Global Tires Business Strategy Meet & Budget 2012-13

Unit: Kapico Auto1 India (P) Limited Presented By: Mr.Jayadevan.S.M Country Head Indian Tire Operations

Country Potential
Indian tire industry is worth US$ 3.2 billion comprises of over forty players in the organized
& unorganized sectors.

Growth trends indicate the Indian tire industry has grown at a CAGR of 11% in terms of
volume in last 5 years.

Indian tire industry is concentrated and the top four companies control 78% of the total
revenue.

Unlike the global market where passenger car tires dominate, in India a majority of the
turnover is contributed by commercial vehicle tyre segment.

The commercial vehicle tires segment account for bulk of the sales at 70% of the industry
revenues.

The PCR segment is growing faster than other segments (CAGR 16%), a drastic shift towards
a global structure is not expected in the next 3-5 years.

The Indian tire industry is two tiered. The Tier-I players account for around 85% of the
industry's turnover with a well diversified product-mix and presence in all three major segments of the replacement market, original equipment manufacturers (OEMs) and exports. Tier-II companies are smaller in size, with a focus only on one or two categories of tyres, plus tubes and flaps primarily for the replacement market.

The Indian tire aftermarket is experiencing significant growth due to a combination of

factors such as high vehicle sales across all categories and increasing industrial activity.

Indias vehicle population has grown at an average of 10.5 percent per annum from 2000 to
2005, which in turn, positively impacted the tire aftermarket.

Around 90.0 percent of passenger car tires in 2005 were radials, and this is expected to

Country Potential Contd

Tyre Segment Passenger Car Radial SUV/ Jeep Light Truck Truck & Bus Off the Road Domestic (In Millions) 2006-07 14.04 1.36 4.66 12.24 0.12 2007-08 (E) 16.12 1.48 5.03 13.11 0.13 Imports

Indian Passenger Car Radial/ SUV Tire Market

Focus Market Category PCR Tubeless Tires. (Extended Category PCR Tube type) Passenger Cars & Utility Vehicle Total Market Population > 10 Million (Approx) Projected Market Population 2010 > 14 Million Leading Car Brands Maruti, TATA, Hyundai, Mahindra, Skoda, Mercedes, BMW, New Entrants Renault, Nissan, Volkswagen, Volvo

Major Brands in India & their Attributes

PCR Output Target markets Product quality Growth Trend Networks& Resources Brand Image Other Attributes B/stone 3.6 Mn All India Excellent + Intl R&D & 3000+dealers Excellent F1 & OE Presence Dealers
Product Performance Wide Range & Brand Equity Dealer Margins & Competition

Goodyear 1.6 Mn All India Average Intl R&D & Wide Segment Good OE Presence

Michelin Imports All India Excellent + Int. R&D

Apollo 3.5 Mn All India Good +

JK Tires 2.3 Mn All India Average =

MRF 2.2 Mn All India Average =

4500+dealers 2500+dealers 3000+dealers

Excellent Racing & Int. Brand Recognition Dealers

Product Performance Wide Range & Brand Equity Small dealer network & premium price

Good OE Presence

Average Racing & OE Presence Dealers

Average Racing & OE Presence Dealers

Brand Equity

Distribution Strategy Strength

Distributors
Product Performance Wide Range & Brand Equity Distribution model of working

Dealers

Weakness

Product Brand Equity in Performance SUV & LT & Brand Segments Equity Few Product Low Riding Patterns Comfort

Low Riding Comfort

CEAT, BIRLA & Imported players are not included in the comparison table as their representation in the PCR market is insignificant as compared to other players

Major Brands in India & their Attributes Contd..

