External risk factors

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The cyclical and seasonal nature of automotive sales and production can adversely affect our business.

The automobile industry has witnessed substantial changes in recent years, including, among others,
continued consolidation, outsourcing, decreasing profit margins in certain segments, regulatory, shifts in
production to low-cost manufacturing centres and technological changes.

Our Automotive - Powertrain and Others and Automotive - Aluminium Products segments are directly
related to our customers’ vehicle sales and production levels across various segments. Automotive sales
and production are highly cyclical and depend on general economic conditions and other factors,
including consumer spending and preferences as well as changes in interest rate levels, consumer
confidence and fuel costs. For example, the recent growth in sales of electric vehicles, which is currently
more prevalent for personal vehicles, may shift towards commercial vehicles as well, thereby directly
impacting our Automotive - Powertrain and Others and Automotive - Aluminium Products segments.
Our sales are also affected by inventory levels and production levels of automotive manufacturers. We
cannot predict when manufacturers will decide to either build or reduce inventory levels or whether new
inventory levels will approximate historical inventory levels. This may result in variability in our sales
and financial condition. Uncertainty regarding inventory levels may be exacerbated by favourable
consumer financing programs initiated by manufacturers, which may accelerate sales that would
otherwise occur in future periods. In the past, we have experienced sales declines during the
manufacturers’ scheduled shutdowns or shutdowns resulting from unforeseen events. As we have high
fixed production costs, even relatively modest declines in our customers’ production levels and thus, our
production volumes, can have a significant adverse impact on our profitability. In addition, lower global
automotive sales during the global financial crisis resulted in substantially all automotive manufacturers
lowering vehicle production schedules. There is no assurance that global automotive sales will continue
to recover or not decrease further. Continued uncertainty and other unexpected fluctuations could have
an adverse effect on our business, results of operations and financial condition.

The automobile industry is also subject to seasonal characteristics. Generally, demand for our products
and aftermarket services increases during the automotive industry’s spring selling season and decreases
during the third quarter of each year due to the impact of scheduled OEM customer plant shutdowns in
the summer for vacations and changeovers in production lines for new model years. Our customers may
also suddenly increase their request for component volumes, which could cause lead time problems and
lead to loss of revenue for our customers if we are unable to meet their demands. As a result our
relationship with our customers may be impacted and our projects’ sales may be adversely affected and
result in loss of revenue and reduced margins. Any cancellation or delay in production could have an
adverse effect on our sales projections and profitability.

In addition, the automotive component industry is sensitive to other factors beyond our control such as
technological changes, cyclicality and unforeseen events, including political instability, recession,
inflation, further volatility in fuel prices and other adverse occurrences. Any such event that results in
decreased demand in the automotive industry, or increased pressure on automobile manufacturers to
develop, implement and maintain in-house automotive component facilities, could have an adverse effect
on our business, results of operations and financial condition.

Political, economic or other factors including but not limited to any changes in laws, rules and
regulations and legal uncertainties that are beyond our control may have an adverse impact on our
business, financial condition, results of operations and cash flows.

The following external risks may have an adverse impact on our business, financial condition, results of
operations and cash flows, should any of them materialize:

. increase in interest rates may adversely impact our access to capital and increase our borrowing
costs, which may constrain our ability to grow our business and operate profitably;

. the Indian economy has had sustained periods of high inflation in the recent past. High rates of

inflation may increase our employee costs and decrease demand for our products and services,
which may have an adverse effect on our profitability and competitive advantage, to the extent

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