Indo Schottle Auto Parts Indo Schottle Auto Parts Pvt. Ltd.Pvt. Ltd.

IPO PresentationIPO Presentation

AgendaAgenda

Company OverviewCompany Overview Organisation SetupOrganisation Setup Business ProfileBusiness Profile Marketing and DistributionMarketing and Distribution Growth StrategyGrowth Strategy FinancialsFinancials

Company OverviewCompany Overview

Brief Background and HistoryBrief Background and History Significant MilestonesSignificant Milestones Awards and CertificationsAwards and Certifications Consultants and AuditorsConsultants and Auditors Promoter ProfilePromoter Profile Capital Structure and Shareholding Capital Structure and Shareholding

PatternPattern

Background and HistoryBackground and History

Incorporated in April 1985Incorporated in April 1985

Jointly Promoted by Mr. V. B. Pusalkar Jointly Promoted by Mr. V. B. Pusalkar (Indian National)(Indian National) and Mr. Wolfgang and Mr. Wolfgang Schottle Schottle (German National)(German National)

Significant MilestonesSignificant Milestones Indo Schottle is incorporated

1 product line (Engine Valve Collets)

2nd product line (Rocker Arm Screws)

30 employees, Sales USD 250k

Established as a premier OEM supplier

Development of Precision machined parts

Sales USD 800k, Exports 10%

100% Export Unit (EOU) established

QS 9000 certification

Developed Fuel System parts for OE exports

Growth rates @ 40%

“Best Indian Manufacturer” of Auto/Engineering Parts

5 product lines

Sales USD 15 million

Exports @ 45%

100 mill. stamped and 50 mill. machined parts / year

Establishment of 3rd Manufacturing Plant

TS 16949 certification

Awards and CertificationsAwards and Certifications

ISO TS 16949 QS 9000 ISO 9001:2000Best Supplier

Award from Holset

Best Supplier

Award from Cummins

Emerging India Award

– 2005 in the Auto, Engg. And Ancilliaries Category

Consultants and AuditorsConsultants and Auditors

Tax Consultants – M/s. Kunte and VaidyaTax Consultants – M/s. Kunte and Vaidya Solicitors – M/s. Crawford and BaileySolicitors – M/s. Crawford and Bailey Statutory Auditors – M/s. PriceWaterhouseStatutory Auditors – M/s. PriceWaterhouse Internal Auditors and Finance Consultants Internal Auditors and Finance Consultants

– M/s. Shah & Kirtane– M/s. Shah & Kirtane

Promoter Profile – Mr. V. B. Promoter Profile – Mr. V. B. PusalkarPusalkar

A commerce graduate with post-A commerce graduate with post-graduate degree in International graduate degree in International Trade from Indian Institute of Foreign Trade from Indian Institute of Foreign Trade, New DelhiTrade, New Delhi

Vast experience in International Vast experience in International Trade of auto componentsTrade of auto components

Has worked as Export Manager with Has worked as Export Manager with Kirloskar Cummins Ltd.Kirloskar Cummins Ltd.

Promoter Profile – Mr. Wolfgang Promoter Profile – Mr. Wolfgang SchottleSchottle

An engineering graduate from An engineering graduate from University of StuttgartUniversity of Stuttgart

Rich experience of over 10 years Rich experience of over 10 years with Mahle, a German auto majorwith Mahle, a German auto major

Promoter of MVI Motorenteile Promoter of MVI Motorenteile Vertrieb GmbH, an European auto Vertrieb GmbH, an European auto majormajor

Promoter Profile – Rohan PusalkarPromoter Profile – Rohan Pusalkar

Mechanical Engineer from Pune Mechanical Engineer from Pune UniversityUniversity

Completed M. S. in Mechanical Completed M. S. in Mechanical Engineering from University of North Engineering from University of North Carolina, USCarolina, US

Served for a brief period as Customer Served for a brief period as Customer Engineer with IBM Corp, USEngineer with IBM Corp, US

Is a certified QS 9000 auditorIs a certified QS 9000 auditor

Capital StructureCapital StructureParticulars Rs. LacsIssued and Paid up Capital 243.78 Share Premium 2,150.40 Accumulated Profits 3,206.77 Other Reserves 105.18 Total Shareholders' Funds 5,706.13

