sandhar technologies limited - sebi.gov.in · please see section 32 of the companies act, ... for...

DRAFT RED HERRING PROSPECTUS

September 28, 2015

Please see section 32 of the Companies Act, 2013

(This Draft Red Herring Prospectus will be updated upon filing with the RoC)

Book Built Issue

SANDHAR TECHNOLOGIES LIMITED

Sandhar Technologies Limited (our Company) was incorporated as Sandhar Locking Devices Private Limited on October 19, 1987, at New Delhi, as a private limited company under the Companies

Act, 1956. The name of our Company was changed to Sandhar Locking Devices Limited on conversion to a public limited company and issuance of a fresh certificate of incorporation consequent upon

change of name, on September 21, 1992. Subsequently, the name of our Company was changed to Sandhar Technologies Limited upon issuance of a fresh certificate of incorporation consequent upon

change of name, on November 11, 2005. For further details, please refer to the chapter History and Certain Corporate Matters on page 161.

Registered Office: C-101 A, Ansal Plaza, HUDCO Place, Khelgaon Marg, New Delhi 110 049, India Tel No: +91 11 4051 1800; Corporate Office: 13, Sector - 44, Gurgaon 122 002, Haryana, India. Tel No: +91 124 451 8900; Fax No: +91 124 401 2845;

E-mail: [email protected]; Website: www.sandhargroup.com; Corporate Identity Number: U74999DL1987PLC029553.

Contact Person: Mr. Arvind Joshi, Wholetime Director, Chief Financial Officer, Company Secretary and Compliance Officer; Tel No: +91 124 451 8900; Fax No: +91 124451 8911

PROMOTER OF OUR COMPANY: MR. JAYANT DAVAR

INITIAL PUBLIC ISSUE OF UP TO [] EQUITY SHARES OF FACE VALUE `10 EACH (EQUITY SHARES) OF SANDHAR TECHNOLOGIES LIMITED (COMPANY OR ISSUER) FOR CASH AT A PRICE OF `[] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF `[] PER EQUITY SHARE) AGGREGATING UP TO `[] MILLION CONSISTING OF A FRESH ISSUE OF UP TO [] EQUITY SHARES BY OUR COMPANY AGGREGATING UP TO `3,000 MILLION (FRESH ISSUE) AND AN OFFER FOR SALE AGGREGATING UP TO 5,115,456 EQUITY SHARES BY GTI CAPITAL BETA PVT LTD (THE SELLING SHAREHOLDER) AGGREGATING UP TO `[] MILLION (OFFER FOR SALE). THE FRESH ISSUE AND THE OFFER FOR SALE ARE TOGETHER REFERRED TO AS THE ISSUE. THE ISSUE WILL CONSTITUTE [] % OF THE POST-ISSUE PAID-UP EQUITY SHARE CAPITAL OF

OUR COMPANY.

THE FACE VALUE OF THE EQUITY SHARES IS `10 EACH. THE PRICE BAND, DISCOUNT, IF ANY, TO RETAIL INDIVIDUAL INVESTORS AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY AND THE SELLING

SHAREHOLDER IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS (BRLMs) AND WILL BE ADVERTISED IN ONE ENGLISH AND ONE HINDI NEWSPAPER,

EACH OF WIDE CIRCULATION, AT LEAST 5 (FIVE) WORKING DAYS PRIOR TO THE BID/ ISSUE OPENING DATE. AND SHALL BE MADE AVAILABLE TO THE BSE LIMITED

AND THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED FOR THE PURPOSE OF UPLOADING ON THEIR WEBSITES.

In case of revision in the Price Band, the Bid / Issue Period shall be extended for at least three Working Days after such revision of the Price Band, subject to the Bid / Issue Period not exceeding 10 Working Days.

Any revision in the Price Band, and the revised Bid/ Issue Period, if applicable, shall be widely disseminated by notification to the BSE Limited (BSE) and the National Stock Exchange of India Limited

(NSE), by issuing a press release and also by indicating the change on the websites of the BRLMs and at the terminals of the Syndicate Members and by intimation to Self Certified Syndicate Banks (SCSBs)

and Non-Syndicate Registered Brokers.

Pursuant to Rule 19(2)(b)(ii) of the Securities Contracts (Regulation) Rules, 1957, as amended (the SCRR), the Equity Shares issued in this Issue shall aggregate to at least such percentage of the post-Issue

Equity Share capital of our Company, calculated at the Issue Price, that will be equivalent to at least `4,000 million and the post-Issue capital of our Company at the Issue Price is more than `16,000 million but less than or equal to `40,000 million. In the event the post-Issue Equity Share capital of our Company calculated at the Issue Price is lesser than or equal to `16,000 million, the Issue will be deemed to be undertaken in terms of Rule 19(2)(b)(i) of the SCRR. The Issue is being made through the Book Building Process in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure

Requirements) Regulations, 2009, as amended (SEBI ICDR Regulations), where in terms of Regulations 26 (1), 50% of the Issue shall be allocated on a proportionate basis to Qualified Institutional Buyers

(QIBs). Our Company may, in consultation with the BRLMs, allocate up to 60% of the QIB Portion to Anchor Investors (the Anchor Investor Portion) at the Anchor Investor Allocation Price, on a

discretionary basis, out of which at least one-third will be available for allocation to domestic Mutual Funds only. In the event of under-subscription or non-allocation in the Anchor Investor Portion, the balance

Equity Shares shall be added to the Net QIB Portion. Such number of Equity Shares representing 5% of the Net QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the

remaining Net QIB Portion shall be available for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids being received at or above Issue Price. Further not less than 15% of

the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue shall be available for allocation to Retail Individual Bidders, subject to valid Bids

being received from them at or above the Issue Price such that subject to availability of Equity Shares, each Retail Individual Bidder shall be Allotted not less than the minimum Bid Lot, and the remaining Equity

Shares, if available, shall be allotted to all Retail Individual Bidders on a proportionate basis. All QIBs (other than Anchor Investors) and Non-Institutional Investors must compulsorily and Retail Individual

Bidders may optionally participate in this Issue though the ASBA process by providing the details of their respective bank accounts in which the corresponding Bid Amounts will be blocked by the SCSBs.

RISKS IN RELATION TO THE FIRST ISSUE

This being the first public issue of Equity Shares of our Company, there has been no formal market for our Equity Shares. The Face Value of the Equity Shares is `10 and the Floor Price is [] times of the Face Value and the Cap Price is [] times of the Face Value. The Issue Price# (as determined and justified by our Company and the Selling Shareholder, in consultation with the BRLMs as stated in the chapter Basis

for Issue Price on page 99 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 of our Company or regarding the price at which the Equity Shares will be traded after listing.

GENERAL RISKS

Investment in equity and equity related securities involves a degree of risk and investors should not invest any funds in this Issue 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 this Issue. For taking an investment decision, investors must rely on their own examination of our Company and the Issue including

the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of

this Draft Red Herring Prospectus. Specific attention of the investors is invited to the chapter Risk Factors beginning on page 16.

ISSUERS AND THE SELLING SHAREHOLDERS ABSOLUTE RESPONSIBILITY

Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to our Company and the Issue, which is

material in the context of this Issue; that the information contained in this Draft 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 Draft 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.

The Selling Shareholder accepts responsibility only for statements in this Draft Red Herring Prospectus in relation to itself and the Equity Shares being sold by it through the Offer for Sale. The Selling Shareholder

does not assume any responsibility for any other statement in this Draft Red Herring Prospectus, including without limitation, any and all of the statements made by or relating to our Company or its business.

LISTING

The Equity Shares offered through this Draft Red Herring Prospectus are proposed to be listed on the BSE and the NSE. The in-principle approvals of the Stock Exchanges for listing the Equity Shares have been

received pursuant to letter no. [] dated [] and letter no. [] dated [], respectively. For the purpose of this Issue, [] shall be the Designated Stock Exchange.

BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE

ICICI Securities Limited ICICI Centre,

H.T. Parekh Marg, Churchgate,

Mumbai 400 020,

Maharashtra, India.

Tel: +91 22 2288 2460

Fax: +91 22 2282 6580

Email: [email protected]

Website: www.icicisecurities.com

Investor grievance email:

[email protected]

Contact Person: Mr. Ayush Jain/ Mr.

Vishal Kanjani

SEBI Regn. No.: MB/INM000011179

IDFC Securities Limited

Naman Chambers, C-32,

G Block,

Bandra Kurla Complex, Bandra (East),

Mumbai 400 051,

Maharashtra, India.

