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RED HERRING PROSPECTUSDated: June 15, 2018
Please read Section 32 of the Companies Act, 2013Book Built
Offer
VARROC ENGINEERING LIMITED
OUR PROMOTER: TARANG JAININITIAL PUBLIC OFFERING OF UP TO
20,221,730 EQUITY SHARES OF FACE VALUE OF ` 1 EACH (THE “EQUITY
SHARES”) OF OUR COMPANY FOR CASH AT A PRICE OF ` [•] PER EQUITY
SHARE (THE “OFFER PRICE”) AGGREGATING UP TO ` [•] MILLION THROUGH
AN OFFER FOR SALE OF (i) UP TO 1,752,560 EQUITY SHARES AGGREGATING
TO ` [•] MILLION BY, OUR PROMOTER, TARANG JAIN (“PROMOTER SELLING
SHAREHOLDER”); (ii) UP TO 16,917,130 EQUITY SHARES AGGREGATING TO `
[•] MILLION BY OMEGA TC HOLDINGS PTE. LTD. (“INVESTOR SELLING
SHAREHOLDER 1”); AND (iii) UP TO 1,552,040 EQUITY SHARES
AGGREGATING TO ` [•] MILLION BY TATA CAPITAL FINANCIAL SERVICES
LIMITED (“INVESTOR SELLING SHAREHOLDER 2”, WHO ALONG WITH INVESTOR
SELLING SHAREHOLDER 1 ARE COLLECTIVELY HEREINAFTER REFERRED TO AS
“INVESTOR SELLING SHAREHOLDERS”), (THE “OFFER FOR SALE” OR THE
“OFFER’ AND SUCH SHAREHOLDERS OFFERING THEIR RESPECTIVE EQUITY
SHARES IN THE OFFER FOR SALE ARE COLLECTIVELY HEREINAFTER REFERRED
TO AS THE “SELLING SHAREHOLDERS” AND INDIVIDUALLY AS A “SELLING
SHAREHOLDER”). THE OFFER INCLUDES A RESERVATION OF 100,000 EQUITY
SHARES AGGREGATING UP TO ` [•] MILLION, FOR SUBSCRIPTION BY
ELIGIBLE EMPLOYEES (THE “EMPLOYEE RESERVATION PORTION”) AT A
DISCOUNT OF [•]% (EQUIVALENT TO ` [•]) ON THE OFFER PRICE
(“EMPLOYEE DISCOUNT”) . THE OFFER LESS THE EMPLOYEE RESERVATION
PORTION IS THE “NET OFFER” AND SUCH NET OFFER AGGREGATES UP TO
20,121,730 EQUITY SHARES. THE OFFER AND THE NET OFFER SHALL
CONSTITUTE 15.00% AND 14.93%, RESPECTIVELY, OF THE POST-OFFER
PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.
THE PRICE BAND, EMPLOYEE DISCOUNT, IF ANY, AND THE MINIMUM BID
LOT WILL BE DECIDED BY OUR COMPANY AND THE SELLING SHAREHOLDERS, IN
CONSULTATION WITH THE GCBRLMS AND THE BRLM, AND WILL BE ADVERTISED
IN ALL EDITIONS OF FINANCIAL EXPRESS (A WIDELY CIRCULATED ENGLISH
NATIONAL DAILY NEWSPAPER), ALL EDITIONS OF JANSATTA (A WIDELY
CIRCULATED HINDI NATIONAL DAILY NEWSPAPER) AND ALL EDITIONS OF
LOKSATTA (A WIDELY CIRCULATED MARATHI NEWSPAPER, MARATHI BEING THE
REGIONAL LANGUAGE OF MAHARASHTRA, WHERE OUR REGISTERED OFFICE IS
SITUATED), AT LEAST FIVE WORKING DAYS PRIOR TO THE BID/OFFER
OPENING DATE AND SUCH ADVERTISEMENT SHALL BE MADE AVAILABLE TO BSE
LIMITED (“BSE”) AND THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED
(“NSE”, AND TOGETHER WITH THE BSE, THE “STOCK EXCHANGES”) FOR THE
PURPOSES OF UPLOADING ON THEIR RESPECTIVE WEBSITES.
THE FACE VALUE OF THE EQUITY SHARES IS ` 1 EACH AND THE OFFER
PRICE IS [•] TIMES THE FACE VALUE OF THE EQUITY SHARESIn case of a
revision to the Price Band, the Bid/Offer Period will be extended
for at least three additional Working Days after the revision of
the Price Band, subject to the Bid/Offer Period not exceeding a
total of 10 Working Days. Any revision in the Price Band and the
revised Bid/Offer Period, if applicable, will be widely
disseminated by notification to the Stock Exchanges, by issuing a
press release, and also by indicating the change on the websites of
the GCBRLMs and the BRLM, and at the terminals of the members of
the Syndicate.
The Offer is being made in terms of Rule 19(2)(b) of the
Securities Contracts (Regulation) Rules, 1957, as amended (the
“SCRR”) read with Regulation 41 of the Securities and Exchange
Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009, as amended (the “SEBI ICDR Regulations”) and in
compliance with Regulation 26(1) of the SEBI ICDR Regulations, this
Offer is being made through the Book Building Process, wherein not
more than 50% of the Net Offer shall be available for allocation on
a proportionate basis to Qualified Institutional Buyers (“QIBs”)
(the “QIB Category”), provided that our Company and the Selling
Shareholders, in consultation with the GCBRLMs and the BRLM, may
allocate up to 60% of the QIB Category to Anchor Investors, on a
discretionary basis (the “Anchor Investor Portion”), of which
one-third shall be reserved for domestic Mutual Funds, subject to
valid Bids being received from domestic Mutual Funds at or above
the price at which allocation is made to Anchor Investors. Further,
5% of the QIB Category (excluding the Anchor Investor Portion)
shall be available for allocation on a proportionate basis to
Mutual Funds only. The remainder of the QIB Category shall be
available for allocation on a proportionate basis to QIBs, subject
to valid Bids being received from them at or above the Offer Price.
Further, not less than 15% of the Net Offer will be available for
allocation on a proportionate basis to Non-Institutional Investors
and not less than 35% of the Net Offer will be available for
allocation to Retail Individual Investors, in accordance with the
SEBI ICDR Regulations, subject to valid Bids being received at or
above the Offer Price. All Bidders (except Anchor Investors) shall
mandatorily participate in this Offer only through the Application
Supported by Blocked Amount (“ASBA”) process, and shall provide
details of their respective bank account in which the Bid amount
will be blocked by the SCSBs. Anchor Investors are not permitted to
participate in the Anchor Investor Portion through the ASBA
process. For details, see “Offer Procedure” on page 593.
RISKS IN RELATION TO THE FIRST OFFERThis being the first public
issue of the Equity Shares by our Company, there has been no formal
market for the Equity Shares. The face value of our Equity Shares
is ` 1 each and the Floor Price and Cap Price are [•] times and [•]
times of the face value of the Equity Shares, respectively. The
Offer Price (as determined by our Company and the Selling
Shareholders in consultation with the GCBRLMs and the BRLM, in
accordance with the SEBI ICDR Regulations, and as justified in
“Basis for Offer Price” on page 122) should not be taken to be
indicative of the market price of the Equity Shares after the
Equity Shares are listed. No assurance can be given regarding an
active and/or sustained trading in the Equity Shares or regarding
the price at which the Equity Shares will be traded after
listing.
GENERAL RISKSInvestments in equity and equity-related securities
involve a degree of risk and investors should not invest any funds
in the Offer unless they can afford to take the risk of losing
their investment. Investors are advised to read the risk factors
carefully before taking an investment decision in the Offer. For
taking an investment decision, investors must rely on their own
examination of our Company and the Offer, including the risks
involved. The Equity Shares have not been recommended or approved
by the Securities and Exchange Board of India (“SEBI”), nor does
SEBI guarantee the accuracy or adequacy of the contents of this Red
Herring Prospectus. Specific attention of the investors is invited
to “Risk Factors” on page 19.
OUR COMPANY’S AND SELLING SHAREHOLDERS’ ABSOLUTE
RESPONSIBILITYOur Company, having made all reasonable inquiries,
accepts responsibility for and confirms that this Red Herring
Prospectus contains all information with regard to our Company and
the Offer, which is material in the context of the Offer, that the
information contained in this Red Herring Prospectus is true and
correct in all material aspects and is not misleading in any
material respect, that the opinions and intentions expressed herein
are honestly held and that there are no other facts, the omission
of which makes this Red Herring Prospectus as a whole or any of
such information or the expression of any such opinions or
intentions, misleading in any material respect. Further, each of
the Selling Shareholder, severally and not jointly, accepts
responsibility for and confirms only the statements specifically
made by such Selling Shareholder in this Red Herring Prospectus to
the extent that the statement pertains to such Selling Shareholder
and the respective portion of the Equity Shares offered by it in
the Offer for Sale are true and correct in all material aspects and
are not misleading in any material respect. Each Selling
Shareholder, severally and not jointly, does not assume any
responsibility for any other statements, including without
limitation, any and all of the statements made by or in relation to
our Company or the other Selling Shareholders in this Red Herring
Prospectus.
LISTINGThe Equity Shares proposed to be issued through this Red
Herring Prospectus are proposed to be listed on the Stock
Exchanges. Our Company has received in-principle approvals from the
BSE and the NSE for the listing of the Equity Shares pursuant to
letters dated April 18, 2018 and April 26, 2018, respectively. For
the purposes of this Offer, NSE is the Designated Stock
Exchange.
