Fag Ar 2007

Annual Report 2007
IREE 2007
FAG India along with the Railway sector of Schaeffler Group participated
in the International Railway Equipment Exhibition (IREE) held at New
Delhi in February 2007. The exhibits at the booth included Axle Box
Bearing with housing, Traction Motor Bearings and the complete unit of
TAROL 6x11 for railway applications like freight cars and locomotives.
The Will to Win

“The Will to Win” was the theme of 2007 Industrial
Distributor Confluence in Bangkok which was
attended by 50 distributor partners of the FAG India
distribution network. The theme was designed to
encourage even higher commitment from all
participants to ensure that the growth targets are
achieved. It was an ideal platform for distributors to
learn about new products, systems and services,
establish mutual relations and exchange ideas and
expertise. The Managing Director of FAG India,
Mr. Biswarup Dhar in his opening speech shared
INA and FAG's expansion plans and threw light on
new emerging technologies, upcoming plants and
development centers. During the application-
oriented sessions, case studies presented by
distributors and sales engineers were particularly
well received by the audience. Lectures on specific
solutions for heavy industry applications, wind
turbines and agricultural machinery as well as
various products and services from F'IS also met
with keen attention. Lamp lighting ceremony at the inauguration of the confluence. This
traditional ritual symbolises wisdom and success
Quality Circle Award

On winning ‘Excellent Category Award’ at State
and National Level, QCFI (India) recommended
‘FAG Team’ for International Competition - Quality
Circle at Beijing, China, in October 2007, where the
‘FAG Team’ was honoured with “GOLD AWARD”.
FAG Bearings India Limited
ANNUAL REPORT
2007
Contents Page No. General Information
General Information 1 Board of Directors
Notice to Members 2
Chairman Avinash Gandhi
Directors' Report 4
Managing Director Biswarup Dhar
Auditors' Report 8
Bernhard Steinruecke
Schedules 12
Dr.Vidya Sagar
Ten Years' Highlights 33
Dietmar Heinrich
Electronic Clearing Service
(Credit Clearing) 36 Frank Huber
Thomas Hetmann
Nominee of GIC Moreshwar Garde
Alternate to Mr. Heinrich Kamlesh Tapadar
Alternate to Mr. Huber R. Sampath Kumar
Alternate to Mr. Hetmann Yezad Kapadia
Chief Financial Officer Satish Patel
Company Secretary Raj Sarraf
Bankers Union Bank of India

ICICI Bank Limited
Registered Office :
Deutsche Bank
Nariman Bhavan, 8th Floor
227, Backbay Reclamation
Nariman Point Auditors Mohinder Puri & Co.
Mumbai - 400 021 New Delhi
Collaborators Schaeffler Group,

Germany
Head Office & Works Maneja, Vadodara - 390 013
Sales Offices Bangalore, Chennai, Kolkata,

Mumbai, New Delhi, Pune.
NOTICE
To
The Member(s)
Notice is hereby given that the Forty Fifth Annual General Meeting of "FAG BEARINGS INDIA LIMITED" will be
held on Thursday, April 17, 2008 at 3.00 P.M. at KAMALNAYAN BAJAJ HALL, Ground Floor, Bajaj Bhawan, Jamnalal
Bajaj Marg, 226, Nariman Point, Mumbai- 400 021 to transact the following businesses:
ORDINARY BUSINESS
1. To receive, consider and adopt the Balance Sheet as at December 31, 2007 and the Profit and Loss Account
for the year ended on that date along with Directors' and Auditors' Report thereon;
2. To declare dividend for the year ended December 31, 2007.
3. To appoint a Director in place of Mr. Frank Huber, who retires by rotation and being eligible offers himself for
reappointment.
4. To appoint a Director in place of Mr. Avinash Gandhi, who retires by rotation and being eligible offers himself
for re-appointment.
5. To appoint Auditors and to fix their remuneration.
SPECIAL BUSINESS
6. To appoint a Director in place of Mr. Thomas Hetmann, who was appointed with effect from February 14, 2008
by the Board as an Additional Director and pursuant to provisions of Section 260 of the Companies Act, 1956
read with article 126 of the "Articles of Association" of the Company holds this office upto the date of 45th
Annual General Meeting of the Company. The Company has received a notice from a member under Section
257 of the Companies Act, 1956 proposing his candidature for the office of the Director.
To consider, and if thought fit, to pass, with or without modification, the following resolution as an Ordinary
Resolution:
"RESOLVED THAT pursuant to applicable provisions of the Companies Act, 1956, Mr. Thomas Hetmann be
and is hereby appointed as the Director of the Company".
"FURTHER RESOLVED THAT the Managing Director, the Chief Financial Officer and the Company Secretary
of the Company be and are hereby authorised to take the necessary actions and complete all the legal formalities
related thereto".
Registered Office: By Order of the Board
Nariman Bhavan, 8th Floor, Sd/-

227, Backbay Reclamation, Raj Sarraf
Nariman Point, Company Secretary
MUMBAI-400 021
Date : February 14, 2008
NOTES:
1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE
INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER.
2. The instrument of proxy, duly completed, should be lodged at the Registered Office of the Company not less
than forty-eight hours before the commencement of the Annual General Meeting.
3. The Company has notified closure of Register of Members and the Transfer Books from April 01, 2008 to April 05,
2008 (both days inclusive) to determine entitlement of dividend on equity shares. Dividend will be paid to those
shareholders, whose names appear on the Register of Members of the Company as at the end of business hours
ANNUAL REPORT
2007
on March 31, 2008. The dividend will be paid within the specified time limit, after approval by members at the
Annual General Meeting. In respect of shares held in electronic form (demat shares), the dividend will be paid on
the basis of beneficial ownership as per the details furnished by the Depositories for this purpose.
4. a) Shareholders, who have not encashed the dividend warrants for the years 2000, 2001, 2002, 2003, 2004,
2005 and 2006 are requested to claim the amount from the Company.
b) Pursuant to provisions of Section 205A read with 205C of the Companies Act, 1956 unclaimed dividends
till the year 1999 were transferred to the Investor Education and Protection Fund in time.
5. Electronic Clearing Service (ECS) has been permitted by Reserve Bank of India in many cities. Shareholders
may fill up the option form and send it to the Registrars by April 6, 2008.
ANNEXURE TO NOTICE
Explanatory statement under Section 173 of the Companies Act, 1956 relating to Special Business mentioned
in the notice convening the 45th Annual General Meeting
ITEM No. 6
Mr. Thomas Hetmann was appointed as an Additional Director, with effect from 14th day of February 2008, by the
Board of Directors to fill the vacancy caused due to the resignation of Mr. Hans-Juergen Goslar. Mr. Hetmann is the
Chief Financial Officer of Schaeffler Group, Germany, who has been associated with the Group since many years
and has been instrumental in managing the Financial Affair of the Group.
A brief profile of Mr. Hetmann is as follows :
Full name Mr. Thomas Hetmann
Father's name Mr. Guenter Hetmann
Date of birth March 21, 1962
Director Identification Number 02064801
Present designation Chief Financial Officer, Schaeffler Group, Germany
Functional area Responsible for the financial affairs of entire

Schaeffler Group, Germany
Directorship in other Indian Public companies Nil
Shareholding in the Company Nil
His continued association with the Company would be a great advantage. Your directors therefore recommend his
election to the office of director of the Company. Notice from a member proposing his candidature together with a
deposit of Rs. 500/- in terms of Section 257 of the Companies Act, 1956 has been received by the Company.
Except Mr. Thomas Hetmann no other director is interested in the resolution.
A brief resume and shareholding of directors who are being re-appointed have been included in the Corporate
Governance Report.
Registered Office: By Order of the Board
Nariman Bhavan, 8th Floor,

227, Backbay Reclamation, Sd/-
Nariman Point, Raj Sarraf
MUMBAI-400 021 Company Secretary
Date: February 14, 2008
Directors' Report
To the members of the Company
Your Directors are pleased to present the Forty Fifth Annual Report of the Company together with the audited financial
statements of the Company for the year ended December 31, 2007.
FINANCIAL HIGHLIGHTS (Rs. in Million)

Year Year
2007 2006
TOTAL INCOME (Net) 6516.2 5529.1

Gross Operating Profit
(Earning before depreciation, interest and tax) 1412.5 1290.1
Depreciation / Amortization 193.6 183.0
Interest (Net) (22.7 ) (0.7 )

Prior Period Adjustments (3.2 ) -
PROFIT FOR THE YEAR BEFORE TAX 1244.8 1107.8
Provision for Tax 449.5 370.8
PROFIT AFTER TAX 795.3 737.0
Balance brought forward 1206.6 619.1
Profit available for appropriation 2001.9 1356.1
APPROPRIATIONS
Proposed dividend 66.5 66.5
Income tax on dividend (*including for an earlier year Rs. 2 million) 13.3 * 9.3
Transfer to General Reserve 200.0 73.7
Balance carried to Balance Sheet 1722.1 1206.6
2001.9 1356.1
FINANCIAL AND OPERATIONAL PERFORMANCE
Your Company's sales have been consistently growing at a rate better than the growth of the bearing industry in
India. Despite sluggish demand in Two Wheeler Industry the Company has realised sales growth of 18% (2006: 32.3%).
The Profit Before Tax (PBT) was higher by 13% (2006: 61.5%).
DIVIDEND
Your Directors recommend for your approval dividend for the year ended December 31, 2007 at the rate of Rs. 4.0
(2006: Rs. 4.0) per equity share amounting to Rs.66.5 million (2006: Rs 66.5 million).
The Company will pay the income tax on dividend as per the provisions of the Income-Tax Act.
TRANSAFER TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to provisions of Section 205A read with Section 205C of the Companies Act, 1956 the unpaid / unclaimed
dividend pertaining to year ended on December 31, 1999 amounting Rs. 312,647/- (including interest accrued thereon)
was lying in the Company's separate unpaid dividend account and remaining unclaimed for a period of seven years,
was transferred to the Investor Education and Protection Fund.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed review of operations, performance and future outlook of the Company is covered under a separate Annexure
to this report as Management Discussion & Analysis. (ANNEXURE - I).
ANNUAL REPORT
2007
DIRECTORS
Mr. Frank Huber and Mr. Avinash Gandhi, who retire by rotation and being eligible, offer themselves for re-appointment.
Mr. Hans-Juergen Goslar has resigned from the directorship of the Company with effect from January 12, 2008. To
fill this vacancy the Board has appointed Mr. Thomas Hetmann as an Additional Director with effect from 14th day
of February 2008.
The Board appreciated the contributions of Mr. Goslar during his tenure with the Company.
PARTICULARS OF EMPLOYEES
The statement under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended and forming part of this report is given in Annexure - IV. The Managing Director is the
only employee covered by these Rules. However, pursuant to provisions of Section 219 (1) (b) (iv) of the Companies
Act, 1956 all reports and accounts are being sent to all the shareholders of the Company except this Annexure -
IV. Any shareholder interested in getting a copy of the said statement may write to the Company Secretary at Registered
or Head Office of the Company.
CORPORATE GOVERNANCE
A separate Section on Corporate Governance is included in the Annual Report and the certificate from M/s Samdani
Kabra & Associates, Company Secretaries, Vadodara (Gujarat), the Company's Secretarial Auditors confirming the
compliance of conditions on Corporate Governance as stipulated in Clause 49 of the Listing Agreement with Stock
Exchanges is annexed thereto. (ANNEXURE - II)
AUDITORS
The Statutory Auditors, M/s Mohinder Puri & Company, Chartered Accountants, who retire at the conclusion of 45th
Annual General Meeting to be held on 17th day of April 2008 and being eligible, offer themselves for reappointment.
A certificate from them has been received to the effect that their re-appointment, if made, would be within the limits
prescribed under Section 224(1B) of the Companies Act, 1956.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO
Information required as per Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 has been given in the Annexure forming part of this
Report. (ANNEXURE - III).
DIRECTORS' RESPONSIBILITY STATEMENT
The directors state that:

i) In preparation of Annual Accounts all applicable accounting standards have been followed.
ii) Accounting Policies as listed in the Schedule 15 to the financial statements have been selected and applied
consistently. Reasonable and prudent judgments as well as estimates have been made so as to give a true
and fair view of the state of affairs of the Company as on December 31, 2007 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 Companies 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.
ACKNOWLEDGEMENTS
Your Directors place on record their sincere appreciation for the wholehearted and continued support extended by
the Schaeffler Group, Suppliers, Customers, Stockists & Importers, Banks and all Employees of the Company during
the year under report.
For and on behalf of the Board

Sd/-
Avinash Gandhi
Mumbai: February 14, 2008 Chairman
MANAGEMENT DISCUSSION AND ANALYSIS

