposed dividend on Equity Shares 131.8 395.5

Tax on Proposed dividend 26.4 70.3

Transfer to General Reserves (including compulsory transfer to Reserves required under Section 205(2A) of the Companies Act, 1956) 750.0 1000.0

Leaving a balance of 6504.7 5847.9

DIVIDEND

Your Directors are pleased to recommend a final dividend of Rs. 2.5 per share (25%) for the year ended December 31, 2014 taking the total dividend to Rs. 10.0 per share (100%), as compared to Rs. 7.5 per share, for the preceding year ended December 31, 2013. The total dividend (including interim dividend), will absorb a sum of Rs. 527.3 million. This would involve a cash outflow of Rs. 620.9 million including tax on dividend. The total dividend pay-out (including dividend tax) for the current year is 30.6 per cent as against 27.9 per cent in the previous year.

OPERATIONS

The Indian economy continued to battle with several challenges from subdued demand & investments, contraction of industrial production and high interest rate during the year 2014. The macro environment improved a little as we went through the year with the new regime in power.

The automotive sector, one of the largest consumers of your Company''s products witnessed tapered demand barring the two-wheeler segment which clocked modest growth. Manufacturing and industrial activities remained sluggish. Industrial sector struggled due to stalled infrastructure & power projects and restricted flow of new investments. Mining, Steel and Power remained dormant due to restrictions in mining of natural resources as well as rising debts.

Despite these constraints and challenging environment, your Company continued to focus on sustainable profitable growth through use of advance technology provided by SKF Group to widen our ability to serve customers. Your Company continues to focus on bringing its manufacturing, innovation capabilities and solutions closer to customers.

These efforts are reflected in the positive improving trend witnessed in the increased sales of your Company''s quarter-on-quarter results during the year. Your Company''s quarterly sales increased from Rs. 5,703 million in the first quarter of 2014 to Rs. 6,059 million in the last quarter. For the twelve months ending March 31, 2014, your Company reported Net Sales of Rs. 23,726.4 million registering a 5.6% increase over the previous year. Our Company''s sales continued to develop positively driven by relatively strong performance in industrial segment. Your company''s export has grown by 2.0% geared by growth in global automotive industry during 2014. Exports constituted 7.9 per cent of the total sales as compared to 8.2 per cent of the total sales in the previous year.

The strong emphasis on internal efficiency using SKF''s Business Excellence philosophy to reduce waste and decrease costs, together with an improvement in the sales mix enabled your Company to withstand inflationary pressures on costs and sustain its profitability.

As a reflection of strong intrinsic value the revenue growth was translated into profitable growth, your Company achieved a significant milestone as its profit after tax surpassed the Rs. 2 billion mark reflecting the leadership position, of your Company. The Profit after Tax as per cent to sales has moved higher at 8.5 per cent as compared to 7.4 per cent last year. The Earnings per share and cash earnings per share for the year under review was Rs. 38.5 and Rs. 48.7 respectively.

The long term prospects for Indian economy remains bright owing to the demographic dividend which will continue to drive demand from across industries. Manufacturing industry will be the key driver to cater to this demand. In the short term, with the revival of confidence coupled with positive signals towards reforms by the government, the country and the industry is well poised to gain. The priorities of your Company that will enable it to benefit from the improving economic environment include strengthening investments in technologies, developing sustainable product and solutions and delivering higher value to customers and enable them to stay ahead.

LIQUIDITY

Your Company continues to remain debt-free and maintain a sufficient cash balance to meet the strategic objectives. There are no long-term borrowings. During 2014, internal cash flows have covered working capital, capital expenditure, investments and dividend payments. The Balance Sheet continued to remain strong with cash and liquid investments of Rs. 5,348 million. These funds are mainly deposits with banks.

SUSTAINABILITY AND SAFETY

SKF Group defines sustainability as SKF Care, which encompasses Business Care, Environmental Care, Employee Care and Community Care.

Meanwhile, the SKF Group BeyondZero™ strategy aims to reduce the environmental impacts of your Company''s operations and provide customers with innovative technologies, products and solutions that offer improved environmental performance. In line with this strategy ''SustEn'' initiative was launched by your Company since 2013 and continuing now, that has reduced the CO2 emissions related to its manufacturing operations by nearly 7,306 tonnes in a year (which is 22% of 2014) by way of changing sourcing mix to greener sources, and also consumption savings from operations, at the same time achieving annualized savings of nearly 71 million INR. This initiative received the SKF Groups Climate Savers Awards 2014 presented together with WWF. Further SKF has installed 1 MW Roof Top solar at its Bengaluru location, a 100 Kwp installation at Pune on its corporate building, and has signed a MOU to have one more 1 MW installation at its Pune plant. SKF has been working on a green energy footprint across all locations for the next 5 years and these installations are part of the same.

At every SKF facility employee safety is of utmost importance. In line with this philosophy, Behavioral Safety Programs have been initiated across the organization at all locations.

Your Company strives to continually improve environment, health and safety performance through the prevention of work place accidents and pollution, the promotion of employee health and well- being and the reduction of environmental impacts, including those from energy consumption and use.

AWARDS / ACCOLADES

Your Directors are happy to report that during the year, your Company was recognized and felicitated for its exemplary performance in various fields by our esteemed customers and organizations some of the significant achievements are:

- Dun & Bradstreet''s award for the best company in bearing sector for 8th consecutive year.

- SKF India ranked among India''s top 50 "Most Admired Companies" by Fortune magazine for the 3rd consecutive year.

- SKF wins Gold award for the 2nd consecutive year at the 11th Economic Times and Frost & Sullivan India Manufacturing Excellence Awards in the engineering sector of Large Business Category.

- Quality Gold Award by India Yamaha Motor Pvt Ltd.

- Superior performance award by Mahindra & Mahindra.

- Certificate of appreciation from Toyota Kirloskar Auto Parts for on-time delivery and quality.

- Best supplier award from Reiter India.

