varroc engineering limited - credit suisse · varroc engineering limited (our “company” or the...

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: U28920MH1988PLC047335

Registered 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 540

E-mail: [email protected]; Website: www.varrocgroup.com

OUR PROMOTER: TARANG JAIN

INITIAL PUBLIC OFFERING OF 20,221,730 EQUITY SHARES OF FACE VALUE OF ` 1 EACH (THE “EQUITY SHARES”) OF OUR COMPANY FOR CASH AT A PRICE OF ` 967 PER EQUITY SHARE (THE “OFFER PRICE”) AGGREGATING ` 19,549.61* MILLION THROUGH AN OFFER FOR SALE OF (i) 1,752,560 EQUITY SHARES AGGREGATING TO ` 1,694.31* MILLION BY, OUR PROMOTER, TARANG JAIN (“PROMOTER SELLING SHAREHOLDER”); (ii) 16,917,130 EQUITY SHARES AGGREGATING TO ̀ 16,354.85* MILLION BY OMEGA TC HOLDINGS PTE. LTD. (“INVESTOR SELLING SHAREHOLDER 1”); AND (iii) 1,552,040 EQUITY

SHARES AGGREGATING TO ` 1,500.45* 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 ` 91.90* MILLION, FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (THE “EMPLOYEE RESERVATION PORTION”) AT A DISCOUNT OF 4.96% (EQUIVALENT TO ` 48) ON THE OFFER PRICE (“EMPLOYEE DISCOUNT”). THE OFFER LESS THE EMPLOYEE RESERVATION PORTION IS THE “NET OFFER” AND SUCH NET OFFER AGGREGATES 20,121,730 EQUITY SHARES. THE OFFER AND THE NET OFFER CONSTITUTES 15.00% AND 14.93%, RESPECTIVELY, OF THE POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY. * SUBJECT TO FINALISATION OF BASIS OF ALLOTMENT

THE PRICE BAND, EMPLOYEE DISCOUNT, AND THE MINIMUM BID LOT WAS DECIDED BY OUR COMPANY AND THE SELLING SHAREHOLDERS, IN CONSULTATION WITH THE GCBRLMS AND THE BRLM,

AND WAS 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), 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 967TIMES THE FACE VALUE OF THE EQUITY SHARES

The Offer was 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 was made through the Book Building Process,

wherein not more than 50% of the Net Offer was available for allocation on a proportionate basis to Qualified Institutional Buyers (“QIBs”) (the “QIB Category”). Further, our Company and the Selling Shareholders, in

consultation with the GCBRLMs and the BRLM, allocated 60% of the QIB Category to Anchor Investors, on a discretionary basis (the “Anchor Investor Portion”), of which one-third was 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) was available

for allocation on a proportionate basis to Mutual Funds only. The remainder of the QIB Category was available for allocation on a proportionate basis to QIBs, subject to valid Bids having been received from them at or above

the Offer Price. Further, not less than 15% of the Net Offer was available for allocation on a proportionate basis to Non-Institutional Investors and not less than 35% of the Net Offer was available for allocation to Retail

Individual Investors, in accordance with the SEBI ICDR Regulations, subject to valid Bids having been received at or above the Offer Price. All Bidders (except Anchor Investors) participated in the Offer only through the

Application Supported by Blocked Amount (“ASBA”) process, and provided details of their respective bank account in which the Bid amount was blocked by the SCSBs. Anchor Investors were 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 OFFER

This 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 965 times and 967 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 RISKS

Investments 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 Prospectus. Specific attention of the investors

is invited to “Risk Factors” on page 19.

OUR COMPANY’S AND SELLING SHAREHOLDERS’ ABSOLUTE RESPONSIBILITY

Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this 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 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 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 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 Prospectus.