(Annexure - I to the Directors' Report)
(a) INDUSTRY STRUCTURE AND DEVELOPMENTS
Indian Bearing market size is estimated at Rs. 54 billion. Approximately 45% of this demand is met through
imports and the balance is met through indigenous products. In domestic market (without Imports), the sales
of the organised bearing industry in India are estimated at Rs. 24.0 billion. The bearing industry recorded a
growth of 7% during the year 2007 in terms of sales value. FAG India total sales during the year 2007 shot
up by 17%. FAG India's share in the total market is around 13%.
The fortunes of the bearing industry in India are linked to the growth of the automotive industry. Based on
declared figures, 2007 was not an impressive year. While the Passenger Vehicle and Light Commercial Vehicle
sales continued to remain buoyant, the overall automotive industry as such hardly grew. The growth of Passenger
Vehicles including Utility Vehicles was 13.6% during 2007. While the growth in Light Commercial Vehicle was
17.2%, the overall growth in commercial vehicle industry was at 9.7%. The two wheeler industries registered
a negative growth of 2.6%. The tractor industry that bounced back in the previous year too showed a negative
trend. The demand from Railways - another important market segment - remained flat during the year.
OEM industries, such as two-wheeler, are facing price competition in their own markets and continue to exert
price pressure on the local bearing suppliers. The growth of Indian middle class with increasing purchasing
power along with strong growth of economy over a past few years will undoubtedly accelerate demand from
the automotive industry and other sectors like steel, power & heavy engineering, thus providing a favourable
market environment for the bearing industry.
(b) OPPORTUNITIES AND THREATS
Opportunities
The last four years have witnessed impressive rates of industrial growth. In 2006-07 the industrial growth was
a splendid 11.5%, while the rate of growth of manufacturing was even higher at 12.5%. Though growth of
manufacturing has slightly decreased in FY 07 on account of slackening of consumer durables sector, the smart
growth in capital goods is suggestive of significant addition to industrial capacity.
Indian economy seems to grow at around 9% in the FY 08. All economic indicators show that the buoyancy
in overall growth trend is expected to continue in the coming year. Demand outlook for the year 2008 is quite
positive. FAG India with its uncompromising commitment to global standards of excellence and vast experience
in Indian market is 'future ready'.
Threats
Over the last few years, there has been sharp increase in the prices of steel which forms the basic material
for bearing. The overall margins of bearing manufacturers are under severe pressure.
The peak customs duty on imports in India has progressively declined over a decade. There is a likelihood
of government slashing peak customs duty rates further in 2008 to fall in line with Asian levels. The cut in
duty will make imports cheaper and resultant increase in import volumes especially from China and Eastern
Europe will intensify of competition for domestic bearing industry.
India has been globally acknowledged as a high growth economy. The highly favourable economic outlook
has attracted many new global bearing players to participate in the fast growing Indian market. Besides, most
of the existing leading domestic players are making investments to enhance the production capacities and benefit
from the demand buoyancy.
The industry has to be on guard against the menace of counterfeit (i.e. spurious bearings) which has increased
over the last few years, in spite of serious efforts taken by industry to check it.
(c) SEGMENT WISE PERFORMANCE
The business of the Company falls under a single segment i.e. "Ball/Roller Bearings and related components"
for the purpose of Accounting Standard AS-17.
(d) OUTLOOK
There has been marked change in the way the Indian economy is viewed, both within the country and in other
countries of the world. This is largely due to the sustained, well directed efforts of the government that have
resulted in globally acclaimed rates of economic growth, increased global competitiveness of Indian industries,
strong macro fundamentals and a highly favourable economic outlook. In the face of the huge opportunities
provided by the automobile sector, capital goods industry and sizzling Indian economy, the Company expects
build up of demand from various industries, which will provide growth to the bearing industry.
(e) RISK AND CONCERNS
While the overall demand outlook for the year 2008 remains good, the Company expects that there will be
risk on its margins on account of intense competition from the unorganized sector in the domestic industry and
ANNUAL REPORT
2007
flow of cheap imports of bearings from China and other low cost countries. To dilute this risk besides any cyclic
fluctuations in bearing demand from Automotive or various other industries, the Company will focus on
technologically advanced and more profitable products/market segments.
The Company will continue to work in the areas of higher productivity, better efficiency and cost reductions
in order to control costs.
(f) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an adequate Internal Audit System that cultivates reliable financial reporting, safeguard assets,
encourage adherence to Management Policies as well as Schaeffler Group Guidelines and Specifications as
far as they are applicable and promote ethical conduct. The strong Internal Control Systems have been designed
in such a way that, not only does it prevent fraud and misuse of the Company's resources but also protect
shareholders' interest.
The Company has appointed an Audit Committee, which on regular intervals, in co-ordination with Internal and
Statutory Auditors review the adequacy of Internal Control System within the Company.
The Company has an independent Internal Audit Department. The internal audit procedures constantly monitor
the controls and any feedback directly reported to the management of the Company. All audit findings are reported
in a structured manner with suggestions and recommendations from the audit department in consideration of
'Internal' as well as 'Schaeffler Group' guidelines and procedures. All transactions are authorised as per the
Schaeffler Group's Approval and Signature Guidelines, which are being recorded and reported in an organised
manner.
Based upon the recommendations of Audit Committee, an Annual Audit Plan (AAP) is prepared by the Internal
Audit Department, which is reviewed periodically by the top management and the Audit Committee.
(g) FINANCE
The year 2007 has been extremely challenging specially for the Bearing Industry, which has recorded a growth
of 7% much lower than expected (2006: 18%). With this at one side where industry was working hard to maintain
the growth rate, it was tough to snatch the desired margin in the highly competitive market. Even in such a
situation the Company was able to register growth and crossed the turnover of Rs. 640 Crore but with comparative
fewer margins, which resulted in profit before tax growth of 14%.
(h) HUMAN RESOURCES AND INDUSTRIAL RELATIONS
The year 2007 has witnessed Company's constant efforts in strengthening Human Resources, providing them
better working atmosphere with advanced infrastructure, which helps them exploring their talent. As usual the
establishment has been contributing a lot to the State not only by generating new employment opportunities
but also helping various Management & Technical Institutes by providing training to their students in our Training
Centre. With the end of this year the employees' strength has reached 1282.
Industrial relations during the year continued to be cordial and peaceful. The Directors place on record the
excellent co-operation and contribution made by the employees at all levels of the organization to the continued
growth of the Company.
The statement under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975 as amended and forming part of this report is given in Annexure - IV. The Managing
Director is the only employee covered by these Rules. However, pursuant to provisions of Section 219 (1) (b)
(iv) of the Companies Act, 1956 all reports and accounts are being sent to all the shareholders of the Company
except this Annexure -IV. Any shareholder interested in getting a copy of the said statement may write to the
Company Secretary at Registered or Head Office of the Company.
(i) CAUTIONARY STATEMENT
Certain statements in the Management Discussion and Analysis describing the Company's objectives, projections,
estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable
securities laws and regulations. Actual results could differ from those expressed or implied therein. Important
factors that could make a difference include raw material availability and prices thereof, cyclical demand and
pricing in the Company's principal markets, changes in Government regulations and tax regime, economic
developments within India and the countries in which the Company conducts business and other incidental
factors.

Sd/-
Avinash Gandhi
Mumbai: February 14, 2008 Chairman
ANNUAL REPORT
2007
CORPORATE GOVERNANCE REPORT

(Annexure - II to the Directors' Report)
1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
The core principles of corporate governance as laid down by the Board lay emphasis on integrity and
accountability. The Corporate Governance Code incorporates several practices aimed at a high level of business
ethics, effective supervision and enhancement of value for all stakeholders. FAG India's corporate governance
conforms to regulatory and legal requirements, such as the terms of Listing Agreements with Stock Exchanges.
The basic philosophy behind an endeavor towards better corporate governance is to enrich the value for
stakeholders by achieving business excellence.
2. BOARD OF DIRECTORS
Your 'Board of Directors', closely monitors the performance of the Company and Management, approves and
reviews the strategy and determines the remuneration of the managerial personnel based on performance. Your
Board ensures statutory and ethical conduct with high quality financial reporting. It holds itself accountable to
the shareholders as well as other stakeholders for the long-term well-being of the Company.
The Management of your Company is entrusted to the Managing Director, who is assisted by a team of Senior
Executives having rich experience and expertise in their respective fields.
(A) Composition of Board
The Board consists of eight* members and three* alternate directors, composition of which is in conformity
with Clause 49 of the Listing Agreement and the members are classified and categorized as under:
Category
Sr.
Name of Director(s) DIN Non- Non-
No. Executive Independent
Executive Independent
1 Mr. Avinash Gandhi 00161107 - Yes Yes -
2 Mr. Biswarup Dhar 00364780 Yes - - Yes
3 Mr. Hans-Juergen Goslar* 00919939 - Yes - Yes
4 Mr. Frank Huber 00689169 - Yes - Yes
5 Mr. Dietmar Heinrich 00928243 - Yes - Yes
6 Mr. Bernhard Steinruecke 01122939 - Yes Yes -
7 Dr. Vidya Sagar 00047326 - Yes - Yes
8 Mr. Moreshwar Garde 00689103 - Yes Yes -
9 Mr. Sampath Kumar (Alternate) 00495192 - Yes - Yes
10 Mr. Kamlesh Tapadar (Alternate) 00161186 - Yes Yes -
11 Mr. Yezad Kapadia (Alternate) * 00161133 - Yes Yes -
*Mr. Hans-Juergen Goslar has tendered his resignation from the Company's Directorship effective from January
12, 2008. Resulting therefrom the office of his Alternate Director Mr. Yezad Kapadia was considered as vacated
with effect from January 12, 2008. A formal noting by the Board is due in the Board Meeting to be held on
February 14, 2008.
Except Mr. Biswarup Dhar, Managing Director, the remaining seven directors are Non-executive Directors. Out
of these, three are 'Independent Directors' and four are 'Non-independent Directors'.
Mr. Avinash Gandhi, a professional having vast experience in Automobile Industry, is the Chairman of the 'Board'
and classified as 'Non-executive and Independent Director'.
Mr. Bernhard Steinruecke, "Director General of Indo German Chamber of Commerce" is a 'Non-executive and
Independent Director'.
Mr. Moreshwar Garde has been nominated on the Board by "General Insurance Corporation of India Limited
(GIC)" and is a 'Non-executive and Independent Director'.
Dr. Vidya Sagar is a Lawyer and Partner in the firm 'Remfry & Sagar', Attorneys-at Law. He has expertise in
Corporate Law as well as Intellectual Property Law and is a 'Non-executive and Non-Independent Director'.
"Mr. Dietmar Heinrich and Mr. Frank Huber are professionals working at senior positions with "Schaeffler KG,
Germany" and are categorized as 'Non-executive and Non-independent Directors'. Mr. Hans-Juergen Goslar
who was also a professional working at a senior position with "Schaeffler KG, Germany" was on the Board
until January 12, 2008 and he was categorized as 'Non-executive and Non-independent Director'. Mr. Kamlesh
Tapadar, Mr. Sampath Kumar and Mr. Yezad Kapadia, in their capacity as Alternate Directors for Mr. Dietmar
Heinrich, Mr. Frank Huber and Mr. Hans-Juergen Goslar, respectively, represented them during their absence
at the Board Meetings."
The 'Board of Directors' is constituted with appropriate combination of Independent, Non-independent Directors,
Executive and Non-executive Directors as per the Clause 49 of the Listing Agreement with the Stock Exchanges.
Details of Directorship of Member(s) of the Board and their attendance at the Board / Committee Meetings
and Annual General Meeting held during the year 2007 are given below:
Name of Member(s) No.* of Total* Number Number of Attendance

of the Board Directorships of Membership / Board at the
held (excluding Chairmanship Meetings Annual General
directorships of committee** Attended Meeting held on
in private (Other than April 26, 2007
companies) Private
as on 31.12.07 Companies)
as on 31.12.07
1. Mr. Avinash Gandhi 9 3 4 Yes
(Chairman) (Including one
Chairmanship)
2. Mr. Biswarup Dhar 1 1 4 Yes
(Managing Director)
3. Mr. Hans-Juergen Goslar 1 - 3 Yes
(until January 12, 2008)
4 Mr. Dietmar Heinrich 1 - 3 No
5. Mr. Frank Huber 1 - 2 Yes
6. Dr. Vidya Sagar 1 2 2 No
7. Mr. Bernhard Steinruecke 5 2 4 Yes
8. Mr. Moreshwar Garde 2 2 4 Yes

(Nominee of GIC) (Including one
Chairmanship)
9. Mr. Yezad Kapadia 2 - 1 @ Yes
(Alternate Director to (By invitation)
Mr. Hans-Juergen Goslar)
10. Mr. R. Sampath Kumar 1 - 2 @ Yes
(Alternate Director to (By invitation)
Mr. Frank Huber)
11. Mr. Kamlesh Tapadar 1 - 1 @ Yes
(Alternate Director to
Mr. Dietmar Heinrich).
* Including directorships / alternate directorships, memberships and Chairmanships of committee(s) of the

Company but excluding foreign Companies.
** Committees considered are Audit Committee and Investors Grievance / Share Transfer Committee of
directors of Companies.
@ Number of Board Meetings attended in a capacity of Alternate Director and not as an invitee.
ANNUAL REPORT
2007
Directors seeking re-appointment at the 45th Annual General Meeting

Mr. Frank Huber and Mr. Avinash Gandhi, retire by rotation and being eligible offer themselves for re-appointment.
Mr. Frank Huber [DIN: 00689169]
Mr. Frank Huber, aged 52 years, has been a Director since February, 1997. At present, he is a Vice President
of Schaeffler KG, Germany and heads the legal function.
He is a Director in the following company :
Sr. Name of Company CIN Position held
No.
1 FAG Bearings India Limited L29130MH1962PLC012340 Director
He is not a member of any committee. He is not holding any share.
Mr. Avinash Gandhi [DIN: 00161107]
Mr. Avinash Gandhi (69 years) was re-appointed as a Director in the 43rd Annual General Meeting on 20th
April 2006. He is the Chairman of the Board and the Audit Committee of the Company. Mr. Gandhi is B.Sc.
in Mechanical Engineering from Birla Institute of Technology, Mesra Ranchi. He was President and Director
of Hyundai Motor India Limited. He had served at very senior positions in reputed organisation like Escorts,
Telco and the Indian Ordinance factories. He has experience of over 45 years.
He is a Director in the following Companies:
Sr. Name of Company CIN Position held
No.
1 FAG Bearings India Limited L29130MH1962PLC012340 Chairman
2 Lumax Industries Limited L74899DL1981PLC012804 Director
3 Fairfield Atlas Limited U34300MH1990PLC055300 Director
4 Uniproducts (India) Limited L45201HR1982PLC014785 Director
5 Panalfa Automotive Pvt. Limited U74899DL1994PTC060689 Director
6 Havells India Limited L31900DL1983PLC016304 Director
7 Continental Engines Limited U34300DL1996PLC081210 Director
8 Mahavir Aluminium Limited U74999DL1979PLC009937 Director
9 Minda Corporation Limited U74899DL1985PLC020401 Director
10 Avinar Consulting Pvt. Limited U74140DL2004PTC127802 Director
11 Panalfa Autoelektrik Pvt. Limited U29221DL2007PTC160549 Director
12 Minda Valeo Security Systems Pvt. Ltd. U34300DL2007PTC157344 Director
13 Alucast Auto Parts Limited U28920KA1995PLC017793 Director
Mr. Gandhi is a member of the following Board Committees:
Sr. Name of Company Name of Committee Position held
No.
1 FAG Bearings India Limited Audit Committee Chairman
2 Lumax Industries Limited Audit Committee Member
Remuneration Committee Chairman
3 Fairfield Atlas Limited Audit Committee Member
Remuneration Committee Chairman
(B) Non-Executive Directors' Compensation and Disclosures