Pricing Reputation Brand Awareness Technology Market Segments B/stone Highest Excellent Very High Superior PCR, LTR & TBR Low Dealer Profitability Goodyear Low & flexuating Medium Very High High PCR, LTR, AGRI & OTR Uncontrolled over pricing & distribution Michelin Highest High High Superior PCR, LTR & TBR Selective Distribution & High Price Apollo Moderate Excellent Very High Medium PCR, LTR, TBR & AGRI JK Tires Moderate High High Medium PCR, LTR, TBR & AGRI MRF Moderate High High Medium PCR, LTR, TBR, AGRI & OTR

Opportunity for NEXEN

Low Low Low representation representation representation in UHP & HP in UHP & HP in Tires Tires UHP & HP Tires Strong Brand Equity in Upcountry Markets

Threat

End Customer No significant Rapidly growing Well Accepted Strong Brand Acceptance threats except Dealer Network Products Equity for price in Upcountry Markets

Auto1 (Nexen) Market Share

B/stone Goodyear Michelin Apollo JK Tires MRF Others NEXEN

PCR Output

3.6 Mn

1.6 Mn

Imports 3.5 Mn 2.3 Mn 2.2 Mn 2.5 Mn

Market share Replacement Market S & W (Excluding 12) 2.1 Million

22% 23%

13% 15%

4% 7%

10% 18%

10% 14%

10%

31% .25%

12% 10.75%

PROJECTED MARKET SHARE

AUTO1 BRANDS 08-09 AUTO1 BRANDS 09-10

Projected Output Market Share

50000 2.1%

75000 2.7%

2007-08 Results A snapshot

0 00 00 0 0 , 0 , 0 0 00 00 0 0 , 0 , 0 0 ,0 0 0 0 0 0 , 0 0 ,0 0 0 0 0 0 , 0 0 ,0 0 0 0 0 0 , 0 0 ,0 0 0 0 0 0 , 0 0 00- 0 0 00 2 2 - 2 Bud 2 22 2 2 - 2 Actual (As on 2. 22 2 ) 2 22 22 . 2 2 2 2 - 2 P roj 2 22 -

Sales 00- 0 0 00 0 0 - 0- Bud 0 00 0 0 - 0- Actual (As on 0 . 00 0 ) 0 00 00 . 0 0 0 0 - 0- Proj 0 00 00 00 0 , 0, 0 0 00 00 0 0, 0, 0 00 00 0 , 0, 0 0 00 00 0 0, 0, 0

Receivables 0 22 22 2 , 2, 2 00 00 0 , 0, 0 00 00 0 , 0, 0

Inventory 00 00 0 , 0, 0 2, 2, 2 22 22 2 0, 0, 0 00 00 0 0, 0, 0 00 00 0

Brand Contribution In Detail

Top Contributors No. of Months Stock Total* 00 .0 2 .2 22 0 .0 00 0 0 0 Non Moving*

* Indicates a required field that must be updated manually. All other fields are calculated automatically

No of Months Good Stock*

Nexen Tires Golden Bridge Tires Nexen Tubes TOTAL

00 . 0

Explain Contribution
Reasons Reasons

Number of Months Stock = Total Stock / Average Cost of Sales ) Number of Months Good Stock Value = (Total Stock Value Nonmoving stocks)/average cost of sales last 3 months

Brand Contribution Snapshot

NEXEN TUBES GOLDENBRIDGE 0 % 0 %

NEXEN 0% 0

Goldenbridge tires were available for sale only on the last quarter of the FY07-08 Product leaflets and literature on the products we not available immediately Price of this new brand is comparatively high when compared to competing
brands Goldenbridge tires come without warranty

Goldenbridg e

Nexen Tubes
Nexen Tubes were added to our offering only on the last quarter of the FY07-08

Sales Analysis Top 5 Tamilnadu & Andhra

0000 000 0000 000 0000 000 0000 000 0 '22 -22 '22 -22
Car Care Zone Shakthi Murugan Anuppar Annai Tyres Kumaran

0000 000 0000 000 0000 000 0000 000 0 '22 -22 '22 -22
Kochery Sales & Agencies Prakash Tyre Agencies Moral Tyre Trades Sri Rama Tyres SVK Tyres (Kakinada)

Top 5 customers sales projection FY08-09

INR 8.1 mn

Top 5 customers sales projection FY08-09

INR 10.2 mn

Sales Analysis Top5 Gujarat & Maharastra

000 000 000 000 000 000 000 000 0 '22 -22 '22 -22
Kirti Tyres (Surat) Raj Automobiles (Himatnagar) Arun Agro (Junagadh) P Patiala (Jamnagar) JK Enterprises (Vapi) Khubchand Sagarmal Qwality Tyres United Tyre Crafts V Rangildas & Co

0000 000 0000 000 000 000 000 000 000 000 000 000 0 '00 -00 '00 -00

Top 5 customers sales projection FY08-09

INR 2.05 mn

Top 4 customers sales projection FY08-09

INR 3.84 mn

SWOT

Strengths
Extensive Range of Tires for majority of Indian & Imported car models in the Indian
market.