Tel: +91 22 6622 2600

Fax: +91 22 6622 2501


Website: www.idfccapital.com


[email protected]

Contact Person: Mr. Akshay Bhandari


IIFL Holdings Limited 8th Floor, IIFL Centre, Kamala City,

Senapati Bapat Marg, Lower Parel (West),

Mumbai 400 013,

Maharashtra, India.

Tel: +91 22 4646 4600

Fax: +91 22 2493 1073


Website: www.iiflcap.com


[email protected]

Contact Person: Mr. Gururaj Sundaram/

Mr. Kunur Bavishi


Jefferies India Private Limited

42/43, 2 North Avenue, Maker Maxity,

Bandra Kurla Complex,

Bandra (East),

Mumbai 400 051,

Maharashtra, India.

Tel: +91 22 4356 6000

Fax: +91 22 6765 5595


Website: www.jefferies.com


[email protected]

Contact Person: Mr. Ranjan Prabhu


Link Intime India Private Limited C-13, Pannalal Silk Mills Compound,

L.B.S. Marg Bhandup (West),

Mumbai 400 078,

Maharashtra, India.

Tel: +91 22 6171 5400

Fax: +91 22 2596 0329


Investor grievance e-mail:

[email protected]

Website: www.linkintime.co.in

Mobile App -blink

Contact Person: Ms. Shanti

Gopalkrishnan

SEBI Regn. Number: INR000004058

BID/ISSUE PROGRAMME#

FOR ALL BIDDERS: ISSUE OPENS ON*: []

FOR QIBS: ISSUE CLOSES ON**: []

FOR RETAIL AND NON-INSTITUTIONAL BIDDERS: ISSUE CLOSES ON: [] # Our Company and the Selling Shareholder, in consultation with the BRLMs, may offer a discount of up to []% (equivalent of `[]) on the Issue Price to Retail Individual Investors. *Our Company and the Selling Shareholder may, in consultation with the BRLMs, consider participation by Anchor Investors. The Anchor Investor shall bid on the Anchor Investor Bidding Date i.e. one Working

Day prior to the Bid / Issue Opening Date.

** Our Company and the Selling Shareholder may, in consultation with the BRLMs, consider closing the Bidding by QIB Bidders one Working Day prior to the Bid / Issue Closing Date in accordance with the SEBI

ICDR Regulations.

http://www.jefferies.com/

Sandhar Technologies Limited

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TABLE OF CONTENTS

SECTION I: GENERAL ...................................................................................................................................... 2

DEFINITIONS AND ABBREVIATIONS ..................................................................................................... 2 PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ............................................. 12 FORWARD LOOKING STATEMENTS ................................................................................................... 15

SECTION II: RISK FACTORS ........................................................................................................................ 16

SECTION III: INTRODUCTION .................................................................................................................... 40

SUMMARY OF INDUSTRY ....................................................................................................................... 40 SUMMARY OF OUR BUSINESS ............................................................................................................... 46 SUMMARY FINANCIAL INFORMATION ............................................................................................. 52 THE ISSUE .................................................................................................................................................... 61 GENERAL INFORMATION ...................................................................................................................... 62 CAPITAL STRUCTURE ............................................................................................................................. 73

SECTION IV: PARTICULARS OF THE OFFER ......................................................................................... 87

OBJECTS OF THE ISSUE .......................................................................................................................... 87 BASIS FOR ISSUE PRICE .......................................................................................................................... 99 STATEMENT OF TAX BENEFITS ......................................................................................................... 102

SECTION V: ABOUT THE COMPANY ....................................................................................................... 116

INDUSTRY OVERVIEW .......................................................................................................................... 116 OUR BUSINESS ......................................................................................................................................... 135 KEY INDUSTRY REGULATIONS AND POLICIES ............................................................................. 155 HISTORY AND CERTAIN CORPORATE MATTERS ......................................................................... 161 OUR SUBSIDIARIES AND JOINT VENTURES .................................................................................... 169 OUR MANAGEMENT ............................................................................................................................... 174 OUR PROMOTER, PROMOTER GROUP AND GROUP COMPANIES ........................................... 191 DIVIDEND POLICY .................................................................................................................................. 199

SECTION VI: FINANCIAL INFORMATION ............................................................................................. 200

FINANCIAL STATEMENTS .................................................................................................................... 200 RELATED PARTY TRANSACTIONS .................................................................................................... 338 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATION ........................................................................................................................................ 339 FINANCIAL INDEBTEDNESS ................................................................................................................ 363

SECTION VII: LEGAL AND OTHER INFORMATION ........................................................................... 374

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ............................................. 374 LICENSES AND APPROVALS ................................................................................................................ 379 OTHER REGULATORY AND STATUTORY DISCLOSURES ........................................................... 396

SECTION VII: ISSUE INFORMATION ....................................................................................................... 412

ISSUE STRUCTURE ................................................................................................................................. 412 TERMS OF THE ISSUE ............................................................................................................................ 417 ISSUE PROCEDURE ................................................................................................................................. 420

SECTION VIII: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION .................................. 471

SECTION IX: OTHER INFORMATION...................................................................................................... 487

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ................................................ 487

SECTION X: DECLARATION ...................................................................................................................... 489

SECTION XI: DECLARATION BY THE SELLING SHAREHOLDER .................................................. 490


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SECTION I: GENERAL

DEFINITIONS AND ABBREVIATIONS

This Draft Red Herring Prospectus uses certain definitions and abbreviations which, unless the context otherwise

indicates or implies, the following terms have the meanings given below. References to statutes, rules, regulations,

guidelines and policies will be deemed to include all amendments and modifications notified thereto from time to

time.

The words and expressions used but not defined herein shall have the same meaning as is assigned to such terms

under the SEBI ICDR Regulations, the Companies Act, 2013, Companies Act, 1956, the SCRA, the Depositories

Act and the rules and regulations made thereunder.

General Terms

Term Description

Sandhar/ our Company or

the Company

Sandhar Technologies Limited, a company incorporated under the Companies Act, 1956,

and having its registered office at C-101 A, Ansal Plaza, HUDCO Place, Khelgaon Marg,

New Delhi 110 049, India.

We/ us/ Our/

Group

Unless the context otherwise indicates or implies, refers to our Company together with our

Subsidiaries and Joint Ventures, on a consolidated basis.

Company Related Terms

Term Description

Articles/ Articles of

Association/ AoA

The articles of association of our Company, as amended.

Auditor / Statutory

Auditor

The statutory auditors of our Company, namely, S.R. Batliboi & Co. LLP, Chartered

Accountants.

Board/ Board of

Directors

The board of directors of our Company or a duly constituted committee thereof.

Corporate Office The corporate office of our Company located at 13, Sector - 44, Gurgaon 122 002,

Haryana, India.

CSR Committee The corporate social responsibility committee of the Board of Directors.

Director(s) The director(s) of our Company.

Equity Shares The equity shares of our Company of `10 each, fully paid up, unless otherwise specified in the context thereof.

Group Companies The entities covered under the applicable accounting standards, being AS 18 (as

identified under the Restated Unconsolidated Summary Statements) more

particularly described in the chapter Our Promoters, Promoter Group and Group Companies - Our Group Companies on page 193.

GTI GTI Capital Beta Pvt Ltd

Han Sung Han Sung IMP Co. Limited

Independent

Director(s)

Independent directors on the Board of Directors. For details of the Independent Directors,

please refer to the chapter Our Management on page 174.

ICRA ICRA Limited

JBM Auto JBM Auto Limited

Joint Ventures The joint ventures entered into by our Company namely, (i) Indo Toolings Private

Limited, (ii) Sandhar Han Sung Technologies Private Limited and (iii) Sandhar Caama

Components Private Limited (up to June 30, 2015). For details of the Joint Ventures,

please refer to the chapter Our Subsidiaries and Joint Ventures on page 169.

Key Management

Personnel/ KMP

The officers vested with executive powers, and the officers at the level immediately below

the Board, as per the SEBI ICDR Regulations and more particularly listed in the chapter

Our Management beginning on page 174.

Memorandum/

Memorandum of

Association/ MoA

The memorandum of association of our Company, as amended.

Promoter The promoter of our Company, namely, Mr. Jayant Davar.

Promoter Group Includes such persons and entities constituting promoter group in terms of Regulation 2

(1)(zb) of the SEBI ICDR Regulations and disclosed in the chapter Our Promoters,


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Term Description

Promoter Group and Group Companies Promoter Group of our Company on page

192.

