SUNDARAM BRAKE LININGS LIMITED
ANNUAL REPORT 2011-2012
Ladies & Gentlemen,
My colleagues on the Board and I have great pleasure in welcoming you all
to the Thirty Eighth Annual General Meeting of your Company.
The Directors' Report and the Audited Accounts for the year ended 31st
March 2012 have been with you for sometime now and with your permission, I
shall take them as read.
India's GDP which grew @ 8.5% in 2010-11 has been decelerating and the
growth of GDP in 2011-12 is estimated around 6.5% and there are clear signs
of slowdown which is a cause for serious concern.
There.is a perceptible decline in Business Confidence level and the new
Investments are not forthcoming amidst policy paralysis. Policymakers must
take key Initiatives to spur Investments and Growth and put the Economy
back on rail.
The commercial vehicles sector, which had a good growth momentum in 2010-
11, slowed down in 2011 -12. As a result of this, Your Company was able to
achieve a growth of only 10% in 2011-12 in Domestic OE and After Market
segments. The export segment registered a marginal growth of 3% in 2011-12
due to Global slowdown.
During the year 2011 -12, your Company reported a turnover of Rs.255.71
crores as compared to Rs.237.52 crores in 2010-11.
- Domestic Market
In the domestic market the overall turnover was Rs.169.88 crores in 2011-12
compared to Rs.154.47 crores in 2010-11.
- Export Market
The export turnover of Rs.83.66 crores constituted 33% of the total
turnover of Rs.255.71 crores of the Company. There has been a 3% growth in
the export turnover, compared to previous year.
The Company had entered into the arrangements for settlement of disputes
arising out of certain derivative transactions entered into on behalf of
the Company with some banks. The settlements were subject to fulfilment of
payment obligations arising on the Company for specified years which have
now been fully met by the Company. With the discharge of all obligations in
accordance with the settlement agreement, there is no further liability on
this account. As per the practice followed in the past, the final amounts
amounting to Rs.14 crores has been included in Extra-ordinary Expenditure
in the Accounts for the Financial year 2011-12.
With your valuable support, Your Company has fully come out of the
extraordinary crisis that had arisen in 2006-07 on account of Unauthorized
derivative transactions and can now look forward to a better future,
leaving behind this bitter episode.
COMPANY OUTLOOK & PROSPECTS DOMESTIC MARKET
The Automobile sector, has started showing clear signs of deceleration in
the 1st quarter of the current financial year. It is hoped that moderate
growth may get revived soon which will help the company in improving its
performance in the OE Segment.
Your Company continues to be focused in its R&D efforts for introduction of
new products for new applications to meet the demands of the Automobile
Your Company has been enjoying Export House Status since April 1997, by
virtue of its consistent export performance and is currently accredited
with Star Export House Status valid till March 2014.
Your Company was successful in clinching a deal in June 2012, for supply of
Commercial Vehicle Linings to a leading and reputed customer in USA on a
long term basis.
CONCERNS ABOUT ESCALATING COSTS AND PRESSURE ON MARGINS
It is a matter of concern that cost of Power & Fuel keeps escalating which
exerts pressure on Margins. All efforts are being taken by the Management
to maintain margins.
Mr. P.S.Raman, Mr. Ashok V Chowgule and Mr. KS.Ranganathan, Directors who
retire by rotation have offered their services for re-appointment. I
request the members to approve their re-appointment as Directors.
On your behalf, on behalf of my colleagues on the Board and on my own
behalf, I wish to take this opportunity to express my sincere thanks to our
wholesalers, both in India and abroad, for their support and for marketing
the Company's products.
I would like to thank the State Bank of India, HDFC Bank, Export-Import
Bank of India, Vehicle Manufacturers, Customers, Suppliers and Investors
for their continued and valuable support.
I would like to once again place on record our appreciation for the good
work done by all the employees of the Company.
I would like to thank you all, ladies and gentlemen, for making it
convenient to attend Your Company's 38,h Annual General Meeting.
SRI K MAHESH,
CHAIRMAN & MANAGING DIRECTOR
DATE: JULY 28, 2012