Study of a Mfg. Co. from Annual Report Company Name: H.O.

Location: Factory Location: CEO: Products Manufactured: Ceat Limited. Worli, Mumbai Mumbai, Nasik and Halol Mr. Paras Chowdhary, MD Automative Tyres, Tubes, and Flaps for Trucks & Buses(T&B), Light Commercial Vehicles(LCBs), Passenger Cars(PCs), Tractors and Trailers, Two Wheelers and three wheelers, Off the road OTR()vehicles, Industrial vehicles

Capacity Analysis Product Name Automative Tyres Automative Tubes Automative Flaps

2009-10 Units License d Capacit y 49.47 49.47 Installe d Capacit y 47.26 %Cap utilization Production Gross Sales 88.70 94.84 26.58 YOY

Nos in Lacs Nos in Lacs Nos in Lacs

84.50 70.56 25.20

Financial Analysis ( All fig. in Rs Lacs. except employees) 08-09 % of 09-10 Sales 251369.2 ----- 285042.6 5 8 170428.5 68% 175934.3 1 4 16069.27 6.4 19633.07 5000 21941.63 9053.99 6844.75 2561.73 49017 68357.43 (1611.16) ---8.7 3.6 2.7 1.02 19.5 27.19 0.7 5215 41719.90 11126.71 6430.18 2749.33 47700 66135.56 16104.15 % of sales -----61.7 6.9 ----14.6 3.9 2.3 0.9 16.73 23.2 5.65 YoY % Change +13.40 % +3.3% +22.18 % +4.3% +90% +23% (6%) 7.3% (2.69%) (3.25%) 899%

Net Sales (Excluding other income) Rs. Material Cost Employee Cost No. of Employees (write whether assumed or actual ?) Inventory held on yr. end Power & Fuel Cost Interest paid Depreciation Exports Imports Net Profit (NOPAT) Average Earning of Employee Revenue generated /Employee ( Sales / No. of Emps.) Inventory/Turn-Over ratio E.P.S. (Rs.)

Rs. 3.21 L/Yr Rs. 50.27---- L ---11.46Times (4.71)

Rs.3.69 L/Yr Rs. 54.66---- L 6.832----- Times 47.03

1. Capacity Utilization: How is Production and Sell w r t Installed Capacity? Is there improvement w r t last year.? Is company moving with market trends ? 2. Productivity, Quality Revenue per employee has increased from 50.27 lac 2008-09 to 54.66 in 200910

3. Inventory Management: Inventory turnover ratio in 2009-10 is 6.8 times as compare to 11.46 times in 2008-09 There is no improvement in inventory turn over .

4. Profitability : Net profit margin in 2009-10 is 5.65 % as compare to loss of -.7 % in 2008 2009 Return on capital employed 30.06% in 2009-10 as compare to 4.29 % in 200809 Return on networth 26.29% 2009-10 as compare to -3.33 % in 2008-09 This was achieved due to smart and strategic raw material procurement, substantial reduction in interest burdenon account of efficient working management and numerous cost reduction initiatives with higher productivity.

5. Management effectiveness :5 year Avg ROI and ROE are 6.3 and 14.37 respectivly . This compares well against the industry average of -3.15 and -12.88 .

6. Ratio Analysis : Current ratio is .84 as compare to industry avg of .80 Quick ratio is .60 as compare to industry Avg of .83 While the company is close to industry average large part of company current asset are tied up with slow moving inventory and slow paying debts so the firm may find difficult to pay its current libility .

5. Future Plans With a new manufacturing facility at halol with a capacity of 130TPD and additional capacity Nasik facility, the total capacity will increase to 570TPD by end of 2011-12. Partnering with OEM for new developments. Develop alternate recipes Developments in passenger radial segment i.e winter tyres, energy saver tyres and eco friendly tyres. The company should introduce Wheel Management Centres to expand reach and customer contact across the country. This will provide services like wheel alignment, tyre repair etc. The company should also tap replacements segment that accounts for 60% of the total tyre industry. The company should double exclusive outlets from the present 80, by opening them in tier-2 and 3 cities to expand reach. The industry is highly raw material sensitive. So the company should look for acquiring raw materials from other centres than East Asian countries. Sharp increase in raw material prices and depreciation due to new capacity creation will pressurize the bottom line margins but topline growth is expected to be robust due to overall increase in demand from automotive industry.

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