Terex Presentation

AR position & planChennai Region

C.Balavivek - Executive, Commercial

Customer in our Balance Sheet

SCHEDULE VI — FORM OF BALANCE SHEET/PROFIT & LOSS ACCOUNT

Figures for the P.Y. (Rs.) LIABILITIES

Figures for the C.Y. (Rs.)

Figures for the P.Y. (Rs.) ASSETS

Figures for theC.Y. (Rs.)

FIXED ASSETS (Refer Note G)

INVESTMENTS (Refer to Note No. H) Showing nature of investment and the mode of valuation for example at cost or market value and distinguishing between:

1. Investments in Govt. or Trust Securities2. Investments in shares, debentures or bonds3. Immovable properties4. Investments in the capital of partnership firms5. Balance of unutilized monies raised by Issue

CURRENT ASSETS, LOANS & ADVANCES(Refer Note I)

A. Current Assets1. Interest accrued on investments2. Stores and spare parts3. Loose tools4. Stock-in-trade5. Works-in-progress6. Sundry debtors: a. Debts outstanding for a period exceeding 6 monthsb. Other debtsLess: Provision7. a. Cash balance on hand

Asset Management

Customer are DEBTORS of a companyDEBTORS are listed under Asset side of Schedule VI (Balance Sheet) in a Company’s Books of Accounts.Assets are classified into two major kinds.

• Fixed Asset – Example, Land & Building, Machinery, Furniture & Fittings Etc.,• Current Asset – Example, Major Customers where we execute projects and huge volume of

maintenance contracts, service charges, Annual maintenance contracted customer.Further current asset can be sub listed as:

Performing Asset (PA)A business's ability to take productive resources and manage them within its operations to produce subsequent returns. Asset performance is typically used to compare one company's performance over time or against its competition. Possessing strong asset performance is one of the criteria for determining whether a company is considered a good investment.

Non-Performing Asset (NPA) (Debtors – O/s Exceeds more than 180 Days)• A debt obligation where a debtor / customer has not paid any previously agreed upon payments to

the designated lender / supplier for an extended period of time. The nonperforming asset is therefore not yielding any income to the lender / supplier in the form of principal and interest payments.

• A loan or lease that is not meeting its stated principal and interest payments. Banks usually classify as nonperforming assets any commercial loans which are more than 90 days overdue and any consumer loans which are more than 180 days overdue.

• More generally, an asset which is not producing income.


Risk of PA moving into NPA

Risk of PA moving into NPA is most likelyMajor Project customers where the customer is not satisfied with our process of executing

the project(Process includes all services like erection, technical and non technical) when project is not as per the customer’s schedule, Delivery Delay. Where material supplied differs from ordered specification.When Invoice submitted to customer does not meet their expectation level / does not match

their PO format (due to partial dispatch).Value mismatch in the invoice raised (error in OC booking).Handing over documents not as specified by customer in their PO.Late invoice raised after the customer closing that project in their system (Back log invoice).Major AMC customers where they do not / late receive the commercial documents to process

our paymentCustomer misplace / lose the commercial documents submitted to themDelay in execution of project from customer end and in-turn erection not completed by us.Fund crunch from customers’ endNon availability of signatories to release our payment change in the organizational / person responsible.


Measures to Move NPA to PA

Material dispatch to be in line with customer PO.Any change in our work plan due to fabrication or other reason should be notified in advance with customer.Frequent customer visit to have the overall feedback.Submitting copy of commercial documents where ever possible to re-ignite the customer to release our paymentTry and resolve unattended issues, if any and address and escalate the technical issues to the respective team / person in-charge of.If the project is delayed due to customer, completed portion of payment to be discussed and released by the customer.


Current Outstanding from Chennai

Running Project Customer O/s – 106.39 MINRDealers

AMC & Field Services – 1.99 MINRNPA due to issues – 3.15 MINRNPA due to LD and other reasons – 6.37 MINRBreakup for Outstanding.

Total Outstanding for Chennai Region as on 28th Feb 2013 is 145.37 MINRTotal DSO as on 28th Feb 2013 is 102.28 Days.


DealersTotal Outstanding

in MINRActual Due for March 2013

Vanavil Projects & Services 23.77 4.30 Motor Engineering Industries 1.58 0.67 Sakthi Material Handling 1.94 1.94Fortune Enterprises 0.16 0.16

Demag Chennai – Customer Cluster

Current AssetsProject / Medium term Customers contributing 73.22% of total outstanding from Chennai Region

Short term Customers – 20.23% of total outstanding from Chennai Region DealersAMC CustomerCustomers due to service call

Non-Performing Assets – 6.55%


Form – C from Chennai Region


Action Plan against NPA of Chennai

Central / joint reconciliation with respective regions for customers like, • M/s. Ashok Leyland Limited (Bangalore & Chennai), • M/s. Tube Products of India (Pune & Chennai), • M/s. TAFE (Bangalore & Chennai) and • M/s. Areva T&D India Limited (Ahmadabad & Chennai)

HO may decide and impose further course of action on• M/s. Leitner Shriram Mfg Ltd., • M/s. Global Wind Infrastructure and Services, • M/s. VME Precast Pvt. Ltd, and • M/s. RRB ENERGY LTD. shall be conducted to arrive at the actual outstanding for the respective region.

Debit note against freight charges booked from HO shall be forwarded to Regional office immediately. (Eg. M/s. KATSUSHIRO MATEX INDIA PRIVATE LIMITED)Snag list from Daimler’s final buy off shall be closed by providing suitable revert immediately.Unaccounted payments need to be identified from our bank statement and rectified internally for old outstanding which are open more than 3 years.Necessary adjustment entry to be passed where ever we have agreed as full and final settlement by signing a formal MOM.



Thank you

Documents

Terex Presentation