23.

Our customers have high and exacting standards for product quantity and quality as well as delivery
schedules and any failure to meet our customers’ expectations could result in the cancellation of orders.
There are also a number of factors other than our performance that are beyond our control and that could
cause the loss of a customer. Moreover, as many of our operating expenses are relatively fixed, an
unanticipated change in customer demand may adversely affect our liquidity and financial condition. We
typically commit to order raw materials and bought-out components from our own suppliers based on
customer forecasts and orders. Cancellation by customers or delay or reduction in their orders or
instances where anticipated orders fail to materialize can result in mismatch between our inventories of
raw materials and bought-out components and of manufactured products, thereby increasing our costs
relating to maintaining our inventory and reduction of our margins, which may adversely affect our
profitability and liquidity.

In addition, we may incur significant expense in preparing to meet anticipated customer requirements
that may not be recovered. Further, in the event large OEM customers change their outsourcing strategy
by moving more work in-house, or replace their existing products with alternative products, it may have
an adverse effect on our business, results of operations and financial condition.

Any shortfall in the supply of our raw materials or an increase in our raw material costs, or other
input costs for any of our segments, may adversely affect the pricing and supply of our products and
have an adverse effect on our business, results of operations and financial condition.

We are dependent on third party suppliers for our raw materials. Discontinuation of production by these
suppliers or a failure of these suppliers to adhere to any delivery schedule or the required quality or
quantity could hamper our production schedule and therefore affect our business and results of operations.
This dependence may also adversely affect the availability of key materials at reasonable prices thus
affecting our margins and may have an adverse effect on our business, results of operations and financial
condition. There can be no assurance that strong demand, capacity limitations or other problems
experienced by our suppliers will not result in shortages or delays in their supply of raw materials to us.
If we were to experience a significant or prolonged shortage of raw materials from any of our suppliers,
and we cannot procure similar raw materials from other sources at comparable costs and of comparable
quality, in a timely manner, we would be unable to meet our production schedules for some of our key
products and to deliver such products to our customers in timely fashion, which would adversely affect
our sales, margins, reputation and customer relations. We cannot assure you that a particular supplier
will continue to supply the required components or raw materials to us in the future. Any change in the
supplying pattern of our raw materials can adversely affect our business and profits. We also rely on
transporters for transport and logistics. Our reliance on third parties for certain outsourced job works and
on transporters for transport and logistics may affect our timelines for making delivery to our customers.

Our business, financial condition and results of operations are significantly impacted by the prices of raw
materials purchased or imported by us, particularly aluminium ingots, steel and sheet metal parts.

We rely significantly on five suppliers for procurement of steel, aluminium ingots required for
manufacturing aluminium castings used in Automotive - Aluminium Products and Industrial and
Engineering segments, which supplied 24.32% of our cost of raw material and components consumed
for Fiscal 2020.

Raw material pricing can be volatile due to a number of factors beyond our control, including global
demand and supply, general economic and political conditions, transportation and labour costs, labour
unrest, natural disasters, pandemic, competition, import duties, tariffs and currency exchange rates, and
there are uncertainties inherent in estimating such variables, regardless of the methodologies and
assumptions that we may use. This volatility in commodity prices can significantly affect our raw
material costs. Further, volatility in fuel prices can also affect commodity prices worldwide which may
significantly increase our raw material costs.

Further, our Automotive - Powertrain and Others, Automotive - Aluminium Products and Industrial and
Engineering segments have experienced significant volatility with respect to raw materials prices in the
recent past, primarily in ferrous and non-ferrous metals. Increasing raw material costs may also lead to
reduction in demand for our OEM customers’ end products, which in turn can affect our operations.
Further, our contracts with our customers provide for pass through of any variation in the raw material
costs. However, our cash flows may still be adversely affected because of any gap in time between the

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