GLOBAL CO-ORDINATORS AND BOOK RUNNING LEAD MANAGERS BOOK RUNNING
LEAD MANAGER REGISTRAR TO THE OFFER
Kotak Mahindra Capital Company Limited 1st Floor, 27 BKC, Plot
No. 27, G BlockBandra Kurla Complex, Bandra (East)Mumbai 400
051Tel: +91 22 4336 0000 Fax: +91 22 6713 2447 E-mail:
[email protected] grievance e-mail:
[email protected] Person: Ganesh RaneWebsite:
www.investmentbank.kotak.com SEBI Registration No.:
INM000008704
Citigroup Global Markets India Private Limited1202, 12th Floor,
First International Financial Centre, G-Block, C54&55 Bandra
Kurla Complex, Bandra (East), Mumbai 400 098Tel: +91 22 6175
9999Fax: +91 22 6175 9898Email: [email protected]
Grievance E-mail: [email protected] Person: Ashish
GunetaWebsite:www.online.citibank.co.in/rhtm/citigroupglobalscreen
SEBI Registration No: INM000010718
Credit Suisse Securities (India) Private LimitedCeejay House,
9th Floor, Plot F, Shivsagar Estate, Dr. Annie Besant Road, Worli
Mumbai 400 018 Tel: +91 22 6777 3914Fax: +91 22 6777 3820E-mail:
[email protected] grievance e-mail:
[email protected] Contact Person: Akshay
SaxenaWebsite:
www.creditsuisse.com/in/en/investment-banking/regional-presence/asia-pacific/india/ipo.htmlSEBI
Registration No.: INM000011161
IIFL Holdings Limited 10th Floor, IIFL CentreKamala City,
Senapati Bapat MargLower Parel (West), Mumbai 400 013Tel: +91 22
4646 4600Fax: +91 22 2493 1073E-mail: [email protected]
Investor grievance e-mail: [email protected] Contact Person: Pranay
DoshiWebsite: www.iiflcap.comSEBI Registration No.:
INM000010940
Link Intime India Private Limited C-101, 1st floor, 247 Park, L
B S Marg Vikhroli West, Mumbai 400 083 Tel: +91 22 4918 6200 Fax:
+91 22 4918 6195E-mail: [email protected]
grievance e-mail: [email protected] Contact Person:
Shanti GopalkrishnanWebsite: www.linkintime.co.in SEBI Registration
No.: INR000004058
BID/OFFER PERIOD*BID/OFFER OPENS ON* Tuesday, June 26, 2018
BID/OFFER CLOSES ON ** Thursday, June 28, 2018
* Our Company and the Selling Shareholders, in consultation with
the GCBRLMs and the BRLM, may consider participation by Anchor
Investors, in accordance with the SEBI ICDR Regulations. The Anchor
Investor Bidding Date shall be one Working Day prior to the
Bid/Offer Opening Date.** Our Company and the Selling Shareholders,
in consultation with the GCBRLMs and the BRLM, may decide to close
the Bid/Offer Period for QIBs one Working Day prior to the
Bid/Offer Closing Date in accordance with SEBI (ICDR)
Regulations
IIFL
Varroc Engineering Limited (our “Company” or the “Company”) was
incorporated on May 11, 1988 at Mumbai as Varroc Engineering
Private Limited, as a private limited company under the Companies
Act, 1956. On July 1, 1997, our Company was converted into a deemed
public company under section 43A (1A) of the Companies Act, 1956
and the word “Private” was deleted from the name of our Company.
Thereafter, on January 24, 2001 our Company was again converted
into a private company under section 43A (2A) of the Companies Act,
1956 and the word “Private” was added to the name of our Company.
Subsequently, our Company was converted into a public limited
company pursuant to approval of the Shareholders at an
extraordinary general meeting held on January 25, 2018. On February
5, 2018, the name of our Company was changed to Varroc Engineering
Limited and a fresh certificate of incorporation consequent upon
conversion to a public limited company was issued to our Company by
the RoC. For more information regarding our Company’s corporate
history and changes to address of the registered office of our
Company, see “History and Certain Corporate Matters” on page
222.
Corporate Identity Number: U28920MH1988PLC047335Registered and
Corporate Office: L-4, MIDC Area, Waluj, Aurangabad 431 136, Tel:
+91 240 6653 700/6653 699, Fax: +91 240 2564 540
Contact Person: Rakesh Darji, Company Secretary and Compliance
Officer; Tel: +91 240 6653 662; Fax: +91 240 2564 540E-mail:
[email protected]; Website: www.varrocgroup.com
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TABLE OF CONTENTS
SECTION I - GENERAL
.....................................................................................................................................
1
DEFINITIONS AND ABBREVIATIONS
........................................................................................................
1 CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION AND MARKET DATA
AND
CURRENCY OF PRESENTATION
...............................................................................................................
14 FORWARD-LOOKING STATEMENTS
.......................................................................................................
17
SECTION II — RISK FACTORS
....................................................................................................................
19
SECTION III – INTRODUCTION
...................................................................................................................
56
SUMMARY OF INDUSTRY
.........................................................................................................................
56 SUMMARY OF BUSINESS
...........................................................................................................................
67 SUMMARY FINANCIAL INFORMATION
.................................................................................................
78 THE OFFER
....................................................................................................................................................
98 GENERAL INFORMATION
........................................................................................................................
100 CAPITAL STRUCTURE
..............................................................................................................................
109 OBJECTS OF THE OFFER
..........................................................................................................................
120 BASIS FOR OFFER PRICE
..........................................................................................................................
122 STATEMENT OF TAX BENEFITS
.............................................................................................................
126
SECTION IV: ABOUT OUR COMPANY
.....................................................................................................
131
INDUSTRY OVERVIEW
.............................................................................................................................
131 OUR BUSINESS
...........................................................................................................................................
182 REGULATIONS AND POLICIES IN INDIA
..............................................................................................
219 HISTORY AND CERTAIN CORPORATE MATTERS
..............................................................................
222 OUR SUBSIDIARIES AND JOINT
VENTURES........................................................................................
229 OUR MANAGEMENT
.................................................................................................................................
240 OUR PROMOTER AND PROMOTER GROUP
.........................................................................................
256 GROUP COMPANIES
..................................................................................................................................
258 RELATED PARTY TRANSACTIONS
........................................................................................................
259 DIVIDEND POLICY
....................................................................................................................................
260
SECTION V – FINANCIAL INFORMATION
.............................................................................................
261
FINANCIAL STATEMENTS
.......................................................................................................................
261 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF
OPERATIONS
..............................................................................................................................................
532 FINANCIAL INDEBTEDNESS
...................................................................................................................
557
SECTION VI – LEGAL AND OTHER INFORMATION
...........................................................................
559
OUTSTANDING LITIGATION AND OTHER MATERIAL DEVELOPMENTS
..................................... 559 GOVERNMENT AND OTHER
APPROVALS
...........................................................................................
564 OTHER REGULATORY AND STATUTORY DISCLOSURES
................................................................
567
SECTION VII – OFFER RELATED INFORMATION
...............................................................................
585
OFFER STRUCTURE
...................................................................................................................................
585 TERMS OF THE OFFER
..............................................................................................................................
589 OFFER PROCEDURE
..................................................................................................................................
593
SECTION VIII – MAIN PROVISIONS OF ARTICLES OF ASSOCIATION
.......................................... 643
SECTION IX – OTHER INFORMATION
....................................................................................................
715
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
...................................................... 715
DECLARATION
..............................................................................................................................................
718
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1
SECTION I - GENERAL
DEFINITIONS AND ABBREVIATIONS
Unless the context otherwise indicates or implies, the following
terms shall have the meanings provided below in
this section, and references to any statute or regulations or
policies will include any amendments or re-enactments
thereto, from time to time. In case of any inconsistency between
the definitions given below and the definitions
contained in the General Information Document (as defined
below), the definitions given in this section shall
prevail. Notwithstanding the foregoing, terms in “Main
Provisions of the Articles of Association”, “Statement of
Tax Benefits”, “Industry Overview”, “Regulations and Policies in
India”, “Financial Information”,
“Outstanding Litigation and Material Developments” and “Part B”
of “Offer Procedure”, will have the meaning
ascribed to such terms in those respective sections.
General terms
Term Description
“our Company”, “VEL”, “the
Company” or “the Issuer”,
Varroc Engineering Limited, a public company incorporated under
the
Companies Act, 1956 and having its Registered and Corporate
Office at L-4,
MIDC Area, Waluj, Aurangabad 431136.
“we”, “us” or “our” Unless the context otherwise requires, our
Company, Subsidiaries and Joint
Ventures, on a consolidated basis.
Company related terms
Term Description
AoA/Articles of Association
or Articles
The articles of association of our Company, as amended.
Aries Mentor Holding B.V. Aries Mentor Holding B.V., The
Netherlands
Audit Committee Audit committee of our Company, constituted in
accordance with Regulation 18
of the SEBI Listing Regulations and Section 177 of the Companies
Act, 2013,
described in “Our Management” on page 240.
Auditors/ Statutory Auditors The statutory auditors of our
Company, being Price Waterhouse & Co Chartered
Accountants LLP.
Amendment Agreement Amendment to Shareholders Agreement and
Subscription Agreement dated
March 25, 2018
Board/ Board of Directors The board of directors of our
Company.
