NRB Bearings Ltd

To

The Members

NRB BEARINGS LIMITED

Your Directors have pleasure in presenting their fifty-ninth Report together with the standalone and consolidated Audited Financial Statements for the year ended March 31, 2024.

1. Financial Results

2. Dividend

Considering the profits for the year under review your Directors hereby inform you that the Interim Dividend of 205 per cent (Two Hundred and Five) per cent i.e. Rs. 4.10 per equity share of face value Rs. 2.00 each paid by the Company on June 20, 2023, shall be considered as the final dividend for the year ended March 31, 2024.

In terms of the provisions of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, hereinafter referred to as "the Listing Regulations", the Company has formulated a Dividend Distribution Policy. The Policy is available on the website of the Company at https://www.nrbbearings.com/resources/investorrelations/ policy/ NRB-Dividend-Distribution-Policy.pdf.

3. Transfer to Reserves:

During the year under review, there was no transfer to the General Reserve.

4. Material changes and commitments, if any, affecting the financial position of the Company

There are no material changes and commitments, affecting the financial position of the Company which have occurred between the close of the financial year on March 31, 2024 to which the financial statements relate and the date of this Report.

5. State of Company's affairs, operations and outlook:

In line with the economy and industry sentiments, the revenue from operations for your Company increased by approx. 3.49 per cent. The increase was noticed across all segments. During the year under review, on a consolidated basis your Company recorded net revenue from operations (net of taxes and incentives) of Rs. 1,09,403 lacs as against Rs. 1,05,716 lacs for the last fiscal. The Company recorded a net profit of Rs. 24,151 lacs, an increase of 151.17 per cent over Rs. 9,615 lacs for the last fiscal.

On a standalone basis your Company recorded net revenue from operations (net of taxes and incentives) of Rs. 1,02,272 lacs a decrease of 0.04 per cent over Rs. 102,310 lacs of the last fiscal. The Company recorded a net profit of Rs. 25,047 lacs, with an increase of 191.92 per cent over the net profit of Rs. 8,580 lacs for the last fiscal.

India's economic performance in recent years demonstrates substantial growth, with a 7.2 per cent expansion in 202223 and an impressive 8.7 per cent growth in 2021-22. Strong domestic demand for consumption and investment, along with Government's continued emphasis on capital expenditure are seen as among the key drivers of the GDP in FY 2023-24.The strength in domestic demand, driven by private consumption and investment, to government reforms and initiatives implemented over the past decade. Investments in both physical and digital infrastructure, along with measures to boost manufacturing, have bolstered the supply side, providing a significant boost to economic activity in the country. India is expected to become the fourth-largest economy in the world by 2025. The Indian automobile industry has historically been a good indicator of how well the economy is doing, as the automobile sector plays a key role in both macroeconomic expansion and technological advancement. India enjoys a strong position in the global heavy vehicles market as it is the largest tractor producer, second-largest bus manufacturer, and third-largest heavy truck manufacturer in the world. The share of the automobile sector in the national GDP increased from 2.77 per cent in 1992-1993 to around 7.1 per cent presently. The Indian auto component industry, being a critical part of the OEM value chain, has grown at a healthy pace over the past few years. The production and demand of the auto component industry is directly proportional to that of the automobile industry. With strong macroeconomic indicators, conducive government policies and over 7 per cent growth projection for the Indian GDP, it is expected that the auto component industry will continue to perform well in FY 2024-25. The Production Linked Incentive Scheme and the Automotive Mission Plan by the government has ensured the growth of the sector.

In the future, the industry shall actively explore emerging markets, such as aerospace, high-speed rail, new energy, and other fields, to achieve greater development space. At the same time, with the in-depth development of global industrialization, there are still huge opportunities in the market. Developing environmentally friendly materials and optimizing production processes will become new highlights. In order to improve the load-bearing capacity and service life of products, companies have begun to develop and apply new materials, such as high-temperature ceramic materials and engineering plastics. These new materials will help improve performance and life to attract customers.

As the industry dynamics and the new product lines get redefined, the Company is preparing to:

• Focus on component categories that could contribute more to vehicle costs as these provide higher margins,

• Components which are not likely not be replaced with the advent of electric vehicle (EV) and new products for EV, and

• Expanding our portfolio to serve adjacent industries.