- SKF Pune Factory bags three awards at 28th National Convention of Quality Circle 2014.

These awards and recognitions are a result of the focused efforts towards evolution of your Company from a bearing manufacturer and supplier to an integrated solutions provider.

We thank all our customers, suppliers, distributors, employees and all other stakeholders for their continued support and contribution to these awards. These recognitions further inspire us to aim higher in order to become competitive and stay ahead in everything we do.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to requirements of Section 217 (2AA) of the Companies Act, 1956 and on the basis of information and advice received by them, your Directors confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

2. appropriate accounting policies have been selected and applied consistently and such judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at December 31, 2014 and of the profit of the Company for the year ended on that date;

3. 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

4. the annual accounts have been prepared on a going concern basis.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company has undertaken the commitment that all new major facilities must be designed and constructed to world-class standards in terms of environmental performance; and we do so by adopting the ''Leadership in Energy and Environmental Design'' (LEED) standard for all our new facilities. With clear focus on energy conservation, your Company has launched several initiatives to reduce carbon footprint and energy consumption along with ''SustEn'' project that has achieved benchmark success within the SKF Group in the area of energy conservation.

The information relating to Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed under section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out as an annexure forming part of this Report.

CORPORATE GOVERNANCE

Your Company observes high standards of corporate governance in all areas of its functioning with strong emphasis on transparency, integrity and accountability. Your Company has complied with all the requirements as per Clause 49 of the listing agreement of the Stock Exchanges, as amended from time to time. The Auditor''s certificate on compliance with Clause 49 is included in the section on Corporate Governance in this Annual Report.

A detailed review of the operations, performance and outlook of the businesses in which the Company operates is given in the Management Discussion & Analysis forms part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As an organization that is continually scaling up in terms of business, reach and impact, Your Company has in place a highly evolved community care program, which enables it to actively and effectively engage with communities outside the organizational charter. Your company is committed to the vision of ensuring that the community care programs make a meaningful difference in the lives of the communities we touch, wherever we are present. During the year a CSR committee was constituted and the areas of initiatives have been expanded. The Community care strategic road map for SKF India focuses primarily on 3 areas

- Education: Focus on SKF sports academy and academic initiatives for underprivileged children.

- Empowerment: Vocational Training Program for under privileged youth.

- Environment : Supporting environmental best practices.

Your Company going forward aims to run and monitor initiatives in the above areas through structured short and long term programs, encouraging employees to volunteer and partner with selected community care professionals and organizations to enhance the effectiveness of these program. All the CSR programs are determined by the philosophy of ''making a meaningful difference to the lives we touch''.

DEPOSITS

The Company discontinued accepting fixed deposits from Public and Shareholders in the year 2001. No amount of Principal or interest was outstanding as at December 31, 2014. There was no failure on repayments of Fixed Deposits on maturity or interest thereon in terms of the conditions of your Company''s erstwhile schemes.

PERSONNEL

The Board of Directors commends the continued dedication of employees at all levels and the industrial relations continue to be peaceful and cordial. During the year a new wage agreement for the Bengaluru plant was entered into. Your Company firmly believe that employee motivation, development and engagement are key aspects of good human resource management. The performance driven culture challenges every employee to scale up and grow. A wide range of competency enhancement opportunities, challenging assignments and rotation across units and countries help employees in their career progression and meeting aspirations. The coaching and mentoring programs enable employees to get constant feedback and career guidance to achieve and exceed their performance targets thus realizing their potential. SKF''s commitment to employee health, safety and security extends beyond accidents and occupational health hazards. These initiatives have delivered the desired results as is evident from the low attrition rate achieved during the year.

Information in accordance with the provision of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this report. However, as per provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this report and the financial statement are being sent to all the members excluding the aforesaid information. Any member desirous of obtaining such particulars may write to the Company Secretary at the registered office of the Company.

DIRECTORS

Mr. Shishir Joshipura has been re-appointed as a Managing Director of the Company with effect from December 1, 2014 for a period of 5 years. The terms and conditions of his appointment, including his remuneration, are subject to the approval of the Company in the general meeting and such other approvals as may be necessary.

Ms Hema A. Hattangady has been appointed as an Additional Director of the Company with effect from July 18, 2014 subject to the approval of the Members. As per provisions of Section 161 of the Companies Act, 2013 and Article 129 of the Articles of Association of the Company, Ms. Hattangady holds office up to the date of the forthcoming 54th Annual General Meeting and is eligible for appointment. Notice under Section 160 of the Companies Act, 2013 has been received from a member proposing the appointment of Ms. Hattangady as Director of the Company.

At the ensuing Annual General Meeting, Mr. Rakesh Makhija retires by rotation and being eligible, offer himself for re-appointment.

Pursuant to Companies Act, 2013 and Clause 49 of the Listing Agreement, Mr. K. C. Mehra, Mr. P. R Menon, Mr. P. M. Telang and Ms Hema A. Hattangady are proposed to be appointed as an Independent Directors for a period of 5 years and shall not be liable to retire by rotation.

Resolutions seeking approval of the Members for their appointment and re-appointment have been incorporated in the Notice of the Annual General Meeting and a brief detail about them has been provided in the Corporate Governance Report.

Mr. Tryggve Sthen, resigned as Director of the Company with effect from December 31, 2014 and Mr. David Bishop with effect from February 18, 2015. The Board expresses its gratitude for the valuable services rendered and guidance provided by Mr. Sthen and Mr Bishop during their tenure with the Company.

AUDITORS

M/s. Price Waterhouse & Co Bangalore LLP, Chartered Accountants, who are the Statutory Auditors of the Company, retire at the conclusion of the forthcoming Annual General Meeting. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 139 of the Companies Act, 2013.

In terms of Clause 41(1)(h) of the Listing Agreement, the statutory auditors of your Company are subjected to the Peer Review Process of the ICAI and hold a valid certificate issued by Peer Review Board of ICAI.