CSR Committee Corporate Social Responsibility committee of our
Company, constituted in
accordance with Regulation 18 of the SEBI Listing Regulations
and Section 177
of the Companies Act, 2013, described in “Our Management” on
page 240.
Chief Financial Officer/ CFO Chief financial officer of our
Company.
Company Secretary Company secretary of our Company.
Compliance Officer Compliance officer of our Company appointed
in accordance with the
requirements of the SEBI ICDR Regulations.
Conversion Deadline In accordance with the Subscription
Agreement, the conversion deadline for
conversion of Series C CCPS into Equity Shares shall initially
be March 31,
2019 and shall be extended in accordance with the provisions of
the Subscription
Agreement.
Director(s) The director(s) on our Board, as appointed from time
to time.
Durovalves India Durovalves India Private Limited.
Equity Shares The equity shares of our Company of face value of
` 1 each. Electromures S.A. Electromures S.A. (Romania).
Endurance Group All companies promoted, owned or controlled by
Anurang Jain, including
Endurance Technologies Limited, its subsidiaries and joint
ventures.
Group Companies The group companies of our Company, as covered
under the applicable
accounting standards and other companies as considered material
by our Board,
if any, in accordance with the materiality policy dated February
6, 2018. For
details, see “Group Companies” of page 258.
I.M.E.S, Italy / I.M.E.S. Industria Meccanica E Stampaggio
S.P.A.
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2
Term Description
Independent Director(s) A non-executive, Independent director as
per the Companies Act, 2013 and the
SEBI Listing Regulations.
Indian Subsidiaries VPPL, Durovalves India, Varroc Lighting
Systems, India and Team Concepts
Investor Selling Shareholder 1 Omega TC Holdings Pte. Ltd.
Investor Selling Shareholder 2 Tata Capital Financial Services
Limited.
Investor Selling Shareholders Investor Selling Shareholder 1 and
Investor Selling Shareholder 2.
IPO Committee The IPO committee of our Company, constituted
pursuant to a Board resolution
dated January 31, 2017 to facilitate the process of the Offer,
described in “Our
Management” on page 240.
IPO Veto Date In accordance with Subscription Agreement, if, at
any time prior to the
Conversion Deadline or any extension thereof, and provided that
market
conditions to support an IPO exist at such time, our Promoter
and our
Company have taken all necessary steps to initiate and undertake
IPO
(including our Promoters exercising their votes in favour of
approving the IPO
at meetings of the Board and / or Shareholders), but the
Investor Selling
Shareholders cast their vote against approving the IPO at the
meeting of the
Board or the Shareholders, then the date of the Board or
Shareholders meeting
at which the Investor Selling Shareholders cast such vote shall
be considered
to be the IPO Veto Date.
Joint Ventures Joint ventures of our Company and as disclosed in
“Our Subsidiaries and Joint
Ventures” on page 229.
KMP/ Key Managerial
Personnel
Key managerial personnel of our Company in terms of Regulation
2(1)(s) of the
SEBI ICDR Regulations and Section 2(51) of the Companies Act,
2013 and as
described in “Our Management” on page 240.
Materiality Policy The policy adopted by our Board on February
6, 2018 for identification of
Group Companies, outstanding material litigation and outstanding
dues to
creditors in respect of our Company, pursuant to the
requirements of the SEBI
ICDR Regulations.
MoA/Memorandum
of Association
The memorandum of association of our Company, as amended.
Naresh Chandra Holdings
Trust
The Naresh Chandra Holdings Trust is a private family trust,
settled by Naresh
Chandra, pursuant to a trust deed dated January 13, 2017.
Nomination and
Remuneration Committee
The nomination and remuneration committee of our Company,
constituted in
accordance with Regulation 19 of the SEBI Listing Regulations
and Section 178
of the Companies Act, 2013, described in “Our Management” on
page 240.
Nuova C.T.S. S.R.L. Nuova C.T.S. S.R.L. (Italy).
Non-Executive Directors A director not being an Executive
Director or an Independent Director.
Optionally Convertible
Preference Shares
7% redeemable cumulative optionally convertible preference
shares of ` 10 each.
Preference Shares Optionally Convertible Preference Shares,
Series A CCPS, Series B CCPS and
Series C CCPS.
Promoter The Promoter of our Company, Tarang Jain. For details,
see “Our Promoter
and Promoter Group” on page 256.
Promoter Group Persons and entities constituting the promoter
group of our Company, pursuant
to Regulation 2(1)(zb) of the SEBI ICDR Regulations, excluding
(i) Anurang
Jain (brother of our Promoter); (ii) Endurance Group; (iii)
Vandana Khaitan
(sister of Rochana Jain, wife of our Promoter); (iv) Sadhana
Khaitan (sister of
Rochana Jain, wife of our Promoter), (collectively, the
“Immediate
Relatives”); (v) any body corporate in which 10% or more of the
equity share
capital is held by the Immediate Relatives; (vi) any body
corporate in which a
body corporate mentioned in (v) above holds 10% or more of the
equity share
capital; (vii) any HUF or firm where such Immediate Relatives
are members, or
hold in the aggregate more than 10% of the shareholding. For
details, see “Our
Promoter and Promoter Group” on page 256.
Promoter Selling Shareholder Tarang Jain.
Registered and Corporate
Office
L-4, MIDC Area, Waluj, Aurangabad 431 136, India.
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3
Term Description
Restated Consolidated
Financial Information
Restated consolidated statement of assets and liabilities as at
March 31, 2018,
2017, 2016, 2015, 2014 and 2013, the restated consolidated
statement of
changes in equity as at March 31, 2018, 2017, 2016 and 2015 and
the related
restated consolidated statement of profit and loss and restated
consolidated
statement of cash flows for each of the years ended March 31,
2018, 2017,
2016, 2015, 2014 and 2013 for our Company, its Subsidiaries and
Joint
Ventures, on a consolidated basis, during the relevant periods,
read along with
all the schedules and notes thereto and included in “Financial
Statements” on
page 261.
Restated Financial
Information
Collectively, the Restated Consolidated Financial Information
and Restated
Standalone Financial Information.
Restated Standalone
Financial Information
Restated standalone statement of assets and liabilities as at
March 31, 2018,
2017, 2016, 2015, 2014 and 2013, the restated standalone
statement of
changes in equity as at March 31, 2018, 2017, 2016 and 2015, and
the related
restated standalone statement of profit and loss and restated
standalone
statement of cash flows for each of the years ended March 31,
2018, 2017,
2016, 2015, 2014 and 2013 for our Company, read along with all
the schedules
and notes thereto and included in “Financial Statements” on page
261.
RoC or Registrar of
Companies
The Registrar of Companies, Mumbai.
Selling Shareholders Collectively, Investor Selling Shareholder
1, Investor Selling Shareholder 2,
and Promoter Selling Shareholder. For details of the Equity
Shares offered by
each Selling Shareholder, see “Other Regulatory and Statutory
Disclosures” on
page 567.
Shareholders agreement Agreement dated January 24, 2014,
executed between our Company, our
Promoter, Omega TC Holdings Pte. Ltd., Tata Capital Financial
Services
Limited, Naresh Chandra, Suman Jain and Rochana Jain.
Shareholders The holders of the Equity Shares from time to
time.
Stakeholders Relationship
Committee
The stakeholders’ relationship committee of our Company,
constituted in
accordance with Regulation 20 of the SEBI Listing Regulations
and Section 178
of the Companies Act, 2013, described in “Our Management” on
page 240.
Suman Jain Holdings Trust
The Suman Jain Holdings Trust is a private family trust, settled
by Suman Jain,
pursuant to a trust deed dated January 13, 2017.
Series A CCPS 0.001% Series “A” compulsorily convertible
preference shares having face
value of ` 10 each.
Series B CCPS 0.0001% Series “B” compulsorily convertible
preference shares having face
value of ` 10 each.
Series C CCPS 0.0001% Series “C” compulsorily convertible
preference shares having face
value of ` 1 each. Subsidiaries The subsidiaries of our Company,
identified in accordance with the relevant
provisions of the Companies Act, 2013, as on date of this Red
Herring
Prospectus and as disclosed in “Our Subsidiaries and Joint
Ventures” on page
229.
Subscription Agreement Agreement dated January 24, 2014 entered
into between our Company, our
Promoter, other Shareholders namely Naresh Chandra, Suman Jain,
and
Rochana Jain, as amended by amendment agreements dated March 27,
2014
and March 9, 2017.
TJ Holdings Trust
The TJ Holdings Trust is a private family trust, settled by
Tarang Jain, pursuant
to a trust deed dated January 13, 2017.
TRI.O.M Mexico TRI.O.M Mexico, S.A. de R.L. C.V. (Mexico)
TRI.O.M. S.p. A TRI.O.M. S.p.A. (Italy)
TRI.O.M Vietnam TRI.O.M. Vietnam Co. Limited (Vietnam)
Team Concepts Team Concepts Private Limited
VPPL Varroc Polymers Private Limited
Varroc Brazil Varroc Do Brasil Comércio, Importação E Exportação
De Máquinas,
Equipamento E Peças LTDA., Brazil
VarrocCorp Holding B.V. VarrocCorp Holding B.V. (The
Netherlands)
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4
Term Description
Varroc European Holding
B.V.
Varroc European Holding B.V. (The Netherlands)
Varroc Group All companies promoted, owned or controlled by
Tarang Jain, including our
Company, our Subsidiaries and Joint Ventures.
