PRESENTED BY :

GROUP 8
VAIBHAV ARORA
MEGHNA DAS
SANYA SACHDEVA
ACHALA MISHRA

NALIN AGGARWAL
Introduction

•The Company started operations in 1958 as CEAT

Tyres of India Limited and was renamed as CEAT
Limited in 1990. The Company caters to both domestic
and international markets. The Company has its
presence in over 100 countries across the world. CEAT,
the flagship company of RPG Group, was established
in 1958.
• At CEAT, we continue to resonate with our Purpose
of ‘Making Mobility Safer & Smarter. Every Day.’
 1. COMMENT UPON THE BUSINESS MODEL OF THE COMPANY. WHAT ARE THE
PRIMARY (CORE) AND SECONDARY ACTIVITIES THAT THE FIRM IS ENGAGED INTO?

 CEAT is one of the largest tyre manufacturers in terms of revenue and is one of the
fastest growing tyre company in India.

 Company produces best-in-class, high performance tyres for a wide range of vehicles,
including tyres for 2/3 Wheelers, Passenger Vehicles and Utility Vehicles,
Commercial Vehicles and Off-Highway Vehicles and produces over 37 Million
tyres in a year. It also manufactures and markets superior quality tubes and flaps.
 It’s manufacturing operations are carried out through
a combination of in-house manufacturing facilities
and outsourcing units. It has plants in Nashik,
Mumbai, Halol, Ambernath and Nagpur. Another
plant is upcoming in Chennai making it the sixth
plant in India. CEAT also has a manufacturing facility
in Sri Lanka through its overseas joint ventures.
• The Replacement, Original Equipment
Manufacturing (OEM) and International Business
segments accounted for 59%, 29% and 12% of
CEAT’s revenue, respectively, in FY19.
• CEAT has over six decades of experience and has
led the industry in innovation, product diversity and
technology. CEAT has dedicated state-of-the-art
R&D centres in Halol, Gujarat and Frankfurt,
Germany.
 Sr.No Particulars Actual/ Projected levels
(Rs. in lacs)
2. WHAT DO YOU THINK OF THE COMPANY’S
31-03-16 31-03-17 31-03-18 31-03-19
MANAGEMENT OF INVENTORIES AND
RECEIVABLES? COMMENT UPON THE     Audited Audited Audited Audited
DEPRECIATION POLICY OF THE COMPANY
i Raw material 20498.10 42720.24 35876.00 37287.00

• Inventory & Receivables    Days (RM o/s*365/RM 25.33 47.12 35.87 31.85
consumed)
• Volatility in commodity prices are managed by combining a
robust price forecast mechanism with a buying model
ii WIP 2483.83 3148.70 2933.00 3273.00
comprising of spot buying, forward buying and strategic
long-term contracts. Since significant quantum of raw    Days (WIP o/s*365/cost of sales) 2.54 2.95 2.45 2.49
materials are procured from international sources,
company tries to keep the stock at optimum level. The
holding level of the inventory and receivables are as iii Finished Goods 35733.49 43183.68 33495.00 52580.00
under:
   Days (FG o/s*365/cost of sales) 36.58 40.40 27.92 39.93

iv Stores and Spares 3210 3291 3192 3375

•Company maintains an average holding level of 30 – 40 days for raw
material and finished goods. Movement of changes in Inventory is mainly on
account of increase in finished goods stock as compared to the previous
year. The overall management of inventory is satisfactory and in line with
its past data.
•Inventories are valued at the lower of cost and net realisable value. Initial
cost of inventories includes the transfer of gains and losses on qualifying
cash flow hedges, recognized in other comprehensive income, in respect of
the purchases of raw materials. Net realisable value is the estimated selling
price in the ordinary course of business, less estimated costs of completion
and the estimated costs necessary to make the sale.
•The raw material prices have increased during the year. As a result, the cost
of material consumed as a percentage of sale of products has increased to 63%
for the year as compared to 60% for the previous year.
• Receivables
• Some sales are in cash, while others are on credit. Receivable represents the Company’s right to an
amount of consideration that is unconditional (i.e., only the passage of time is required before
payment of the consideration is due).

• The receivables position for the current year is at 27 days sales as at March 31, 2019 as compared
to 35 days sales outstanding as at March 31, 2018. Not much fluctuations in receivable holding
level shows company’s great ability in managing its receivable portfolio.