Falcon Tyres Ltd BSE: 509527 | NSE: FALCONTYRE | ISIN: INE511B01024 Market Cap: [Rs.Cr.] 82 | Face Value: [Rs.

] 5 Industry: Tyres

Company Profile Acquired by the Shaw Wallace group through its subsidiary and associate companies in 1987, Falcon Tyres started operations in 1975. It was running profitably till 1982, after which its performance suffered due to a non-remunerative product-mix, outmoded technology and factors like recession in the automobile industry, etc. Continuously incurring cash losses, the company came under the purview of the BIFR. Shaw Wallace worked out a professional plan soon after acquiring it. Dunlop India, an associate company of the group, extended technical, marketing and managerial support and the erstwhile BIFR company turned around. The company has its manufacturing plant at Mysore. At present, it manufactures tyres and tubes for scooters, mopeds, motor cycles, auto rickshaws and animal-drawn vehicles. The company has a technical and marketing tie-up with a Korean company to manufacture hi-tech automotive international quality butyl tubes. Falcon sells 70% of its production to OEMs; its client list includes Bajaj, Hero Honda, Escorts, etc. In 1994-95, the company came out of the purview of the BIFR after posting a profit. It has diversified by manufacturing four-wheeler tyres and radial car tyres. In 1995-96, the company was implementing the expansion of tyre and tube

capacity by 6.5 lac. The loan is provided by KSIIDC, banks, internal accurals. The company has also entered into the allied field of passenger car tyre. The company has increased the installed capacity of two and three wheelers tyres from 3,00,000 to 3,50,000 tyres per month, which was completed in March, 1999. The company is planning to diversify its product range like Tyres for Jeep,Car,Tractor front & Rear in the Current Financial Year. The installed capacity of Tyres was increased to 4000000 Nos in 2001-02 and again in 2002-03 it was increased to 5200000 Nos. The company is also planning to enhance the manufacturing capacities in all sizes and diversify in new segments like Car,LCV,Jeep and Tractor Front tyre Key Information Key Executives: Pawan Kumar Ruia , Chairman Ambuj Kumar Jain , Director Kokkarne Natarajan Prithviraj , Director S Ravi , Director

Company Head Office / Quarters: K R S Road, Metagalli, Mysore, Karnataka-560016 Phone : 91-0821-2582453/2055 Fax : 91-0821-2582321 E-mail : secretary@falcontyres.com Web : http://www.falcontyres.com Registrars: Integrated Enterprises (I) Ltd No. 30 Ramana Resid. 4th Cross Sampige Rd Malleswaram Bangalore - 560003

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Falcon Tyres Limited Padmashree institute of management and sciences Page 1

Falcon Tyres Limited INTRODUCTION In India, tyre industry has seen a major revolution due to spurt in Automobilesector. The tyre industry is a raw material intensive industry. Raw materials accountsfor about a 55% of the total production cost. Two of the 4 major raw materials used int y r e m a r k e t i n g ( i . e . N y l o n t y r e c o r d a n d s y n t h e t i c r u b b e t ) a r e p e t r o l e u m b a s e d derivatives. In India the ratio of Synthetic rubber to natural rubber in the profile of rawmaterial consumption is approximately 20:80, which stands in sharp contrast to theratio if 70:30 for developed countries. Natural rubber is more resistant and is thereforemore suitable to Indian road conditions.The Indian tyre industry is made up of 16 major players and 13 minor players,which amounts to Rs. 9000 crores business. There are more than 34 plants located allover India. This industry depends on the agricultural and industrial performance of theeconomy, transportation and production of vehicles. MAJOR KINDS OF RAW MATERIALS USED IN TYRE INDUSTRY: The major raw materials and their weight age in the total raw materials

coststructure are: 1.NATURAL RUBBER: It is the most important raw material used in the manufacture of tyres. Natural rubber a c c o u n t s f o r a b o u t 4 0 % ( b y w e i g h t ) o f t h e t o t a l r a w m a t e r i a l requirement in themanufacture of a tyre. The productivity of natural r u b b e r i n I n d i a i s h i g h e s t i n t h e world, but still India face shortage of natural rubber produced in the country. Padmashree institute of management and sciences Page 2

Falcon Tyres Limited 2.SYNTHETIC BUTADIENCE RUBBER: It is one of the major kinds of raw materials. It contains three types of rubber namely: a. Styrene Rubber: It is manufactured from petroleum feed stock. It is used in Car, Jeep. T y r e industry alone consumes about 50% of total quality of this kind of rubber. b. Poly Butadiene Rubber:

