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Dear Jan, Rhody, Alma and Take!

Before the meeting tomorrow, I would like to answer your letter.

1. Turnover increase:
The sales department in Esztergom is capable of processing orders for 160.000 bikes per year.
To use this capacity in 2015, the following steps are required:
- we have to receive orders in time.
- processing the orders and developing new models has to start in August 2014.
- sample production, tests and development has to start no later than August/September.
- orders to the Far East suppliers have to be finalized no later than August/September.
2. Prices, overhead and profit:
Our prices include overhead costs and profit as described by DBG. The prices are significantly reduced
compared with the previous years, in the hope of a succesful cooperation between our companies.
3. Technical background
As we mentioned previously, the factory is capable of producing 160.000 bikes yearly. This year, we plan to
produce 135.000 bikes which is feasible regarding our current production background.
We will start the next year with technological developments to ensure yearly production capacity of 160.000
4. Sandblasting machine
There is 24/7 service for our sandblasting device, so in case of any malfunction, it is repaired within 24 hours.
We also have a manual sandblasting machine.
Within 50 Kms reach, we have 2 contracted partners who can fix the machines anytime.
5. Current questions, answers:
Despite that you are putting heavy pressure on us, we cannot answer questions about orders for which parts will
not arrive in time and there is no alternative for those parts, we only can give a 'no' as an answer.
In the next 2 months, processing the orders in time will be fully restored.
It is important for you to understand that we spent the last 2 months dealing with the out of turn extra orders
received at the end of 2013, which needs huge time and work efforts.
Our current administration capacity allows processing of orders for 7000 bikes weekly. But, since orders for
almost 50.000 bikes were received at the end of 2013, this takes much longer time.
5. Communications
Andrs had to make priorities.
Most important is processing of the orders.

In many cases, customer needs were indeed neglected because it would reduce the time spent on parts orders.
You need to know that processing orders is a huge amount of work. We work with 3 months delay because of
the late orders.
6. Development:
In 2013, 4 people were working at purchasing/sales.
Now, 6 perople are working there.
We do not search for new markets at the moment since Dutch market is of primary importance for us.
We prepared our IT system to handle DBG part numbers.
We are continuously developing our production system.
Our production workers, QC staff and team leaders received technical and quality management training
specifically for Dutch produtcs.
In 2014, the root of problems related to the production of Dutch market bicycles is that we received the orders
extremely late.
Despite that, we worked very hard on processing the orders and managing supplies.
The current state of processing the orders could not have been achieved without the extraordinary amount of
work we invested in it.
About the Union bikes:
According to your promise, all orders and coordination regarding these bikes was to be done by you, we only do
the assembly work.
We would like to know how these preparations are progressing.
My personal opinion, often told to Andrs, Jan, Alma and Take is that we need help from you with orders,
production documentation, recipes, ID system, transports, etc. We need someone who is constantly present and
works here with us, at least one person who knows the bikes and parts.