Notes to Accounts of NRB Industrial Bearings Ltd.

Mar 31, 2025

l. Provisions and Contingencies
Provisions

Provisions are recognised when there is a present
obligation (legal or constructive) as a result of past
event, where it is probable that there will be
outflow of resources to settle the obligation and
when a reliable estimate of the amount of the
obligation can be made. The expense relating to a
provision is presented in the statement of profit
and loss.

The amount recognised as a provision is the best
estimate of the consideration required to settle the
present obligation at the end of the reporting
period, taking into account the risks and
uncertainties surrounding the obligation.

If the effect of the time value of money is material,
provisions are discounted using a current pre-tax
rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used,
the increase in the provision due to the passage of
time is recognised as a finance cost.

Contingencies

Contingent liabilities exist when there is a
possible obligation arising from past events, the
existence of which will be confirmed only by the
occurrence or non-occurrence of one or more
uncertain future events not wholly within the
control of the Company, or a present obligation
that arises from past events where it is either not
probable that an outflow of resources will be
required or the amount cannot be reliably
estimated. Contingent liabilities are appropriately
disclosed unless the possibility of an outflow of
resources embodying economic benefits is
remote.

m. Financial Instruments

A financial instrument is any contract that gives
rise to a financial asset of one entity and a
financial liability or equity instrument of another
entity.

Financial Assets

(i) Initial recognition and measurement

Financial assets are classified, at initial
recognition, and subsequently measured at

amortised cost, fair value through other
comprehensive income (OCI), and fair
value through profit or loss.

The classification of financial assets at initial
recognition depends on the financial asset’s
contractual cash flow characteristics and
the Company’s business model for
managing them.

With the exception of trade receivables that
do not contain a significant financing
component or for which the Company has
applied the practical expedient, the
Company initially measures a financial
asset at its fair value plus, in the case of a
financial asset not at fair value through profit
or loss, transaction costs. Trade receivables
that do not contain a significant financing
component or for which the Company has
applied the practical expedient are
measured at the transaction price
determined under Ind AS 115. Refer to the
accounting policies in section (B)(a)
Revenue from contracts with customers.

In order for a financial asset to be classified
and measured at amortised cost or fair
value through OCI, it needs to give rise to
cash flows that are ‘solely payments of
principal and interest (SPPI)’ on the
principal amount outstanding. This
assessment is referred to as the SPPI test
and is performed at an instrument level.
Financial assets with cash flows that are not
SPPI are classified and measured at fair
value through profit or loss, irrespective of
the business model.

The Company’s business model for
managing financial assets refers to how it
manages its financial assets in order to
generate cash flows. The business model
determines whether cash flows will result
from collecting contractual cash flows,
selling the financial assets, or both.
Financial assets classified and measured at
amortised cost are held within a business
model with the objective to hold financial
assets in order to collect contractual cash
flows while financial assets classified and
measured at fair value through OCI are held
within a business model with the objective of
both holding to collect contractual cash
flows and selling.

Purchases or sales of financial assets that
requires delivery of assets within a time
frame established by regulation or
convention in the marketplace (regular way

trades) are recognised on the trade date,
i.e., the date that the Company commits to
purchase or sell the asset.

(ii) Subsequent measurement

All recognised financial assets are
subsequently measured in their entirety at
either amortised cost or fair value,
depending on the classification of the
financial assets.

(iii) Financial assets at amortised cost

A ‘Financial Asset’ is measured at its
amortised cost if both the following
conditions are met:

a) The asset is held within a business
model whose objective is to hold
assets for collecting contractual cash
flows, and

b) Contractual terms of the asset give rise
on specified dates to cash flows that
are solely payments of principal and
interest (SPPI) on the principal
amount outstanding.

After initial measurement, such financial
assets are subsequently measured at
amortised cost using the effective interest
rate (EIR) method and are subject to
impairment as per the accounting policy as
applicable to ‘Impairment of financial
assets’. Amortised cost is calculated by
taking into account any discount or
premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR
amortisation is included in other income in
the statement of profit or loss. The losses
arising from impairment are recognised in
the statement of profit or loss. The
Company’s financial assets at amortised
cost includes trade receivables and other
financial assets.

(iv) Financial assets at fair value through
profit or loss (FVTPL)

FVTPL is a residual category for financial
assets. Any financial assets, which does not
meet the criteria for categorization as at
amortized cost or as FVTOCI, is classified
as at FVTPL. Financial assets included
within the FVTPL category are measured at
fair value with all changes recognized in the
statement of profit and loss.

(v) Equity Instruments

All equity investments in scope of Ind AS

109 are measured at fair value. Equity
instruments which are held for trading and
contingent consideration recognised by an
acquirer in a business combination to which
Ind AS 103 applies are classified as at
FVTPL. For all other equity instruments,
other than investment in Subsidiary, the
Company makes an irrevocable election to
present in other comprehensive income
subsequent changes in the fair value. The
Company makes such election on an
instrument-by-instrument basis. The
classification is made on initial recognition
and is irrevocable.

(vi) Derecognition

A financial asset (or, where applicable, a
part of a financial asset or part of a company
of similar financial assets) is primarily
derecognised (i.e., removed from the
Company’s balance sheet) when:

- The rights to receive cash flows from
the asset have expired, or

- The Company has transferred its rights
to receive cash flows from the asset or
has assumed an obligation to pay the
received cash flows in full without
material delay to a third party under a
‘pass-through’ arrangement; and
either (a) the Company has transferred
substantially all the risks and rewards
of the asset, or (b) the Company has
neither transferred nor retained
substantially all the risks and rewards
of the asset, but has transferred
control of the asset.

When the company has transferred its rights
to receive cash flows from an asset or has
entered into a pass-through arrangement, it
evaluates if and to what extent it has
retained the risks and rewards of ownership.
When it has neither transferred nor retained
substantially all of the risks and rewards of
the asset, nor transferred control of the
asset, the company continues to recognise
the transferred asset to the extent of the
Company’s continuing involvement. In that
case, the company also recognises an
associated liability. The transferred asset
and the associated liability are measured on
a basis that reflects the rights and
obligations that the Company has retained.

Continuing involvement that takes the form
of a guarantee over the transferred asset is
measured at the lower of the original

carrying amount of the asset and the
maximum amount of consideration that the
company could be required to repay.

(vii) Impairment of financial assets

The Company assessed the expected credit
losses associated with its assets carried at
amortised cost and fair value through profit
and loss based on the Company’s past
history of recovery, credit worthiness of the
counter party and existing and future market
conditions.

For all financial assets other than trade
receivables, expected credit losses are
measured at an amount equal to the 12-
month expected credit loss (ECL) unless
there has been a significant increase in
credit risk from initial recognition in which
case those are measured at lifetime ECL.
The Company applied the expected credit
loss (ECL) model for measurement and
recognition of impairment losses on trade
receivables. For trade receivables, the
Company follows simplified approach for
providing expected credit losses as
prescribed by Ind AS 109, which permits the
use of the lifetime expected loss provision
for all trade receivables. The Company has
computed expected losses based on a
provision matrix which uses historical credit
loss experience of the Company and where
applicable, specific provision are made for
individual receivables.

(viii) Reclassification of financial assets

The Company determines classification of
financial assets and liabilities on initial
recognition. After initial recognition, no
reclassification is made for financial assets
which are equity instruments and financial
liabilities. For financial assets which are
debt instruments, a reclassification is made
only if there is a change in the business
model for managing those assets.

Financial Liabilities

(ix) Initial recognition and measurement

Financial liabilities are classified, at initial
recognition, as financial liabilities at fair
value through profit or loss, loans and
borrowings, payables, as appropriate.

All financial liabilities are recognised initially
at fair value and, in the case of loans and
borrowings and payables, net of directly
attributable transaction costs.

The Company’s financial liabilities include
trade payables, loans and borrowings
including bank overdrafts, other financial
liabilities and financial guarantee contracts.

(x) Subsequent measurement

The measurement of financial liabilities
depends on their classification, as
described below:

(xi) Financial liabilities at fair value through
profit or loss

Financial liabilities at fair value through
profit or loss include financial liabilities held
for trading and financial liabilities
designated upon initial recognition as at fair
value through profit or loss. Financial
liabilities are classified as held for trading if
they are incurred for the purpose of
repurchasing in the near term. This category
also includes derivative financial
instruments entered into by the Company
that are not designated as hedging
instruments in hedge relationships as
defined by Ind AS 109. Gains or losses on
liabilities held for trading are recognised in
the profit or loss.

(xii) Financial liabilities at amortised cost

After initial recognition, interest-bearing
loans and borrowings are subsequently
measured at amortised cost using the EIR
method. Gains and losses are recognised in
the statement of profit and loss when the
liabilities are derecognised as well as
through the EIR amortisation process.

Amortised cost is calculated by taking into
account any discount or premium on
acquisition and fees or costs that are an
integral part of the EIR. The EIR
amortisation is included as finance costs in
the statement of profit and loss. This
category generally applies to borrowings.

(xiii) Derecognition

A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires. When an existing
financial liability is replaced by another from
the same lender on substantially different
terms, or the terms of an existing liability are
substantially modified, such an exchange or
modification is treated as the derecognition
of the original liability and the recognition of
a new liability. The difference in the
respective carrying amounts is recognised

(xiv) Offsetting of financial instruments

Financial assets and financial liabilities are
offset and the net amount is reported in the
Balance Sheet if there is a currently
enforceable legal right to offset the
recognised amounts and there is an
intention to settle on a net basis, to realise
the assets and settle the liabilities
simultaneously.

n. Investment in Associates

An associate is an entity over which the Company
has significant influence. Significant influence is
the power to participate in the financial and
operating policy decisions of the investee but is
not control or joint control over those policies.

The Company’s investments in its associates are
accounted at cost less impairment. The Company
reviews its carrying value of investments carried
at cost annually, or more frequently when there is
indication for impairment. If the recoverable
amount is less than its carrying amount, the
impairment loss is recorded in the Statement of
Profit and Loss.

When an impairment loss subsequently reverses,
the carrying amount of the Investment is
increased to the revised estimate of its
recoverable amount, so that the increased
carrying amount does not exceed the cost of the
Investment. A reversal of an impairment loss is
recognised immediately in Statement of Profit or
Loss.

o. Cash and Cash Equivalents

Cash and cash equivalent in the balance sheet
comprise cash at banks and on hand and short¬
term deposits with an original maturity of three
months or less, that are readily convertible to a
known amount of cash and subject to an
insignificant risk of changes in value.

For the purpose of the statement of cash flows,
cash and cash equivalents consist of cash and
short-term deposits, as defined above, net of
outstanding bank overdrafts as they are
considered an integral part of the Company’s cash
management.

p. Earnings per share (EPS)

Basic EPS is calculated by dividing the profit or
loss attributable to equity shareholders of the
Company by the weighted average number of
equity shares outstanding during the period.
Diluted EPS is determined by adjusting the profit
or loss attributable to equity shareholders and the

weighted average number of equity shares
outstanding adjusted for the effects of all dilutive
potential equity shares.

q. Segment Reporting

Operating segments are reported based on the
internal reporting provided to the chief operating
decision maker (CODM). The chief operating
decision-maker assesses the financial
performance and position of the Company as a
whole and makes strategic decisions. The
Company operates in one reportable business
segment i.e., “Industrial Business”.

r. Borrowing Cost

Borrowing costs directly attributable to the
acquisition, construction or production of an asset
that necessarily takes a substantial period of time
to get ready for its intended use or sale (qualifying
asset) are capitalised as part of the cost of the
asset. All other borrowing costs are expensed in
the period in which they occur. Borrowing costs
consist of interest and other costs that an entity
incurs in connection with the borrowing of funds.
Borrowing cost also includes exchange
differences to the extent regarded as an
adjustment to the borrowing costs.

s. Current Versus Non-Current Classification

The Company presents assets and liabilities in
the balance sheet based on current/ non-current
classification. An asset is treated as current when
it is:

- Expected to be realised or intended to be
sold or consumed in normal operating cycle

- Held primarily for the purpose of trading

- Expected to be realised within twelve
months after the reporting period, or

- Cash or cash equivalent unless restricted
from being exchanged or used to settle a
liability for at least twelve months after the
reporting period

All other assets are classified as non-current.