During the year, a fire incident occured at Waluj Plant of the Company. However, there was no loss or injury to human life or other casualty due to the fire incident. An auto-product assembly line was majorly damaged and the fire spread to the adjacent stores department damaging the ready components and other production related stores and spares. The Company has adequate insurance coverage for the assets in the premises of the said Plant.

6. Finance

The Company has been rated AA-/Stable long term borrowings and A1+ for short term borrowings. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters are continuously monitored. Driving operational efficiencies and prudence with respect to capital expenditure, capturing opportunities are the other focus areas for the Company.

a. Public Deposits

The Company has not taken fixed deposits during the year under review. There are no unclaimed deposits.

b. Particulars Loans, Guarantees or Investments

As on March 31, 2024, the outstanding principal amount for the loan given to NRB Holdings Limited, wholly owned subsidiary of the Company was USD 8.80 million and there was interest outstanding of USD 0.09 million.

Details of loans, guarantees and investments covered under the provisions of section 186 of the Companies Act, 2013 are given in the notes to the financial statements.

7. Directors and Key Managerial Personnel

During the year under review, Mr. Devesh Singh Sahney (DIN 00003956) ceased to be the Director of the Company with effect from September 29, 2023 as the resolution for his re-appointment as a Director retiring by rotation was not passed by the shareholders at the 58th Annual General Meeting of the Company.

Mr. Satish Rangani (DIN: 00209069), shall continue as a non-executive, non-independent Director with effect from January 24, 2024. The continuation of Mr. Satish Rangani who had attained the age of 75 (Seventy-Five) years, was recommended by the Nomination and Remuneration Committee at its meeting held on January 11, 2024 and approved by the Board of Directors vide resolution passed through circulation on January 17, 2024 and by the Members vide Special Resolution passed through Postal Ballot on February 25, 2024.

In accordance with the provisions of section 152 and the Articles of Association of the Company, Mr. Satish Rangani (DIN: 00209069) will retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.

Ms. Bapsy Dastur (DIN: 09623277) and Mr. Jayavardhan Dhar Diwan (DIN: 01565319) are appointed as Independent Directors (Additional) with effect from May 27, 2024 subject to approval of the Shareholders by way of Special Resolution at the next general meeting or within a time period of three months from the date of appointment, whichever is earlier.

Mr. Pankaj Khemka resigned as the Chief Financial Officer of the Company with effect from December 31, 2023. The Board of Directors, at its meeting held on February 13, 2024, approved the appointment of Mr. Raman Malhotra as the Chief Financial Officer of the Company with effect from February 15, 2024.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The composition of the Board duly meets the criteria stipulated in Section 152 of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Pursuant to the provisions of Section 2(51) and Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the following were the Key Managerial Personnel of the Company during the year under review:

• Ms. Harshbeena Zaveri Vice Chairman & Managing Director

• Mr. Satish Rangani Executive Director (upto January 23, 2024)

• Mr. Pankaj Khemka Chief Financial Officer (Ceased to be CFO on December 31, 2023)

• Mr. Raman Malhotra Chief Financial Officer (Appointed as CFO w.e.f. February 15, 2024)

• Ms. Shruti Joshi Company Secretary and Compliance Officer

Familiarisation Programme for Independent Directors

In order to familiarize the Independent Directors with the business, the Company makes a presentation covering nature and scope of business, nature of industry in which the Company operates, profitability and future scope. Regularly at meetings updates, are given to the Board, by the Company's senior management in areas of operations, industry and regulatory trends, competition and future outlook. The familiarization programme is available on the website of the Company at www.nrbbearings.com.

Board Evaluation

The Board has carried out an annual performance evaluation of its own performance and that of its Committees and the Directors individually. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. The process endorsed the confidence of the Directors in the ethical standards of the Company and its strategies for growth. In the coming year, the Board intends to enhance focus on exploring new drivers for continuing growth.

The Independent Directors have also met separately on March 9, 2024.

Remuneration Policy

The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, senior management and their remuneration. As part of its policy the Company strives to ensure that the remuneration to Directors, Key Managerial Personnel (KMP) and senior management involves a balance between fixed and incentive pay, reflecting short and long term performance objectives appropriate to the working of the Company and its goals. The remuneration policy is available on the website of the Company www. nrbbearings.com. Details of remuneration paid to Executive Directors and KMP and the Independent Directors form part of the Corporate Governance Report attached to this Report.