Figures as of 31/3/06, ProvisionalFigures as of 31/3/06, Provisional

4%

38%

56%

2%

Issued andPaid upCapital

SharePremium

Accumulated Profits

OtherReserves

ShareholdersShareholders

The Pusalkar Family jointly holds The Pusalkar Family jointly holds around 59% of the total capitalaround 59% of the total capital

Mr. Wolfgang Schottle holds 12.30%Mr. Wolfgang Schottle holds 12.30% The private investors holds another The private investors holds another

23.99%23.99% While the balance 4.32% is held by While the balance 4.32% is held by

close friends and relativesclose friends and relatives

Shareholding PatternShareholding PatternSr.No. Name of the Shareholder No. of Amount % Share

Shares Rs Holding1 Mr. Vijay B. Pusalkar & others 1,280,643 12,806,430 52.53%2 Mr. Rohan V. Pusalkar 113,400 1,134,000 4.65%3 Mr. Ajit V. Kher 53,750 537,500 2.21%

A) PUSALKAR FAMILY 1,447,793 14,477,930 59.39%4 Mr. Wolfgang Schottle 299,875 2,998,750 12.30%

B) MR.WOLFGANG SCHOTTLE 299,875 2,998,750 12.30%

Promoters taken together 1,747,668 17,476,680 71.69%

C) OTHERS 105,250 1,052,500 4.32%

5 Crossover Fund -I 232,162 2,321,620 9.52%6 Geosam Mauritius Limited, Mauritius 235,247 2,352,470 9.65%7 Swiss Technology Venture Capital Fund

Private Limited 117,515 1,175,150 4.82%

D) INVESTORS 584,924 5,849,240 23.99%

TOTAL (A+B+C+D) 2,437,842 24,378,420 100.00%

Organisation SetupOrganisation Setup

Board of DirectorsBoard of Directors Organisation StructureOrganisation Structure Employee StrengthEmployee Strength Labour RelationsLabour Relations Employee Training & DevelopmentEmployee Training & Development Sister ConcernsSister Concerns

Board of DirectorsBoard of Directors Mr. V. B. Pusalkar – Mr. V. B. Pusalkar – Chairman and Managing DirectorChairman and Managing Director Mr. R. V. Pusalkar – Mr. R. V. Pusalkar – Executive DirectorExecutive Director Mr. Wolfgang SchottleMr. Wolfgang Schottle Mr. V. D. KherMr. V. D. Kher

Mrs. S. B. KalyaniMrs. S. B. Kalyani Mr. S. S. ShirgaokarMr. S. S. Shirgaokar Mr. M. K. SomanMr. M. K. Soman Mr. A. S. BehrayMr. A. S. Behray Mr. D. D. DandekarMr. D. D. Dandekar

Mr. Ravi LekharajaniMr. Ravi Lekharajani Mr. Nikhil KhattauMr. Nikhil Khattau Mr. Pramod SheddeMr. Pramod Shedde

Representatives of

the Promoter

Group

Independent

Directors

Representatives of

the Investors

No major changes in the current Board of Directors is expected, except in case of the Investors, whose representation shall depend upon their holding post-issue

Organisation StructureOrganisation StructureChairman and

Managing Director

Mr. Vijay Pusalkar

Executive Director & CEO

(EOU Unit)Mr. Rohan Pusalkar

CEO (Domestic Unit)

Mr. Anil Khadkikar

GM Sales & CommercialMr. Shirish

Pathak

GM Engineering

Mr. Vijay Mahashabde

HOD Quality AssuranceMr. Ganesh

Gosavi

HOD AdminCapt. Ashok

Umbarje

HOD PersonnelMr.

Mangalvedhekar

GM Finance & Accounts

Mr. R. P. Sathe

Employee StrengthEmployee Strength Total Employee Strength:- 441 nos.Total Employee Strength:- 441 nos.

Technical team Strength:- 390 nos.Technical team Strength:- 390 nos.

Production Engineers:- 296 nos. ( 190 Operators working on Machines are Engineers), Production Engineers:- 296 nos. ( 190 Operators working on Machines are Engineers), Skills – Job set-up, cycle time monitoring, output.Skills – Job set-up, cycle time monitoring, output.

Quality Engineers:- 52 nos., Skills - Final Quality, SPC, MSA, and Quality Systems.Quality Engineers:- 52 nos., Skills - Final Quality, SPC, MSA, and Quality Systems.

Purchase & Vendor Development Engineers:- 9 nos. Skills:- Techno-commercial Purchase & Vendor Development Engineers:- 9 nos. Skills:- Techno-commercial approach. approach.