Registered Office The registered office of our Company located at C-101 A, Ansal Plaza, HUDCO Place,

Khelgaon Marg, New Delhi 110 049, India.

Registrar of Companies

/ RoC

The Registrar of Companies, Delhi and Haryana located at 4th Floor, IFCI Tower, 61,

Nehru Place, New Delhi 110 019 India.

Selling Shareholder The selling shareholder in the Issue namely, GTI Capital Beta Pvt Ltd.

Shareholders The shareholders of our Company.

TECFISA Tecnicas de la Fundicion Inyectada SA GTI Shareholders

Agreement/ GTI SHA

Shareholders Agreement dated March 30, 2012 entered into between the Promoter, the

Selling Shareholder, our Company and others. For further details, please refer please refer

to, History and Certain Corporate Matters Summary of Key Agreements on page 166.

Subsidiaries The subsidiaries of our Company namely, (i) Sandhar Tooling Private Limited, (ii)

Sandhar Technologies Barcelona, S.L., Spain, (iii) Sandhar Euro Holdings B.V., the

Netherlands, (iv) PT Sandhar Indonesia, Indonesia, (v) Sandhar Technologies Poland sp.

z.o.o., Poland, (vi) Sandhar Technologies De Mexico, Mexico, and (vii) Breniar Project

S.L., Spain. For details of the Subsidiaries, please refer to the chapter Our Subsidiaries

and Joint Ventures on page 169.

Issue Related Terms

Term Description

Allot/ Allotment/ Allotted Allotment/ transfer of Equity Shares to successful Bidders pursuant to this Issue.

Allotment Advice Note or advice or intimation of Allotment sent to the Bidders who have been or are to be

Allotted the Equity Shares after the Basis of Allotment has been approved by the

Designated Stock Exchange.

Allottee A successful Bidder to whom the Allotment is made.

Anchor Investor A QIB, applying under the Anchor Investor Portion and in accordance with the

requirements specified in the SEBI ICDR Regulations.

Anchor Investor

Allocation Price

The price at which allocation is being done to Anchor Investors on the Anchor Investor

Bid Period. The Anchor Investor Allocation Price will be decided by our Company and

the Selling Shareholder in consultation with the BRLMs.

Anchor Investor Bid/

Issue Period

The final day, one Working Day prior to the Bid/ Issue Opening Date, on which Bids by

Anchor Investors shall be submitted and Allocation to Anchor Investors shall be

completed.

Anchor Investor Issue

Price

The price at which Equity Shares will be Allotted to the Anchor Investors in terms of the

Red Herring Prospectus and Prospectus, which price will be equal to or higher than the

Issue Price but not higher than the Cap Price.

Anchor Investor Portion Up to 60% of the QIB Portion which may be allocated by our Company and the Selling

Shareholder, in consultation with the BRLMs, to Anchor Investors on a discretionary

basis.

One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds,

subject to valid Bids being received from domestic Mutual Funds at or above the Anchor

Investor Allocation Price.

Application Supported by

Blocked Amount/ ASBA

An application, whether physical or electronic, used by ASBA Bidder to make a Bid

authorising a SCSB, to block the Bid Amount in their ASBA Account.

Bids by QIBs (except Anchor Investors) and Non-Institutional Investors should be

compulsorily made through ASBA. Anchor Investors are not permitted to participate

through the ASBA process.

ASBA Account Account maintained with a SCSB and specified in the Bid cum Application Form

submitted by the ASBA Bidders for blocking the extent of the appropriate Bid Amount

specified by an ASBA Bidder in the Bid cum Application Form.

ASBA Bidder(s) Any Bidder, other than an Anchor Investor, who Bids in the Issue through the ASBA

process.

Bankers to the Issue The Escrow Collection Bank(s), Refund Bank(s) and Public Issue Bank(s).

Basis of Allotment The basis on which Equity Shares will be Allotted to successful Bidders under the Issue

and which is described in the chapter Issue Procedure on page 420.


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Term Description

Bid(s) An indication to make an offer during the Bid/Issue Period by a Bidder pursuant to

submission of the Bid cum Application Form, or during the Anchor Investor Bid/ Issue

Period by the Anchor Investors, to subscribe to or purchase the Equity Shares of our

Company at a price within the Price Band, including all revisions and modifications

thereto as permitted under the SEBI ICDR Regulations.

The term Bidding shall be construed accordingly.

Bid Amount The highest value of optional Bids indicated in the Bid cum Application Form and payable

by the Bidder/ blocked in the ASBA Account on submission of a Bid cum Application

Form in the Issue, which shall be net of Retail Discount, as applicable.

However for Retail Individual Investors applying at the Cut-Off Price, the Bid amount

shall be Cap Price multiplied by the number of Equity Shares Bid for by such Retail

Individual Investors and mentioned in the Bid cum Application Form net of Retail

Discount, if any.

Bid cum Application

Form

The form used by a Bidder, including ASBA Bidders, which is serially numbered

comprising an eight digit application number, to make a Bid and which will be considered

as the application for Allotment in terms of the Red Herring Prospectus and the

Prospectus.

Bid/ Issue Closing Date Except in relation to any Bids received from Anchor Investors, the date after which the

Syndicate, the Designated Branches and the Non-Syndicate Registered Brokers will not

accept any Bids, which shall be notified in two national daily newspapers, one each in

English and Hindi, with wide circulation and in case of any revision, the extended Bid/

Issue Closing Date also to be notified on the website and terminals of the Syndicate, the

Non-Syndicate Registered Brokers and SCSBs, as required under the SEBI ICDR

Regulations.

Our Company and the Selling Shareholder may, in consultation with the BRLMs, consider

closing the Bid/ Issue Period for QIBs one Working Day prior to the Bid/ Issue Closing

Date in accordance with the SEBI ICDR Regulations.

Bid/ Issue Opening Date Except in relation to Anchor Investor, the date on which the Syndicate, the SCSBs and

the Non-Syndicate Registered Brokers shall start accepting Bids.

Bid/ Issue Period The period between the Bid/ Issue Opening Date and the Bid/ Issue Closing Date,

inclusive of both days, during which prospective Bidders (except Anchor Investors) can

submit their Bids, including any revisions thereof. The Bid/ Issue Period shall comprise

of Working Days only. Our Company and the Selling Shareholder, in consultation with

the BRLMs may consider closing the Bidding by QIB Bidders one Working Day prior to

the Bid/ Issue Closing Date, which shall be notified in an advertisement in same

newspapers in which the Bid/ Issue Opening advertisement was published and in such a

case the Bid/ Issue Period for the QIBs shall be determined accordingly.

Bid Lot [] Equity Shares

Bidder Any prospective investor who makes a Bid pursuant to the terms of the Red Herring

Prospectus and the Bid cum Application Form, including an Anchor Investor unless stated

or implied otherwise.

Book Building Process/

Method

The book building process as provided under Part A of Schedule XI of the SEBI ICDR

Regulations, in terms of which this Issue is being made.

Broker Centre Broker centres notified by the Stock Exchanges where Bidders can submit the Bid cum

Application Forms to a Non-Syndicate Registered Broker.

The details of such Broker Centres, along with the names and contact details of the Non-

Syndicate Registered Broker are available on the websites of the respective Stock

Exchanges.

BRLMs/ Book Running

Lead Managers

The book running lead managers to the Issue, in this case being ICICI Securities Limited,

IDFC Securities Limited, IIFL Holdings Limited and Jefferies India Private Limited.

CAN/ Confirmation of

Allocation Note

The note or advice or intimation of allocation of Equity Shares sent to the successful

Anchor Investors who have been allocated Equity Shares after discovery of the Anchor

Investor Issue Price, including any revisions thereof.

Cap Price The higher end of the Price Band above which the Issue Price will not be finalized and

above which no Bids will be accepted.

Client ID Client identification number of the Bidder maintained with one of the Depositories in

relation to demat account.


5

Term Description

Cut-off Price The Issue Price, as finalised by our Company and the Selling Shareholder in consultation

with the BRLMs. Only Retail Individual Investors are entitled to Bid at the Cut-off Price,

for a Bid Amount not exceeding `200,000 (which shall be net of Retail Discount, if any). No other category of Bidders are entitled to Bid at the Cut-off Price.

Demographic Details The address, Bidders bank account details, MICR code and occupation of a Bidder.

Depository A depository registered with SEBI under the Depositories Act.

Designated Branch Such branches of the SCSBs, which shall collect Bid cum Application Forms used by

ASBA Bidders, a list of which is available on

http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries or at such

other websites as may be prescribed by SEBI from time to time.