LISTING

The Equity Shares issued through the 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 Block

Bandra Kurla Complex, Bandra (East)

Mumbai 400 051

Tel: +91 22 4336 0000

Fax: +91 22 6713 2447

E-mail: [email protected]

Investor grievance e-mail:

[email protected]

Contact Person: Ganesh Rane

Website:

www.investmentbank.kotak.com

SEBI Registration No.:

INM000008704

Citigroup Global Markets India Private

Limited

1202, 12th Floor, First International

Financial Centre, G-Block, C54&55

Bandra Kurla Complex, Bandra (East),

Mumbai 400 098

Tel: +91 22 6175 9999

Fax: +91 22 6175 9898

Email: [email protected]

Investor Grievance E-mail:

[email protected]

Contact Person: Ashish Guneta

Website:www.online.citibank.co.in/rhtm/c

itigroupglobalscreen

SEBI Registration No: INM000010718

Credit Suisse Securities (India) Private

Limited

Ceejay House, 9th Floor, Plot F, Shivsagar

Estate, Dr. Annie Besant Road, Worli Mumbai

400 018

Tel: +91 22 6777 3914

Fax: +91 22 6777 3820


Investor grievance e-mail: list.igcellmer-

[email protected]

Contact Person: Akshay Saxena

Website:

www.creditsuisse.com/in/en/investment-

banking/regional-presence/asia-

pacific/india/ipo.html

SEBI Registration No.: INM000011161

IIFL Holdings Limited

10th Floor, IIFL Centre

Kamala City, Senapati Bapat Marg

Lower Parel (West), Mumbai 400

013

Tel: +91 22 4646 4600

Fax: +91 22 2493 1073



[email protected]

Contact Person: Pranay Doshi

Website: www.iiflcap.com


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 6195



[email protected]

Contact Person: Shanti

Gopalkrishnan

Website: www.linkintime.co.in


INR000004058

BID/OFFER PERIOD*

BID/OFFER OPENED ON* Tuesday, June 26, 2018 BID/OFFER CLOSED ON Thursday, June 28, 2018

* The Anchor Investor Bidding Date was June 25, 2018, which was one Working Day prior to the Bid/Offer Opening Date.

PROSPECTUS

Dated: June 29, 2018

Please read Section 32 of the Companies Act, 2013

Book Built Offer

VARROC ENGINEERING LIMITED

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

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.

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



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.

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



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 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)

Varroc European Holding

B.V.

Varroc European Holding B.V. (The Netherlands)

4

Term Description

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


Mexico

Varroc Lighting Systems S.de.R.L. de. C.V., Mexico


Morocco

Varroc Lighting Systems, S.A., Morocco


Poland

Varroc Lighting Systems Sp. Z o.o., Poland


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 applied 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

June 25, 2018, 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

` 967 per Equity Share, being the price at which the Equity Shares were Allotted to Anchor Investors in terms of the Red Herring Prospectus and this Prospectus, The

Anchor Investor Offer Price was decided by our Company and the Selling Shareholders,

in consultation with the GCBRLMs and the BRLM.

Anchor Investor

Portion

60% of the QIB Category, which was 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 was reserved for domestic Mutual Funds, subject to valid Bids

having been received from domestic Mutual Funds at or above the price at which

allocation is made to Anchor Investors.

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.

5

Term Description

ASBA Account A bank account maintained with an SCSB and specified in the Bid cum Application

Form was 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 the Red Herring Prospectus and this 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 the 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.

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 the

Red Herring Prospectus and this Prospectus.

Bid Lot 15 Equity Shares.

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

Prospectus and the Bid cum Application Form and unless otherwise stated or implied,

includes an Anchor Investor.

Bid/Offer Closing

Date

June 28, 2018, except in relation to Anchor Investors

Bid/Offer Opening

Date

June 26, 2018, except in relation to Anchor Investors

Bid/Offer Period June 26, 2018 to June 28, 2018, except in relation to Anchor Investors

Bidding Centres Centres at which the Designated Intermediaries accepted 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 was

made.

Book Running Lead

Manager or BRLM

IIFL Holdings Limited

Broker Centres Broker centres of the Registered Brokers, where Bidders (other than Anchor Investors)

submitted 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. ` 967 per Equity Share. 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

6

Term Description

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 the Red Herring Prospectus, after

this 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 the 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,

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 the 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 the Red Herring

Prospectus constituted an invitation to purchase the Equity Shares.

Employee Discount A discount of 4.96% (equivalent to ` 48) on the offer price to Eligible Employees.

7

Term Description

Employee Reservation

Portion

The portion of the Offer, being 100,000 Equity Shares, aggregating ` 91.90 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 ` 965 per Equity Share being the lower end of the Price Band. 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.