A certificate from the Auditors has been received to the effect that their re-appointment, if made, would be according to the terms and conditions prescribed under section 139 and 141 of the Companies Act, 2013 and rules framed thereunder.

COST AUDITORS

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit of the Company. The Board of Directors on recommendation of the Audit Committee has appointed M/s. R. A. & Co. as Cost Auditors of the Company for the year 2014. The Cost Audit is under process and the Company will submit the Cost Auditors'' report to the Central Government in time. The Cost Audit report for the financial year 2013 has been submitted on June 24, 2014 as against the due date of June 30, 2014.

ACKNOWLEDGEMENT

The Board wishes to acknowledge and thank all stakeholders for their valuable sustained support and encouragement towards the conduct of the efficient operations of the Company. Your Board is particularly indebted to its Principals, Aktiebolaget SKF who have supported the Company at all times.

For and on behalf of the Board SKF India Limited

K. C. Mehra Chairman

Pune, February 18, 2015


Dec 31, 2013

Dear Members,

The Directors of your Company are pleased to present the 53rd Annual Report, with the statement of the audited accounts for the financial year ended on December 31, 2013.

FINANCIAL RESULTS

Year ended Year ended Dec 31, 2013 Dec 31, 2012 Rs. in million Rs. in million

Net Sales & Services 22464.4 22041.3

Other Income 916.9 917.8

Total Income 23381.3 22959.1

Operating Expenditure 20135.6 19691.9

Depreciation 494.4 435.9

Exceptional items 221.0 -

Profit Before Tax 2530.3 2831.3

Provision for taxation 863.1 930.5

Profit After Tax 1667.2 1900.8

Balance brought forward from last year 5646.5 5205.3

Profit available for appropriation 7313.7 7106.1

The appropriations are as follows:

Proposed dividend on Equity Shares 395.5 395.5

Tax on Proposed Dividend including differential provision for earlier years 70.3 64.1

Transfer to General Reserves 1000.0 1000.0

Leaving a balance of 5847.9 5646.5

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 7.5 per share (75%) for the year ended December 31, 2013 out of the current year''s profit, as compared to Rs. 7.5 per share, for the preceding year ended December 31, 2012. The dividend, if approved, at the forthcoming Annual General Meeting will be paid out of the profits of the Company for the year and will absorb a sum of Rs. 395.5 million. This would involve a cash outflow of Rs. 462.7 million including tax on dividend.

OPERATIONS

The Indian economy battled several challenges from high interest rates, persistent inflation, weak rupee to tapered demand and contraction of industrial production during the year 2013.

The automotive sector, one of the largest consumers of Your Company''s products witnessed weak demand barring the two- wheeler and tractor segment which clocked modest growth. Manufacturing and industrial activities remained sluggish.

Despite these constraints and challenging environment, your Company continued to focus on its fundamental strength which lies in its ability to continuously develop technologies, products and services that enhance competitive advantages for its customers. The efforts over the years to develop a wide range of products and service offerings and the ability to combine the knowledge across the SKF technology platforms - Bearings and units, Seals, Mechatronics, Services and Lubrication systems - to develop value propositions for the different industries and customers enabled SKF India''s specialist teams to work even more closely with customers. This ability to provide them advanced integrated solutions to improve their production efficiency and improve their competitiveness and profitability enabled us to strengthen our leadership position even further in a difficult external environment.

The efforts are reflected in the positive improving trend witnessed quarter-on-quarter during the year from sales of Rs. 5,290 million in the first quarter of the year 2013 to Rs. 5,912 million in the last quarter. For the twelve months ending 31st March, 2013, your Company reported Net Sales of Rs. 22,464 million clocking a 2 per cent increase over the previous year. The continued growth in the aftermarket segment and 28 per cent increase in export worked favorably for your Company.

The strong emphasis on internal efficiency together with an improvement in the sales mix enabled your Company to withstand inflationary pressures on costs and sustain its profitability. Notwithstanding the difficult business and macro environment, your Company''s Profit Before Tax (excluding exceptional items) as percent to sales was only marginally lower at 12.2 per cent as compared to 12.8 per cent last year. Exports constituted 8.2 per cent of the total sales as compared to 6.5 per cent of sales in the previous year. The Earnings per share and cash earnings per share for the year under review was Rs. 31.6 and Rs. 41 respectively.

Despite the visible short term challenges, your Company believes that the long term India story remains intact. Domestic consumption will remain one of the key growth engines of the Indian economy. A large and growing population, significant additions to the working age population, rising disposable incomes including in rural areas and the Government''s increasing spends on the social sector to foster inclusive growth will all together play an important role in sustaining consumption.

Your Company will continue to leverage the global knowledge and expertise and its well-developed research and development facilities along with its own competent talent to take part in India''s growth story. While your Company will constantly strive to increase the stakeholder''s value, emphasis continues to be on delivering value to customers and strengthening processes while driving sustainable practises. Energy efficiency initiatives including Beyond Zero® portfolio, clean technology, energy efficient products and alternative sources of energy will continue to remain our focus areas. Your Company will continue to invest time, money and energy in developing products that are safe, environment friendly and at the same time are, affordable and efficacious to strengthen our competitive and market leadership position.

LIQUIDITY

Your Company continues to remain debt-free and maintains sufficient cash to meet strategic objectives. There are no long- term borrowings. During 2013, internal cash flows have covered working capital requirements, investments and dividend payments. The Balance Sheet remained strong with cash and liquid investments of Rs. 3758 million.

SUSTAINABILITY AND SAFETY

Your Company''s approach entails consideration of safety as a value- led concept which drives behavior change and supports the creation of a safety culture fully integrated with business improvement processes. In line with this philosophy, Behavioral Safety Programs have been initiated across the organization at all locations.

Your Company has addressed the critical area of climate change mitigation and adaptation through several innovative and pioneering initiatives. These include continuous improvement in energy conservation through a program ''SustEn'', creating a green built environment through ''Beyond Zero®'' and waste reduction through ''War on Waste''.

