According to the company, the developments in the road transport sector reflected the state of the economy. Freight rates have not increased in the last few years while diesel rates have gone up, rendering it difficult for truck operators to make both ends meet.

Moreover, spurred by good demand in 1995-96, the operators created huge capacities which are lying idle now.

The management assured the shareholders that the company was taking steps to counter the recession in the industry and its impact on recoveries. Task forces have been appointed to focus on recoveries, credit appraisal has been improved, legal department have been strengthened and training programmes have been initiated for increasing awareness among the employeesabout the situation in the industry.

The company also said that it was diversifying into other areas, especially car financing, to make up for the sluggishness in the commercial vehicle sector.

It has also forayed into two-wheeler financing in a small way. On the insurance business, the shareholders were informed that the company was awaiting government guidelines on the issue.

The shareholders also approved the company's decision to buyout the entire equity of two finance companies -- Aparajita Finance.

Company Ltd and Paramjyothi Finance Company Ltd. These companies will be merged with Sundaram Finance Ltd in due course. In that context, the management also made it clear that the company would be on the lookout for growth prospects and will not miss out good opportunities.