Except Mr. Biswarup Dhar, Managing Director, the remaining directors are Non-Executive Directors. Non-
Executive Directors (except who are in whole-time employment of Schaeffler KG, Germany) are paid sitting
fees for attending Board / Committee Meetings and no commission / share of profit is paid to them. The
detail of compensation paid to them is disclosed under point no 4 of this report.
(C) Board Meeting(s) during 2007
In all, four Board Meetings were held during 2007 on the following dates:
Board Meeting (s) I II III IV
Dates February 8 April 26 July 26 October 25
Start Timing 11.30 AM 11.15 AM 11.45 AM 2.15 PM
Venue Mumbai Mumbai New Delhi Vadodara
The details of attendance of each of the directors at the Board Meeting(s) are given in the table at Point
No.2A. The Board has reviewed periodically the compliance of all the laws applicable to the Company.
(D) Board Procedure
The Notice convening Board Meetings are being sent to each of the directors along with relevant papers
seven to ten days in advance of the date of Board / Committee Meetings. To enable the Board to discharge
its responsibilities effectively, the Managing Director briefs the Board at every meeting on the financial
performance of the Company upto the last completed month as against the budget / budget of the year.
Presentations are made by the Managing Director about the financial, operational performance and market
scenario. The Board also reviews:
1. Strategy and business plans,
2. Annual operating and capital expenditure budgets,
3. Adoption of quarterly / half yearly / annual results (after recommendation of the Audit Committee),
4. Investment plans of the Company,
5. Major accounting provisions and write-offs,
6. Foreign exchange exposure and risks,
7. Compliance with statutory / regulatory requirements and review of major legal issues and
8. Details of Joint Venture or Collaboration Agreement.
(E) Code of Conduct
The Company has laid down a Code of Conduct, under Clause 49 of the Listing Agreement, for all its
Board Members and Senior Management Personnel for avoidance of conflicts of interest. The declarations
with regard to compliance of Code of Conduct have been received for the year 2007 from all Board
Members and Senior Management Personnel.
There were no material financial and commercial transactions, in which Board Members and Senior
Management personnel have personal interest, which could lead to potential conflict of interest with the
Company during the year. The Code of Conduct is also available on Company's website.
3. AUDIT COMMITTEE
A. The Company's Audit Committee has been in existence since 1987, which meets applicable requirements
of the Companies Act, 1956 and Listing Agreement as well. For adoption of changes in members and
sometime in governing regulation, the Committee had been re-constituted from time to time - with the last
reconstitution being on April 20, 2006. The existing Audit Committee consists of the following members :
Sr. Name of Director Acting in the Committee as Category under clause 49
No.
1 Mr. Avinash Gandhi Chairman Independent & Non-executive
2 Mr. Bernhard Steinruecke Member Independent & Non-executive
3 Dr. Vidya Sagar Member Non-Independent & Non-executive
4 Mr. Moreshwar Garde Member Independent & Non-executive
The Company Secretary is the Secretary of the Audit Committee.
B. Details of the Audit Committee Meetings held during 2007 are as follows:
Audit Committee Meeting(s) I II III IV
Dates February 8 April 26 July 26 October 25
Start Timing 10.00 AM 10.15 AM 10.30 AM 1.15 PM
Venue Mumbai Mumbai New Delhi Vadodara
Attended by Members Mr. Gandhi Mr. Gandhi Mr. Gandhi Mr. Gandhi
Mr. Steinruecke Mr. Steinruecke Dr. Sagar Dr. Sagar
Mr. Garde Mr. Garde Mr. Steinruecke Mr. Steinruecke
Mr. Garde Mr. Garde
The meetings of the Audit Committee were also attended by the Managing Director, the Chief Financial
Officer, the Company Secretary, the Internal Auditor and the Statutory Auditors. The Cost Auditor attended
one meeting.
All the members of Audit Committee are financially literate and majority of them have accounting and
financial management expertise.
The Chairman of the Audit Committee, Mr. Avinash Gandhi, attended the 44th Annual General Meeting held
on Thursday, April 26, 2007.
ANNUAL REPORT
2007
C. Terms of Reference
The terms of reference of this Committee include matters specified in the Companies Act, 1956, Listing
Agreement and are specified by the Board in writing. Besides having access to all required information within
the Company, the Committee may obtain external professional advice, whenever required. The Committee
acts as a link between the Statutory Auditors, Internal Auditors and Board of Directors. It is authorised to select
and establish accounting policies, to review reports of Statutory and Internal Auditors, co-ordinate with them to
discuss their observations, suggestions and to strengthen the Internal Control System within the Company. The
Committee is empowered to review the remuneration payable to the Statutory Auditors.
4. REMUNERATION TO DIRECTORS FOR THE YEAR 2007
Remuneration to the Executive Director
As per the Employment Agreement and approval of the Board in its Meeting held on April 26, 2007, the details
of Remuneration paid / payable for the year 2007 are as follows:
(Rs. in million)
Salary & Performance Allowance & Company's Total
Bonus Perquisites contribution to funds
4.5 1.4 0.9 6.8
Notes:
a) Performance Bonus is variable subject to maximum limit of Rs. 1.35 Million.
b) Company's contributions to fund include Superannuation Fund and Provident Fund and exclude the
accruals for gratuity as it is funded on the basis of an actuarial valuation for the Company as a whole.
c) The Employment Agreement may be terminated by either party upon giving to the other 12 months' prior
notice.
d) The Company does not have any Stock Option Scheme as at December 31, 2007.
The remuneration limit of Mr. Dhar for the period up to and including 2010 will be in accordance with the
'Employment Agreement' and the annual increment for the years 2008, 2009 and 2010 will be decided by the
Board of the Company.
Remuneration to the Non-Executive Directors
Directors (except, who are in whole-time employment of the Company or Schaeffler KG, Germany) are paid
sitting fees for attending Board / Committee Meetings and no commission / share of profit is paid to them. The
details of sitting fees paid to them for attending Board / Committee Meetings during the year are as follows:
No. of Meetings Attended
Name of the Director Board Audit Investor's Grievance / Amount

Committee Share Transfer Committee (Rs.)
Mr. Avinash Gandhi 4 4 - 56,000
Dr. Vidya Sagar 2 2 1 32,000
Mr. Bernhard Steinruecke 4 4 - 56,000
Mr. Moreshwar Garde 4 4 2 64,000
Mr. R. Sampath Kumar 2* - - 20,000
Mr. Yezad Kapadia 1* - - 10,000
Mr. Kamlesh Tapadar 1* - - 10,000
Total 248,000
* Number of Board Meetings attended in a capacity of Alternate Director and not as an invitee.
All the directors have been reimbursed expenses incurred by them in discharge of their duties. The payments made
to a director in his individual capacity or to his relatives have been disclosed. However, none of these Directors
has any material pecuniary relationship or transactions with the Company, its Promoters or its Management,
which, in the judgment of the Board, would affect their independence. The Company has not entered into any
materially significant transaction with its promoters, directors or their relatives, or its management, or subsidiaries
that may have potential conflict with the interests of the Company.
Transactions of the Non-Executive Directors or their relatives with the Company are as follows:
1. Professional consultation fees (including service Tax and reimbursement of expenses) paid / payable to
Mr. Avinash Gandhi is Rs. 5,63,040/-.
2. Rs. 72,000/- was paid to relatives of Mr. Avinash Gandhi towards rent.
3. Professional consultation fees paid / payable to Mr. Bernhard Steinruecke is Rs.3,00,000/-.
Directors' Shareholding with the Company
Except Mr. Biswarup Dhar and Mr. Kamlesh Tapadar (who hold 450 shares and 75 shares respectively), no
other director is having shareholding in the Company.
5. INVESTORS GRIEVANCE/SHARE TRANSFER COMMITTEE MEETINGS
Details of the Investors Grievance/Share Transfer Committee Meeting held during 2007 are as follows:
Meeting(s) I II
Dates February 8 July 26
Start Timing 11.00 AM 11.15 AM
Venue Mumbai Mumbai
Attended by Members Mr. Moreshwar Garde Mr. Moreshwar Garde
Mr. Biswarup Dhar Mr. Biswarup Dhar
Dr. Vidya Sagar
The Company Secretary is the Secretary of this Committee and also appointed as Compliance Officer of the
Company.
The Committee meets to deal with matters relating to transfers / transmission of shares and to monitor redressal of
complaints from shareholders relating to transfers, non-receipt of Balance Sheet, non-receipt of dividends declared
etc. During 2007, twelve complaints were received from the shareholders / investors, which were attended and
resolved satisfactorily during the year. There was no complaint pending as on December 31, 2007.
6. GENERAL BODY MEETINGS
Details of Annual General Meetings held in last three years are as follows :
Sr. Meetings
No. Particulars 44th AGM 43rd AGM 42nd AGM
1 Date 26th April, 2007 20th April, 2006 28th April, 2005
2 Start Timing 3.00 PM 3.00 PM 3.00 PM
3 Venue Kamalnayan Bajaj Hall, Gr. Floor, Bajaj Bhawan,
226 Nariman Point, Mumbai - 400 021
4 Resolutions Passed
ORDINARY BUSINESS:
1 Adoption of Accounts As at 31.12.06 As at 31.12.05 As at 31.12.04
2 Declaration of Dividend 40 % 35% 35%
3 Re-appointment of Rotational Mr. Goslar Mr. Gandhi Mr. Huber
Directors under section 256 Mr. Steinruecke Dr. Sagar Mr. Morber
4 Appointment of Auditors & to Mohinder Puri & Co. Deloitte Haskins & Sells,
fix their remuneration Chartered Accountants, Chartered Accountants, Mumbai
New Delhi
SPECIAL BUSINESS :
Appointment of Directors Mr. Heinrich - Mr. Goslar
under Section 257 Mr. Steinruecke
Appointment of Managing Director Mr. Dhar Mr. Jagannath -
under Section 198, 269, 309,
311 and Sch. XIII
Keeping the Register of Members (RoM) Maintenance of RoM at the
of the Company under Section 163 read office of "Intime Spectrum
with Rule 4(1)(b) of SEBI (RTA) Rules 1993 Registry Ltd." (RTA). - -
Fee / Compensation to Non-Executive / - Mr. Gandhi -
Independent Directors under clause 49 of Mr. Steinruecke
Listing Agreement
• No special resolution was passed in any of the last three Annual General Meetings.
• No Extraordinary General Meeting of members was held during the last three years.
• No postal ballots were used for voting at these meetings.
• At the forthcoming Annual General Meeting there is no item on the agenda requiring postal ballot.
ANNUAL REPORT
2007
7. DISCLOSURES
i) There were no materially significant related party transactions that have potential conflict with the interests
of the Company at large.
ii) There have been no instances of any penalties, strictures imposed on the company on any matter relating
to the capital market and listing either by Stock Exchange or SEBI or on any statutory authority during
the last three years.
iii) The Company has adopted and complied with mandatory requirement as per Clause 49 of the Listing
Agreement. Some of the non-mandatory requirements have also been complied with.
iv) The requisite certificates from CEO and CFO were placed before the Board Meetings for consideration.
v) The Company has adequate risk assessment and minimization system in place. The risk management
procedure is reviewed in the Board Meetings periodically.
Non-mandatory Requirements of Clause 49 {Annexure 1D}
1) The Board
Mr. Avinash Gandhi, being Non-Executive Chairman, is entitled for re-imbursement of expenses
incurred in performance of his duties.
2) Shareholder's Rights
A letter from the Chairman, on half yearly financial performance including summary of the significant
events is circulated to all shareholders.
3) Audit Qualification
There has been no Audit Qualification in the Audit Report by the Auditor in year 2007.
4) Whistler Blower Policy
While the Company has not implemented a formal Whistler Blower Policy, employees are not
disqualified from reporting to the Management on any matter concerning unethical behaviour, actual
or suspected fraud or violation of the Company's Code of Conduct or ethics policy.
8. MEANS OF COMMUNICATION
Quarterly Results
Pursuant to provisions of the listing agreements, periodical financial results of the Company are being published
in one widely circulated English newspaper (The Economic Times) and a Vernacular Marathi newspaper
(Maharashtra Times). Financial results, as soon as they are approved by the Board, are forwarded to the Stock
Exchanges (BSE & NSE) and also displayed on Company's Website (www.fag.co.in). Along with the financial
results, other information as per the listing guidelines such as Annual Report and Shareholding Pattern, are
displayed in EDIFAR, which pursuant to listing agreement, would be shifted on website www.corpfiling.co.in
under "Corporate Filing and Dissemination System (CFDS).
The Company does not make any presentation to analysts or to institutional investors. A letter from the Chairman
along with half-yearly results is sent individually to all the shareholders.
9. GENERAL SHAREHOLDER INFORMATION
i) 45th Annual General Meeting is scheduled to be held
On: Thursday, the 17th day of April 2008
At: 3.00 P.M.
At: KAMALNAYAN BAJAJ HALL, Ground Floor, Bajaj Bhawan, Jamnalal Bajaj Marg,
226, Nariman Point, Mumbai-400 021
ii) Financial Year
A twelve month period starting from January 1, 2008 to December 31, 2008.
Financial Reporting for:
(a) 1st quarter ending March 31, 2008 - by the end April 2008,
(b) 2nd quarter & half year ending June 30, 2008 - by the end July 2008,
(c) 3rd quarter ending September 30, 2008 - by the end October 2008,
(d) 4th quarter and year ending December 31, 2008 - by the end Jan /Feb. 2009.
Note: The above dates are indicative.
iii) Date of Book Closure
April 1, 2008 to April 5, 2008 (Both days inclusive)
iv) Dividend Payment Date
The Dividend for the year 2007 shall be declared under agenda item no. 2 of ensuing 45th Annual General
Meeting scheduled on April 17, 2008, and shall be paid within the time limit prescribed in the Companies
Act, 1956.
v) Listing of Equity Shares on Stock Exchanges

The Equity Shares of the Company are listed on Bombay Stock Exchange Limited (BSE) and National
Stock Exchange of India Limited (NSE). The requisite listing fees have been paid to the Stock
Exchanges upto March 2008.
vi) Stock Code
Bombay Stock Exchange Limited (BSE), Mumbai 505790
National Stock Exchange of India Limited (NSE), Mumbai FAGBEARING
Demat International Security Identification Number (ISIN) in NSDL and
CDSL for Equity Shares INE513A01014
vii) Market Price Data

A summary containing monthly High / Low share prices at Bombay Stock Exchange Limited, Mumbai
(BSE) and National Stock Exchange of India Limited (NSE) is as under:
Equity Shares
For the Year 2007 Bombay Stock Exchange Limited, National Stock Exchange
(BSE) of India Limited, (NSE)
High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)
January 698.90 635.00 700.00 640.10
February 725.00 630.00 717.00 635.10
March 687.00 560.00 680.00 559.25
April 625.00 565.00 625.00 566.00
May 709.00 593.00 714.90 595.00
June 690.00 610.00 688.00 591.00
July 685.00 631.35 740.00 630.00
August 712.00 613.00 724.95 601.50
September 699.95 600.00 754.90 617.00
October 690.00 571.00 674.00 570.60
November 624.00 527.00 714.00 532.00
December 720.00 571.00 724.95 583.00
viii) Stock Performance
The performance of the Company's shares relative to the BSE Sensitive Index for the year 2007
is given below:
ANNUAL REPORT
2007
ix) Registrar and Share Transfer Agent

The detail is as under:
Name : Intime Spectrum Registry Limited
Address : 308, Jaldhara Complex, 1st Floor, Opp. Manisha Society,
Vasna Road, VADODARA: 390 015
Phone No. : +91-265-2250 241, 3249 857
Fax No. : +91-265-2250 246
E-mail : Mr. Jaydeep Mehta: jaydeep.mehta@intimespectrum.com
Website : www.intimespectrum.com
Intime Spectrum Registry Limited was appointed as 'Registrar & Share Transfer Agent' for Company's
Equity shares in physical and demat form.
x) Share Transfer System
Trading of equity shares of the Company is possible in Dematerialised Form. Shares sent for transfer
in physical form are registered on a fortnightly basis and returned within a period of thirty days
from the date of receipt of document, provided all the documents are valid and complete in all
respects. The authority to approve the share transfer / transmission lies with Board of Directors.
Further, with an intention to expedite the process of share transfer / transmission, the Board has
delegated this authority to the Managing Director upto 10000 shares per transfer and to issue
duplicate shares certificates in lieu of originals upto 500 shares.
The Company confirms that there is no share transfer pending as on December 31, 2007 for more
than thirty days from the date of lodgement thereof and all requests for demat / remat received
by the Company / Registrar and Transfer Agent were confirmed / rejected within the specified period
of 15 days from the date of receipt thereof.
xi) Information on Unclaimed Dividend
Pursuant to provisions of the Companies Act, 1956 Company is committed in making timely payment
of dividend. Pursuant to provisions of Section 205A of the Companies Act, 1956 dividend that
remained unpaid or unclaimed for the financial year ended on December 31, 2000 will, as on July
26, 2008, be transferred to "Investor Education and Protection Fund" (IEPF) a fund constituted by
the Central Government under Section 205C of the Companies Act, 1956.
Entitled Members are requested to lodge their claims before the last date for claiming unpaid /
unclaimed dividend as shown in the table below for the dividend of respective years. For the claims
lodged after the last due dates, the Company does not take any responsibility for payment, as the
balance amount on last due dates along with interest earned thereon shall be transferred to the
IEPF fund set up under Section 205C of the Companies Act, 1956:
Details of unclaimed dividend
Year ended on Date of declaration Last date for claiming Amount lying
of dividend unpaid dividend unpaid (Rs.)
as on 31.12.2007
31.12.2000 21.06.2001 26.07.2008 442,216

31.12.2001 03.05.2002 08.06.2009 378,914
31.12.2002 24.04.2003 30.05.2010 463,356
31.12.2003 29.04.2004 04.06.2011 460,021
31.12.2004 28.04.2005 03.06.2012 371,677
31.12.2005 20.04.2006 26.05.2013 361,329
31.12.2006 26.04.2007 01.06.2014 404,500
Total amount lying unpaid as on 31.12.2007 2,882,013
xii) Distribution of Shareholding

(As on 31st December, 2007)
Year 2007 2006
Shareholder's Category Number of Number of Number of Number of
Shareholders % Shares held % Shareholders Shares held
Individuals 7,103 95.48 2,172,056 13.07 7,370 2,586,701