Varroc Japan Varroc Japan Co., Limited
Varroc Lighting Systems /
VLS
The subsidiaries forming the Varroc Lighting Systems group
Varroc Lighting Systems,
India
Varroc Lighting Systems (India) Private Limited
Varroc Lighting Systems
GmbH
Varroc Lighting Systems GmbH, (Germany)
Varroc Lighting Systems, Inc. Varroc Lighting Systems, Inc.,
USA
Varroc Lighting Systems,
Mexico
Varroc Lighting Systems S.de.R.L. de. C.V., Mexico
Varroc Lighting Systems,
Morocco
Varroc Lighting Systems, S.A., Morocco
Varroc Lighting Systems,
Poland
Varroc Lighting Systems Sp. Z o.o., Poland
Varroc Lighting Systems,
S.R.O.
Varroc Lighting Systems, s.r.o, Czech Republic
Varroc TYC Varroc TYC Corporation Limited, British Virgin
Islands
Varroc TYC Auto Lamps Varroc TYC Auto Lamps Co. Ltd.,
Changzhou
Varroc TYC Auto Lamps
(CQ)
Chongqing Varroc TYC Auto Lamps Co. Limited
Offer related terms
Term Description
Acknowledgment Slip The slip or document issued by the
Designated Intermediary(ies) to a Bidder as proof of
registration of the Bid cum Application Form.
Allotted/Allotment/All
ot
The transfer of the Equity Shares to successful Bidders pursuant
to the Offer.
Allottee A successful Bidder to whom the Equity Shares are
Allotted.
Allotment Advice The note or advice or intimation of Allotment,
sent to each successful Bidder who has
been or is to be Allotted the Equity Shares after approval of
the Basis of Allotment by the
Designated Stock Exchange.
Anchor Escrow
Account
Account opened with the Escrow Bank for the Offer and in whose
favour the Anchor
Investors will transfer money through direct credit or NEFT or
RTGS in respect of the
Bid Amount when submitting a Bid.
Anchor Investor A QIB who applies under the Anchor Investor
Portion in accordance with the
requirements specified in the SEBI ICDR Regulations. For further
details, see “Offer
Procedure” on page 593.
Anchor Investor
Bidding Date
The date one Working Day prior to the Bid/Offer Opening Date on
which Bids by
Anchor Investors shall be submitted and allocation to the Anchor
Investors shall be
completed.
Anchor Investor Offer
Price
The final price at which the Equity Shares will be Allotted to
Anchor Investors in terms
of this Red Herring Prospectus and the Prospectus, which will be
a price equal to or
higher than the Offer Price but not higher than the Cap Price.
The Anchor Investor Offer
Price will be decided by our Company and the Selling
Shareholders, in consultation
with the GCBRLMs and the BRLM.
Anchor Investor
Portion
Up to 60% of the QIB Category, which may be allocated by our
Company and the
Selling Shareholders, in consultation with the GCBRLMs and the
BRLM, to Anchor
Investors, on a discretionary basis, in accordance with SEBI
ICDR Regulations. One-
third of the Anchor Investor Portion is reserved for domestic
Mutual Funds, subject to
valid Bids being received from domestic Mutual Funds at or above
the price at which
allocation is made to Anchor Investors.
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5
Term Description
Application Supported
by Blocked Amount/
ASBA
The application (whether physical or electronic) by a Bidder
(other than Anchor
Investors) to make a Bid authorizing the relevant SCSB to block
the Bid Amount in the
relevant ASBA Account.
ASBA Account A bank account maintained with an SCSB and
specified in the Bid cum Application
Form which will be blocked by such SCSB to the extent of the
appropriate Bid Amount
in relation to a Bid by a Bidder (other than a Bid by an Anchor
Investor).
ASBA Form An application form, whether physical or electronic,
used by Bidders bidding through
the ASBA process, which will be considered as the application
for Allotment in terms
of this Red Herring Prospectus and the Prospectus.
Banker to the Offer Escrow Bank, Refund Bank and Public Offer
Account Bank.
Basis of Allotment The basis on which the Equity Shares will be
Allotted to successful Bidders under the
Offer, described in “Offer Procedure” on page 593.
Bid An indication to make an offer during the Bid/Offer Period
by a Bidder (other than an
Anchor Investor), or on the Anchor Investor Bidding Date by an
Anchor Investor,
pursuant to submission of a Bid cum Application Form, to
purchase our Equity Shares at
a price within the Price Band, including all revisions and
modifications thereto, to the
extent permissible under the SEBI ICDR Regulations, in terms of
this Red Herring
Prospectus and the Bid cum Application Form. The term ‘Bidding’
shall be construed
accordingly.
Bid Amount The highest value of the optional Bids as indicated
in the Bid cum Application Form
and payable by the Bidder or as blocked in the ASBA Account of
the Bidder, as the
case may be, upon submission of the Bid in the Offer, discount,
if any.
Bid cum Application
Form
The form in terms of which the Bidder shall make a Bid,
including an ASBA Form, and
which shall be considered as the application for the Allotment
pursuant to the terms of
this Red Herring Prospectus and the Prospectus.
Bid Lot [•] Equity Shares. Bidder Any prospective investor who
makes a Bid pursuant to the terms of this Red Herring
Prospectus and the Bid cum Application Form and unless otherwise
stated or implied,
includes an Anchor Investor.
Bid/Offer Closing
Date
Except in relation to Anchor Investors, the date after which the
Designated Intermediaries
shall not accept any Bids for the Offer, which shall be
published in all editions of Financial
Express (a widely circulated English national daily newspaper),
all editions of Jansatta (a
widely circulated Hindi national daily newspaper) and all
editions of Loksatta (a widely
circulated Marathi newspaper, Marathi being the regional
language of Maharashtra,
where our Registered Office is located) and in case of any
revisions, the extended
Bid/Offer Closing Date shall also be notified on the websites
and terminals of the
Syndicate Members, as required under the SEBI ICDR Regulations.
Our Company and
the Selling Shareholders, in consultation with the GCBRLMs and
the BRLM, may
decide to close the Bid/ Offer Period for QIBs one Working Day
prior to the Bid/Offer
Closing Date, subject to the conditions imposed by the SEBI ICDR
Regulations.
Bid/Offer Opening
Date
Except in relation to Anchor Investors, the date on which the
Designated Intermediaries
shall start accepting Bids for the Offer, which shall be
published in all editions of Financial
Express (a widely circulated English national daily newspaper),
all editions of Jansatta (a
widely circulated Hindi national daily newspaper) and all
editions of Loksatta (a widely
circulated Marathi newspaper, Marathi being the regional
language of Maharashtra
where our Registered Office is located).
Bid/Offer Period Except in relation to Anchor Investors, the
period between the Bid/Offer Opening Date
and the Bid/Offer Closing Date, inclusive of both days during
which prospective Bidders
(excluding Anchor Investors) can submit their Bids, including
any revisions thereof in
accordance with the SEBI ICDR Regulations and the terms of this
Red Herring
Prospectus.
Bidding Centres Centres at which the Designated Intermediaries
shall accept the Bid cum Application
Forms, being the Designated Branch for SCSBs, Specified
Locations for the Syndicate,
Broker Centres for Registered Brokers, Designated CRTA Locations
for CRTAs and
Designated CDP Locations for CDPs.
Book Building Process The book building process as described in
Part A of Schedule XI of the SEBI ICDR
Regulations, in terms of which the Offer Price shall be
determined and the Offer is being
made.
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6
Term Description
Book Running Lead
Manager or BRLM
IIFL Holdings Limited
Broker Centres Broker centres of the Registered Brokers, where
Bidders (other than Anchor Investors)
can submit the Bid cum Application Forms to a Registered Broker.
The details of such
Broker Centres, along with the names and contact details of the
Registered Brokers are
available on the respective websites of the Stock Exchanges.
CAN / Confirmation
of Allocation Note
Notice or intimation of allocation of the Equity Shares sent to
Anchor Investors, who have
been allocated the Equity Shares, after the Anchor Investor
Bidding Date.
Cap Price The higher end of the Price Band i.e. ` [•] above
which the Offer Price and Anchor Investor Offer Price will not be
finalized and above which no Bids will be accepted,
including any revisions thereof.
Client ID Client identification number maintained with one of
the Depositories in relation to a demat
account.
Collecting Depository
Participants/CDPs
A depository participant, as defined under the Depositories Act,
1996 and registered under
Section 12 (1A) of the SEBI Act and who is eligible to procure
Bids at the Designated
CDP Locations in terms of circular no.
CIR/CFD/POLICYCELL/11/2015 dated
November 10, 2015 issued by SEBI.
Collecting Registrar
and Share Transfer
Agents or CRTAs
Registrar and share transfer agents registered with SEBI and
eligible to procure Bids at
the Designated RTA Locations in terms of circular no.
CIR/CFD/POLICYCELL/11/2015
dated November 10, 2015 issued by SEBI.
Credit Suisse Credit Suisse Securities (India) Private
Limited
Cut-off Price The Offer Price, finalized by our Company and the
Selling Shareholders, in consultation
with the GCBRLMs and the BRLM, which may be any price within the
Price Band. Only
Retail Individual Investors and Eligible Employees Bidding in
the Employee Reservation
Portion are entitled to Bid at the Cut-off Price. QIBs
(including Anchor Investors) and
Non-Institutional Investors are not entitled to Bid at the
Cut-off Price.
Demographic Details The details of the Bidders including the
Bidders’ address, names of the Bidders’
father/husband, investor status, occupation and bank account
details.
