annual-report-FY2021

130 COMPANY OVERVIEW BOARD’S REPORT MANAGEMENT DISCUSSION AND ANALYSIS CORPORATE GOVERNANCE BUSINESS RESPONSIBILITY REPORT STANDALONE ACCOUNTS CONSOLIDATED ACCOUNTS In F21, the COVID-19 pandemic and lockdown resulted in GDP degrowth after 41 years. H2F21 had seen a revival in economic activity but a record rise in COVID-19 cases temporarily slowed down the economic revival. On the supply side, there are risks in the short to medium term, as many suppliers are facing challenges due to local lockdowns, in addition to chal lenges of labour availability, limited working hours, and adherence to COVID-19 safety norms. In F21, the Company initiated various countermeasures to minimise any short-term impact andmitigate any long-term impact on the Company. This included comprehensively looking at cost structures and optimising them, cash ow management, and sustained investment in new products. Company-wide initiatives to bring down costs and conserve cash yielded some very good results in F21 and are expected to deliver benets in the future. Given the unprecedented impact that COVID-19 had on the business, the Company borrowed funds to shore up liquidity as a precautionary measure. This ensured sufcient liquidity tomanage the adverse effects of pandemic. From a long-term perspective, the Company is committed to continuing all its strategic initiatives as planned, including, but not limited to, product and technology development. (i) The cash position of the Company is good, and the liquidity is assured, having enough unused credit lines; (ii) The Company continues to enjoy the highest rating from all four major Rating Agencies i.e. CRISIL, ICRA, CARE and India Ratings and Research for both short term (A1+) and long term (AAA/Stable) borrowings and banking facilities; (iii) Financial resilience and strong governance which support the AAA rating enables the Company to raise additional liquidity, as and when required, by way of Commercial Papers and other debt securities. Competitive Intensity Keeping in mind the high growth potential of the Indian automotive market, all OEMs, homegrown as well as MNCs, have presence across all vehicle segments. Today, multinational OEMs are deeply entrenched in the Indian market with local development centres, a strong local supplier base and good channel penetration. In the PV segment, the differentiation between cars and UVs is largely blurred. There is great demand for compact UVs with car-like features. As of now, 51% of UV sales are from UVs less than 4m in length, while UVs as a share of PVs stand at 39.1% (was 12.6% in F11). The LCV < 3.5T commercial vehicle segment, which is 66.6% of the CV goods industry, is witnessing increased competition with new and competitive launches from homegrown as well as MNC brands. With the aim to remain competitive in the market and sustain its leadership position, your Company continues to invest in new product development, technology upgradations, increasing channel reach, while focussing on delivering customer centric products, services and brand building. Tax Regulations India has traditionally seen tax rate differential between small and large passenger vehicles. This differential is based on length of the vehicle, engine size and fuel type. While the agship products of your Company attract higher tax rates, your Company has strengthened the UV product portfolio attracting lower tax rates with products like XUV300, TUV300 and KUV100. New Emission Norms From 1st April 2020, India has switched over to BS-VI emission norms. With BS-VI implementation, the emission of petrol and diesel vehicles is at par and hence, concerns over cleanliness of diesel emissions should dissipate.