Raunaq EPC International Ltd Management Discussions.


Global Economy

The global economy witnessed the slowest GDP growths in 2019, since last recession, majorly due to drastic fall in manufacturing and trade, attributed to the negative growth in a few emerging economies. Brexit related ambiguities and an ongoing trade war between the U.S. and China has further affected the growth parameters. The International Monetary Fund (IMF), in its World Economic Outlook, April 2020, calculated a global economic growth of 2.9% in 2019, a significant fall from 3.6% in 2018.


Global Economic Growth (in %)

Output 2018 2019 2020P 2021P
World output 3.6 2.9 –3.0 5.8
Advanced Economies 2.2 1.7 6.1 4.5
Emerging Markets and Developing Economies (EMDEs) 4.5 3.7 –1.0 6.6

Source: IMF World Economic Outlook, April 2020, P=Projections

Economic experts were confident of pick up in growth in the next fiscal, supported by monetary easing in a number of countries and a positive trade environment. However, the earlier growth forecasts for the next fiscal were suddenly turned upside down by the worldwide outbreak of the Novel COVID-19 pandemic (Coronavirus) in the first quarter of 2020. The unforeseen global health crisis and the measures to contain its spread, such as the lockdown, quarantine and the ban on travel brought the economy to a standstill. World Trade Organisation has projected a fall in world trade between 13% and 32% in 2020 as the pandemic disrupts normal economic activities. The virus outbreak is expected to have a long term impact on consumer and investor confidence as well as the supply chain. Experts have signaled a recession considering the impact on financial and consumer market. Even if the pandemic comes under control in the second half of the year, normal economic activities are not likely to resume full scale over the year.


Considering the COVID-19 impact, the IMF has projected the global growth rate to shrink by 3% in 2020. However, it also projects that if the pandemic is contained by the second half of 2020, the economy will presumably grow by 5.8% in 2021, driven by fiscal and monetary support.

Source: https://www.imf.org/en/Publications/WEO/Issues/2020/04/14/weo-april-2020,https://www.wto.org/english/news_e/pres20_e/pr855_e.htm, https:// hbr.org/2020/03/what-coronavirus-could-mean-for-the-global-economy,

I ndian Economy

The global pessimism, some country specific deterrents and the outbreak of Covid-19 in the fourth quarter of FY 2020, brought the Indian economy to the lowest growth since 2009. The pandemic sped up the fall that was being attributed to slower than expected demand growth owing to stress in the non-bank financial sector and decline in credit growth. The decline in real investment and consumption growth, weak rural income growth and higher inflation rate culminated in a pandemic induced force majeure in the last quarter of FY 2020. The IMF World Economic Outlook, April 2020 estimated a 4.2% GDP growth for

Indiain FY 2020, compared to 6.1% in the previous year.

Actual and Projected GDP Growth in India (%)

Fiscal Year GDP growth in %
FY 2016 8.0
FY 2017 7.1
FY 2018 6.7
FY 2019 6.1
FY 2020E 4.2
FY 2021P 1.9

Source: https://www.imf.org/en/publications/weo

Covid-19 and Aatmanirbhar Bharat

As an umbrella support to the economy battling with the pandemic and the lockdown, a Rs. 20 lakh crore all-inclusive stimulus package called "Aatmanirbhar Bharat", has been announced by the Government. Equating to 10% of the GDP, this is one of the biggest relief packages ever announced. The package is focused on land, labour, liquidity and laws and will cater to the industries, MSMEs, labourers, middle class, urban and rural poor. It has offered tax breaks for small businesses as well as incentives for domestic manufacturing including collateral free loans to businesses and MSMEs. Under the package, the Reserve Bank of India(RBI) has cut down the repo rate to 4% in order to make loans easily available to banks and help the economy. Further, it cut the reverse repo rate to 3.75%, to discourage commercial banks to park cash with RBI. In order to inject liquidity into the economy and boost consumption, the RBI has also offered a loan repayment moratorium for three months. Despite all the strategies and support, under the current environment, a mid-term growth forecast is completely dependent on the movement of the virus curve and the time it takes to flatten the curve. However, the country is expected to bounce back in the long run. IMF still forecasts a positive growth for Indias GDP in FY 2021 at 1.9%. It also projects the economy to grow by 7.4% in FY 2022 supported by Governments growth strategies and policy support.