Excellent product quality & performance attributes

Wide Selection of patterns Tubeless Range Directional Tires Specific tires for various kind of applications/ preferences

KAIPL expertise of handling distribution of imported tires in various other

international markets.

KAPILs options to add brands from various origins as compared to other Indian
manufacturers

Anytime Stock of unique/ upsizing tires for a majority of car models. Commitment to have long term approach with the market channels. National level approach in the business of imported tires. Clean & Transparent transaction procedures on imports of tires. Financial Strength & managements perseverance for a long term approach towards
the market.

Strengths Contd
One of the few Specialist Marketing & Distribution companies in the business of
tires in India.

Working & In depth knowledge of the team about most of important tire markets in
India.

Auto1s credentials & experience of having created a successful tire agency model
in Kuwait & UAE.

Auto1s excellent contacts with Global tire manufacturers. Average experience of field personnels experience in their respective territories is
more than 10 years.

Well maintained and equipped central warehouse in Coimbatore for more than
12000 sq. ft.

Ability to offer credit terms to channel partners. Sure plans in setting up of satellite warehouses in all the important tire markets in
India.

Dealer prospect of earning high margins on the product compared to established

brands in the market.

Offer of unconditional warranty on Nexen tires.

Weakness
Levy of restrictions & duties on the import item. Being a late entrant to the market, knowing the right channel partner &
getting into a rapport with them will take time.

General impression of the importing tire distributors, are that they are
short term oriented towards the market.

Brand Power Lack of brand equity with the target market. Inability to enter the market with an exciting approach due high costs of
marketing & branding.

Lack in control & quick implementation of plans. Absence of a professional marketing approach owing to manpower
limitations.

Lesser occurrence of team meetings due to high cost & wide dispersion of
team.

Limited resources on the distribution support at present

Weakness Contd
Limited knowledge on the few of the markets on the channel options. Increased time of the material to reach the destination states due to
unavailability of stocking facilities at present.

Lack of clarity on interstate transaction procedures & delay in setting it,

cause hurdles in starting up business.

Limited control on the new product developments to keep inline with

domestic market requirements.

Limitation on getting immediate supplies for crucial market requirements. Lack of service infrastructure. Limitations on advertising & promotional intensity & spend. Limited scope of control on fixing of selling prices as compared to Indian
manufacturers, due to our agency model.

Opportunities
Growing Indian automotive market. Low Brand Loyalty in replacement markets The Indian PCR market is growing faster than the capacity of Indian tire
manufacturers, already all manufacturers running their plants at around 90% capacity there is very little Indian manufacturers will be able to make up.

The thrust for expansions from most of the major tire players is more on
OTR manufacturing capabilities and less on PCR manufacturing capacities. Hence, is expected create an unbalanced demand supply gap in the Indian PCR market.

Scope for value addition to the distribution channel through offering of

various international brands.

Growing car population in India has created the demand for more tire
service providers & thereby a space for a national/ regional level tire retailing concept.

Potential increase in demand for UHP tires through the entry of

 Changes in lifestyle of of the population have increased the awareness &

acceptance for high quality imported brands.

Irregular demand: supply pattern in some markets, due to improper

planning/ lack of transparency of supply chain activities among various market players.

Decreasing age of vehicle ownership, creating a market for attractive,

sporty and aggressive style tire requirement among the youth.

Decreasing profit margins for tire distribution channels due to

competition from the same & other brands.

Its relatively easier now to create a market for a known international

brand in India. This is due to the increased exposure of the target Indian customer with internet & travel thereby learns more about the international scenario.