It is manufactured from petroleum feed stock. It is mainly used in heavy dutytyres. Tyre industry consumes 80% of total rubber. c. Butyl Rubber: It is a synthetic rubber mainly used for making inner tubes in tyres. It is vital tothe durability of the tyres because of its ability to hold air better than natural rubber,which in turn results in better performance and longer life of tyres. 3.CARBON BLACK: It is Petroleum based unorganised chemical in the form of quasi graphite powder of extreme fineness and with high surface area c o m p o s e d e s s e n t i a l l y o f elemental carbon. The main input required in the manufacturing of carbon black is feedstock. Carbon black is divided into soft grade and hard grade. In India carbon black used is of N660, N220 and N330 variety. 4.NYLON YARN / FABRIC / TYRE CORD Nylon tyre cords are an essential reinforcement material weightage of Nylont y r e yarn in terms of cost of raw materials used in the highest a t a b o u t 2 7 % . Caprolactum is a major raw materials used in the manufacture of Nylon tyre cord. Padmashree institute of management and sciences Page 3

Falcon Tyres Limited To sum up, the tyre industry is highly raw-material intensive, with raw materialcosts accounting for 70% of the cost of production. The export import policy allowsfree import of all tyres of new tyres and tubes. However, import of retreated tyres either f o r u s e o r f o r

reclamation of rubber is restricted. This has led to use tyres b e i n g smuggled into the country under the label of new tyres. Though tyre imports and allraw materials for tyres except natural rubber are under Open General Licences (OGL)only import of natural rubber from Srilanka is eligible under OGL.The profitability of the industry has high correlation with the price of key rawmaterials such as rubber and crude oil. They account for more than 70% of the totalcost. The tyre industry is also capital intensive industry as it requires around Rs. 4 billion to set up a radial tyre plant (tyre having fabric layers parallel) and around 1.5 to2 billion for a cross ply tyres. Padmashree institute of management and sciences Page 4

Falcon Tyres Limited

INDUSTRY PROFILE The tyre industry is essentially an automobile ancillary business. The demandfor its products emanates from the OEM, Replacement and Export Market. All thesesegments are equally important in terms of volume of business. The tyre industrysgrowth is linked to the growth in demand from vehicle manufacturers and the after market.During 2005-06, the growth in production of 2/3 wheelers and the after marketdemand were buoyant. Consequently there was a substantial growth in the sales of 2/3wheeler tyres. Input costs, especially the price of Natural Rubber and Fabric remainedh i g h due to increased demand for tyres in passenger car and commercial v e h i c l e segments and also export of Natural Rubber.T h e t y r e i n d u s t r y i n I n d i a appears to be on the verge of changes due to theongoing process of g l o b a l i z a t i o n . S o m e f o r e i g n c o m p a n i e s a r e m a k i n g e f f o r t s t o establish a manufacturing facility in India by setting up joint ventures to cater to localdemand as well as for buyback. Indian companies are also stepping up their efforts andworking to

capture new markets. Regional trade agreements may also have an impacton the industrys future performance and development.T h e y t y r e i n d u s t r y h a s s h o w n t r e m e n d o u s g r o w t h d u r i n g t h e y e a r . T h e 2 / 3 wheeler industry also witnessed substantial growth in the period under review. Therehas been a marked shift in consumer preference away from mopeds and scooters andtowards motorcycles. The motorcycle tyre segment is estimated to grow at 15% per a n n u m . G i v e n the current economic realities, the industry will witness f i e r c e competition between companies of varying size and stature, including multinationalcompanies. Padmashree institute of management and sciences Page 5

Falcon Tyres Limited OFFICER AND DIRECTORS

Name Current Position Badrinarayanan, S.Vice President - Finance, Compliance Officer,Company SecretaryGandhi, Tarun Non-Executive Director Jain, Ambuj Non-Executive Director Bhansali, SunilExecutive Director Ruia, PawanExecutive Chairman of the BoardPrithviraj, KokkarneAdditional Director Ravi, S.Additional Director

Padmashree institute of management and sciences Page 29

Falcon Tyres Limited DEPARTMENTAL ANALYSIS FINANCE: OPERATIONS MARKETING PRODUCTION TECHNICAL HUMAN RESOURCE INFORMATION SYSTEM Padmashree institute of management and sciences

