product mix, manufacturing strategy and growth strategy, and macroeconomic factors affecting the
economy in general, and our customers in particular.

Our growth depends on the growth of our key customers. If our key customers do not successfully enter
into and retain market share in high-growth segments, we may be prevented from capitalizing on new
growth opportunities. Since we are significantly dependent on certain key customers for a significant
portion of our sales, the loss of any one of our key customers, a significant reduction in demand from
such customers or the downturn in business by such customers could have an adverse effect on our
business, results of operations and financial condition. We may continue to remain dependent upon our
key customers for a substantial portion of our revenues. In the event of our failure to retain one or more
of our key customers, it will have an adverse effect on our financial performance and result of operations.

Additionally, as our orders are linked to specific vehicles/models and are not generally interchangeable
with other models/vehicles, therefore, the discontinuation of, loss of business with respect to, or a lack
of commercial success of, a particular vehicle model for which we are a significant supplier could lead
to cancellation of orders or loss of business and consequently reduce our sales and affect our estimates
of anticipated sales, which could have an adverse effect on our business and results of operations. Further,
our future growth is also linked to the addition of new customers and failure to do so may cause
significant damage to our future growth, which could have an adverse effect on our business.

We do not have long term contracts or exclusive arrangements with any of our suppliers, and any
major disruption to the timely and adequate supplies of our raw materials for any of our segments
could adversely affect our business, results of operations and financial condition.

We do not currently have long term contracts or exclusive supply arrangements with any of our suppliers
and we purchase the raw materials on spot order basis. The failure of our suppliers to deliver raw material
in the necessary quantities or as per the required schedule, of a specified quality/standard/specification,
may adversely affect our production processes thereby giving rise to contractual penalties or liabilities,
loss of customers and/or an adverse effect on our reputation, which may in turn result in an adverse effect
on our business, financial condition and results of operations. Additionally, a material shortage in supply
of raw material could result in the failure to meet our sales obligations, which may in turn result in a loss
of revenue and cash flows. Although we have not encountered any significant disruptions in the sourcing
and/or supply of our raw materials, we cannot assure you that such disruptions will not occur and/or we
shall continue to be able to source raw materials in a cost effective manner.

We have undertaken joint ventures and strategic investments in the past and may continue to
undertake joint ventures, strategic investments, alliances as well as inorganic growth through strategic
acquisitions, in the future, which may be difficult to integrate and manage. These may expose us to
uncertainties and risks, any of which could adversely affect our business, financial conditions and
result of operations.

We have pursued and may continue to pursue joint ventures, strategic investments and alliances in India
as well as overseas as a mode of expanding our operations. Going forward, we may undertake further
joint ventures, investments and expansions to enhance our operations and technological capabilities.
Further, we intend to explore opportunities, including selectively evaluating targets for strategic
acquisitions in the powertrain business. Further, acquisitions and joint ventures may require us to incur
or assume new debt, expose us to future funding obligations or integration risks and we cannot assure
you that such acquisitions or joint ventures will contribute to our profitability. For instance, in June 2007,
we entered into a joint venture with Carl Stahl Hebetechnik GmbH (previously known as Carl Stahl
International GmbH) forming Carl Stahl Craftsman Enterprises Private Limited for engaging in
marketing, installation, commissioning and rendering after-sales services of material handling
equipment, such as chain hoists, rope hoists and cranes kits, manufactured by us and sold under the name
“Carl Stahl Craftsman”. Further, we have made a strategic investment along with Mitsubishi Corporation
in forming MC Craftsman Machinery Private Limited for engaging in the marketing and after-sales
service of CNC, EDM and LASER manufactured by Mitsubishi Corporation, Japan. Both these
arrangements have enabled us to gain access to new customers and geographies. There are no guarantees
that we will be able to successfully integrate any companies or assets we acquire, or that we will realize
the strategic and/or operational benefits that we expect. Moreover, we may expend significant
management attention trying to do so, but may not see the desired results. In addition, there can be no
assurance that we will be able to consummate our expansions, acquisitions, mergers or alliances in the

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