Increased acceptance & fitment of tubeless tires over the last couple of
years.

Threats
Increasing replacement cycle of tires due to better product features &
driving conditions.

Aggressive marketing approach of the top 5 tire brands in the country. Increased influx of imported brands in to the Indian market Price increase by our suppliers. Potential implementation of mandatory certification procedures for all
imported tires sold in India.

Potential threat from all competing firms through their efforts to counter
the penetration of Nexen tires.

Product / Import Planning with Movement Analysis

Movement Analysis
Brands Months Apr-07May-07 Jun-07 Jul-07 Aug-07 Sep-07 O-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 (As on 18) Inward Outward GB TYRE Inward Outward NEXEN TUBES Inward Outward 0 0 0 0 0 0 0 0 0 2346 5 0 0 370 92 0 0 422 816 0 0 0 163 0 0 0 99 0 0 3959 729 0 0 0 656 1593 56 0 1171 934 0 9 19010 228 2581 425 0 12 0 170 Total

NEXEN TYRE

10,849 3,919 1,593 77 19,010 398

Abstract of Import Plan FY 08-09

New product lines suggested for sourcing

Product / Import Planning with Movement Analysis

Sales & Procurement Plan
Brands Current Apr-08 May-08 Jun-08 Stock + Pipeline Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Total

SALES PLAN NEXEN TYRE GB TYRES GOODRIDE NEXEN TUBES

4000

4150

4500

4500

4750

4750

4500

4250

3750

3500

3375

3975

50000

EXPECTED BRAND MIX ( 7:1:1:1) 2800 400 4000 2905 415 455 4150 3150 450 490 4500 3150 450 490 4500 3325 475 515 4750 3325 475 515 4750 3150 450 450 4500 2975 425 465 4250 2625 375 415 3750 2450 350 390 3500 2363 338 378 3375 2783 398 438 3975 35000 5000 5000 50000

IMPORT PLAN NEXEN TYRE GB TYRE GOODRIDE NEXEN TUBE

12361 3516 18612

3665 2400 1265

2400 2400

3650 2400 1250

20750 3600 17150

4850 3600 1250

3650 2400 1250

2400 2400

21900 2400 1250 18250

3635 2400 1235

2400 2400

2400 2400

19450 3600 1250

91150 32400 3750 5000

14600

50000

The figures given against various brands for the respective months denotes the order to placed with the supplier on that month. Various factors considered while arriving at the import plan are Current Stock levels & Pipeline stocks Peak & Lean month requirement Delivery Lead time (For Nexen 30-45 days, Goldenbridge & Goodride 30 days & Nexen Tubes 30-45 days)

Product / Import Planning with Movement Analysis

Total Import for FY 08-09: 33x40ft containers & 3x20ft containers NEXEN: 27x 40ft containers Goldenbridge: 3x40ft containers Goodride: 3x40ft containers Nexen Tubes: 3x20ft containers

Sales Plan 2008-09 Key Drivers & Target Achievement Plan

Feedback awaited from field
personnel

Operating Expenses General Control Measures

Manpower
Optimum utilization of available man power There is no scope for cost reduction in this area as per current levels. KAIPL is already operating with minimum manpower resources during this year.

Occupancy
Optimum utilisation of available space in the existing warehouse and C&F Premises

Sales & Distribution

Product distribution cost to be minimised Maximum utilization of C&F arrangement

General Admin
Centralized procurement of stationeries Communication expenses Maximum utilization of cheap more of communication

Finance Charges
Collection of outstanding on or before the due date

Advertising & Sales Promotion Activity Planner & Calendar 200809

ACTIVITIES PLANNED IN THE MARKETING PROGRAM T Shirts/ Shirts to employees with brands & logo Create a Press Kit Answering Machine in the office (Nicely recorded voice messages on our activities & offers) Distribute Auto1 & our dealing brands merchandise (pens, key chains, Mugs, mouse pads) Ads through fixing of sticker in Taxi & Call Taxi Maintaining of roadside gardens in prominent locations in all districts of the state Ads in popular websites Yellow Pages Ad (National & Local) Install dealer boards (minimum 30 in each state) Participate in Trade Shows (list of trade shows for the next year in each state) Creation of dealer welcome kit Collect dealer information (Send gifts, cards on their landmark days) (Printing of Greeting Cards) Window displays in hospitals on road safety Road signs/ safety slogans on side of highways in coordinating with traffic police/ highways department Displays in hotels, airports Offer referral purchase discounts to end customers

