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MD & A
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CORPORATE OVERVIEW (1-31)
STATUTORY REPORTS
FINANCIALS (123-204)
Underperformance of distribution channels and supply
chains:
The Company products are sold and serviced through
a network of authorized dealers and service centers across the
domestic market, and a network of distributors and local
dealers in international markets. The Company monitors the
performance of its dealers and distributors and provides them
with support to enable them to perform to the expectations.
Any under-performance by the dealers or distributors could
adversely affect the Company’s sales and results of operations.
The Company relies on third parties to supply raw materials,
parts and components used in the manufacture of products.
Furthermore, for some of these parts and components, the
Company is dependent on a single source. The Company’s
ability to procure supplies in a cost effective and timely manner
is subject to various factors, some of which are not within its
control. While the Company manages its supply chain as part
of the vendor management process, any significant problems
with supply chain in the future could affect the results of
operations. Impact of natural disasters and man-made
accidents, adverse economic conditions, decline in automobile
demand, lack of access to sufficient financing arrangements
could have a negative financial impact on the Company’s
suppliers and distributors, in turn impairing timely availability
of components, or increases in costs of components.
The tragic earthquake and tsunami in Japan in March 2011,
shows the vulnerability of the automotive supply chain to
external shocks. Several suppliers to the automotive industry,
including those to the Company, were severely impacted by
the earthquake and tsunami and its after-effects. The Company,
however, managed to avoid any production disruption by
working with its overall supply base to temporarily resource
components and help Japanese suppliers to restart production.
In managing a complex supply chain the Company has
developed close relationships with both direct and indirect
suppliers. The Company continues to develop long-term
strategic relationships with suppl iers to support the
development of parts, technology and production facilities.
With respect to Jaguar Land Rover operations, as part of a
separation agreement from Ford, the Company entered into
supply agreements with Ford and certain other third parties
for critical components. Any disruption of such transitional
services could have amaterial adverse impact on the operations
and financial condition.
Changes in tax, tariff or fiscal policies and regulations:
Imposition of any additional taxes and levies designed to limit
the use of automobiles could adversely affect the demand for
the Company‘s vehicles and the results of operations. Changes
in corporate and other taxation policies as well as changes in
export and other incentives given by the various governments,
could also adversely affect the results of operations. The
Government of India had proposed a comprehensive national
goods and services tax, or GST, regime that will combine taxes
and levies by the central and state governments into one
unified rate structure. The same was to be effective from April
1, 2012, but its implementation has been deferred. While
both the Government of India and other state governments of
India have publicly announced that all committed incentives
will be protected following the implementation of the GST,
there is no clarity all aspects of the tax regime following
implementation of the GST. The implementation of this
rational ized tax structure might be affected by any
disagreement between certain state governments, which
could create uncertainty.
The Direct Tax Code Bill 2010, or DTC, proposes to replace the
existing Income Tax Act, 1961 and other direct tax laws, with
a view to simplify and rationalize the tax provisions into one
unified code. The DTC is currently proposed to come into
effect from April 1, 2013. The various proposals included in
DTC are subject to review by Indian parliament and as such
impact if any, is not quantifiable at this stage.
Further, Brazil has recently increased import duty for foreign
build vehicles which put pressure on margins. The Company
FINANCIAL HIGHLIGHTS (32-45)