Meetings

During the year 8 (eight) Board Meetings were convened and held (details in Corporate Governance Report) and the gap between any 2 (two) consecutive meetings did not exceed 120 days. The date for the next meeting is fixed in advance at the previous meeting both for board and committee meetings.

8. Subsidiaries

As at March 31, 2024, the Company has 2 (two) subsidiaries viz. SNL Bearings Limited and NRB Holdings Limited. As at March 31, 2024, NRB Bearings, USA Inc, NRB Bearings Europe GmbH and NRB Bearings (Thailand) Limited, are wholly owned subsidiaries of NRB Holdings Limited and step-down subsidiaries of the Company.

SNL Bearings Limited (SNL), in which your Company holds 73.45 per cent equity, has reported profit after tax of Rs. 782 lacs (previous year Rs. 818.00 lacs), lower by 4.40 per cent. Revenue from Operations during the year at Rs. 4,769 lacs is lower by 0.38 per cent over the previous year. SNL is working on projects to improve its financial results in the coming years by enhancing operational efficiencies and scaling up manufacturing capacities.

NRB Holdings Limited (NHL), a wholly owned subsidiary, was incorporated on October 14, 2021, in Dubai, United Arab Emirates for the growth of the global business. During the financial year ended March 31, 2024, NHL recorded a revenue of USD 887,911 (Rs. 735.40 lacs) and the resultant loss after tax was USD 137,309 (Rs. 113.72 lacs).

As a part of comprehensive international strategy of the Company, NRB Bearings Europe GmbH, NRB Bearings (Thailand) Limited and NRB Bearings USA Inc., which were set up to support increasing exports to Europe, Thailand and North America respectively, were acquired by NHL. The companies provide marketing and customer support services. The income during the year is EURO 11,475,085.60 (Rs. 10,304.46 lacs), THB 4,86,915,623 (Rs. 11,431.32 lacs) and USD 52,37,124 (Rs. 4,337.56 lacs) respectively and the resultant profit after tax is EURO 406,174.91 (Rs. 364.74 lacs), 3,11,52,733 THB (Rs. 731.37 lacs) and USD 3,34,903 (Rs. 277.38 lacs) respectively.

Pursuant to section 129 (3) read with rule 5 of Companies (Accounts) Rules, 2014 details of financial statements of subsidiary companies and the step-down subsidiaries have been given in Annexure 1 (AOC-1) forming part of this statement.

During the year under review, no subsidiary of the Company met with a criterion to become material subsidiary as mentioned in SEBI (LODR) Regulations, 2015.

9. Business Risk Management

The Company has in place a risk management framework to identify risks and minimize their adverse impact on business and strives to create transparency which in turn enhances the Company's competitive advantage. The Company has identified the risks associated with its operations and an action plan for mitigation has been identified. The Company has constituted a Risk Management Committee which is responsible for timely identification and mitigation of business and operational risks. The Risk Management Policy is available on the website of the Company at www.nrbbearings. com.

10. Internal Financial Control Systems and Adequacy

The Company's internal control systems are commensurate with the nature of business, the size and complexity of its operations and such internal financial controls, with reference to the Financial Statements, are adequate.

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

Information pursuant to Section 134 (3) (m) of the Companies Act, 2013 and Rule 8 of Companies (Accounts) Rules 2014 has been given in the Annexure 2 forming part of this report.

12. Industrial Relations/Vigil Mechanism and Whistle Blower Policy

During the year, the Company maintained cordial relations with the workmen's unions at all plants. There was no major issue/dispute between management and unions at any of the plants of the Company.

Our people approach is reflected in the team work and the implementation of the number of initiatives involving employees and their families to share and promote organizational values. Regular training programmes are conducted for imparting understanding of bearings and engineering principles, modern manufacturing practices and attitudinal and behavioral aspects.

The Company has a Vigil Mechanism and Whistle Blower Policy which provides for adequate safeguards to employees using such mechanism. It also allows direct access to the Audit Committee in appropriate cases. Details of the same is given in Annexure 3 forming part of this report, and is also available on the website of the Company, www. nrbbearings.com.

Your Company hereby affirms that no complaints were received during the year, under the Vigil Mechanism.

13. Safety, Health and Environment

The Company is committed to establishing and maintaining safe working environment that promotes good health and high performance of the employees, and simultaneously takes measures to protect the environment. We also ensure that safety behavior is well demonstrated by our employees while working on the shop floor by using personal protective equipment as required.