A liability is current when:

- It is expected to be settled in normal
operating cycle

- It is held primarily for the purpose of trading

- It is due to be settled within twelve months
after the reporting period, or

- There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period

The Company classifies all other liabilities as non¬
current.

Deferred tax assets and liabilities are classified as
non-current assets and liabilities.

The operating cycle is the time between the
acquisition of assets for processing and their
realization in cash and cash equivalents. The
Company has identified twelve months as its
operating cycle.

t. Events after the reporting period

If the Company receives information after the
reporting period, but prior to the date of approved
for issue, about conditions that existed at the end
of the reporting period, it will assess whether the
information affects the amounts that it recognises
in its separate financial statements. The
Company will adjust the amounts recognised in
its financial statements to reflect any adjusting
events after the reporting period and update the
disclosures that relate to those conditions in light
of the new information. For non-adjusting events
after the reporting period, the Company will not
change the amounts recognised in its separate
financial statements but will disclose the nature of
the non-adjusting event and an estimate of its
financial effect, or a statement that such an
estimate cannot be made, if applicable.

C. Climate Related Matters:

The Company considers climate-related matters
in estimates and assumptions, where appropriate
and based on its overall assessment, believes
that the climate-related risks might not currently
have a significant impact on the Company.
However, the Company will continue to closely
monitor relevant changes and developments,
such as any new climate-related legislation as
and when they become applicable.

3. Significant Accounting judgements, estimates and
assumptions:

In the application of the Company’s accounting policies,
which are described in Note 2, Management is required
to make judgements, estimates and assumptions about
the revenues, expenses, assets and liabilities and the
accompanying disclosures, and the disclosure of
contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes
that require a material adjustment to the carrying
amount of assets or liabilities affected in future periods.
The estimates and associated assumptions are based
on historical experience and other factors that are
considered to be relevant. Actual results may differ from
these estimates.

The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
estimates are revised if the revision affects only that
period or in the period of the revision and future periods
if the revision affects both current and future periods.

Estimates and assumptions

The key assumptions concerning the future and other
key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described
below. The Company based its assumptions and
estimates on parameters available when the
Standalone Ind AS financial statements were prepared.
Existing circumstances and assumptions about future
developments, however, may change due to market
changes or circumstances arising that are beyond the
control of the Company. Such changes are reflected in
the assumptions when they occur.

(a) Estimation of useful life of Property, Plant and
Equipment and intangible assets

The Company has estimated useful life of each
class of assets based on the nature of assets, the
estimated usage of the asset, the operating
condition of the asset, past history of
replacement, anticipated technological changes,
etc. The Company reviews the useful life of
property, plant and equipment and intangible
assets as at the end of each reporting period. This
reassessment may result in change in
depreciation and amortisation expense in future
periods.

(b) Contingent Liabilities

Management has estimated the possible outflow
of resources at the end of each annual reporting
financial year, if any, in respect of contingencies /
claim / litigations by / against the Company as it is
not possible to predict the outcome of pending
matters with accuracy. Further details about
Contingent Liabilities are given in Note 33.

(c) Estimation of Defined Benefit Obligation

The cost of the defined benefit plan and the
present value of the defined benefit obligation are
determined using actuarial valuations. An
actuarial valuation involves making various
assumptions that may differ from actual
developments in the future. These include the
determination of the discount rate; future salary
increases and mortality rates. Due to the
complexities involved in the valuation and its
long-term nature, a defined benefit obligation is

highly sensitive to changes in these assumptions.
All assumptions are reviewed at each reporting
date.

The calculation is most sensitive to changes in the
discount rate. In determining the appropriate
discount rate for plans operated in India, the
management considers the interest rates of
government bonds where remaining maturity of
such bond correspond to expected term of
defined benefit obligation.

The mortality rate is based on publicly available
mortality tables. Those mortality tables tend to
change only at interval in response to
demographic changes. Future salary increases
and gratuity increases are based on expected
future inflation rates. Further details about
employee benefit obligations are given in Note
35.

(d) Impairment of Trade Receivables

The Company applies the expected credit loss
(ECL) model for measurement and recognition of
impairment losses on trade receivables. The
Company follows simplified approach to
providing for ECL prescribed by Ind AS 109,
which permits the use of the lifetime ECL
provision for all trade receivables. The Company
has computed ECL provision based on a
provision matrix which uses historical credit loss
experience of the Company. The amount of ECLs
is sensitive to changes in circumstances and the
Company’s historical credit loss experience may
also not be representative of customer’s actual
default in the future. Details of impairment
provision on other financial assets and trade
receivables are given in Note 11.

(e) Fair value measurement of financial
instruments

When the fair values of financial assets or
financial liabilities recorded or disclosed in the
financial statements cannot be measured based

on quoted prices in active markets, their fair value
is measured using valuation techniques including
the DCF model. The inputs to these models are
taken from observable markets where possible,
but where this is not feasible, a degree of
judgment is required in establishing fair values.
Judgements include consideration of inputs such
as liquidity risk, credit risk and volatility. Changes
in assumptions about these factors could affect
the reported fair value of financial instruments.
Refer Note 40 for further disclosures.

4. (a) New and amended standards adopted by the

Company:

The Ministry of Corporate Affairs (MCA) had
issued the Companies (Indian Accounting
Standards) (Amendment) Rules, 2024 amending
the following Ind AS, which are effective for
annual periods beginning on or after April 1,2024:

- Ind AS 116 ‘Leases’ - This amendment
specifies the requirements that seller-
lessee uses in measuring the lease liability
arising in a sale and leaseback transaction,
to ensure the seller-lessee does not
recognise any amount of the gain or loss
that relates to the right of use it retains.

- Ind AS 117 ‘Insurance Contracts’ - It is a
comprehensive new accounting standards
which replaces the Ind AS 104 ‘Insurance
Contracts’. It applies to all types of
Insurance Contracts, regardless of the type
of entities that issue them as well as to
certain guarantees and financial
instruments with discretionary participation
features.

These amendments do not have a material
impact on the financial statements.

(b) Standards notified but not yet effective:

There are no standards that are notified and not
yet effective as on the date.

Footnotes:

1) There is no immovable property (other than properties where the Company is the lessee and the lease agreements are
duly executed in favour of the lessee) held by the Company.

2) None of the Company’s Property, plant and equipment, intangible asset and right of use assets were revalued during the
year.

3) During the year the company entered intercompany agreement with NRB Bearings Limited for release of the right to use
the immovable property. Accordingly, the assets having WDV of Rs. 88.06 lakhs were released as per the Intercompany
agreement. This has been considered as exceptional item. Refer Note 42 for details on exceptional item.

4) Assets pledged as security

(i) Loan taken by the Company are secured by a first pari passu charge over immovable property, plant and equipment
(buildings), leasehold land of the Company and its movable fixed assets at its factory at Shendra (near Aurangabad)
against the sanction fund and non fund based facility of Rs. 1,500 Lakhs. (March 31,2024 Rs. 1,500 Lakhs). Refer
Note 17A and Note 17B on Borrowings.

(ii) Loan taken by associate companies NRB - IBC Bearings Private Limited of Rs. 775 Lakhs [outstanding as at March
31, 2025 is Rs. 628.31 Lakhs (as at March 31, 2024 is Rs. 458.98 Lakhs)] and NIBL-Korta Engineering Private
Limited of Rs. 300 Lakhs [outstanding as at March 31,2025 is Rs. 290.18 Lakhs (as at March 31,2024 is Rs. 188.94
Lakhs)] are secured by a second pari passu charge over immovable property, plant and equipment (buildings),
leasehold land of the Company and its movable fixed assets at its factory at Shendra (near Aurangabad).

5) On transition to Ind AS (April 1, 2016), the Company has elected to consider fair value as deemed cost for plant and
machinery recognised as at April 1,2016. For other items of Property, Plant and Equipment, the Company has not elected
the exemption of previous GAAP carrying value consequently, cost in respect of other items of Property, Plant and
Equipment has been retrospectively remeasured in accordance with Ind AS.

6) Also refer Note 32 (2) for assets given under operating lease to a related party.

---

Mar 31, 2024

N. Provisions and Contingencies Provisions

Provisions are recognised when there is a present obligation (legal or constructive) as a result of past event, where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingencies

Contingent liabilities exist when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company, or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required or the amount cannot be reliably estimated. Contingent liabilities are appropriately disclosed unless the possibility of an outflow of resources embodying economic benefits is remote.

O. Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial Assets

• Initial recognition and measurement

All financial assets except for trade

receivable (as they are recognize at transaction price) are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that requires delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

• Subsequent measurement

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

• Financial assets at amortised cost

A ‘Financial Asset’ is measured at its amortised cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in other income in the statement of profit or loss. The losses arising from impairment are recognised in the statement of profit or loss.

• Financial assets at fair value through profit or loss (FVTPL)

FVTPL is a residual category for financial assets. Any financial assets, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Financial assets included within the FVTPL category are measured at fair

value with all changes recognized in the statement of profit and loss.

¦ Equity Instruments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS 103 applies are classified as at FVTPL. For all other equity instruments, other than investment in Subsidiary, the Company makes an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

¦ Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial assets) is primarily derecognised (i.e., removed from the Company’s balance sheet) when:

- The rights to receive cash flows from the asset have expired, or

- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognise the transferred asset to the extent of the Company’s continuing involvement. In that case, the company also recognises an associated liability. The transferred asset and the associated liability are measured on

a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay.

• Impairment of financial assets

The Company assessed the expected credit losses associated with its assets carried at amortised cost and fair value through profit and loss based on the Company’s past history of recovery, credit worthiness of the counter party and existing and future market conditions.

For all financial assets other than trade receivables, expected credit losses are measured at an amount equal to the 12-month expected credit loss (ECL) unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The Company applied the expected credit loss (ECL) model for measurement and recognition of impairment losses on trad e receivables. For trad e receivables, the Company follows simplifies approach to providing for expected credit losses prescribed by Ind AS 109, which permits the use of the lifetime expected loss provision for all trade receivables. The Company has computed expected losses based on a provision matrix which uses historical credit loss experience of the Company and where applicable, specific provision are made for individual receivables.

• Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets.

Financial Liabilities

• Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

• Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

• Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Gains or losses on liabilities held for trading are recognised in the profit or loss.

• Financial liabilities at amortised cost

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit and loss wh en th e liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

• Derecognition

A financial liability is derecognised when the obligation under the liability is

discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.

¦ Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

P. Investment in Associate

An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The Company’s investments in its associates are accounted at cost less impairment. The Company reviews its carrying value of investments carried at cost annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is recorded in the Statement of Profit and Loss.

When an impairment loss subsequently reverses, the carrying amount of the Investment is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the cost of the Investment. A reversal of an impairment loss is recognised immediately in Statement of Profit or Loss.

Q. Cash and Cash Equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and shortterm deposits with an original maturity of three months or less, that are readily convertible to a known amount of cash and subject to an insignificant risk of; changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and

short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company’s cash management.

R. Earnings per share (EPS)

Basic EPS is calculated by dividing the profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders and the weighted average number of equity shares outstanding for the effects of ail dilutive potential equity shares.

S. Segment Reporting

Operating segments are reported based on the internal reporting provided to the chief operating decision maker (CODM). The chief operating decision-maker assesses the financial performance and position of the Company as a whole and makes strategic decisions. The Company operates in one reportable business segment i.e., “Industrial Business”.

T. Borrowing Cost

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

U. Current Versus Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:

• Expected to be realised or intended to be sold or consumed in normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised within twelve months after the reporting period, or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

The Company classifies all other liabilities as noncurrent.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

3. Significant Accounting judgements, estimates and assumptions:

In the application of the Company’s accounting policies, which are described in Note 2, Management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.

Estimation of useful life of Property, Plant and Equipment and intangible assets [Note 5 and Note 6]

The Company has estimated useful life of each class of assets based on the nature of assets, the estimated usage of the asset, the operating condition of the asset, past history of replacement, anticipated technological

changes, etc. The Company reviews the useful life of property, plant and equipment and intangible assets as at the end of each reporting period. This reassessment may result in change in depreciation and amortisation expense in future periods.

Contingencies [Note 33]

Management has estimated the possible outflow of resources at the end of each annual reporting financial year, if any, in respect of contingencies / claim / litigations by / against the Company as it is not possible to predict the outcome of pending matters with accuracy.