Source:https://www.imf.org/en/Publications/WEO/Issues/2020/04/14/weo-april-2020, https://www.wto.org/english/news_e/pres20_e/pr855_e.htm https://www.imf.org/en/Publications/WEO/Issues/2020/04/14/weo-april-2020


Construction Equipment Industry

The Construction industry in India is the 2nd largest employer in India, after agriculture, and contributes 8% to Indias GVA according to the latest estimate. There is a linear relationship between the growth in infrastructure sector and the construction equipment industry as the largest part of construction demand comes from infrastructure projects. Construction equipment industrys revenue is estimated to reach US$ 5 billion by FY 2021. The growth curve for the industry started shrinking in early 2019 attributed to a lag in projects due to general election and negative growth in investment. This was further impacted by a credit crunch and the coronavirus outbreak in the last quarter of the financial year.

Source:https://www.investindia.gov.in/sector/construction , http:// mospi.nic.in/press-release?field_press_release_category_ tid=All&date_filter%5Bmin%5D&date_filter%5Bmax%5D&page=1, http://www.mospi.gov.in/sites/default/files/press_release/Presss%20 note%20for%20FAE%202019-20.pdf

Key Growth Drivers

A few initiatives and projects in the infrastructure sector which are likely to drive the growth in construction and construction equipment sector are discussed below:

National Infrastructure Pipeline (NIPFY 2020-25)

Infrastructure development is a crucial indicator of growth. The Government of India is boosting both public and private investment in all key sectors to reach a GDP target of USD 5 trillion over next five years. The National

Infrastructure Pipeline, which was announced to boost investment and job creation, has already lined up 6,500 projects across 23 key sectors in India.

Source :https://pib.gov.in/PressReleseDetail.aspx?PRID=1598055

Share of Centre, States and the Private Sector investment in the NIP

Center 39%
State 39%
Private sector 21%

Construction related sectors such as urban and housing (16%), railways (13%), roads (19%) and Rural Infrastructure (8%) account for a major share of NIP investment. As this ambitious programme unfolds, the actual expenditure may vary from the estimates/ projections. However, the NIP remains a critical endeavour towards construction development.

Power Sector


Power is one of the most critical components of infrastructure crucial for the economic growth and welfare of nations. The existence and development of adequate infrastructure is essential for sustained growth of the Indian economy.

Indias power sector is one diversifiedin of the most the world. Sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and agricultural and domestic waste. Electricity demand in the country has increased rapidly and is expected to rise further in the years to come. In order to meet the increasing demand for electricity in the country, massive addition to the installed generating capacity is required.

In May 2018, India ranked fourth in the Asia Pacific region out of 25 nations on an index that measures their overall power. India is ranked fourth in wind power, fifth in solar power and fifth in renewable power installed capacity as of 2018. India ranked sixth in list of countries to make most investments in clean energy with US$ 90 billion.

Market Size

Indian power sector is undergoing significantchange that has redefined the industry outlook. Sustained economic growth continues to drive electricity demand in India. The Government of Indias focus on attaining ‘Power for all has accelerated capacity addition in the country. At the same time, the competitive intensity is increasing at both the market and supply sides (fuel, logistics, finances, and manpower).

Wind energy is estimated to contribute 60 GW, followed by solar power at 100 GW by 2022 and 15GW from biomass and hydropower. The target for renewable energy has been increased to 175 GW by 2022.

Total installed capacity of power stations in India stood at 368.68 Gigawatt (GW) as of January 2020. Electricity production reached 1,050.78 BU in FY20 (up to January


Investment Scenario

Between April 2000 and December 2019, the industry attracted US$ 14.65 billion in Foreign Direct Investment (FDI), accounting for three per cent of total FDI inflows in India.

Some major investments and developments in the Indian power sector are as follows:

In March 2020, the central government signed virtual agreement to conclude strategic sales in Kamarajar Port Ltd, THDC India Ltd and North Eastern Electric Power Corporation Limited (NEEPCO) for which it will receive Rs. 13,500 crore (US$ 1.93 billion) from the three deals.

In December 2019, NTPC announced investment of Rs. 50,000 crore (US$ 7.26 billion) to add 10GW solar energy capacity by 2022.