Commercial & service staff :- 41 nos. (Skills – Exim, Finance, Logistics, Stores, Human Commercial & service staff :- 41 nos. (Skills – Exim, Finance, Logistics, Stores, Human resources)resources)

Apart from the above company has 213 contract laboursApart from the above company has 213 contract labours

Employee attrition Rate:- 4.5 % Employee attrition Rate:- 4.5 %

Employee Average age:- 28 yearsEmployee Average age:- 28 years

Average Employee cost - Rs. 0.90 Lacs (p.a.)Average Employee cost - Rs. 0.90 Lacs (p.a.)

Labour RelationsLabour Relations

The company has maintained “Zero The company has maintained “Zero Labour Issue” status right from Labour Issue” status right from inceptioninception

The company has an internal unionThe company has an internal union Wage agreement has been signed Wage agreement has been signed

with the Union and will be in-force till with the Union and will be in-force till 3131stst July 2007 July 2007

Employee Training & DevelopmentEmployee Training & Development

Training needs of employees are identified through Training needs of employees are identified through a specially devised system comprising of – a specially devised system comprising of – • Training need identification formatTraining need identification format• Gap Analysis of Competency mappingGap Analysis of Competency mapping• Annual appraisalAnnual appraisal

A need-based training calendar is formulatedA need-based training calendar is formulated It is implemented with help of outside experts as It is implemented with help of outside experts as

well as ISAP facultieswell as ISAP faculties Training Centre established in 2005Training Centre established in 2005 Aim of the Training Centre – Development, Value Aim of the Training Centre – Development, Value

addition and imparting of requisite skills in the addition and imparting of requisite skills in the employeesemployees

Associate ConcernsAssociate Concerns

Pusalkar Mitchel Engineering Pvt. Ltd. Pusalkar Mitchel Engineering Pvt. Ltd. • A 50:50 joint venture with The Mitchel A 50:50 joint venture with The Mitchel

Group Inc., U.S. Group Inc., U.S. • 100% Export Oriented Unit100% Export Oriented Unit• Started commercial production in May Started commercial production in May

20052005 Belgaum Motor Parts Pvt. Ltd.Belgaum Motor Parts Pvt. Ltd. Pusalkar Schottle Exports Pvt. Ltd.Pusalkar Schottle Exports Pvt. Ltd. Pusalkar EngineersPusalkar Engineers

Business ProfileBusiness Profile

ProductsProducts Revenue Break-upRevenue Break-up Manufacturing facilitiesManufacturing facilities Research and DevelopmentResearch and Development Key SuppliersKey Suppliers Trademarks and WarrantiesTrademarks and Warranties

ProductsProducts

Components with Dimensional Accuracies within 5 microns, Flatness – 2 Components with Dimensional Accuracies within 5 microns, Flatness – 2 microns, Cylindricity – 1.5 microns, Roughness Values up to 0.4 Ramicrons, Cylindricity – 1.5 microns, Roughness Values up to 0.4 Ra

Component size from Dia. 3 mm to 55 mm & length 2mm up to 145 mmComponent size from Dia. 3 mm to 55 mm & length 2mm up to 145 mm

ProductsProducts

Fuel System PartsTurbocharger Parts

Engine Valve ColletsInstalled Capacity - 150 millionCold formed with High repeatabilityPatent pending on process

Installed Capacity 4 million partsHeat treated and groundRoundness < 2 micronsMatch assembled (Size control in microns)

Rocker Arm ScrewsInstalled Capacity - 40 million

Alloy steel with special heat treatment and Class I threads

Hydraulic Components

Installed Capacity 1.5 million partsVery Close tolerancesRoundness / Flatness < 3 microns