Your Company has been accredited with internationally acclaimed certification viz. ISO 14001:2015 to identify and control environmental impact and constantly improve the environmental performance; ISO 45001:2018 occupational health and safety management system; and IATF16949:2016 for Quality Management System.

The commitment towards environment preservation extends beyond regulatory compliances; ambient air, noise levels and waste monitoring through ETP/STP treatment is being carried out. Initiatives are taken across the Company to conserve natural resources by reduction and recycling of wastes and adherence to emission norms.

During the year there have been numerous initiatives by the Company towards safety and environment awareness among employees:

1. "Safety first and always first" is accorded the highest priority in the Company.

2. Safety Week celebration to create safety awareness among employees, activities and competitions such as safety posters as well as slogans conducted. Environment day celebrations to create awareness for environment and natural resource conservation by tree plantation in premises and awareness sessions.

3. ETP upgradation for separating the ETP and STP effluents and disposing to the CETP for the safe disposal of treated effluent.

4. Water conservation through re-use of waste water and rain water harvesting at plants-capacity to harvest up to 3.06 crore litres rain water every year to increase ground water level.

5. Energy conservation activities replacement of traditional bulbs with LED lamps to reduce the electrical consumption.

6. Conducted awareness program on food waste from external NGOs.

7. Training and awareness sessions on process safety and Environmental resource conservation.

8. Annual Health Check-up for all the employees.

9. Special initiatives have been taken up such as theme based walk, leading and lagging indicators, mock drills, up-gradation and revamping of fire hydrants/protection systems, safety training to employees, organizing safety awareness week, reporting of near-miss incidents and first aid across the plant. The Company strives to achieve "Zero-Accident Tolerance".

10. On time testing of stack emission, water testing, ambient and work zone air testing, earth pit testing, testing of all safety and environmental equipment calibration, ultrasonic and hydraulic test of air receiver tank, pressure vessel testing, manual and electrical stacker testing, safety harness testing and calibration.

11. Strict policy for non-consumption of tobacco and intoxicating materials to protect the mental and physical health health of employees. Regular awareness programs like "Vyasan Mukti" and "Yoga Classes" conducted to educate employees to get rid of evils of intoxication and stressful work life and embrace good health and work-life balance.

14. Corporate Social Responsibility

In line with the activities specified in schedule VII relating to the provisions of sections 135 of the Companies Act, 2013, your company has been focusing on:

• Promotion of education.

• Promoting gender equality and empowering women.

• Employment enhancing vocational skills.

• Promotion of social business projects including ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, conservation of natural resources.

• Promoting healthcare including preventive healthcare with specific emphasis on women, children and girl child.

In terms of the above the Company has been contributing for primary education, secondary education particularly STEM (study of sciences, maths and engineering) and also for impactful social projects like Antim Sanskar Seva (to redevelop the Worli Smashan Bhumi to provide dignified funeral and cremation community service). The Company has continued its support to the Ashoka University which is devoted to transforming Indian higher education based on the principles of multidisciplinary education delivered by exceptional faculty members and providing ivy-league quality education at an affordable price. The liberal education helps develop intellect, nurture critical thinking and provides specialization with a broader foundation of knowledge. The Company has been the chief supporter to IIT-Bombay for its Racing Car Project and has been associated with the project since the last 7 (seven) years.

The Annual Report on CSR activities in pursuance of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure 4.

During the year under review, the Company has spent an amount of Rs. 170.00 lacs on CSR projects.

15. Corporate Governance

Pursuant to the Listing Regulations, Management Discussion and Analysis, Business Responsibility and Sustainability Report, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of Corporate Governance are made part of the Annual Report. Details of Board meetings held during the year under review and the composition of the various committees are included therein.

The Code of Conduct for Directors and senior management of the Company, as approved by the Board, has been affirmed on an annual basis by all the Directors and the senior management personnel of the Company.

The relevant certification on the various matters specified under Regulation 17(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been done by the Vice Chairman & Managing Director and the Chief Financial Officer of the Company.

During the year under review the Company has complied with all the applicable Secretarial Standards.

All pecuniary relationships or transactions of the Non-Executive Directors vis-a-vis the Company along with criteria for such payments and disclosures on remuneration of Directors along with their shareholding are disclosed in Form MGT9, which forms a part of this Report.

There are no relationships between the Directors of the Company.