Page 30

Falcon Tyres Limited FINANCE DEPARTMENT : The Finance department is headed by Mr. S. Badrinarayanan who is also thecompany secretary, who is in charge of whole finance department.The department is subdivided into:1 . F i n a n c e 2 . A c c o u n t s 3 . C o s t i n g 4 . C o m m e r c i a l A c c o u n t s 5 . S e c r e t a r i a l D e p a r t m e n t 6.Purchase (Capacity Availability U t i l i z a t i o n ) These are headed by Deputy General Managers (DGMs) of respective subdepartments.I n A d d i t i o n , F i n a n c e d e p a r t m e n t c o n s i s t s o f o t h e r e x e c u t i v e s l i k e D e p u t y Manager Costing, Assistant Manager and Secretarial Manager Systems and relatedofficers and Trainees. All are having reporting relationship to VP (Finance) or DGM(Finance).The key functions of Finance department are:I ) A r r a n g e m e n t o f F i n a n c e I I ) M a i n t e n a n c e o f A c c o u n t s I I I ) C o s t A n a l y s i s I V ) C o s t C u t t i n g M e t h o d s V ) R e c e i p t s a n d P a y m e n t s VI)Preparation of P & L Account, Balance S h e e t V I I ) I n t e r n a l A u d i t i n g VIII)Verification of C & F Agent activitiesI X ) I t a c t s a s l i a i s o n f o r b a n k s . Padmashree institute of management and sciences

Page 31

Falcon Tyres Limited OPERATIONS DEPARTMENT:Personal Department: Human Resource department controls over 3 main areas:2 . H u m a n R e s o u r c e 3 . P u b l i c R e l a t i o n 4 . P e r s o n n e l D e p a r t m e n t The major functions of personnel department are:a ) R e c r u i t m e n t b ) S e l e c t i o n c ) T r a i n i n g a n d Developmentd ) I n d u c t i o n e ) M a n p o w e r Planningf ) D e p l o y m e n t g)Ab se n t e e ism h ) D e m a n d s i ) M o t i v a t i o n j)Welfare Measures (Canteen and Fringe Benefits, Ambulance)k ) S p o k e p e r s o n o f t h e o r g a n i z a t i o n Padmashree institute of management and sciences Page 32

Falcon Tyres Limited TECHNICAL DEPARTMENT The functions of technical department are as follows:I . T y r e d e s i g n a n d d e v e l o p m e n t II.Issuing of processes for manufacturing of compound, fabric, bead tyre tube.III.Testing of tyres to meet v a r i o u s m a n d a t o r y r e q u i r e m e n t s . IV.Raw material specification (Rubber, Nylon, Carbon Black, Beadwire etc)V . M a i n t e n a n c e specification of manufacturing process at the shop floor.VI.Passing of compound of fabric for manufacturing process.VII.Isolation of rejected batches and their d i s p o s a l . VIII.Approval of vendor and development of new sources.I X . S e t t i n g o f a c c e p t a n c e s t a n d a r d s f o r m a r k e t . X . N e w t y r e m a n u f a c t u r i n g . XI.Interface with Original Equipment Manufacturers. Padmashree institute of management and sciences Page 33

KRUPA Falcon Tyre Project Add To Collection 3.3K Reads

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INTRODUCTION 1.NATURAL RUBBER: 2.SYNTHETIC BUTADIENCE RUBBER: 3.CARBON BLACK: 4.NYLON YARN / FABRIC / TYRE CORD INDUSTRY PROFILE Sector Comments: Market Profile: Sector Specifics: Sector Trends: Outlook: GROWTH AND DEVELOPMENT OF THE INDUSTRY COMPANY PROFILE Quality Accreditations A) Companys Philosophy on Corporate Governance: B) Board of Directors C. Audit Committee C. Remuneration Committee D. Investors / Shareholders Grievances Committee

Competitors Information: MRF: CEAT: Apollo Tyres Ltd. (ATL) Achievements / Awards: Future Growth and Prospectus: Work-In-Progress: POWER & FUEL CONSUMPTION SHARED VALUE: STYLE: Major Customers of Falcon Tyres Ownership Pattern: PRODUCT PROFILE ORGANIZATION STRUCTURE DEPARTMENTAL ANALYSIS FINANCE DEPARTMENT : OPERATIONS DEPARTMENT: Personal Department: TECHNICAL DEPARTMENT PRODUCTION DEPARTMENT INVENTORY CONTROL SYSTEM: Raw Material: Stores & Spares: STORES MARKETING DEPARTMENT STRATEGY Information System: HUMAN RESOURCE DEPARTMENT HR FUNCTIONS: POWERS AND DUTIES OF PERSONNEL MANAGER: POWERS: DUTIES: OPERATIVES FUNCTIONS OF HRD DEPARTMENTS: WAGE AND SALARY: EOHS- Policy: VISION STATEMENT: MISSION STATEMENT: SWOT Analysis STRENGTHS: WEAKNESS: OPPORTUNITIES: THREATS: FINDINGS: SUGGESTIONS: CONCLUSION

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