Designated Date The date on which funds are transferred from the Escrow Account to the Public Issue

Account or the Refund Account, as appropriate, and instructions for transfer of the amount

blocked by the SCSB from the bank account of the ASBA Bidder to the Public Issue

Account are provided, after the Prospectus has been filed with the RoC, following which

the Board of Directors may Allot Equity Shares to successful Bidders/Applicants in the

Fresh Issue and the Selling Shareholder shall transfer the Equity Shares in the Offer for

Sale.

Designated Stock

Exchange/ DSE

[]

Draft Red Herring

Prospectus or DRHP

This draft red herring prospectus dated September 28, 2015 issued in accordance with

SEBI ICDR Regulations, filed with SEBI and which does not contain complete particulars

of the price at which the Equity Shares would be Alloted and the size of the Issue.

Eligible FPIs FPIs from such jurisdictions outside India where it is not unlawful to make an Issue /

invitation under the Issue and in relation to whom the Red Herring Prospectus constitutes

an invitation to purchase the Equity Shares offered thereby.

Eligible NRIs NRI(s) from jurisdictions outside India where it is not unlawful to make an offer or

invitation under the Issue and in relation to whom the Bid cum Application Form and the

Red Herring Prospectus will constitute an invitation to subscribe to or purchase the Equity

Shares.

Escrow Account Account opened with the Escrow Collection Banks for the Issue and in whose favour the

Bidder (except ASBA Bidders) will issue cheques or drafts in respect of the Bid Amount

when submitting a Bid.

Escrow Agreement Agreement to be entered into by our Company, the Selling Shareholder, the Registrar to

the Issue, the BRLMs, the Syndicate Members, the Escrow Collection Bank(s) and the

Refund Bank(s) for collection of the Bid Amounts and where applicable, refunds of the

amounts collected from the Bidders (excluding the ASBA Bidders), on the terms and

conditions thereof.

Escrow Collection Banks The banks which are clearing members and registered with SEBI under the Securities and

Exchange Board of India (Bankers to an Issue) Regulations, 1994, with whom the Escrow

Account(s) will be opened.

First/ Sole Bidder Bidder whose name shall be mentioned in the Bid cum Application Form or the Revision

Form and in case of joint Bids, whose name shall also appear as the first holder of the

beneficiary account held in joint names.

Floor Price Lower end of the Price Band, subject to any revision thereto, at or above which the Issue

Price and the Anchor Investor Issue Price will be finalised and below which no Bids will

be accepted.

Fresh Issue The fresh issue of up to [] Equity Shares aggregating up to `3,000 million by our Company

General Information

Document/ GID

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, suitably modified and included in Issue Procedure General Information

Document for Investing in Public Issues on page 433.

I-Sec ICICI Securities Limited

IDFC IDFC Securities Limited

IIFL IIFL Holdings Limited

Indian Companies Our Company, Indo Toolings, Sandhar Caama, Sandhar Han Sung and STPL

Indo Toolings Indo Toolings Private Limited

Insurance Companies Any company registered with Insurance Regulatory and Development Authority as an

insurance company.

Issue The public issue of up to [] Equity Shares of face value of `10 each for cash at a price


6

Term Description

of `[] each, aggregating up to `[] million comprising the Fresh Issue and the Offer for Sale.

Issue Agreement The agreement dated September 28, 2015 entered into among our Company, the Selling

Shareholder and the BRLMs, pursuant to which certain arrangements are agreed to in

relation to the Issue.

Issue Price Final price (less the discount, if any) at which Equity Shares will be Allotted in terms of

the Red Herring Prospectus. The Issue Price will be decided by our Company and the

Selling Shareholder in consultation with the BRLMs on the Pricing Date.

A discount of up to []% (equivalent to `[]) on the Issue Price may be offered to Retail Individual Investors. The Rupee amount of the such discount, if any, will be decided by

our Company and the Selling Shareholder, in consultation with the BRLMs, and which

shall be notified in two national daily newspapers, one each in English and Hindi, with

wide circulation at least five Working Days prior to the Bid/ Issue Opening Date, and shall

be made available to the Stock Exchanges for the purpose of uploading on their website.

Issue Proceeds The proceeds of the Issue. For further details, please refer to the chapter Objects of the

Issue on page 87.

Jefferies Jefferies India Private Limited

Listing Agreement The listing agreement to be entered into by our Company with the Stock Exchanges.

Members of the

Syndicate

The BRLMs and the Syndicate Member(s).

Mutual Funds A mutual fund registered with SEBI under the Securities and Exchange Board of India

(Mutual Funds) Regulations, 1996.

Mutual Fund Portion 5% of the Net QIB Portion or [] Equity Shares available for allocation to Mutual Funds,

out of the Net QIB Portion.

Net QIB Portion The portion of the QIB Portion, less the number of the Equity Shares Allotted to the

Anchor Investors.

Net Proceeds Proceeds of the Fresh Issue less our Companys share of the Issue expenses. For further

information about use of the Issue Proceeds and the Issue expenses.

Non-Institutional

Investors

All Bidders, including Category III FPIs, that are not QIBs or Retail Individual Investors

and who have Bid for Equity Shares for a cumulative amount more than `200,000 (but not including NRIs other than eligible NRIs).

Non-Institutional Portion Portion of the Issue being not less than 15% of the Issue consisting of [] Equity Shares

which shall be available for allocation on a proportionate basis to Non-Institutional

Investors, subject to valid Bids being received at or above the Issue Price.

Non-Resident A person resident outside India, as defined under FEMA and includes an NRI, FII, FPIs

and FVCI.

Non-Syndicate Broker

Centre

A broker centre of the Stock Exchanges with broker terminals, where in a Non-Syndicate

Registered Broker may accept Bid cum Application Forms, a list of which is available on

the website of the Stock Exchanges, and at such other websites as may be prescribed by

SEBI from time to time.

Non-Syndicate

Registered Broker

A broker registered with SEBI under the Securities and Exchange Board of India (Stock

Brokers and Sub Brokers Regulations), 1992, having office in any of the Non-Syndicate

Broker Centres, and eligible to procure Bids in terms of the circular No. CIR/ CFD/ 14/

2012 dated October 4, 2012 issued by SEBI.

Offer for Sale The offer for sale of up to 5,115,456 Equity Shares by the Selling Shareholder at the Issue

Price aggregating up to `[] million, in terms of the Red Herring Prospectus. Price Band Price band of a minimum price of `[] per Equity Share (Floor Price) and the maximum

price of `[] per Equity Share (Cap Price) including any revisions thereof.

Price Band, discount, if any, to Retail Individual Investors and the minimum Bid Lot size

for the Issue will be decided by our Company and the Selling Shareholder in consultation

with the BRLMs and will be advertised, at least five Working Days prior to the Bid/ Issue

Opening Date, in two national daily newspapers, one each in English and Hindi, with wide

circulation.

Pricing Date The date on which our Company and the Selling Shareholder in consultation with the

BRLMs finalise the Issue Price.

Prospectus The prospectus to be filed with the RoC in accordance with section 26 of the Companies

Act, 2013 and the SEBI ICDR Regulations, containing, inter alia, the Issue Price that is

determined at the end of the Book Building process, the size of the Issue and certain other


7

Term Description

information.

Public Issue Account The bank accounts opened with the Public Issue Bank(s) by the Selling Shareholder under

section 40(3) of the Companies Act, 2013 to receive money from the Escrow Accounts

on the Designated Date and where the funds shall be transferred by the SCSBs from the

ASBA Accounts.

Public Issue Bank(s) The banks which are clearing members and registered with SEBI under the Securities and

Exchange Board of India (Bankers to an Issue) Regulations, 1994 with whom the Public

Issue Account(s) will be opened.

Qualified Institutional

Buyers or QIBs

Qualified institutional buyers as defined under Regulation 2(1)(zd) of the SEBI ICDR

Regulations.

QIB Portion The portion of the Issue of [] Equity Shares required to be allocated to QIBs.

Red Herring Prospectus/

RHP

Red herring prospectus to be issued in accordance with section 32 of the Companies Act,

2013 and the provisions of the SEBI ICDR Regulations, which will not have complete

particulars of the price at which the Equity Shares will be offered and the size of the Issue.

Red Herring Prospectus will be registered with the RoC at least three days before the Bid/

Issue Opening Date and will become the Prospectus upon filing with the RoC after the

Pricing Date.

Refund Account(s) The account(s) opened with Refund Bank(s), from which refunds (excluding to the ASBA

Bidders), if any, of the whole or part of the Bid Amount shall be made.