Revenue Break-upRevenue Break-up

2004-05 2005-06

4,712.11 5,554.61

2004-05 2005-06 2004-05 2005-06

2,183.65 2,628.39 2,528.46 2,926.22

2004-05 2005-06 2004-05 2005-06

1,119.20 1,384.11 1,409.26 1,542.11

Domestic

Turbocharger Components Fuel System Components

Total Sales

EOU

2004-05 2005-06

Screws 1,130.92 1,346.24

Collets 873.60 1,045.85

Pivot 130.21 172.20

J ob Work Charges 47.89 63.50

Others 1.03 0.60

2004-05 2005-06

Oil Seal Plates 513.75 554.59

S.S. Bush 185.25 189.88

J ournal Bearing 326.05 391.50

Others 94.15 248.14

2004-05 2005-06

Tappet Sleeve Assy. 83.36 21.57

Tappet Hyd. Assy. 548.60 854.18

Coupling Injector Plunger Assy. 643.30 638.96

Others 134.00 27.40 Figures in Rs. Lacs

Revenue Break-upRevenue Break-up

2,131

2,581

2,356

3,199

- 500 1,000 1,500 2,000 2,500 3,000 3,500

Export

Domestic

Rs. Lacs

2005-06

2004-05

Manufacturing FacilitiesManufacturing Facilities

Export Unit at Export Unit at PirangutPirangut

Domestic Unit at Domestic Unit at PirangutPirangut

Manufacturing Facilities - DomesticManufacturing Facilities - Domestic

Spread over 3 acres of LandSpread over 3 acres of Land Built-up manufacturing facility of Built-up manufacturing facility of

27,000 sq. ft.27,000 sq. ft. Manufactures Valve Collets, Rocker Manufactures Valve Collets, Rocker

Arm Screws & other precision Arm Screws & other precision engineering componentsengineering components

Manufacturing Facilities - EOUManufacturing Facilities - EOU

Spread over 11 acres of LandSpread over 11 acres of Land Built-up manufacturing facility of Built-up manufacturing facility of

63,000 sq. ft.63,000 sq. ft. Manufactures Turbocharged parts, Manufactures Turbocharged parts,

Fuel system parts, Hydraulics and Fuel system parts, Hydraulics and Fluid power partsFluid power parts

Machinery and EquipmentsMachinery and Equipments

S.No Machinery & Equipments Make Nos1 CNC Bar Auto Citizen, Spinner 132 Sliding head CNC automats Nexturn 2

3Twin spindle CNC lathe/ turn mill center

Kummer,Takisawa, Emco, Index, Mazak

9

4 CNC lathesMazak, Hardinge, LMW, Galexy, Parishudh, PMT

30

5 VMC Brother, Kafo 46 Electro Chemical deburring Elchem 1

7Internal grinder with auto loader

Nova 1

8 Cyl./ C'less grinderMicromatic, Solitaire, HMT, Paragon, Bhagawansons

7

9 Gun drilling machine Nagal 110 Laser marking machine Pryor 111 Continues mesh belt furnace Fluidtherm 112 Sub zero treatment furnace 1

13 Press Bilher, Haulic Roos, Godrej, Aptech Engineers

4

14 Thread rolling M/ cPraga Tools, Machine Tool Equip, Profiroll Technologies

14

15 Induction hardening M/ cElectronic Devices, Inducto- therm

8

Other Infrastructural FacilitiesOther Infrastructural Facilities

Plants equipped with Compressed AirPlants equipped with Compressed Air 100% Power back-up through 100% Power back-up through

generating setsgenerating sets In-house heat treatment facilityIn-house heat treatment facility Leased Office Premises in World Leased Office Premises in World

Trade Centre, Cuffe Parade, Mumbai Trade Centre, Cuffe Parade, Mumbai of about 243 sq. ft built-up areaof about 243 sq. ft built-up area

Owns un-utilised land of about 3 Owns un-utilised land of about 3 acres for further expansionacres for further expansion

Research and DevelopmentResearch and Development

Design Design • Products designs are of the customersProducts designs are of the customers• The company designs the Manufacturing The company designs the Manufacturing

Process, measuring process and toolsProcess, measuring process and tools Research – Focused on Research – Focused on

• Selection of appropriate Manufacturing ProcessSelection of appropriate Manufacturing Process• Optimizing it Optimizing it

Trials and TestingTrials and Testing• Several experimental and empirical tests, Several experimental and empirical tests,

trials, manufacturing try outs, are done to trials, manufacturing try outs, are done to improve and optimize productivity, tool cost improve and optimize productivity, tool cost and qualityand quality

Key SuppliersKey SuppliersSr. No. Name of the Suppliers

Name of the Product

No. of years as Suppliers

1 Corus Special Steels,UK Steel/Stainless Steel 72 Leend Bronze,UK Leaded Bronze 73 Mukund Iron, Thane Steel/Stainless Steel 154 Hindalco Aluminium 25 Jeena Special Alloys Bearing Steel 36 Cold Drawn Products Strips for Collet 6

As can be seen above the Key Suppliers are basically Raw-Material Suppliers.