The philosophy of ''SKF Care'' is embedded in everything that we do. SKF Care is integral to the processes and operations and our way of doing business. During the year, safety sensitization workshops were organized at all locations and accountability matrix was established for safe operations. At SKF, business decisions are guided by the principles of SKF Care which includes Business Care, Environmental Care, Employee Care and Community Care.

AWARDS / RECOGNITION

Your Directors are delighted to report that during the year, the Company was recognized and felicitated for exemplary performance in various fields and some of the significant achievements are:

- Dun & Bradstreet''s Award for best bearing company for 7th consecutive year

- GOLD award at the 10th Economic Times and Frost & Sullivan India Manufacturing Excellence Awards 2013.

- Frost & Sullivan Indian Industrial technologies award 2013 for market leadership in the industrial bearings market in India.

- Ranked amongst the top 10 Auto Component companies by Fortune India for the 2nd consecutive year.

- Quality Gold award from Bajaj Auto.

- Best Supplier for Consistent Performance in Quality & Reliability award from TAFE.

- Best performer award in the engineering spares category at Ultratech North''s Business Associates Meet 2013.

- Ace Designers Award for consistency in quality and excellence.

Your Company''s Managing Director, Shishir Joshipura was recognized as one of the ''most valuable CEOs'' of India by Business World and also featured in the list of Top 100 Indian CEOs by Business Today publication.

These awards and recognitions are a result of the focused efforts towards evolution of your company from a bearing manufacturer and supplier to an integrated solutions provider.

We thank all our customers, suppliers, distributors, employees and all other stakeholders for their continued support and contribution to these awards. These recognitions further inspire us to aim higher in order to become competitive and deliver value in everything we do.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to requirements of Section 217 (2AA) of the Companies Act, 1956 and on the basis of information and advice received by them, your Directors confirm:-

1. That in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures.

2. That the Directors have 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 as on December 31, 2013 and of the profit of the Company for the year ended on that date;

3. That the Directors have taken proper and sufficient care 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;

4. That the Directors have prepared the annual accounts on a going concern basis.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company has undertaken the commitment that all new major facilities must be designed and constructed to world-class standards in terms of environmental performance; and we do so by adopting the ''Leadership in Energy and Environmental Design'' (LEED) standard for all our new facilities. In this regard our new Haridwar plant has been awarded silver rating by Indian Green Building Council (IGBC).

With an aim to achieve a higher degree of sustainability, reduce energy consumption and improve your Company''s carbon foot prints, a country level program "SustEn" was launched during the year. The project also involved evaluating options to move away from carbon intensive sources of energy to become more competitive. The information relating to Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed under section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out as an annexure forming part of this Report.

CORPORATE GOVERNANCE AND SOCIAL RESPONSIBILITY

Your Company strongly believes that the spirit of Corporate Governance goes beyond the statutory form. Sound Corporate Governance is a key driver of sustainable corporate growth. Your Company is committed to maintaining the highest level of transparency, accountability and equity in its operations.

Your Company has complied with all the requirements as per Clause 49 of the listing agreement of the Stock Exchanges, as amended from time to time. The Auditor''s certificate on compliance with Clause 49 is included in the section on Corporate Governance in this Annual Report. In addition, your Company has documented its internal policies in line with the Corporate Governance guidelines. The Management Discussion & Analysis forms part of the Annual Report.

Your Company''s CSR initiatives are aimed at local community needs and contributes to the community development. All the CSR activities are determined by the philosophy of ''making a meaningful difference to the lives we touch''. Your Company''s CSR activities are conceived to help in the holistic development of the underprivileged children by engaging them in various activities such as sports, culture and education. Keeping this in mind, your Company runs a sports academy for underprivileged children as it believes sport is an essential part of a child''s mental and physical development. Plans are on the anvil to expand the SKF sports academy model to other SKF facilities besides Pune.

DEPOSITS

The Company discontinued accepting fixed deposits from Public and Shareholders in the year 2001. No amount of Principal or interest was outstanding as at December 31, 2013. There was no failure on repayments of Fixed Deposits on maturity or interest thereon in terms of the conditions of your Company''s erstwhile schemes.

PERSONNEL

The Board of Directors commends the continued dedication of employees at all levels and the industrial relations continue to be peaceful and cordial. Your Company''s human resource management systems and processes are designed to empower employees and enable them adopt innovative approaches to creating enduring value. Towards this end, your Company has assiduously built a culture of continuous learning, innovation and collaboration across the organization by providing cutting-edge learning and development inputs to its employees, along with a judicious blend of coaching, mentoring and on the job training. In addition, your Company''s comprehensive talent development strategy has enabled the enhancement of the competitive capability of each business. The company''s performance management system has been instrumental in creating a strong performance culture.

At the beginning of the current year, the Company incurred a one time restructuring cost of Rs. 221 million, arising out of a Voluntary Retirement Scheme for its employees.

Pursuant to the provision of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out as an annexure to the Directors'' report. However, as per provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and the accounts are being sent to all the shareholders excluding the aforesaid information. Any Shareholder desirous of obtaining such particulars may write to the Company Secretary at the registered office of the Company.

DIRECTORS

In accordance with the requirements of the Companies Act, 1956 and the Company''s Articles of Association, Mr. K. C. Mehra, Mr. H. Lange and Mr. V. Vartanian retire by rotation and being eligible have offered themselves for re-appointment. Resolutions seeking approval of the Members for their appointment have been incorporated in the Notice of the Annual General Meeting and a brief detail about them has been provided in the corporate governance report.

Mr. Tore Bertilsson, resigned as Director of the company with effect from 12th July, 2013. The Board expresses its gratitude for the valuable services rendered and guidance provided by Mr. Bertilsson during his tenure with the Company.