In August 2019, Sembcorp Industries, the Singapore-based energy made an equity infusion of Rs. 521 crore (US$ 101.6 million) into Sembcorp Energy

India Ltd.

Brookfieldto invest US$ 800 million in ReNew Power.

ReNew Power and Shapoorji Pallonji will invest nearly Rs. 750 crore (US$ 0.11 billion) in a 150 megawatt (mw) floating solar power project in Uttar Pradesh.

The Government of India is expected to offer nearly 20 power transmission projects worth Rs. 16,000 crore (US$ 2.22 billion) for bidding in 2019.

Government Initiatives

The Government of India is expected to invest highly in the infrastructure sector, mainly highways, renewable energy and urban transport.

The Government of India is taking every possible initiative to boost the infrastructure sector. Announcements in Union Budget 2019-20:

The Government of India has given a massive push to the infrastructure sector by allocating Rs.4.56 lakh crores (US$ 63.20 billion) for the sector. Communication sector allocated Rs.38,637.46 crores (US$ 5.36 billion) to development of post and telecommunications departments. The Indian Railways received allocation under Union Budget 2019-20 at Rs.66.77 billion (US$ 9.25 billion). Out of this allocation, Rs.64.587 billion (US$ 8.95 billion) is capital expenditure.

The Road Ahead

The Government of India has released its roadmap to achieve 175 GW capacity in renewable energy by 2022, which includes 100 GW of solar power and 60 GW of wind power. The Union Government of India is preparing a ‘rent a roof policy for supporting its target of generating 40 gigawatts (GW) of power through solar rooftop projects by 2022.

Coal-based power generation capacity in India, which currently stands at 229.40 (As of October 2019) GW is expected to reach 330-441 GW by 2040.

All the states and union territories of India are on board to fulfil the Government of Indias vision of ensuring 24x7 affordable and quality power for all by March 2019, as per the Ministry of Power and New & Renewable Energy, Government of India.

Impact of Covid-19 on the Power Sector

The central government has enforced a nation-wide lockdown as part of its measures to contain the spread of COVID-19. During the lockdown, several restrictions have been placed on the movement of individuals and economic activities have come to a halt barring the activities related to essential goods and services. The restrictions are being relaxed in less affected areas in a limited manner since April 20. Power supply saw a decrease of 25% during the lockdown (year-on-year). As the lockdown has severely reduced the industrial and commercial activities in the country, these segments would have seen a considerable decline in demand for electricity. However, note that the domestic demand may have seen an uptick as people are staying indoors. Electricity demand may continue to be subdued over the next few months. Indias growth projections also highlight a slowdown in the economy in 2020 which will further impact the demand for electricity.

On April 16, the International Monetary Fund has slashed its projection for Indias GDP growth in 2020 from 5.8% to 1.9%.

Coal is the primary source of power generation in the country (~71% in March 2020). During the lockdown period, the coal stock with coal power plants has seen an increase.

Finances of the power sector to be severely impacted

Power distribution companies (discoms) buy power from generation companies and supply it to consumers. In India, most of the discoms are state-owned utilities. One of the key concerns in the Indian power sector has been the poor financial health of its discoms. The discoms have had high levels of debt and have been running losses. At the end of February 2020, the total outstanding dues of discoms to generation companies stood at Rs 92,602 crore. Due to the lockdown and its further impact in the near term, the financial situation of discoms is likely to be aggravated. This will also impact other entities in the value chain including generation companies and their fuel suppliers. This may lead to reduced availability of working capital for these entities and an increase in the risk of NPAs in the sector. Note that, as of February 2020, the power sector has the largest share in the deployment of domestic bank credit among industries (Rs. 5.4 lakh crore, 19.3% of total).

Domestic Automobile Industry

The Indian automobile sector is comprised of Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers and others. The Indian automobile sector is the worlds fourth largest auto market in terms of sales and production. The Gross Turnover of the Automobile Manufacturers in India stood at about USD70 billion in

FY 2018-19. The industry has registered healthy growth rate over last one decade driven by robust economic activity and infrastructure development; growing middle class population with increasing income and availability of easy finance. Availability of low cost skilled labours, research and development support and easy availability of raw materials are other factors that supported the industry growth. The industry also provides great investment opportunities and creates jobs. It has received FDI worth US$ 23.89 billion between April, 2000 and December, 2019.