Monthly, Quarterly & Annual Activity Cycles

Monthly Activity Cycle Press Release/ Articles to newspapers & magazines Ads in National Magazine One dealer place promotion in every state Dealer of the Month - Publish in Newsletter with months activity & achievements Quarterly Activity Cycle Minimum one Tire Check-up Camp in each state Ads in regional magazines/ newspapers in local language Ads in national newspapers in English Newsletter to all dealers & institutional customers Seminars in every state Taxi Operators Dealers Automobile Workshops Annual Activity Cycle Dealer Meet in every state Annual Award for dealers in every state & publicize

Marketing Activity AMJ 2008

Month/ Week FY 08-09 Effort Campaign Manager Place Costs Expected Benefit Results April - Week1 April - Week2 April - Week3 April - Week4 Dealer Place Promotion Dealer Place Promotion Tire Checkup Camp TN Dealer Place Promotion Seminar TN Pats & Shiva Shibu & Raju Pats Hariharan Pats Hariharan M Pats & Shiva Shibu Rajesh Shibu & Raju Shiva Hariharan Shiva Hariharan M Shibu Pats & Shiva Rajesh Shibu & Raju Hariharan Hariharan M TN & AP KL & GJ TN MH & KA TN All India TN & AP KL GJ KL & GJ AP MH & KA AP All India TN & AP GJ KL & GJ MH & KA All India 10000 10000 5000 10000 20000 50000 10000 5000 20000 10000 20000 10000 5000 50000 10000 5000 10000 10000 50000 Awareness on Auto1 Brands Awareness on Auto1 Brands Awareness on Auto1 Brands

Apr/ May - Week1 (28-3) Ad in Autocar India May - Week2 Dealer Place Promotion Tire Checkup camp KL Seminar GJ Dealer Place Promotion Seminar AP Dealer Place Promotion Tire Checkup Camp AP Ad in Autocar India Seminar KL Dealer Place Promotion Tire Checkup Camp GJ Dealer Place Promotion Dealer Place Promotion

May - Week3 May - Week4 May - Week5 June - Week1 June - Week2 June - Week3 June - Week4

June/ July - Week1 (30-5) Ad in Autocar India

Marketing Activity JAS 2008

Month/ Week FY 08-09 June/ July - Week1 July - Week2 Effort Quarterly Newsletter AMJ 08 Dealer Place Promotion Tire Checkup Camp KL Seminar GJ Dealer Place Promotion Seminar TN Dealer Place Promotion Tire Checkup Camp TN Seminar KL Ad in Autocar India Seminar AP Dealer Place Promotion Tire Checkup Camp GJ Dealer Place Promotion Dealer Place Promotion Tire Checkup Camp AP Ad in Autocar India Dealer Place Promotion Dealer Place Promotion Dealer Place Promotion Campaign Manager Place Hariharan M Pats & Shiva Shibu Rajesh Shibu & Raju Pats Hariharan Pats Shibu Hariharan M Shiva Pats & Shiva Rajesh Shibu & Raju Hariharan Shiva Hariharan M Pats & Shiva Shibu & Raju Hariharan Hariharan M All India TN & AP KL GJ KL & GJ TN MH & KA TN KL All India AP TN & AP GJ KL & GJ MH & KA AP All India TN & AP KL & GJ MH & KA All India Costs Expected Benefit Results 5000 10000 5000 20000 10000 20000 10000 5000 20000 50000Awareness 20000 10000 5000 10000 10000 5000 50000Awareness 10000 10000 10000 50000Awareness

July - Week3 July - Week4

July/ Aug - Week1 August - Week2 August - Week3 August - Week4 August - Week5 September - Week1 September - Week2 September - Week3 September - Week4

