NRB Industrial Bearings Ltd Management Discussions

I. Outlook/ Business Overview

Indias real GDP growth for FY 2024-25 is projected at 6.4 percent, aligning with its decadal average. The real gross value added (GVA) is also expected to grow at the same rate. While the global economy grew by 3.3 percent in 2023, the IMF projects a 3.2 percent growth rate over the next 5 years. For FY 2025-26, Indias GDP growth is forecasted to range between 6.3 percent and 6.8 percent, depending on external factors. The survey underlines Indias commitment to structural reforms and deregulation to strengthen its medium-term growth potential.

However, geopolitical tensions, global trade risks, and ongoing conflicts remain significant concerns. Inflationary trends indicate a decline, with retail headline inflation reducing from 5.4 percent in FY24 to 4.9 percent in April-December 2024. Capital expenditure has consistently improved, with an 8.2 percent year-on-year increase post-general elections (July-November 2024). India also maintains its position as the seventh-largest global exporter of services, reflecting its strong competitiveness.

The industrial sector is projected to grow by 6.2 percent in FY25, driven by strong performance in electricity and construction. Domestic electronics manufacturing continues to expand, with smartphone production reaching 99 percent localization. The pharmaceutical sector maintained steady growth, with a total annual turnover of INR 4.17 trillion. MSMEs have emerged as a key economic driver, with government initiatives such as the Self-Reliant India Fund (INR 500 billion) supporting their growth.

The Indian bearings market is projected to grow significantly, reaching USD 853.9 million by 2029, fueled by factors like increasing automation, heavy industry demand, and electric vehicle production. The market is segmented by end-user, product type, and geographical region. Key trends include the rise of smart bearings and condition monitoring, expanding export opportunities for Indian manufacturers, and the increasing use of additive manufacturing in bearing production.

In FY 2023-24, NRB Industrial Bearings Limited focused on cost containment, optimizing resource utilization, and enhancing production capacity of few lines, to address the changing demand environment.

The domestic business had a mixed bag where key segments like textile Machine tool and mining performed below potential which lead to drop in schedules and shrinking of market potential. On the other hand penetration in Gear box, Combne harvester, Material handling segment, construction machinery grew well. Our constant thrust of penetrating new customers and grabbing business share of competitors with major existing OEMs ensured we could dampen the negative impact.

New product development, tapping new markets and segments remains to be mantra in coming financial year.

In conclusion, NRB Industrial Bearings Limited had a sluggish financial year, primarily driven by external factors. However with right business decisions taken in place gives high hopes of promising 25-26 year.

II. Financial Condition

1. Changes in Share Capital:

During the period under review there has been no change in the share capital of the Company.

2. Reserves and Surplus:

The balance of Capital Reserve as at March 31,2025 amounted to Rs. Rs. 5,700.16 lakhs Retained Earnings of the Company for the financial year ended March 31, 2025 stood at Rs. -14,555.33 lakhs and deemed capital contribution is Rs. 6,406.03 lakhs.

3. Fixed Assets:

During the year, we capitalized Rs. 61.89 lakhs to our gross block comprising Rs. 61.89 lakhs for Plant & Machinery. During the year we have disposed 241.40 Lakhs of Fixed Assets.

4. Deferred tax assets / liabilities:

Deferred tax asset and liabilities primarily comprise deferred taxes on fixed assets, un-availed leave, Provision for doubtful debts, accrued compensation to employees and unabsorbed business losses which are not tax-deductible in the current year.

5. Trade receivables:

Trade receivables amounted to Rs. 909.93 lakhs as at March 31, 2025 compared to Rs. 1,424.10 lakhs as March 31,2024. Debtors are at 14.28% of revenues for the year ended March 31,2025, compared to 19.48 % as on March 31,2024.

6. Cash and cash equivalents:

The bank balances in India include both rupee accounts and foreign currency accounts.

7. Loans and advances and other non-current assets:

The following tables give the details of our long-term and short-term loans, advances and other non-current Loans and advances.