Defined benefit plans [Note 35]

The cost of the defined benefit plans and the present value of the defined benefit obligation are based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. All assumptions are reviewed at each Balance Sheet date and disclosed in the Financial Statements.

Litigations [Note 33]

From time to time, the Company is subject to legal proceedings the ultimate outcome of each being always subject to many uncertainties inherent in litigation. A provision for litigation is made when it is considered probable that a payment will be made, and the amount of the loss can be reasonably estimated. Significant judgement is made when evaluating, among other

factors, the probability of unfavorable outcome and the ability to make a reasonable estimate of the amount of potential loss. Litigation provisions are reviewed at each Balance Sheet date and revisions made for the changes in facts and circumstances.

Impairment of financial assets [Note 11]

The Company’s Management reviews periodically items classified as receivables and to assess whether a provision for impairment should be recorded in the statement of profit and loss. Management estimates the amount and timing of future cash flows when determining the level of provisions required. Such estimates are necessarily based on assumptions about several factors involving varying degrees of judgement and uncertainty.

Fair value measurement of financial instruments

When the fair values of financial assets or financial liabilities recorded or disclosed in the financial statements cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgements include consideration of inputs such as liquidity risk, credit risk and volatility.

4. Standards notified but not yet effective:

There are no standards that are notified, but not yet effective, upto the date of the issuance of the Company’s financial statement.

2) Trade receivables are non-interest bearing and are generally on the terms of 30 to 75 days of credit period.

3) As at March 31,2024, there are no trade receivable which are due from directors or other officers of the company either severally or jointly with any other person. Further, there are no trade receivables which are due from firms or private companies respectively in which any director is a partner, a director or a member.

4) The Company and NRB IBC Bearings Private Limited (NIBC) have transactions with IBC INDUSTRIAL BEARINGS AND COMPONENTS AG (IBC AG) and IBC Walzlager, Gmbh (IBC Gmbh) in nature of export of goods and import of raw materials since December 2013 For transactions held between December 2013 and August 2015, IBC AG and IBC Gmbh has netted off the outstanding receivables and payables in their books of accounts and remitted Euro 28,079 in October 2015 for the same.

As per RBI Circular RBI/2014-15/5 Master Circular No 14/2014-15 dated July 1, 2014 Clause C.25, RBI had delegated the powers to accept the application for set-off of export receivables against import payables to Authorised Dealer bank (Ad) on behalf of RBI.

The Company had made the statutory application to its AD bank along with all the necessary documents seeking approval for set off of export receivables against import payables in the books of the Company. Pending approval the Company has disclosed receivables of Rs. 156.08 lakhs (March 31,2023 Rs. 155.02 lakhs) as Non current Trade Receivable in Note 11 and payable of Rs. 90.94 lakhs (March 31,2023 Rs. 90.33 lakhs) as Non current Trade Payable in Note 18.

5) The Company applied the expected credit loss (ECL) model for measurement and recognition of impairment losses on trade receivables. The Company follows simplified approach to providing for expected credit losses prescribed by Ind AS 109, which permits the use of the lifetime expected loss provision for all trade receivables. The Company has computed expected losses based on a provision matrix which uses historical credit loss experience of the Company and where applicable, specific provision are made for individual receivables.

( i) (a) Rights attached to equity shares:

1) The Company has only one class of equity shares having a face value of Rs. 2 each. The Equity Shareholders have all the rights of equity shares as provided by the Companies Act, 2013 and Rules & Regulations made thereunder.

2) The Company in General Meeting may declare dividend to be paid to members according to their respective rights, but no dividend shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend.

3) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.

(b) Rights attached to Preference shares:

1) The Preference shareholders shall carry a preferential right over the equity shareholders with respect to payment of dividend and repayment of capital in case of winding up;

2) The Preference shareholders shall be non- participating in the surplus fund;

3) The Preference shareholders shall be non-participating in the surplus assets and profits which may remain after the entire capital has been repaid on winding up of the Company;

4) The holders of Preference shares shall be paid dividend on a cumulative basis at the rate as recommended by the Board and declared by the shareholders of the Company. Presently, the preference dividend be paid annually at 2% p.a. post tax expenses;

5) The Preference share shall not be convertible into equity shares;

6) The Preference share shall carry voting rights as per the provisions of Section 47(2) of the Companies act 2013;

7) The Preference share shall be redeemed after the end of 10 years from the date of issue of such shares;

. 8) The Preference shares shall not be listed on any stock exchange.

1. Consequent to the demise of Mr. Trilochan Singh Sahney, the Company has not received share transmission application from legal heirs of Late Mr. Trilochan Singh Sahney and accordingly the name of Late Trilochan Singh Sahney is still appearing in register of Members and is accordingly disclosed above.

2. As at March 31,2021, number of equity shares in the name of Late Mr. Trilochan Singh Sahney was 29,29,101 equity shares in the Company. Out of 29,29,101 equity shares, 11,46,000 equity shares were held in the joint names of Late Mr. Trilochan Singh Sahney and Mrs. Hanwantbirkaur Trilochansingh Sahney. During the year ended March 31,2022, the 11,46,000 shares were transferred to Mrs. Hanwantbirkaur Trilochan Singh Sahney due to applicable procedural requirements and are appearing in register of members in her name and accordingly disclosed above. However, as per the communication received from Executrix of the estate of Late Mr. Trilochan Singh Sahney, the above mentioned shares will ultimately devolve to the legal heirs of Late Mr. Trilochan Singh Sahney.

Nature and purpose of reserves

(i) Capital reserve

This represents value of excess of asset received over liabilities assumed during demerger from NRB Bearings Limited.

(ii) Equity component of compound financial instruments

This represents the difference between fair valuation and transaction price on initial recognition of preference shares issued to a Promoter shareholder.

(iii) Retained earnings

Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include remeasurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss. The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the financial statements of the Company and also considering the requirements of the Companies Act, 2013.

Secured

Term loans from Bank

(a) Rs. 44.54 lakhs (March 31,2023 Rs. 102.05 lakhs) secured by second charge on all present and future stock and book debts of the Company and second pari pasu charge over immovable Property, plant and equipment (buildings), leasehold land of the Company and its movable plant and machinery, furniture and fixtures and other movables at its factory at Shendra (near Aurangabad) and personal guarantee of Promoter Director of the Company. The working capital term loan is repayable in balance 9 equal monthly instalments of Rs. 5.50 lakhs each till December 7, 2024 and carried interest rate of 7.5 % p.a.

(b) Rs. 83.51 lakhs (March 31,2023 Rs. 98.77 lakhs) secured by second charge on all present and future stock and book debts of the Company and second pari passu charge over immovable Property, plant and equipment (buildings), leasehold land of the Company and its movable plant and machinery, furniture and fixtures and other movables at its factory at Shendra (near Aurangabad) and personal guarantee of Promoter Director of the Company. The working capital term loan is repayable in 33 equal monthly instalments of Rs. 2.72 lakhs each till December 7, 2026 after end of balance moratorium period of 5 months and carries interest rate of 7.5 % p.a.

(c) Rs.316.71 lakhs (March 31, 2023 Rs. 361.68 lakhs) secured by first pari- passu charge over Land and Building situated at Shendra, MIDC Aurangabad. The working capital term loan is repayable in remaining 51 monthly instalments Rs. 8.90 lakhs each till June 27, 2028 and carries interest rate of 14 % p.a.

(d) Rs. 84.82 lakhs (March 31,2023 Rs. 115.09 lakhs) secured by hypothecation of vehicles. Out of these , the term loan of Rs. 74.45 lakhs (March 31,2023 Rs. 101.46 lakhs) carrying interest rate of 7.65% p.a. is repayable in remaining 29 equal monthly instalments by August, 2026 and the term loan of Rs. 10.37 lakhs (March 31, 2023 Rs. 13.63 lakhs) carrying interest rate of 7.65 % p.a. is repayable in remaining 33 equal monthly instalments by December 5, 2026.

(e) Rs. 112.27 lakhs (March 31,2023 Rs. NIL lakhs) secured by hypothecation of machineries purchased out of bank’s finance at its factory at Shendra (near Aurangabad) and personal guarantee of Promoter Director of the Company. The machinery term loan is repayable in 78 equal monthly instalments of Rs. 3.84 lakhs each till March 30, 2030 after end of balance moratorium period of 6 months and carries interest rate of 12.30 % p.a.

Term loan from Others

(a) Rs. 7.21 lakhs (March 31,2023 Rs. 13.41 lakhs) secured by hypothecation of vehicles. The entire term loan carrying interest rate of 8.21 % p.a. is repayable in remaining 20 equal monthly instalments by November 20, 2025.

Unsecured

Loans from related parties

(a) 100 lakhs each 6 % Redeemable Cumulative Non - Convertible Preference shares of Rs. 10 each fully paid up were issued to a Promoter shareholder in March 2016 and in April 2016 with redemption at the end of 5 years from the date of issue. During the year ended March 31,2018, the terms of existing Redeemable Cumulative Non - Convertible Preference shares were changed w.e.f. February 15, 2018, the preference dividend rate is modified to 2 % and redemption term is changed to 10 years for above said preference shares.

200 lakhs 2 % Redeemable Cumulative Non - Convertible Preference shares of Rs. 10 each fully paid up were issued to a Promoter shareholder in February 2018 with redemption at the end of 10 years.

100 lakhs and 35 lakhs 2 % Redeemable Cumulative Non - Convertible Preference shares of Rs. 10 each fully paid up were issued to a Promoter shareholder in January 2019 and in March 2019 respectively with redemption at the end of 10 years.

50 lakhs, 15 lakhs, 150 lakhs and 50 lakhs 2 % Redeemable Cumulative Non - Convertible Preference shares of Rs. 10 each fully paid up were issued to a Promoter shareholder in June 2019, August 2019, December 2019 and in March 2020 respectively with redemption at the end of 10 years.

65 lakhs 2 % Redeemable Cumulative Non - Convertible Preference shares of Rs. 10 each fully paid up were issued to a Promoter shareholder in March 2023 with redemption at the end of 10 years.

75 lakhs 2 % Redeemable Cumulative Non - Convertible Preference shares of Rs. 10 each fully paid up were issued to a Promoter shareholder in March 2023 with redemption at the end of 10 years.

(b) Pursuant to the members’ resolution passed dated November 29, 2019 for conversion of unsecured loan of a Promoter shareholder amounting to Rs. 1,400 lakhs into 2% Redeemable Cumulative Non- convertible Preference Shares of Rs. 10 each (“Preference Shares”), the Company, during the year ended March 31, 2023, sought to increase its authorized share capital from Rs. 85 Crore (Equity share capital Rs. 5 Crore and Preference share capital Rs. 80 Crore) to Rs. 99 Crore (Equity share capital Rs. 5 Crore and Preference share capital Rs. 94 Crore) by obtaining an approval from members via a resolution approved through a postal ballot dated March 20, 2023.

During the voting period for such postal ballot, the Scrutinizer invalidated the vote of a Promoter shareholder, who had initially voted against the resolution and later (during the voting period) communicated the decision to vote in favour of the said resolution. Accordingly, the Scrutinizer, in accordance with Clause 16.5.3 (d) of SS-2 ‘Secretarial Standard on General Meetings’ while counting the votes and declared that the resolution to increase the authorized share capital was passed by absolute majority (‘the decision’). Basis such decision, unsecured loan of a Promoter shareholder has been converted into 2% Redeemable Cumulative Non-convertible Preference Shares by the Company.

Subsequently, during March 2023 the Scrutinizer received communication from another Promoter shareholder challenging the decision / result published by the Scrutinizer. In the event the said Promoter pursues and is successful in setting aside the Scrutinizer’s report then the same could result in certain modifications to the above financial results such as decrease in authorised share capital by Rs. 1,400 lakhs and its resultant impact on reclassification of borrowings from Non-Current Liabilities and Deemed capital contribution under Equity to Borrowings under Current Liabilities by equivalent amount and increase in the profit for the period by approximately Rs. 25 lakhs. The Company is of the view, supported by legal opinions, that the Scrutinizer’s decision is appropriate and accordingly the resolution for increase in authorised capital and consequent conversion of unsecured Promoter loan to preference shares is valid. Accordingly, no adjustments have been made by management in the said Standalone Financial Statements.