Designated Branches Such branches of the SCSBs which shall
collect the Bid cum Application Form used by
Bidders (other than Anchor Investors), a list of which is
available at the website of the
SEBI
(https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes)
and
updated from time to time.
Designated CDP
Locations
Such centres of the Collecting Depository Participants where
Bidders (except Anchor
Investors) can submit the Bid cum Application Forms. The details
of such Designated
CDP Locations, along with the names and contact details of the
CDPs are available on the
respective websites of the Stock Exchanges and updated from time
to time.
Designated Date The date on which the funds from the Anchor
Escrow Accounts are transferred to the
Public Offer Account or the Refund Account(s), as appropriate,
and the amounts
blocked by the SCSBs are transferred from the ASBA Accounts, to
the Public Offer
Account or Refund Account, as applicable, in terms of this Red
Herring Prospectus, after
the Prospectus is filed with the RoC.
Designated
Intermediaries
Collectively, the members of the Syndicate,
sub-syndicate/agents, SCSBs, Registered
Brokers, CDPs and CRTAs, who are authorized to collect Bid cum
Application Forms
from the Bidders (other than Anchor Investors), in relation to
the Offer.
Designated CRTA
Locations
Such centres of the CRTAs where Bidders (except Anchor
Investors) can submit the Bid
cum Application Forms. The details of such Designated RTA
Locations, along with the
names and contact details of the CRTAs are available on the
respective websites of the
Stock Exchanges (www.nseindia.com and www.bseindia.com) and
updated from time to
time. Designated Stock
Exchange
NSE
Draft Red Herring
Prospectus/DRHP
The draft red herring prospectus dated March 28, 2018, issued in
accordance with the
SEBI ICDR Regulations, which did not contain complete
particulars of the price at which
our Equity Shares will be Allotted and the size of the
Offer.
Eligible Employee A permanent and full-time employee of our
Company and our Indian subsidiaries,
(excluding such employees not eligible to invest in the Offer
under applicable laws,
rules, regulations and guidelines) as of the date of filing of
this Red Herring Prospectus
with the RoC and who continues to be an employee of our Company
and our Indian
subsidiaries until the submission of the Bid cum Application
Form, and is based,
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7
Term Description
working and present in India as on the date of submission of the
Bid cum Application
Form and a director of our Company and our Indian subsidiaries,
whether a whole time
director, part time director or otherwise, (excluding such
directors not eligible to invest
in the Offer under applicable laws, rules, regulations and
guidelines) as of the date of
filing this Red Herring Prospectus with the RoC and who
continues to be a director of
our Company and our Indian subsidiaries, as applicable until the
submission of the Bid
cum Application Form and is based and present in India as on the
date of submission of
the Bid cum Application Form.
An employee, who is recruited against a regular vacancy but is
on probation as on the
date of submission of the Bid cum Application Form will also be
deemed a ‘permanent
and a full-time employee’.
Unless the Employee Reservation Portion is undersubscribed, the
value of allocation to
an Eligible Employee shall not exceed ` 200,000. In the event of
undersubscription in the Employee Reservation Portion, the
unsubscribed portion may be allocated, on a
proportionate basis, to Eligible Employees for value exceeding `
200,000 up to ` 500,000. Any unsubscribed portion remaining in the
Employee Reservation Portion
shall be added to the Net Offer to the public.
Eligible NRI A non-resident Indian, resident in a jurisdiction
outside India where it is not unlawful to
make an offer or invitation under the Offer and in relation to
whom this Red Herring
Prospectus constitutes an invitation to purchase the Equity
Shares.
Employee Discount A discount of [•]% (equivalent to ` [•]) on
the offer price to Eligible Employees. Employee Reservation
Portion
The portion of the Offer, being up to 100,000 Equity Shares,
aggregating up to `[•] million, available for allocation to
Eligible Employees, on a proportionate basis.
Cash Escrow
Agreement
Agreement dated June 15, 2018 entered into among our Company,
the Selling
Shareholders, the Registrar to the Offer, the GCBRLMs and the
BRLM, the Escrow
Bank, Public Offer Account Bank and Refund Bank for collection
of the Bid Amounts
and where applicable remitting refunds, if any, on the terms and
conditions thereof.
Escrow Bank A bank, which is a clearing member and registered
with SEBI as a banker to an offer and
with whom the Anchor Escrow Account has been opened, in this
case being Axis Bank
Limited.
First Bidder The Bidder whose name appears first in the Bid cum
Application Form or the Revision
Form and in case of joint Bids, whose name appears as the first
holder of the beneficiary
account held in joint names.
Floor Price The lower end of the Price Band, and any revisions
thereof, at or above which the Offer
Price and the Anchor Investor Offer Price will be finalized and
below which no Bids will
be accepted and which shall not be less than the face value of
the Equity Shares.
General Information
Document
The General Information Document for investing in public issues
prepared and issued
in accordance with the circular (CIR/CFD/DIL/12/2013) dated
October 23, 2013,
notified by SEBI and updated pursuant to the circular
(CIR/CFD/POLICYCELL/11/2015) dated November 10, 2015 and
(SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January 21, 2016 notified
by SEBI and
included in “Offer Procedure” on page 593.
Global Co-ordinators
and Book Running
Lead Managers or
GCBRLMs
Kotak Mahindra Capital Company Limited, Citigroup Global Markets
India Private
Limited and Credit Suisse Securities (India) Private
Limited.
IIFL IIFL Holdings Limited.
Kotak Kotak Mahindra Capital Company Limited.
Maximum RII
Allottees
The maximum number of RIIs who can be allotted the minimum Bid
Lot. This is
computed by dividing the total number of Equity Shares available
for Allotment to RIIs
by the minimum Bid Lot.
Minimum Promoter’s
Contribution
Aggregate of 20% of the fully diluted post-Offer Equity Share
capital of our Company
held by our Promoter that shall be locked-in for a period of
three years from the date of
Allotment.
Mutual Funds Mutual funds registered with SEBI under the
Securities and Exchange Board of India
(Mutual Funds) Regulations, 1996.
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8
Term Description
Mutual Fund Portion 5% of the QIB Category (excluding the Anchor
Investor Portion) or [•] Equity Shares
which shall be available for allocation to Mutual Funds only, on
a proportionate basis,
subject to valid Bids being received at or above the Offer
Price.
Non-Institutional
Category
The portion of the Offer, being not less than 15% of the Net
Offer or [•] Equity Shares,
available for allocation on a proportionate basis to
Non-Institutional Investors, subject to
valid Bids being received at or above the Offer Price.
Non-Institutional
Investors/NIIs
All Bidders, including Category III FPIs that are not QIBs
(including Anchor Investors)
or Retail Individual Investors, or Eligible Employees Bidding in
the Employee
Reservation Portion, who have Bid for Equity Shares for an
amount of more than ` 200,000 (but not including NRIs other than
Eligible NRIs).
Offer/Offer for Sale Public offer of up to 20,221,730 Equity
Shares of face value ` 1 each for cash at a price of ` [•] each by
the Selling Shareholders in terms of this Red Herring Prospectus
and the Prospectus. The Offer, aggregating up to ̀ [•] million,
comprises a Net Offer to the public of up to 20,121,730 Equity
Shares and an Employee Reservation Portion of up to 100,000
Equity Shares for subscription by Eligible Employees. The Offer
and the Net Offer shall
constitute 15.00% and 14.93% of the post-Offer paid up Equity
Share capital of our
Company, respectively.
Offer Agreement The agreement dated March 28, 2018 and amendment
to the Offer Agreement dated June
8, 2018 entered into among our Company, the Selling
Shareholders, the GCBRLMs and
the BRLM, pursuant to which certain arrangements are agreed to
in relation to the Offer.
Offer Price The final price at which Equity Shares will be
Allotted to the successful Bidders (except
Anchor Investors), as determined in accordance with the Book
Building Process and
determined by our Company and the Selling Shareholders, in
consultation with the
GCBRLMs and the BRLM, in terms of this Red Herring Prospectus on
the Pricing Date,
less Discount, if any.
Offered Shares Equity Shares held by the Selling Shareholders
and offered for sale in the Offer.
Price Band Price band of the Floor Price of `[•] and a Cap Price
of ` [•], including any revisions thereof. The Price Band and the
minimum Bid Lot size for the Offer will be decided by
our Company and the Selling Shareholders, in consultation with
the GCBRLMs and the
BRLM, and advertised in all editions of Financial Express (a
widely circulated English
national daily newspaper), all editions of Jansatta (a widely
circulated Hindi national daily
newspaper) and all editions of Loksatta (a widely circulated
Marathi newspaper, Marathi
being the regional language of Maharashtra where our Registered
Office is located) at
least five Working Days prior to the Bid/Offer Opening Date,
with the relevant financial
ratios calculated at the Floor Price and at the Cap Price and
shall be made available to the
Stock Exchanges for the purpose of uploading on their
websites.
Pricing Date The date on which our Company and the Selling
Shareholders, in consultation with the
GCBRLMs and the BRLM, shall finalize the Offer Price.
Prospectus The Prospectus to be filed with the RoC in relation
to this Offer, on or after the Pricing
Date in accordance with the provisions of Section 26 of the
Companies Act, 2013 and the
SEBI ICDR Regulations, containing the Offer Price, the size of
the Offer and certain other
information, including any addenda or corrigenda thereto.
Public Offer Account The account(s) opened with the Banker(s) to
the Offer under Section 40(3) of the
Companies Act, 2013 to receive monies from the Anchor Escrow
Account(s) and the
ASBA Accounts on the Designated Date.