Sept/ October - Week1 Ad in Autocar India

Marketing Activity OND 2008

Month/ Week FY 08-Effort 09 Sept/ October - Week October - Week2 October - Week3 October - Week4 October - Week5 November - Week1 November - Week2 November - Week3 Quarterly News Letter JAS 2008 Dealer Place Promotion Seminar KL Dealer Place Promotion Seminar AP Dealer Place Promotion Seminar GJ Tire Checkup Camp GJ Ad in Auto car India Campaign Manager Pats & Shiva Shibu Shibu & Raju Shiva Hariharan Rajesh Rajesh Hariharan Place TN & AP KL KL & GJ AP MH & KA GJ GJ All India All India KL & GJ AP TN MH & KA All India TN & AP MH & KA TN All India Costs 5000 10000 20000 10000 20000 10000 20000 5000 50000 100000 10000 5000 20000 10000 50000 10000 5000 10000 10000 5000 50000 Expected Benefit Awareness Results

Printing of 2009 Calender & DiaryChris Dealer Place Promotion Tire Checkup Camp AP Seminar TN Dealer Place Promotion Ad in Autocar India Dealer Place Promotion Tire Checkup Camp KL Distribution of 09 Calendar & Diary Dealer Place Promotion Tire Checkup Camp TN Ad in Autocar India Shibu & Raju Shiva Pats Hariharan Hariharan Pats & Shiva Chris Hariharan Pats Hariharan M

November - Week4 December - Week1 December - Week2 December - Week3 December - Week4 Dec/ January - Week1

Awareness Awareness

Marketing Activity JFM 2008

Month/ Week FY 08-09 Dec/ January Week1 Effort Quarterly News Letter OND 2008 Campaign Manager Pats & Shiva Shibu & Raju Hariharan Place TN & AP KL & GJ MH & KA Costs Expected Benefit

Results

January - Week2 Dealer Place Promotion Seminar GJ January - Week3 Dealer Place Promotion Seminar AP January - Week4 Dealer Place Promotion Seminar KL January - Week5 Tire Checkup Camp AP Seminar TN February Week1 February Week2 February Week3 February Week4 March - Week1 Ad in Autocar India Dealer Place Promotion Tire Checkup Camp KL Dealer Place Promotion Dealer Place Promotion Tire Checkup Camp GJ Ad in Autocar India

10000

Shiva Hariharan M Pats & Shiva Shibu & Raju Hariharan

All India TN & AP KL & GJ MH & KA

50000 Awareness on Auto1 Brands

10000

Hariharan M

All India

50000 Awareness on Auto1 Brands

March - Week2

Updating of Product Catalogues - All brands Dealer Place Promotion Dealer Place Promotion Tire Checkup Camp TN

Pats & Shiva

TN & AP

March - Week3

Shibu & Raju

KL & GJ

Quarterly Marketing Expense

Dealer promotion programs 90000 (5000 x 18 programs/ Qtr) Tire Checkup Clinics 20000 (5000 x 4 clinics/ Qtr) Seminars 80000 (20000 x 4 clinics/ Qtr) Ad in Auto Car 150000 (50000 x 3 issues/ Qtr) Other Expenses 100000 (CtC basis on need) Quarterly Newsletter - 10000 Giveaways/ Merchandise items 50000
TOTAL INR. 500000.00/ Qtr

Warehouse Status & Requirements in line to Budget 2008-09

Future requirement to cater 2008-09 stock Levels Local Delivery Vehicle Required to reach local dealers & transport agents

Permanent Loading & Unloading Staff C&F Arrangements on Pipeline

Maharastra 1000 Sft Andrapradesh 1000 Sft Gujarat 800 Sft

C&F Arrangements to be initiated in

Karnataka 1000 Sft Kerala 800 Sft

Coimbatore Warehouse Area 11400

Sft Stocking Area 10000 Sft Office Area 480 Sft Claim Area 320 Sft Gangway 600 Sft