(Rs. in Lakhs)

Particulars	31st March, 2025	31st March, 2024
Capital advance	37.22	65.45
Security deposits	129.15	130.05
Total	166.37	195.50

Capital advances represent amount paid in advance on capital expenditure.

Non-current Investments:

The Company had acquired 42,00,000 equity shares of Rs. 10/- each comprising 35% of paid-up capital in its associate viz. NRB-IBC Bearings Private Limited for the year ended December 31,2013.

The Company had acquired 10,50,000 equity shares of Rs. 10/- each comprising 35% of paid-up capital in its associate viz. NIBL - Korta Engineering Private Limited for the year ended March 31,2019.

Further theres no change for the year ended March 31,2025.

8. Liabilities:

Long term Liabilities:

(Rs. in Lakhs)

Particulars	31st March, 2025	31st March, 2024
Secured Term Loan	252.45	461.29
Other Loan	7,234.02	6,365.29
Total	7,486.47	6,826.58

Term Loan from Bank Secured:

a) Rs. Nil (March 31, 2024 Rs. 44.54 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 fully repaid in Current year and carried interest rate of 7.5 % p.a.

b) Rs. 35.58 lakhs (March 31, 2024 Rs. 83.51 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 21 equal monthly instalments of Rs. 2.72 lakhs each till December, 2026 after end of balance moratorium period of 5 months and carries interest rate of 7.5 % p.a.

c) Rs. 258.23 lakhs (March 31, 2024 Rs. 316.71 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 39 monthly instalments Rs. 8.90 lakhs each till June 27, 2028 and carries interest rate of 14 % p.a.

d) Rs. 49.02 lakhs (March 31, 2024 Rs. 84.82 lakhs) secured by hypothecation of vehicles. Out of these , the term loan of Rs. 42.51 lakhs (March 31,2024 Rs. 74.45 lakhs) carrying interest rate of 7.65% p.a. is repayable in remaining 17 equal monthly instalments by August, 2026 and the term loan of Rs. 6.50 lakhs (March 31,2024 Rs. 10.37 lakhs) carrying interest rate of 7.65 % p.a. is repayable in remaining 21 equal monthly instalments by December 5, 2026.

e) Rs. 66.42 lakhs (March 31, 2024 Rs. 112.27 lakhs) secured by hypothecation of machineries purchased out of banks finance at its factory at Shendra (near Aurangabad) and personal guarantee of Promoter Director of the Company. The machinery term loan is repayable in 60 equal monthly instalments of Rs. 3.85 lakhs each till Feb 30, 2030 and carries interest rate of 12.30 % p.a.

Term loan from others:

a) Rs. 3.09 lakhs (March 31, 2024 Rs. 7.21 lakhs) secured by hypothecation of vehicles. The entire term loan carrying interest rate of 8.21 % p.a. is repayable in remaining 8 equal monthly instalments by November 20, 2025.

Loans from related parties:

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, with the dividend rate being modified to 2% and

the redemption term being changed to 10 years.

10. Revenue from Operations

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.

DETAILS FOR DIRECTORS REPORT

In the Human Resources Report you can explore how we motivate, engage and care for our talent. Meet our workforce and see how we develop the future of work at NIBL Group.

III. Environment, Health and Safety:

At NIBL, safeguarding the health, safety, and overall well-being of our employees is a strategic priority and an ethical responsibility. We believe that a safe and healthy work environment is fundamental not only to employee satisfaction but also to sustainable business performance.

Our EHS initiatives are driven by a proactive, prevention-first philosophy. Comprehensive safety protocols, hazard assessments, and incident response plans are consistently reviewed and strengthened. Regular training programs including fire safety drills, emergency evacuation simulations, and awareness sessions equip our workforce to act decisively in critical situations.

In addition to physical safety, we acknowledge the importance of holistic well-being. To address occupational health risks and reduce stress-related issues, we organize routine medical check-ups, wellness sessions, and mental health awareness drives. These interventions are designed to detect and mitigate health risks early while promoting a culture of care.

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.

