On behalf of the Board of Directors and my own. I welcome you all to the 2002 Annual General Meeting of Sona Koyo Steering Systems Limited. The notice convening this meeting, the audited accounts of SONA, along with the Directors' Report have been with you for sometimes and with your permission, I take them as read.

I truly appreciate you having taken the time to be with us this morning.

Much has already been shared with you this time in the detailed Management Discussion Analysis and the Special Section on the Code of Corporate Governance, as well as in my personal address to you forming part of Annual Report - 2002. So without repeating the same, I take this opportunity to briefly express my views on the economy and your company's current operations.

The GDP growth rate was lower at 5.4 % last year and in the current year, whist there are certain specific sectors showing signs of recovery, the recovery in all the sectors of the economy, such as agriculture, industry and services, is not evident. Industrial production growth which was 2.7 % last year has still not improved. Capital goods sector and Exports continue to be sluggish. It is a fact that the housing sector, telecommunication, 2 - wheelers and commercial vehicles have picked up in the last few months and thus the economists are forecasting that the whole economy will have a full blown recovery.

The Prime Minister and the new Finance Minister have recently announced that Government will take the economic reforms further and their projection is that the Economy should grow at the rate of 6 % this year. This is a very welcome announcement and I hope that with this 'feel good factor' - customers consuming stock markets booming, the recovery in the economy turns out to a reality.

Our economy has shown resilience. Despite the border tension, indirect economic sanctions by way of travel advisory and the Gujrat riots, our economy continues to remain positive, thought the rate of growth is slow.

The automotive industry is one of the core industrial sectors of most economies. In India, the automotive sector represents 5 % of Industrial output, employing 3 % of industrial employees, while in the U. S. automotive sector represents 16 % of Industrial output and employs 15 % of Industrial employees. It is evident that the Government needs to work closely with the automotive industry to spur growth in this sector, by giving incentives todiscardold vehicles ensuring speedy highway construction and ensuring introduction of VAT appropriately.

The automotive components industry is the backbone of the automotive industry and I am happy to say that our industry is transforming itself to ensure world class quality levels at very competitive costs. Recently, Sona,s Chennai Plant was awarded the 100 pm Quality Award by Hundai Motors India and Sona's Gurgaon Plant was awarded the Toyota Kirloskar Motors " Excellence Award" in cost reduction . The auto component industry has supported the development of Tata's Indica range of cars and the Mahindra's Scorpio utility vehicle. This has helped the industry to learn and fine tune the product development process. I urge the world Giant car companies to use India as a base for development of new vehicle ad convey to the Government that there is a need to give incentive for such R & D efforts to the automobile industry.

In the last year, although sales dropped from Rs. 214 crores to Rs. 205 crores, the profit after tax increased from Rs. 178 lacs to Rs. 499 lacs due to focus on operational efficiencies and cost reduction activities.

In the first three months of the current year ( April - June, 2002) SONA's sales were Rs. 46 crores compared to Rs. 49 crores in the corresponding period of the previous year. However the profit after tax Rs. 97 lacs against Rs. 64 lacs of the year. Sona expects to achieve sales of Rs. 215 crores for the current year, provided, the new launch of Mahindra's Scorpio is as per the plan and Sona is able to meet its commitment to Hyundai of Power Steering which the management is confident of.

In order to be in compliance with the norms of SEBI's Code of Corporate Governance, the Board of Directors of your Company has bee reconstituted with Mr. Rizvi Bhoothalingam and Mr. P.K. Chadha joining the Board as independent Directors. Along with this, Sona has constituted the Executive Management Board under my chairmanship whose members are Mr. P.V. Prabhu Pparrker, Group Chief - Supply Chain Management, Mr. K.M. Deshmukh, Chief - Operating Officer, Mr Y. Akiyama, Chief - Gurgaon plant, Mr. Ajeet V. Garde, Chief - Finance & information Officer and Mr. Sunjay J. Kapur, Chief - Business Development.

This new structure of organization, with the formation of Executive Management Board, I am sure will go a long way to further strengthen the operations of your Company and will infuse more impetus in the area of development of new business.

I wish to place on record our sincere thanks to our main customer and partner Maruti Udyog Ltd. and Koyo Seiko Co. Ltd. Also thanks to Hyundai Motors (India) Ltd., Toyota Kirloskar Mkotors Ltd., Tata Engineering, Hindustan Motors Ltd., Eher Moors Ltd. an Mahindras for their business support.

My deep gratitude to the members of SONA Parivar, for their dedication in making SONA a strong enterprise, and to our Vendors, Bankers and Financial Institutions for their support.

Last but not the least, my sincere thanks to my colleagues on the Board for their valuable advise and to you, our esteemed Shareholders for your confidence in the management of the Company.