Refund Banks The banks which are clearing members and registered with SEBI under the Securities and

Exchange Board of India (Bankers to an Issue) Regulations, 1994 with whom the Refund

Account will be opened.

Refunds through

electronic transfer of

funds

Refunds through electronic transfer of funds means refunds through NECS, Direct Credit,

NEFT or RTGS, as applicable.

Registrar/ Registrar to

the Issue

Registrar to this Issue, in this case being Link Intime India Private Limited.

Retail Discount Our Company and the Selling Shareholder, in consultation with the BRLMs, may decide

to offer a discount of `[] to the Issue Price to Retail Individual Investors and which shall be announced at least five Working Days prior to the Bid/ Issue Opening Date.

Retail Individual Bidders

/ Retail Individual

Investors / RIIs

Individual Bidders, submitting Bids, who have Bid for the Equity Shares for an amount

not more than `200,000 in any of the bidding options in the Issue (including HUFs applying through their Karta and Eligible NRIs and does not include NRIs other than

Eligible NRIs).

Retail Portion/ Retail

Category

The portion of the Issue being not less than 35% of the Issue available for allocation to

Retail Individual Investor(s) in accordance with the SEBI ICDR Regulations, subject to

valid Bids being received at or above the Issue Price.

Restated Consolidated

Summary Statements

Restated consolidated statement of assets and liabilities of our Company as at March 31,

2015, March 31, 2014, March 31, 2013, March 31, 2012 and March 31, 2011, and the

restated consolidated statement of profit and loss and the restated consolidated statement

of cash flows of our Company, for each of the years ended March 31, 2015, March 31,

2014, March 31, 2013, March 31, 2012 and March 31, 2011 and included in the section

Financial Statements on page 200.

Restated Unconsolidated

Summary Statements

Restated unconsolidated statement of assets and liabilities of our Company as at March

31, 2015, March 31, 2014, March 31, 2013, March 31, 2012 and March 31, 2011, and the

restated unconsolidated statement of profit and loss and the restated unconsolidated

statement of cash flows of our Company, for each of the years ended March 31, 2015,

March 31, 2014, March 31, 2013, March 31, 2012 and March 31, 2011 and included in

the section Financial Statements on page 200.

Revision Form Form used by Bidders, including ASBA Bidders, to modify the quantity of the Equity

Shares or the Bid Amount in any of their Bid cum Application Forms or any previous

Revision Form(s).

QIB Bidders and Non-Institutional Investors are not allowed to lower their Bids (in terms

of quantity of Equity Shares or the Bid Amount) at any stage.

Self-Certified Syndicate

Bank(s) or SCSB(s)

The banks which are registered with SEBI under the Securities and Exchange Board of

India (Bankers to an Issue) Regulations, 1994 and offer services in relation to ASBA,

including blocking of an ASBA Account in accordance with the SEBI ICDR Regulations

and a list of which is available on the website of SEBI or at such other website as may be


8

Term Description

prescribed by SEBI from time to time.

Share Escrow

Agreement

Agreement to be entered into between the Selling Shareholder, our Company and the

Escrow Agent in connection with the transfer of Equity Shares under the Offer for Sale by

the Selling Shareholder and credit of such Equity Shares to the demat account of the

Allottees.

ST Barcelona Sandhar Technologies Barcelona S.L.

Sub-Syndicate Member A SEBI Registered member of BSE and/ or NSE appointed by the BRLMs and / or

Syndicate Member(s) to act as a Sub Syndicate Member in the Issue.

Syndicate Includes the BRLMs and Syndicate Member.

Syndicate Agreement The agreement to be entered into between the BRLMs, the Selling Shareholder, the

Syndicate Member(s) and our Company in relation to the collection of Bids (excluding

Bids by ASBA Bidders) in this Issue.

Syndicate ASBA Centres Bidding Centres where an ASBA Bidder can submit his Bid cum Application Form to the

Syndicate Member and prescribed by SEBI from time to time.

Syndicate Member(s) Intermediary(ies) registered with the SEBI to act as a syndicate members and who are

permitted to carry on the activity as an underwriter in this case being [] and [].

Transaction Registration

Slip/ TRS

The slip or document issued by member of the Syndicate or the SCSB (only on demand),

as the case may be, to the Bidder as proof of registration of the Bid.

Underwriters The BRLMs and the Syndicate Member(s).

Underwriting Agreement The agreement among the Underwriters, the Selling Shareholder and our Company to be

entered into on or after the Pricing Date.

Working Day All days, other than 2nd and 4th Saturday of the month, Sunday or a public holiday on

which commercial banks are open for business, provided however, with reference to (a)

announcement of Price Band; and (b) Bid/Offer Period, Working Days shall mean all

days, excluding Saturdays, Sundays and public holidays, which are working days for

commercial banks in India.

Technical/ Industry Related Terms / Abbreviations

Term Description

Asst. Assistant

Ashok Leyland Ashok Leyland Limited

Arkay Fabsteel Arkay Fabsteel Systems Private Limited Actis Group Actis Auto Components Investment Limited and Actis Auto Investments Limited

Bosch Robert Bosch GmbH

BS IV norms Bharat Stage IV emission norms

Caterpillar Caterpillar India Private Limited CFO Chief Financial Officer

CGU Cash generating unit

CPD Central procurement division

Denso Denso Auto Body Parts India Private Limited EVAP Evaporative Emission Control System

Hero Hero MotorCorp Limited

Honda Cars Honda Cars India Limited

Honda Lock Honda Lock Manufacturing Company Limited

Hyundai Construction Hyundai Construction Equipment India Private Limited

JCB JCB India Limited

JEM Techno JEM Techno Co. Limited, Korea

Komatsu Komatsu India Private Limited

L&T Construction Larsen and Toubro Construction Equipment Limited

Mahindra Mahindra and Mahindra Limited OEM Original Equipment Manufacturer

OHV Off-highway vehicle

Royal Enfield Royal Enfield, an unit of Eicher Motors Group

SCID Sandhar Centre for Innovation and Development, Gurgaon

Steady Stream Steady Stream Business Limited, Taiwan

Suzuki Suzuki Motorcycle India Private Limited Tata Motors Tata Motors Limited


9

Term Description

TAFE Tractors and Farm Equipment Limited TVS TVS Motor Company Limited Yamaha India Yamaha Motor Private Limited V.P. Vice President

Conventional and General Terms/ Abbreviations

Term Description

Act or Companies Act The Companies Act, 1956 and/ or the Companies Act, 2013, as applicable.

AGM Annual general meeting

AIF(s) Alternative investment funds, as defined in, and registered with SEBI under the Securities

and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.

AS Accounting standards issued by the Institute of Chartered Accountants of India

AY Assessment year

BPLR Bank prime lending rate

BG Bank guarantee

BR Base rate

BSE BSE Limited

Bn/ bn Billion

CAGR Compounded annual growth rate

CC Cash credit

CCI Competition Commission of India

CDSL Central Depository Services (India) Limited

CIN Corporate identity number

CIT Commissioner of Income Tax

CST Act The Central Sales Tax Act, 1956

CST Rules The Central Sales Tax (Registration and Turnover Rules), 1957

Category I Foreign

Portfolio Investors

FPIs that are registered as Category I foreign portfolio investors under the SEBI FPI

Regulations.

Category II Foreign

Portfolio Investors

FPIs that are registered as Category II foreign portfolio investors under the SEBI FPI

Regulations.

Category III Foreign

Portfolio Investors

FPIs that are registered as Category III foreign portfolio investors under the SEBI FPI

Regulations.

Consolidated FDI

Policy

Consolidated FDI Policy (Circular 1 of 2015) dated May 12, 2015 issued by the

Government of India, Ministry of Commerce and Industry.

Companies Act, 1956 The Companies Act, 1956 (without reference to the provisions thereof that have ceased

to have effect upon notification of the sections of the Companies Act, 2013) along with

the relevant rules made thereunder.

Companies Act, 2013 The Companies Act, 2013, to the extent in force pursuant to the notification of sections

of the Companies Act, 2013, along with the relevant rules made thereunder.

DIN Director identification number

DIPP Department of Industrial Policy and Promotion, Ministry of Commerce and Industry,

Government of India

DP ID Depository participant identification

Depositories NSDL and CDSL

Depositories Act The Depositories Act, 1996

EBITDA Earnings before interest, tax, depreciation and amortisation

EPS Earnings per share

ERP Enterprise resource planning EOU Export oriented unit

Eur/ Euro, is the official currency of the Eurozone, which consists of 19 of the 28 member

states of the European Union FCNR Account Foreign currency non-resident account

FDI Foreign direct investment

FEMA

The Foreign Exchange Management Act, 1999 read with rules and regulations thereunder

and amendments thereto.