Note 30:

Consequent to the demise of Mr. Trilochan Singh Sahney (“TSS”) in 2018, his WILL has been probated. According to the Will, Mrs. Hanwantbir Kaur Sahney is sole executrix having lifetime interest.

The Company has received the communication of the Probate of the WILL. As per the WILL, subject to the life interest of the Executrix:

a) The redeemable cumulative non-convertible preference shares (“Preference Shares”) and the unsecured interest free loan from TSS will be distributed amongst the beneficiaries as mentioned in the WILL.

b) The Company has received certain communication pertaining to transmission (of the Preference Shares) and transfer (of the unsecured interest free loan), from the representatives of the Executrix of the estate of Mr. TSS and has received communication from beneficiary that the matter as per (a) above is under discussion with the Executrix.

Accordingly, as at March 31,2024, the name of TSS is still appearing in books of accounts.

2. Company as a lessor:

Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset is classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

The Company had entered into lease agreement with a related party effective from 8 March, 2013 for certain portion of its factory and office premises including furniture and fixtures, electrical installation, etc. During the year, Rs. 102.22 lakhs (previous year Rs. 92.93 lakhs) recognised as rental income in the Statement of Profit and Loss. The agreement contains renewal clause. The said agreement was renewed with effect from April 1,2023 for a period of seven years.

Note 35 : Employee Benefits Brief description of the Plans:

1) Defined contribution plans :

a) Provident and Family Pension Fund

The eligible employees of the Company are entitled to receive post employment benefits in respect of provident and family pension fund, in which both employees and the Company make monthly contributions at a specified percentage of the employees’ eligible salary (currently 12% of employees’ eligible salary). The contributions are made to the Regional Provident Fund Commissioner. Provident Fund and Family Pension Fund are classified as Defined Contribution Plans as the Company has no further obligations beyond making the contribution.

b) Superannuation

The eligible employees of the Company are entitled to receive post employment benefits in respect of superannuation scheme, in which the Company makes quarterly contributions at 15% of employees’ eligible salary. Superannuation scheme is classified as Defined Contribution Plan as the Company has no further obligations beyond making the contribution.

2) Defined Benefit Plans : (Gratuity Funded)

The Company has an obligation towards gratuity, a funded defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of the employment of an amount equivalent to 15 days salary, as applicable, payable for each completed year of service, without any payment ceiling. Vesting occurs upon completion of five years of service.

Nature of benefits:

The gratuity benefits payable to the employees are based on the employee’s service and last drawn salary at the time of leaving. The employees do not contribute towards this plan and the full cost of providing these benefits are met by the Company.

Regulatory framework:

There are no minimum funding requirements for a gratuity plan in India. The trustees of the gratuity fund have a fiduciary responsibility to act according to the provisions of the trust deed and rules. Since the fund is income tax approved, the Company and the trustees have to ensure that they are at all times fully compliant with the relevant provisions of the income tax and rules. Besides this if the Company is covered by the Payment of Gratuity Act, 1972 then the Company is bound to pay the statutory minimum gratuity as prescribed under this Act.

Governance of plan:

The Trust established for the purpose, has arrangement with Insurance Company (currently HDFC Standard Life Insurance Company Limited and Kotak Life Insurance Company Limited) for future payments of gratuities on behalf of the Trust.

Inherent risk

The plan is of a final salary defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, there is a risk for the Company that any adverse salary growth or demographic experience or inadequate returns on underlying plan assets can result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature the plan is not subject to any longevity risks.

The most recent actuarial valuation of the present value of the defined benefit obligation was carried out at March 31, 2024 by an independent actuary. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

Note 39 : Capital management and Risk management I Capital Management

For the purpose of the Company’s capital management, capital includes issued equity capital, convertible preference shares, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company’s capital management strategy is to effectively determine, raise and deploy capital so as to create value for its shareholders. The same is done through a mix of either equity and/or preference and/or combination of short term /long term debt as may be appropriate. The Company determines the amount of capital required on the basis of its product, capital expenditure, operations and strategic investment plans. The same is funded through a combination of capital sources be it either equity and/or preference and/or combination of short term/long term debt as may be appropriate.

II Financial Risk Management Framework

The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade payables, and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Company’s operations and to provide guarantees to support its operations. The Company’s principal financial assets include loans, trade receivables, and cash and cash equivalents that derive directly from its operations.

The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk. In order to manage the aforementioned risks, the Company operates a risk management policy and a program that performs close monitoring of and responding to each risk factors.

A Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).

Trade receivable

Customer credit risk is managed as per the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on payment performance over the period of time. The Company’s exposure of its customers are continuously monitored based on the customer’s past performance and business dynamics. Credit exposure is controlled by customer’s credit limits that are reviewed and approved by the management at regular intervals.

An impairment analysis is performed at each reporting date. The Company applies the simplified approach to providing for expected credit losses prescribed by Ind AS 109, which permits the use of the lifetime expected loss provision for all trade receivables. The Company has computed expected credit losses based on a provision matrix which uses historical credit loss experience of the Company and where applicable, specific provisions are made for individual receivables.

B Liquidity Risk

(i) Liquidity Risk management

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Company’s short-, medium- and long-term funding and liquidity management requirements. The Company manages liquidity risk by way of banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

(ii) Maturities of financial liabilities

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities . The amount disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.

Interest rate sensitivity

Interest rate risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of changes in market interest rate. During the year, the Company has availed benchmarked linked, short term and long term debts from Bank. Therefore, the Company has exposure to the risk of changes in market interest rates towards the debt availed during the year. It is estimated that an increase in 40 bps change in benchmark rate would result in a loss of approximately Rs. 6.61 lakhs whereas a decrease in 40 bps change in benchmark rate would result in a profit of approximately Rs. 6.61 lakhs. The movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.

C Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Company uses derivatives to manage any significant market risks. Derivatives are only used for economic hedging purposes and not as speculative investments. All such transactions are carried out within the guidelines set by the Board of Directors .

(i) Currency Risk

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company’s exposure to currency risk relates primarily to the Company’s operating activities when transactions are denominated in a different currency from the Company’s functional currency.

The Company’s foreign currency exposure are denominated in US Dollar, Euro and Emirati Dirham which arise mainly from foreign exchange imports, exports and foreign currency borrowings.

As at the end of the reporting period, the carrying amounts of the company’s foreign currency denominated financial assets and financial liabilities are as follows:

b) Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required):

The Company consider that the carrying amount of financial asset and financial liabilities recognised in the financial statements approximate their fair value.

Note 41 :

As at March 31,2024 the Company has a net current liability position of Rs. 3,496.71 lakhs and has a negative net worth of Rs. 3,626.06 lakhs. The management of the Company has formulated strategic plans for improving the profitability of the Company, which includes increase in sales and reduction in operating expenses. The Promoter director has also provided a commitment in the form of support letter to provide the necessary financial support to the Company to meet its operational and financial obligations including loan from other Promoter as and when they fall due. Based on the business plans of the Company, cash flow projections and support letter from Promoter director, management is confident that the Company will be able to meet its financial obligations as they arise. Accordingly, these Standalone Financial Statements have been prepared on the basis that the Company will continue as a going concern for the foreseeable future.

Note 43 : Other Statutory information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any transaction with Companies struck off.

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (ultimate beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(viii) The Company is not declared wilful defaulter by and bank or financials institution or lender during the year.

(ix) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017

(x) The Company is maintaining its books of account in electronic mode and these books of account are accessible in India at all times and the back-up of books of account has been kept in servers physically located in India on a daily basis.

(xi) The Company is using the accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software except that, audit trail feature is not enabled for certain changes, if any, made using privileged/ administrative access rights in the Navision software. Audit trail for deletion of logs performed by users having such access has not been maintained by the Company. Further, no instance of the audit trail feature being tampered with was noted in respect of an accounting software where the audit trail has been enabled.

As per our report of even date attached For and on behalf of the Board of Directors

For S R B C & CO LLP

Chartered Accountants D. S. Sahney

ICAI Firm Registration No. 324982E/E300003 Chairman and Managing Director

DIN Number : 00003956

per Aruna Kumaraswamy Gulestan Kolah Vandana Yadav

Partner Chief Financial Officer Company Secretary

Membership No: 219350

Place : Mumbai Place : Mumbai

Date : May 21,2024 Date : May 21,2024

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Mar 31, 2018

1. Corporate Information

NRB Industrial Bearings Limited (the Company) was incorporated on 24th day of February, 2011 as a Private Limited Company under the provisions of the Companies Act, 1956 (the 1956 Act) .On the acquisition of equity shares of the Company on 4th November, 2011 by NRB Bearings Limited, a public limited company, the Company in terms of Section 3 (1) (iv) (c) of the 1956 Act became a Public Limited Company and the name of the Company was changed from “NRB Industrial Bearings Private Limited” to “NRB Industrial Bearings Limited”.

The Scheme of Arrangement (the Scheme) for the transfer of Industrial Bearings Undertaking of NRB Bearings Limited (NRB) to the Company under section 391 to 394 read with section 100 to 103 of the Companies Act, 1956 was sanctioned by the Hon’ble High Court of Judicature, Bombay on 24th August 2012. The Scheme, which has become operative from 25th September, 2012 upon filing of the certified copies of the Orders of the Hon’ble High Court with the Registrar of Companies became effective from 1st October, 2012 (the Appointed Date). Pursuant to the Scheme, with effect from the Appointed date the Industrial Bearings Undertaking of NRB is transferred and vested in the Company as a going concern, with all its assets, liabilities, properties, rights, benefits and interest therein subject to existing charges thereon.

In terms of the Scheme, in consideration of the transfer and vesting of the Industrial Bearings Undertaking of NRB, in respect of every 4 equity shares of Rs. 2 each, held by the shareholders of NRB, 1 equity share of Rs. 2 each fully paid up aggregating 24,230,650 equity shares have been issued and allotted on 31st October, 2012, to the shareholders of NRB whose names appeared in the Register of Members, as on 25th October, 2012, being the record date.

All the staff, workmen and employees of Industrial Bearings Undertaking of NRB in service as on 1st October, 2012 have become staff, workmen and employees of the Company without any break in their service.

In terms of the Scheme, the Company recorded all the assets and liabilities pertaining to the Industrial Bearings Undertaking, at the respective book values appearing in the books of NRB as on the Appointed Date. The Company credited to its share capital account, the aggregate face value of the equity shares issued by it pursuant to the Scheme. The difference of Rs. 5,700.16 lakhs between excess of net assets and the amount credited as share capital after adjusting the cancellation of existing share capital of the Company held by NRB has been credited to Capital Reserve. The equity shares allotted have been listed on the Bombay Stock Exchange and the National Stock Exchange on 9th April, 2013.

The Company is engaged in the business of manufacturing and selling of all types of industrial bearings.

The address of its registered office is 2nd floor, Dhannur building, 15, Sir P.M. Road, Fort, Mumbai - 400 001, Maharashtra, India.

2 Use of estimates and judgments

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses etc. at the date of these financial statements and the reported amounts of revenues and expenses for the years presented. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected.

In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are included in the following notes:

3 First-time adoption - mandatory exceptions, optional exemptions

Overall principle

The Company has prepared the opening balance sheet as per Ind AS as of April 1, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to the certain exception and certain optional exemptions availed by the Company as detailed below.

A. Exceptions applied:

(i) Use of Estimates:

The Company’s estimates in accordance with Ind AS at the date of transition are consistent with previous GAAP (after adjustments to reflect any difference in accounting policies) or as required under Ind AS but not under previous GAAP.

(ii) Derecognition of financial assets and financial liabilities

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2016 (the transition date).

(iii) Classification of debt instruments:

The Company has determined the classification of debt instruments in terms of whether they meet the amortised cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as on the transition date.

(iv) Impairment of financial assets:

The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind AS, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.

B. Exemptions applied:

(i) Past business combinations:

The Company has elected not to apply Ind AS 103 -Business Combinations retrospectively to past business combinations that occurred before the transition date.

(ii) Deemed cost for property, plant and equipment and intangible assets

a) Property, plant and equipment

On transition to Ind AS, the Company has elected to consider fair value as deemed cost for plant and machinery recognised as at April 1, 2016. For other items of Property, Plant and Equipment, the Company has not elected the exemption of previous GAAP carrying value consequently, cost in respect of other items of Property, Plant and Equipment has been retrospectively remeasured in accordance with Ind AS.

b) Intangible assets

The Company has elected to continue with the carrying value of its intangible assets recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

(iii) Deemed cost for investment in associates:

Under Ind AS, the Company has considered their previous GAAP carrying amount as their deemed cost.