AUDITORS

M/s. Price Waterhouse & Co., Bangalore, Chartered Accountants, who are the Statutory Auditors of the Company, continue to hold office until the conclusion of this Annual General Meeting and offer themselves for re-appointment. In terms of Clause 41(1)(h) of the Listing Agreement, the statutory auditors of your Company are subjected to the Peer Review Process of the ICAI and hold a valid certificate issued by Peer Review Board of ICAI.

A certificate from the Auditors has been received to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

COST AUDITORS

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit of the Company. The Board has appointed M/s. RA & Co. as Cost Auditors of the Company for the year 2013. The Cost Audit is under process and the Company will submit the Cost Auditors'' report to the Central Government in time. The Cost Audit report for the financial year 2012 has been submitted on 26th June, 2013 as against the due date of 29th June, 2013.

ACKNOWLEDGEMENT

The Board wishes to acknowledge and thank all stakeholders for their valuable sustained support and encouragement towards the conduct of the efficient operations of the Company. Your Board is particularly indebted to its Principals, AB SKF who have supported the Company at all times.

For and on behalf of the Board

SKF India Limited

K. C. Mehra

Chairman

Pune, February 21, 2014


Dec 31, 2012

To the Members,

The Directors of your Company are pleased to present the 52nd Annual Report, with the statement of the audited accounts for the financial year ended on December 31, 2012.

FINANCIAL RESULTS

Year ended Year ended Dec 31, 2012 Dec 31, 2011 Rs.in million Rs.in million

Net Sales & Services 22041.3 24167.2

Other Income 917.8 727.2

Total Income 22959.1 24894.4

Operating Expenditure 19691.9 21370.0

Depreciation 435.9 385.2

Profit Before Tax 2831.3 3139.2

Provision for taxation 930.5 1054.3

Profit After Tax 1900.8 2084.9

Balance brought forward from last year 5205.3 4180.0

Profit available for appropriation 7106.1 6264.9

The appropriations are as follows:

Proposed dividend on Equity Shares 395.5 395.5

Tax on Proposed dividend 64.1 64.1

Transfer to General Reserves (including compulsory transfer to Reserves required under Section 205(2A) of the Companies Act, 1956) 1000.0 600.0

Leaving a balance of 5646.5 5205.3

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 7.5 per share (75%) for the year ended December 31, 2012 out of the current year''s profit, as compared to Rs. 7.5 per share, for the preceding year ended December 31, 2011. The dividend, if approved, at the forthcoming Annual General Meeting will be paid out of the profits of the Company for the year and will absorb a sum of Rs. 395.5 million. This would involve a cash outflow of Rs. 462.7 million including tax on dividend.

OPERATIONS

The year posed prolonged challenging scenarios in the economic environment. High inflation, fiscal imbalances and resultant high interest rates continued to deter the sentiments. A decline in the buoyancy in the Asian economies along with fragile recovery in advanced economies also affected export growth adversely.

A sharp drop in volumes led to a decline in sales by 9%. This coupled with inflationary pressures on cost and a weakening Rupee put additional pressure on margins. Despite the difficult business and macro environment, our profit before tax as percent to sales is only marginally lower at 12.8 per cent as compared to 13 per cent last year and Profit after Ta x for the year as per cent to sales remains at 8.6% though lower by 8.8 per cent over the previous year. Exports constitute 6.2 per cent of the total sales as compared to 8.7 per cent of sales in the previous year reflective of the weakness in the global markets. The earning per share and cash earning per share for the year under review was Rs. 36.0 and Rs. 44.3 respectively.

Brownfield expansions at Pune and Haridwar facilities are planned in the coming years to create capacities to meet the expected growth in demand.

Business excellence is one of our core competitive strategies of doing business. Business excellence addresses the entire value chain and weeds out what is not relevant or sub-optimal. We continue to actively nurture and foster a culture of innovation by leveraging on our global knowledge base and delivering value to our customers.

Backed by the intrinsic strengths of SKF, driven by the experience of working with customers over 100 years and across geographies, your company continues to be the leader in its segment. SKF India Ltd will continue to leverage the parent company''s well-developed global research and development facilities, competent talent to further strengthen its market leadership.

LIQUIDITY

Your Company continues to remain debt-free and maintains sufficient cash to meet strategic objectives. There are no long-term borrowings. During 2012, internal cash flows have covered working capital requirements, investments and dividend payments. The Balance Sheet remained strong with cash and liquid investments of Rs. 3070 million.

SUSTAINABILITY AND SAFETY

The philosophy of ''SKF Care'' is embedded in everything that we do. SKF Care is integral to the processes and operations and our way of doing business. At SKF business decisions are guided by the principles of SKF Care which includes Business Care, Environmental Care, Employee Care and Community Care.

SKF''s BeyondZeroTM strategy describes SKF''s overall commitments towards environment and sustainability. Being a responsible citizen, we at SKF strive to act in a way that not only secures strong financial performance but also supports environmental sustainability.

SKF BeyondZeroTM consists of two simultaneous goals:

- Reduce the negative environmental impact from our own operations and those of our suppliers

- Innovate and offer our customers new technologies, products and services with enhanced environmental performance characteristics.

In this continuously changing world, ever-evolving sustainable and profitable technologies will define progress in future. SKF''s knowledge engineering capabilities and its applications to manufacture innovative and energy-efficient solutions enable customers to achieve business profitability and their environmental goals.

Along with the above goals, safety at work place continues to remain a prime focus for the company. Your company continues to improve the EHS performance by implementing various programs and stringent practices towards the prevention of work place accidents and pollution, promotion of employee health and well being and reduction of environmental impacts.