Companies 291 3.92 10,279,076 61.86 300 9,312,278
Financial Institutions and Banks 10 0.13 1,625 0.01 10 1,625
Insurance Companies and LIC 3 0.04 374,448 2.25 3 421,732
Mutual Funds and UTI 12 0.16 2,276,524 13.70 12 1,987,007
Foreign Institutional Investors 20 0.27 1,513,541 9.11 19 2,307,927
TOTAL 7,439 100.00 16,617,270 100.00 7,714 16,617,270
Year 2007 2006

Analysis of Shareholding Number of Number of Number of Number of
Shareholders Shares held Shareholders Shares held
1 - 50 2.963 73,321 2,791 75,939
51 - 100 1,584 138,121 1,680 146,990
101 - 250 1,350 232,068 1,490 257,809
251 - 500 741 281,133 825 315,052
501 - 1000 396 30,1709 473 362,382
1001 - 5000 325 69,1845 359 781,199
5001 and above 80 14,899,073 96 14,677,899
TOTAL 7,439 16,617,270 7,714 16,617,270
Note: The information given above in Distribution Schedules is on the basis of a Certificate received from
the Registrars & Transfer Agents, Intime Spectrum Registry Limited, on which auditors have relied.
xiii) Dematerialization of Shares and liquidity
46.47% of the Paid-up Equity Share Capital is held in Dematerialised form with National Securities
Depository Limited and Central Depository Services (India) Limited as on December 31, 2007.
xiv) Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impact
on equity: NIL
xv) Plant Location
The manufacturing activities of the Company are being carried out from plant located at Maneja
in Vadodara, Gujarat State.
xvi) Address for correspondence
In addition to the Registrar's details given in (ix) above, shareholders may correspond at the following
addresses:
Registered Office:
Nariman Bhavan, 8th Floor, 227 Backbay Reclamation, Nariman Point,Mumbai - 400 021
E-mail: muralidharan.nair@schaeffler.com
Head Office & Works:
Maneja, Vadodara - 390 013
E-mail: raj.sarraf@schaeffler.com
In the demat mode, shareholders are advised to correspond with their respective Depository
Participants.
ANNUAL REPORT
2007
The Management Discussion and Analysis Report for the year ended on December 31, 2007 forms part of the
Annual Report.
Sd/-
Avinash Gandhi
Chairman
Mumbai: February 14, 2008
To,
The Members of FAG Bearings India Limited
Re.: Declaration by CEO under Clause 49(1) (D) (ii) of the Listing Agreement
I, Biswarup Dhar, Managing Director of FAG Bearings India Limited, hereby declare that to the best of my knowledge
and belief, all members of the Board of Directors and Senior Management Personnel have confirmed compliance
of Company's Code of Conduct for the year ended on December 31, 2007.
Sd/-
Biswarup Dhar
Mumbai : February 14, 2008 Managing Director
CERTIFICATE
To the Members of FAG Bearings India Limited
We have examined the compliance of conditions of Corporate Governance by FAG Bearings India Limited, for
the year ended on December 31, 2007 as stipulated in Clause 49 of the Listing Agreement of the said Company
with stock exchanges in India.
The compliance of conditions of Corporate Governance is the responsibility of the Company’s management. Our
examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the
compliance of the conditions of Governance. It is neither an audit nor an expression of an opinion on the financial
statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that
the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned
Listing Agreement.
We state that in respect of investor grievances received during the year ended 31st December, 2007, no investor
grievances are pending against the Company, as per the records maintained by the Company and presented
to the Investors/Shareholders Grievance Committee.
We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency
or effectiveness with which the management has conducted the affairs of the Company.
For Samdani Kabra & Associates

Company Secretaries
Sd/-
S.S. Samdani
Partner
Date : 14th February, 2008 FCS/CP No. 3677 / 2863
Place : Vadodara
ANNUAL REPORT
2007
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,

FOREIGN EXCHANGE EARNING AND OUTGO
(Annexure - III to the Directors' Report)
The Particulars under the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 are
as under:
(A) ENERGY CONSERVATION MEASURES TAKEN DURING THE YEAR 2007
1. Installation of 2 nos. air compressor which leads to higher efficiency and power saving.
2. Installation of new air dryer, thereby usage of only 1 no. 4500 CFM air dryer instead of 2 nos. air dryers.
3. Installation of 4 nos. capacitors in the plant to improve the power factor.
4. As usual, the power factor has been maintained at 0.99 resulting in optimized utilization of power.
(B) TECHNOLOGY ADAPTATION, ABSORPTION & INNOVATION
The year has witnessed some developments mainly from better infrastructure point of view, be it environmental
conditions, replacement of machines with modern technology, roofing etc. The advance equipment and methods
have been adopted in Heat Treatment Section, which has resulted improvement in grinding and overall
productivity.
Around 75 nos. young Engineers have been recruited for very critical and precise operations.
TECHNOLOGY ABSORPTION
a. 53 new types of Bearings have been developed successfully.
b. Improvement in Manufacturing Process Conditions like; illumination, temperature mistake proofing, etc. at
Hall 1 and DGBB area.
c. Precise machines for critical components of ball inspection are installed to ensure improvement in
productivity.
(C) FOREIGN EXCHANGE EARNING AND OUTGO
Import substitution is used as a measure of cost reduction, where possible.
(Rs. in million)
Particulars Year Year
2007 2006
Earnings:
Earning in foreign exchange
Service Income 66.0 69.0
FOB value of exports 896.3 847.8
Total foreign exchange earned 962.3 916.8
Outgo:
Imports CIF value of
Raw materials, Components, Products purchased for Sale, Stores & Spares, 1355.0 1225.8
Capital goods and intangible assets
Expenditure in foreign currency
Interest on foreign currency loans, Fees for use of technology, interest on 193.6 166.1
foreign suppliers credit, professional fees and other expenses
Dividend paid to Shareholders (net of tax) 34.1 34.1
Total foreign exchange used 1582.7 1426.0

Sd/-
Mumbai: February 14, 2008 Avinash Gandhi
Chairman
CEO AND CFO CERTIFICATE
To
The Board of Directors
We hereby certify that -
a) We have reviewed financial statements and the cash flow statement for the year ended December 31, 2007
and that to the best of our knowledge and belief
i) these statements do not contain any materially untrue statement or omit any material fact or contain
statements that might be misleading;
ii) these statements together present a true and fair view of the company's affairs and are in compliance
with existing accounting standards, applicable laws and regulations.
b) there are, to the best of our knowledge and belief, no transactions entered into by the company during
the quarter which are fraudulent, illegal or violative of the company's code of conduct.
c) we accept responsibility for establishing and maintaining internal controls for financial reporting, we have
evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and
we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such
internal controls, if any, of which we are aware and the steps we have taken to rectify these deficiencies.
d) We further certify that -
i) there have been no significant changes in the internal control over financial reporting during the year,
ii) there have been no significant changes in the accounting policies during the year and
iii) there have been no instances of significant fraud of which we have become aware and the involvement
therein, if any, of the management or an employee having a significant role in the company's internal
control system over financial reporting.
For FAG Bearings India Limited
Sd/- Sd/-
Biswarup Dhar Satish Patel
Managing Director Chief Financial Officer
Place : Mumbai
Auditor's Report to the members of FAG Bearings India Limited
We have audited the attached Balance Sheet of FAG Bearings India Limited, as at December 31, 2007 and also the Profit
and Loss Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that
date. 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.
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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
1) As required by the Companies (Auditor’s Report) Order, 2003 as amended by the Companies (Auditor’s Report)
(Amendment) Order, 2004 issued by the Central Government of India in terms of Sub-Section (4A) of Section 227
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.
2) Further to our comments in the Annexure referred to above, we report that:
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 appears
from our examination of such books;
c) the Balance Sheet, the Profit and Loss Account 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 Profit and Loss Account and the Cash Flow Statement dealt with by this
report comply with the accounting standards referred to in Sub-Section (3C) of Section 211 of the Companies
Act, 1956;
e) on the basis of written representations received from the directors, as on December 31, 2007 and taken on
record by the Board of Directors, we report that none of the directors is disqualified as on December 31, 2007
from being appointed as a director in terms of clause (g) of Sub-Section (1) of Section 274 of the Companies
Act, 1956;
f) 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 December 31, 2007,
(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.
For Mohinder Puri & Company

Chartered Accountants
Sd/-
VIKAS VIG
Partner
Membership No.16920
Place : Mumbai
ANNUAL REPORT
2007
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE AUDITOR'S REPORT TO THE MEMBERS OF FAG

BEARINGS INDIA LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED DECEMBER 31, 2007
(i) (a) The Company has maintained proper records showing full particulars including quantitative
details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of fixed assets which, in our
opinion is reasonable. The assets which were to be covered as per the said programme, have
been physically ver ified by the management during the year. According to the infor mation and
explanations given to us, no material discrepancies were noticed on such verification.
(c) There was no disposal of substantial par t of fixed assets during the year.
(ii) (a) The inventories have been physically verified by the management during the year 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 are reasonable and adequate
in relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the records of the inventor y, we are of the opinion that the
Company is maintaining proper records of inventory. According to the information and explanations
given to us, no material discrepancies were noticed on physical verification between the
physical stock and the book records.
(iii) (a) In an earlier year, the Company granted unsecured loans to two Companies which have been
covered during the year in the register maintained under Section 301 of the Companies Act,
1956 (the Act). The maximum amount involved during the year was Rs. 61 million and the year-
end balance of loans granted to such parties was Rs. 61 million.
(b) In our opinion, the rate of interest and other terms and conditions of the above loans are not,
pr ima facie, prejudicial to the interest of the Company.
(c) The par ties are generally regular in payment of interest to the Company. The principal amount
was not due for repayment as per the rescheduled terms of repayment of the loans.
(d) There is no overdue interest outstanding as at the year end.
(e) The Company has not taken any loans, secured or unsecured from companies, firms or other
par ties covered in the register maintained under Section 301 of the Act. Accordingly, clauses
(iii)(f) and (iii)(g) of paragraph 4 of the Companies (Auditors’s Repor t) Order, 2003 (hereinafter
referred to as the order) are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, having regard to the
explanation that some of the items are of a special nature and comparable alternative quotations
are not available, there is an adequate internal control system commensurate with the size of the
Company and the nature of its business for the purchase of inventory and fixed assets and for the
sale of goods and services. During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control system in respect of these areas.
(v) (a) Based on the audit procedures applied by us and according to the information and
explanations provided by the management, we are of the opinion, the transactions that need
to be entered into the register in pursunce of Section 301 of the Act have been so entered.
(b) In our opinion and according to the information and explanations given to us, the transactions
made in pursuance of contracts or arrangements entered in the registers maintained under
Section 301 of the Companies Act, 1956 and exceeding the value of five lakh rupees in respect
of any party during the year have been made at prices which are reasonable having regard
to prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations given to us, the Company has
complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Act
and the Companies (Acceptance of Deposits) Rules, 1975, with regard to the deposits accepted from
the public in earlier year/s which have remained unclaimed. We have been informed that during the
year, no order has been passed by the Company Law Board or National Company Law Tribunal or
Reser ve Bank of India or any Cour t or any other Tribunal in respect of such deposits.
(vii) The Company has a dedicated internal audit department carrying out Internal Audits. In our opinion ,
the Company has an internal audit system commensurate with the size and the nature of its business.
However, company is taking steps to fur ther enlarge the scope and coverage of inter nal audit to be
more effective.
(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules
made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the
Act and are of the opinion that prima facie the prescribed accounts and records have been made
and maintained. We have not, however, made a detailed examination of the records.
(ix) (a) According to the information and explanations given to us and according to the records of the
Company, the Company is regular in depositing with appropriate authorities undisputed statutory
dues including provident fund, investor education and protection fund, employees’ state insurance,
income tax, sales tax, value added tax, wealth tax, service tax, octroi, custom duty, excise duty,
cess and other material statutory dues applicable to it except for a delay in deposit of sales
tax at one of the branch.
(b) According to the information and explanations given to us, no undisputed amounts payable in
respect of provident fund, investor education and protection fund, employees’ state insurance,
income tax, sales tax, value added tax, wealth tax, service tax, octroi, custom duty, excise duty,
cess and other material statutory dues applicable to it were in arrears as at the balance sheet
date for a period of more than six months from the date they became payable.
(c) As explained to us and according to the records of the Company, the following dues as at the
year end of income tax/ sales tax/ value added tax/ wealth tax / service tax/ custom duty/ excise
duty/ cess have not been deposited on account of dispute:
Name of the Nature of the Due as at Period to which Forum where dispute
Statute Dues the year end the amount is pending
(Rs.) relates
The Income Tax Income Tax 9,814,228 A.Y. 2003-04 Commissioner of

Act, 1961 (penalty) Income Tax (Appeals)
The Central Sales Sales Tax 13,572,126 January 2003 to Joint Commissioner of
Tax Act, 1956 (including interest) December 2003 Sales Tax (Appeals)
The Gujarat Sales Sales Tax 1,085,868 2004 Joint Commissioner of

Tax Act, 1969 (including interest) Sales Tax (Appeals)
The Central Sales Sales Tax 44,154,235 2004 Joint Commissioner of

Tax Act, 1956 (including interest) Sales Tax (Appeals)
The Finance Act, Service Tax 42,597,248 July 2003 to The Company is in
1994 (including penalty) December 2004 the process of filing
the appeal
The Finance Act, Service Tax 500,000 November 1997 Central Excise and
1994 (Estimated) to January 1998 Service Tax Appellate
Tribunal, Mumbai
ANNUAL REPORT
2007
(x) The Company does not have accumulated losses. The Company has not incurred any cash losses during the
financial year covered by our audit and in the immediately preceding financial year.
(xi) As the Company has no amount due to any financial institution, bank or debenture holder, the provisions of Clause
4(xi) of the Order are not applicable to the Company.
(xii) Since the Company has not granted any loans or advances on the basis of security by way of pledge of shares,
debentures and other securities, the provisions of Clause 4(xii) of the Order are not applicable.
(xiii) As the Company is not a chit fund/ nidhi /mutual benefit fund / society, the provisions of Clause 4(xiii) of the Order are
not applicable.
(xiv) Based on our examination of the records and evaluation of the related internal controls, we are of the opinion that
proper records have been maintained of the transactions and contracts of dealings or trading in shares, securities,
debentures and other investments with timely entries in those records. We also report that the Company has held the
shares, securities, debentures and other investments in its own name.
(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken
by others from banks or financial institutions.
(xvi) Since the Company has not obtained any term loans, the Provisions of Clause 4(xvi) of the Order are not applicable.
(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the
Company, we report that no funds raised on short-term basis have been used for long-term investments.
(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of
shares during the year to parties or companies covered in the register maintained under Section 301 of the Act.
(xix) Since the Company has not issued any debentures, the Provisions of Clause 4(xix) of the Order are not applicable.
(xx) Since the Company has not raised any money during the year by way of public issue, the provisions of Clause 4(xx)
of the Order are not applicable.
(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial
statements and according to the information and explanations given by the management, we report that no fraud on
or by the Company has been noticed or reported during the course of our audit.
For Mohinder Puri & Company

Chartered Accountants
Sd/-
VIKAS VIG
Partner
Membership No.16920
Place : Mumbai
ANNUAL REPORT
2007
Balance Sheet
As at December 31, 2007
(Rs. in million)
Schedule 31.12.2007 31.12.2006
(I) SOURCES OF FUNDS
(1) Shareholders' funds :
(a) Capital 1 166.2 166.2
(b) Reserves and surplus 2 3014.8 2310.1
3181.0 2476.3
(2) Deferred tax liabilities (Net) [Note 19] 66.3 51.8

