MANAGEMENT DISCUSSION AND ANALYSIS

Industry Structure and Development:

The Auto Ancillary segment has established itself with global level of technology and capabilities. The demand for products will continue to grow with enhanced volumes of the vehicle industry and our Company can look towards its growth. Quality, delivery and competitive pricing are to conform to International Standard.

Opportunities and Threats:

The increase in new generation of vehicles which have to conform to stringent emission norms call for manufacture of Bearings with matching characteristics. Your Company is positioned to meet the opportunities.

Outlook:

The increase in the demand for the Company's products supported by appropriate economic factors in the market segments like Heavy Vehicles, Tractors, Powders, and Strips are expected to offer good opportunities for the Company.

Internal Financial Control System:

The internal financial controls followed by the Company are considered adequate and operating effectively. The internal audit of the Company is entrusted to M/s. Fraser & Ross, Chartered Accountants.

Financial Performance:

The prudent Management of working capital, treasury operations backed by planned capital expenditure is expected to support better performance in the current year.

Human Resources and Industrial Relations:

During the year under review, the industrial relations in the Company were cordial. The average number of employees of the Company was 423 during the year.