AWARDS / RECOGNITION

Your Directors are glad to report that during the year, the company was recognised and felicitated for exemplary performance in various fields and some of the significant achievements are:

- SKF India ranked among the top 50 Most Admired Companies in India by Fortune Magazine - Ranked 1st in the Engineering and Capital Goods category and 3rd in the Auto Components category

- SKF India Ltd. was honored with the prestigious Dun & Bradstreet award 2011, for the 6th consecutive year, for its significant contribution to the bearing sector

- SKF Pune manufacturing facility was conferred the Gold Certificate of merit at the Ninth edition of Economic Times and Frost & Sullivan India Manufacturing Excellence award-2012

- SKF India was awarded in 2012 ''Star performer'' by the Engineering Export Promotion Council of India (EEPC), for excellence in exports of engineering goods and services during 2009-10

- SKF has been conferred as the best supplier in the ''Best Quality & Services'' category and Improvement Orientation'' category by Tata Steel

- SKF India awarded as the "Preferred supplier for local R&D capability development" by Maruti

- SKF India, Awarded Quality - Gold award from Bajaj Auto for Valuable Support and Contribution for the year 2011

- SKF India bags two awards at Productivity Improvement Case Competition 2012 organized by Pune Divisional Productivity Council, winner (best case study) in the management category and first runner up in the operator category.

These awards and recognitions came as a result of the focused effort towards evolution of your company from a bearing manufacturer and supplier to an integrated solutions provider.

We thank all our customers, suppliers, employees and all other stakeholders for their continued support and contribution to these awards. These recognitions further inspire us to aim higher in order to become competitive and deliver value in everything we do.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As responsible corporate citizens, we have always endeavored to make positive contribution to the communities in which we operate. Your company''s CSR initiatives are aimed at local community needs and contributes to the community development.

All the CSR activities are determined by the philosophy of ''making a meaningful difference in the lives we touch''. Your Company''s CSR activities are conceived to help in the holistic development of the underprivileged children by engaging them in various activities such as sports, culture and education. Keeping this in mind, your company runs a sports academy for underprivileged children as it believes sport is an essential part of a child''s mental and physical development

Your company also supports several NGOs guided by the above philosophy.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to requirements of Section 217 (2AA) of the Companies Act, 1956 and on the basis of information and advice received by them, your Directors confirm:-

1. that in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures

2. that the Directors have 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 as on December 31, 2012 and of the profit of the company for the year ended on that date;

3. that the Directors have taken proper and sufficient care 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;

4. that the Directors have prepared the annual accounts on a going concern basis.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Irrespective of the location, your company has undertaken the commitment that all new facilities must be designed and constructed to world-class standards in terms of environmental performance; and we do so by adopting the ''Leadership in Energy and Environmental Design'' (LEED) standard for all our major constructions.

With clear focus on energy conservation, your company has launched ''SustEn'' project to reduce carbon footprint and energy consumption costs, results for which will be visible in 2013 and beyond.

The information relating to Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed under section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out as an annexure forming part of this Report.

CORPORATE GOVERNANCE

A detailed report on the Corporate Governance system and practices of the Company and certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance and a separate section on Management Discussion & Analysis forms part of the Annual Report.

Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. Certificate from CEO/CFO, inter alia, confirming the correctness of the financial statements, compliance with Company''s code of conduct, adequacy of the Internal Control measures and reporting of matters to the Audit Committee in terms of Clause 49 of the Listing Agreement with the Stock Exchanges, is also enclosed as a part of the Annual Report.

DEPOSITS

The Company discontinued accepting fixed deposits from Public and Shareholders in the year 2001. No amount of Principal or interest was outstanding as at December 31, 2012.

PERSONNEL

The Board of Directors commends the continued dedication of employees at all levels and the industrial relations continue to be peaceful and cordial. Your Company''s dedicated and talented workforce has enabled it to remain at the forefront of the industry. Your Company remains committed to provide a challenging and rewarding work environment to all its employees.

Pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out as an annexure to the Directors'' report. However, as per provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and the accounts are being sent to all the shareholders excluding the aforesaid information. Any shareholder desirous of obtaining such particulars may write to the Company Secretary at the registered office of the Company.

DIRECTORS

Mr. Prakash M. Telang was appointed as an additional Director with effect from October 23, 2012. Mr. Telang is an Independent Director. As per the provision of Section 260 of the Act, Mr. Telang holds office only up to the date of the forthcoming Annual General Meeting and is eligible for appointment.

In accordance with the requirements of the Companies Act, 1956 and the Company''s Articles of Association, Mr. T. Sthen and Mr. R. Makhija retire by rotation and being eligible have offered themselves for re-appointment. Resolutions seeking approval of the Members for their appointment have been incorporated in the Notice of the Annual General Meeting and a brief detail about them has been provided in the corporate governance report.

Mr. D. C. Shroff, a Director of the Company who retires by rotation at the forthcoming AGM, has conveyed his decision not to offer himself for re-appointment. He is also the Chairman of the Audit Committee. The Directors place on record their appreciation of the valuable contribution made by him.

AUDITORS

M/s. B S R & Associates, Chartered Accountants, the retiring auditors have expressed their unwillingness for their re-appointment. The Company has received a notice to propose M/s Price Waterhouse & Co., Bangalore, Chartered Accountants, as statutory auditors in place of the retiring auditors who will hold office from the conclusion of the forthcoming Annual General Meeting until the conclusion of the next Annual General Meeting. In terms of Clause 41(1)(h) of the Listing Agreement, the statutory auditors of your Company are subjected to the Peer Review Process of the ICAI. M/s Price Waterhouse & Co,, Bangalore, hold a valid certificate issued by Peer Review Board of ICAI.

A certificate from the proposed Auditors has been received to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

COST AUDITORS

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit of the Company. The Board has appointed M/s. RA & Co. as Cost Auditors of the Company for the year 2012. The Cost Audit is under process and the Company will submit the Cost Auditors'' report to the Central Government in time. The Cost Audit report for the financial year 2011 has been submitted on 30th March 2012 as against the due date of 28th June 2012.

ACKNOWLEDGEMENT

The Board wishes to acknowledge and thank all stakeholders for their valuable sustained support and encouragement towards the conduct of the efficient operations of the Company. Your Board is particularly indebted to its Principals, AB SKF who have supported the Company at all times.