The company has good and long standing relationship with these suppliers.

Trademarks and WarrantiesTrademarks and Warranties

Application to the Patent Office for Application to the Patent Office for grant of patent for invention “A grant of patent for invention “A process of preparing Valve Collets” is process of preparing Valve Collets” is underwayunderway

The company do not give any The company do not give any guarantee to customers. guarantee to customers.

Only warranties in respect of Only warranties in respect of defective workmanship or material is defective workmanship or material is givengiven

Marketing and DistributionMarketing and Distribution

Marketing Set-up & StrategyMarketing Set-up & Strategy CustomersCustomers Contracts with CustomersContracts with Customers Market Size and ShareMarket Size and Share CompetitionCompetition

Marketing Setup & StrategyMarketing Setup & Strategy

Supplies products only to Original Supplies products only to Original Equipment Manufactures (Tier I & Tier II)Equipment Manufactures (Tier I & Tier II)

Long-term relationships with all its Engine Long-term relationships with all its Engine ManufacturersManufacturers

Supplies to almost all domestic Engine Supplies to almost all domestic Engine Manufacturers and significant Engine Manufacturers and significant Engine Manufacturers based in US and EuropeManufacturers based in US and Europe

Not over-dependent on a single customerNot over-dependent on a single customer

Customers - DomesticCustomers - Domestic Sales Value

(Rs.Lacs) %

Sales Value (Rs.Lacs)

%

1 SANSERA ENGINEERING PVT.LTD. (MARUTI) 358.55 16.42% 489.30 18.62%2 MARUTI UDYOG LIMITED. 318.04 14.56% 318.63 12.12%3 HERO HONDA MOTORS LIMITED-GUR 272.48 12.48% 316.27 12.03%4 SUNDRAM FASTENERS LTD (CUMMINS) 165.78 7.59% 262.78 10.00%5 BAJAJ AUTO LTD 135.78 6.22% 167.16 6.36%6 TATA MOTORS LTD. 129.30 5.92% 147.87 5.63%7 TVS MOTOR COMPANY LTD. 104.46 4.78% 136.45 5.19%8 JKM DAERIM AUTOMOTIVE LIMITED. (HYUNDAI) 102.64 4.70% 104.06 3.96%9 MAHINDRA & MAHINDRA LTD 71.29 3.26% 93.34 3.55%

10 CUMMINS INDIA LTD. 63.82 2.92% 67.89 2.58%11 MIVIN ENGINEERING TECHNOLOGIES (MICO) 47.89 2.19% 63.79 2.43%12 HONDA MOTORS&SCOOTERS INDIA 70.36 3.22% 50.06 1.90%13 AUTOTECH INDUSTRIES (I) P. LTD (CUMMINS) 9.16 0.42% 35.16 1.34%14 TATA CUMMINS LIMITED 32.22 1.48% 34.85 1.33%15 YAMAHA MOTOR INDIA LIMITED. 25.56 1.17% 33.64 1.28%16 ASHOK LEYLAND LIMITED 23.12 1.06% 33.07 1.26%17 AUTO PARTS (BAJAJ AUTO) 20.61 0.94% 30.23 1.15%18 SIMPSON COMPANY LIMITED(MTR) 14.47 0.66% 20.71 0.79%19 UGC LOGISTICS PVT.LTD (KIRLOSKAR OIL ENG.) 13.69 0.63% 20.31 0.77%20 AUTOLINE (MARUTI) 25.26 1.16% 17.98 0.68%21 ESCORTS LIMITED- TRACTOR DIV 13.79 0.63% 17.53 0.67%22 GREAVES COTTON LTD. 10.26 0.47% 14.67 0.56%23 EICHER MOTORS LIMITED 11.58 0.53% 13.72 0.52%24 INTERNATIONAL TRACTORS 7.62 0.35% 11.85 0.45%25 LML LIMITED. 10.98 0.50% 10.06 0.38%26 OTHERS 124.98 5.72% 117.01 4.45%

Grand Total >>> 2,183.65 100.00% 2,628.38 100.00%

2005-06 Customers

Sr. No.