FEMA Regulations The Foreign Exchange Management (Transfer or Issue of Security by a Person Resident

Outside India) Regulations 2000 and amendments thereto.

FG Finished goods

https://en.wikipedia.org/wiki/Eurozonehttps://en.wikipedia.org/wiki/Member_state_of_the_European_Unionhttps://en.wikipedia.org/wiki/Member_state_of_the_European_Union


10

Term Description

FII(s) Foreign Institutional Investors as defined under the SEBI FPI Regulations.

FPI(s) Foreign Portfolio Investors as defined under the SEBI FPI Regulations.

Fiscal Year/ Fiscal/ FY Period of 12 months ended March 31 of that particular year, unless otherwise stated.

FIPB Foreign Investment Promotion Board

FLC Foreign letter of credit

FVCI Foreign Venture Capital Investor, as defined in and registered with SEBI under the SEBI

FVCI Regulations

GDP Gross Domestic Product

GoI/ Government Government of India

GST Goods and Services Tax

HNI High Net worth Individual

HUF Hindu Undivided Family

ICAI The Institute of Chartered Accountants of India

IFRS International Financial Reporting Standards

IPO Initial Public Offering

ILC Inland letter of credit

IRDA Insurance Regulatory and Development Authority

I.T. Act The Income Tax Act, 1961

Indian GAAP Generally Accepted Accounting Principles in India

Insider Trading

Regulations

The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations,

2015

KMP/ Key Management

Personnel

Key management personnel defined under section 2(1)(s) of the SEBI ICDR Regulations

and includes the officers vested with executive powers and the officers at the level

immediately below the Board and defined more particularly in Our Management Key

Management Personnel on page 187.

LER Loan equivalent risk

LOC Letters of credit

LOU Letter of undertaking

LLP Act The Limited Liability Partnership Act, 2008

MAT Minimum Alternate Tax

MCA Ministry of Corporate Affairs, Government of India

MICR Magnetic ink character recognition

Mn / mn million

MOU Memorandum of understanding

Mutual Fund(s) Mutual Fund (s) means mutual funds registered under the Securities and Exchange Board

of India (Mutual Funds) Regulations, 1996.

NA/ N.A. Not Applicable

NAV/ Net Asset Value Net Worth divided by number of issued Equity Shares.

NAFTA North American Free Trade Agreement

NBFC Non-banking financial company registered with the RBI

NCR National capital region

NECS National electronic clearing services

NEFT National electronic fund transfer

Net Worth Net worth represents sum of equity share capital and reserves and surplus (including

securities premium, general reserve and surplus in the Statement of Profit and Loss) and

share application money pending allotment.

NOC No objection certificate.

Notified Sections The sections of the Companies Act, 2013 that have been notified by the MCA and are

currently in effect.

NR Non-resident

NRE Account Non-resident external account

NRI A person resident outside India, as defined under FEMA and who is a citizen of India or

a person of Indian origin, such term as defined under the Foreign Exchange Management

(Deposit) Regulations, 2000

NRO Account Non-resident Ordinary Account

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited

OCB/ Overseas

Corporate Body

A company, firm, partnership, society or other corporate body owned directly or

indirectly to the extent of at least 60% by NRIs including overseas trusts, in which not

less than 60% of beneficial interest is irrevocably held by NRIs directly or indirectly and


11

Term Description

which was in existence on October 3, 2003 and immediately before such date had taken

benefits under the general permission granted to OCBs under FEMA. OCBs are not

allowed to invest in this Issue, except with the specific permission of the RBI.

p.a. Per annum

P/ E Ratio Price/ earnings ratio

PAN Permanent account number allotted under the Income Tax Act, 1961.

PAT Profit after tax

PBT Profit before tax

PIO Persons of Indian origin

PLR Prime lending rate

RBI The Reserve Bank of India

RBI Act The Reserve Bank of India Act, 1934

RONW Return on Net Worth

R&D Research and development

`/ Rs./ Rupees/ INR Indian Rupees RTGS Real time gross settlement

SCRA The Securities Contracts (Regulation) Act, 1956

SCRR The Securities Contracts (Regulation) Rules, 1957

SCSB Self-certified syndicate bank

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 FII Regulations The Securities and Exchange Board of India (Foreign Institutional Investors) Regulations,

1995

SEBI FPI Regulations The Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations,

2014

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 Takeover

Regulations

The Securities and Exchange Board of India (Substantial Acquisition of Shares and

Takeovers) Regulations, 2011

SEBI VCF Regulations The erstwhile Securities and Exchange Board of India (Venture Capital Funds)

Regulations, 1996

Securities Act U.S. Securities Act of 1933

SIA Secretariat of Industrial Assistance, Department of Industrial Policy & Promotion,

Ministry of Commerce and Industry, Government of India

SPV Special Purpose Vehicle

Sq. ft. / sq. ft. Square feet

Sr. Senior

Stamp Act The Indian Stamp Act, 1899

STT Securities Transaction Tax

State Government The government of a state of the Union of India

Stock Exchange (s) BSE and/ or NSE, as the context may refer to

UK The United Kingdom

US / USA/ United States The United States of America

US GAAP Generally Accepted Accounting Principles in the United States of America

USD/ US$/ U.S.$ United States Dollars

VAT Value added tax

VCFs Venture Capital Funds as defined and registered with SEBI under the SEBI VCF

Regulations

WIP Work in progress

Notwithstanding the foregoing, any terms and abbreviations used in the chapters Statement of Tax Benefits,

Financial Statements, Outstanding Litigations and Material Developments and Main Provisions of the

Articles of Association on pages 102, 200, 374 and 471, respectively, shall have the meanings given to such terms

in these respective chapters.


12

PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA

Certain Conventions

All references to India in this Draft Red Herring Prospectus are to the Republic of India and all references to

the U.S., USA or United States are to the United States of America. Further, all references to following

countries are:

Sr.

No.

Reference Country

1. Indonesia The Republic of Indonesia

2. Mexico The Estados Unidos Mexicanos or the United Mexican States

3. Netherlands The Kingdom of Netherlands

4. Poland The Republic of Poland or the Rzeczpospolita Polska

5. Spain The Kingdom of Spain

6. U.K., UK or United Kingdom The United Kingdom of Great Britain and Northern Ireland

Financial Data

Unless stated or the context requires otherwise, the financial information in this Draft Red Herring Prospectus is

derived from our Restated Consolidated Summary Statements as of and for the fiscal years ended March 31, 2015,

2014, 2013, 2012 and 2011 and the Annexures thereto and our Restated Unconsolidated Summary Statements as

of and for fiscal 2015, 2014, 2013, 2012 and 2011 and annexures thereto included elsewhere in this Draft Red

Herring Prospectus, which have been prepared in accordance with the applicable provisions of the Companies

Act, 1956, to the extent applicable, and the Companies Act, 2013 and Indian GAAP and restated in accordance

with the SEBI ICDR Regulations which have been approved by the Board of Directors on May 28, 2015, on May

23, 2014, on May 31, 2013, on May 19, 2012 and on May 31, 2011, respectively.

In this Draft Red Herring Prospectus, any discrepancies in any table between the total and sums of the amount

listed are due to rounding off. All figures in decimals have been rounded off to the second decimal and all

percentage figures have been rounded off to two decimal places and accordingly there may be consequential

changes in this Draft Red Herring Prospectus.

Our Companys fiscal year commences on April 1 and ends on March 31 of the next year; accordingly, all

references to a particular fiscal year, unless stated otherwise, are to the 12 month period ended on March 31 of

that year.

There are significant differences between Indian GAAP, US GAAP and IFRS. Our Company does not provide

reconciliation of its financial information to IFRS or US GAAP financial information. Our Company has not

attempted to explain those differences or quantify their impact on the financial data included in this Draft Red

Herring Prospectus and we urge investors to consult your own advisors regarding such differences and their impact

on our Companys financial data. For details in connection with risks involving differences between Indian GAAP

and IFRS, please refer to Risk Factors 56. Significant differences exist between Indian GAAP and other

accounting principles, such as US GAAP and IFRS, which may be material to investors' assessments of our

financial condition on page 37. Accordingly, the degree to which the financial information included in this Draft

Red Herring Prospectus will provide meaningful information is entirely dependent on the readers level of

familiarity with Indian accounting policies and practices, Indian GAAP, the Companies Act and the SEBI ICDR

Regulations. Any reliance by persons not familiar with Indian accounting policies, Indian GAAP, the Companies

Act, the SEBI ICDR Regulations and practices on the financial disclosures presented in this Draft Red Herring

Prospectus should accordingly be limited.

