ANNUAL REPORT 2000-2001
NRB BEARINGS LIMITED
CHAIRMAN'S SPEECH 36TH ANNUAL GENERAL MEETING HELD ON AUGUST 1st 2001
Ladies and Gentlemen:
I am pleased to e)tend, on behalf oF my colleagues on the Board and of
myself, a very warm welcome to this 36 h Annual General Meetings of our
company. In compliance of Corporate Governance guidelines, we have
constituted an Audit Committee comprising independent non-executive
Directors - we have Dr.P D Ojha (retired Deputy Governor of the Reserve
Bank of India) as Chairman of the Committee, Dr.(Ms) Kala S ant (Economist)
and Mr.Keki Elavia (Partner, Kalyaniwala & Mistry), all of whom are present
here today. Mr.Thiery Michaud, Managing Director, Nadella is also in our
The year ended March 2001 was very challenging for the automotive
industry. Other than Motorcycles all other segments - commercial vehicles,
passenger cars, scooters, mopeds, 3-wheelers and tractor- posted a decline
in volumes. Your company net sales (net of excise duty) declined by 2.80%.
The fall in volumes adversely effected profit margins, with profit before
tax declining by 22% over the previous year. The dividend has been lowered
from 45% to 40x/.
To contain any build up of finished goods inventories, the company
maintained production levels in line with the low demand market situation
which has had an adverse impact on the results for the first quarter
(April-June 2001). With net sales down by 7.4% profit before tax is down
substantially over the corresponding quarter of the previous year.
We look forward with cautious optimism to the remaining period of the year
as offtakes from the motor cycle segment, the replacement market and
exports are showing signs improvement. The commercialization from August
2001 of new products developed will further boost sales through the
subsequent quarters resulting in improved profitability.
Outook and business strategies
The current fiscal year started against the backdrop of a slowdown in
economic activity, causing concern all around. However, notwithstanding
some deceleration in GDP during 2000-01, India remains one of the fastest
growing economies in the world. A decade of reforms has strengthened the
resilience of the Indian economy and its ability to withstand periodic
shocks. With comfortable stocks of foodgrains and foreign exchange
reserves, no serious supply management problems are expected. The
expectations of a normal monsoon should lead to an improvement in
We cannot help but look optimistically at India's future with continuing
liberalization and encouragement of private investment. The government's
enormous infrastructure project to implement a major and much needed
national road network covering the length and breadth of the country should
give the much needed impetus to the economy.
2001-02 will be a year of change: Success will belong to companies who can
align themselves to their customers. The winners of the day will be those
who move with speed and deliver new products fastest to their customers.
Your company is moving towards this alignment and is taking steps to focus
on the drivers for future success:
New Product Development
Significant resources have been committed to the design, development and
testing of new products, both for industrial and automotive applications.
Our attitude to quality provides the basis for a sustainable competitive
edge to our customers. With cross functional quality teams in place across
the organization, we have planned milestones to monitor our progress in the
quality journey towards continuous product improvement, greater yields and
higher productivity. We expect this to translate into higher levels of
customer satisfaction and improved operating margins.
The company's stated objective is to aggressively grow e