2004-05

Customers - EOUCustomers - EOU

Sales Value

(Rs.Lacs) %

Sales Value

(Rs.Lacs) %

1 DIESEL RECON - USA (CUMMINS) 528.72 20.91% 680.28 23.25%2 FUEL SYSTEMS PLANT - USA (CUMMINS) 643.30 25.44% 638.96 21.84%3 HOLSET ENGG.COMPANY LTD - USA 428.92 16.96% 430.20 14.70%4 HOLSET ENGG. COMPANY LTD - UK 395.75 15.65% 414.29 14.16%5 TATA HOLSET LIMITED 149.22 5.90% 210.80 7.20%6 CUMMINS INDIA LIMITED 189.16 7.48% 190.78 6.52%7 TURBO ENERGY LIMITED 122.58 4.85% 173.25 5.92%8 BOCSH REXROTH AG. - GERMANY - 0.00% 74.15 2.53%9 TATA AUTOCOMP SYSTEMS LTD. 1.98 0.08% 49.37 1.69%10 CUMMINS ENGINE CO.- USA 42.28 1.67% 17.44 0.60%11 CUMMINS INC.-FSP - USA 1.71 0.07% 6.71 0.23%12 THE MITCHEL GROUP INC. - 0.00% 6.01 0.21%13 MELETT LTD - 0.00% 4.82 0.16%14 AGROMACH SPARES CORPORATION - 0.00% 3.13 0.11%15 TURBO INTERNATIONAL - 0.00% 2.57 0.09%16 CUMMINS RECON AUSTRALIA 1.87 0.07% 1.57 0.05%17 TEL - EXPORTS 0.11 0.00% 0.62 0.02%18 CUMMINS INDIA LTD. 0.27 0.01% 0.13 0.00%19 OTHERS 22.61 0.89% 21.15 0.72%

Grand Total >>> 2,528.46 100.00% 2,926.22 100.00%

Sr. No. Customers

2004-05 2005-06

Contracts with CustomersContracts with Customers

The company has long-term The company has long-term relationships with most of its relationships with most of its customerscustomers

The customers generally raise an The customers generally raise an open orderopen order

This is backed up by monthly This is backed up by monthly delivery schedulesdelivery schedules

Market Size and ShareMarket Size and Share

Auto Industry Overview – Auto Industry Overview – • During the FY 05-06, worldwide 60 Mn During the FY 05-06, worldwide 60 Mn

Cars were manufactured - U.S.A. 45%, Cars were manufactured - U.S.A. 45%, Europe 40%, Asia Including China 10-Europe 40%, Asia Including China 10-13% , India – 2%13% , India – 2%

• Worldwide 25 Mn Motor Cycles were Worldwide 25 Mn Motor Cycles were manufactured, of which 10 Mn were in manufactured, of which 10 Mn were in IndiaIndia

Market Size and ShareMarket Size and Share Valve CollectsValve Collects

• Indian market projected to grow around 20% - 25% Indian market projected to grow around 20% - 25% annuallyannually

• Global market is of about 3 Billion collects a year, about Global market is of about 3 Billion collects a year, about 30 times company’s current production30 times company’s current production

• Globally there are about 6 -7 well-known collect Globally there are about 6 -7 well-known collect manufacturersmanufacturers

• Enormous growth potential for the companyEnormous growth potential for the company Rocker Arm ScrewsRocker Arm Screws

• Global Market of around 450 Mn pieces annuallyGlobal Market of around 450 Mn pieces annually• Company produces around 36 Mn pieces annuallyCompany produces around 36 Mn pieces annually• Aims to emerge as largest manufacturerAims to emerge as largest manufacturer

Market Size and ShareMarket Size and Share Turbo ChargersTurbo Chargers

• The sector has been growing at about 20% annuallyThe sector has been growing at about 20% annually• The turbocharger market globally is of about $ 2 BillionThe turbocharger market globally is of about $ 2 Billion• The company is targeting a 5% global market share by The company is targeting a 5% global market share by

20102010 Fuel Injection ComponentsFuel Injection Components

• Total market size is estimated to be $ 500 BillionTotal market size is estimated to be $ 500 Billion• The company’s turnover of this segment is merely $ 3.5 The company’s turnover of this segment is merely $ 3.5

millionmillion• Huge potential for growthHuge potential for growth

Hydraulic and Fluid PowerHydraulic and Fluid Power• Enjoys a market share of about 3%Enjoys a market share of about 3%• Another high growth segmentAnother high growth segment