Public Offer Account
Bank
The bank with whom the Public Offer Account is opened for
collection of Bid Amounts
from Anchor Escrow Account and ASBA Account on the Designated
Date in this case
being Axis Bank Limited.
QIB Category The portion of the Offer, being not more than 50%
of the Net Offer or [•] Equity Shares to be Allotted to QIBs on a
proportionate basis, including the Anchor Investor Portion (in
which allocation shall be on a discretionary basis, as
determined by our Company and the
Selling Shareholders, in consultation with the GCBRLMs and the
BRLM).
Qualified Institutional
Buyers or QIBs
A qualified institutional buyer as defined under Regulation
2(1)(zd) of the SEBI ICDR
Regulations.
Red Herring
Prospectus or RHP
This red herring prospectus dated June 15, 2018, issued in
accordance with Section 32 of
the Companies Act, 2013 and the SEBI ICDR Regulations, which
does not have
complete particulars of the price at which the Equity Shares
shall be Allotted and filed
with the RoC at least three Working Days before the Bid/Offer
Opening Date and will
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9
Term Description
become the Prospectus after filing with the RoC after the
Pricing Date, including any
addenda or corrigenda thereto.
Refund Account(s) Account(s) opened with the Refund Bank from
which refunds, if any, of the whole or part
of the Bid Amount shall be made to Anchor Investors.
Refund Bank The bank with whom the Refund Account(s) have been
opened, in this case being Axis
Bank Limited.
Registered Brokers Stock brokers registered with the stock
exchanges having nationwide terminals, other
than the members of the Syndicate and eligible to procure Bids
in terms of circular number
CIR/CFD/14/2012 dated October 14, 2012, issued by SEBI.
Registrar Agreement The agreement dated March 9, 2018 entered
into among our Company, the Selling
Shareholders and the Registrar to the Offer in relation to the
responsibilities and
obligations of the Registrar to the Offer pertaining to the
Offer.
Registrar to the Offer Link Intime India Private Limited
Retail Category The portion of the Offer, being not less than
35% of the Net Offer or [•] Equity Shares, available for allocation
to Retail Individual Investors, which shall not be less than
the
minimum Bid lot, subject to availability in the Retail
Category.
Retail Individual
Investors/ RIIs
Bidders other than Eligible Employees Bidding in the Employee
Reservation Portion,
whose Bid Amount for Equity Shares in the Offer is not more than
` 200,000 in any of the bidding options in the Offer (including
HUFs applying through their Karta and
Eligible NRIs and does not include NRIs other than Eligible
NRIs).
Revision Form The form used by the Bidders to modify the
quantity of Equity Shares or the Bid Amount
in any of their Bid cum Application Forms or any previous
Revision Form(s), as
applicable. QIBs and Non-Institutional Investors are not
permitted to withdraw their
Bid(s) or lower the size of their Bid(s) (in terms of quantity
of Equity Shares or the Bid
Amount) at any stage.
Self Certified
Syndicate Banks or
SCSBs
The banks registered with the SEBI which offer the facility of
ASBA and the list of which
is available on the website of the SEBI
(https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmI
d=34) and updated from time to time and at such other websites
as may be prescribed by
SEBI from time to time.
Share Escrow Agent The share escrow agent appointed pursuant to
the Share Escrow Agreement, namely
Linkintime India Private Limited.
Share Escrow
Agreement
The agreement dated June 12, 2018, entered into among the
Selling Shareholders, our
Company and a share escrow agent in connection with the transfer
of the respective
portion of Equity Shares offered by each Selling Shareholder and
credit of such Equity
Shares to the demat account of the Allottees.
Specified Locations Bidding centres where the Syndicate shall
accept Bid cum Application Forms, a list of
which is included in the Bid cum Application Form.
Stock Exchanges Collectively, BSE Limited and National Stock
Exchange of India Limited.
Syndicate Agreement The agreement dated June 12, 2018, entered
into among the members of the Syndicate,
our Company, the Selling Shareholders and the Registrar to the
Offer in relation to the
collection of Bid cum Application Forms by the Syndicate (other
than Bids directly
submitted to the SCSBs under the ASBA process and Bids submitted
to the Registered
Brokers at the Broker Centers).
Syndicate Members Intermediaries registered with the SEBI and
permitted to carry out activities as an
underwriter, in this case being Kotak Securities Limited and
IIFL Securities Limited.
Syndicate or members
of the Syndicate
Collectively, the GCBRLMs, the BRLM and the Syndicate
Members.
Systematically
Important Non-
Banking Financial
Company
A non-banking financial company registered with the Reserve Bank
of India and having
a net-worth of more than ` 5,000 million as per the last audited
financial statements.
Underwriters [•]. Underwriting
Agreement
The agreement to be entered among our Company, the Selling
Shareholders and the
Underwriters, to be entered into on or after the Pricing
Date.
Working Day(s) Any day, other than the second and fourth
Saturdays of each calendar month, Sundays
and public holidays, days on which commercial banks in Mumbai
are open for business,
provided however, with reference to (a) announcement of Price
Band; and (b) Bid/Offer
Period, “Working Day” shall mean any day, excluding all
Saturdays, Sundays and
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10
Term Description
public holidays, on which commercial banks in Mumbai are open
for business; and with
reference to the time period between the Bid/Offer Closing Date
and the listing of the
Equity Shares on the Stock Exchanges, “Working Day” shall mean
all trading days of
the Stock Exchanges, excluding Sundays and bank holidays, as per
the SEBI Circular
SEBI/HO/CFD/DIL/CIR/P/2016/26 dated January 21, 2016.
Conventional and general terms and abbreviations
Term Description
AIF(s) Alternative Investment Funds.
Ind AS 24 Indian Accounting Standard 24 issued by the Institute
of Chartered Accountants
of India.
BSE BSE Limited.
Book value per equity share Networth divided by number of equity
shares.
Compounded Annual Growth
Rate / CAGR
(Ending value/ beginning value)^(1/number of periods)-1.
Category III FPIs FPIs who are registered as “Category III
Foreign Portfolio Investors” under the
SEBI FPI Regulations.
CDSL Central Depository Services (India) Limited.
CIN Corporate Identity Number.
Companies Act Companies Act, 1956 and the Companies Act,
2013.
Companies Act, 1956 Companies Act, 1956 (without reference to
the provisions thereof that have
ceased to have effect upon notification of the Notified
Sections) read with the
rules, regulations, clarifications and modifications
thereunder.
Companies Act, 2013 Companies Act, 2013, to the extent in force
pursuant to the notification of the
Notified Sections, read with the rules, regulations,
clarifications and
modifications thereunder, as the context requires.
Competition Act Competition Act, 2002.
Consolidated FDI Policy The consolidated FDI Policy, issued by
the Department of Industrial Policy and
Promotion, Ministry of Commerce and Industry, Government of
India, and any
modifications thereto or substitutions thereof, issued from time
to time.
CSR Corporate Social Responsibility.
Net debt to equity ratio Total liabilities reduced by cash and
current investments divided by share
capital and reserves.
Depository A depository registered with the SEBI under the
Securities and Exchange Board
of India (Depositories and Participants) Regulations, 1996.
Depositories Act The Depositories Act, 1996.
DIPP Department of Industrial Policy and Promotion, Ministry of
Commerce and
Industry, GoI.
DP ID Depository Participant’s identity number.
EBITDA Profit before exceptional items, share of net profits of
investments accounted
for using equity method and tax plus interest plus depreciation
and amortisation.
EPA Environment Protection Act, 1986.
EPF Act Employees’ Provident Fund and Miscellaneous Provisions
Act, 1952.
EPS Earnings per share.
ESI Act Employees’ State Insurance Act, 1948.
ESIC Employees’ State Insurance Corporation.
FCNR Account Foreign Currency Non-Resident (Bank) account
established in accordance with
the FEMA.
FDI Foreign direct investment.
FEMA The Foreign Exchange Management Act, 1999 read with rules
and regulations
thereunder.
Financial Year/Fiscal/ Fiscal
Year/FY
The period of 12 months commencing on April 1 of the immediately
preceding
calendar year and ending on March 31 of that particular calendar
year.
FPIs Foreign Portfolio Investors, as defined under SEBI FPI
Regulations.
FVCI Foreign Venture Capital Investors (as defined under the
Securities and
Exchange Board of India (Foreign Venture Capital Investors)
Regulations,
2000) registered with SEBI.
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11
Term Description
GAAR General Anti-Avoidance Rules.
GDP Gross Domestic Product.
GoI The Government of India.
GST Goods and services tax.
HUF(s) Hindu Undivided Family(ies).
IAS Rules Companies (Indian Accounting Standards) Rules,
2015.
ICAI Institute of Chartered Accountants of India.
ICDS Income Computation and Disclosure Standards.
IFRS International Financial Reporting Standards of the
International Accounting
Standards Board.
IFSC Indian Financial System Code.
Income Tax Act Income Tax Act, 1961.
Ind AS The Indian Accounting Standards referred to in the
Companies (Indian
Accounting Standard) Rules, 2015, as amended.
Indian GAAP / IGAAP Generally Accepted Accounting Principles in
India.
INR or Rupee or ` or Rs. Indian Rupee, the official currency of
the Republic of India. IT Information Technology.
KYC Know Your Customer
LIBOR London Interbank Offered Rate
MCA The Ministry of Corporate Affairs, GoI.