4 Application of new and revised Ind ASs.

Ind AS 115 - Revenue from Contracts with Customers

This standard establishes a single comprehensive model for accounting of revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recognition guidance under Ind AS 11 ‘Construction Contracts’ and Ind AS 18 ‘Revenue’ The Company is currently assessing the impact of application of Ind AS 115 on Company’s financial statements.

Amendment to Ind AS 21 - The Effect of Changes in Foreign Exchange Rates

This amendment clarifies translation of advance payments denominated in foreign currency into functional currency at the spot rate on the day of payment. The guidance aims to reduce diversity in practice. The changes will not have any material impact on the financial statements of the Company.

Notes:

1 The cost of inventories recognised as an expense during the year was Rs. 1,892.55 lakhs (for the year ended March 31, 2017: Rs. 1,593.70 lakhs).

2 The cost of inventories recognised as an expense includes Rs. Nil (during 2016-2017: Rs.25 lakhs) in respect of writedowns of inventory to net realisable value, and has been reduced by Rs. 30.46 lakhs (during 2016-2017: Rs. 8.61 lakhs) in respect of the reversal of such write-downs.

3 The mode of valuation of inventories has been stated in note 2 (f).

4 Assets pledged as security

Refer Note 17 (A) and 17 (B) on Borrowings.

The credit period on sales of goods ranges from 30 to 75 days.

At 31 March 2018 and as at 31 March 2017, the Company had no customer that owed the Company more than 10% of total receivables outstanding and as at April 1 2016, one customer owed the company Rs. 187.78 lakhs and accounted for approximately 15.41 % of all the receivables outstanding.

The tax rate used for the year 2017-18 is 25.75% (25% education cess @ 2% secondary and higher education cess @ 1%) and year 2016-17 is 30.9% (30% and education cess @ 3%) payable by corporate entities in india taxable profits under the Income Tax Act, 1961.

(e) Amounts on which Deferred tax asset has not been created:

Deferred tax assets on carry forward unused tax losses have been recognised to the extent of deferred tax liabilities less deferred tax assets on other taxable temporary difference. It is expected that any reversals of the deferred tax liability would be offset against the reversal of the deferred tax asset.

(i) (a) Rights attached to equity shares:

1) The Company has only one class of equity shares having a face value of Rs. 2 each. The Equity Shareholders have all the rights of equity shares as provided by the Companies Act, 2013 and Rules & Regulations made thereunder.

2) The Company in General Meeting may declare dividend to be paid to members according to their respective rights, but no dividend shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend.

3) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.

(ii) Nature and purpose of each reserve within Other equity Deemed capital contribution

This represents the difference between fair valuation and transaction price on initial recognition of preference shares issued to a Promoter Shareholder.

Footnotes:

Secured

Term loans from Bank

(a) Rs. 139.71 lacs (March 31, 2017 Rs. 417.04 lacs and March 31, 2016 Rs. 710.82 lacs) secured by exclusive first charge over immovable Property, plant and equipment ( buildings ), leasehold land of the Company and its movable plant & machinery, furniture & fixtures and other movables at its factory at Shendra (near Aurangabad). The term loan is repayable in remaining 2 equal quarterly instalments by September 2018 and carries floating interest rate of LIBOR 350 bps. The present rate of interest is 4.98% .

(b) As at March 31, 2016 Rs. 1918.92 lacs was secured by security stated in (a) above. The term loan was fully repaid in November 2016.

(c) Rs. 1491.41 lacs (March 31, 2017 Rs. Nil and March 31, 2016 Rs. Nil) secured by subservient charge on current assets and movable Property, plant and equipment and pledge of 2,083,250 shares of NRB Bearings Limited held by a director of the Company . The working capital term loan is repayable in total 17 quaterly installments comprisinng of 5 Quaterly installment of Euro 0.38 lac each starting from 27 Feb , 2019 till 2nd March 2020 and 12 Quaterly installment of Euro 1.42 lacs each starting from 1 June , 2020 till 28 February 2023 and carries interest rate of EURIBOR 6M 3.05 % which has been converted in to a fixed rate loan carrying interest rate of a 6.3 % p.a through Interest rate Swap.

(d) Rs. Nil (March 31, 2017 Rs. 988.39 lacs and March 31, 2016 Rs. Nil) secured by subservient charge on current assets and movable Property, plant and equipment and pledge of 24,46,808 shares of NRB Bearings Limited held and personal guarantee by a director of the Company . The working capital term loan was repayable in two equal installments of Rs. 500 lacs each on 30 June, 2017 and on 30 December, 2017 and carried interest rate of one year MCLR 70 bps. The term loan is fully repaid in September 2017.

(e) Rs. Nil (March 31, 2017 Rs. 1077.57 lacs and March 31, 2016 Rs. Nil) secured by subservient charge on current assets and movable Property, plant and equipment and pledge of 20,95,238 shares of NRB Bearings Limited held by a promoter of the Company and personal guarantee by two directors and promoter of the Company . The working capital term loan was repayable in monthly installments of Rs. 10 lacs from April 2017 to June 2017 , of Rs. 15 lacs from July 2017 to September 2017, of Rs. 86 lacs October 2017 to August 2018 and of Rs. 79 lacs in September 2018 and carried interest rate of one year MCLR 85 bps. The term loan is fully repaid in October 2017.

Term loan from Others

(f) Rs. 23.12 lacs (March 31, 2017 Rs. 23.70 lacs and March 31, 2016 Rs. 30.88 lacs) secured by hypothecation of vehicles. Out of these , the term loan of Rs. 1.35 lacs (March 31, 2017 Rs. 3.83 lacs and March 31, 2016 Rs. 6.06 lacs) carrying interest rate of 10.71 % is repayable in remaining 6 equal monthly instalments by September, 2018, the term loan of Rs. 14.25 lacs (March 31, 2017 Rs. 19.87 lacs and March 31, 2016 Rs. 24.82 lacs) carrying interest rate of 12.75 % is repayable in remaining 24 equal monthly instalments by April, 2020 and the term loan of Rs. 7.52 lacs (March 31, 2017 Rs. Nil and March 31, 2016 Rs. Nil) carrying interest rate of 8.82 % is repayable in remaining 49 equal monthly instalments by April, 2022.

Unsecured Term loans from others

(g) Rs. 1639.06 lacs (March 31, 2017 Rs. Nil and March 31, 2016 Rs. Nil) secured by pledge of 2,458,597 shares of NRB Bearings Limited held by a director and a promoter of the Company. The term loan is repayable in eight equal quaterly installments of Rs. 206.25 lacs starting from 6 Dec , 2019 and carries interest rate of 10.5 % p.a.

Loans from related parties

(h) 100 lacs each 6 % Redeemable Cumulative Non -Convertible Preference shares of Rs. 10 each fully paid up were issued to a Promotor shareholder in March 2016 and in April 2016 respectively with redemption at the end of 5 years from the date of issue. During the year, the terms of existing Redeemable Cumulative Non -Convertible Preference shares were changed w.e.f. February 15, 2018 the preference dividend rate is modified to 2 % and redemption term is changed to 10 years for above said preference shares. 200 lacs 2 % Redeemable Cumulative Non -Convertible Preference shares of Rs. 10 each fully paid up were issued to a Promotor shareholder in February 2018 with redemption at the end of 10 years.

Footnotes:

(i) Loans repayable on demand from banks

a) Rs. 1637.35 lacs (March 31, 2017 Rs. 1,897.72 lacs and March 31, 2016 Rs. Nil) secured by first pari passu charge on all present and future stock and book debts of the Company and second pari pasu charge over immovable Property, plant and equipment ( buildings ), leasehold land of the Company and its movable plant & machinery, furniture & fixtures and other movables at its factory at Shendra (near Aurangabad). The present interest rate is in the range of 11.50% to 14.50 % p.a.

(b) As at March 31, 2016 Rs. 1,010.93 lacs secured by first exclusive charge on all present and future stock and book debts of the Company.

(c) As at March 31, 2016 Rs. 499.92 lacs secured by first pari pasu charge on all present and future stock and book debts of the Company.

ii) Other loans from banks

As at March 31, 2016 Rs. 419.82 lacs was secured by security stated in footnote (i) (b) above.

Notes:

1. The company does not have any dues outstanding to Micro and Small Enterprises as mentioned in the Micro, Small and Medium Enterprises Development Act 2006. This is determined on the basis of information available with the Company. This has been relied upon by by the auditors.

2. The credit period ranges from 45 days to 90 days .

(i) As at 31 March 2018, the increase in carrying amount of the provision for compensated absences result from further leave accumulation during the FY 2017-18 . As at 31 March 2017, the decrease in the carrying amount of the provision for compensated absences results from benefits being paid during the year ended March 31, 2017.

(ii) Refer note 35 for Employee Benefits related disclosures.

Note :

Excise duty on sale of products was included under Revenue from operations and disclosed separately under expenses upto all reporting periods ending June 30, 2017. Post implementation of Goods and Service Tax (GST) w.e.f. July 01, 2017, Revenue from operations is reported net of GST, as unlike Excise duty, GST is not a part of Revenue.

NOTE 5 : Leases

1. Lease Expense:

(a) The company has taken land, office and residential premises on operating lease. Lease rental charged to the Statement of Profit and Loss for the year ended 31 March, 2018 Rs.14.49 Lakhs (Previous year Rs.13.95 Lakhs).

(b) (i) Under some agreements, refundable interest free deposit have been given and contain a provision for renewal.

(ii) The agreements provide for early termination by either party with a notice period which varies from 1 month to 6 months.

2. Lease Income:

The Company has entered into lease agreement effective from 8 March, 2013 for certain portion of its factory and office premises including furniture and fixtures, electrical installation, etc. During the year, Rs. 76.80 lakhs lakhs (previous Rs. 76.80 lakhs) recognised as rental income in the Statement of Profit and Loss. The agreement contains renewal clause. The agreement is expired on 8 February, 2018 and is extended till 31 March, 2018 with same terms and conditions.

NOTE 6 : Employee Benefits Brief description of the Plans:

1) Defined contribution plans :

a) Provident and Family Pension Fund

The eligible employees of the company are entitled to receive post employment benefits in respect of provident and family pension fund, in which both employees and the company make monthly contributions at a specified percentage of the employees’ eligible salary (currently 12% of employees’ eligible salary). The contributions are made to the Regional Provident Fund Commissioner. Provident Fund and Family Pension Fund are classified as Defined Contribution Plans as the company has no further obligations beyond making the contribution

b) Superannuation

The eligible employees of the company are entitled to receive post employment benefits in respect of superannuation scheme, in which the company makes quarterly contributions at 15% of employees’ eligible salary. Superannuation scheme is classified as Defined Contribution Plan as the Company has no further obligations beyond making the contribution.

The Company has recognized, in the Statement of profit and loss for the year, an amount of Rs. 87.70 lakhs ( March 31, 2017 Rs. 78.64 lakhs) as expenses under defined contribution plans.

2) Defined Benefit Plans : (Gratuity Funded)

The Company has an obligation towards gratuity, a funded defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of the employment of an amount equivalent to 15 days salary, as applicable, payable for each completed year of service, without any payment ceiling. Vesting occurs upon completion of five years of service.

Nature of benefits:

The gratuity benefits payable to the employees are based on the employee’s service and last drawn salary at the time of leaving. The employees do not contribute towards this plan and the full cost of providing these benefits are met by the Company.

Regulatory framework:

There are no minimum funding requirements for a gratuity plan in India. The trustees of the gratuity fund have a fiduciary responsibility to act according to the provisions of the trust deed and rules. Since the fund is income tax approved, the Company and the trustees have to ensure that they are at all times fully compliant with the relevant provisions of the income tax and rules. Besides this if the Company is covered by the Payment of Gratuity Act, 1972 then the Company is bound to pay the statutory minimum gratuity as prescribed under this Act.

Governance of plan:

The Trust establised for the purpose, has arrangement with Insurance Company (currently HDFC Standard Life Insurance Company Limited) for future payments of gratuties on behalf of the Trust.