Total 3247.3 2528.1
(II) APPLICATION OF FUNDS

(1) Fixed assets : 3
(a) Gross block 3630.5 3246.0
(b) Less : Depreciation 2318.2 2133.7
(c) Net block 1312.3 1112.3
(d) Capital work-in-progress 103.2 259.9
(e) Capital advances 7.4 19.8
1422.9 1392.0
(2) Investments 4 12.2 26.5
(3) Current assets, loans and advances :

(a) Inventories 5 982.8 918.7
(b) Sundry debtors 6 1046.7 858.2
(c) Cash and bank balances 7 639.3 122.9
(d) Other current assets 8 13.1 2.1
(e) Loans and advances 9 317.3 253.7
2999.2 2155.6
Less : Current liabilities and provisions :
(a) Current liabilities 10 1016.4 878.9

(b) Provisions 11 170.6 167.1
1187.0 1046.0
Net current assets 1812.2 1109.6
Total 3247.3 2528.1
Statement of significant accounting policies 15
Notes to the accounts 16
Per our report attached Sd/-

For Mohinder Puri & Co. Avinash Gandhi Chairman
Chartered Accountants Biswarup Dhar Managing Director
Satish Patel Chief Financial Officer
Sd/- Raj Sarraf Company Secretary
Vikas Vig
Partner
Membership No. 16920
Mumbai : February 14, 2008 Mumbai : February 14, 2008
ANNUAL REPORT
2007
Profit and Loss Account

for the year ended December 31, 2007
(Rs. in million)
Schedule Year Year
2007 2006
INCOME
Sales turnover (Gross) 7159.7 6122.5

Less : Excise duty 746.7 702.1
Sales turnover (Net) 6413.0 5420.4
Other income 12 103.2 108.7

6516.2 5529.1
EXPENDITURE
Manufacturing and other expenses 13 5103.7 4239.0

Depreciation / Amortisation [Note 2 (a)(ii)] 193.6 183.0
Interest(Net) 14 (22.7 ) (0.7 )
5274.6 4421.3
PROFIT FOR THE YEAR BEFORE PRIOR PERIOD 1241.6 1107.8

ADJUSTMENTS AND TAX
Prior period adjustments [Note 27] 3.2 -

PROFIT BEFORE TAX 1244.8 1107.8
Less : Provision for tax
(a) Current tax 423.5 356.0
(b) Deferred tax 19.8 (16.5 )
(c) Fringe benefit tax 7.2 6.5
Tax adjustments for earlier years (net) (1.0 ) 24.8
449.5 370.8
PROFIT AFTER TAX 795.3 737.0
Balance brought forward 1206.6 619.1

Available for appropriation 2001.9 1356.1
APPROPRIATIONS :

Income tax on dividend (*including for an earlier year Rs.2 million) 13.3 * 9.3
Transferred to general reserve 200.0 73.7
Balance carried to Balance Sheet 1722.1 1206.6
Earnings per equity share of nominal value of Rs.10 each :

Basic and diluted [Note 22] 47.85 44.35
Statement of significant accounting policies 15
Notes to the accounts 16

Vikas Vig
Partner
ANNUAL REPORT
2007
CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2007
(Rs. in million)
2007 2006
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit for the year before tax 1,244.8 1,107.6
Adjustment for non-cash item/items required to be
disclosed seperately:
Depreciation/ Amortisation 193.6 183.0
Interest expenses 4.0 13.3
Loss/ (Profit) on sale / write off of fixed assets(net) 0.3 0.1
Unrealised exchange loss / (gain) (net) (0.1) 0.9
Interest income including interest on investment (26.7) (14.0)
Loss/ (Profit) on sale of investments (net) 0.7 -
Provision for doubtful debts/advances 43.1 -
Provision for Gratuity/leave encashment 11.7 7.0
Provision for warranty 0.9 -
Provision for diminution in value of long term investment 10.6 0.7
Prior period adjustments (3.2) -
234.9 191.0
Operating profit before changes in working capital 1,479.7 1,298.6
Adjustment for changes in Working Capital and Provisions :

Trade and other receivables (222.3) (203.2)
Inventories (64.1) (223.5)
Trade and other payables 153.3 223.5
(133.1) (203.2)
Cash generated from operations 1,346.6 1,095.4
Income tax including fringe benefit tax paid(Net of refunds) (528.0) (395.4)
Prior period adjustments 3.2 -
A Net cash from operating activities 821.8 700.0
CASH FLOW FROM INVESTING ACTIVITIES

Fixed Assets (Note 1) :
Purchase (242.4) (477.1)
Sale 0.2 2.4
Sale of Long term Investment 3.0 -
Interest Received 15.4 14.2
B Net cash used in investing activities (223.8) (460.5)
CASH FLOW FROM FINANCING ACTIVITIES

Increase/(Decrease) in short term borrowings from banks - (111.9)
Interest paid (4.0) (18.3)
Dividend paid (66.3) (58.1)
Tax on dividend paid (11.3) (8.1)
C Net cash used in financing activities (81.6) (196.4)
Net change in cash and cash equivalents (A+B+C) 516.4 43.1
Cash or cash equivalents (Opening balance) (Note 2) 122.9 79.8
Cash or cash equivalents (Closing balance) (Note 2) 639.3 122.9
516.4 43.1
Notes:
1. Purchase of fixed assets includes payments for items in capital work in progress and advances of capital
nature.
2. Cash and Cash equivalents comprise of :
(Rs. in million)
31.12.2007 31.12.2006
Cash on hand 0.8 0.6
Cheques on hand 17.7 15.3
With scheduled banks on :
Current accounts 140.8 103.4
Deposit accounts 480.0 3.6
639.3 122.9
3. Previous year's figures have been regrouped wherever necessary to conform to the current year's
classifications.

Vikas Vig
Partner
Schedules forming part of the accounts
(Rs. in million)
31.12.2007 31.12.2006
1. SHARE CAPITAL
Authorised :
20,000,000 Equity Shares of Rs. 10 each 200.0 200.0
Issued :
16,818,270 Equity Shares of Rs.10 each 168.2 168.2
Subscribed and paid up:

16,617,270 Equity Shares of Rs. 10 each
fully paid [Note 1] 166.2 166.2
2. RESERVES AND SURPLUS
Revaluation reserve account [Note 2 (a)] :

Per last Balance Sheet 24.7 25.3
Less : Transferred to Profit and Loss Account
for adjustment of depreciation 0.6 0.6
24.1 24.7
Securities premium account :

General Reserve :
Add : Transferred from Profit and Loss Account 200.0 73.7
Less : Transitional adjustment for leave encashment
liability (Refer Note No.28) (10.3)
1068.4 878.7
Profit and Loss Account 1,722.1 1,206.5
3,014.8 2,310.1
3. FIXED ASSETS
(Rs. in million)
Gross Block Depreciation / Amortisation Net Block
Description As at Additions Deductions As at As at Additions Deductions As at As at As at
January 1, December 31, January 1, December 31, December 31, December 31,
2007 2007 2007 2007 2007 2006
1 Tangible assets
a) Land-freehold [Note 2(a)(i)] 19.4 - - 19.4 - - - - 19.4 19.4
b) Buildings and roads [Notes 2(a) &(b)] 212.7 16.1 - 228.8 65.7 6.5 - 72.2 156.6 147.0
c) Plant and Machinery 2883.2 367.4 9.3 3241.3 1980.3 182.5 9.3 2153.5 1087.8 902.9
d) Furniture, fittings & equipment 71.9 9.7 0.9 80.7 35.5 4.1 0.4 39.2 41.5 36.4
e) Motor vehicles 10.9 1.5 - 12.4 4.3 1.1 - 5.4 7.0 6.6
2 Intangible assets
a) Software upgradation - acquired 34.8 - - 34.8 34.8 - - 34.8 - -
b) Lumpsum fees for technical know-how 13.1 - - 13.1 13.1 - - 13.1 - -
Total 3246.0 394.7 10.2 3630.5 2133.7 194.2 9.7 2318.2 1312.3
(2786.7) (467.3) (8.0) (3246.0) (1955.6) (183.6) (5.5) (2133.7) 1112.3

Capital work-in-progress 103.2 259.9
Capital advances 7.4 19.8
1422.9 1392.0
The figures in the brackets represent previous year's figures.

ANNUAL REPORT
2007
(Rs. in million)
31.12.2007 31.12.2006
4. INVESTMENTS (Quoted, unless otherwise stated)
Long term Investments
Non-trade:
Government Securities-
30,000 Nos. 13.05% Government of India Securities 2007 - 3.7

of Rs.100 each
Investments in shares and bonds
5,000 Equity Shares of Rs.25 each fully paid up in

Co-op. Bank of Baroda Ltd. (Unquoted) 0.1 0.1
6 Nos. 11% Bonds 2011 of Rs.500,000 each in
Steel Authority of India Limited 3.3 3.3
Trade (Unquoted)
1,100,000 shares of Rs.10 each of FAG Roller 11.0 11.0
Bearings Private Limited(Company under the same
management)
14.4 18.1
Current investments (Non-trade)
91,001 Nos. 6.75% Tax Free US 64 Bonds 2008 of Rs.100 each 9.1 9.1
23.5 27.1
Less:
Provision for diminution in value of investments (11.3 ) (0.7 )
12.2 26.5
Aggregate book value of quoted investments 12.4 16.0

Aggregate market value of quoted investments 12.1 15.4
Aggregate book value of investments - unquoted 11.1 11.1
5. INVENTORIES
Stores and spares 63.0 78.2

Loose tools 22.7 20.2
Stock in trade :
Raw materials and components 297.2 286.6
Finished goods - Produced/Purchased for sale 511.4 436.3
Work-in-progress 88.5 97.4
982.8 918.7
6. SUNDRY DEBTORS [Note 3]
(Considered good, unless otherwise stated)
Debts outstanding for a period exceeding six months :

Secured 0.2 0.1
Unsecured - considered good 3.5 2.0

- considered doubtful 5.4 5.0
9.1 7.1
Other Debts :
Secured 7.0 6.2
Unsecured - considered good 1,036.0 849.9
- considered doubtful 4.2 -
1047.2 856.1
1056.3 863.2
Less : Provision for doubtful debts 9.6 5.0
1046.7 858.2
(Rs. in million)
31.12.2007 31.12.2006
7. CASH AND BANK BALANCES
Cash on hand 0.8 0.6

Cheques on hand 17.7 15.3
18.5 15.9
With scheduled banks on :
Current accounts 140.8 103.4
Deposit accounts 480.0 3.6
620.8 107.0
639.3 122.9
8. OTHER CURRENT ASSETS
Export incentive receivable 4.1 1.6

Others 9.0 0.5
13.1 2.1
9. LOANS AND ADVANCES

(Considered good, unless otherwise stated)
Advances recoverable in cash or in kind

or for value to be received [Note 4]
Unsecured - Considered good 144.7
Unsecured - Considered doubtful 38.5 183.2 187.8
Balance with excise authorities 75.4 44.1
Income tax payments less provisions 97.2 21.8
355.8 253.7
Less : Provision for doubtful loans and advances (38.5 ) -
317.3 253.7
10. CURRENT LIABILITIES
Acceptances 2.7 17.3

Sundry creditors [including creditors for capital
expenditure Rs.17.2 million(2006: Rs.34 million)] 996.8 846.1
Investor Education and Protection Fund shall be
credited by the following amount:
- Unclaimed dividend* 2.9 2.7
- Unclaimed matured deposits * 0.1 0.1
- Interest accrued on Unclaimed matured deposits * 0.2 0.2
Security deposits 13.7 12.5
1,016.4 878.9
The figures reflect the position as at the year end.“The actual
amount to be transferred to the Fund in this respect shall be
determined on the due dates.
11. PROVISIONS
Provision for tax less payments :

Income tax 31.8 57.5
Fringe benefit tax 1.5 1.5
Wealth tax 0.4 0.4
Income tax on proposed dividend 11.3 9.3
Provision for gratuity 7.8 4.3
Provision for leave encashment 51.3 27.6
170.6 167.1
ANNUAL REPORT
2007
(Rs. in million)
Year Year
2007 2006
12. OTHER INCOME
Service income 71.7 74.5

Write back of provision for doubtful debts and advances(net) - 0.9
Miscellaneous income 31.5 33.3
103.2 108.7
13. MANUFACTURING AND OTHER EXPENSES
(i) Raw materials and components consumed [Notes 5(a)(i) and 10] 2,078.1 1,921.0
(ii) Purchase of products for sale 1,387.8 1,100.0
(iii) Increase in work-in-progress and finished goods :
Opening stock 533.7 329.7
Less : Closing stock 599.9 533.7
(66.2 ) (204.0 )
(iv) Payments to and provisions for employees :
Salaries, wages and bonus 430.4 349.3
Contribution to gratuity fund 9.7 4.6
Contribution to provident and other funds 24.5 20.9
Staff welfare 58.9 47.0
523.5 421.8
(v) Expenses for manufacture, administration and selling :
Stores, spares and tools consumed [Note 5(a)(ii)] 299.6 283.8
Power and fuel 149.4 133.2
Repairs to buildings 8.5 8.8
Repairs to machinery [Note 5(b)] 14.7 18.5
Other repairs 9.9 6.8
Rates and taxes 9.2 8.8
Excise duty [Note 25] 2.1 24.2
Rent 4.1 2.7
Advertising and sales promotion expenses 41.6 24.2
Legal and professional fees [Note 5(iii)] 10.3 8.8
Outside services 105.2 94.8
Travelling 49.1 37.3
Insurance 21.8 18.5
Fees for use of technology 142.7 121.8
Cash discount 26.2 19.0
Turnover bonus / discounts 115.2 86.3
Freight and forwarding expenses 74.1 63.6
Bad debts / advances written off (net) - 0.4
Provision for doubtful debts and advances 43.1 -
Provision for diminution in value of long term investment 10.6 0.7
Loss on sale of long term investment 0.7 -
Loss on sale/write off of fixed assets (net) 0.3 0.1
Other expenses 42.1 37.9
1,180.5 1,000.2
5,103.7 4,239.0
14. INTEREST
On fixed loans - 10.5

