Galaxy Bearings Ltd Management Discussions.

ECONOMIC OVERVIEW

Indian economy is forecasted to grow at 7 to 7.5% in Financial Year 2018-19 as compared to 6.7 per cent in previous Financial Year 2017-18. As per Central Statistics Organisation (CSO) and International Monetary Fund (IMF] India has emerged as the fastest growing major economy in the world and it is expected to be one of the top three economic powers of the world over the next 10-15 years, backed by its strong democracy and partnerships. Financial Year 2017- 18 is marked as a year of major economic reformatory measure by implementation of the Goods and Services Tax (GST) w.e.f. 01st July, 2017. Investment activity is picking up and more emerging markets arc showing signs of recovery. The future outlook remains optimistic. Indian economy has emerged as worlds sixth largest economy and has moved into Top 100 club in the World Banks Global Fase of Doing Business rankings.

OVERVIEW/ INDUSTRY STRUCTURE

The growth of the bearing industry is correlated with the automotive and industrial sectors. The demand for the bearings is derived from two key user segments - the automotive and industrial sectors. A major portion of bearings market in India is unorganized that caters to the low-end replacement market. Several main industrial sectors and user segments are expected to push the production of industrial equipment and automotives, leading to an increase in demand for automotive component, equipment, and vehicles in the developing countries. The Automotive Industry in India is expected to continue the growth momentum into F. Y. 2018-19. The Indian bearings Industry in present is quite bullish with excellent growth prospects, owing to spurt in growth of automobile and industrial sector which has given substantial rise to the demand for bearings.

FUTURE OUTLOOK

The Government of India is taking various steps to boost the infrastructure development in the country. Looking at the huge potential for growth in the infrastructure sector, your company sees a good outlook for the coming years and the Company will benefit from the same. The outlook for the industry and the company looks bright and new markets in the global arena arc being developed by the company. The Company is also focusing on cost cutting and increased productivity to enhance its competitiveness.

RISK & CONCERN

The Company is exposed to external business risk, internal risk and financial risk. External business risks arise out of highly competitive industry, Variations in prices of raw -material etc. Internal risks basically cover operational efficiency and ability to withstand competition. Financial risks are basically in the nature of interest rate variations.

OPPORTUNITIES AND THREATS

Opportunities:

Growing automobile industry and increasing vehicle production and sales are few of the major factors aiding India automotive bearings market. Moreover, expanding size of two-wheelers, three-wheelers and cars in India is anticipated to continue fueling demand for automotive bearings in the coming years. Additionally, with expanding middle class population and increasing disposable income, automobile sales across all the major automobile segments are expected to grow in the coming years, thereby positively influencing India automotive bearings market.

Threats:

Bearings are mainly manufactured using high grade steel or alloy steel, which exposes them to global steel price movement. Volatility in global steel prices during 2017-18 is main threat to bearing industry. With global demand weakening, dumping of cheap bearings by Chinese and other South East Asian countries has intensified.

SEGMENT- WISE-PERFORMANCE

During the year under review, the Company has only one segment of activity namely ball and roller bearings.

INTERNAL CONTROL SYSTEMS

The Company has adequate systems of Internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information.

FINANCIAL PERFORMANCE Net Worth:

The total net worth of the Company as on 31st March, 2017 was Rs. 2166.50 Lacs which is Rs. 2528.41 Lacs as on 31st March, 2018 indicating increase of 16.70 % in the net worth.

Earnings per Share:

Basic and Diluted BPS of the Company as on 31st March, 2017 was Rs. 9.37 both of which stands to Rs. 11.34 as on 31st March, 2018.

EBITDA and PET:

During the year 2017-18 the Company has earnings before interest, depreciation and tax amounting to Rs. 785.32 Lacs after providing for finance cost of Rs. 109.14 Lacs and depreciation of Rs. 118.89 Lacs, Profit before tax comes to Rs. 557.29 Lacs which was Rs. 449.92 Lacs during the year 2016-17.

HUMAN RESOURCES

Employees are our vital and most valuable assets. Companys philosophy is to establish and build a high performing organization, where each individual is motivated to perform to the fullest capacity: to contribute to developing and achieving individual excellence and departmental objectives and continuously improve performance to realize the full potential of our personnel. The relations between the employees and the Management have remained cordial.

CAUTIONARY STATEMENT

Statements in this report on Managements Discussion and Analysis describing the Companys objectives, projections, estimates, exceptions or predictions may be forward looking statements within the meaning of applicable security luws or regulations. These statements arc based on certain assumptions and exceptions of future events. Actual results could however differ materially from those expressed or implied. The Company assumes no responsibility in respect of forward looking statements herein which may undergo changes in future on the basis of subsequent developments, information or events.