Late delivery of a hull from Topcrest

Idle work hours and compensation No. of Idle Workers(5% of 1940) No. Of Idle hours per month (10% of 152hours) Amount paid by Topcrest per hour for the idle time Average cost per hour paid to the employees by Merbatty Total no. of idle hours per worker in 2 months Total no. of idle hours per worker in 1.5 months Total no. of idle hours in 2 months Total no. of idle hours in 1.5 months Total amount to be paid to the idle workers by Merbatty(1.5 months) Total amount to be paid to the idle workers by Merbatty(2 months) Total amount to be paid to the idle workers by Topcrest(2 months) Amount Paid by Topcrest to Merbatty Amount Paid by Topcrest for idle hours Amount Paid by Topcrest for Customer discount Amount paid by Topcrest for Breach of Contract 97 15.2 hours/month 30 per hour 18 per hour 30.4 hours 22.8 hours 97*30.4 97*22.8 18 x 22.8 x 97 = 39,808.80 18 x 30.4 x 97 = 53,078.40 30 x 30.4 x 97 = 88,464.00

88,464.00 25,000.00 30,000.00

Financial Impact on Merbatty(On continuing with Topcrest) Amount Paid by Merbatty to its employees for idle hours 53,078.00 Amount Paid by Merbatty for Customer discount Extra money received by Merbatty 25,000.00 65,385.60

Financial Impact on Merbatty(On switching on to a new supplier) Amount Paid by Merbatty to its employees for idle hours 39,808.80 Amount Paid by Merbatty for Customer discount Extra Cost 25,000.00 50,000.00

New design supplier for Surania

Boats made in Surania Every year (2014-2017)

82% 62% 88% 100%

Boats needed in Middle East Boats needed in other areas

:Assuming the plants in Europe and USA are being used to their full capacity

Sales Staff Expenditure on hiring educated agents

Operating Profit % (in 2012)

20.00% 15.00% 13.30% 10.00% 5.00% 0.00% Small Boats Large Boats Additional Features 16.80% 18%

Revenue generated in Middle East countries= 40m Assuming that the boats sold in this region were long, Operating profit% of long boats=16.8% Operating profit generated in Middle East countries= 6.72m Lets assume an expense of 0.6m to hire educated agents would have reduced the profits to 6.12m New Operating Profit % =15.3% New operating profit % (15.3%) in this region would have been greater than the overall operating profit % of Merbatty.

OVERALL OPERATING PROFIT %

15.1% 15.1%

14.4%

14.3%

14.2% 13.7%

2012

2013

2014

2015

2016

2017