On others 4.0 2.8
Interest income on income tax / sales tax refund, (25.6) (12.7 )
bank deposits, from customers/suppliers, etc.
(Tax deducted at source Rs.2.7 million, 2006: Rs.1.6 million)
Interest income from non-trade investments - Gross
Current investments - (0.6 )
Long term investments(Tax deducted at source Rs.0.1million, (1.1 ) (0.7 )
2006: Rs.0.1 million) (1.1 ) (1.3 )
(22.7 ) (0.7 )
15. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
A) Basis of preparation
The financial statements have been prepared to comply in all material respects in respect with the Notified
Accounting Standards by Companies Accounting Standards Rules, 2006 and the relevant provisions of the
Companies Act, 1956. The financial statements have been prepared under the historical cost convention
on an accrual basis. The accounting policies have been consistently applied by the Company, are consistent
with those used in the previous year.
B) Use of Estimates
The preparation of financial statements in conformity with general accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent liabilities at the date of the financial statements and the results of operations
during the reporting period end. Although these estimates are based upon management's best knowledge
of current events and actions, actual results could differ from these estimates.
C) Fixed assets and depreciation
(i) Fixed assets are stated at cost of acquisition or construction or at revalued amounts, net of impairment
loss if any, less depreciation/ amortisation. Costs include financing costs of borrowed funds attributable
to acquisition or construction of fixed assets, upto the date the assets are put to use. Assessment
of indication of impairment of an asset is made at the year end and impairment loss, if any, recognised.
(ii) Depreciation/Amortisation:
a) Tangible assets:
i) Depreciation on Buildings and Roads acquired prior to April 2, 1987 is provided on straight
line method at the rates - 3.39%, 2.31% (as applicable) which are different from the principal
rates prescribed in Schedule XIV to the Companies Act, 1956 or the useful life considered
in the rates so prescribed.
ii) Assets individually costing Rs.5,000 or less are depreciated fully in the year when the
assets are put to use.
iii) In respect of the other assets, depreciation is provided on straight line method at the rates
and in the manner laid down in Schedule XIV to the Companies Act, 1956.
b) Intangible assets:
These are amortised equally over a period of three years.
D) Impairment
The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of
impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling
price and value in use. In assessing value in use, the Company measures its 'value in use' on the basis
of undiscounted cash flows of next five years projections estimated based on current prices.
After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining
useful life.
E) Investments
Investments that are readily realisable and intended to be held for not more than a year are classified as
current investments. All other investments are classified as long-term investments. Current investments are
valued at the lower of cost and fair value. Changes in the carrying amount of current investments are
recognised in the Profit and Loss Account. Long-term investments are valued at cost, less any provision
ANNUAL REPORT
2007
for diminution, other than temporary, in the value of such investments; decline, if any, is charged to the Profit
and Loss Account. Cost comprises cost of acquisition and related expenses such as brokerage and stamp
duties.
F) Inventories
Inventories are valued at the lower of cost and net realisable value, except for scrap which is valued at
net realisable value. Cost is ascertained on a moving weighted average basis except for goods in transit
which is ascertained on a specific identification basis. Work-in-progress and manufactured finished goods
are valued on full absorption cost basis and include material, labour and factory overheads.
G) Foreign Currency Transactions
Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency
amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.
Conversion
Foreign currency monetary items are reported using the closing rate.
Exchange Differences
Exchange differences arising on the settlement of monetary items or on reporting company's monetary items
at rates different from those at which they were initially recorded during the year, or reported in previous
financial statements, are recognized as income or as expenses in the year in which they arise.
H) a) Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured.
(i) Sale of goods is recognised on shipment or dispatch to customers. "Sales" are net of sales tax/
value added tax and sales returns.
(ii) Income from service contracts is recognised on the basis of the "completed contract method".
(iii) Consultancy income on indenting business is recognised based on intimation received for sales
made.
(iv) Dividend income from investments is recognised when the Company's right to receive payment
is established.
b) Interest Income
Interest income is accounted for on a time proportion basis taking into account the amount outstanding
and the rate applicable.
I) Research and Development
All revenue expenses pertaining to research and development are charged to the Profit and Loss Account
in the year in which they are incurred and expenditure of capital nature is capitalised as fixed assets, and
depreciated as per the Company's depreciation policy.
J) Retirement benefits
Retirement benefit costs for the year are determined on the following basis:
(i) All employees are covered under contributory provident fund benefit of a contribution of 12% of salary
and certain allowances. Certain employees are also covered by a Company managed Superannuation
fund benefit at a contribution of 15% of salary and certain allowances. Both are defined contribution
schemes and the contributions are charged to Profit and Loss Account of the year when the
contributions to the respective funds are due. There are no obligation other than the contributions
payable to the respective fund.
(ii) All employees are covered under Employees’ Gratuity Scheme which is a defined benefit plan. The
Company contributes to the Fund on the basis of the year-end liability actuarially determined in
pursuance of the Scheme. All actuarial gains/losses arising during the accounting year are recognised
immediately in the Profit and Loss Account as income or expense.
(iii) Accrual for leave encashment benefit is made on the basis of a year-end actuarial valuation in
pursuance of the Company's leave rules.
K) Income and Deferred Taxes
Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit
tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian
Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable
income and accounting income for the year and reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the
balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty
that sufficient future taxable income will be available against which such deferred tax assets can be realised.
In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax
assets are recognised only if there is virtual certainty supported by convincing evidence that they can be
realised against future taxable profits.
At each balance sheet date the Company reassesses unrecognized deferred tax assets. It recognises
unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain,
as the case may be that sufficient future taxable income will be available against which such deferred tax
assets can be realised.
L) Earnings per share
Basic earning per share are calculated by dividing the net profit or loss for the period attributable to equity
shareholders by the weighted average number of equity share outstanding during the period.
M) Provisions
A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable
that an outflow of resources will be required to settle the obligation, in respect of which a realiable estimate
can be made. Provisions are not discounted to its present value and are determined based on best estimate
required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date
and adjusted to reflect the current best estimates.
N) Cash and Cash Equivalents
Cash and cash equivalents in the cash flow comprise cash at bank and cash/cheques in hand and short
term deposits with Banks.
ANNUAL REPORT
2007
16. NOTES TO THE ACCOUNTS FOR THE YEAR ENDED DECEMBER 31, 2007
1) Share Capital :
(a) Out of the total subscribed and paid-up capital,
(i) 71,250 Equity Shares of Rs. 10 each are allotted as fully paid-up pursuant to contracts without
payment having been received in cash.
(ii) 4,523,590 Equity Shares of Rs. 10 each were allotted as fully paid-up by way of bonus shares
by Capitalisation from Securities Premium Account.
(b) The total number of shares held by the Holding Company FAG Kugelfischer GmbH, Germany as at
the year end are 8,529,183.
2) Fixed Assets :
(a) (i) Land, Buildings and Roads were revalued as at December 31, 1985 at depreciated market value
on the basis of valuation made by a Government Registered Valuer. The revalued amounts were
revised during the year ended December 31, 1987 by the said Valuer based on certain
information provided by the Company. The indices, if any, used are not stated in the valuation.
The amounts added on revaluation after the aforesaid revision are as under:
(Rs. in million)
Land 19.1
Buildings and Roads 19.0
38.1
(ii) Depreciation on the increase in the value of fixed assets due to revaluation is charged to the
Revaluation Reserve. Consequently, the depreciation charge for the year shown in the profit
and loss account is after deducting an amount of Rs. 0.6 million (2006: Rs.0.6 million),
representing depreciation on the increase due to revaluation of Buildings and Roads transferred
from the Revaluation Reserve.
(b) Buildings and Roads include Rs. 250, being cost of five ordinary shares of Rs. 50 each of Nariman
Bhavan Premises Co-operative Society Limited and Rs. 500 being cost of ten ordinary shares of Rs.
50 each of Parekh Market Premises Co-Operative Society Limited, which entitle the Company to real
estate.
3) Sundry Debtors include:
Dues from INA Bearings India Private Limited (INA India) Rs. Nil (2006: Rs. 0.3 million) and LuK India Private
Limited (LuK India) Nil (2006: Rs.0.2 million) being companies under the same management. Two of the
Directors of the Company are Directors in INA India.
4) Loans and Advances include :
(a) Amount due from Directors of the Company Rs. Nil (2006: Rs. Nil). Maximum amount due from Directors
of the Company at any time during the year Rs. Nil (2006 : Rs. 0.3 million).
(b) Dues as under aggregating Rs. 84.7 million (2006: Rs. 81.0 million) from FAG Roller Bearings Private
Limited (FRB) and INA Bearings India Private Limited (INA India), the Companies under the same
management. Two directors of the Company are directors in FRB and in INA India.
(i) Loan Rs. 38.5 million to FRB (2006: Rs. 38.5 million)
(ii) Loan Rs. 22.5 million to INA India (2006 : Rs. 22.5 million)
(iii) Other dues Rs. 23.2 million from FRB (2006 : Rs. 19.1 million)
(iv) Other dues Rs. 0.5 million from INA India (2006 :Rs. 0.9 million)
Maximum amount outstanding during the year in respect of (i) and (iii) above Rs. 62.0 million
(2006: Rs. 62.8 million) and in respect of (ii) and (iv) above Rs. 24.5 million (2006: Rs. 24.5 million).
5) Manufacturing and other expenses :

(a) Outside processing charges incurred during the year are included in :
(i) Raw materials and components consumed Rs. 248.9 million (2006: Rs. 238.7 million).
(ii) Stores, spares and tools consumed Rs. 2.6 million (2006: Rs. 2.5 million).
(b) Repairs to machinery exclude spares consumed Rs. 29.2 million (2006: Rs. 31.0 million) and payments
to and provisions for employees Rs. 29.5 million (2006: Rs. 22.5 million).
(c) (i) Managerial remuneration for the year Rs.7.9 million (2006: Rs. 8.4 million).
(ii) The above includes the following :
(Rs.in million)
Year Year
2007 2006
a) Remuneration to Managing Director
Salary (including performance bonus) 4.5 4.0
Commission - 0.3
Allowances 1.3 1.8
Perquisites 0.1 0.3
Contribution to Provident and Superannuation Fund* 0.9 0.9
Total 6.8 7.3
b) Consultancy Fee and Professional Charges for the services rendered by the Chairman
and Independent Director Rs. 0.8 million (2006: Rs. 0.8 million)
c) Pursuant to provisions of section 309(2) of the Companies Act, 1956 Director's sitting fee
was paid in 2007 Rs. 0.3 million (2006: Rs. 0.3 million).
* Excludes the accrual for gratuity as it is funded on the basis of an actuarial valuation for the
Company as a whole.
(Rs.in million)
Year Year
2007 2006
(iii) Remuneration to Auditors: (Excluding Service Tax)
Audit fees 1.2 1.2
Other services 1.4 1.4
Out-of-pocket expenses* 0.5 0.2
3.1 2.8
* Includes payment to erstwhile auditors Rs.0.4 million
(Rs. in million)
Year Year
2007 2006
6) Contracts on Capital account :
Estimated amount of contracts remaining to be executed on capital account and
not provided for ( net of capital advances) 83.8 87.3
7) Contingent liabilities not provided for in respect of :
a) Claims against the company not acknowledged as debts :
i) Employees and ex-employees related matters :
— Matters pending in Labour Court/Civil Court/High Court for reinstatement of service/recovery
of salary Rs.63.6 million (2006: Rs.16.3 million);
— Applicability of provident fund on certain benefits to employees Rs.59.8 million (2006:Rs.48.0
million);
— Demand for discontinuing of contract system and for differential wages Rs. 48.5 million
(2006:Rs.40.7 million);
ANNUAL REPORT
2007
— Applicability of Employees State Insurance on certain benefits to employees etc. Rs.3.9

million (2006: Rs.3.6 million).
ii) Others : Rs.86.1 million (2006: Rs.1.0 million)
b) Sales Tax:
— For interest on tax paid under the Amnesty Scheme and for non receipt of C Forms in respect
of Assessment years 1995-96 to 2001 Rs. 6.5 million (2006:Rs.6.5 million);
— For non receipt of C Forms and rejection of Company's claim of certain sales as exempt sales
in respect of Assessment years 2002 to 2004 Rs.76.0 million (2006:Rs.21.3 million).
c) Service Tax:
— Service Tax on royalty Rs. 42.6 million (2006:Rs. Nil)
— Others Rs. 0.5 million (2006 Rs. Nil)
d) Income Tax (Exclusive of the effect of similar matters in respect of assessments remaining to be
completed):
i) In respect of matters decided against the Company, for which the Company is in appeal with
higher authorities Rs.32.1 million (2006: Rs.174.7 million)
ii) In respect of matters where the Company has received favourable orders/partial relief from the
First Appellate authorities but the Income Tax Department is pursuing further with higher Appellate
authorities (excluding the matters if not ultimately allowed, would be allowed in the following
assessment years) Rs.160.9 million (2006: Rs.63.6 million)
Future ultimate outflow of resources embodying economic effect in respect of matters stated above is uncertain
as it depends on the final outcome of judgements /decisions on the matters involved.
8) Opening and Closing Stock of Goods manufactured/traded for the year ended December 31, 2007:*
Opening Stock Closing Stock
Nos. Rs.in million Nos. Rs. in million
(a) Manufactured
(i) Ball and Roller Bearings 2,526,287 246.0 2,993,997 202.4
(1,443,228 ) (144.8 ) (2,526,287 ) (246.0 )
(ii) Manufactured Components 6,931 1.7 330,237 1.2

(8,624 ) (1.4 ) (6,931 ) (1.7 )
(b) Traded
(i) Bearings and Equipment 54,654 161.5 139,992 289.3
(21,498 ) (101.7 ) (54,654 ) (161.5 )
$$ (ii) Components of Axle Box Housing

and, Re-Railing Equipment 27.1 18.5
(11.3 ) (27.1 )
436.3 511.4
(259.2 ) (436.3 )
Brackets denote previous year's figures.
* Closing stock is net of scrapped/reworked items and shortages/excesses.
$$ For some of these items purchased for a sale, assembly/ minor processing by outside parties is carried
out. These items are considered as traded items. As the components involved are dissimilar in nature
it is not practicable to disclose quantitative information in respect of these products.
9) Information for each class of goods manufactured/traded and sold for the year ended December 31, 2007:
Installed Production Sales
Class of goods Capacity Nos. Nos. Rs.in million
Nos**
(a) Manufactured ***
(i) Ball and Roller Bearings 47,103,000 45,146,713 44,621,155 4,747.0
(43,338,000 ) (44,140,102 ) (42,971,186 ) (4177.9 )
(ii) Manufactured - 1,428,178 1,104,156 2.6
Components (- ) (231,290 ) (229,672 ) (8.0 )
Purchase
Nos. Rs.in million
(b) Traded
(i) Bearings 761,562 1,149.5 676,224 1,354.4
(272,521 ) (783.5 ) (239,365 ) (866.4 )
$$ (ii) Axle Box Housing, Re-Railing
Equipment and its components 238.0 309.0
(316.5 ) (368.1 )
1,387.5 6,413.0
(1,100.0 ) (5,420.4 )
Brackets denote previous year's figures.
** Installed capacity is as certified by the management on which the auditors have placed reliance without
verification, being a technical matter.
*** Under a notification dated July 25, 1991 issued by the Ministry of Industry, the Company's industrial
undertaking is exempt from the licensing provisions of the Industries (Development and Regulation)
Act, 1951. Accordingly, the requirement concerning disclosure of licensed capacity is not applicable.
$$ For some of these items purchased for a sale, assembly/ minor processing by outside parties is carried
out. These items are considered as traded items. As the components involved are dissimilar in nature
it is not practicable to disclose quantitative information in respect of these products.
10) Raw materials and components consumed (including outside processing charges) :
Year 2007 Year 2006
Quantity Rs.in million Quantity Rs.in million
(a) Ferrous Metals Meter 11,295 5.0 9,570 4.8
MT 2.2 0.1 2.7 0.1
Forged rings Nos. 17,732 0.8 144,465 2.5
*5.9 *7.4
Components Nos.(000) 664,544 2,072.2 578,685 1,913.6
2,078.1 1,921.0
% %
(b) Imported 14.48 301.0 18.57 356.7
Indigenously obtained 85.52 1,777.1 81.43 1,564.3
100.00 2,078.1 100.00 1,921.0

The consumption figures shown above have been ascertained on the basis of materials consumed and after
considering excesses and shortages ascertained on physical count.
*excludes raw materials supplied by the Company to the outside parties for manufacture of components.
Such components are considered as consumed when issued for production.
ANNUAL REPORT
2007
11) Spare parts and components consumed :

