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Our business, results of operations and financial condition may be adversely affected by any of the factors
mentioned above, in particular, on account of any such events affecting our flagship manufacturing
facilities in Coimbatore.

Changes in technology may render our current technologies obsolete or require us to make substantial
capital investments. Further, our failure to keep our technical knowledge confidential could erode our
competitive advantage.

Our business is continually changing due to technological advances and scientific discoveries. These
changes result in the frequent introduction of new products and services and significant price
competition. If our products and technologies become obsolete for various factors, our business and
results of operations could be adversely affected. Although we strive to maintain and upgrade our
technologies, facilities and machinery consistent with current national and international standards, the
technologies, facilities and machinery we currently use may become obsolete. The cost of implementing
new technologies and upgrading our manufacturing facilities could be significant, which could adversely
affect our business, results of operations and financial condition. Any failure on our part to effectively
address such situations, innovate and keep up with technological advancements or to successfully
introduce new products and services in these areas, could adversely affect our business, results of
operations, financial condition and cash flows.

Further, with the expected increase in growth of electric vehicles in future, we will need to adapt with
the technological advances which will require us to make substantial capital investments. Our customers
may shift to other manufacturers if we do not meet their changing needs as per the requirement of the
automobile industry. Further, our already existing technologies may become redundant. All these factors
could adversely affect our business, results of operations, financial condition and cash flows.

We are susceptible to product liability claims that may not be adequately covered by our insurance
coverage or by warranties and assurances from our equipment suppliers, and which, if successful,
could require us to pay substantial sums, adversely affecting our business, results of operations and
financial condition.

We face an inherent business risk of exposure to product liability or recall claims, in the event that any
of our products fail to perform as expected or such failure results or is alleged to result, in bodily injury
or property damage or both. Consequently, we cannot assure you that we will not experience any material
product liability losses in the future or that we will not incur significant costs to defend any such claims.

The provision for warranty and rejection is done based on past experiences, product lifecycle maturity,
reprocessing or repair cost. The provisions for expected cost of warranty obligations are recognized based
on our management’s best estimate of the expenditure required to settle the obligation, which takes into
account the empirical data on the nature frequency and average cost of warranty claims and regarding
possible future incidences. For details, see “Financial Statements” on page 225.

Whilst we maintain insurance for product liability and recall for our exports, we do not maintain these
for sales in India. As a result of product liability legislation, civil claims may be brought against our
OEM customers, and we may be made parties to such claims where damages may have been caused by
any faulty products that we produced. We cannot assure you that such claims will not be brought against
us in the future, and any adverse determination may have an adverse effect on our business, results of
operations and financial condition and reputation.

If we are unable to continue to implement our brand building and marketing initiatives, for each of
our brands, our business and prospects may be adversely affected. Moreover, any deterioration in the
reputation and market perception of our brands may have an adverse effect on our sales, profitability
and the implementation of our growth strategy.

We operate under our brands “V-Store”, “Carl Stahl Craftsman” and “Craftsman Marine” in our
Industrial and Engineering segment. Our brand and reputation are among our important assets. The
performance and quality of products are critical to the success of our business. The success of these
products depend significantly on the effectiveness of the product design, quality of the raw materials and
bought out components, quality control systems, installation and after sales service, which in turn, depend

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