Short term Liabilities

(Rs. In Lakhs)

Particulars	31st March, 2025	31st March, 2024
Current Maturities of Long Term Debt	159.89	187.77
Current Liabilities	124.58	108.80
Total	284.47	296.57

Other Payables includes - payables on, statutory remittances (Contribution to PF, PT, Withholding Tax, GST, Excise Duty etc.).

9. Provisions

Short term provisions for the previous financial year ended March 31,2024 was Rs.91.64 Lakhs compared to Rs. 97.87 Lakhs for the financial year ended March 31,2025.

Long term provisions for the previous financial year ended March 31, 2024 was Rs 190.38 Lakhs compared to Rs. 403.29 Lakhs for the financial year ended March 31,2025.

The classification of the as follows:

Statement of Profit and Loss is (Rs. In Lakhs)

Particulars	For the Financial Year ended March 31,2025	For the Financial Year ended March 31,2024
Revenue from Operations	6,374.20	7,311.15
Loss Before Tax and Exceptional Item	(2,817.06)	(2,616.79)
Income From Exceptional Item	4,646.76	-
EBITDA	3,928.96	(664.34)
Tax Expenses	-	-
Profit/(Loss) after Tax after Exception Items	1,829.70	(2,616.79)
Other Comprehensive Income	168.17	143.16
Total Comprehensive Income	1,661.53	(2,759.95)
Earnings Per Share	7.55	(10.80)

We are proud of the progress weve made in embedding safety into every facet of our operations. This integrated approach has resulted in lower incident rates, increased employee engagement, and greater resilience in our operations.

We continue to align our safety and environmental initiatives with national and global benchmarks, contributing positively to our Environmental, Social, and Governance (ESG) commitments.

IV. Human Resources:

At NIBL, we view our employees not just as contributors, but as partners in progress. Our people- first philosophy places emphasis on empowerment, engagement, and continuous development, recognizing that our long-term success is intrinsically linked to the growth and satisfaction of our workforce.

Our HR policies are designed to create a nurturing and high-performance environment. From competency- based hiring to structured career development programs, we aim to attract, retain, and develop top talent aligned with our business goals.

We have adopted agile people practices that promote inclusivity, diversity, and innovation. Our focus remains on building future-ready teams through upskilling, leadership training, and digital learning initiatives.

V. Living Our Core Values:

Our organizational culture is grounded in a set of core values that guide our decisions and define how we work together:

1. Flexibility & Adaptability - Responding swiftly to change and customer needs.

2. Everyone is the MD of their Own Task - Every employee is a leader in their role.

3. No Compromise on Quality - Quality is nonnegotiable across all functions.

4. Loyalty & Transparency - Upholding trust and openness with all stakeholders.

5. Customer First in All Actions - Putting customer success at the heart of what we do.

6. Growth with Profits - Delivering results responsibly.

7. Fun at Work - Fostering happiness and positivity at the workplace.

8. Keep it Simple - Keeping processes efficient and lean.

VI. Offering a harassment-free workplace to all:

NIBL is committed to maintaining a workplace where every individual is treated with dignity and respect. Our robust Code of Conduct and Anti-Harassment policies ensure a zero-tolerance approach to discrimination and misconduct of any kind.

Mandatory ethics and compliance training is conducted for all employees during onboarding and at regular intervals, ensuring alignment with our ethical framework and legal responsibilities.

VII. Safety Governance Structure:

Our commitment to workplace safety was exemplified during the annual Safety Week held at our Shendra plant. The initiative featured a variety of activities including hands-on fire safety drills, first-aid training, competitions, and creative engagement through poster and slogan contests.

Notably, total participation was encouraged underscoring our belief that safety is a shared responsibility. The 2025 theme, "Safety & Well-being: Crucial for Viksit Bharat," reaffirmed our alignment with Indias national development goals and our own ESG vision.

VIII. Equal opportunity to all:

Diversity and meritocracy are at the heart of our talent strategy. NIBL is an equal opportunity employer where hiring, promotions, and career development are based purely on capability and performance irrespective of race, gender, age, religion, disability, or background.