Spare parts and components consumed referred to in para 4-D (c) Part II of Schedule VI to the Companies
Act, 1956, are assumed to be those incorporated in goods produced and not those used for the maintenance
of plant and machinery.
(Rs.in million)
Year Year
2007 2006
12) Value of imports* :
Raw materials and components 309.6 307.1
Products purchased for sale 885.2 571.4
Stores and spares for maintenance of machinery 52.4 60.1
Capital goods 107.8 287.2
1355.0 1225.8
*At FOB basis as it is not practicable to disclose the value of imports on CIF basis.
13) Expenditure in foreign currency :
(Gross) subject to deduction of tax wherever applicable:
(i) Fee for use of technology [including tax deducted at source 142.7 121.9
Rs. 3.5 million (2006: Rs. 3.1 million)]
(ii) Travelling 4.2 4.1
(iii) Charges for SAP/R3 and its connectivity & maintenance [including tax 21.5 26.9
deducted at source Rs. 2.0 million (2006: Rs. 2.6 million)]
(iv) Products recall/ liability insurance 9.4 7.4
(v) Others - [Auto exhibition, testing charges, exchange loss (net), etc.] 15.8 5.8
193.6 166.1
14) Remittances by the Company in foreign currency on account of dividend :
On 8,529,183 Equity Shares of Rs. 10 each to one non-resident shareholder
- for the year ended December 31, 2006 34.1
- for the year ended December 31, 2005 29.9
15) Earnings in foreign exchange :
Service income 66.0 69.0
FOB value of exports 896.3 847.8
962.3 916.8
16) Research and Development expenses :
Capital 1.1 1.5
Revenue 29.3 27.0
30.4 28.5
17) (a) Exchange differences of Rs.1.2 million (net credit) [2006: Rs. 1.0 million (net debit)] on revenue account
have been appropriately recognized in the Profit and Loss Account.
(b) Exchange differences of Nil [2006: Rs. 0.7 million (net credit)] arising consequent to realignment of
rupee value in case of foreign currency liabilities have been adjusted in the carrying cost of fixed
assets.
18) The tax year for the Company being the year ending March 31, 2008, the provision for taxation for the
year is the aggregate of the provision made for the three months ended March 31, 2007 and the provision
based on the figures for the remaining nine months upto December 31, 2007 the ultimate tax liability of
which will be determined on the basis of the figures for the period April 1, 2007 to March 31, 2008.
19) Deferred Taxes

The major components of deferred tax liabilities and deferred tax assets are set out below:
(Rs. in million)
Year Year
2007 2006
(i) Deferred Tax Liabilities
(i) Difference between accounting and tax depreciation (cumulative) 85.4 61.9
(ii) Others 2.2 -
87.6 61.9
(ii) Deferred Tax Assets
(i) Provision for Doubtful Debts 3.2 1.7
(ii) Provision for Sales Tax Demand - 1.0
(iii) Provision for leave encashment 14.4 6.3
(iv) Others 3.7 1.1
21.3 10.1
Net Deferred Tax Liabilities 66.3 51.8
20) Segment reporting

The business of the Company falls under a single segment i.e. "Ball/Roller Bearings and related components"
for the purpose of Accounting Standard AS-17.
21) (A) Disclosure in respect of assets taken on lease :

Operating Leases
The Company has entered into rent agreement for an equipment and leave and license agreements
for certain premises (along with furniture and fixtures in certain cases) including godowns.
(Rs. in million)
Year Year
2007 2006
1. Lease payments recognized in the Profit and Loss Account for the year 4.1 2.7
2. (i) Under certain agreements, refundable interest free deposits have been given.
(ii) The agreements
• do not provide for increase in rent during the tenure of the agreements except in
one case
• contain renewal clause
• contain clause for restrictions on sub leasing.
Finance Lease
No asset has been taken on finance lease.
(B) Disclosure in respect of assets given on lease :

Operating Leases
The Company has entered into lease agreement for certain portion of its factory and office premises.
The said agreement does not provide for increase in rent during the tenure of the agreement and
contains renewal clause. The lessee is entitled to terminate the lease by giving 3 months notice without
assigning any reason. The Company may terminate the lease by giving 3 months notice only on the
grounds specified in the agreement.
(Rs. in million)
Gross carrying amount Accumulated Depreciation
of the portion of premises depreciation recognised in the
Category
leased, included in Schedule Profit and Loss Account
4 ‘Fixed Assets’
Buildings 7.7 1.5 0.2
(Year 2006) (7.7) (1.3) (0.2)
ANNUAL REPORT
2007
22) Earnings Per Share (EPS) :

Unit Year Year
2007 2006
a) Amount used as the numerator Rs. in million 795.2 737.0

Profit after tax attributable to equity shareholders
b) Weighted average number of equity shares used No. 16,617,270 16,617,270
as the denominator
c) Nominal value of share Rs. 10.00 10.00
d) Earnings per share (basic and diluted) Rs. 47.85 44.35
23) Related Party disclosures as required under AS-18 are given below :
1. Name and nature of relationship of the Related Party where Control exists
FAG Kugelfischer GmbH, Germany : Holding Company holds 8,529,183 equity shares i.e. 51.33% of
the equity share capital as at the year end. The ultimate control lies with INA Holding Schaeffler KG,
Germany (Schaeffler Group).
2. Names of the Related Parties having transactions with the Company during the year
2007 2006
a) Holding Company a) Holding Company
FAG Kugelfischer GmbH, Germany FAG Kugelfischer GmbH, Germany
b) Fellow subsidiary/associate companies b) Fellow subsidiary/associate companies
Schaeffler Korea Corporation, Korea Schaeffler Korea Corporation, Korea

Schaeffler Japan Co. Ltd. Japan FAG Bearings Korea Corporation, Korea
FAG Magyarorszag Ipary KFT, Hungary Schaeffler Japan Co. Ltd. Japan
Schaeffler Brasil Ltda, Brazil FAG Japan Co. Limited, Japan
Schaeffler Group USA Inc. FAG Magyarorszag Ipary KFT, Hungary
The Barden Corporation, UK ROL-Rolamentos Portugueses, S.A.
The Barden Corporation, USA Schaeffler Brasil Ltda, Brazil
Schaeffler KG, Germany
Schaeffler Group USA Inc.
INA Bearings India Private Ltd., India
The Barden Corporation, UK
FAG Roller Bearings Private Ltd. , India
The Barden Corporation, USA
Schaeffler Versicherungs- Vermittlungs GmbH,
FAG China Company Limited, China
Germany
Schaeffler KG, Germany
LuK India Private Ltd. India
Profi-Team, Spain (Formerly known as INA Schaeffler KG,
Schaeffler (China) Co. Ltd. ,China Germany)
Schaeffler Holding China Co. Ltd., China INA Bearings India Private Ltd., India
Schaeffler Trading (Shanghai) Co. Ltd., China INA Lanskroun, s.r.o.
Schaeffler (Singapore) Pte. Ltd., Singapore FAG Roller Bearings Private Limited,
HK Autoteile GmbH, Germany LuK GmbH & Co.oHG
FAG Railway Bearing (Ningxia) Co. Ltd., China Schaeffler Versicher ungs- Ver mittlungs
FAG Industrial Services GmbH, Germany GmbH, Germany
Schaeffler Canada Inc., Canada LuK India Private Limited, India
WPB Water Pump Bearing GmbH & Co. KG, Profi-Team, Spain
Germany
c) Key Management Personnel c) Key Management Personnel
Mr. B. Dhar Managing Director Mr. D.Jagannath Managing Director

(upto May 18, 2006)
Mr. B. Dhar Managing Director

(from May 26, 2006)
3. Transactions with related parties during the year ended December 31, 2007
(Rs.in million)
Nature of Transaction Holding Fellow Key Total
Company Subsidiaries/ Management
Associate Personnel
Companies
Purchase of Finished Goods - 820.9 - 820.9

(548.3 ) - (548.3 )
Purchase of Raw materials and - 149.9 - 149.9
Components/Spares - (226.7 ) - (226.7 )
Purchase of Tangible Fixed Assets - 95.5 - 95.5
- (124.4 ) - (124.4 )
Sale of Finished Goods - 897.8 - 897.8
- (848.6 ) - (848.6 )
Dividend for the year - 2006 34.1 - - 34.1
- 2005 (29.9 ) - - (29.9 )
Fees for use of technology - 139.2 - 139.2
- (118.8 ) - (118.8 )
Charges for SAP/R3 and Connectivity - 19.6 - 19.6
- (23.5 ) - (23.5 )
Deputation, Travelling, Training, Testing, - 26.8 - 26.8
Insurance & Other Costs - (12.3 ) - (12.3 )
Supply of Material/Payments on behalf - 26.4 - 26.4

of related parties - (15.8 ) - (15.8 )
Recovery against supply of Material/ - 13.2 - 13.2

Payments on behalf of related parties - (6.7 ) - (6.7 )
Interest on loan given and on current account - 6.2 - 6.2

- (5.3 ) - (5.3 )
Recovery of interest on loan and on - 3.8 - 3.8
current account - (9.9 ) - (9.9 )
Provision for diminution of long term - 11.0 - 11.0

investment in shares - (- ) - (- )
Provision for doubtful loans and advances - 38.4 - 38.4

- (- ) - (- )
Payments made by related parties - 3 - 3
on our behalf - (- ) - (- )
Service Income - 66.0 - 66.0

- (69.0 ) - (69.0 )
Lease rent - 1.5 - 1.5
- (1.1 ) - (1.1 )
Remuneration (Refer Note 5(c)(ii)(a) of - - 6.8 6.8
Schedule 16 to the accounts) - - (7.3 ) (7.3 )
Capital Advance given - 9.8 - 9.8
- (15.1 ) - (15.1 )
Note: Figures in the brackets represent previous year's figures.

ANNUAL REPORT
2007
4. Balances outstanding as at December 31, 2007

(Rs.in million)
Holding Fellow Key
Company Subsidiaries/ Management
Associate Personnel
Companies
Investment - 11.0
- (11.0 )
Capital Advance - 9.8

- (15.1)
Receivables - 185.0
(- ) (244.0 )
Payables - 440.6 0.3

(- ) (234.6 ) (0.3 )
Note: The figures in the brackets represent previous year's figures.
The significant related party transactions are as under (Rs.in million)
Nature of Transactions Fellow Subsidiaries/Associate Companies Amount
Purchase of Finished Goods Schaeffler KG, Germany 812.5

(548.3 )
Purchase of Raw materials and Schaeffler Korea Corporation, Korea 68.4
Components/Spares (87.0 )
FAG Bearing Korea Corporation, Korea -
(73.9 )
Schaeffler Japan Co. Ltd., Japan 19.7
(14.8 )
FAG Japan Co. Limited, Japan -
(5.1 )
FAG Magyarorszag Ipary KFT, Hungary -
(0.3)
Schaeffler KG, Germany 52.6
(44.3 )
Purchase of Tangible Fixed Assets Schaeffler KG, Germany 48.6
(Formerly known as INA Schaeffler KG, Germany) (118.4 )
Sale of Finished Goods Schaeffler KG, Germany 806.1
(783.4 )
Fees for use of technology Schaeffler KG, Germany 137.5
(117.9 )
Charges for SAP/R3 and connectivity Schaeffler KG, Germany 19.6
(23.5 )
Deputation, Travelling, Training, Testing, Schaeffler KG, Germany 13.6
Insurance & Other Costs (4.9 )
Schaeffler Versicherungs- Vermittlungs GmbH, 9.5
Germany (7.4 )
FAG Railway Bearing (Ningxia) Co. Ltd. 3.7
(-)
(Rs.in million)
Nature of Transactions Fellow Subsidiaries/Associate Companies Amount
Supply of Material/Payments on FAG Roller Bearings Private Limited, India 19.6

behalf of related parties (13.5 )
The Barden Corporation, USA -
(1.2 )
Recovery against supply of Material/ FAG Roller Bearings Private Limited, India 9.6
Payments on behalf of related parties (4.4 )
The Barden Corporation, USA -
(2.3 )
INA Bearings India Pvt. Limited, India 1.4
(- )
Schaeffler KG, Germany 2.0

(- )
Interest on loan given and on FAG Roller Bearings Private Limited, India 4.5
current account (3.8 )
(1.5 )
Recovery of interest on loan and on FAG Roller Bearings Private Limited, India 1.4
current account (9.1 )
(0.8 )
Provision for diminution of long term FAG Roller Bearings Private Limited, India 11.0
investment in shares (- )
Provision for doubtful loans and FAG Roller Bearings Private Limited, India 38.4
advances (- )
Service Income Schaeffler KG, Germany 66.0

(69.0 )
Lease Rent FAG Roller Bearings Private Limited, India 1.5
(1.1)
Capital Advance FAG Roller Bearings Private Limited, India 9.8
(15.1)
(Rs.in million)
Nature of Transactions Key Management Personnel Amount
Remuneration Mr. Biswarup Dhar 6.8

(3.6 )
Note : Figures in the brackets represent previous year's figures.

24) Disclosure under Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 :
As per the information available with the company and as certified by the management, there are no dues
outstanding including interest as on 31st December, 2007 to Small and Micro enterprises as defined under
Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.
25) (a) Excise duty paid and collected from customers is shown separately and deducted from the Sales
turnover (Gross) in the Profit and Loss Account.
(b) Excise duty appearing under Manufacturing and Other expenses (Schedule 13) represents (i) the
difference between excise duty included in the closing stock and that in opening stock of manufactured
finished goods Rs. 1.4 million (2006: Rs. 22.2 million) and (ii) the excise duty on the free samples,
scrap etc. Rs. 0.7 million (2006: Rs. 2.0 million).
ANNUAL REPORT
2007
26) The Company has not taken any derivative instrument during the year and there is no derivative instrument
outstanding as at the year end. The foreign currency exposures that are not hedged by a derivative
instruments or otherwise are as follows :
Particulars Amount in Foreign Currency Equivalent Amount in

Indian Currency (Rs. in million)
Creditors USD 2,627,752 116.8
(2,961,821 ) (131.6 )
EURO 2,335,612 135.8
(2,132,724 ) (124.8 )
JPY 2,652,408 1.0
(2,652,408 ) (1.0 )
Debtors USD 5,503,430 216.0
(3,717,737 ) (163.3 )
GBP - -
(6,645 ) (0.6 )
Advances given to Suppliers USD 102,612 4.1
(34,069 ) (1.5 )
EURO 22,277 1.2
(4,941 ) (0.3 )
CHF 35,250 1.3
(35250 ) (1.3 )
GBP 4,565 0.4
(3,600 ) (0.3 )
Bank balance in EFC accounts USD 80,278 3,150,943
(327,974 ) (14,401,330 )
EURO 19,592 1,131,428
(20,141 ) (1,154,844 )
Note: Figures disclosed in brackets represents previous year's figures.
27) Prior period adjustments represents income arising on account of adjustment to insurance expenses
amounting to Rs. 2.5 million and adjustment to gratuity amounting to Rs. 0.7 million.
28) Effective January 01, 2007 the Company has adopted the revised Accounting Standard (AS) 15 on Employee
Benefits. Pursuant to the adoption, the transitional obligations of the Company amounted to Rs.10.3 million
(net of deferred tax) which has been charged to the General Reserve. As a result of application of the said
revised AS15, the charge for the year is higher by Rs.13.28 million.
29) Disclosure under Accounting Standard 15 on Employee Benefits :

Disclosures in respect of Defined benefit obligations in respect of gratuity pursuant to Accounting
Standard 15:
The amounts (Rs in million) recognized in the balance sheet are as follows:
As on 31.12.2007
Present value of funded obligations 113.8
Fair value of plan assets 106.0
Unrecognized past service cost 0.0

Net liability in the Balance Sheet 7.8
The amounts (Rs in million) recognized in the statement of profit and loss are as follows:
For the year ended 31.12.2007
Current service cost 5.2
Interest on obligation 7.7
Expected return on plan assets (7.4)
Net actuarial losses (gains) recognized in year 4.2
Past service cost 0.0
Losses (gains) on curtailments and settlements 0.0
Total included in 'employee benefit expense' 9.7
Actual return on plan assets 4.18
Changes in the present value of the defined benefit obligation representing reconciliation of opening and
closing balances thereof are as follows:
(Rs in million)
Opening defined benefit obligation 105.5
Prior period adjustment (0.7)
Service cost 5.2
Interest cost 7.7
Actuarial losses (gains) 0.9
Benefits paid (4.8)
Closing defined benefit obligation 113.8
Changes in the fair value of plan assets representing reconciliation of the opening and closing balances
thereof are as follows:
(Rs in million)
Opening fair value of plan assets 101.2
Expected return 7.4
Actuarial gains and (losses) (3.2)
Contributions by employer 5.4
Assets acquired in an amalgamation in the nature of purchase -
Exchange differences on foreign plans -
Benefits paid (4.8)
Closing fair value of plan assets 106.0
ANNUAL REPORT
2007
The Group expects to contribute Rs.8 million to its defined benefit pension plans in the year 2008
The major categories of plan assets as a percentage of total plan assets are as follows:
As on 31.12.2007
Government of India Securities 9%
Corporate bonds 2%
Special Deposit Scheme 5%
Insurer Managed Funds 79%
Others 5%
Principal actuarial assumptions at the balance sheet date (expressed as weighted average)
Discount rate per annum as at 31st December 2007 7.95%