MCLR Marginal Cost of funds based Lending Rates
MICR Magnetic Ink Character recognition
Mn Million.
Net Asset Value / NAV Net worth at the end of period/ year
Net Worth Equity share capital plus preference share capital and
reserves and surplus.
Mutual Funds Mutual funds registered with the SEBI under the
Securities and Exchange
Board of India (Mutual Funds) Regulations, 1996.
Notified Sections The sections of the Companies Act, 2013 that
have been notified by the MCA and
are currently in effect.
NR/ Non-resident A person resident outside India, as defined
under the FEMA and includes an
NRI.
NRI Non-Resident Indian as defined under the FEMA
Regulations.
NSDL National Securities Depository Limited.
NSE The National Stock Exchange of India Limited.
P/E Ratio Price/Earnings Ratio.
PAN Permanent account number.
PAT Profit after tax.
PCS Practising Company Secretary.
Payment of Bonus Act Payment of Bonus Act, 1965.
Payment of Gratuity Act Payment of Gratuity Act, 1972.
RBI The Reserve Bank of India.
Regulation S Regulation S under the U.S. Securities Act.
Return on Equity / ROE (PAT plus notional interest on CCPS)
divided by (average of opening and closing
value of (equity plus reserves plus debt portion of CCPS)).
Return on Capital Employed /
ROCE
(Profit before tax plus exceptional items plus interest) divided
by (average of
opening and closing value of (non current borrowings plus short
term borrowings
plus current portion of non-current borrowings minus cash minus
current
investment plus equity including non controlling interest))
Rule 144A Rule 144A under the U.S. Securities Act.
SCRA Securities Contract (Regulation) Act, 1956.
SCRR The Securities Contracts (Regulation) Rules, 1957.
SEBI The Securities and Exchange Board of India constituted
under the SEBI Act.
SEBI Act The Securities and Exchange Board of India Act,
1992.
SEBI AIF Regulations The Securities and Exchange Board of India
(Alternative Investment Funds)
Regulations, 2012.
SEBI FPI Regulations The Securities and Exchange Board of India
(Foreign Portfolio Investors)
Regulations, 2014.
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12
Term Description
SEBI FVCI Regulations The Securities and Exchange Board of India
(Foreign Venture Capital
Investors) Regulations, 2000.
SEBI ICDR Regulations The Securities and Exchange Board of India
(Issue of Capital and Disclosure
Requirements) Regulations, 2009.
SEBI Ind AS Transition
Circular
The SEBI Circular SEBI/HO/CFD/DIL/CIR/P/2016/47 dated March 31,
2016.
SEBI Listing Regulations The Securities and Exchange Board of
India (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
STT Securities Transaction Tax.
Takeover Regulations The Securities and Exchange Board of India
(Substantial Acquisition of Shares
and Takeovers) Regulations, 2011.
Trademarks Act Trademarks Act, 1999.
Total Indebtedness Cumulative of current borrowings, non-current
borrowings and current maturities
of non-current borrowings.
US$/ USD/ US Dollar United States Dollar, the official currency
of the United States of America.
USA/ U.S./ US United States of America and its territories and
possessions, including any state
of the United States of America, Puerto Rico, the U.S. Virgin
Islands, Guam,
American Samoa, Wake Island and the Northern Mariana Islands and
the
District of Columbia.
U.S. GAAP Generally Accepted Accounting Principles in the United
State of America.
U.S. Securities Act U.S. Securities Act of 1933.
VCFs Venture capital funds as defined in and registered with the
SEBI under the
Securities and Exchange Board of India (Venture Capital Fund)
Regulations,
1996 or the Securities and Exchange Board of India (Alternative
Investment
Funds) Regulations, 2012, as the case may be.
Business / Industry Related Terms
Defined Term Description
ABS antilock braking system
ADAS advanced driver assistance system
AFLS / AFS Advanced Front Lighting Systems
AMT Automated Manual Transmission
ASP average selling price
BEV battery electric vehicles
CAD computer-aided design
CAE computer-aided engineering
CAGR compound annual growth rate
CAM computer-aided manufacturing
CBS combined braking system
CDI capacitor discharge ignition
CHMSLs center high mount stop lamps
CNG compressed natural gas
CPI consumer price index
DMD digital micromirror device
DRL daytime running lamps
DSIR Department of Scientific and Industrial Research
EBITDA earnings before interest, taxes, depreciation and
amortization
ECU electronic control units
EFI electronic fuel injection
EOHS Environment, occupational health and safety
EV electric vehicles
FMEA failure modes and effects analysis
GST Goods Services Tax
GV goods vehicle
GVA gross value added
HEV hybrid electric vehicle
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13
Defined Term Description
ICE internal combustion engine
IMD Indian Meteorological Department
KPIs Key Performance Indicators
LCV light commercial vehicle
LED light-emitting diode
LIDAR Light detection and ranging
MEMS Micro-Electro-Mechanical Systems
MSPs minimum support prices
NBFCs non-banking financial companies
OEMs original equipment manufacturers
OHV off highway vehicle
OLED organic light-emitting diode
PC passenger cars
PV passenger vehicle
PHEV plug-in hybrid electric vehicles
R&D research and development
RR regulator and rectifier
SCVs small commercial vehicles
SMT Semi-automated Manual Transmission
TPM total preventive maintenance
VES Varroc Excellence System
VDS Varroc Development System
VQS Varroc Quality System
The words and expressions used but not defined in this Red
Herring Prospectus will have the same meaning as
assigned to such terms under the Companies Act, 1956, as
superseded and substituted by notified provisions of
the Companies Act, 2013, the SEBI Act, the SEBI ICDR
Regulations, the SCRA, the Depositories Act and the
rules and regulations made thereunder.
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14
CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION AND MARKET
DATA AND
CURRENCY OF PRESENTATION
Certain Conventions
All references in this Red Herring Prospectus to “India” are to
the Republic of India and its territories and
possessions and all references herein to the “Government”,
“Indian Government”, “GoI”, “Central Government”
or the “State Government” are to the Government of India,
central or state government, as applicable.
All references herein to the following “US”, the “U.S.” or the
“United States” are to the United States of America
and all references to “Germany”, “Italy”, “Mexico” “Czech
Republic”, “Mexico” and “Morocco” are to the Federal Republic of
Germany, the Italian Republic, United Mexican State, Czech Republic
and Kingdom
of Morocco respectively.
Unless indicated otherwise, all references to page numbers in
this Red Herring Prospectus are to page numbers of
this Red Herring Prospectus.
Financial Data
The GoI has adopted the Indian Accounting Standards (“Ind AS”)
which are converged with the International
Financial Reporting Standards of the International Accounting
Standards Board (“IFRS”) under the Companies
(Indian Accounting Standards) Rules, 2015, as amended till date
(the “IAS Rules”).
In terms of:
(i) the IAS Rules, our Company is required to prepare its
statutory financial statements under the Companies Act, 2013 in
accordance with Ind AS for periods beginning on or after April 1,
2016, and
(ii) the SEBI Circular SEBI/HO/CFD/DIL/CIR/P/2016/47 dated March
31, 2016 (the “SEBI Ind AS Transition Circular”) and SEBI final
observation letter dated June 6, 2018, for the purposes of
disclosure in this Red Herring Prospectus, our Company has
prepared and presented its restated
standalone and consolidated financial information for the latest
four Fiscals (in this case, for Fiscals
2018, 2017, 2016 and 2015) in accordance with Ind AS as the base
and the Companies Act, 2013
and then restated in accordance with SEBI ICDR Regulations and
presented its restated standalone
and consolidated financial information for the earliest two
Fiscals (in this case, Fiscals 2014 and
2013) in accordance with the previously applicable generally
accepted accounting principles
followed in India (“Indian GAAP”) as the base and the Companies
Act, 2013 and then restated in
accordance with SEBI ICDR Regulations.
While for statutory reporting purposes, we have adopted Ind AS
from April 1, 2016 onwards with a transition date
of April 1, 2015, we have prepared our Restated Standalone
Financial Information and the Restated Consolidated
Financial Information for: (a) Fiscals 2018, 2017, 2016 and 2015
in accordance with Ind AS as the base and the
Companies Act, 2013 and then restated in accordance with SEBI
ICDR Regulations; and (b) Fiscals 2014 and
2013 in accordance with Indian GAAP as the base and the
Companies Act, 2013 and then restated in accordance
with SEBI ICDR Regulations. The Restated Financial Information
have been presented in accordance with the
SEBI Ind AS Transition Circular, the Companies Act, 2013 and
restated in accordance with the SEBI ICDR
Regulations.
However, India has adopted the accounting standards converged or
synchronized with IFRS, and not IFRS. Ind
AS, therefore, differs in certain significant respects from IFRS
and other accounting principles and standards with
which investors may be more familiar. We have not made any
attempt to quantify the impact of IFRS on the
financial data included in this Red Herring Prospectus, nor do
we provide a reconciliation of our financial
statements to those of IFRS. If we were to prepare our financial
statements in accordance with such other
accounting principles, our results of operations, financial
condition and cash flows may be substantially different.
The significant accounting policies applied in the preparation
of our Restated Financial Information are set forth
in the section “Financial Statements” included in this Red
Herring Prospectus. Prospective investors should review
the Indian GAAP and Ind AS accounting policies applied in the
preparation of our restated financial information
summarized in the section “Financial Statements” on page 261 and
consult their own professional advisers for an
understanding of the differences between these accounting
principles and those with which they may be more
familiar.