Source: https://www.ibef.org/industry/automobiles-presentation

Source: http://www.siam.in/statistics aspx?mpgid=8&pgidtrail=12

The industry had a bearish year in FY 2020 in terms of production and sales. India produced a total of 26,362,284 vehicles in FY 2020 as against 30,914,874 in FY 2019, registering a drop of about 15%. Total sales also dropped to 21,547,552 vehicles in FY 2020 as against 26,267,783 in FY 2019.

Domestic Automobile Production Trends (Units)

Category FY 2018-19 FY 2019-20 Change
Passenger Vehicles 4,028,471 3,434,013 -14.7
Commercial Vehicles 1,112,405 752,022 -32.3
Three Wheelers 1,268,833 1,133,858 -10.6%
Two Wheelers 24,499,777 21,036,294 -14.1%
Quadricycle* 5,388 6,095 -13.1%
Grand Total 30,914,874 26,362,282 -14.7%

Source: Society of Indian Automobile Manufacturers (SIAM) http://www.siam.in/statistics.aspx?mpgid=8&pgidtrail=9

The lower production was attributed to falling domestic demand, mostly driven by economic slump in the Indian corporate, financing difficulty sentiment. The coronavirus epidemic put further pressure on Indias automotive sector creating supply chain disruptions. Because of the closure of auto parts factories in China, there have been a delay in the production and delivery of BS-IV compliant vehicles. This, followed by the virus outbreak in India in March, led to a plunge in sales driven by BSVI transition, lockdown and the manufacturing shutdown. With a slow restart of production in April, the first half of the year will be extremely challenging for industry. Even if the Covid-19 pandemic is controlled in the second half of the year, the consumer sentiments are expected to remain negative further because of the stress in the entire economy.

The automobile industry has been discussing with the Government on policy measures which can minimise the impact of Covid-19 on the industry. The government has assured an Incentive based Scrappage Policy will be implemented in order to support the industry in future. While there will be challenges on the supply side, many OEMs may consider localising their supply chain. This could be an opportunity for Indian auto component manufacturers. As a positive development, the new social distancing norms are likely to drive demand for entry level passenger vehicles and 2-wheelers as people will tend to prefer individual vehicles rather than shared transport after the coronavirus outbreak. A ‘V shaped recovery is expected with the normalization of economic activities.


Raunaq EPC International Limited (REIL)

In FY 2019-20, there is a downturn in the total revenue of the Company from Rs. 5204.59 Lakhs in FY 2018-19 to Rs. 2222.00 Lakhs in FY 2019-20. The Company has been struggling to bag new orders due to the continuous adverse market conditions in the power sector especially thermal power. The Companys order book position as on

31 March, 2020 stood at Rs. 1485 Lakhs.


Sr. No. Particulars 2019-20 2018-19 % Change in Ratios Remarks
1. Debtor Turnover Ratio 0.55 0.98 -44.24% The main reason is due to low order booking.
2. Inventory Tunover Ratio 49.78 66.83 -25.51% The reason of improvement is due to more focus on inventory level.
3. Current Ratio 1.06 0.83 27.35% The reason is change in a customers ageing.
4. Debt Equity Ratio 2.78 1.18 135.64% The main reason is increases in losses.
5. Operating Profit Margin 36.70% 15.00% 144.67% The reason of improvement is reduction in Operating expenses.
6. Net Profit/ Loss Margin -157.06% -10.98% 1330.45% The main reason of loss is provisions against debtors and diminishing in the value of investments.

The Company has abled to bag an order of Rs. 1350 Lakhs on 01 May, 2019 for Construction of Circulating

Water System works for 2x800 MW APJL Project, Godda from HTG Engineering Private limited for Adani Power

(Jharkhand) Limited.

In terms of the execution, some of the major projects that the Company successfully worked on during FY 2019-20 include:

Fabrication and erection of Large Dia CW piping system at NUPPL Ghatampur 3x660MW for GE

Power Systems.

Fabrication and erection of Large Dia CW piping system at 1x660 MW Harduaganj extension II project for Toshiba.

Additional Ash water re-circulation project at NTPC Ramagundam 2600 MW.