Expected return per annum on plan assets as at 31st December 2007 8.00%
Salary Escalation per annum 6.00%
Retirement Age 58 years
Mortality LIC 1994-96 mortality tables
Attrition rate 1% - 2%
The estimates of future salary increases, considered in actuarial valuation take account of inflation, seniority,
promotion and other relevant factors such as supply and demand in the employment market.
30) Previous year's figures have been regrouped, wherever necessary, to conform to the current year's
classifications.
Sd/-
Avinash Gandhi Chairman
Biswarup Dhar Managing Director
Raj Sarraf Company Secretary
Mumbai : February 14, 2008

STATEMENT PURSUANT TO PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956 BALANCE SHEET
ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE
Registration Details
Registration No. 1 2 3 4 0 State Code 1 1
Balance Sheet Date 3 1 1 2 2 0 0 7
Date Month Year
1 Capital Raised during the year (Amount Rs. in million)
Public Issue Rights Issue
N I L N I L
Bonus Issue Private Placement
N I L N I L
2 Position of Mobilisation and Deployment of funds (Amount Rs. in million)
Total liabilities Total assets
3 1 8 1 . 0 3 1 8 1 . 0
3 Sources of Funds (Amount Rs. in million)
Paid-up Capital Reserves & Surplus
1 6 6 . 2 3 0 1 4 . 8
Secured Loans Unsecured Loans
N I L N I L
4 Application of Funds (Amount Rs. in million)
Net Fixed Assets Investments
1 4 2 2 . 9 1 2 . 2
Net Current Assets Misc. Expenditure [Deferred Tax Asset/(Liability)]
1 8 1 2 . 2 - 6 6 . 3
Accumulated Losses
N I L
5 Performance of Company (Amount Rs. in million)
Turnover Total Expenditure
6 5 1 6 . 2 5 2 7 4 . 6
+ – Profit/Loss Before Tax + – Profit/Loss After Tax
+ 1 2 4 4 . 8 + 7 9 5 . 3
(Please tick appropriate box + for profit - for loss)
Earning/(Loss) per share (Rs.) Dividend Rate %
4 7 . 8 5 4 0
6 Generic Names of Three Principal Products/Services of Company (as per monetary terms)
Item Code No. (ITC Code) 8 4 8 2
Product Description* B A L L A N D R O L L E R B E A R I N G S
*includes spherical and cylindrical roller bearings Sd/-

Avinash Gandhi Chairman
Biswarup Dhar Managing Director
Raj Sarraf Company Secretary
Mumbai : February 14, 2008
ANNUAL REPORT
2007
Ten Years' Highlights

(Rs. in million)
Year 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998
(9months)
SOURCES OF FUNDS
Share Capital 166.2 166.2 166.2 166.2 166.2 166.2 166.2 166.2 166.2 135.7
Reserves * 2990.7 2285.4 1624.2 1212.2 969.2 830.5 693.4 678.6 582.5 479.3
Net-Worth * 3156.9 2451.6 1790.4 1378.4 1135.4 996.7 859.6 844.8 748.7 615.0
Borrowings - long term Nil Nil Nil Nil 169.9 231.5 332.2 484.3 708.3 814.0
Funds employed 3156.9 2451.6 1790.4 1378.4 1305.3 1228.2 1191.8 1329.1 1457.0 1429.0
INCOME AND PROFITS
Sales ( net ) 6413.0 5420.4 4083.2 3231.2 2669.1 2443.1 2226.7 2056.7 1839.1 1283.2
Gross operating profit 1412.5 1290.1 854.5 601.1 502.0 483.3 437.4 458.1 371.5 248.7
Profit before tax 1244.8 1107.8 677.6 434.0 309.7 253.9 192.2 184.3 80.7 45.6
Tax 449.5 370.8 198.7 125.2 *** 78.1 56.2 42.0 55.5 8.8 5.5
Profit after tax 795.3 737.0 478.9 308.8 231.6 197.7 150.2 128.8 71.9 40.1
Dividend per share (Rs.) ** 4.0 4.0 3.5 3.5 4.5 4.0 3.5 3.5 2.7 1.8
Retained earnings 715.5 661.2 412.0 243.0 138.7 131.2 86.1 57.5 22.8 16.0
OTHER DATA
Gross fixed assets 3741.1 3525.7 3058.6 2709.4 2585.8 2496.8 2406.9 2273.5 2099.7 1965.5
Net worth per equity (Rs.) 190.0 147.5 107.7 82.9 68.3 60.0 51.7 50.8 45.0 45.3
Debt equity ratio Nil Nil Nil Nil 0.15 0.23 0.39 0.57 0.95 1.32
Current ratio 2.5 2.1 1.8 1.9 1.7 1.4 1.3 1.3 2.0 1.6
Production (Nos. in million) 45.1 44.1 32.3 27.2 25.6 24.7 21.7 20.7 17.4 11.6
Sales (Nos. in million) 44.6 43.0 32.1 28.4 25.8 23.8 22.5 20.3 17.5 12.8
Employees (Nos.) 1282 1157 1037 1031 1063 1064 1085 1118 1129 1296
* Excluding revaluation reserve

** Proposed
*** Net off write back
Electronic Clearing Service (Credit Clearing)
Dear Shareholder,
Electronic Clearing Service (ECS) facility is available at the following cities :
Reserve Bank of India Clearing Centres :
Ahmedabad Bangalore Bhubaneshwar Kolkata Chandigarh
Chennai Guwahati Hyderabad Jaipur Kanpur

Mumbai Nagpur New Delhi Patna Trivendrum
If you have an account in these cities and your bank is having this facility, you can avail of the ECS facility.
ECS operates as under:
1. You need to send the ECS Form given overleaf after filling up the relevant details to the Registrars.
2. FAG would instruct its dividend banker to credit your account. Your account would get an immediate
credit with marking 'ECS' for the amount of dividend.
3. This facility is available only for transactions upto dividend amount of Rs. 5,00,000 in each folio.
4. This is an alternative mode of payment and is optional. You would have the right to withdraw from
this mode of payment by giving an advance notice of 6 weeks.
5. If you are agreeable to participate in the new payment mechanism, you are requested to fill in the
Mandate Form given overleaf. The information to be supplied should be accurate and complete in
all respects. The ECS Form should reach the Registrars latest by April 6, 2008. They will inform the
shareholders opting for this facility about the credit of dividend amount.
6. Those Shareholders who prefer to get dividend warrant and who have not given bank details so far
may send the details for printing on Dividend warrant.
i) Shareholders with shares in demat mode may send their bank details to their respective depository
participants.
ii) Shareholders with physical shares may write to the Registrars or the Company.

ANNUAL REPORT
2007
To,
Intime Spectrum Registry Limited
The Registrar & Transfer Agent
(Unit : FAG Bearings India Limited)
308, Jaldhara Complex,
1st Floor, Opp.: Manisha Society,
Vasna Road, VADODARA - 390 015
Electronic Clearing Service (Credit Clearing)

Mandate Form
(Shareholders' option to receive payments through Credit Clearing Mechanism)
Dividend Payment
1) Shareholder's Name :
2) Registered Folio No. :
*DP ID No. :
*Client ID No. :
(Applicable to Investors holding shares in dematerialised form)
3) Particulars of Bank account:
A Name of the Bank :
B Name of the branch :
And Address :
Telephone No. : STD Code:
C 9-Digit code number of the bank and branch appearing
on the MICR cheque issued by the bank :
D Type of the account (Saving, Current or Cash Credit)
with MICR Code :
E Ledger and Ledger folio number :
F Bank Account number (as appearing on the cheque book) :
(In lieu of the bank certificate to be obtained as under, please attach a blank cancelled cheque or
photocopy of a cheque or front page of your savings bank passbook issued by your bank for verification
of the above particulars)
4. Date of effect:
I hereby declare that the particulars given above are correct and complete. If the transaction is delayed
or not effected at all for reasons of incomplete or incorrect information, I would not hold FAG Bearings India
Limited responsible.
Date :
Place : Signature of the shareholder
Certified that the particulars furnished above are correct as per our records.
Bank's stamp
Date: Signature of the authorised

Official of the Bank
BANK CERTIFICATE NOT REQUIRED, IF ATTACHMENT GIVEN AS PER 3 'F' ABOVE

A MEMBER OF THE SCHAEFFLER GROUP
Registered Office :
"Nariman Bhavan", 8th Floor, 227, Backbay Reclamation, Nariman Point, Mumbai-400 021
Attendance Slip
I certify that I am a registered shareholder/proxy for the registered shareholder of the Company.
I hereby record my presence at the Forty Fifth ANNUAL GENERAL MEETING of the Company at
Kamalnayan Bajaj Hall, Ground Floor, Bajaj Bhawan, Jamnalal Bajaj Marg, 226, Nariman Point,
Mumbai-400 021 on Thursday, April 17, 2008 at 3.00 P.M.
Member's/Proxy's name in BLOCK Letter Regd.Folio No./Client ID No. Member's/Proxy's Signature
Note : Please fill in this attendance slip and hand it over at the ENTRANCE OF THE HALL.
Shareholders attending the meeting are requested to bring their copies of the Annual Report
with them.

A MEMBER OF THE SCHAEFFLER GROUP
Registered Office :
"Nariman Bhavan", 8th Floor, 227, Backbay Reclamation, Nariman Point, Mumbai-400 021
Proxy Form
Reg. Folio No./Client ID No.

I/We
of
being a Member/Members of the above named Company hereby appoint
of
or failing him of
as my/ our proxy to vote for
me/us on my/our behalf at the Forty Fifth Annual General Meeting of the Company to be held on
Thursday, April 17, 2008 at 3.00 P.M.
Signed this day of 2008.
Affix
Place Signature 1 Rupee
Revenue
Stamp
Note : This form in order to be effective should be duly stamped, completed and signed and must be
deposited at the Registered Office of the Company, not less than 48 hours before the Meeting.
“Added Competence for
Machine Tools” symposium
FAG India along with "Production Machinery" sector of Schaeffler Group
recently held its first technical symposium for key customers in
Bangalore. More than 80 participants from 22 leading industrial
companies in India attended the “Added Competence for Machine
Tools” symposium. Participants in the symposium came from the fields
of design, production, maintenance and purchasing. The presentations
about bearing supports for feed spindles, linear guides, rotary tables
and spindles as well as the presentation of F'IS services for machine
tools elicited a lot of interest and appreciation.
Auto Expo 2008

The automobile trade show, Auto Expo, was held in New Delhi in January
2008. LUK, INA and FAG displayed more than 20 exhibits with a wide
variety of products at the exhibition booth. In addition to valvetrain
components and parts of the belt drive, also on display were clutches,
release systems as well as bearings for steering column and wheels.
In the trade show, “TATA Nano” the People's Car from TATA Motors took
center stage. The Schaeffler Group too is developing components with
an aim to secure a substantial market-share in this new emerging
segment. Currently, the Nano incorporates rear axle wheel bearings that
are manufactured at our plant in India according to our philosophy
“Development and production in the region for the region”. Moreover,
the gearshift is equipped with bearings and locking pins “Made by
Schaeffler Group”. The Schaeffler Group will supply rear axle wheel
bearings and gearshift elements for the Nano
India in Focus Collaborating to Win
Symposiums for Industrial customers were organized at

across 9 different locations in 2007. Around 700
Maria-Elisabeth Schaeffler and Georg F.W. Schaeffler visited FAG India participants engaged in diverse disciplines like design,
for the inauguration of the Group's new plant and the Research & manufacturing, purchase and maintenance, from various
Development center in Pune. During the visit, Mrs. Schaeffler industries like: Mining and Construction, Steel Plants,
emphasized that - “India is very important to us and it holds great future Wind Power, Textile Machinery, Cement, Paper and
potential. It is our intention to participate and have a share in the Machine Tools took keen interest in the topics discussed.
development of the promising Indian market.” Their active involvement aided in making this initiative an
outstanding one.
Maneja, Vadodara - 390013
Gujarat, India.
Tel.: 91 265 2642651-2-3-4
Fax: 91 265 2638804
www.fag.co.in

Fag Ar 2007

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Annual Report 2007

The Will to Win

Quality Circle Award

Contents Page No. General Information

General Information 1 Board of Directors

Nominee of GIC Moreshwar Garde

Alternate to Mr. Heinrich Kamlesh Tapadar

Alternate to Mr. Huber R. Sampath Kumar

Alternate to Mr. Hetmann Yezad Kapadia

Chief Financial Officer Satish Patel

Company Secretary Raj Sarraf

Bankers Union Bank of India

Collaborators Schaeffler Group,

Head Office & Works Maneja, Vadodara - 390 013

Sales Offices Bangalore, Chennai, Kolkata,

2. To declare dividend for the year ended December 31, 2007.

5. To appoint Auditors and to fix their remuneration.

Registered Office: By Order of the Board

Nariman Bhavan, 8th Floor, Sd/-

A brief profile of Mr. Hetmann is as follows :

Full name Mr. Thomas Hetmann

Father's name Mr. Guenter Hetmann

Date of birth March 21, 1962

Director Identification Number 02064801

Present designation Chief Financial Officer, Schaeffler Group, Germany

Functional area Responsible for the financial affairs of entire

Directorship in other Indian Public companies Nil

Shareholding in the Company Nil

Except Mr. Thomas Hetmann no other director is interested in the resolution.

Registered Office: By Order of the Board

Nariman Bhavan, 8th Floor,

To the members of the Company

FINANCIAL HIGHLIGHTS (Rs. in Million)

TOTAL INCOME (Net) 6516.2 5529.1

Interest (Net) (22.7 ) (0.7 )

FINANCIAL AND OPERATIONAL PERFORMANCE

TRANSAFER TO INVESTOR EDUCATION AND PROTECTION FUND

MANAGEMENT DISCUSSION AND ANALYSIS

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

DIRECTORS' RESPONSIBILITY STATEMENT

The directors state that:

For and on behalf of the Board

MANAGEMENT DISCUSSION AND ANALYSIS

For and on behalf of the Board

CORPORATE GOVERNANCE REPORT

Name of Member(s) No.* of Total* Number Number of Attendance

5. Mr. Frank Huber 1 - 2 Yes

6. Dr. Vidya Sagar 1 2 2 No

7. Mr. Bernhard Steinruecke 5 2 4 Yes

8. Mr. Moreshwar Garde 2 2 4 Yes

* Including directorships / alternate directorships, memberships and Chairmanships of committee(s) of the

Directors seeking re-appointment at the 45th Annual General Meeting

(B) Non-Executive Directors' Compensation and Disclosures

Name of the Director Board Audit Investor's Grievance / Amount

v) Listing of Equity Shares on Stock Exchanges

vii) Market Price Data

ix) Registrar and Share Transfer Agent

31.12.2000 21.06.2001 26.07.2008 442,216

xii) Distribution of Shareholding

Individuals 7,103 95.48 2,172,056 13.07 7,370 2,586,701

Year 2007 2006

To the Members of FAG Bearings India Limited