Members desirous of receiving the full Report and Accounts of the subsidiaries will be provided the same on receipt of a written request from them or on submission of their e-mail IDs for forwarding documents through electronic mode. This will help save considerable cost in connection with printing and mailing of the Report and Accounts. This measure would be in line with the green initiative for paperless communications. The same shall also be kept for inspection by any Member at the registered office of the Company and of the respective subsidiary Company concerned and shall also be posted on the website of the Company viz. www.nrbbearings.com.

16. Directors' Responsibility Statement

In accordance with Section 134 of the Companies Act, 2013 (the Act), the Directors state that:

i. in the preparation of annual accounts, all applicable accounting standards have been followed and no material departures have been made from the same;

ii. accounting policies selected were consistently applied. Reasonable and prudent judgements and estimates have been made so as to give a true and fair view of the state of affairs of the Company as on March 31, 2024 and of the profit of the Company for the accounting year ended on that day;

iii. proper and sufficient care for maintenance of adequate accounting records has been taken in accordance with the provisions of the Act so as to safeguard the assets of the Company and to prevent and detect fraud and other irregularities;

iv. the Annual Accounts have been prepared on a going concern basis;

v. the internal financial controls to be followed by the Company have been laid down and are adequate and were operating effectively;

vi. proper systems have been devised to ensure compliance with the provisions of all applicable laws and all such systems were adequate and operating effectively.

17. Related Party transactions (RPT)

All RPT that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant RPT by the Company with promoters, directors, key managerial personnel or other designated persons.

All RPT are placed before the Audit Committee for approval and are noted by the Board. Prior approval of the Audit Committee is obtained on periodic basis for transactions which are foreseen and repetitive in nature. The compliance of the transfer pricing norms in relation to such transactions is certified by the tax advisors.

The policy on RPT as approved by the Board is available on the Company's website. Form AOC-2 for disclosure of particulars of contracts has been enclosed as Annexure 5.

18. Auditors Statutory Auditors

Appointment of M/s Walker Chandiok & Co. LLP, Chartered Accountants as statutory auditors was approved at the Annual General Meeting held on September 29, 2023 for a second term of 5 (five) consecutive years.

Cost Auditors

Pursuant to the Rules issued by Ministry of Corporate Affairs under Companies (Cost records and Audit) Rules 2014, your Company is subject to cost audit during the year and M/s. R. Nanabhoy & Co., Cost Accountants were appointed to undertake the same.

The cost accounts and records of the Company are duly prepared and maintained as required under Section 148(1) of the Act.

Secretarial Audit

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. U. C. Shukla, Practicing Company Secretary to undertake the Secretarial Audit of the Company. The report is annexed as Annexure 6.

Explanation or Comments on disqualifications, reservations, adverse remarks or disclaimers in the auditors' reports

There have been no disqualifications, reservations, adverse remarks or disclaimers in any of the auditors' reports except by the Secretarial Auditor who has mentioned that the term of Mr. Satish C Rangani, who attained the age of 75 years on 13/11/2023, as Executive Director expired on 23/01/2024 and As per regulation 17(1A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company was required to pass Special Resolution prior to 23/01/2024 i.e. before the change in designation from Executive Director to Non-Executive Director. The Company has obtained the approval of the Members vide Special Resolution through Postal Ballot on 25/02/2024.

19. Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure 7.

20. Particulars of Employees

The information required pursuant to section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, in respect of employees of the Company will be provided upon request. In terms of Section 136 of the Act the Report and Accounts are being sent to the Members excluding this information.

21. Significant and Material Orders passed by the Regulators or the Courts or the Tribunal

There are no significant and material orders passed by the Regulators or the Courts or the Tribunals impacting the going concern status and Company's operations in future.

22. Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status.

The Company has not made any application under the Insolvency and Bankruptcy Code, 2016 during the financial year 2023-24.

23. Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.

The provision regarding difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions is not applicable to the Company for the financial year 2023-24.

24. Change in nature of business

During the year under review there was no change in the nature of the business carried on by the Company.

25. Disclosure under Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013

In accordance with the provisions of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has set up 6 (six) Internal Committees (IC) to redress complaints. During the year under review nil complaint were received.

26. Acknowledgement

The Directors wish to record their appreciation of the contribution made by employees at all the levels by their hard work, solidarity and support, and for the confidence and loyalty shown by our customers. The Directors also wish to thank the Members, suppliers, bankers and all other business associates for the continuous support given by them to the Company and for their confidence in its management.