CompetitionCompetition The nature of the industry and inherent strengths of the company reduce the The nature of the industry and inherent strengths of the company reduce the

risk and impact of competitionrisk and impact of competition

Internal Strengths – Internal Strengths – • Long-term relationships with customersLong-term relationships with customers• Supply against open purchase ordersSupply against open purchase orders• Single Supplier for many productsSingle Supplier for many products• High performance standards in terms of delivery and qualityHigh performance standards in terms of delivery and quality• Transparent PricingTransparent Pricing• High quality systems have resulted in high customer confidenceHigh quality systems have resulted in high customer confidence• Ability to identify appropriate Manufacturing process, its improvisation and suitable Ability to identify appropriate Manufacturing process, its improvisation and suitable

machinery and equipment setupmachinery and equipment setup

External Factors – External Factors – • Very few manufacturers globally (e.g. Collets, ISAP amongst 6 collects Very few manufacturers globally (e.g. Collets, ISAP amongst 6 collects

manufacturers)manufacturers)• Presence of small value items (e.g. screws, collets) making unviable for new Presence of small value items (e.g. screws, collets) making unviable for new

entrantsentrants• Stringent procedures followed by OEM’s while appointing suppliers. This is a big Stringent procedures followed by OEM’s while appointing suppliers. This is a big

entry barrier in itselfentry barrier in itself• Machines and equipments are of high standards. Hence, of high value. Thus, Machines and equipments are of high standards. Hence, of high value. Thus,

making it an capital intensive sector. This also acts as an entry barriermaking it an capital intensive sector. This also acts as an entry barrier

Growth StrategyGrowth Strategy

Growth StrategyGrowth Strategy Present Expansion PlansPresent Expansion Plans Proposed Expansion PlansProposed Expansion Plans Utilisation of Issue ProceedsUtilisation of Issue Proceeds Alternative Financing OptionsAlternative Financing Options

Growth StrategyGrowth Strategy

““The World is Our Market”The World is Our Market” The company is guided by this The company is guided by this

strategystrategy Planning for expanding sales to US Planning for expanding sales to US

and European Marketsand European Markets At the same time the company will At the same time the company will

pursue growth within the India pursue growth within the India Automobile ArenaAutomobile Arena

Present Expansion PlansPresent Expansion Plans Dedicated Manufacturing Setup for Dedicated Manufacturing Setup for

EatonEaton• LOI received from Eaton Corp.LOI received from Eaton Corp.• Supply of spool assemblySupply of spool assembly

Dedicated Manufacturing Setup for Dedicated Manufacturing Setup for HoneywellHoneywell• Long-term commitment receivedLong-term commitment received• Supply of Sleeve Thrust AssemblySupply of Sleeve Thrust Assembly

Proposed Expansion PlansProposed Expansion Plans

Export of Collets and Screws to US Export of Collets and Screws to US CustomersCustomers

Become a leading player in Turbocharger Become a leading player in Turbocharger SegmentSegment

Dedicated Manufacturing facility for a Dedicated Manufacturing facility for a leading automobile manufacturer in USleading automobile manufacturer in US

Expanding the Journal Bearings segmentExpanding the Journal Bearings segment Establishing marketing tie-up in USEstablishing marketing tie-up in US Establishing new manufacturing facility for Establishing new manufacturing facility for

exports in SEZexports in SEZ

Utilisation of Issue ProceedsUtilisation of Issue Proceeds

For fulfilling the expansion plansFor fulfilling the expansion plans Acquisition of Indian / Overseas Acquisition of Indian / Overseas

companiescompanies For the present expansion plans, the For the present expansion plans, the

company has already contracted for company has already contracted for debt. Issue proceeds can be utilised debt. Issue proceeds can be utilised for its pre-paymentfor its pre-payment

Alternative Financing OptionsAlternative Financing Options

Public Issue is the preferred choicePublic Issue is the preferred choice The next best option would be DebtThe next best option would be Debt The company has good relationship The company has good relationship

with various banks and enjoys great with various banks and enjoys great credibility amongst all of themcredibility amongst all of them

FinancialsFinancials

Past Financials & RatiosPast Financials & Ratios Current Debt PatternCurrent Debt Pattern Tax BenefitsTax Benefits Projected FinancialsProjected Financials

Past FinancialsPast Financials

2002 2003 2004 2005 2006Particulars Audited Audited Audited Audited Prov.