Unless the context otherwise indicates, any percentage amounts, as set forth in Risk Factors, Our Business

and Managements Discussion and Analysis of Financial Conditional and Results of Operations on pages 16,

135 and 339 respectively, and elsewhere in this Draft Red Herring Prospectus have been calculated on the basis

of the Restated Consolidated Summary Statements and Restated Unconsolidated Summary Statements of our

Company prepared in accordance with the Companies Act, Indian GAAP and restated in accordance with the

SEBI ICDR Regulations.


13

Currency and Units of Presentation

All references to:

Rupees or ` or INR or Rs. are to Indian Rupee, the official currency of the Republic of India;

USD or US$ are to United States Dollar, the official currency of the United States of America;

Euro or EUR are to Euro, the official currency of the European Union and consequently, the official currency of the Republic of Poland and the Kingdom of Spain;

IDR or Rp are to Indonesian Rupiah, the official currency of the Republic of Indonesia; and

MXN is to Mexican Peso, the official currency of the Estados Unidos Mexicanos or Mexico.

Except otherwise specified, our Company has presented certain numerical information in this Draft Red Herring

Prospectus in million units. One million represents 1,000,000 and one billion represents 1,000,000,000.

Exchange Rates

This Draft Red Herring Prospectus contains conversion of certain other currency amounts into Indian Rupees that

have been presented solely to comply with the SEBI ICDR Regulations. These conversions should not be

construed as a representation that these currency amounts could have been, or can be converted into Indian Rupees,

at any particular rate or at all.

The following table sets forth, for the periods indicated, information with respect to the exchange rate between

the Rupee and other currencies:

(in `) Currency Closing rates as on March 31,

2011 2012 2013 2014 2015

US $ 45.34 51.97 54.51 59.81 62.60

EUR 63.92 69.36 69.87 82.26 67.93

MXN 3.80 4.06 4.43 4.58 4.19

IDR 0.01 0.01 0.01 0.01 0.01

THB 1.50 1.69 1.86 1.84 1.92

JPY 0.30 0.63 0.58 0.58 0.52

Source: www.oanda.com

In case March 31 of any of the respective years is a public holiday, the previous calendar day not being a public

holiday has been considered.

Industry and Market Data

We have commissioned the Indian Automobile & Auto Component Industry Report, September 2015 by ICRA

to obtain an independent assessment of the opportunities, dynamics and competitive landscape of the automobile

and auto component industry in India. Except for the Indian Automobile & Auto Component Industry Report,

September 2015, other market and industry data used in this Draft Red Herring Prospectus has generally been

obtained or derived from publicity available information as well as industry publications and sources. These

publications typically state that the information contained therein has been obtained from sources believed to be

reliable but their accuracy and completeness are not guaranteed and their reliability cannot be assured.

Industry publications generally state that the information contained in such publications has been obtained from

publicly available documents from various sources believed to be reliable but their accuracy and completeness

are not guaranteed and their reliability cannot be assured. Accordingly, no investment decision should be based

on such information. Although we believe the industry and market data used in this Draft Red Herring Prospectus

is reliable, it has not been independently verified by us, the Selling Shareholder or the BRLMs or any of their

affiliates or advisors. The data used in these sources may have been re-classified by us for the purposes of

presentation. Data from these sources may also not be comparable.


14

The extent to which the market and industry data used in this Draft Red Herring Prospectus is meaningful depends

on the readers familiarity with and understanding of the methodologies used in compiling such data. There are

no standard data gathering methodologies in the industry in which business of our Company is conducted, and

methodologies and assumptions may vary widely among different industry sources.

In accordance with the SEBI ICDR Regulations, the section Basis for the Issue Price beginning on page 99

includes information relating to our peer group companies. Such information has been derived from publicly

available sources, and neither we, the Selling Shareholder, nor the BRLMs, have independently verified such

information.

Further, in accordance with Regulation 51A of the SEBI ICDR Regulations, our Company may be required to

undertake an annual update of the disclosures made in the Draft Red Herring Prospectus and make it publicly

available in the manner specified by SEBI. The extent to which the market and industry data used in this Draft

Red Herring Prospectus is meaningful depends on the readers familiarity with and understanding of the

methodologies used in compiling such data. There are no standard data gathering methodologies in the industry

in which the business of our Company is conducted, and methodologies and assumptions may vary widely among

different industry sources.

Such data involves risks, uncertainties and numerous assumptions and is subject to change based on various

factors. Accordingly, investment decisions should not be based solely on such information.


15

FORWARD LOOKING STATEMENTS

This Draft Red Herring Prospectus contains certain forward-looking statements. These forward-looking

statements can generally be identified by words or phrases such as will, aim, will likely result, believe,

expect, will continue, anticipate, estimate, intend, plan, contemplate, seek to, future,

objective, goal, project, should, will pursue and similar expressions or variations of such expressions.

All statements contained in this Draft Red Herring Prospectus that are not statements of historical fact constitute

forward-looking statements. All statements regarding our expected financial condition and results of operations,

business, plans, objectives, strategies, goals and prospects are forward-looking statements.

Forward-looking statements reflect our current views with respect to future events and are not a guarantee of

future performance. These statements are based on our managements beliefs and assumptions, which in turn are

based on currently available information. Although our Company believes the assumptions upon which these

forward-looking statements are based to be reasonable, any of these assumptions could prove to be inaccurate,

and the forward-looking statements based on these assumptions could be incorrect.

Further, the actual results may differ materially from those suggested by the forward-looking statements due to

risks or uncertainties associated with our expectations with respect to, but not limited to, regulatory changes

pertaining to the auto component manufacturing sector India in which our Company operates and our ability to

respond to them.

Important factors that could cause actual results to differ materially from our expectations include, but are not

limited to, the following:

1. our dependence on a limited number of clients, and a loss of or significant decrease in business from them; 2. discontinuation of, the loss of business with respect to, or a lack of commercial success of, a particular

vehicle model for which we are a significant supplier;

3. failure in implementing our strategies, such as expanding of product portfolio, increasing wallet share from existing OEM customers and enhancing innovation and design capabilities;

4. difficulty in integrating and managing strategic investments and alliances, acquisitions and mergers in the future;

5. inability to accurately forecast demand for our products and plan production schedules in advance; 6. exposure to foreign currency exchange rate fluctuations; 7. inability to retain and hire key employees or to maintain good relations with our workforce; 8. inability to attract or retain senior management and key managerial personnel; and 9. any adverse changes to the demand in the two wheeler market.

We cannot assure investors that the expectation reflected in these forward-looking statements will prove to be

correct. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking

statements and not to regard such statements as a guarantee of future performance.

By their nature, certain risk disclosures are only estimates and could be materially different from what actually

occurs in the future. As a result, actual future gains or losses could materially differ from those that have been

estimated. Our Company, the Directors, the BRLMs and their respective affiliates or associates do not have any

obligation to, and do not intend to, update or otherwise revise any statements reflecting circumstances arising after

the date hereof or to reflect the occurrence of underlying events, even if the, underlying assumptions do not come

to fruition. In accordance with the SEBI ICDR Regulations, our Company and the BRLMs will ensure that

investors in India are informed of material developments until such time as the grant of listing and trading

permissions by the Stock Exchanges for the Equity Shares allotted pursuant to the Issue. The Selling Shareholder

will ensure that investors are informed of material developments in relation to statements and undertakings made

by the Selling Shareholder in the Red Herring Prospectus until the time of the grant of listing and trading

permission by the Stock Exchanges.

All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause our

actual results to differ materially from those contemplated by the relevant forward looking statement. For further

discussion of factors that could cause our actual results to differ from our expectations, please refer to the chapters

Risk Factors, Our Business and Managements Discussion and Analysis of Financial Condition and Results

of Operation on pages 16, 135 and 339, respectively.


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SECTION II: RISK FACTORS

Any investment in equity shares involves a high degree of risk. You should carefully consider all the information

in this Draft Red Herring Prospectus, including the risks, uncertainties and challenges described below, before

making an investment in our Equity Shares. You should read this chapter in conjunction with Our Business

and Management's Discussion and Analysis of Financial Condition and Results of Operations on pages 135

and 339, respectively, as well as the other financial and statistical information contained in this Draft Red

Herring Prospectus.

