97
Notice
Directors’ Report
(69-103)
Management Discussion & Analysis
Corporate Governance
Secretarial Audit Report
language barriers, cultural differences and other difficulties in
staffing and managing overseas operations, inherent difficulties and
delays in contract enforcement and the collection of receivables
under the legal systems of some foreign countries, the risk of non-
tariff barriers, other restrictions on foreign trade or investment
sanctions, and the burdens of complying with a wide variety of
foreign laws and regulations.
Insurance coverage may not be adequate to protect us
against all potential losses:
While the Company believes that
the insurance coverage that it maintain is reasonably adequate to
cover all normal risks associated with the operation of its business,
there can be no assurance that insurance will be sufficient, that any
claim under insurance policies will be honored fully or timely or
that the insurance premium will not increase substantially. To the
extent that the Company, suffer loss or damage that is not covered
by insurance or which exceeds the insurance coverage or are
required to pay higher insurance premium the Company’s financial
condition may be affected.
Disruption in the manufacturing, design and engineering
facilities:
The Company has manufacturing facilities and design and
engineering centres, located in India, the UK, South Korea, Thailand,
and South Africa and have established a presence in Indonesia. The
Company could experience disruption to its manufacturing, design
and engineering capabilities for a variety of reasons, including,
among others, extreme weather, fire, theft, system failures, natural
catastrophes, mechanical or equipment failures and similar risks. Any
significant disruptions could adversely affect the Company’s ability
to design, manufacture and sell the Company’s products and, if any
of those events were to occur, the Company cannot be certain that
the Company would be able to shift its design, engineering and
manufacturing operations to alternative sites in a timely manner
or at all. Any such disruption could therefore materially affect the
Company’s business, financial condition or results of operations.
Regulation of production facilities:
The Company’s production
facilities are subject to a wide range of environmental, health and
safety requirements. These requirements address, among other
things, air emissions, wastewater discharges, accidental releases
into the environment, human exposure to hazardous materials,
storage, treatment, transportation and disposal of wastes and
hazardous materials, investigation and cleanup of contamination,
process safety and maintenance of safe conditions in the workplace.
Many of the Company’s operations require permits and controls
to monitor or prevent pollution. The Company has incurred, and
will continue to incur, substantial on-going capital and operating
expenditures to ensure compliance with current and future
environmental, health and safety laws and regulations or their more
stringent enforcement. Other environmental, health and safety laws
and regulations could impose restrictions or onerous conditions on
the availability or the use of raw materials the Company need for
the Company’s manufacturing process.
For JLR operations, the EU Emissions Trading Scheme, an EU-wide
system in which allowances to emit greenhouse gases are issued
and traded, is anticipated to cover more industrial facilities and
become progressively more stringent over time, including by
reducing the number of allowances that will be allocated free of
cost to manufacturing facilities. In addition, a number of further
legislative and regulatory measures to address greenhouse gas
emissions, including national laws and the Kyoto Protocol, are in
various phases of discussion or implementation. These measures
could result in increased costs to: (i) operate and maintain the
Company’s production facilities; (ii) install new emissions controls
or reduction technologies; (iii) purchase or otherwise obtain
allowances to emit greenhouse gases; and (iv) administer and
manage the Company’s greenhouse gas emissions programmes.
Inability to attract and retain skills:
The Company believes that
the Company’s growth and future success depend largely on the
skills of the Company’s workforce, including executives and officers,
as well as the designers and engineers and the attraction of critical
skills. The loss of the services of one or more of these employees
could impair the Company’s ability to continue to implement its
business strategy. The Company’s success also depends, in part, on
its continued ability to attract and retain experienced and qualified
employees, particularly qualified engineers with expertise in
automotive design and production. In view of intense competition
and the Company’s inability to continue to attract, retain and
motivate employees could adversely affect its business and plans
to invest in the development of new designs and products.
Operational risks, including risks in the connection with the
use of information technology:
Operational risk is the risk of loss
resulting from inadequate or failed internal processes, people and