Mutual Fund Portion 5% of the QIB Category (excluding the Anchor Investor Portion) or 201,218 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 3,018,260 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 20,221,730 Equity Shares of face value ` 1 each for cash at a price of ` 967 each by the Selling Shareholders in terms of the Red Herring Prospectus and this

Prospectus. The Offer, aggregating ` 19,549.61 million#, comprises a Net Offer to the public of 20,121,730 Equity Shares and an Employee Reservation Portion of 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. # Subject to finalization of the Basis of Allotment

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 ` 967 per Equity Share, being the 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 the Red Herring

Prospectus on the Pricing Date, less Discount.

8

Term Description

Offered Shares Equity Shares held by the Selling Shareholders and offered for sale in the Offer.

Price Band `965 per Equity Share to ` 967 Equity Share

The Price Band and the minimum Bid Lot size for the Offer were decided by our Company

and the Selling Shareholders, in consultation with the GCBRLMs and the BRLM, and

were 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) 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 was made available to the Stock

Exchanges for the purpose of uploading on their websites.

Pricing Date June 29, 2018, being the date on which our Company and the Selling Shareholders, in

consultation with the GCBRLMs and the BRLM, finalized the Offer Price.

Prospectus This Prospectus dated June 29, 2018, issued in accordance with Section 26 of the

Companies Act, 2013, and the SEBI ICDR Regulations containing, inter alia, the Offer

Price that is determined at the end of the Book Building Process, the size of the Offer and

certain other information, including any addenda or corrigenda hereto.

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 10,060,864 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

The red herring prospectus dated June 15, 2018, issued in accordance with Section 32 of

the Companies Act, 2013 and the SEBI ICDR Regulations, which did not have complete

particulars of the price at which the Equity Shares were Allotted and was filed with the

RoC at least three Working Days before the Bid/Offer Opening Date.

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 7,042,606 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.

9

Term Description

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 accepts 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 Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private

Limited, Credit Suisse Securities (India) Private Limited, IIFL Holdings Limited, Kotak

Securities Limited and IIFL Securities Limited.

Underwriting

Agreement

The agreement dated June 29, 2018 entered among our Company, the Selling

Shareholders and the Underwriters.

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

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.

10

Term Description

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.

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.

11

Term Description

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.

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.

12

Term Description

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

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

13

Defined Term Description

VES Varroc Excellence System

VDS Varroc Development System

VQS Varroc Quality System

The words and expressions used but not defined in this 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.

14

CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION AND MARKET DATA AND

CURRENCY OF PRESENTATION

Certain Conventions

All references in this 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 Prospectus are to page numbers of this

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 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 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 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.

15

Unless indicated otherwise, the financial information in this 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 Prospectus are to a calendar year.

Certain figures contained in this 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 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 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 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

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 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

to be construed as CRISIL providing or intending to provide any services in jurisdictions where CRISIL does not

16

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 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

Prospectus expressed in such denominations as provided in their respective sources.

Exchange Rates

This 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/

17

FORWARD-LOOKING STATEMENTS

This 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 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 financing to meet our capital expenditure and working capital requirements;

11. failure to sustain or manage our growth; 12. failure to compete effectively in the highly competitive automotive components industry; 13. risks associated with our international operations; 14. dependence on third parties for the supply of raw materials and delivery of products and such providers

could fail to meet their obligations;

15. dependence on third parties for the supply of raw materials and delivery of products; and 16. our inability to protect our patents.

For a further discussion of factors that could cause our actual results to differ, see “Risk Factors”, “Our Business”

and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 19, 182

and 532, respectively. By their nature, certain market 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 be materially be

different from those that have been estimated. Forward-looking statements reflect our current views as of the date

of this Prospectus and are not a guarantee of future performance. These statements are based on our management’s

belief and assumptions, which in turn are based on currently available information. Although we believe that the

assumptions on which such statements are based are reasonable, any such assumptions as well as statements based

on them could prove to be inaccurate.

18

Neither our Promoter, Company, nor the Directors, nor the Selling Shareholders, GC-BRLMs, BRLM nor the

Syndicate, nor any of their respective affiliates or associates have any obligation 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 applicable regulatory requirements,

our Company, the Selling Shareholders (to the extent it relates to any statement made by such Selling Shareholders

in the Red Herring Propectus and this Prospectus and to the extent it specifically pertains to such Selling

Shareholder and the respective portion of the Equity Shares offered by them in the Offer for Sale) and the

GCBRLMs and the BRLM will ensure that investors in India are informed of material developments until the

receipt of final listing and trading approvals for the Equity Shares Allotted pursu

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