1.  We have audited the attached Balance Sheet of NRB BEARINGS LIMITED
 (the Company) as at 31st March, 2012, the Statement of Profit and Loss
 and the Cash Flow Statement of the Company for the year ended on that
 date, both annexed thereto. These financial statements are the
 responsibility of the Company''s Management. Our responsibility is to
 express an opinion on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatements. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and the significant estimates
 made by the Management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion.
 
 3.  Without qualifying our opinion, we draw attention to note 43 of
 financial statements wherein the company has proposed to demerge the
 industrial bearings undertaking in to a wholly owned subsidiary, NRB
 Industrial Bearings Limited (NIBL) with effect from 1st October, 2012
 after obtaining the required approvals. The proposed demerger, as
 stated in the note, will not have a material impact on the company''s
 financial statements.
 
 4.  As required by the Companies (Auditor''s Report) Order, 2003 (CARO)
 issued by the Central Government in terms of Section 227(4A) of the
 Companies Act, 1956, we enclose in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the said Order.
 
 5.  Further to our comments in the paragraph 3 above and Annexure
 referred to in paragraph 4 above, we report as follows:
 
 (a) we have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 (b) in our opinion, proper books of account as required by law have
 been kept by the Company so far as it appears from our examination of
 those books;
 
 (c) the Balance Sheet, the Statement of Profit and Loss and the Cash
 Flow Statement dealt with by this report are in agreement with the
 books of account;
 
 (d) in our opinion, the Balance Sheet, the Statement of Profit and Loss
 and the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211(3C) of the
 Companies Act, 1956;
 
 (e) in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts give the information
 required by the Companies Act, 1956 in the manner so required and give
 a true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2012;
 
 (ii) in the case of the Statement of Profit and Loss, of the profit of
 the Company for the year ended on that date and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 6.  On the basis of the written representations received from the
 Directors as on 31st March, 2012 and taken on record by the Board of
 Directors, none of the Directors is disqualified as on 31st March, 2012
 from being appointed as a director in terms of Section 274(1)(g) of the
 Companies Act, 1956.
 
 ANNEXURE TO THE AUDITORS'' REPORT TO THE MEMBERS OF NRB BEARINGS LIMITED
 ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2012 (referred to in
 paragraph 4 of our report of even date)
 
 (i) Having regard to the nature of the Company''s
 business/activities/result, clauses (iii) (d) to (g), (vi), (x), (xii),
 (xiii), (xiv), (xviii) and (xx) of CARO are not applicable.
 
 (ii) In respect of its fixed assets:
 
 (a) The Company has generally maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The fixed assets were physically verified during the year by the
 Management in accordance with a regular programme of verification which,
 in our opinion, provides for physical verification of all the fixed
 assets at reasonable intervals. According to the information and
 explanations given to us, no material discrepancies were noticed on
 such verification.
 
 (c) There is no fixed assets disposed off during the year and therefore
 the question of reporting on clause 4(i)(c) of CARO does not arise.
 
 (iii) In respect of its inventory:
 
 (a) As explained to us, the inventories were physically verified during
 the year by the Management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the Management were reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verification.
 
 (iv) In respect of loans, secured or unsecured, granted by the Company
 to companies, firms or other parties covered in the Register under
 Section 301 of the Companies Act, 1956, according to the information
 and explanations given to us:
 
 (a) The Company had in an earlier year granted loan to a party, SNL
 Bearings Limited (a subsidiary). At the year- end, the outstanding
 balance of such loan is Rs. Nil and the maximum amount involved during
 the year was Rs. 200.00 lacs.
 
 (b) The rate of interest and other terms and conditions of such loan
 is, in our opinion, prima facie not prejudicial to the interest of the
 Company.
 
 (c) The receipt of principal amount and interest have been regular/ as
 per stipulations.
 
 (v) In our opinion and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased are of special nature and suitable alternative sources are
 not readily available for obtaining comparable quotations, there is an
 adequate internal control system commensurate with the size of the
 Company and the nature of its business with regard to purchases of
 inventory and fixed assets and the sale of goods and services. During
 the course of our audit, we have not observed any major weakness in
 such internal control system.
 
 (vi) In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to Section
 301 that needed to be entered in the Register maintained under the said
 Section have been so entered.
 
 (b) Where each of such transaction is in excess of Rs. 5 lacs in
 respect of any party, the transactions entered in the register are of a
 special nature for which there are no alternative sources or any
 similar transactions with other parties. In the absence of such
 transactions being produced to us, we are unable to comment on the
 same.
 