Inherent risk

The plan is of a final salary defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, there is a risk for the Company that any adverse salary growth or demographic experience or inadequate returns on underlying plan assets can result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature the plan is not subject to any longevity risks.

The most recent actuarial valuation of the present value of the defined benefit obligation was carried out at March 31, 2018 by an independent actuary. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

H. Sensitivity Analysis

Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes in demographic assumptions. The key actuarial assumptions to which the benefit obligation results are particularly sensitive to are discount rate and future salary escalation rate. The following table summarizes the impact on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 100 basis points.

These sensitivities have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analyses.

The above sensitivity analyses are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

J. Other Disclosures

a) The weighted average duration of the obligations as at March 31, 2018 is 8 years (March 31, 2017: 8 Years; April 1, 2016: 9 Years).

b) The Company expects to contribute Rs. 35.24 lakhs to the plan during financial year 2018-19.

NOTE 7 : Segment information

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (“CODM”) of the Company. The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Managing Director and Chief Financial Officer of the Company. The Company operates only in one Business Segment i.e. industrial bearings, hence does not have any reportable Segments as per Ind AS 108 “Operating Segments”.

Information about major customers:

Revenues of approximately Rs. 417.69 Lakhs (March 2017: Rs. 429.13 Lakhs) arose from sales to one customer who contributed 10% or more to the Company’s revenue for both years ended March 31, 2018 and March 31, 2017.

NOTE 8 : Managerial Remuneration

The Board of Directors and the Members of the Company had approved the appointment and remuneration of Mr. Devesh Singh Sahney as Managing Director of the Company (“hereinafter MD”) for a term of 5 years effective October 01, 2012 to September 30, 2017 at their meetings held on October 04, 2012 and October 15, 2012 respectively.

The Central Government vide letter dated August 28, 2014 approved the appointment of MD for a term of five years and partially addressed the remuneration payable (Basic remuneration & Cash allowances) for the period upto March 31,2014 and has not specifically addressed Perquisites payable for that period. The Company has submitted an application for obtaining clarification/approval from the Central Government in respect of perquisites paid for the period upto March 31, 2014.

Accordingly remuneration paid to the MD of Rs. 34.81 lacs for the period from October 01,2012 to March 31, 2014 is subject to approval by the Central Government.

In terms of Clause 12.1 of the Scheme referred to in Note 1 above to the financial statement, the terms and conditions of the employment of all the employees transferred from NRB shall not be less favourable than those applicable to them with reference to NRB in relation to Industrial Bearing Undertaking on the effective date. Since the remuneration paid to the Managing Director is the same as that was paid to him by NRB as Executive Director, the Company is confident of getting approval from the Central Government for the remuneration paid / payable for the relevant period. Pending such clarification / approval, the Managing Director holds the remuneration paid in trust for the company.

Pursuant to provisions of section 197 read with Schedule V of the Companies Act, 2013, the Company had obtained approval by way of a special resolution from the members in the Annual General Meeting held on July 7, 2015 and amended the terms of remuneration of MD by reducing the tenure of remuneration payable to three years (April 01, 2014 to March 31, 2017). The Nomination & Remuneration Committee and Board of Directors of the Company approved remuneration payable to the MD from April 01, 2014 to March 31, 2017.

NOTE 9 : Capital management and Risk management

I Capital Management

The Company’s capital management strategy is to effectively determine, raise and deploy capital so as to create value for its shareholders. The same is done through a mix of either equity and/or preference and/or combination of short term / long term debt as may be appropriate.

The Company determines the amount of capital required on the basis of its product, capital expenditure, operations and strategic investment plans. The same is funded through a combination of capital sources be it either equity and/or preference and/or combination of short term/long term debt as may be appropriate.

II Financial Risk Management Framework

The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk . In order to manage the aforementioned risks, the Company operates a risk management policy and a program that performs close monitoring of and responding to each risk factors.

A CREDIT RISK

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).

Trade receivables

Customer credit risk is managed as per the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on payment performance over the period of time. The Company’s exposure of its customers are continuously monitored based on the customer’s past performance and business dynamics. Credit exposure is controlled by customer’s credit limits that are reviewed and approved by the management at regular intervals.

An impairment analysis is performed at each reporting date. The Company applies the simplified approach to providing for expected credit losses prescribed by Ind AS 109, which permits the use of the lifetime expected loss provision for all trade receivables. The Company has computed expected credit losses based on a provision matrix which uses historical credit loss experience of the Company and where applicable, specific provisions are made for individual receivables.

B LIQUIDITY RISK

(i) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Company’s short-, medium- and long-term funding and liquidity management requirements. The Company manages liquidity risk by way of banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

(ii) Maturities of financial liabilities

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities . The amount disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.

Interest Rate sensitivity

If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Company’s loss for the year ended March 31, 2018 would increase/decrease by Rs.1.40 lakhs (year ended March 31, 2017 by Rs. 4.17 lakhs). This is mainly attributable to the Company’s exposure to borrowings at floating interest rates.

C Market Risks

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Company uses derivatives to manage any significant market risks. Derivatives are only used for economic hedging purposes and not as speculative investments. All such transactions are carried out within the guidelines set by the Board of Directors .

(i) Currency Risk

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company’s exposure to currency risk relates primarily to the Company’s operating activities when transactions are denominated in a different currency from the Company’s functional currency.

The Company’s foreign currency exposure are denominated in US Dollar, Pound Sterling, Euro and Japanese Yen) which arise mainly from foreign exchange imports, exports and foreign currency borrowings.

As at the end of the reporting period, the carrying amounts of the company’s foreign currency denominated financial assets and financial liabilities are as follows:

(ii) Interest Rate Risk

Refer note B (ii) for interest rate sensitivity

The Company has entered in to Interest Rate Swap contract wherein the Company has converted its floating interest rate loan into a fixed interest rate loan, in order to reduce the Company’s cash flow exposure resulting from variable interest rates on borrowings.

(iii) Raw material price risk

The Company does not have significant risk in raw material price variations. In case of any variation in price same is passed on to the customer through appropriate adjustments to selling prices.

NOTE 10 : Fair Value Disclosures

This section explains the judgment and estimates made in determining the fair value of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair value are disclosed in financials statements. To provide an indication about the reliability of the inputs used in determining the fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standards.

c) Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required):

The Company consider that the carrying amount of financial asset and financial liabilities recognised in the financial statements approximate their fair value.

NOTE 11 : First-time adoption of Ind-AS

First Time Ind AS Adoption reconciliations

(i) Reconciliation of Total Equity as at 31 March 2017 and 1 April 2016:

(iv) There are no material adjustments to the Statement of Cash Flows

(v) Notes to the reconciliation to previous GAAP:

A On transition to Ind AS, the Company has treated fair value as deemed cost for plant and machinery resulting in an increase in carrying value as compared to the previous GAAP. The consequential impact of additional depreciation on fair value increase is recognised in the Statement of profit or loss for year ended March 31, 2017.

The effect of this change is an increase in Property, Plant and Equipment-Tangible and total equity as at March 31, 2017 of Rs. 1,690.40 lakhs, as at April 1, 2016 of Rs. 1,825.88 lakhs and increase in depreciation and loss before tax for the year ended March 31, 2017 of Rs. 135.50 lakhs.

B Under previous GAAP, redeemable preference shares were classified as part of total equity. Dividends declared (if any) on these preference shares were required to be adjusted against retained earnings and not recognised as finance costs in profit or loss. However, under Ind AS, financial instruments are classified as a liability or equity according to the substance of the contractual arrangement and not its legal form.

Further, under Ind AS, at initial recognition, an entity is required to measure a financial liability at its fair value. The present value (i.e. fair value) of the liability component is calculated using the market interest rate for similar borrowings. The difference between the proceeds of the preference shares issued and the fair value of the liability has been assigned to the equity component.

The interest on liability component is recognized using the effective interest method and has been recognised as finance costs in profit or loss.

The effect of this change is as follows:

a) Decrease in total equity as at March 31, 2017 of Rs. 1558.06 lakhs and as at April 1, 2016 of Rs. 685.41 lakhs

b) Increase in non-current borrowings as at March 31, 2017 of Rs. 1558.06 lakhs and as at April 1, 2016 of Rs. 685.41 lakhs

c) Increase in finance cost and loss for the year ended March 31, 2017 of Rs. 186.63 lakhs

C Under previous GAAP, the Company had entered into derivative contracts in the nature of call spread currency options and interest rate swaps. These derivative contracts were marked-to-market and losses were recognised in the Statement of Profit and Loss while, gains arising on the same were not recognised on grounds of prudence. Premium / discount on such contracts were amortised over the period of the contracts if such contracts relate to monetary items as at the balance sheet date.

Under Ind AS, all derivatives contracts need to be recognised at fair values with resulting gains or losses due to changes in fair value recognised in the Statement of Profit and Loss.

The effect of this change is an increase in total equity and other current financial assets as at March 31, 2017 (Rs. Nil), as at April 1, 2016 of Rs. 168.37 lakhs and increase in loss before tax for the year ended March 31, 2017 of Rs. 168.37 lakhs.

D Under previous GAAP, actuarial gains and losses on remeasurement of net defined benefit obligation were recognized in statement of profit or loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit obligation which is recognised in other comprehensive income. The actuarial gain for the year ended March 31, 2017 was Rs. 13.30 lakhs . This change does not affect total equity, but there is a decrease in loss before tax and in loss for the year ended March 31, 2017 of Rs. 13.30 lakhs.

E Under previous GAAP, lease hold land was considered as tangible fixed assets and was amortised over the period of the lease. Under Ind-AS, interest in lease hold land is considered as leases as per definition and classification criteria in Ind AS 17. Accordingly in respect of net written down value of leasehold land as at March 31, 2017 Rs. 733.32 lakhs (as at April 1, 2016 Rs. 741.51 lakhs ) has been classified under non-current assets and Rs. 8.18 lakhs as at 31 March, 2017 (Rs. 8.18 lakhs as at 1 April, 2016) to other current assets.

Similarly the amortisation of lease hold land for the year ended on March 31, 2017 of Rs. 8.18 lakhs has been classified under other expenses as lease rent.

This change does not affect total equity as at April 1, 2016 and March 31, 2017 and the loss before tax or loss for the year ended March 31, 2017.

F Under previous GAAP, revenue from sale of product was presented net of excise duty under revenue from operations. Whereas, under Ind AS, revenue from sale of products includes excise duty. The corresponding excise duty expense of Rs. 319.53 lakhs for the year ended on March 31, 2017 is presented separately on the face of the statement of profit and loss as “Excise duty”. This change does not affect total equity as at April 1, 2016 and March 31, 2017 and the loss before tax or loss for the year ended March 31, 2017.

G Under previous GAAP, excise duty on closing stock of Rs. 55.74 lakhs for year ended on March 31, 2017 was presented under other expenses. Whereas, under Ind AS, the same is presented as part of “Changes in stock of finished goods, work-in-progress and stock-in-trade”. This change does not affect total equity as at March 31, 2017 and the loss before tax or loss for the year ended March 31, 2017.

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Mar 31, 2017

Liabilities are classified as current when it satisfies any of the following criteria:

1. it is held primarily for the purpose of being traded;

2. it is due to be settled within twelve months after the reporting date; or

3. the company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

All other liabilities are classified as non-current.

4. Rights attached to equity shares:

5. The Company has only one class of equity shares having a face value of Rs. 2 each. The Equity Shareholders have all the rights of equity shares as provided by the Companies Act, 2013 and Rules & Regulations made there under.

6. The Company in General Meeting may declare dividend to be paid to members according to their respective rights, but no dividend shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend.

7. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.

8. Rights attached to Preference shares:

9. Preference Shares rank prior in respect to payment of Dividend or redemption amount compared to equity shareholders of the Company without having voting powers and that in the event of winding up right over the equity shareholders in participation of surplus funds, surplus assets and profits of the Company. Annual preference dividend is 6%. Preference shares shall be redeemed at the end of 5 years from the date of allotment.

10. On account of loss for the year, no dividend is proposed on preference shares. Arrears of the preference dividend as at the year end is Rs. 143.78 Lakhs ( as at 31 March, 2016 Rs. 0.24 Lakhs.)