The risks set out in this chapter may not be exhaustive. If any or a combination of the following risks, or other

risks and uncertainties that are not currently known or are now deemed immaterial, actually materialize, our

business, financial condition, results of operations, cash flows and prospects may suffer, the trading price of our

Equity Shares may decline, and all or part of your investment in our Equity Shares may be lost. Unless otherwise

stated, we are not in a position to specify or quantify the financial or other risks mentioned here.

Unless stated or the context requires otherwise, the financial information in this chapter is derived from our

Restated Consolidated Summary Statements as at and for the years ended March 31, 2015, March 31, 2014,

March 31, 2013, March 31, 2012 and March 31, 2011.

This Draft Red Herring Prospectus contains forward-looking statements that involve risks and uncertainties. Our

actual results may differ materially from those anticipated in these forward-looking statements as a result of

certain factors, including the considerations described below and elsewhere in this Draft Red Herring Prospectus.

Please refer to Forward-Looking Statements on page 15.

Internal Risk Factors

Risks Relating to Our Business

1. We depend on a limited number of customers for a significant portion of our revenues. The loss of a major customer or significant reduction in production and sales of, or demand for our products from, our major

customers may adversely affect our business, financial condition, results of operations and prospects.

A significant majority of our revenue from operations is from sales to Original Equipment Manufacturers

(OEMs). OEM sales constituted 73.87% of our income from operations in fiscal 2015. Within OEM sales,

we depend on a limited number of customers for a significant portion of our revenues. Revenue from our top

five customers constituted 66.53%, 66.71% and 65.91%, of our income from operations for fiscal 2015, 2014

and 2013, respectively. We do not have firm commitment from our customers for any particular quantity of

work or price and purchase orders may be amended or cancelled by the customers.

It is difficult to forecast the success or sustainability of any strategies undertaken by any of our major

customers in response to the current economic or industry environment. Unfavorable industry conditions can

also result in an increase in commercial disputes and other risks of supply disruption. A sustained decline in

the demand for products produced by our OEM customers could prompt them to cut their production

volumes, directly affecting the demand from OEMs for our products. In addition to decline in demand for

existing products, insufficient demand for new products launched by our OEMs may also affect demand for

our products from such OEMs.

Further, it is common for large OEMs to source their parts from relatively small numbers of vendors, and as

a result, our customers often undertake vendor rationalisation to reduce costs related to procurement from

multiple vendors. Since we are significantly dependent on certain key customers for a significant portion of

our sales, the loss of any one of our key customers or a significant reduction in demand from such customers

could have an adverse effect on our business, results of operations and financial condition.

2. We may not be successful in implementing our strategies, such as expanding of product portfolio, increasing wallet share from existing OEM customers and enhancing innovation and design capabilities,

which could adversely affect our business, results of operations and future prospects.

The success of our business depends greatly on our ability to effectively implement our business and

strategies. Please refer to the chapter Our Business on page 135. Even if we have successfully executed

our business strategies in the past, there can be no assurance that we will be able to execute our strategies on


17

time and within the estimated budget, or that we will meet the expectations of targeted customers. We expect

our strategies to place significant demands on our management and other resources and require us to continue

developing and improving our operational, financial and other internal controls. Our inability to effectively

manage our business and strategies could have an adverse effect on our business, financial condition and

profitability.

Our strategy of expanding our product portfolio involves understanding different product specifications,

technology and other factors, which we may currently be unfamiliar with. Further, change in product mix

manufactured by us may lead to an increase in costs on account of cost of raw materials that may be higher

than those required for our existing products. Further, aggressive positioning by our competitors may prevent

us from successfully pursuing our strategy of increasing our wallet share from existing OEM customers.

In order to achieve future growth, we need to effectively manage our expansion projects, accurately assess

new markets, attract new customers, obtain sufficient financing for our expected capital expenditures, control

our input costs, maintain sufficient operational and financial controls and make additional capital investments

to take advantage of anticipated market conditions. We may not be able to achieve growth in revenues and

profits or maintain such rate of growth in the future. If we are unable to execute our future strategies

effectively, our business and financial results will be adversely affected. Our inability to manage the

expansion of our business could have an adverse effect on our business, results of operations and financial

condition.

3. We have undertaken and may continue to undertake strategic investments and alliances, acquisitions and mergers in the future, which may be difficult to integrate and manage.

We have pursued and may continue to pursue acquisitions, mergers and strategic investments and alliances

as a mode of expanding our operations. For example, we currently have joint venture agreements with Han

Sung and JBM Auto. Further, during fiscal 2006, we acquired Adeep Locks Limited, Adeep Roloforms

Limited and Agrim Automach Private Limited to complement our overall strategy for growth. Adeep Locks

Limited, Adeep Roloforms Limited and Agrim Automach Private Limited were subsequently merged into

our Company in fiscal 2006. For details of our joint venture agreements, acquisitions and the scheme of

amalgamation, please refer to the chapter History and Certain Corporate Matters on page 161. We also

acquired the business carried on by Mag Engineering Private Limited in fiscal 2013 and the cabin division

of Arkay Fabsteel Systems Private Limited in fiscal 2015 and acquired the aluminium die casting of small

parts and mould design business of TECFISA, Spain, into our Subsidiary, ST Barcelona, in fiscal 2008. For

further details, please refer to the chapter Our Business on page 135. There can be no assurance that the

integration of any future expansion or acquisitions will be successful or that the expected strategic benefits

of any future expansion, acquisitions, mergers or alliances will be realised.

Our Company has in the past incurred losses from one of its joint venture, Sandhar Caama Components

(Private) Limited, wherein our Company had to write down unamortized goodwill of ` 1.63 million in the Restated Consolidated Summary Statements. Further, our Company has agreed to waive off the outstanding

loan amount amounting to `4.35 million and has borne 50% of the outstanding liability in the books of Sandhar Caama Components (Private) Limited amounting to ` 1.36 million.

Further, one of our Subsidiaries, PT Sandhar Indonesia is currently under liquidation on account of non-

viability of the business being undertaken. Our Company has invested `40.39 million and has a recoverable amount (loans and advances) of `41.97 million from PT Sandhar, Indonesia, as at March 31, 2015. Our Company has made necessary adjustments in its Restated Unconsolidated Summary Statements and may not

be able to realise this investment or the recoverable amount from PT Sandhar, Indonesia.

Going forward, we may continue to pursue further acquisitions, mergers, investments and expansions to

enhance our operations and technological capabilities. However, there can be no assurance that we will be

able identify suitable acquisition targets or investment opportunities on commercially reasonable terms or be

able to raise sufficient funds to finance such strategies for growth. Further expansion and acquisitions may

require us to incur or assume new debt, expose us to future funding obligations or integration risks and we

cannot assure you that such expansion or acquisitions will contribute to our profitability. In addition, there

can be no assurance that we will be able to consummate our expansions, acquisitions, mergers or alliances in

the future on terms acceptable to us, or at all. Further there is no assurance that our products manufactured

through technical collaborations and alliances will generate the expected levels of interest amongst our OEM

customers or that our new ventures will generate return on investment at expected levels or at all.


18

Our failure to successfully integrate an acquired business or our inability to realise the anticipated benefits

of such expansion or acquisitions could adversely affect our business, results of operations and financial

condition.

4. If we are unable to accurately forecast demand for our products and plan production schedules in advance, our business, cash flows, financial condition, results of operations and prospects may be adversely affected.

The volume and timing of sales to our customers may vary due to variation in demand for our customers

products, our customers attempts to manage their inventory, design changes, changes in their product mix,

manufacturing strategy and growth strategy, and macroeconomic factors affecting the economy in general

and our customers in particular. Further, decline in demand for existing products, or insufficient demand for

new products launched by our OEMs may affect demand for our products from such OEMs. Our inability to

forecast the level of customer demand for our products, process innovation and value engineering costs as

well as inability to accurately schedule our raw material purchases and production and manage our inventory

may adversely affect our business and cash flows from operations. In particular, our inability to accurately

forecast demand for products in our emerging product verticals may hinder our planned growth in these

verticals.

We have general purchase agreements which define the terms and conditions of purchases by the customers.

These are supplemented by specific open purchase orders which do not have any validity in respect of time

period. These purchase orders only specify the price at which the products are to be supplied with no mention

of any specific quantity. The quantities supplied are based on delivery schedules provided by the customers

based on their own demand and supply situation. Although our customers provide us with forecasts of annual

business volumes, which enable us to predict our income for a portion of our business, the actual orders are

only placed by way of on-going purchase orders. Our customers do not provide a firm commitment for any

s

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