We actively monitor and review our diversity metrics, and any reports of bias or unfair treatment are swiftly investigated and resolved with due diligence.

IX. Positive working environment:

Building a Vibrant and Connected Culture

At NIBL, we believe a strong organizational culture is built through connection and celebration. We host regular engagement initiatives such as festival events, wellness challenges, appreciation weeks, and interdepartmental competitions.

These touchpoints not only strengthen team bonds but also foster a shared sense of pride and purpose, translating into improved collaboration and productivity across the board.

X. No Child Labor Policy:

NIBL upholds the highest standards of human rights across our value chain. We have a strict zero-tolerance policy toward child labor, ensuring that no individual under the age of 18 is employed either directly or through third-party contractors.

Vendor and supplier agreements are explicitly aligned with this policy, and regular audits are conducted to verify compliance. Our stance reinforces our commitment to ethical and socially responsible business practices.

XI. Segment wise Performance:

Your Company has a single reportable segment of Industrial Bearings as the primary business segment for the purposes of Accounting Standards-17. The assets and liabilities of the Company are all expended towards this business segment.

XII. Risks and concern:

The economic and business environment is fast evolving, and with the rapid transformation of technology and the impact of cultural changes, society and consumers are also transforming on multiple dimensions. Your Company is operating in an industry that faces price volatility in raw materials and is dependent on agricultural commodities that need to meet stringent quality standards and on natural resources where alternatives are not viable.

XIII. Internal control systems and their adequacy:

The Company has in process vigilant process to monitor the internal control. The management has devised its Internal Control Systems to safeguard its assets, controlling costs, efficiency in operations, compliance of statutes, and effective management of working Capital. These systems are designed keeping in mind the Business plans and overall growth of the company and its stakeholders.

XIV. Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore, including:

Particulars	Numerator	Denominator	2024-25	2023-24	Difference	Remarks for variance more than 25%
a. Current Ratio	Current Assets	Current Liabilities	0.93	0.55	68.46%	Ratio has Increased on account of Increase in current asset in during the year.
b. Debt Equity Ratio	Borrowings	Total Equity	(6.18)	(3.16)	95.56%	Ratio has Increased on account of increase in debt compared to previous year and also due to increase in equity on account of gainduring the year.
c. Debt Service Coverage Ratio	Earning Available for Debt Service = Profit after taxes + Non-cash operating expenses like depreciation and other amortizations + Finance Costs + Bad Debt + Provision for Doubtful debt - Gain on sale of FA	Debt Service = Interest on borrowings+ Principal repayments	2.31	(1.17)	-297.83%	Ratio has increased on account of gain incurred during the year
d. Return on Equity	Net Profit After Tax	Average Shareholder\u2019s Equity	(0.65)	1.05	-162.34%	Due to increase in profit for the year on account of exceptional item.
e. Inventory Turnover	Cost of Goods Sold	Average Inventory	1.13	1.28	-11.38%	NA
f. Trade Receivable Turnover Ratio	Revenue from operations	Average Trade Receivable	5.46	4.21	29.74%	Due to decrease in trade receivable in the during the year.
g. Trade Payables Turnover Ratio	Cost of Goods Sold and other expense	Average Trade Payable	1.94	2.32	-16.27 %	NA
h. Net Capital Turnover Ratio	Revenue from Operations	Average Working Capital	(3.26)	(2.24)	45.48%	Ration has Increased on account of Increase in current asset in during the year.
I. Return on Capital Employed	Earnings before interest and Tax	Capital Employed = Tangible Net Worth + Total Borrowings + Deferred Tax Liability	(0.16)	(0.19)	-15.51%	Due to increase in profit for the year.
j. Net Profit Margin	Net Profit After Tax	Revenue from Operations	0.29	(0.36)	-180.20%	Due to increase in profit for the year.
k. Return on Investment
Mutual Fund income	Income generated from Investment	Time weighted Average Investment	7.41%	-	100.00%	Due to investment in mutual fund made during the year
Fixed Deposit Investment	Income generated from Investment	Time weighted Average Investment	6.71%	6.96%	-0.25%	NA