Footnotes: Term loans from Bank

11. Rs. 417.04 lakhs (Previous year Rs. 710.82 lakhs) secured by exclusive first charge over immovable fixed assets (leasehold land and buildings thereon) of the Company and its movable plant & machinery, furniture & fixtures and other movables at its factory at Shendra (near Aurangabad). The term loan is repayable in remaining 6 equal quarterly installments by September 2018 and carries floating interest rate of LIBOR 350 bps. The present rate of interest is 4.45%.

12. Previous year Rs. 1,918.92 lakhs was secured by security stated in (a) above. The term loan is fully repaid in November 2016.

13. Rs. 1,000 lakhs (Previous year Rs. Nil) secured by subservient charge on current assets and movable fixed assets and pledge of 24,46,808 shares of NRB Bearings Limited held and personal guarantee by a director of the Company. The working capital term loan is repayable in two equal installments of Rs. 500 lakhs each on 30 June, 2017 and on 30 December, 2017 and carries interest rate of one year MCLR 70 bps. The present rate of interest is 10.40 %.

14. Rs. 1,100 lakhs ( Previous year Rs. Nil) secured by subservient charge on current assets and movable fixed assets and pledge of 20,95,238 shares of NRB Bearings Limited held by a promoter of the Company and personal guarantee by two directors and promoter of the Company. The working capital term loan is repayable in monthly installments of Rs. 10 lacs from April 2017 to June 2017 , of Rs. 15 lakhs from July 2017 to September 2017, of Rs. 86 lakhs October 2017 to August 2018 and of Rs. 79 lakhs in September 2018 and carries interest rate of one year MCLR 85 bps. The present rate of interest is 10.55 % .

Term loan from Others

15. Rs. 23.70 lakhs (Previous year Rs. 30.88 lakhs) secured by hypothecation of vehicles. Out of these , the term loan of Rs. 3.83 lakhs ( Previous year Rs. 6.06 lacs) carrying interest rate of 10.71 % is repayable in remaining 18 equal monthly installments by September, 2018 and the term loan of Rs. 19.87 lakhs (previous year Rs. 24.82 lakhs) carrying interest rate of 12.75 % is repayable in remaining 37 equal monthly installments by April, 2020.

16. Loans repayable on demand from bank

17. Rs. 1,897.72 lakhs (Previous year Rs. Nil) secured by first pari passu charge on all present and future stock and book debts of the Company and second pari pasu charge over immovable fixed assets (leasehold land and buildings thereon) of the Company and its movable plant & machinery, furniture & fixtures and other movables at its factory at Shendra (near Aurangabad). The present interest rate is in the range of 11.50% to 14.50 % p.a.

18. Rs. Nil (Previous year Rs. 1,010.93 lakhs) secured by first exclusive charge on all present and future stock and book debts of the Company.

19. Rs. Nil (Previous year Rs. 499.92 lakhs) secured by first pari pasu charge on all present and future stock and book debts of the Company.

20. Other short term borrowings

Previous year Rs. 419.82 lakhs was secured by security stated in footnote (i) (b) above.

21.- Disclosure under Accounting Standard 19 - " Leases"

22. Lease Expense

23. The company has taken office and residential premises on operating lease. Lease rental charged to the Statement of Profit and Loss for the year ended 31 March, 2017 Rs. 5.77 lakhs (previous year Rs. 2.82 lakhs).

24. Under some agreements, refundable interest free deposit have been given and contain a provision for renewal.

25. The agreements provide for early termination by either party with a notice period which varies from 1 month to 6 months.

26. Lease Income

The Company has entered into lease agreement effective from 8 March, 2013 for certain portion of its factory and office premises including furniture and fixtures, electrical installation, etc. During the year, Rs. 76.80 lakhs (previous Rs. 76.80 lakhs) recognized as rental income in the Statement of Profit and Loss. The agreement contain renewal clause. The agreement provide for termination prior to the expiry of the term, as per mutual understanding of the parties or due to breach of terms and conditions as mentioned in the agreement.

27- Managerial Remuneration

The Board of Directors and the Members of the Company had approved the appointment and remuneration of Mr. Devesh Singh Sahney as Managing Director of the Company ("hereinafter MD") for a term of 5 years effective October 01, 2012 to September 30, 2017 at their meetings held on October 04, 2012 and October 15, 2012 respectively.

The Central Government vide letter dated August 28, 2014 approved the appointment of MD for a term of five years and partially addressed the remuneration payable (Basic remuneration & Cash allowances) for the period up to March 31,2014 and has not specifically addressed Perquisites payable for that period. The Company has submitted an application for obtaining clarification/approval from the Central Government in respect of perquisites paid for the period up to March 31, 2014.

Accordingly remuneration paid to the MD of Rs. 34.81 lakhs for the period from October 01,2012 to March 31, 2014 is subject to approval by the Central Government.

In terms of Clause 12.1 of the Scheme referred to in Note 1 above to the financial statement, the terms and conditions of the employment of all the employees transferred from NRB shall not be less favourable than those applicable to them with reference to NRB in relation to Industrial Bearing Undertaking on the effective date. Since the remuneration paid to the Managing Director is the same as that was paid to him by NRB as Executive Director, the Company is confident of getting approval from the Central Government for the remuneration paid / payable for the relevant period. Pending such clarification / approval, the Managing Director holds the remuneration paid in trust for the company.

Pursuant to provisions of section 197 read with Schedule V of the Companies Act, 2013, the Company has obtained approval by way of a special resolution from the members in the Annual General Meeting held on July 7, 2015 and amended the terms of remuneration of MD by reducing the tenure of remuneration payable to three years (April 01, 2014 to March 31, 2017). The Nomination & Remuneration Committee and Board of Directors of the Company have approved remuneration payable to the MD from April 01, 2014 to March 31, 2017.

28- Issue of Preference Shares

The members of the Company have given their consent by passing special resolution through Postal Ballot on 12 March, 2016 to issue Preference Shares to Mr. Trilochan Singh Sahney, in one or more tranches, within one year from the approval of members, for an amount not exceeding Rs. 20,00,00,000/- (Rupees Twenty Crores Only) through private placement by issuance of 2,00,00,000 Cumulative, Redeemable, Non-convertible Preference Shares at face value of Rs. 10/- each and that the preference dividend be paid annually at 6% p.a. post tax expenses and shall be redeemed at the end of 5 years from the date of allotment.

The Company has allotted Cumulative, Redeemable, Non-convertible Preference Shares at face value of Rs. 10/- in four tranches. In previous year, 1st tranch of 50,00,000 Preference shares was allotted on 30 March, 2016 and 2nd Tranch of 50,00,000 Preference shares on 31 March, 2016. In Current year, 3rd tranch of 50,00,000 Preference shares was alloted on 5 April, 2016 and 4th and last tranch of 50,00,000 Preference shares on 6 April, 2016.

29. The figures for the previous year have been regrouped / restated where necessary to conform to the current year''s classification.

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Mar 31, 2015

1. Corporate Information:

NRB Industrial Bearings Limited (The Company) was incorporated on 24th day of February, 2011 as a Private Limited Company under the provisions of the Companies Act, 1956 (the Act).On the acquisition of equity shares of the Company on 4th November, 2011 by NRB Bearings Limited, a public limited company, the Company in terms of Section 3 (1) (iv) (c) of the Act became a Public Limited Company and the name of the Company was changed from "NRB Industrial Bearings Private Limited" to "NRB Industrial Bearings Limited"

The Company is engaged in the business of manufacturing and selling of all types of industrial bearings.

The Scheme of Arrangement (the Scheme) for the transfer of Industrial Bearings Undertaking of NRB Bearings Limited (NRB) to the Company under section 391 to 394 read with section 100 to 103 of the Companies Act, 1956 was sanctioned by the Hon''ble High Court of Judicature, Bombay on 24th August 2012. The Scheme, which has become operative from 25th September, 2012 upon filing of the certified copies of the Orders of the Hon'' ble High Court with the Registrar of Companies became effective from 1st October, 2012 (the Appointed Date).

Pursuant to the Scheme, with effect from the Appointed date the Industrial Bearings Undertaking of NRB is transferred and vested in the Company as a going concern, with all its assets, liabilities, properties, rights, benefits and interest therein subject to existing charges thereon.

In terms of the Scheme, in consideration of the transfer and vesting of the Industrial Bearings Undertaking of NRB, in respect of every 4 equity shares of Rs. 2 each, held by the shareholders of NRB, 1 equity share of Rs. 2 each fully paid up aggregating 24,230,650 equity shares have been issued and allotted on 31st October, 2012, to the shareholders of NRB whose names appeared in the Register of Members, as on 25th October, 2012, being the record date.

All the staff, workmen and employees of Industrial Bearings Undertaking of NRB in service as on 1st October, 2012 have become staff, workmen and employees of the Company without any break in their service.

In terms of the Scheme, the Company recorded all the assets and liabilities pertaining to the Industrial Bearings Undertaking, at the respective book values appearing in the books of NRB as on the Appointed Date. The Company credited to its share capital account, the aggregate face value of the equity shares issued by it pursuant to the Scheme. The difference of Rs. 5,700.16 lacs between excess of net assets and the amount credited as share capital after adjusting the cancellation of existing share capital of the Company held by NRB has been credited to Capital Reserve. The equity shares allotted have been listed on the Bombay Stock Exchange and the National Stock Exchange on 9th April, 2013.

2. Rights attached to equity shares:

a) The Company has only one class of equity shares having a face value of Rs. 2 each. The Equity Shareholders have all the rights of equity shares as provided by the Companies Act, 2013 and Rules & Regulations made thereunder

b) The Company in General Meeting may declare dividend to be paid to members according to their respective rights, but no dividend shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend.

c) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.

3. Footnotes:

Term loans from Bank

(a) Rs. 4224.88 lacs (Previous period Rs. 7162.37 lacs) secured by exclusive first charge over immovable fixed assets (leasehold land and buildings thereon) of the Company and its movable plant & machinery, furniture & fixtures and other movables at its factory at Shendra (near Aurangabad). The term loan is repayable in remaining 7 equal quarterly installments by November 2016. Interest rate swap taken to convert floating interest rate of LIBOR 300 bps under the loan agreement into fixed interest rate of 6.45% p.a.

(b) Rs. 938.86 lacs (Previous year Rs. 928.45) to be secured by security stated in (a) above (security created after the year end). The term loan is repayable by September 2018 in 14 equal quarterly installments commencing from June 2015 and carries floating interest rate of LIBOR 350 bps.

Term loan from Others

(a) Rs. 36.86 lacs (previous period Rs. 10.29 lacs) secured by hypothecation of vehicles. Out of these , the term loan of Rs. 8.06 lacs carrying interest rate of 10.71 % is repayable in remaining 42 equal monthly installments by September, 2018 and the term loan of Rs. 28.80 lacs carrying interest rate of 12.75 % is repayable in 60 equal monthly installments by April, 2020.

4. Contingent liabilities not provided for:

a) Bank guarantees

* To Indian Custom Department 3.95 55.00

* To Maharashtra Pollution Control Board 5.00 2.00

5. Disclosure under Accounting Standard - "Leases"

1) Lease Expense

(a) The company has taken vehicle and residential premises on operating lease. Lease rental charged to the Statement of Profit and Loss for the period ended 31.03.2015 Rs. 24.67 lacs (previous period Rs. 30.29 lacs includes minimum lease payment of 9.45 lacs for the non-cancellable period up to February, 2013)

(b) (i) Under some agreements, refundable interest free deposit have been given and contain a provision for renewal.

(ii) The agreements provide for early termination by either party with a notice period which varies from 1 month to 6 months.

2) Lease Income

The Company has entered into lease agreements for certain portion of its factory and office premises including furniture and fixtures, electrical installation, etc. During the period, Rs.96.00 lacs (previous period Rs. 68.90 lacs) recognised as rental income in the Statement of Profit and Loss. The agreement existing as at the year end provide for increase in rent after 3 years and contain renewal clause. The agreement provide for termination prior to the expiry of the term, as per mutual understanding of the parties or due to breach of terms and conditions as mentioned in the agreements.

5. Disclosure under Accounting Standard - " Segment Reporting"

The operations of the Company fall within a single primary segment viz. Industrial bearings.

6. Managerial Remuneration

The Board of Directors and the Members of the Company had approved the appointment and remuneration of Mr. Devesh Singh Sahney as Managing Director of the Company ( ""hereinafter MD"") for a term of 5 years effective October 01, 2012 to September 30, 2017 at their meetings held on October 04, 2012 and October 15, 2012 respectively.