For and on behalf of the Board

SKF India Limited

K C Mehra

Mumbai, March 26, 2013 Chairman


Dec 31, 2010

This year marks our fiftieth year and the Directors have pleasure in presenting the Fiftieth Annual Report together with the Audited Financial Statements for the year ended December 31, 2010.

Financial Results

Year ended Year ended Dec 31, 2010 Dec 31, 2009 Rs. in million Rs. in million

Net Sales & Services 20,684.1 15,709.3

Other Income 247.6 131.2

Total Income 20,931.7 15,840.5

Operating Expenditure 18,137.4 14,243.7

Depreciation 333.4 289.8

Financial Income (207.4) (131.6)

Financial Expense 7.6 7.6

Profit before tax 2,660.7 1,431.0

Provision for taxation 890.5 488.5

Profit after tax 1,770.2 942.5

Balance brought forward from last year 3,840.2 3,238.7

Profit available for appropriation 5,610.4 4,181.2

The appropriations are as follows:

Proposed dividend on Equity Shares 369.1 210.9

Tax on Proposed dividend 61.3 35.8

Transfer to General Reserves (including compulsory transfer to Reserves required under Section 205(2A) of the Companies Act, 1956) 1,000.0 94.3

Leaving a balance of 4,180.0 3,840.2

Dividend

Your Directors are pleased to recommend a dividend of Rs. 7 per share (70%) for the year ended December 31, 2010 including Golden Jubilee Special Dividend of Rs. 1 per share, out of the current years profit, as compared to Rs. 4.0 per share for the preceding year ended December 31, 2009. The dividend if approved at the forthcoming Annual General Meeting will be paid out of the profits of the Company for the year and will absorb a sum of Rs. 369.1 million as compared to Rs. 210.9 million for the previous year. This would involve a cash ouflow of Rs. 430.4 million including tax on dividend. The dividend, will be paid to those shareholders whose names appear on the Register of Members of the Company after giving effect to all valid share transfers lodged with the share transfer agent on or before April 26, 2011 and to those whose names appear as beneficial owners in the records of Naional Securities Depository Limited and Central Depository Services (India) Limited as on said date.

Operations

Indian economy continued to build on its strong recovery and achieved robust growth rates exceeding 8% in all quarters of the year. The growth was well spread across the segments of the economy and in some cases specially in automotive sector the surging demand exceeded all expectations. Whilst this led to improved capacity uilizaion a factories of most auomotive component vendors, it also led to inability of some component vendors to keep pace with the production schedules of the auomotive OEMs. Your Company benefited from the investment made lats year a Haridwar which continued to make progress owards achieving is installed capacity. The Company also made invesments in enhancing capacities in the Bengaluru facility while continuing is focus on productivity improvement measures across all plants.

In this year of all round economic growth, your Company has achieved credible financial resuls. Our sales continued to develop very positively, driven by strong performance in our Automotive Division, and a continued good development in Industrial Division. The Company focused on deeper customer relationships and improved is value proposition to the customers, resulting in growth in volume. The continued focus on engineering solution for customers is helping in maintaining our position as the market leader.

Your Company achieved a significant milestone as its Sales surpassed the Rs. 20 billion mark reflecting the leadership position of the Company. As a reflection of strong inrinstic value the revenue growth was translated into higher profitability growth on the bactk of strong customer relationship and higher value offerings. Operating profis (EBIT) grew to Rs. 2,460.9 million from Rs. 1,307.0 million over the lats year. Operating margin stood a 11.9% for 2010 up from 8.3% in the previous year.

Profit afer tax increased to Rs. 1,770.2 million, a growth of 88% over 2009. Our Earnings per share for the year was Rs. 33.6.

The rapid recovery of the growth momentum in year 2010 was comforting. A couple of concerns emerged which will need careful monitoring over the next few quarters namely inflation and economic fall outs of changing geo-political situaion across the globe. An immediate fallout of the global development is the volatility in the commodity prices and the resulant pressures on margins. The continued rise in interest rates as a measure for battling inflation could impact the growth.

Your Company has laid the foundaion for growh with several building blocks during 2010 which will help achieve is straegic goals -

- New factory a Haridwar to meet growing demand for auto sector

- Solution facory a Pune to offer value added solutions to our customers

- Sourcing domestically large industrial bearings for our industrial business.

Your Company will coninue to drive straegies that will be cusomer-centrict to capture growth opportunities. We will continue to, build capabilities to meet the market demands and further consolidate our position. Your Company is confident that year 2011 will bring newer opportunities and is well positioned to leverage the same.

Liquidity

Your Company continues to remain debt-free and maintains sufficient cash to meet srategic objectives. There are no long term borrowings. During 2010, inernal cash flows have more than adequately covered working captial requirements, investments and dividend payments. As on December 31, 2010, your Company had cash & cash equivalents amounting to Rs. 2,119.1 million.

Golden Jubilee Year

The year 2011 is the Golden Jubilee year of the Company. SKF India has had an exciting journey of five decades to reach its present position supported by all its stakeholders. Your Company is confident of building on its past success and creating an even better future.

Safety,Health and Environment (SHE)

Minimizing the environmental impact of our operations assumes utmost priority in the face of challenges faced by mankind to proect our earth. We are commited to maintain the highest standards of SHE by complying and even going beyond the minimum standards to keep our plane safe for future generations. Our comprehensive SHE policies as well as dedicaed measures taken are a testament to our commitment to the cause.

Greates emphasis is given to safety measures for Zero accidents, safety training for employees, use of green principles in our product development and incorporaing resource reduction and recycling in our plans. Reducing our existing carbon footprint through program Beyond Zero and tailoring our processes to minimize the impact on the environment continue to rank high on the list of priorities.

The year 2010 saw further significant steps in the direction of building a robus Safey, Health and Environment system in the organizaion. Number of activities were carried ou during the year to enable sustainable operations some of which were:

- Conducted On the Job training and training through One Point Lesson following TPM mehodology. More than 4,500 man days of training in a year in sustaining the awareness on safety.