Sales 1,268.90 1,574.93 2,680.00 4,708.63 5,618.28 PBDIT 358.80 545.16 894.51 1,881.80 1,989.83 PBT 152.51 315.27 566.47 1,521.89 1,577.96 PAT 116.56 222.85 417.06 1,250.82 1,327.00 Cash acruals 195.51 338.92 599.69 1,492.24 1,775.84

Net Worth 491.66 707.52 1,199.51 2,350.50 5,837.73 Term Liabilities 717.38 1,075.54 966.51 1,202.50 1,058.89 Current Liabilities 236.02 395.53 1,068.71 1,072.98 1,213.88

Fixed Assets 754.87 1,230.10 1,983.87 2,344.87 4,316.57

Year ended on 31st March

Figures in Rs. Lacs

Past RatiosPast Ratios

2002 2003 2004 2005 2006Particulars Audited Audited Audited Audited Prov.

PAT / Sales 9.2% 14.1% 15.6% 26.6% 23.6%Outside Liab. / Net Worth 1.94 2.08 1.70 0.97 0.39 Current Ratio 2.84 2.38 1.20 2.05 3.06

Return on Equity 24% 31% 35% 53% 23%Book Value 47 67 63 124 239 Earnings Per Share 11 21 22 66 54 Dividend Payout 25% 25% 25% 50%

Year ended on 31st March

Current Debt PatternCurrent Debt Pattern

Outstanding as of 30th June 06

Figures in Rs. Lacs

Bank Term Loan Cash Credit Bill Discounting Packing Credit TotalThane J anata Sah. Bank 461 200 300 961 Canara Bank 310 310 Citibank 1,200 300 1,500 ICICI Bank 3,000 3,000 Total 4,661 200 300 610 5,771

Sanctioned Limits

Bank Term Loan Cash Credit Bill Discounting Packing Credit TotalThane J anata Sah. Bank 66.27 144.34 251.92 - 462.53 Canara Bank - - - 210.30 210.30 Citibank 65.10 - - 172.38 237.48 ICICI Bank - - - - - Total 131.37 144.34 251.92 382.68 910.31

Facility

Tax BenefitsTax Benefits

The company has registered its The company has registered its Export Unit with SEEPZ as a 100% Export Unit with SEEPZ as a 100% EOUEOU

It enjoys all the tax benefits available It enjoys all the tax benefits available to an EOU under the Income Tax Act to an EOU under the Income Tax Act (available only upto FY 08-09)(available only upto FY 08-09)

The EOU also enjoys tax breaks in The EOU also enjoys tax breaks in terms for Excise and Sales Taxterms for Excise and Sales Tax

Projected FinancialsProjected Financials

2007 2008 2009 2010 2011Particulars Projected Projected Projected Projected Projected

Sales 7,436.75 10,702.22 13,543.38 15,440.18 17,704.30 PBDIT 3,011.16 4,645.26 5,642.92 6,106.68 7,026.59 PBT 2,392.19 3,746.08 4,338.97 5,030.17 5,941.51 PAT 2,007.01 3,220.69 3,753.10 3,269.06 3,861.43 Cash acruals 2,570.23 4,022.98 4,656.28 4,204.14 4,796.51

Net Worth 7,382.04 10,538.91 14,228.19 17,433.43 21,231.04 Term Liabilities 3,973.67 4,330.11 2,323.95 1,638.47 884.45 Current Liabilities 958.00 1,248.16 1,504.46 1,750.79 2,045.05

Fixed Assets 6,291.16 6,539.93 6,253.68 5,318.61 4,383.53 Current Assets 5,950.74 9,505.44 11,731.12 15,432.28 19,705.20

Year ended on 31st March

Figures in Rs. LacsAbove Projections are based on Present Expansion

Plans

Projected RatiosProjected Ratios

2007 2008 2009 2010 2011Particulars Projected Projected Projected Projected Projected

PAT / Sales 27.0% 30.1% 27.7% 21.2% 21.8%Outside Liab. / Net Worth 0.67 0.53 0.27 0.19 0.14 Current Ratio 6.21 7.62 7.80 8.81 9.64

Return on Equity 27% 31% 26% 19% 18%Book Value 303 432 584 715 871 Earnings Per Share 82 132 154 134 158

Year ended on 31st March

Return on Equity, Book Value and Earnings Per Share have been computed on the existing Paid-up capital of Rs. 243.78 Lacs

Above Projections are based on Present Expansion Plans

Thank youThank you