The Central Government vide letter dated August 28, 2014 approved the appointment of MD for a term of five years and partially addressed the remuneration payable (Basic remuneration & Cash allowances) for the period upto March 31,2014 and has not specifically addressed Perquisites payable for that period. The Company has submitted an application for obtaining clarification/approval from the Central Government in respect to perquisites paid for the period upto March 31, 2014.

Pursuant to provisions of section 179 read with Schedule V of the Companies Act, 2013, the Company will seek approval by way of a special resolution from the members in the forthcoming Annual General Meeting to amend the terms of remuneration of MD by reducing the tenure of remuneration payable to three years (April 01, 2014 to March 31, 2017). The Nomination & Remuneration Committee and Board of Directors of the Company have approved remuneration payable to the MD from April 01, 2014 to March 31, 2017.

Accordingly remuneration paid to the MD of Rs. 6.00 lacs for the quarter ended March 31, 2014 and Rs. 28.81 lacs for the period ended December 31, 2013 is subject to approval by the Central Government and Rs. 65.03 lacs for the period from April 01, 2014 to March 31, 2015 is subject to approval by the members.

In terms of Clause 12.1 of the Scheme referred to in Note 1 above to the financial statement, the terms and conditions of the employment of all the employees transferred from NRB shall not be less favorable than those applicable to them with reference to NRB in relation to Industrial Bearing Undertaking on the effective date. Since the remuneration paid to the Managing Director is the same as that was paid to him by NRB as Executive Director, the Company is confident of getting approval from the Central Government and members for the remuneration paid / payable for the relevant period. Pending such clarification / approval, the Managing Director holds the remuneration paid in trust for the company.

7. (a) In terms of the separate Memorandum of Understanding entered into on 1st November, 2013 with NRB Bearings Limited, the Company has,

(i) assigned its leasehold rights in the plot of land at Aurangabad admeasuring 576 sq. mtrs. with building structure thereon admeasuring 144 sq. mtrs. of built up area for a consideration of Rs. 270 lacs. The profit on assignment of its leasehold rights of Rs. 268.44 lacs is included in Note 27 - Exceptional items.

(ii) granted exclusive rights to use 700 Sq. ft. of carpet area situated on the 3rd Floor of Building Dhannur at Mumbai, for a consideration of Rs. 185 Lacs . The profit on grant of exclusive rights of Rs. 185 lacs is included in Note 27 - Exceptional items.

8. NRB Bearings Ltd (NRB) had entered into a Joint Venture agreement in the year 2011 with IBC Industrial Bearings and Components AG, Switzerland to form a joint venture Company for manufacture of Angular Contact Bearings. Pending formation of the joint venture company, the Project was started in 2011 by NRB as a part of Industrial Bearings Undertaking and Loan of USD 2.5 Million was availed for the Project. In terms of the Scheme referred to in Note 1, Industrial Bearings Undertaking of NRB which included the said Project was transferred and vested in the Company. The Project of Angular Contact Bearings was completed in December, 2013 and Assets pertaining to the Project having aggregate cost of Rs. 3031.87 lacs (including capitalised interest on the Loan) were sold to NRB IBC Bearings Pvt. Ltd (NIBC). Also, liabilities of Rs. 694.14 lacs outstanding relating to machineries purchased were transferred. Further, premium of Rs.104.01 lacs on Call Spread Option Contract relating to the loan referred to above has been debited to NIBC. The amount of Rs. 2026.74 lacs is fully recovered during the period ended 31st March 2015.

9. The figures for the previous period have been regrouped / restated where necessary to conform to the current period''s classification.

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Dec 31, 2013

1. Corporate Information:

NRB Industrial Bearings Limited (''the Company) was incorporated on 24th day of February, 2011 as a Private Limited Company under the provisions of the Companies Act, 1956 (the Act). On the acquisition of equity shares of the Company on 4th November, 2011 by NRB Bearings Limited, a public limited company, the Company in terms of Section 3 (1) (iv) (c) of the Act became a Public Limited Company and the name of the Company was changed from "NRB Industrial Bearings Private Limited" to "NRB Industrial Bearings Limited"

The Company is engaged in the business of manufacturing and sellingof all types of industrial bearings.

The Scheme of Arrangement (the Scheme) for the transfer of Industrial Bearings Undertaking of NRB Bearings Limited (NRB) to the Company under section 391 to 394 read with section 100 to 103 of the Companies Act, 1956 was sanctioned by the Humble High Court of Judicature, Bombay on 24th August 2012. The Scheme, which has become operative from 25th September, 2012 upon filing of the certified copies of the Orders of the Humble High Court with the Registrar of Companies is effective from 1st October, 2012 (the Appointed Date).

Pursuant to the Scheme, with effect from the Appointed date the Industrial Bearings Undertaking of NRB is transferred and vested in the Company as a going concern, with all its assets, liabilities, properties, rights, benefits and interest therein subject to existing charges thereon.

In terms of the Scheme, in consideration of the transfer and vesting of the Industrial Bearings Undertaking of NRB, in respect of every 4 equity shares of Rs. 2 each, held by the shareholders of NRB, 1 equity share of Rs. 2 each fully paid up aggregating 24,230,650 equity shares have been issued and allotted on 31st October, 2012, to the shareholders of NRB whose names appeared in the Register of Members, as on 25th October, 2012, being the record date.

All the staff, workmen and employees of Industrial Bearings Undertaking of NRB in service as on 1st October, 2012 have become staff, workmen and employees of the Company without any break in their service.

In terms of the Scheme, the Company recorded all the assets and liabilities pertaining to the Industrial Bearings Undertaking, at the respective book values appearing in the books of NRB as on the Appointed Date. The Company credited to its share capital account, the aggregate face value of the equity shares issued by it pursuant to the Scheme. The difference of Rs. 5,700.16 lacs being excess of net assets and the amount credited as share capital after adjusting the cancellation of existing share capital of the Company held by NRB has been credited to Capital Reserve. The equity shares allotted have been listed on the Bombay Stock Exchange and the National Stock Exchange on 9th April, 2013.

NOTE 2 - Contingent Liabilities not provided for:

As at As at 31.12.2013 30.09.2012 Rs. Lacs Rs. Lacs

a) Bank guarantees

- To Indian Custom Department 55.00

- To Maharashtra Pollution Control Board 2.00

NOTE 3 - Commitments

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 607.96

2. Other commitment

- Premium payable for remaining period of Call Spread Option Contract. 618.53

2) Defined Benefit Plans : (Funded)

Gratuity- as per actuarial valuation as at the period end (based on Projected Unit Benefit Method). The Company has an obligation towards gratuity, a funded defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of the employment of an amount equivalent to 15 days salary, as applicable, payable for each completed year of service, without any payment ceiling. Vesting occurs upon completion of five years of service.

Footnotes:

(i) There were no employees in the previous period and hence disclosure under Accounting Standard 15 was not applicable.

(ii) The expected rate of return on plan assets is based on the average long term rate of return expected on investments of the fund during the estimated term of obligation.

(iii) The assumption of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotion, increment and other relevant factors.

(iv) The discount rate is based on the benchmark rate yield of government of India security as at the Balance sheet date.

NOTE 4 - Disclosure under Accounting Standard 19 - " Leases"

1) Lease Expense

(a) The company has taken vehicle and residential premises on operating lease. Lease rental charged to the statement of profit and loss for the period ended 31.12.2013 Rs. 30.29 lacs (includes minimum lease payment of Rs. 9.45 Lacs for the non - cancellable period up to February, 2013)

(b) (i) Under some agreements, refundable interest free deposit have been given and contain a provision for renewal.

(ii) The agreements provide for early termination by either party with a notice period which varies from 1 month to 6 months.

2) Lease Income

The Company has entered into lease agreements for certain portion of its factory and office premises including furniture and fixtures, electrical installation, etc. During the period, Rs. 68.90 Lacs recognised as rental income in the Statement of Profit and Loss. The agreement existing as at the yearend provide for increase in rent after 3 years and contain renewal clause. The agreement provide for termination prior to the expiry of the term, as per mutual understanding of the parties or due to breach of terms and conditions as mentioned in the agreements.

NOTE 5 - Disclosure under Accounting Standard 17 - " Segment Reporting"

The operations of the Company fall within a single primary segment viz. Industrial bearings.

NOTE 6 - Managerial Remuneration

Mr. Devesh Singh Sahney was appointed as Managing Director of the Company w.e.f 1st October,2012 vide resolution passed by the Board of Directors in its meeting held on 4th October, 2012 in which the Board also approved the remuneration. Members of the Company in its Annual General Meeting held on 15th October, 2012 approved the said appointment and remuneration.

The Central Government has approved the appointment of the Managing Director on 14th February, 2014 for which an application was made by the Company on 10th February, 2014. The Company''s application to the Central Government made on 10th February, 2014 for the approval of remuneration to the Managing Director is pending for approval. Accordingly the remuneration of Rs 79.51 lacs to the Managing Director paid and debited to the Statement of Profit and Loss is subject to the approval of the Central Government. Pending such approval the Managing Director holds the remuneration paid in trust for the Company.

NOTE 7 - Advance against assignment of certain Rights

In terms of the seperate Memorandum of Understanding entered into on 1st November, 2013 with NRB Bearings Limited, the Company has agreed,

(i) to assign its leasehold rights in the plot of land at Aurangabad admeasuring 576 sq.mtrs. with building structure thereon admeasuring 144 sq.mtrs. of built up area for a consideration of Rs. 270 lacs subject to approval of the relevant Government Authorities, and

(ii) to grant exclusive rights to use 700 Sq. ft. of carpet area situated on the 3rd Floor of Building Dhannur at Mumbai, for a consideration of Rs. 185 Lacs Pending approval of the relevant Government Authorities/ completion of certain regulatory procedures, the aggregate amount of Rs. 455 Lacs received has been considered as advance and included under Note 10.

NOTE 8

NRB Bearings Ltd (NRB) had entered into a Joint Venture agreement in the year 2011 with IBC Industrial Bearings and Components AG, Switzerland to form a joint venture Company for manufacture of Angular Contact Bearings. Pending formation of the joint venture company, the Project was started in 2011 by NRB as a part of Industrial Bearings Undertaking and Loan of USD 2.5 Million was availed for the Project. In terms of the Scheme referred to in Note 1, Industrial Bearings Undertaking of NRB which included the said Project was transferred and vested in the Company. The Project of Angular Contact Bearings was completed in December, 2013 and Assets pertaining to the Project having aggregate cost of Rs. 3,031.87 lacs (including capitalised interest on the Loan) were sold to NRB IBC Bearings Pvt. Ltd (NIBC). Also, liabilities of Rs. 694.14 lacs outstanding relating to machineries purchased were transferred. Further, premium of Rs. 104.01 lacs on Call Spread Option Contract relating to the loan referred to above has been debited to NIBC. The amount of Rs. 2,026.74 lacs recoverable as at the year end on this account is included in Note 20 - Other current assets. The Loan availed continues to be in the books of the Company.

NOTE 9

Pursuant to the Scheme of Arrangement referred to in Note 1 investment in 112,500 equity shares of Rs. 10 each aggregating to Rs. 11.25 Lacs in joint venture, Schneeberger India Private Limited was transferred to the Company on 1st October, 2012.

In terms of the Share Purchase Agreement with Schneeberger Holding AG the above equity shares were sold for a consideration of Rs. 252.56 lacs on September 10, 2013. The profit on sale of Rs. 241.31 lacs is included in Note 27 - Exceptional items.

NOTE 10

During the month of October, 2012 the Company had placed Inter - Corporate Deposit of Rs. 10 Crores with NRB Bearings Limited, the Company covered under section 295 of the Companies Act, 1956 without obtaining previous approval of the Central Government as required under the said section. The deposit has been repaid by NRB Bearings Limited during November, 2012. The Company will be making an application to the Central Government for approval of the deposit placed.

NOTE 11

Consequent to the transfer and vesting of the Industrial Bearings Undertaking of NRB Bearings Limited to the Company in terms of the Scheme referred to in Note 1, the financial statements of the Company include the operations of the Industrial Bearings for the fifteen months period ended 31 December 2013 and therefore are strictly not comparable with the figures of the previous period ended 30 September 2012. The figures for the previous period have been regrouped / restated where necessary to conform to the current period''s classification.