- A dedicated Safety Management Team in place for prevention of unsafe incidents at the plant level.

- A separate Susainability team has been formed to increase awareness level of each employee about Global warming.

- SKF is cerified to ISO 14001 & OHSAS 18001, new factory Haridwar has also been recommended for cerification during the year.

- Continued awareness program by releasing every week a daily tip on Save the Plane earth to educate all our employees to conserve energy.

- Water conservation and capure programs including rain waer harvesting hereby achieving over 7% reduction in net water consumption as compared to year 2009.

- Well equipped Industrial Effluent Treatment Plans complying with Zero Discharge condition.

Awards / Recognition

Your Directors are glad to report that during the year, the Company was recognized and feliciaed for exemplary performance in various fields significant amongst which are the following:

- Firts Prize and prestigious Sona Kaizen Trophy at 10th CII-TPM National Conference.

- First Prize a CIIT 4th Naional Conference & Competition on Six Sigma in the Lean Manufacturing Organizations category

- Star Performance Award from Engineering Expotr Promotion Council of India (EEPC), sponsored by Minisry of Commerce & Industries for contribution in Export.

- Best Kaizen Award from Toyoa for the Pune region. (Consecutive 2nd year in the row)

Corporate Social Responsibility

As responsible corporate citizens, we have always endeavored to make conribution owards betterment of society in and around the areas of our operation. Our CSR initiatives are aimed at helping our surrounding communities become self-reliant.

SKF India has always believed in sport as an essential part of a societys mental and physical wellbeing. The sports academy set up by your Company for underprivileged children is an example of an initiative in this area. The objective is to nurture young talent at grass roots level and develop community participation.

Directors Responsibility Statement

Pursuant to requirements of Section 217 (2AA) of the Companies Act, 1956 and on the basis of information and advice received by them your Directors confirm:-

1. that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures;

2. that the Directors have 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 as on December 31, 2010 and of the profit or loss of the Company for the year ended on that date;

3. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assest of the Company and for preventing and detecting fraud and other irregularities;

4. that the Directors have prepared the annual accounts on a going concern basis.

Energy Conservaion, Technology Absorpion and Foreign Exchange Earnings and Outgo

The information relating to Energy Conservaion, Technology Absorpion and Foreign Exchange Earnings and Ougo as required to be disclosed under section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Repor of Board of Directors) Rules, 1988 is given in Annexure forming part of this Report.

Corporate Governance

A detailed report on the Corporate Governance system and practices of the Company and cerificate from the Auditors of the Company regarding compliance of condiions of Corporae Governance and a separate section on Management Discussion & Analysis forms part of the Annual Report.

Your Company is commited to transparency in all is dealings and places high emphasis on business ethics. Cerificate from CEO/CFO, inter alia, confirming the correctness of the financial staements, compliance with Companys code of Conduct, adequacy of the Internal Control measures and reporting of matters to the Audit Committee in terms of Clause 49 of the Listing Agreement with the Stock Exchanges, is also enclosed as a part of the Annual Report.

Deposits

The Company discontinued accepting fixed deposits from Public and Shareholders in the year 2001. The amounts outstanding are those amounts which have no been claimed by the deposit holders on maturity even after sending reminders. A sum of Rs. 0.1 million from Public remained unclaimed as at December 31, 2010.

Pursuant to Secion 205C of the Companies Act, 1956 an amount of Rs. 0.78 million lying as deposits and an amount of Rs. 0.08 million onwards interest on fixed deposits which remained matured and unclaimed for a period of seven years from the date they became due for payment have been transferred to Investor Education and Protection Fund set up by the Central Government.

Personnel

The Board of Directors commends the continued dedication of employees at all levels and the industrial relations continue to be peaceful and cordial.

The information as per Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 forms part of this Report.

Directors

Mr. Giuseppe Donao resigned as Director of the Company with effect from Ocober 21, 2010. The Board places on record is gratitude for the valuable services rendered and guidance provided by Mr. Donao during his tenure with the Company. Mr. Tore Berilsson is appointed as Director to fill in the casual vacancy caused by resignation of Mr. Donao with effect from October 21, 2010.

In accordance with the requirements of the Companies Act, 1956 and the Companys Articles of Association, Mr D.C. Shroff, Mr. H. Lange and Mr. T Berilsson (who has been appointed to fill up the casual vacancy caused by resignaion of Mr. G. Donao and who holds office upto the date of this Annual General Meeting) retire by rotaion and being eligible have offered themselves for re-appointment.

The Company has received noice under Secion 257 of the Act along with the requisite deposit, in respect of the above person, proposing the appointment as a Director of the Company. Resolutions seeking approval of the Members for their appointment have been incorporated in the Notice of the Annual General Meeting and a brief deail about them has been provided in the Corporate Governance Report.

Auditors

M/s. B S R & Associates, Chartered Accountants, who are the Stautory Auditors of the Company, continue to hold office until the conclusion of the Fifieth Annual General Meeting and offer themselves for re-appoinment. In terms of Clause 41(l)(h) of the Listing Agreement, the stautory auditors of your Company are subjected to the Peer Review Process of the ICAI and hold a valid certificate issued by Peer Review Board of ICAI.

A cerificate from the Auditors has been received to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

Cost Auditors

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed cost Audit of the Company. The Board has appoined M/s. N. I. Mehta & Co., cost Auditor of the Company for the year 2010. The cost Audit is under process and the Company will submit the cost Auditors report to the Central Government in time.

Acknowledgement

The Board wishes to acknowledge and thank all stakeholders for their valuable sustained support and encouragement owards the conduct of the efficient operations of the Company. Your Board is particularly indebted to is Principals, AB SKF who have supported the Company at all times.

For and on behalf of the Board SKF India Limited

K C Mehra Chairman

Pune, February 23, 2011

 
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