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15
Unless indicated otherwise, the financial information in this
Red Herring Prospectus is derived from our Restated
Financial Information.
Our Company’s financial year commences on April 1 of the
immediately preceding calendar year and ends on
March 31 of that particular calendar year, so all references to
a particular financial year or fiscal are to the 12
months period commencing on April 1 of the immediately preceding
calendar year and ending on March 31 of
that particular calendar year.
Unless indicated otherwise, all references to a year in this Red
Herring Prospectus are to a calendar year.
Certain figures contained in this Red Herring Prospectus,
including financial information, have been subject to
rounding adjustments. All decimals have been rounded off to two
decimal points. In certain instances, (i) the sum
or percentage change of such numbers may not conform exactly to
the total figure given; and (ii) the sum of the
numbers in a column or row in certain tables may not conform
exactly to the total figure given for that column or
row. Further, any figures sourced from third-party industry
sources may be rounded off to other than two decimal
points to conform to their respective sources.
Unless the context otherwise indicates, any percentage amounts,
as set forth in the sections “Risk Factors”, “Our
Business”, “Management’s Discussion and Analysis of Financial
Conditional and Results of Operations” on pages
19, 182 and 532, respectively, and elsewhere in this Red Herring
Prospectus have been calculated on the basis of
our Restated Financial Information unless otherwise stated.
Industry and market data
Unless stated otherwise, industry and market data used
throughout this Red Herring Prospectus has been obtained
from publicly available information, various government
publications and industry sources, such as a reports titled
“Report on specific auto components for Indian two and
three-wheeler industry” (the “CRISIL Report”) that has
been prepared by CRISIL Research and “Industry Report on
Automotive Lighting: Market, Industry and
Technologies” (the “Yole Report”) that has been prepared by Yole
Développement. Industry publications
generally state that the information contained in such
publications has been obtained from sources generally
believed to be reliable, but their accuracy, adequacy,
completeness or underlying assumptions are not guaranteed
and their reliability cannot be assured. Accordingly, no
investment decisions should be made based on such
information. Industry sources and publications are also prepared
based on information as of specific dates and
may no longer be current or reflect current trends.
Although we believe that the industry and market data used in
this Red Herring Prospectus is reliable, it has not
been independently verified by us, the Selling Shareholders, the
GCBRLMs and the BRLM, or any of our or their
respective affiliates or advisors, and none of these parties
makes any representation as to the accuracy of this
information. The data used in these sources may have been
reclassified by us for the purposes of presentation and
may also not be comparable. Industry sources and publications
may also base their information on estimates and
assumptions that may prove to be incorrect. The extent to which
the industry and market data presented in this
Red Herring Prospectus is meaningful depends upon the reader’s
familiarity with, and understanding of, the
methodologies used in compiling such information. There are no
standard data gathering methodologies in the
industry in which our Company conducts business and
methodologies and assumptions may vary widely among
different market and industry sources. Such information involves
risks, uncertainties and numerous assumptions
and is subject to change based on various factors, including
those discussed in “Risk Factors—We are not able to
guarantee the accuracy of third party information.” on page
46.
CRISIL Research has issued the following disclaimer for
inclusion of the information in the CRISIL Report in
this Red Herring Prospectus:
“CRISIL Research, a division of CRISIL Limited (CRISIL) has
taken due care and caution in preparing this report
(Report) based on the Information obtained by CRISIL from
sources which it considers reliable (Data). However,
CRISIL does not guarantee the accuracy, adequacy or completeness
of the Data / Report and is not responsible
for any errors or omissions or for the results obtained from the
use of Data / Report. This Report is not a
recommendation to invest / disinvest in any entity covered in
the Report and no part of this Report should be
construed as an expert advice or investment advice or any form
of investment banking within the meaning of any
law or regulation. CRISIL especially states that it has no
liability whatsoever to the subscribers / users /
transmitters/ distributors of this Report. Without limiting the
generality of the foregoing, nothing in the Report is
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16
to be construed as CRISIL providing or intending to provide any
services in jurisdictions where CRISIL does not
have the necessary permission and/or registration to carry out
its business activities in this regard. Varroc
Engineering Limited will be responsible for ensuring compliances
and consequences of non-compliances for use
of the Report or part thereof outside India. CRISIL Research
operates independently of, and does not have access
to information obtained by CRISIL’s Ratings Division / CRISIL
Risk and Infrastructure Solutions Ltd (CRIS),
which may, in their regular operations, obtain information of a
confidential nature. The views expressed in this
Report are that of CRISIL Research and not of CRISIL’s Ratings
Division / CRIS. No part of this Report may be
published/reproduced in any form without CRISIL’s prior written
approval.”
Currency and Units of Presentation
All references to “Rupees” or “`” or “Rs.” are to Indian Rupees,
the official currency of the Republic of India. All references to
“U.S.$”, “U.S. Dollar”, “USD” or “U.S. Dollars”, “MXN”, “EUR”,
“JPY”, “LEY”, “CZK”,
“VND”, “Moroccan Dirham”, “Chinese Yuan RMB”, “BRL” and “PLN”
are references to the official
currencies of the respective countries.
In this Red Herring Prospectus, our Company has presented
certain numerical information. All figures have been
expressed in millions. One million represents ‘10 lakhs’ or
1,000,000. However, where any figures that may have
been sourced from third-party industry sources are expressed in
denominations other than millions, such figures
appear in this Red Herring Prospectus expressed in such
denominations as provided in their respective sources.
Exchange Rates
This Red Herring Prospectus may contain conversions of certain
other currency amounts into Indian Rupees that
have been presented solely to comply with the requirements of
the SEBI ICDR Regulations. These conversions
should not be construed as a representation that such currency
amounts could have been, or can be converted into
Indian Rupees, at any particular rate, or at all.
The exchange rates of the various currencies into Indian Rupees
for the dates indicated are provided below.
(in `)
Currency Exchange rate as on
March 31, 2018
Exchange rate as on
March 31, 2017
Exchange rate as on
March 31, 2016
Exchange rate as on
March 31, 2015
1 USD 65.04 64.84 66.33 62.59
1 EUR 80.62 69.24 75.09 67.51
1 JPY 0.61 0.58 0.58 0.58
1 LEY 17.29 15.22 15.16 18.55
1 VND 0.002 0.002 0.002 0.002
1 CZK 3.16 2.55 2.78 2.42
1 Moroccan
Dirham
7.07 6.45 6.87 6.25
1 MXN 3.57 3.46 3.84 4.08
1 BRL 19.70 20.75 18.46 19.43
1 PLN 19.02 16.31 17.78 16.42
1 Chinese
Yuan RMB
10.37 9.40 10.25 10.04
Source: RBI Reference Rate, http://www.xe.com/
Note:
In the event that March 31 of any of the respective years is a
public holiday, the previous calendar day not being a public
holiday has been
considered.
http://www.xe.com/
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17
FORWARD-LOOKING STATEMENTS
This Red Herring Prospectus contains certain statements which
are not statements of historical fact and may be
described as “forward-looking statements”. These forward looking
statements include statements which can
generally be identified by words or phrases such as “aim”,
“anticipate”, “are likely”, “believe”, “continue”, “can”,
“could”, “expect”, “estimate”, “intend”, “may”, “likely”,
“objective”, “plan”, “propose”, “will continue”, “seek
to”, “will achieve”, “will likely”, “will pursue” or other words
or phrases of similar import. Similarly, statements
that describe the strategies, objectives, plans or goals of our
Company are also forward-looking statements. All
statements regarding our expected financial conditions, results
of operations, business plans and prospects are
forward-looking statements. These forward-looking statements
include statements as to our business strategy,
plans, revenue and profitability (including, without limitation,
any financial or operating projections or forecasts)
and other matters discussed in this Red Herring Prospectus that
are not historical facts. However, these are not the
exclusive means of identifying forward-looking statements.
These forward-looking statements are based on our current plans,
estimates and expectations and actual results
may differ materially from those suggested by such
forward-looking statements. All forward-looking statements
are subject to risks, uncertainties and assumptions about us
that could cause actual results to differ materially from
those contemplated by the relevant forward-looking statement.
This may be due to risks or uncertainties associated
with our expectations with respect to, but not limited to,
regulatory changes pertaining to the industries in India in
which we have our businesses and our ability to respond to them,
our ability to successfully implement our
strategy, our growth and expansion, technological changes, our
exposure to market risks, general economic and
political conditions in India, which have an impact on our
business activities or investments, the monetary and
fiscal policies of India, inflation, deflation, unanticipated
turbulence in interest rates, foreign exchange rates, equity
prices or other rates or prices, the performance of the
financial markets in India and globally, changes in domestic
laws, regulations and taxes, changes in competition in our
industry and incidence of any natural calamities and/or
acts of violence. Important factors that would cause actual
results to differ materially include, including, but not
limited to the following:
1. pricing pressures that may adversely affect our margins; 2.
dependence on key customers; 3. exposure to counterparty credit
risk; 4. dependence on the performance of the global passenger
vehicle market and the two wheeler and three
wheeler markets in India;
5. failure to identify and understand evolving industry trends
and preferences 6. failure to develop new products to meet our
customers' demands; 7. environmental and safety regulations that
may adversely affect our business; 8. failure in implementing our
strategies, such as expanding our business in China, South America,
Southern
Europe and Northern Africa, and East Asia or capitalizing on
technological trends in the automotive
industry;
9. strategic investments and alliances, acquisitions and mergers
in the future, which may be difficult to integrate and manage;
10. our inability to obtain additional finan