Xlerate Driveline India Limited (XDIL)

In FY 2019-20, though there was recession in the

Automobile Sector specifically commercial Sector, but

XDIL could manage to retain the last year revenues. This is mainly due to increasing our market share in the subdued auto market in the aftermarket. Further, we have also maintain the existing levels in the OES segment. In FY 2019-20, Company has registered a revenue of Rs.

4331.89 lakhs against the previous years revenue of Rs. 4678.46 lakhs in FY 2018-19.

During the last year, the Company has initiated development for new product range for established OEM commercial manufacturers namely 395 Dia and 330

Dia Clutch for Aftermarket and Institutional Customers. Testing for Prototypes were conducted and minor change was needed in the Design based on testing. Tooling development is complete and after complete testing it will be introduced FY 2020-21. Delay in testing was because of Lockdown. Lastly to complete the Indian commercial Range, 430 Dia Clutch for other Commercial OEM players is under development. Design benchmarking and feasibility studies have been conducted.


Raunaq EPC International Limited

Even with a limited scope in the existing market, the Company is trying to quote with cautious aggression and expect to receive few orders in the first quarter itself.

The Company has also quoted few tenders in the water system field also, but unfortunately because of general elections the same were either cancelled or postponed.

The Company shall be tracking this important field and shall try to enter the same with the help of some JV partner so as to achieve a healthy outlook. Quality and timely execution of projects shall remain our prime focus areas to enhance our brand image. The Company intends to select clients and projects cautiously to reduce exposure to laggard projects that can be a drag on its balance sheet.

Xlerate Driveline India Limited

The Company focuses on leveraging existing OEM credentials to expand its OEM business portfolio necessary for scaling operations and effectively sweating production lines that are currently running at one-third capacities.

New Developments are happening at OEMs and are at final stages. Commercial Settlement are going for new ranges. Almost a quarter is lost due to covid but with these new opportunities we hope to retain the sales if not the growth. Also new institutional Customers have shown interest in our range and commercial is finalized this may help the company to maintain the sales.

Risk and Concerns

"Raunaq EPC International Limited", an Engineering Contracting Organization managed by a dedicated team of professionals at various levels in different disciplines, is engaged primarily in the service of core infrastructural and industrial sectors in India, namely Power, Chemical, Hydro-carbon, Metal and Automobile sectors and is exposed to market volatilities which are driven by changing industry dynamics, rapid technological development and unique economic cycles. Additionally, the regulatory changes and macro-economic environments have a direct impact on their business. The Company has a strong and integrated enterprise risk management framework that has the responsibility of identifying the common prevailing enterprise risks. Their work is reviewed by the Audit Committee periodically. The Board approves a risk management policy prepared by the risk management framework which is then adopted by the Company and is reviewed on yearly basis. This helps the Company prepare ahead for market challenges and respond quickly.

Some of the possible key risks for the Company are given below with corresponding mitigation measures.

Macreoeconomic risk:

A downturn in the macroeconomic scenario along with unfavourable regulatory policies can negatively impact on business.

Mitigation: After the Covid situation gets over, the macroeconomic scenario of the country is likely to improve with interest rates and inflation being coming down leading to favourable conditions for EPC players. Besides, the increased focus on infrastructure segment and initiatives undertaken to enhance ease of doing business and fast-track projects are all likely to improve the dire scenario of the EPC space over the past few years. Further, the water distribution space that the Company plans to diversify is amongst the most lucrative space owing to the growing demand for water and its inherent importance.

Moreover, the Company was strongly focusing on international markets to reduce country dependent risk. In its automotive business the Company already has export presence in Nepal, Sri Lanka and Bangladesh while in the EPC business it is actively focusing on bidding international projects under JV agreement. In view of the pandemic there might now be a considerable delay in making new arrangements.

Competition risk:

The increasing competition within the EPC space may coerce the Company to tender at lower prices leading to compressed margins. Mitigation: The Companys focus on quality, timely delivery, projects brand value and successful track record give a competitive edge over others. Further, its vast experience, technology investments and competent work force enable to manage the project costs allowing it to provide customers the most competitive rates.