Distributor arrangements to be made in

Pondy Goa Chattisgarh Orissa

Maximum Capacity 11000 PCR &

SUV Tires

Travel Plans / Expenditure Control Measures

All Sales staff shall give their annual travel budget. Annual Travel budget shall be further broken month wise with
place of travel need to be specified Repetitive travel to one location without any compelling reasons to be avoided Travel by air for overnight journey to be avoided Use of company vehicle wherever possible

Manpower Status & Needs

Current Manpower
DGM - Sales

Sales Manager Gujarat

Asst. Manager Commercial Warehouse Executive

Service Engineer

Sales Manager - Kerala

Dy Sales Manager TN Dy Sales Manager AP

Aspects of Manpower Affecting Business Operations

Limitations in Manpower Resources

Proposed Manpower Recruitment Plan (Budget 2008-09)

Field Staff Manager/ Dy. Manager Maharastra Manager/ Dy. Manager Karnataka Dy. Manager Tamilnadu (Mr. Pattabi) Dy. Manager Chattisgarh Commercial Accounts Assistant

Credit Norms, Evaluation Techniques & Post Control Measures

Present Credit Norms

A stipulated credit period of 30 days is given to all dealers from the date of invoice. In
case of upcountry dealers, grace period equivalent to delivery time transit period of 7 days for the billing on same state and 14 days for billing to other states.

Payment Mode: Payment should be preferably by way of pre-signed local cheque in

case of local dealers and by way of Demand Draft in case of upcountry dealers.

Cheque Returns: A penalty of rupee 500/- or 1% of the cheque value whichever is

higher will be levied in case of cheque return. And payment against cheque return should be strictly by way of demand draft.

Cash Discount: Dealers would be eligible for a cash discount of 1.5% on all payments
received with in 3 days in case of local dealers and 7 days in case of up-country dealers

All appointed dealers will ideally have a Trade Advance (have a bearing on expected
business volume) deposited to KAIPL before start of the business.

Credit limit for dealers generally fixed equivalent to maximum of 3 times the TAS
amount.

Evaluation Techniques
No of years in business Annual Turnover Counter potential Dealers reputation in the market Brands represented Credit History Dealer infrastructure Financial strength No of outlets

Post Control Measures

Quarterly confirmation of balance Acknowledgment of delivery and price by the dealer on the invoice Obtaining post dated cheque Review of supply to dealers with overdue more than 60 days Dealers having 3 or more occurrences of default in payments would be dealt only
on DD

Over Due Receivable Analysis / Recovery / Avoiding Techniques

Date INV Partys' Name Pending Amount 30 to 60 90 to 120 (> 120 days ) days days 30634 135074 125186 133420 93850 27693 14684 55898 450731 165708 923005 24921 20694 968620 Reason Expected Collection Date

08-09-2007 10-09-2007 18-10-2007 31-10-2007 03-11-2007 06-12-2007 24-12-2007 27-12-2007

21 25 54 63 66 74 91 98

Chequered Flag Tyres & Services Chequered Flag Tyres & Services MADURA TYRES MADURA TYRES Tyre Mart Tyre Centre Tyre Mart BHAGYA MARKETING

923,005 24,921 20,694 30,634 135,074 125,186 133,420 93,850 27,693 14,684 55,898 1,585,059

29-12-2007 101 BHAGYA MARKETING 11-01-2008 119 The Covai Tyress 12-01-2008 121 Tyre Mart TOTAL OVERDUE AMOUNT

Outstanding More than 30 days for local dealer & 45 days for upcountry dealer is considered as overdue

Gross Margin Improvement Plan Concept

Product Mix: Try to sell more the

size which is having maximum margins.

Adding of more profitable product

lines.

Having our retail outlets. Decreasing the cost of clearing &

forwarding the tyres.

Negotiating for discounts from the

supplier/ avoiding price increases.

Possibility of increasing the selling

price.

New Business Opportunities Conceive, Utilize & Convert

Feedback awaited from field
personnel

New Business Opportunities & Conversions - 2008-09

Sr. Project Description
1 2 3

Value

Status

Target Date

Issues & Achievements Issues

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Achievements
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Thank You