42.

such personnel may affect our profitability. In addition, our strategies for growth have placed, and are
expected to continue to place, increased demands on our management’s and employees’ skills and
resources.

Further, our manufacturing activities are labour intensive, requiring our management to undertake
significant labour interface, and expose us to the risk of industrial action. As on December 31, 2020, we
had a large workforce of 259 management staff, 1,372 permanent workmen, 755 apprentices and 1,214
contract workmen.

As on December 31, 2020, our employee benefit expenses was % 1,105.91 million, constituting 10.81%
of our revenue from operations.

As on the date of this Prospectus, we have no labour unions in any of our manufacturing facilities.
However, there is no assurance that our employees will not unionize in the future. Further, while we have
not experienced any strikes or labour unrest at any of our manufacturing facilities in the past, we cannot
assure you that we will not experience work disruptions in the future due to disputes or other problems
with our work force. Any such event, at our current facilities or at any new facilities that we may
commission or acquire in the future, may adversely affect our ability to operate our business and serve
our customers, and impair our relationships with key customers and suppliers, which may adversely
impact our business and financial condition. Any changes in the existing labour laws of the countries in
which we operate may increase our labour cost and may also increase time spent by our management in
labour related matters, which could impact our business and results of operations. If labour laws become
more stringent or are more strictly enforced, it may become difficult for us to maintain flexible human
resource policies, discharge employees or downsize, any of which could have an adverse effect on our
business, results of operations, financial condition and cash flows.

We depend on our senior management, Key Managerial Personnel, persons with technical expertise
and other permanent employees for our business and future growth. If we are unable to attract or
retain key executives, Key Managerial Personnel or permanent employees, our operations may be
adversely affected.

Our future performance would depend on the continued service of our senior management, Key
Managerial Personnel, persons with technical expertise, and the loss of any senior employee and the
inability to find an adequate replacement may impair our relationship with key customers and our level
of technical expertise, which may adversely affect our business, financial condition, results of operations
and prospects. In particular, we rely on the experience and business relationships of our Promoter,
Chairman and Managing Director, Srinivasan Ravi, our Key Managerial Personnel, and other business
heads, unit heads and functional heads. Should their involvement in our business reduce, or should our
relationship with these persons deteriorate for any reason in the future, our business, financial condition,
results of operations and prospects may be adversely affected. For details of our management and Key
Managerial Personnel, see “Management — Key Managerial Personnel” on page 216.

Failure to hire or retain key managerial personnel could adversely affect our business and result of
operations.

The continued operations and growth of our business is also dependent upon our ability to attract and
retain personnel who have the necessary and required experience and expertise. We cannot assure you
that we will be able to retain these employees or find adequate replacements in a timely manner, or at
all. Our Company’s performance depends largely on the efforts and abilities of these employees. The
attrition rate for permanent employees was 23.33%, 17.51%, 11.55% and 10.74% for the nine months
ended December 31, 2020 and Fiscals 2020, 2019 and 2018, respectively. We may require a long period
of time to hire and train replacement personnel when skilled personnel terminate their employment with
us. We may also be required to increase our levels of employee compensation and benefits more rapidly
than in the past to remain competitive in attracting skilled personnel, or to address any breaches on parts
of our respective contractors and subcontractors, where we have been the principal employers. Loss of
the services of our permanent employees could adversely affect our business, financial condition and
results of operations.

 

42