 (vii) In our opinion, the internal audit functions carried out during
 the year by a firm of Chartered Accountants appointed by the Management
 have been commensurate with the size of the Company and the nature of
 its business.
 
 (viii) We have broadly reviewed the cost records maintained by the
 Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
 prescribed by the Central Government under Section 209(1)(d) of the
 Companies Act, 1956 and are of the opinion that prima facie the
 prescribed cost records have been maintained.  We have, however, not
 made a detailed examination of the records with a view to determine
 whether they are accurate or complete.
 
 (ix) According to the information and explanations given to us in
 respect of statutory dues:
 
 (a) The Company has generally been regular in depositing undisputed
 statutory dues including Provident fund, Investor Education and
 Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax,
 Wealth-tax, Service Tax, Custom Duty, Excise Duty, Cess and other
 material statutory dues applicable to it with the appropriate
 authorities.
 
 (b) There were no undisputed amounts payable in respect of Income-tax,
 Wealth-tax, Custom Duty, Excise Duty Cess and other material statutory
 dues in arrears as at 31st March, 2012, for a period of more than six
 months from the date they became payable.
 
 (c) Details of dues of Income-tax, Sales Tax, Wealth-tax, Service Tax,
 Custom Duty, Excise Duty and Cess which have not been deposited as on
 31st March, 2012 on account of any disputes are given below:
 
 Statute                    Nature of       Forum where
                            Dues            Dispute is pending
 
 The Income Tax Act, 1961   Income Tax      Income Tax Appellate
                                            Tribunal
 
 The Income Tax Act, 1961   Income Tax      Income Tax Appellate
                                            Tribunal
 
 The Income Tax Act, 1961   Income Tax      Income Tax Appellate
                                            Tribunal
 
 The Income Tax Act, 1961   Income Tax      Commissioner of
                                            Income Tax (Appeals)
 
 The Income Tax Act, 1961   Income Tax      Commissioner of
                                            Income Tax (Appeals)
 
 The Bombay Sales Tax Act, 
 1959                       Sales Tax       Deputy Commissioner
                                           (Appeals)
 
 The Bombay Sales Tax Act, 
 1959                       Sales Tax       Joint Commissioner
                                           (Appeals)
 
 The Central Sales Tax Act, 
 1956                       Sales Tax       Deputy Commissioner
                                           (Appeals)
 
 The Central Sales Tax Act, 
 1956                       Sales Tax       Joint Commissioner
                                           (Appeals)
 
 The Customs Act, 1962      Custom Duty,    Supreme Court
                            Penalty and
                            Fine
 
 
 
 Statute                    Period to             Amount
                            which the             involved
                            amount relates       (Rs. in lacs)
 
 The Income Tax Act, 1961   A.Y. 2005-2006         40.06
 
 The Income Tax Act, 1961   A.Y. 2006-2007         32.62
 
 The Income Tax Act, 1961   A.Y. 2007-2008        157.46
 
 The Income Tax Act, 1961   A.Y. 2008-2009        222.20
 
 The Income Tax Act, 1961   A.Y. 2009-2010        212.50
 
 The Bombay Sales Tax Act, 
 1959                       F.Y. 1996-1997         21.83
                            and 1998-1999
 
 The Bombay Sales Tax Act, 
 1959                       F.Y. 2003-2004         65.84
                            and 2004-2005
 
 The Central Sales Tax Act, 
 1956                       F.Y. 1996-1997         24.18
                            and 1998-1999
 
 The Central Sales Tax Act, 
 1956                        F.Y. 2003-2004         6.23
                             and 2004-2005
 
 The Customs Act,1962        F.Y. 1993-1994       138.87
 
 
 (x) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in the repayment of dues to
 banks and debenture holders.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the terms and conditions of the guarantees given by the
 Company for loans taken by others from banks and financial institutions
 are not prima facie prejudicial to the interest of the Company.
 
 (xii) In our opinion and according to the information and explanations
 given to us, the term loans have been applied for the purpose for which
 they were obtained, other than temporary deployment pending
 application.
 
 (xiii) In our opinion and according to the information and explanations
 given to us and on an overall examination of the Balance Sheet, we
 report that no funds raised on short-term basis have been used during
 the year for long- term investment.
 
 (xiv) According to the information and explanations given to us the
 Company has created security in respect of debentures issued and
 outstanding at the year end.
 
 (xv) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no material fraud
 on the Company has been noticed or reported during the year.
 
                                          For Deloitte Haskins & Sells
 
                                                 Chartered Accountants
 
                                             (Registration No. 117365W)
 
                                                          A. C. Khanna
 
                                                               Partner
 Mumbai : May 30, 2012                            (Membership No.17814)