Probability of Occurrence Probability of occurrence Improbable Remote

Very High High Medium Low Very Low Global Economic Conditions Exchange rate and interest rate fluctuations: New or changing laws, regulations and government policies: Averse effects impacted by political instability

Probability of Occurrence Occasional Probable Frequent

Category Industry

Type of Risk (X) Deterioration in global economic conditions Exchange rate and interest rate fluctuations: New or changing laws, regulations and government policies: Adverse effects impacted by political instability, etc Indias obligations under the World Trade Organization Agreement.

Severity (S) 4 3 2 2 2 4 3 4 3 3 3 3

Economy

Demand-supply Input-related risk Extent of competition Changing customer demands for innovative products New products, emissions and technology Business is seasonal in nature: Employee Productivity

Probability of occurrence (P) 0.8 0.8 0.8 0.2 0.2 0.6 0.8 0.6 0.6 0.2 0.6 0.2

Impact on Sales (C) 3 4 3 2 1 4 4 3 3 4 2 3

Costed risk factor (S*P*C) 9.60 9.60 4.80 0.80 0.40 9.60 9.60 7.20 5.40 2.40 3.60 1.80

Type of Risk

Cause and Impact

Severity (S)

Probability of occurrence (P)

Impact on Sales (C)

Costed risk factor (S*P*C)

Risks Poor associated with Manufacturing product processes, liability, poor after sales warranty and service recall. Risk associated with Poor market automobile conditions, financing increasing business in interest rates India. Underperform Poor ance of performance of distribution dealership channels and sales and supply chains service teams

0.8

12.8

0.6

3.6

0.6

9.6

Risk Mitigation approach Improve quality checks, manufacturing processes, improve dealer network

Cost involved (1 - 5)

Reduce vehicle costs to make the product more attractive Increased dealer training and dealer distribution network, availability of spare parts

Type of Risk

Cause and Impact

Severity (S)

Probability of occurrence (P)

Inability to timely rampup production to meet Lack of production market demand and facilities planned growth. Loss of customer satisfaction and brand image due to quality issues Poor quality, manufaturing defects

0.6

0.8

Inability to grow exports Lack of volumes with current distribution distributor model, current network in foreign products and perceived nations quality. Entry of new players in Globalization and the premium segment may entry of foreign players pose (indirect) competition. Delay in conceptualization and execution of projects

0.6

0.6

Execution risk

0.6

Impact on Sales Costed risk factor Risk Mitigation (C) (S*P*C) approach

Cost involved (1 5)

7.2

Increase production capacity Quality checks/ improve manufacturing processes Develop vehicle models to suit country wise requirement Introduction of new models to compete with foreign players Improve cycle time of projects, reduction of vehicle evaluation time

12.8

5.4

5.4

5.4

Type of Risk

Cause and Impact Low presence in the LCV segment which is the fastest growing segment in the country

Severity (S)

Probability of occurrence (P)

Impact on Sales (C)

Segment concentration

0.8

Unanticipated demand recession results in mismatch between production and sale, which in turn cause strain on liquidity.

Sudden recession in the market due to poor economic conditions in the country

0.4

Increasing Manfacturing costs

Increasing steel prices, fuel costs

0.6

Costed risk factor (S*P*C)

Risk Mitigation approach The company is the second largest player in the commercial vehicle segment. The company has now entered into LCV segment through its JV with Nissan. The company has revised its working capital policy in order to minimize such risks. Several interest rates (both fixed and floating) have been taken in order to leverage the rate fluctuation. To mitigate the increase in material cost the company has undertaken a wide range of product reduction exercises through deep dives, value engineering and alternate sourcing to sustain the extent feasibility

Cost involved (1 - 5)

12.8

2.4

9.6

Type of Risk

Cause and Impact

Severity (S)

Probability of occurrence (P)

Impact on Sales (C)

Economic Growth, performance of Alternate modes of railways and transportation overall demand which are cheaper for growth carriers Mandatory regulation to Introduction of reduce pollution. emission norms Introduction of new technology Increase in input material prices Increasing steel prices, fuel costs

0.4

0.4

0.6

Costed risk factor (S*P*C)

Risk Mitigation approach

Cost involved (1 5)

2.4

Decrease cost of vehicles

4.8

Reduce vehicle costs to make the product more attractive Introduce cost cutting measures/ alternate sourcing

9.6

Type of Risk

Cause and Impact Poor manufacuring quality, non availability of quality manpower Brand not well known, marketing not sufficient Products are limited to LCV's and sub LCV's

Severity (S)

Probability of occurrence (P)

Impact on Sales (C)

Production and technology risks

0.6

Poor Branding

0.6

Limited Product line

0.6

Costed risk factor (S*P*C)

Risk Mitigation approach

Cost involved (1 5)

7.2

Increase production capacity

7.2

5.4

Quality checks/ improve manufacturing processes Develop vehicle models to suit market requirement

Probability of occurrence

Low

Medium

Hi gh

Probable I

Probable Impact High Medium

Deterioration in global economic conditions

Input-related risk

Exchange rate and interest rate fluctuations:

New or changing laws, regulations and

government policies: New products, emissions Medium Priority and technology

Low

Business is seasonal in nature

Indias obligations under the World Trade Organization Agreement

Adverse effects impacted by political instability, etc