Project execution risk:

Inability of the Company to effectively manage projects may lead to cost/time overruns and reputation loss. Mitigation: The Company has adequate modern equipments which leads to high productivity at project sites. Investment in sophisticated IT infrastructure enabling real time data sharing, effective project planning and management, developing cost-effective designs and maintaining connectivity with employees at project sites. Besides, the Company has a competent engineering team having expertise in diverse fields. A combination of all these enables it to maintain a successful track-record of delivering quality projects in the scheduled time frame.

Liquidity risk:

Inability of the Company to recover payments in time may hamper its working capital which in turn may impact funding of other on-going projects. Further banks/Financial Institutions adopts strict guidelines to extend credit limits to the Companies in EPC and Power Business due to the prolong downturn in the sector for quite sometime. Mitigation: The Company conducts a judicious risk-return evaluation of each project and rigorous follow up for the outstanding balances over 180 days. In addition, the efficient fund management by talented human resources enables it to remain low on debt by prudent reinvestments of working capital to fund new projects.The Company is shifting its focus to the Irrigation and water system project wherein the Bankers can support with extended credit facilities.

Business volume risks:

The Companys automotive business, being into aftermarket components requires high volumes to make it profitable and sustainable.

Mitigation: The Company has successfully obtained orders from OEM and OES from established commercial players that is likely to provide with steady business volumes. It is also exploring opportunities for new OEM approvals and extending portfolio to passenger vehicle segment.

Production quality risk:

Inability of the Company to manufacture quality automotive products may result in rejection, loss of goodwill, inventory pile-up and losses. Mitigation: The Company employs competent team having strong design and manufacturing skills. It has advanced equipments that ensures quality of manufactured products along with product testing facilities that validates the quality of the products as per the specifications.

Fraud risk:

REIL cannot eliminate fraud entirely however, the Company is trying to prevent some things from happening to lessen the financial impact to it.

Mitigation: We have put in place and strengthen anti-fraud measures. The Company has adopted following measures to tranquillize the risk:

Carry out fraud risk assessment including results from past reviews and audits.

Improve controls.

An effective governance structure including appropriate lines of authority and Board oversight.

Independent check on performance and compliance.

Segregation of duties so that no employee has control over whole process.

Legal risk:

The traditional mechanisms for project risk allocation that are available in other countries are not suitable in India due to differences in legal systems. Moreover we strive upon to develop a compliance structure which can be carefully studied and processed.

Mitigation: The management has a team of advisors for deep study of contractual terms and access the risk associated with it and make out strategies accordingly and provide legal proactive support and contingency planning.

Information risk:

Information risk is the probability that the information circulated by the company can be leaked or destroyed.

This may affect the Companys ongoing and upcoming operations.

Mitigation: The information risk mitigation process developed by our Company includes:

Establishing information risk management practices that will help to make the organization successful.

Regular re-evaluation of the nature and extent of the risks to which the organization is exposed, plus periodic adjustment to ensure that the Company continues to steer the line between allowing risks to grow out of hand and constraining operational effectiveness.

Natural calamity/pandemic risks:

Natural calamity or any other global and country wise pandemic, like the recent outbreak of Covid-19 can have a negative impact on the various ongoing work at different sites, leading to disruption of work at various sites and non availability of sufficientmanpower for execution of the jobs. In automotive business, it can impact the market the Company caters to, leading to supply chain disruption, production cuts and shutdown.


Since these are not predictable risks, Raunaq makes future strategies to bounce back during such risks. The Company takes up measures like deferring any capital investment and cost cutting during financial and industry crisis. It is well supported by an experienced management in its crisis management measures.

Internal Control Systems and their Adequacy

Raunaq has well defined systems and processes to control and monitor all the corporate operations and various units. The Company follows the best practices in corporate governance. It has an internal Audit Process oversee the effectiveness and efficiency of operations, safe-guarding of assets, accuracy of financial reporting and compliance with applicable laws and regulations. The Company has a risk mitigation framework for identifying key business risks and taking mitigation measures. Well-documented policies and procedures enable it to strictly adhere to all applicable procedures, laws, rules and statutes. The Audit Committee of the Board oversees the Audit function through regular reviews of and monitoring of corrective actions.

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be ‘forward-looking statements within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those downtrend in the automotive industry globally or domestic or both due to significant changes in political and economic environment in India or key markets abroad, tax laws, litigation, labour relations, exchange rate fluctuations, interest and other costs.